485BPOS 1 classicfocus.htm As filed with the Securities and Exchange Commission on April 6, 2001 REGISTRATION NO

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As filed with the Securities and Exchange Commission on April 28, 2003

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REGISTRATION NO. 333-05227

811-05846

-------------------------------------------------------------------------------- -----------------------------------------------------------SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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FORM N-4

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POST-EFFECTIVE AMENDMENT NO. 12

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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

AND

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

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AMENDMENT NO. 54

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SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F

(EXACT NAME OF REGISTRANT)

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

(NAME OF DEPOSITOR)

ONE SUN LIFE EXECUTIVE PARK

WELLESLEY HILLS, MASSACHUSETTS 02481

(ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES)

DEPOSITOR'S TELEPHONE NUMBER: (781) 237-6030

EDWARD M. SHEA, ASSISTANT VICE PRESIDENT AND SENIOR COUNSEL

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

RETIREMENT PRODUCTS AND SERVICES

112 WORCESTER STREET

WELLESLEY HILLS, MASSACHUSETTS 02481

(NAME AND ADDRESS OF AGENT FOR SERVICE)

COPIES OF COMMUNICATIONS TO:

JOAN E. BOROS, ESQ.

JORDEN BURT LLP

1025 THOMAS JEFFERSON STREET, N.W.

SUITE 400 EAST

WASHINGTON, D.C. 20007

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Approximate Date of Proposed Public Offering: Continuous

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

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

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[X] On May 1, 2003 pursuant to paragraph (b) of Rule 485.

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[ ] 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.

PART A

PROSPECTUS

MAY 1, 2003

Futurity Focus

Sun Life Assurance Company of Canada (U.S.) and Sun Life of Canada (U.S.) Variable Account F offer the flexible payment deferred annuity contracts and certificates described in this Prospectus to groups and individuals.

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

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Large-Cap Value Equity Funds	Mid-Cap Blend Equity Funds
Franklin Templeton VIP Trust Templeton Foreign	OpCap Mid Cap Portfolio*
Securities Fund - Class 2	SC^SM Blue Chip Mid Cap Fund
Franklin Templeton VIP Trust Templeton Growth	SC^SM Value Mid Cap Fund
Securities Fund - Class 2	Mid-Cap Growth Equity Funds
Goldman Sachs VIT CORE^SM U.S. Equity Fund	AIM V.I. Capital Appreciation Fund
MFS/Sun Life Total Return Series	Small-Cap Blend Equity Funds
OpCap Equity Portfolio*	Credit Suisse Trust Global Post-Venture Capital
OpCap Managed Portfolio*	Portfolio
SC^SM Davis Venture Value Fund	JPMorgan Small Company Portfolio
SC^SM Value Equity Fund	OpCap Small Cap Portfolio*
SC^SM Value Managed Fund	SC^SM Value Small Cap Fund
Large-Cap Blend Equity Funds	Small-Cap Growth Equity Funds
AIM V.I. Core Equity Fund	Alger American Small Capitalization Portfolio*
Alger American Income & Growth Portfolio*	Credit Suisse Trust Emerging Markets Portfolio
Credit Suisse Trust International Focus Portfolio	Credit Suisse Trust Small Cap Growth Portfolio
JPMorgan International Opportunities Portfolio	Goldman Sachs VIT CORE^SM Small Cap Equity Fund
JPMorgan U.S. Large Cap Core Equity Portfolio	MFS/ Sun Life New Discovery Series
Lord Abbett Series Fund Growth and Income Portfolio	SC^SM Alger Small Capitalization Fund
MFS/ Sun Life Massachusetts Investors Trust Series	Large-Cap Blend Sector Equity Funds
SC^SM Alger Income & Growth Fund	SC^SM Davis Financial Fund
SC^SM Investors Foundation Fund	Mid-Cap Value Sector Equity Funds
SC^SM Select Equity Fund	Sun Capital Real Estate Fund^(R)
Large-Cap Growth Equity Funds	Mid-Cap Blend Sector Equity Funds
AIM V.I. Growth Fund	MFS/ Sun Life Utilities Series
AIM V.I. International Growth Fund	High-Quality Short-Term Bond Funds
Alger American Growth Portfolio*	PIMCO VIT Real Return Portfolio
Goldman Sachs VIT Growth and Income Fund	High Quality Intermediate-Term Bond Funds
Goldman Sachs VIT International Equity Fund	PIMCO VIT Total Return Portfolio
MFS/ Sun Life Capital Appreciation Series	Sun Capital Investment Grade Bond Fund^(R)
MFS/ Sun Life Emerging Growth Series	High Quality Long-Term Bond Funds
MFS/ Sun Life Massachusetts Investors Growth	MFS/ Sun Life Government Securities Series
Stock Series	Low-Quality Short-Term Bond Fund
SC^SM Alger Growth Fund	MFS/ Sun Life High Yield Series
Mid-Cap Value Equity Funds	Low-Quality Intermediate-Term Bond Fund
First Eagle Overseas Variable Fund	PIMCO VIT Emerging Markets Bond Portfolio
	PIMCO VIT High Yield Portfolio
	Money Market Fund
	Sun Capital Money Market Fund^(R)

* Not available for further investment after May 1, 2002.

A I M Advisors, Inc. advises the AIM Variable Insurance Funds. Arnhold and S. Bleichroeder Advisers, LLC advises the First Eagle Funds. Credit Suisse Asset Management, LLC advises the Credit Suisse Trust Portfolios with Abbott Capital Management, LLC serving as sub-investment advisor to the Global Post-Venture Capital Portfolio with respect to the Portfolio's investments in private equity portfolios. Fred Alger Management, Inc. advises the Alger American Funds. Goldman Sachs Asset Management, L.P. advises the Goldman Sachs VIT Funds. J.P. Morgan Investment Management Inc. advises the J.P. Morgan Series Trust II Portfolios. Lord, Abbett & Co. LLC advises the Lord Abbett Series Fund Portfolios. Massachusetts Financial Services Company advises the MFS/Sun Life Funds.

OpCap Advisors advises the OpCap Funds. Pacific Investment Management Company LLC advises the PIMCO VIT Portfolios. Sun Capital Advisers, Inc. advises the Sun Capital Funds; SC^SM Alger Funds (sub-advised by Fred Alger Management, Inc.); SC^SM Davis Funds (sub-advised by Davis Advisors); SC^SM Value Funds (sub-advised by OpCap Advisors); SC^SM Blue Chip Mid Cap Fund, SC^SM Investors Foundation Fund and SC^SM Select Equity Fund (all sub-advised by Wellington Management Company, LLP). Templeton^(R) Investment Counsel, LLC advises Templeton Foreign Securities Fund and Templeton^(R) Global Advisors Limited advises Templeton Growth Securities Fund.

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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 May1, 2003 (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 38 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 Mailing Address.") or by telephoning (888) 786-2435. 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 address:

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

    P.O. Box 9133

    Wellesley Hills, Massachusetts 02481

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TABLE OF CONTENTS

		Page
Special Terms		5
Product Highlights		5
Fees and Expenses		7
Example		8
Condensed Financial Information		9
The Annuity Contract		9
Communicating To Us About Your Contract		9
Sun Life Assurance Company of Canada (U.S.)		10
The Variable Account		10
Variable Account Options: The Funds		10
The Fixed Account		11
The Fixed Account Options: The Guarantee Periods		11
The Accumulation Phase		12
Issuing Your Contract	12
Amount and Frequency of Purchase Payments	12
Allocation of Net Purchase Payments	12
Your Account	13
Your Account Value	13
Variable Account Value	13
Fixed Account Value	14
Transfer Privilege	15
Waivers; Reduced Charges; Credits; Bonus Guaranteed Interest Rates	16
Optional Programs	16
Withdrawals and Market Value Adjustment		18
Cash Withdrawals	18
Market Value Adjustment	19
Contract Charges		20
Account Fee	20
Administrative Expense Charge	20
Mortality and Expense Risk Charge	20
Premium Taxes	20
Fund Expenses	21
Modification in the Case of Group Contracts	21
Death Benefit		21
Amount of Death Benefit	21
Method of Paying Death Benefit	22
Selection and Change of Beneficiary	22
Payment of Death Benefit	22
Due Proof of Death	22
The Income Phase - Annuity Provisions		23
Selection of the Annuitant or Co-Annuitant	23
Selection of the Annuity Commencement Date	23
Annuity Options	24
Selection of Annuity Option	24
Amount of Annuity Payments	25
Exchange of Variable Annuity Units	26
Account Fee	26
Annuity Payment Rates	26
Annuity Options as Method of Payment for Death Benefit	26
Other Contract Provisions		26
Exercise of Contract Rights	26
Change of Ownership	27
Death of Participant	27
Voting of Fund Shares	28
Periodic Reports	29

Substitution of Securities

29

Change in Operation of Variable Account

29

Splitting Units

29

Modification

29

Limitation or Discontinuance of New Participants

30

Reservation of Rights

30

Right to Return

30

Tax Considerations

30

U.S. Federal Income Tax Considerations

31

Deductibility of Purchase Payments

31

Pre-Distribution Taxation of Contracts

31

Distributions and Withdrawals from Non-Qualified Contracts

31

Distributions and Withdrawals from Qualified Contracts

32

Withholding

33

Investment Diversification and Control

33

Tax Treatment of the Company and the Variable Account

33

Qualified Retirement Plans

33

Pension and Profit-Sharing Plans

33

Tax-Sheltered Annuities

34

Individual Retirement Accounts

34

Roth IRAs

34

Puerto Rico Tax Considerations

35

Administration of the Contracts

35

Distribution of the Contracts

35

Performance Information

36

Available Information

37

Incorporation of Certain Documents by Reference

37

State Regulation

37

Legal Proceedings

38

Financial Statements

38

Table of Contents of Statement of Additional Information

38

Appendix A - Glossary

40

Appendix B - Condensed Financial Information - Accumulation Unit Values

43

Appendix C - Fixed Account - Examples of the Market Value Adjustment

48

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 Futurity Focus Fixed and Variable 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. The Contract also provides a death benefit if you die during the Accumulation Phase.

The Accumulation Phase

Under most circumstances, you can buy the Contract with an initial Purchase Payment of $25,000 or more, and you can make additional Purchase Payments of at least $1,000 at any time during the Accumulation Phase. We will not normally accept a Purchase Payment if your Account Value is over $1 million or, if the Purchase Payment would cause your Account Value to exceed $1 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 series 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 interest 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.

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Fees and Expenses

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

Each year, we deduct an annual Account Fee of $50. We will not charge the annual Account Fee if your Account Value is more than $100,000 on your Account Anniversary.

We deduct a mortality and expense risk charge of 1.00% of the average daily value of the Contract invested in the Variable Account. We also deduct an administrative charge of 0.15% 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.

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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. The charges vary depending upon which Fund(s) you have selected.

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The Income Phase: Annuity Provisions

If you want to receive regular income from your annuity, you can select one of a several Annuity Options. Subject to the Maximum Annuity Commencement Date, 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. You decide when your Income Phase will begin but, once it begins, you cannot change your choice of annuity payment options.

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 your age on the Contract Date. If you are 86 or older on your Contract Date, the death benefit is equal to the amount we would pay on a full surrender of your Contract ("Surrender Value"). If you are 85 or younger on your Contract Date, the death benefit pays the greatest of the following amounts: (1) your Account Value on your Death Benefit Date, (2) your Surrender Value on your Death Benefit Date, (3) your total Purchase Payments minus the sum of partial withdrawals from your Account.

Withdrawals, Withdrawal Charge and Market Value Adjustment

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. Withdrawals made from the Fixed Account, however, may be subject to a Market Value Adjustment (see prospectus under "Market Value Adjustment"). You may also 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, depending upon the laws of your state, either the full amount of all of your Purchase Payments or 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 or a Market Value Adjustment.

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 you are younger than 59 1/2 when you take money out, you may be charged a 10% federal tax penalty.

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

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

P. O. Box 9133

Wellesley Hills, Massachusetts 02481

Toll Free (888) 786-2435

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FEES AND EXPENSES

The following tables describe the fees and expenses that you will pay when buying, owning, and surrendering the Contract. The first table 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. State premium taxes may also be deducted.

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 Transfer Fee (currently $0):		$15*

*	Currently, we impose no fee upon transfers; however, we reserve the right to impose a fee of up to $15 per transfer. (See "Transfer Privilege.")

The next table describes 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

$ 50*

Variable Account Annual Expenses

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

	Mortality and Expense Risks Charge:	1.00%**

	Administrative Expenses Charge:	0.15%

	Total Variable Account Annual Expenses:	1.15%

*	The Annual Account Fee is $50. The fee is waived on Contracts greater than $100,000 in value on your Account Anniversary. (See "Account Fee.")

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 reimbursement)	0.60%	5.16%*

The expenses shown are for the year ended December 31, 2002, 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 expenses of certain Funds are reduced by contractual fee reduction and expense reimbursement arrangements that will remain in effect at least through May 1, 2004. Other Funds have voluntary fee reduction and/or expense reimbursement arrangements that may be terminated at any time. The minimum and maximum Total Annual Fund Operating Expenses for all Funds after all fee reductions and expense reimbursements are 0.60% and 1.49%, 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.

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. 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

$ 277	$1,570	$2,826	$5,815

(2)	If you annuitize your Contract or if you do *not* surrender your Contract at the end of the applicable time period:

1 year	3 years	5 years	10 years

$ 277	$1,570	$2,826	$5,815

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.

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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 B.

THE ANNUITY CONTRACT

Sun Life Assurance Company of Canada (U.S.) (the "Company", "we" or "us") and Sun Life of Canada (U.S.) Variable Account F (the "Variable Account") offer the Contract to groups and individuals for use in connection with their retirement plans. The Contract is available on a group basis and, in certain states, may be available on an individual basis. We issue an Individual Contract directly to the individual owner of the Contract. We issue a Group Contract to the Owner covering all individuals participating under the Group Contract. Each individual receives a Certificate that evidences his or her participation under the Group Contract.

In this Prospectus, unless we state otherwise, we refer to both the owners of Individual Contracts and participating individuals under Group Contracts as "Participants" and we address all those Participants as "you"; we use the term "Contracts" to include Individual Contracts, Group Contracts and Certificates issued under Group Contracts. For the purpose of determining benefits under both Individual Contracts and Group Contracts, we establish an Account for each Participant, which we will refer to as "your" Account or a "Participant 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. It provides a death benefit if the Annuitant dies during the Accumulation Phase. Finally, if you so elect, during the Income Phase we will make 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. The Fixed Account options may not be available in all states. When you choose Variable Account investment options or a Variable Annuity option, your benefits will be responsive to changes in the economic environment, including inflationary forces and changes in rates of return available from different types of investments. With these options, you assume all investment risk under the Contract. When you choose a Guarantee Period in our Fixed Account or a Fixed Annuity option, we assume the investment risk, except in the case of early withdrawals in the Accumulation phase, where you bear the risk of unfavorable interest rate changes. You 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 lower than that permitted by law.

The Contract is designed for use in connection with 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 others as "Non-Qualified Contracts."

COMMUNICATING TO US ABOUT YOUR CONTRACT

All materials sent to us, including Purchase Payments, must be sent to our Annuity Mailing Address as set forth on the first page of this Prospectus. For all telephone communications, you must call (888) 786-2435.

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 on a Business Day.

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 ASSURANCE COMPANY OF CANADA (U.S.)

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

We are an indirect wholly-owned subsidiary of Sun Life Assurance Company of Canada ("Sun Life (Canada)"). Sun Life (Canada) completed its demutualization on March 22, 2000. As a result of the demutualization, a new holding company, Sun Life Financial Services of Canada Inc. ("Sun Life Financial"), is now the ultimate parent of Sun Life (Canada) and the Company. Sun Life Financial, a corporation rganized in Canada, is a reporting company under the Securities Exchange Act of 1934 with common shares listed on the Toronto, New York, London, and Manila stock exchanges.

THE VARIABLE ACCOUNT

We established the Variable Account as a separate account on July 13, 1989, pursuant to a resolution of our Board of Directors. The Variable Account funds the Contract and various other variable annuity and variable life insurance product contracts which are offered by the Company and other affiliated and unaffiliated offerors. These other products may have features, benefits and charges that are different from those under the Contract.

Under Delaware 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 described in this Prospectus 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 the Contracts, 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 to the Variable Account will be used to purchase Fund shares as designated by you at their net asset value. Any and all distributions made by the Fund with respect to the shares held by the Variable Account will be reinvested to purchase additional 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 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

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The Contract offers Sub-Accounts that invest in a number of Fund 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.

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 nformation for each

Fund, may be obtained without charge from the company by calling 1-888-786-2435 or writing to Sun Life Assurance Company of Canada (U.S.), P.O. Box 9133, Wellesley Hills, Massachusetts 02481.

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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 Participants and Payees and those of other companies, or some other reason. In the event of conflict, we will take any steps necessary to protect Participants 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.

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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 Participants, 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."

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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 all the general assets of the Company other than those allocated to any separate account. Amounts you allocate to Guarantee Periods become part of the Fixed Account, and are available to fund the claims of all classes of our customers, including claims for benefits under the Contracts.

We will invest the assets of the Fixed Account in those assets we choose that are allowed by applicable 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 applicable 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 Period(s) 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 of a particular duration, allocations, transfers or renewals into that Guarantee Period will not be permitted. We publish Guaranteed Interest rates for each Guaranteed 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 with 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.

We may from time to time at our discretion offer interest rate specials for new Purchase Payments that are higher than the rates we are then offering for renewals or transfers.

Early withdrawals from your allocation to a Guarantee Period, including cash withdrawals, transfers, and commencement of an annuity, may be subject to a Market Value Adjustment, which could decrease or increase the value of your Account. See "Withdrawals and Market Value Adjustment."

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 the Annuitant dies before the Annuity Commencement Date.

Issuing Your Contract

When you purchase a Contract, a completed Application and the initial Purchase Payment are sent to us for acceptance. When we accept an Individual Contract, we issue the Contract to you. When we accept a Group Contract, we issue the Contract to the Owner; we issue a Certificate to you as a Participant when we accept your Application.

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 $25,000, and each additional Purchase Payment must be at least $1,000, unless we waive these limits. In addition, we will not accept a Purchase Payment if your Account Value is over $1 million, or if the Purchase Payment would cause your Account Value to exceed $1 million, unless we have approved the Payment in advance. 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 we offer but any allocation to a Guarantee Period must be at least $1,000. During the life of your Contract, you may allocate amounts among as many as 18 of the available investment options.

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. Your allocation factors will remain in effect as long as your selected Sub-Accounts and Guarantee Periods continue to be available for investment. You may, however, change the allocation factors for future Payments by sending us written notice of the change in a form acceptable to us. 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 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 below under the headings "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 the 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 Series 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 Series during the Valuation Period, by (2) the net asset value per share of the Series share at the end of the previous Valuation Period; we then deduct a factor representing the mortality and expense risk charge and administrative expense charge for each day in the Valuation Period. See "Contract Charges."

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

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.

Crediting Interest

We credit interest on amounts allocated to a Guarantee Period at the applicable Guaranteed Interest Rate for the duration of the Guarantee Period. The Guarantee Period begins the day we apply your allocation and ends when the number of 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. During the Guarantee Period, we credit interest daily at a rate that yields the Guaranteed Interest Rate on an annual effective basis.

Guarantee Amounts

Each separate allocation you make to a Guarantee Period, together with interest credited thereon, is called a Guarantee Amount. Each Guarantee Amount is treated separately for purposes of determining the Market Value Adjustment. We may restrict a Guarantee Period that will extend beyond your Maximum Annuity Commencement Date. Renewals into a Guarantee Period that extends beyond your maximum Annuity Commencement Date will result in a Market Value Adjustment upon annuitization or withdrawal. Each new allocation to a Guarantee Period must be at least $1,000.

Renewals

We will notify you in writing between 45 and 75 days before the Expiration Date for any Guarantee Amount. If you would like to change your Fixed Account option, we must receive from you prior to the Expiration Date:

o	written notice electing a different Guarantee Period from among those we then offer, or

o	written instructions to tranfer the Guarantee Amount to one or more Sub-Accounts, in accordance with the transfer privilege provisions of the Contract (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 dame duration as the last Guarantee Period. If we are no long offering a Guarantee Period of the same duration, we will automatically transfer your Fixed Account allocation into the Money Market Sub-Account.

A Guarantee Amount will not renew into a Guarantee Period that will extend beyond your Maximum Annuity Commencement Date. In that case, unless you notify us otherwise, we will automatically renew your Guarantee Amount into the Money Market Sub-Account.

Early Withdrawals

If you withdraw, transfer, or annuitize an allocation to a Guarantee Period before the Expiration Date, we will apply a Market Value Adjustment to the transaction. This could result in an increase or decrease of your Account Value, depending on interest rates at the time. You bear the risk that you will receive less than your principal if the Market Value Adjustment applies.

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:

o	You may not make more than 12 transfers in any Account Year;
o	The amount transferred from a Sub-Account must be at least $1,000, unless you are transferring your entire balance in that Sub-Account;
o	Your Account Value remaining in a Sub-Account must be at least $1,000;
o	The amount transferred from a Guarantee Period must be the entire Guarantee Amount;
o	At least 30 days must elapse between transfers to or from Guarantee Periods;
o	Transfers to or from Sub-Accounts are subject to terms and conditions that may be imposed by the Funds;
o	The total number of Sub-Accounts and Guarantee Periods within an Account may not exceed 18 over the lifetime of the Contract; and
o	We impose additional restrictions on market timers, which are further described below.

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

There is usually no charge imposed on transfers; however, we reserve the right to impose a transfer charge of $15 for each transfer. Transfers out of a Guarantee Period more than 30 days before the Expiration Date or any time after the Expiration Date will be subject to the Market Value Adjustment described below. Under current law, there is no tax liability for transfers.

Request for Transfers

You may request transfers in writing or by telephone. If the request is by telephone, it must be made 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. The telephone transfer privilege is available automatically, 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 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 p.m. Otherwise, your transfer request will be effective on the next Business Day.

Market Timers

individual Participants who have executed preauthorized transfer forms that are submitted at the same time by market timing firms or other third parties on behalf of more than one Participant. We will not impose these restrictions unless our actions are reasonably intended to prevent the use of such transfers in a manner that will disadvantage or potentially impair the Contract rights of other Participants.

In addition, the Funds have reserved the right to temporarily or permanently refuse exchange requests from the Variable Account if, in the judgment of the Fund's investment advisor, the Fund would be unable to invest effectively in accordance with its investment objective and policies, or would otherwise potentially be adversely affected. In particular, a pattern of exchanges that coincide with a market timing strategy may be disruptive to a Fund and therefore may be refused. Accordingly, the Variable Account may not be in a position to effectuate transfers and may refuse transfer requests without prior notice. We also reserve the right, for similar reasons, to refuse or delay exchange requests involving transfers to or from the Fixed Account.

Waivers; Reduced Charges; Credits; Bonus Guaranteed Interest Rates

We may reduce or waive the annual Account Fee, credit additional amounts, or grant bonus Guaranteed Interest Rates in certain situations. 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 Participant, 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.

Optional Programs

Dollar-Cost Averaging

Dollar-cost averaging allows you to invest gradually, over time, in up to 4 Sub-Accounts. You may select one of the following dollar-cost averaging programs at no extra charge by allocating a minimum of $1,000 to a Guarantee Period we make available in connection with the program.

(1)

Monthly Dollar-Cost Averaging Option: Amounts allocated will be divided among 12 separate sequentially maturing Guarantee Periods. The first Guarantee Period ends one full calendar month following the date the Purchase Payment is applied and each subsequent Guarantee Period shall end one full calendar month later, sequentially thereafter. The Guarantee Amount at the Expiration Date of each such Guarantee Period will equal 1/12 of the Purchase Payment applied under this option, with the Guarantee Amount at the last Expiration Date including all interest earned in the 12 Guarantee Periods.

(2)

Quarterly Dollar-Cost Averaging: Amounts allocated will be divided among 4 separate sequentially maturing Guarantee Periods. The first Guarantee Period ends 3 full calendar months following the date the Purchase Payment is applied and each subsequent Guarantee Period shall end 3 full calendar months later, sequentially thereafter. The Guarantee Amount at the Expiration Date of each such Guarantee Period will equal 1/4 of the Purchase Payment applied under this Option, with the Guarantee Amount at the last Expiration Date including all interest earned in the 4 Guarantee Periods.

Only Purchase Payments may be allocated to a dollar-cost averaging program. Previously applied amounts may not be transferred to a dollar cost averaging program.

If you discontinue or alter the program, a Market Value Adjustment will apply to amounts remaining in the Fixed Account and this amount will be transferred to the Money Market Sub-Account, unless you instruct us to allocate the amount to another Sub-Account.

The main objective of a dollar-cost averaging program is to minimize the impact of short-term price fluctuations on Account Value. Since you transfer the same dollar amount to the Sub-Accounts 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 assure a profit or protect against loss in a declining market.

Asset Allocation

One or more asset allocation programs may be available in connection with the Contracts, 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 available asset allocation models, each of which represents a combination of Sub-Accounts with a different level of risk. These 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 programs in the future.

If you elect an asset allocation program, we will automatically allocate your Purchase Payments among the Sub-Accounts represented in the model you choose. By electing an asset allocation program, you thereby authorize us to automatically reallocate your investment options, as determined by the terms of the Asset Allocation Program, to reflect the current composition of the model you have selected, without further instruction, until we receive notification that you wish to terminate the program, or choose a different model.

Systematic Withdrawal Program

If you have an Account Value of $10,000 or more, you may select our Systematic Withdrawal Program.

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Under the Systematic Withdrawal Program, you determine the amount and frequency of regular withdrawals you would like to receive from your Fixed and/or Variable Account Value and we will effect them automatically; a Market Value Adjustment may be applicable upon withdrawal. Withdrawals under the Systematic Withdrawal Program may be included in income and subject to a 10% federal tax penalty, as well as all charges and any Market Value Adjustment applicable upon withdrawal. You should consult a qualified tax professional before choosing this option.

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

Portfolio Rebalancing Program

Under the Portfolio Rebalancing Program, we transfer funds among the 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.

Portfolio Rebalancing does not permit transfers to or from any Guarantee Period.

WITHDRAWALS AND MARKET VALUE ADJUSTMENT

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, you must send us a written request at our Annuity Mailing 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.

Withdrawals from your Fixed Account Value may be subject to a Market Value Adjustment (see "Market Value Adjustment" below). Upon request we will notify you of the amount we would pay in the event of a full or partial withdrawal. Withdrawals also may have adverse federal 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; we deduct the Account Fee for the Account Year in which the withdrawal is made; and finally we add or subtract the amount of any Market Value Adjustment applicable to your Fixed Account Value.

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

Partial Withdrawals

If you request a partial withdrawal, we will pay you the actual amount specified in your request and then reduce the value of your Account by deducting the amount paid, adding or deducting any Market Value Adjustment applicable to amounts withdrawn from the Fixed Account.

You may specify the amount you want withdrawn from each Sub-Account and/or Guarantee Period 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.

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 Account Year in which you make the withdrawal, we will 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 applicable state insurance law. Currently, we may defer payment of amounts you withdraw from the Variable Account only for the following periods:

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

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."

Order of Withdrawal

When you make a withdrawal, we consider the oldest remaining Purchase Payment to be withdrawn first, then the next oldest, and so forth. Once all Purchase Payments are withdrawn, the balance withdrawn is considered to be accumulated value.

For purposes of a full or partial withdrawal, each withdrawal is allocated to Purchase Payments you have not previously withdrawn on a first-in, first-out basis until all Purchase Payments have been withdrawn. Once all Purchase Payments have been withdrawn, any additional withdrawals will come from the earnings on the Contract.

Market Value Adjustment

We will apply a Market Value Adjustment if you withdraw or transfer amounts from your Fixed Account Value more than 30 days before the end of the applicable Guarantee Period. For this purpose, using Fixed Account Value to provide an annuity is considered a withdrawal, and the Market Value Adjustment will apply.

We apply the Market Value Adjustment separately to each Guarantee Amount in the Fixed Account, that is, to each separate allocation you have made to a Guarantee Period together with interest credited on that allocation.

A Market Value Adjustment may decrease, increase or have no effect on your Account Value. This will depend on changes in interest rates since you made your allocation to the Guarantee Period and the length of time remaining in the Guarantee Period. In general, if the Guaranteed Interest Rate we currently declare for Guarantee Periods equal to the balance of your Guarantee Period (or your entire Guarantee Period for Guarantee Periods of less than one year) is higher than your Guaranteed Interest Rate, the Market Value Adjustment is likely to decrease your Account Value. If our current Guaranteed Interest Rate is lower, the Market Value Adjustment is likely to increase your Account Value.

We determine the amount of the Market Value Adjustment by multiplying the amount that is subject to the adjustment by the following formula:

[ (1 + I) / (1 + J) ] ^ (n/12) -1

where:

I	is the Guaranteed Interest Rate applicable to the Guarantee Amount from which you withdraw, transfer or annuitize;

J	is the Guaranteed Interest Rate we declare at the time of your withdrawal, transfer or annuitization for Guarantee Periods equal to the length of time remaining in the Guarantee Period applicable to your Guarantee Amount, rounded to the next higher number of complete years, for Guarantee Periods of one year or more. For any Guarantee Periods of less than one year, J is the Guaranteed Interest Rate we declare at the time of your withdrawal, transfer or annuitization for a Guarantee Period of the same length as your Guarantee Period. If, at that time, we do not offer the applicable Guarantee Period we will use an interest rate determined by straight-line interpolation of the Guaranteed Interest Rates for the Guarantee Periods we do offer; and


N	is the number of complete months remaining in your Guarantee Period.

We will apply the Market Value Adjustment to the amount being withdrawn after deduction of any Account Fee, if applicable.

For examples of how we calculate the Market Value Adjustment, see Appendix C.

CONTRACT CHARGES

Account Fee

During the Accumulation Phase of your Contract, we will deduct from your Account an annual Account Fee 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 Account Anniversary, which is the anniversary of the first day of the month after we issue your Contract. The Account Fee is $50. 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 Account Anniversary. We will not charge you the Account Fee if your Account Value is more than $100,000 on your Account 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 Account Anniversary and the day before the Annuity Commencement Date.

After the Annuity Commencement Date, we will deduct an annual Account Fee of $50 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

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

Mortality and Expense Risk Charge

During both the Accumulation Phase and the Income Phase, we deduct a mortality and expense risk charge from the assets of the Variable Account at an effective annual rate equal to 1.00%. The mortality risk we assume 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. This obligation assures each Annuitant that neither the longevity of fellow Annuitants nor an improvement in life expectancy generally will have an adverse effect on the amount of any annuity payment received under the Contract. The mortality risk also arises from our contractual obligation to pay a death benefit upon the death of the Annuitant prior to the Annuity Commencement Date. The expense risk we assume is the risk that the annual Account Fee and the administrative expense charge we assess under the Contracts may be insufficient to cover the actual total administrative expenses we incur. If the amount of the charge is insufficient to cover the mortality and expense risks, we will bear the loss. If the amount of the charge is more than sufficient to cover the risks, 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 Contracts.

Premium Taxes

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Some states and local jurisdictions impose a premium tax on us that is equal to a specified percentage of the Purchase Payments you make. In many states there is no premium tax. 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 your state imposes a premium tax and the amount of any tax.

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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's prospectus and related Statement of Additional Information.

Modification in the Case of Group Contracts

For Group Contracts, we may modify the annual Account Fee, the administrative expense charge and the mortality and expense risk charge upon notice to Owners. However, such modification will apply only with respect to Participant Accounts established after the effective date of the modification.

DEATH BENEFIT

If the Annuitant dies during the Accumulation Phase, we will pay a death benefit to your Beneficiary, using the payment method elected - a single cash payment or one of our Annuity Options. (If you have named more than one Annuitant, the death benefit will be payable after the death of the last surviving of the Annuitants.) If the Beneficiary is not living on the date of death, we will pay the death benefit in one sum to you or to your estate if you are the Annuitant. We do not pay a death benefit if the Annuitant dies during the Income Phase. However, the Beneficiary will receive any payments provided under an Annuity Option that is in effect.

If your spouse is your Beneficiary, upon your death (if you are the Annuitant) your spouse may elect to continue the Contract as the Participant, rather than receive the death benefit. In that case, the death benefit provisions of the Contract will not apply until the death of your spouse. See "Other Contract Provisions - Death of Participant."

Amount of Death Benefit

To calculate the amount of your death benefit, we use a "Death Benefit Date." The Death Benefit Date is the date we receive proof of the Annuitant's death in an acceptable form ("Due Proof of Death") if you have elected a death benefit payment method before the Annuitant's death and it remains effective. Otherwise, the Death Benefit Date is the later of the date we receive Due Proof of Death or the date we receive either the Beneficiary's election of payment method, or if you were the Annuitant and the Beneficiary is your spouse, the Beneficiary's election to continue the Contract. If we do not receive the Beneficiary's election within 60 days after we receive Due Proof of Death, the Death Benefit Date will be the last day of the 60 day period.

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

If the Annuitant was 85 or younger on your Contract Date (the date we accepted your first Purchase Payment), the death benefit will be the greatest of the following amounts:

(1)	Your Account Value for the Valuation Period during which the Death Benefit Date occurs;
(2)	The amount we would pay if you had surrendered your entire Account on the Death Benefit Date; and
(3)	Your total Purchase Payments minus the sum of partial withdrawals from your Account.

If the Annuitant was 86 or older on your Contract Date, the death benefit is equal to amount (2) above; because this amount will reflect any applicable withdrawal charges and Market Value Adjustment, it may be less than your Account Value.

If the death benefit we pay is amount (2) or (3), your Account Value will be increased by the excess, if any, of that amount over amount (1). 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. Also, any portion of this new Account Value attributed to the Fixed Account will be transferred to the Sun Capital Money Market Sub-Account (without the application of a Market Value Adjustment). The Beneficiary may then transfer to the Fixed Account and begin a new Guarantee Period.

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 "Income Phase - Annuity Provisions."

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During the Accumulation Phase, you may elect the method of payment for the death benefit. These elections are made by sending us at our Service Address an election form, which we will provide.If no such election is in effect on the date of the Annuitant's death, the Beneficiary may elect either a single cash payment or an annuity. If you were the Annuitant and 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, we will pay the death benefit in a single cash payment.

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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 (See "The Income Phase - Annuity Provisions.".

Neither you nor the Beneficiary may exercise rights that would adversely affect the treatment of the Contract as an annuity contract under the Internal Revenue Code. See "Other Contract Provisions - Death of Participant."

Selection and Change of Beneficiary

You select your Beneficiary in your Application. You may change your Beneficiary at any time while the Annuitant is living 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.

Due Proof of Death

We accept any of the following as proof of any person's death:

o	An original certified copy of an official death certificate;
o	An original certified copy of a decree of a court of competent jurisdiction as to the finding of death; or
o	Any other proof we find satisfactory.

THE INCOME PHASE - ANNUITY PROVISIONS

During the Income Phase, we make regular monthly 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 below, 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 below under the heading "Annuity Options," and you cannot change the Annuity Option(s) selected. You may request a full withdrawal before the Annuity Commencement Date, which will be subject to all charges applicable on withdrawals. See "Withdrawals, Withdrawal Charge and Market Value Adjustment."

Selection of the Annuitant or Co-Annuitant

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(s) refer to the Annuitant as the "Payee."

Under a Non-Qualified Contract, if you name someone other than yourself as the Annuitant, you may also select a Co-Annuitant, who will become the new Annuitant if the original Annuitant dies before the Income Phase. If you have named a Co-Annuitant, the death benefit payable under the Contract will only be paid following the death of the last surviving of the Annuitants. If you have named both an Annuitant and a Co-Annuitant, you may designate one of them to become the sole Annuitant as of the Annuity Commencement Date, if both are living at that time. If you have not made that designation on the 30th day before the Annuity Commencement Date, and both the Annuitant and the Co-Annuitant are still living, the Co-Annuitant will become the Annuitant on the Annuity Commencement Date.

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

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:

o	The earliest possible Annuity Commencement Date is the first day of the second month following your Contract Date.
o	The latest possible Annuity Commencement Date is the first day of the month following the Annuitant's 95th birthday or, if there is a Co-Annuitant, the 95th birthday of the younger of the Annuitant and Co-Annuitant.
o	The Annuity Commencement Date must always be the first day of a month.

You may change the Annuity Commencement Date from time to time by sending us written notice, with the following additional limitations:

o	We must receive your notice at least 30 days before the current Annuity Commencement Date.
o	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 70 1/2 (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 70 1/2).

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 except that Annuity Option E is available only for a Fixed Annuity. 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 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. If payments under this option are paid on a Variable Annuity basis, the Annuitant may elect to receive some or all of the discounted value of the remaining payments, less any applicable withdrawal charge; 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 under Annuity Option B. The election of this Annuity Option may result in the imposition of a penalty tax.

Annuity Option E - Fixed Payments

We hold the portion of your Adjusted Account Value selected for this option at interest, and make fixed payments in such amounts and at such times as you and we may agree. We continue making payments until the amount we hold is exhausted. The final payment will be for the remaining balance and may be less than the previous installments. We will credit interest yearly on the amount remaining unpaid at a rate we determine from time to time, but never less than 3% per year (or a higher rate if specified in your Contract), compounded annually. We may change the rate at any time, but will not reduce it more frequently than once each calendar year. 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.

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 immediately prior to the Annuity Commencement Date and making the following adjustments:

o	We deduct a proportional amount of the annual Account Fee, based on the fraction of the current Account Year that has elapsed.
o	If applicable, we apply the Market Value Adjustment to your Account Value in the Fixed Account, which may result in a deduction, an addition, or no change to your Account Value.
o	We deduct any applicable premium tax or similar tax if not previously deducted.

Variable Annuity Payments

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

interest rate of 3% per year, compounded annually, 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 from one Sub-Account to another, up to 12 times each Account Year. To make an exchange, the Annuitant sends us, at our Annuity Mailing 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 from one Sub-Account to another, the Annuitant should carefully review the Series Fund prospectus for the investment objectives and risk disclosure of the Series 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 $50 in equal amounts from each Variable Annuity payment. We do not deduct the annual Account Fee from Fixed Annuity payments.

Annuity Payment Rates

The Contract contains 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 (at least 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 (at least 3% per year, compounded annually). We may change these rates under Group Contracts for Accounts established after the effective date of such change (See "Other Contract Provisions - Modification").

The Annuity Payment Rates may vary according to the Annuity Option(s) elected and the adjusted age of the Annuitant. The Contract also describes 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 1983 Individual Annuitant Mortality 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 your 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

privileges; otherwise, each Annuitant will be entitled to exercise such rights and privileges. In any case, such 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 during the lifetime of the Annuitant 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 Annuitant. 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 Participants under a Group Contract; 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 during the lifetime of the Annuitant and prior to the Annuity Commencement Date, and each Participant, in like manner, may change the ownership interest in a Contract.

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 or Participant, as appropriate, 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.

Death of Participant

If your Contract is a Non-Qualified Contract and you die prior to the Annuitant and before the Annuity Commencement Date, special distribution rules apply. In that case, your Account Value, plus or minus any Market Value Adjustment, must be distributed to your "designated beneficiary" within the meaning of Section 72(s) of the Internal Revenue Code, 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, 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, the Annuitant automatically becomes the designated beneficiary.

If the designated beneficiary is your surviving spouse, your spouse may elect to continue the Contract in his or her own name as Participant. If you were the Annuitant as well as the Participant, your surviving spouse (if the designated beneficiary) may elect to be named as both Participant and Annuitant and continue the Contract; in that case, we will not pay a death benefit and the Account Value will not be increased to reflect the death benefit calculation. In all other cases where you are the Annuitant, the death benefit provisions of the Contract control, subject to the condition that any Annuity Option elected complies with the special distribution requirements described above.

If your spouse elects to continue the Contract (whether or not you are the Annuitant, your spouse must give us written notification within 60 days after we receive Due Proof of Death, and the special distribution rules will then apply on the death of your spouse.

If you are the Annuitant and you die during the Income Phase, the remaining value of the Annuity Option in place must be distributed at least as rapidly as the method of distribution under the option.

If the Participant is not a natural person, these distribution rules apply on a change in, or the death of, any Annuitant or Co-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.

If your Contract is a Qualified Contract, any distributions upon your death will be subject to the laws and regulations governing the particular retirement or deferred compensation plan in connection with which the Qualified Contract was issued.

Voting of Fund Shares

We will vote Fund shares held by the Sub-Accounts at meetings of shareholders of the Fund or in connection with similar solicitations, but will follow 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, except in the case of a Group Contract where the Owner has reserved this right. 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, Participants and Payees, as applicable.

Owners of Qualified Contracts issued on a group basis may be subject to other voting provisions of the particular plan and of the Investment Company Act of 1940. Employees who contribute to plans that are funded by the Contracts may be entitled to instruct the Owners as to how to instruct us to vote the Fund shares attributable to their contributions. Such plans may also provide the additional extent, if any, to which the Owners shall follow voting instructions of persons with rights under the plans. If no voting instructions are received from any such person with respect to a particular Participant Account, the Owner may instruct the Company as to how to vote the number of Fund shares for which instructions may be given.

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 by the Investment Company Act of 1940, or any duty to inquire as to the instructions received or the authority of Owners, Participants or others, as applicable, 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 under Group Contracts 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 Fund 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 Participant 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.

Periodic Reports

During the Accumulation Period we will send you, or such other person having voting rights, at least once during each Account Year, a statement showing the number, type and value of Accumulation Units credited to your Account and the Fixed Accumulation Value of your Account, which statement shall be accurate as of a date not more than 2 months previous to the date of mailing. These periodic statements contain important information concerning your transactions with respect to a Contract. 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.

In addition, every person having voting rights will receive such reports or prospectuses concerning the Variable Account and the Fund as may be required by the Investment Company Act of 1940 and the Securities Act of 1933. We will also send such statements reflecting transactions in your Account as may be required by applicable laws, rules and regulations.

Upon request, we will provide you with information regarding fixed and variable accumulation values.

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 Contracts. We may also substitute shares of another registered open-end investment company or unit investment trust for the shares held in any Sub-Account, provided that the substitution has been approved, if required, by the SEC. 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 we deem 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 Contracts.

Modification

Upon notice to the Participant, in the case of an Individual Contract, and the Owner and Participant(s), in the case of a Group Contract (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, Participants, or Payees, as applicable. In the event of any such modification, we may make appropriate endorsement in the Contract to reflect such modification.

In addition, upon notice to the Owner, we may modify a Group Contract to change the withdrawal charges, Account Fees, mortality and expense risk charges, administrative expense charges, the tables used in determining the amount of the first monthly variable annuity and fixed annuity payments and the formula used to calculate the Market Value Adjustment, provided that such modification applies only to Participant Accounts established after the effective date of such modification. In order to exercise our modification rights in these particular instances, we must notify the Owner of such modification in writing. The notice shall specify the effective date of such modification which must be at least 60 days following the date we mail notice of modification. All of the charges and the annuity tables which are provided in the Group Contract prior to any such modification will remain in effect permanently, unless improved by the Company, with respect to Participant Accounts established prior to the effective date of such modification.

Limitation or Discontinuance of New Participants

We may limit or discontinue the acceptance of new Applications and the issuance of new Certificates under a Group Contract by giving 30 days prior written notice to the Owner. This will not affect rights or benefits with respect to any Participant Accounts established under such Group Contract prior to the effective date of such limitation or discontinuance.

Reservation of Rights

We reserve the right, to the extent permitted by law, to: (1) combine any 2 or more variable accounts; (2) add or delete Funds, or other investment companies and corresponding Sub-Accounts; (3) add or remove Guarantee Periods available at any time for election by a Participant; and (4) restrict or eliminate any of the voting rights of Participants (or Owners) or other persons who have voting rights as to the Variable Account. Where required by law, we will obtain approval of changes from Participants 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 Mailing Address as shown on the cover of this Prospectus within 10 days after it was delivered to you. When we receive the returned Contract, it will be cancelled and we will refund to you your Account Value. However, if applicable state law requires, we will return the full amount of any Purchase Payment(s) we received. State law may also require us to give you a longer "free look" period or allow you to return the Contract to your sales representative.

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 Contract 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 a Participant establishing an IRA a "ten day free-look," notwithstanding the provisions of the Internal Revenue Code.

TAX CONSIDERATIONS

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.

U.S. Federal Income Tax Considerations

The following discussion applies only to those Contracts issued in the United States. For a discussion of tax considerations effecting Contracts issued in Puerto Rice, see "Puerto Rico Tax Considerations," below.

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.

Pre-Distribution Taxation of Contracts

Generally, an increase in the value of a Contract will not give rise to a current income tax liability 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.

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 59 1/2, to distributions pursuant to the death or disability of the owner , or to distributions that are a part of a series of substantially equal periodic payments made annually under a lifetime annuity, 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 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 includible in income. 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.

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 59 1/2, except in certain circumstances.

If you receive an eligible rollover distribution from a Qualified Contract (other than from a Contract issued for use with an individual retirement account) and roll over some or all of that distribution to another eligible plan, the portion of such distribution that is rolled over will not be includible in your income. However, any eligible rollover distribution 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.

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An "eligible rollover distribution" is any distribution to you of all or any portion of the balance to the credit of your account, other than:

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o	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;

o	Any required minimum distribution, or

o	Any hardship distribution.

Only you or your spouse may elect to roll over a distribution to an eligible retirement plan.

Withholding

In the case of an eligible rollover distribution (as defined above) from a Qualified Contract (other than from a Contract issued for use with an individual retirement account), we (or the plan administrator) must withhold and remit to the U.S. Government 20% of the distribution, unless the Participant 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 spouse may elect a direct rollover. In the case of a distribution from (i) a Non-Qualified Contract, (ii) a Qualified Contract issued for use with an individual retirement account, 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 Participant or Payee provides us his or her taxpayer identification number and instructs us (in the manner prescribed) not to withhold. The Participant 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 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 Contract 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 preamble to the 1986 investment diversification regulations stated that the Internal Revenue Service may promulgate guidelines under which an owner's excessive control over investments underlying the contract will preclude the contract from qualifying as an annuity for federal tax purposes. We cannot predict whether such guidelines, if and when they may be promulgated, will be retroactive. We reserve the right to modify the Contract and/or the Variable Account to the extent necessary to comply with any such guidelines, but cannot assure that such modifications would satisfy any retroactive guidelines.

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

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 Tax Equity and Fiscal Responsibility Act of 1982 eliminated most differences between qualified retirement plans of corporations and those of self-employed individuals. Self-employed persons may therefore use Qualified Contracts as a funding vehicle for their retirement plans, as a general rule.

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 Participant attains age 59 1/2, separates from service 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 Participant 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 Participant may be entitled to transfer all or a portion of the Account Value to one or more alternative funding options. Participants should consult the documents governing their plan and the person who administers the plan for information as to such investment alternatives.

Individual Retirement Accounts

Sections 219 and 408 of the Code permit eligible individuals to contribute to an individual retirement program, including Simplified Employee Pension Plans, Employer/Association of Employees Established Individual Retirement Account Trusts, 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. If we sell Contracts for use with IRAs, the Internal Revenue Service or other agency may impose supplementary information requirements. We will provide purchasers of the Contracts for such purposes with any necessary information. You will have the right to revoke the Contract under certain circumstances, as described in the section of this Prospectus entitled "Right to Return."

Roth IRAs

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 an individual converts a traditional IRA into a Roth IRA the full amount of the IRA is included in taxable income. The Internal Revenue Service and other agencies may impose special information requirements with respect to Roth IRAs. If and when we make Contracts available for use with Roth IRAs, we will provide any necessary information.

Puerto Rico Tax Considerations

The Contract offered by this Prospectus is considered an annuity contract under Section 1022 of the Puerto Rico Internal Revenue Code of 1994, as amended (the "1994 Code"). Under the current provisions of the 1994 Code, no income tax is payable on increases in value of accumulation shares of annuity units credited to a variable annuity contract until payments are made to the annuitant or other payee under such contract.

When payments are made from your Contract in the form of an annuity, the annuitant or other payee will be required to include as gross income the lesser of the amount received during the taxable year or the portion of the amount received equal to 3% of the aggregate premiums or other consideration paid for the annuity. The amount, if any, in excess of the included amount is excluded from gross income as a return of premium. After an amount equal to the aggregate premiums or other consideration paid for the annuity has been excluded from gross income, all of the subsequent annuity payments are considered to be taxable income.

When a payment under a Contract is made in a lump sum, the amount of the payment would be included in the gross income of the Annuitant or other Payee to the extent it exceeds the Annuitant's aggregate premiums or other consideration paid.

The provisions of the 1994 Code with respect to qualified retirement plans described in this Prospectus vary significantly from those under the Internal Revenue Code. Although we currently offer the Contract in Puerto Rico in connection with qualified retirement plans, the text of this Prospectus under the heading "Federal Tax Status" dealing with such qualified retirement plans is inapplicable to Puerto Rico and should be disregarded.

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For information regarding the income tax consequences of owning a Contract, you should consult a qualified tax professional.

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ADMINISTRATION OF THE CONTRACTS

We perform certain administrative functions relating to the Contracts, Participant 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, Participant Account number and type, the status of each Participant Account and other pertinent information necessary to the administration and operation of the Contracts; processing Applications, Purchase Payments, transfers and full and partial withdrawals; issuing Contracts and Certificates; 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 CONTRACTS

We offer the Contracts on a continuous basis. The Contracts are sold by licensed insurance agents in those states where the Contracts 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, Clarendon Insurance Agency, Inc. ("Clarendon"), One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481. Clarendon, 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.

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Certificates or other contracts offered by the Company. Promotional incentives may change at any time. Commissions will not be paid with respect to 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 Contracts, 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 this Prospectus under the heading "Waivers; Reduced Charges; Credits; Bonus Guaranteed Interest Rates." During 2000, 2001 and 2002 approximately $17,331; $20,761 and $0 respectively was paid to and retained by Clarendon in connection with distribution of the Contracts.

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PERFORMANCE INFORMATION

From time to time the Variable Account may publish reports to shareholders, sales literature and advertisements containing performance information relating to the Sub-Accounts. This information may include standardized and non-standardized "Average Annual Total Return," "Cumulative Growth Rate" and "Compound Growth Rate." We may also advertise "yield" and "effective yield" for some Sub-Accounts.

Average Annual Total Return measures the net income of the Sub-Account and any realized or unrealized gains or losses of the Funds in which it invests, over the period stated. Average Annual Total Return figures are annualized and represent the average annual percentage change in the value of an investment in a Sub-Account over that period. Standardized Average Annual Total Return information covers the period after we began offering the Futurity products or, if shorter, the life of the Fund. Nonstandardized Average Annual Total Return covers the life of each Fund, which may predate the Futurity products. Cumulative Growth Rate represents the cumulative change in the value of an investment in the Fund for the period stated, and is arrived at by calculating the change in the Accumulation Unit Value of a Fund between the first and last day of the period being measured. The difference is expressed as a percentage of the Accumulation Unit Value at the beginning of the base period. "Compound Growth Rate" is an annualized measure, calculated by applying a formula that determines the level of return which, if earned over the entire period, would produce the cumulative return.

Average Annual Total Return figures assume an initial Purchase Payment of $1,000 and reflect all applicable withdrawal and Contract charges. The Cumulative Growth Rate and Compound Growth Rate figures that we advertise do not reflect withdrawal charges or the annual Account Fee, although such figures do reflect all recurring charges. Results calculated without withdrawal and/or certain Contract charges will be higher. We may also use other types of rates of return that do not reflect withdrawal and Contract charges.

The performance figures used by the Variable Account are based on the actual historical performance of the Funds for the specified periods, and the figures are not intended to indicate future erformance. For periods before the date the Contracts became available, we calculate the performance information for the Sub-Accounts on a hypothetical basis. To do this, we reflect deductions of the current Contract fees and charges from the historical performance of the corresponding Fund.

Yield is a measure of the net dividend and interest income earned over a specific one month or 30-day period (7-day period for the Sun Capital Money Market Fund), expressed as a percentage of the value of the Sub-Accounts Accumulation Units. Yield is an annualized figure, which means that we assume that the Sub-Accounts generates the same level of net income over a one-year period and compound that income on a semi-annual basis. We calculate the effective yield for the Sun Capital Money Market Fund similarly, but include the increase due to assumed compounding. The Sun Capital Money Market Fund's effective yield will be slightly higher than its yield as a result of its compounding effect.

The Variable Account may also from time to time compare its investment performance to various unmanaged indices or other variable annuities and may refer to certain rating and other organizations in its marketing materials. More information on performance and our computations is set forth in the Statement of Additional Information.

The Company may also advertise the ratings and other information assigned to it by independent industry ratings organizations. Some of these organizations are A.M. Best, Moody's Investor's Service, Standard and Poor's Insurance Rating Services, and Fitch. Each year A.M. Best reviews the financial status of thousands of insurers, culminating in the assignment of Best's rating. These ratings reflect A.M. Best's current opinion of the relevant financial strength and operating performance of an insurance company in comparison to the norms of the life/health industry. Best's ratings range from A + + to F. Standard and Poor's and Fitch's ratings measure the ability of an insurance company to meet its obligations under insurance policies it issues. These two ratings do not measure the insurance company's ability to meet non-policy obligations. Ratings in general do not relate to the performance of the Sub-Accounts.

We may also advertise endorsements from organizations, individuals or other parties that recommend the Company or the Contracts. We may occasionally include in advertisements (1) comparisons of currently taxable and tax deferred investment programs, based on selected tax brackets; or (2) discussions of alternative investment vehicles and general economic conditions.

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 for the year ended December 31, 2002 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 document (unless such exhibits are specifically incorporated by reference in this Prospectus). Requests for such document 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 Delaware governing life insurance companies and to regulation by the Commissioner of Insurance of Delaware. An annual statement is filed with the Commissioner 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 Commissioner or his agents at any time and a full examination of its operations is conducted at periodic intervals.

The Company is also subject to the insurance laws and regulations of the other states and jurisdictions in which it is licensed to operate. The laws of the various jurisdictions establish supervisory agencies with 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. Each insurance company is required to file detailed annual reports with supervisory agencies in each of the fire jurisdictions in which it does business and its operations and accounts are subject to examination by such agencies at regular intervals.

In addition, many states regulate affiliated groups of insurers, such as the Company, Sun Life (Canada) and its affiliates, 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.

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FINANCIAL STATEMENTS

The financial statements of the Company which are included in the Statement of Additional Information 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, 2002 are also included in the Statement of Additional Information.

____________________

Table of Contents of Statement of Additional Information

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Calculation of Performance Data

Non-Standardized Investment Performance

Advertising and Sales Literature

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

Accountants

Financial Statements

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This Prospectus sets forth information about the Contracts and the Variable Account that a prospective purchaser should know before investing. Additional information about the Contracts and the Variable Account has been filed with the Securities and Exchange Commission in a Statement of Additional Information dated May 1, 2003 which is incorporated herein by reference. The Statement of Additional Information is available upon request and without charge from Sun Life Assurance Company of Canada (U.S.). To receive a copy, return this request form to the address shown below or telephone (888) 786-2435.

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

P.O. Box 9133

Wellesley Hills, Massachusetts 02481

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Please send me a Statement of Additional Information for

Futurity Focus Variable and Fixed Annuity

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

Name

Address

City State Zip

Telephone

APPENDIX A

GLOSSARY

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

ACCOUNT or PARTICIPANT ACCOUNT: An account established for each Participant 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.

ACCOUNT YEAR and ACCOUNT ANNIVERSARY: Your first Account Year is the period of (a) 12 full calendar months plus (b) the part of the calendar month in which we issue your Contract (if not on the first day of the month), beginning with the Contract Date. Your Account Anniversary is the first day immediately after the end of an Account Year. Each Account Year after the first is the 12 calendar month period that begins on your Account Anniversary. If, for example, the Contract Date is in March, the first Account Year will be determined from the Contract Date but will end on the last day of March in the following year; your Account Anniversary is April 1 and all Account Years after the first will be measured from April 1.

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

*ANNUITANT: The person or persons named in the Application and on whose life the first annuity payment is to be made. In a Non-Qualified Contract, if you name someone other than yourself as Annuitant, you may also name a Co-Annuitant. If you do, all provisions of the Contract based on the death of the Annuitant will be based on the date of death of the last surviving of the persons named. By example, if the Annuitant dies prior to the Annuity Commencement Date, the Co-Annuitant will become the new Annuitant. The death benefit will become due only on the death before the Annuity Commencement Date of the last surviving Annuitant and Co-Annuitant named. These persons are referred to collectively in the Contract as "Annuitants." If you have named both an Annuitant and Co-Annuitant, you may designate one of them to become the sole Annuitant as of the Annuity Commencement Date, if both are living at that time. In the absence of such designation, the Co-Annuitant will become the sole Annuitant during the Income Phase.

*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: Prior to the Annuity Commencement Date, the person or entity having the right to receive the death benefit and, for Non-Qualified Contracts, who, in the event of the Participant's death, is the "designated beneficiary" for purposes of Section 72(s) of the Internal Revenue Code. After the Annuity Commencement Date, the person or entity having the right to receive any payments due under the Annuity Option elected, if applicable, upon the death of the Payee.

BUSINESS DAY: Any day the New York Stock Exchange is open for trading.

CERTIFICATE: The document for each Participant which evidences the coverage of the Participant under a Group Contract.

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

CONTRACT DATE: The date on which we issue your Contract. This is called the "Issue Date" in the Contract.

DEATH BENEFIT DATE: If you have elected a death benefit payment option before the Annuitant'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 Death Benefit Date will be the last day of the 60 day period and we will pay the death benefit in cash.

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 proof satisfactory to the Company.

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.

GROUP CONTRACT: A Contract issued by the Company on a group basis.

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 during which we make payments under the Contract.

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

NET INVESTMENT FACTOR: An index applied to measure the investment performance of a Sub-Account from one Valuation Period to the next. The Net Investment Factor may be greater or less than or equal to one.

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 Participant'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.

OWNER: The person, persons or entity entitled to the ownership rights stated in a Group Contract and in whose name or names the Group 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 Group Contract.

*PARTICIPANT: In the case of an Individual Contract, the owner of the Contract. In the case of a Group Contract, the person named in the Contract who is entitled to exercise all rights and privileges of ownership under the Contract, except as reserved by the Owner.

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 Annuitant.

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 series of the Series Fund.

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.

VARIABLE ACCOUNT: Variable Account F 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.

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

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APPENDIX B

CONDENSED FINANCIAL INFORMATION - ACCUMULATION UNIT VALUES

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The following information should be read in conjunction with the Variable Account's Financial Statements appearing in the Statement of Additional Information.

	Accumulation	Accumulation	Number of
	Unit Value	Unit Value	Accumulation
	Beginning	End	Units End
Sub-Account	of Period	of Period	of Period	Year

AIM V.I. Capital Appreciation Fund	$ 9.7401	$ 7.2839	35,863	2002
	12.8428	9.7401	51,961	2001
	14.5809	12.8428	65,636	2000
	10.0000	14.5809	13,617	1999

AIM V.I. Growth Fund	6.5105	4.4429	98,618	2002
	9.9612	6.5105	101,644	2001
	12.6718	9.9612	109,938	2000
	10.0000	12.6718	35,873	1999

AIM V.I. Core Equity Fund	7.9601	6.6432	75,790	2002
	10.4350	7.9601	117,787	2001
	12.3530	10.4350	127,601	2000
	10.0000	12.3530	54,107	1999

AIM V.I. International Growth Fund	8.5036	7.0891	60,180	2002
	11.2494	8.5036	84,003	2001
	15.4607	11.2494	107,328	2000
	10.0000	15.4607	25,337	1999

Alger American Growth Portfolio	8.7955	5.8266	51,048	2002
	10.0894	8.7955	112,241	2001
	11.9744	10.0894	120,147	2000
	10.0000	11.9744	38,842	1999

Alger American Income & Growth	11.0010	7.4934	61,349	2002
Portfolio	12.9887	11.0010	84,103	2001
	13.3063	12.9887	100,057	2000
	10.0000	13.3063	32,436	1999

Alger American Small Capitalization	7.2188	5.2650	26,945	2002
Portfolio	10.3598	7.2188	41,509	2001
	14.3935	10.3598	49,303	2000
	10.0000	14.3935	9,175	1999

Credit Suisse Institutional Emerging	11.1384	9.7382	1,855	2002
Markets Portfolio	12.4705	11.1384	2,058	2001
	18.4283	12.4705	2,172	2000
	10.0000	18.4283	1,472	1999

Credit Suisse Institutional Global	9.0915	5.9180	384	2002
Post-Venture Capital Portfolio	12.8872	9.0915	518	2001
	16.0808	12.8872	1,030	2000
	10.0000	16.0808	100	1999


Credit Suisse Institutional	8.4673	6.7047	2,451	2002
International Focus Portfolio	11.0200	8.4673	3,679	2001
	15.0418	11.0200	4,808	2000
	10.0000	15.0418	861	1999

Credit Suisse Institutional Small	11.8952	7.7977	952	2002
Cap Growth Portfolio	14.3265	11.8952	5,920	2001
	17.6963	14.3265	3,664	2000
	10.0000	17.6963	194	1999

Goldman Sachs VIT CORE Large	7.5709	-	1	2002
Cap Growth Fund	9.6654	7.5709	17,248	2001
	12.6110	9.6654	19,354	2000
	10.0000	12.6110	4,085	1999

Goldman Sachs VIT CORESmall	13.1097	11.0207	7,145	2002
Cap Equity Fund	12.6867	13.1097	6,187	2001
	12.6115	12.6867	10,209	2000
	10.0000	12.6115	1,112	1999

Goldman Sachs VIT COREU.S.	8.9259	6.8922	30,599	2002
Equity Fund	10.2536	8.9259	31,091	2001
	11.4782	10.2536	36,643	2000
	10.0000	11.4782	20,598	1999

Goldman Sachs VIT Growth and	8.6248	7.5599	32,964	2002
Income Fund	9.6232	8.6248	32,281	2001
	10.2122	9.6232	33,518	2000
	10.0000	10.2122	29,257	1999

Goldman Sachs VIT International	8.4696	6.8379	36,826	2002
Equity Fund	11.0210	8.4696	65,299	2001
	12.8408	11.0210	47,320	2000
	10.0000	12.8408	8,621	1999

J.P. Morgan International	8.6152	6.9578	24,101	2002
Opportunities Portfolio	10.7779	8.6152	46,409	2001
	12.9528	10.7779	44,907	2000
	10.0000	12.9528	12,234	1999

J.P. Morgan Small Company	12.1442	9.4064	6,731	2002
Portfolio	13.3571	12.1442	12,526	2001
	15.2351	13.3571	9,987	2000
	10.0000	15.2351	2,709	1999

J.P. Morgan U.S. Large Cap Core	8.7021	6.4846	19,034	2002
Equity Portfolio	9.9928	8.7021	20,535	2001
	11.3541	9.9928	23,980	2000
	10.0000	11.3541	18,690	1999

Lord Abbett Series Fund Growth and	11.7564	9.5266	94,937	2002
Income Portfolio	12.7488	11.7564	135,962	2001
	11.1378	12.7488	99,109	2000
	10.0000	11.1378	40,278	1999


MFS/Sun Life Capital Appreciation	8.4664	5.6592	28,904	2002
Series	11.4675	8.4664	54,457	2001
	13.0937	11.4675	57,721	2000
	10.0000	13.0937	23,051	1999

MFS/Sun Life Emerging Growth	8.6993	5.6611	79,559	2002
Series		8.6993	114,175	2001
	16.8156	13.4516	100,707	2000
	10.0000	16.8156	41,308	1999

MFS/Sun Life Government Securities	11.5464	12.5341	72,975	2002
Series	13.4516	11.5464	54,736	2001
	9.8048	10.8700	49,055	2000
	10.0000	9.8048	42,930	1999

MFS/Sun Life High Yield Series	9.4328	9.5774	50,157	2002
	9.3774	9.4328	72,562	2001
	10.1744	9.3774	76,769	2000
	10.0000	10.1744	21,929	1999

MFS/Sun Life Massachusetts	8.8268	6.2780	75,741	2002
Investors Growth Stock Series	11.8887	8.8268	121,172	2001
	12.8093	11.8887	114,348	2000
	10.0000	12.8093	29,925	1999

MFS/Sun Life Massachusetts	8.5318	6.6443	91,214	2002
Investors Trust Series	10.2417	8.5318	118,204	2001
	10.3484	10.2417	119,777	2000
	10.0000	10.3484	74,478	1999

MFS/Sun Life New Discovery Series	14.7332	9.6919	38,928	2002
	15.7067	14.7332	31,253	2001
	15.8255	15.7067	35,143	2000
	10.0000	15.8255	7,128	1999

MFS/Sun Life Total Return Series	11.2076	10.4469	66,455	2002
	11.2795	11.2076	44,996	2001
	9.7678	11.2795	48,739	2000
	10.0000	9.7678	8,841	1999

MFS/Sun Life Utilities Series	10.2403	7.7090	37,893	2002
	13.6861	10.2403	72,646	2001
	12.9391	13.6861	79,990	2000
	10.0000	12.9391	20,685	1999

OCC Equity Portfolio	10.1673	7.8992	22,162	2002
	11.0611	10.1673	29,536	2001
	10.1788	11.0611	54,602	2000
	10.0000	10.1788	7,388	1999

OCC Managed Portfolio	10.5251	8.6487	3,060	2002
	11.1965	10.5251	10,624	2001
	10.3195	11.1965	7,734	2000
	10.0000	10.3195	5,669	1999


OCC Mid Cap Portfolio	16.4599	15.1117	13,260	2002
	15.6254	16.4599	22,707	2001
	12.5548	15.6254	20,586	2000
	10.0000	12.5548	6,976	1999

OCC Small Cap Portfolio	16.3483	12.6653	4,624	2002
	15.2655	16.3483	14,408	2001
	10.7094	15.2655	14,301	2000
	10.0000	10.7094	3,882	1999

PIMCO Total Return Portfolio	10.0000	10.2226	23,270	2002

PIMCO Real Return Portfolio	10.0000	10.0894	12,239	2002

PIMCO High Yield Portfolio	10.0000	10.8416	9,162	2002

PIMCO Emerging Markets Bond	10.0000	11.6365	9,571	2002
Portfolio

SC^SM Alger Growth Fund	10.0000	7.5149	2,456	2002

SC^SM Alger Income & Growth Fund	10.0000	7.7996	591	2002

SC^SM Alger Small Cap Fund	10.0000	7.6823	1,547	2002

SC^SM Blue Chip Mid Cap Fund	14.7048	12.3712	33,821	2002
	15.3767	14.7048	37,885	2001
	12.4467	15.3767	41,853	2000
	10.0000	12.4467	2,350	1999

SC^SM Davis Financial Fund	10.4154	8.3958	93	2002
	11.2793	10.4154	1,214	2001
	10.0000	11.2793	1,214	2000
	-	-	-	1999

SC^SM Davis Venture Value Fund	8.6647	7.1734	13,541	2002
	9.8051	8.6647	18,232	2001
	10.0000	9.8051	919	2000
	-	-	-	1999

Sun Capital Investment Grade Bond	11.2981	11.7504	87,003	2002
Fund	10.6573	11.2981	148,113	2001
	9.8082	10.6573	119,290	2000
	10.0000	9.8082	34,584	1999

SC^SM Investors Foundation Fund	9.3113	6.9190	7,529	2002
	10.2301	9.3113	8,643	2001
	11.0042	10.2301	6,739	2000
	10.0000	11.0042	1,253	1999

Sun Capital Money Market Fund	11.0156	11.0128	41,778	2002
	10.7567	11.0156	86,057	2001
	10.2760	10.7567	118,427	2000
	10.0000	10.2760	41,528	1999


Sun Capital Real Estate Fund	14.6892	15.1169	18,183	2002
	13.2008	14.6892	7,813	2001
	10.1759	13.2008	10,164	2000
	10.0000	10.1759	2,642	1999

SC^SM Select Equity Fund	9.1777	6.5738	4,076	2002
	11.0848	9.1777	7,155	2001
	12.4115	11.0848	10,071	2000
	10.0000	12.4115	1,940	1999

SC^SM Value Equity Fund	10.0000	7.7609	630	2002

SC^SM Value Managed Fund	10.0000	8.0820	2,778	2002

SC^SM Value Mid Cap Fund	10.0000	9.1167	7,650	2002

SC^SM Value Small Cap Fund	10.0000	7.3504	13,673

First Eagle SoGen Overseas Variable	10.0000	11.1493	10,943	2002
Fund

Templeton Growth Securities Fund	10.0000	0	0	2002

Templeton Foreign Securities Fund	10.0000	0	0	2002

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APPENDIX C

FIXED ACCOUNT - EXAMPLES OF THE MARKET VALUE ADJUSTMENT

The Market Value Adjustment ("MVA") Factor is:

[ (1 + I) / (1 + J) ] ^ (N/12) -1

These examples assume the following:

o	The Guarantee Amount was allocated to a one year Guarantee Period with a Guaranteed Interest Rate of 4% or .04.
o	The date of surrender is 6 months from the Expiration Date (N = 6).
o	The value of the Guarantee Amount on the date of surrender is $40,792.16.
o	No transfers or partial withdrawals affecting this Guarantee Amount have been made.
o	Withdrawal charges, if any, are calculated in the same manner as shown in the examples in Part 1.

Example of a Negative MVA:

Assume that on the date of surrender, the current rate (J) is 5% or .05.

The MVA factor	=	[ (1 + I) / (1 + J) ] ^ (N/12) -1
	=	[ (1 + .04) / (1 + .05) ] ^ (6/12) -1
	=	-.0047733

The value of the Guarantee Amount is multiplied by the MVA factor to determine the MVA:

$40,792.16 x -.0047733 = -$194.71

-$194.71 represents the MVA that will be deducted from the value of the Guarantee Amount.

For a partial withdrawal of $2,000 from this Guarantee Amount, the MVA would be

($2,000.00) x (-.0047733) = -$9.55.

$9.55 represents the MVA that will be deducted from the partial withdrawal amount.

Example of a Positive MVA:

Assume that on the date of surrender, the current rate (J) is 3% or .03.

The MVA factor	=	[ (1 + I) / (1 + J) ] ^ (N/12) -1
	=	[ (1 + .04) / (1 + .03) ] ^ (6/12) -1
	=	.00484264

The value of the Guarantee Amount is multiplied by the MVA factor to determine the MVA:

$40,792.16 x - 00484264 = - $197.54

- $197.54 represents the MVA that would be added to the value of the Guarantee Amount.

For a partial withdrawal of $2,000 from this Guarantee Amount, the MVA would be $2,000.00 x .00484264 = $9.69.

$9.69 represents the MVA that would be added to the value of the partial withdrawal amount.

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

P.O. Box 9133

Wellesley Hills, Massachusetts 02481

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Telephone:

Toll Free (888) 786-2435

General Distributor

Clarendon Insurance Agency, Inc.

One Sun Life Executive Park

Wellesley Hills, Massachusetts 02481

Auditors

Deloitte & Touche LLP

200 Berkeley Street

Boston, Massachusetts 02116

PROSPECTUS

May 1, 2003

MFS Regatta Classic

You may choose among a number of variable investment options and a range of fixed options. The variable options are Sub-Accounts in the Variable Account. Each Sub-Account invests in one of the following series of the MFS/Sun Life Series Trust (the ''Series Fund''), a fund advised by our affiliate, Massachusetts Financial Services Company:

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Large-Cap Value Equity Funds	Mid-Cap Growth Equity Funds
MFS/ Sun Life Global Asset Allocation Series	MFS/ Sun Life Mid Cap Growth Series
MFS/ Sun Life Global Total Return Series	Small-Cap Growth Equity Funds
MFS/ Sun Life International Value Series	MFS/ Sun Life New Discovery Series
MFS/ Sun Life Total Return Series	Large-Cap Growth Sector Equity Funds
MFS/ Sun Life Value Series	MFS/ Sun Life Global Telecommunications
Large-Cap Blend Equity Funds	Series
MFS/ Sun Life Capital Opportunities Series	MFS/ Sun Life Technology Series
MFS/ Sun Life Massachusetts Investors Trust Series	Large-Cap Value Sector Equity Funds
MFS/ Sun Life Research Series	MFS/ Sun Life Utilities Series
MFS/ Sun Life Research Growth and Income Series	High Quality Intermediate-Term Bond Funds
Large-Cap Growth Equity Funds	MFS/ Sun Life Bond Series
MFS/ Sun Life Capital Appreciation Series	MFS/ Sun Life Government Securities Series
MFS/ Sun Life Emerging Growth Series	High Quality Long-Term Bond Funds
MFS/ Sun Life Emerging Markets Equity Series	MFS/ Sun Life Global Governments Series
MFS/ Sun Life Global Growth Series	Low-Quality Intermediate-Term Bond Fund
MFS/ Sun Life International Growth Series	MFS/ Sun Life High Yield Series
MFS/ Sun Life Managed Sectors Series	MFS/ Sun Life Strategic Income Series
MFS/ Sun Life Massachusetts Investors Growth	Money Market Fund
Stock Series	MFS/ Sun Life Money Market Series
MFS/ Sun Life Research International Series
MFS/ Sun Life Strategic Growth Series

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

This Prospectus must be accompanied by a current prospectus for the Series Fund. Please read this Prospectus and the Series Fund prospectus carefully before investing and keep them for future reference. They contain important information about the Contract and the Series Fund.

We have filed a Statement of Additional Information dated May 1, 2003 (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 Mailing Address'') or by telephoning (800) 752-7215. 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.

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

P.O. Box 9133

Wellesley Hills, Massachusetts 02481

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TABLE OF CONTENTS

		Page
Special Terms
Product Highlights
Fees and Expenses
Example
Condensed Financial Information
The Annuity Contract
Communicating To Us About Your Contract
Sun Life Assurance Company of Canada (U.S.)
The Variable Account
Variable Account Options: The MFS/Sun Life Series Trust
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; Credits; Bonus Guaranteed Interest Rates
Optional Programs
Withdrawals and Market Value Adjustment
Cash Withdrawals
Market Value Adjustment
Contract Charges
Account Fee
Administrative Expense Charge
Mortality and Expense Risk Charge
Premium Taxes
Series Fund Expenses
Modification in the Case of Group Contracts
Death Benefit
Amount of Death Benefit
Method of Paying Death Benefit
Selection and Change of Beneficiary
Payment of Death Benefit
Due Proof of Death
The Income Phase - Annuity Provisions
Selection of the Annuitant or Co-Annuitant
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
Death of Participant

Voting of Series Fund Shares
Periodic Reports
Substitution of Securities
Change in Operation of Variable Account
Splitting Units
Modification
Limitation or Discontinuance of New Participants
Reservation of Rights
Right to Return
Tax Considerations
U.S. Federal Income Tax Considerations
Deductibility of Purchase Payments
Pre-Distribution Taxation of Contracts
Distributions and Withdrawals from Non-Qualified Contracts
Distributions and Withdrawals from Qualified Contracts
Withholding
Investment Diversification and Control
Tax Treatment of the Company and the Variable Account
Qualified Retirement Plans
Pension and Profit-Sharing Plans
Tax-Sheltered Annuities
Individual Retirement Accounts
Roth IRAs
Puerto Rico Tax Considerations
Administration of the Contracts
Distribution of the Contracts
Performance Information
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 - Condensed Financial Information - Accumulation Unit Values
Appendix C - Fixed Account - Examples of the Market Value Adjustment

SPECIAL TERMS

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 Regatta Classic Fixed and Variable 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. The Contract also provides a death benefit if you die during the Accumulation Phase.

The Accumulation Phase

Variable Account Options: The Funds

You can allocate your Purchase Payments among Sub-Accounts investing in a number of Fund options. Each Fund is a separate series of the MFS/Sun Life Series Trust, an open-end management investment company registered under the Investment Company Act of 1940. Our affiliate, Massachusetts Financial Services Company ("MFS"), serves as the investment adviser to the Series 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

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Fees and Expenses

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

Each year, we deduct an annual Account Fee of $50. We will not charge the annual Account Fee if your Account Value is more than $100,000 on your Account Anniversary.

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

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The Income Phase: Annuity Provisions

Death Benefit

Withdrawals, Withdrawal Charge and Market Value Adjustment

Right to Return

Tax Considerations

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

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

     P. O. Box 9133

     Wellesley Hills, Massachusetts 02481

     Toll Free (800) 752-7215

</R>

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FEES AND EXPENSES

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 Transfer Fee (currently $0):		$15*

*	Currently, we impose no fee upon transfers; however, we reserve the right to impose a fee of up to $15 per transfer. (See "Transfer Privilege.")

The next table describes 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

$ 50*

Variable Account Annual Expenses

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

	Mortality and Expense Risks Charge:	1.00%**

	Administrative Expenses Charge:	0.15%

	Total Variable Account Annual Expenses:	1.15%

*	The Annual Account Fee is $50. The fee is waived on Contracts greater than $100,000 in value on your Account Anniversary. (See "Account Fee.")

	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 reimbursement)	0.57%	8.05%*

The expenses shown are for the year ended December 31, 2002, 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 expenses of certain Funds are reduced by contractual fee reduction and expense reimbursement arrangements that will remain in effect at least through May 1, 2004. The minimum and maximum Total Annual Fund Operating Expenses for all Funds after all fee reductions and expense reimbursements are 0.57% and 1.26%, 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

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

1 year	3 years	5 years	10 years

$ 254	$2,079	$3,751	$7,340

(2)	If you annuitize your Contract or if you do *not* surrender your Contract at the end of the applicable time period:

1 year	3 years	5 years	10 years

$ 254	$2,079	$3,751	$7,340

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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 B.

THE ANNUITY CONTRACT

Sun Life Assurance Company of Canada (U.S.) (the ''Company'', ''we'' or ''us'') and Sun Life of Canada (U.S.) Variable Account F (the ''Variable Account'') offer the Contract to groups and individuals for use in connection with their retirement plans. The Contract is available on a group basis and, in certain states, may be available on an individual basis. We issue an Individual Contract directly to the individual owner of the Contract. We issue a Group Contract to the Owner covering all individuals participating under the Group Contract. Each individual receives a Certificate that evidences his or her participation under the Group Contract.

In this Prospectus, unless we state otherwise, we refer to both the owners of Individual Contracts and participating individuals under Group Contracts as ''Participants'' and we address all those Participants as ''you''; we use the term ''Contracts'' to include Individual Contracts, Group Contracts and Certificates issued under Group Contracts. For the purpose of determining benefits under both Individual Contracts and Group Contracts, we establish an Account for each Participant, which we will refer to as ''your'' Account or a ''Participant 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. It provides a death benefit if the Annuitant dies during the Accumulation Phase. 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. The Fixed Account options may not be available in all states. When you choose Variable Account investment options or a Variable Annuity option, your benefits will be responsive to changes in the economic environment, including inflationary forces and changes in rates of return available from different types of investments. With these variable options, you assume all investment risk under the Contract. When you choose a Guarantee Period in our Fixed Account or a Fixed Annuity option, we assume the investment risk, except in the case of early withdrawals in the Accumulation Phase, where you bear the risk of unfavorable interest rate changes. You 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 lower than that permitted by law.

The Contract is designed for use in connection with 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 others as ''Non-Qualified Contracts.''

COMMUNICATING TO US ABOUT YOUR CONTRACT

All materials sent to us, including Purchase Payments, must be sent to our Annuity Mailing Address, as set forth on the first page of this Prospectus. For all telephone communications, you must call (800) 752-7215.

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 Mailing Address. However, we will consider 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 on a Business Day.

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 ASSURANCE COMPANY OF CANADA (U.S.)

We are an indirect wholly-owned subsidiary of Sun Life Assurance Company of Canada (''Sun Life (Canada)''). Sun Life (Canada) completed its demutualization on March 22, 2000. As a result of the demutualization, a new holding company, Sun Life Financial Services of Canada Inc. (''Sun Life Financial''), is now the ultimate parent of Sun Life (Canada) and the Company. 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, London, and Manila stock exchanges.

THE VARIABLE ACCOUNT

The assets of the Variable Account are divided into Sub-Accounts. Each Sub-Account invests exclusively in shares of a specific Series of the MFS/Sun Life Series Trust (the ''Series Fund''). All amounts allocated to the Variable Account will be used to purchase Series Fund shares as designated by you at their net asset value. Any and all distributions made by the Series Fund with respect to the shares held by the Variable Account will be reinvested to purchase additional 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 and any applicable taxes will, in effect, be made by redeeming the number of Series 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 Series Fund shares at all times.

VARIABLE ACCOUNT OPTIONS: THE MFS/SUN LIFE SERIES TRUST

The MFS/Sun Life Series Trust (the ''Series Fund'') is an open-end management investment company registered under the Investment Company Act of 1940. Our affiliate, Massachusetts Financial Services Company (''MFS''), serves as the investment adviser to the Series Fund.

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The Series Fund is composed of a number of independent portfolios of securities, each of which has separate investment objectives and policies. Shares of the Series Fund are issued in Series, each corresponding to one of the portfolios. The Contracts provide for investment by the Sub-Accounts in shares of various Series of the Series Fund. Additional portfolios may be added to the Series Fund which may or may not be available for investment by the Variable Account.

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The Series Fund pays fees to MFS for its services pursuant to investment advisory agreements. MFS also serves as investment adviser to each of the funds in the MFS Family of Funds, and to certain other investment companies established by MFS and/or us. MFS Institutional Advisers, Inc., a whollyowned subsidiary of MFS, provides investment advice to substantial private clients. MFS and its predecessor organizations have a history of money management dating from 1924. MFS operates as an autonomous organization and the obligation of performance with respect to the investment advisory and underwriting agreements is solely that of MFS. We undertake no obligation in this regard.

MFS may serve as the investment adviser to other mutual funds which have similar investment goals and principal investment policies and risks as the Series, and which may be managed by a Series' portfolio manager(s). While a Series 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 Series and these similar products, including differences in sales charges, expense ratios and cash flows.

The Series Fund also offers its shares to other separate accounts established by the Company and by our New York subsidiary in connection with variable annuity and variable life insurance contracts. Although we do not anticipate any disadvantages to this arrangement, 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 investing in the Series Fund. A conflict may occur due to differences in tax laws affecting the operations of variable life and variable annuity separate accounts, or some other reason. We and the Series Fund's Board of Trustees will monitor events for such conflicts, and, in the event of a conflict, we will take steps necessary to remedy the conflict, including withdrawal of the Variable Account from participation in the Series which is involved in the conflict or substitution of shares of other Series or other mutual funds.

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More comprehensive information about the Series Fund and the management, investment objectives, policies, restrictions, expenses and potential risks of each Series may be found in the current prospectus of the Series Fund. You should read the Series Fund prospectus carefully before investing. The Series Fund's prospectus and Statement of Additional Information is available by calling 1-800-752-7215.

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THE FIXED ACCOUNT

We will invest the assets of the Fixed Account in those assets we choose that are allowed by applicable 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 applicable 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 Period(s) 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 of a particular duration, allocations, transfers or renewals into that Guarantee Period will not be permitted. 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 Reate 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 may from time to time at our discretion offer interest rate specials for new Purchase Payments that are higher than the rates we are then offering for renewals or transfers.

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 the Annuitant dies before the Annuity Commencement Date.

Issuing Your Contract

Amount and Frequency of Purchase Payments

Allocation of Net Purchase Payments

You may allocate your Purchase Payments among the different Sub-Accounts and Guarantee Periods we offer but any allocation to a Guarantee Period must be at least $1,000. Over the life of your Contract, you may allocate amounts among as many as 18 of the available investment options.

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. Your allocation factors will remain in effect as long as your selected Sub-Accounts and Guarantee Periods continue to be available for investment. You may, however, change the allocation factors for future Payments by sending us notice of the change in a form acceptable to us. 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 Payment (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 below under the headings ''Variable Account Value'' and ''Fixed Account Value''.

Variable Account Value

Variable Accumulation Units

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 the 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.

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

Crediting Interest

Guarantee Amounts

Each separate allocation you make to a Guarantee Period, together with interest credited thereon, is called a Guarantee Amount. Each Guarantee Amount is treated separately for purposes of determining the Market Value Adjustment. We may restrict a Guarantee Period that will extend beyond your Maximum Annuity Commencement Date. Renewals into a Guarantee Period that will extend beyond your maximum Annuity Commencement Date will result in a Market Value Adjustment upon annuitization or withdrawal. Each new allocation to a Guarantee Period must be at least $1,000.

Renewals

We will notify you in writing between 45 and 75 days before the Expiration Date for any Guarantee Amount. If you would like to change your Fixed Account option, we must receive from your prior Renewal Date:

o	written notice electing a different Guarantee Period from among those we then offer, or

o	written instructions to transfer the Guarantee Amount to one or more Sub-Accounts, in accordance with the transfer privilege provisions of the Contract (see "Transfer Privilege.")

If we receive no instructions from you prior ro 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.

A Guarantee Amount will not renew into a Guarantee Period that will extend beyond your Maximum Annuity Commencement Date. In that case, unless you notify us otherwise, we will automatically renew your Guarantee Amount into the Money Market Sub-Account

Early Withdrawals

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:

o

You may not make more than 12 transfers in any Account Year;

o

The amount transferred from a Sub-Account must be at least $1,000, unless you are transferring your entire balance in that Sub-Account;

o

Your Account Value remaining in a Sub-Account must be at least $1,000;

o

The amount transferred from a Guarantee Period must be the entire Guarantee Amount;

o

At least 30 days must elapse between transfers to or from Guarantee Periods;

o

Transfers to or from Sub-Accounts are subject to terms and conditions that may be imposed by the Funds;

o

The total number of Sub-Accounts and Guarantee Periods within an Account may not exceed 18 over the lifetime of the Contract; and

o

We may impose additional restrictions on market timers, which are further described below.

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

There is usually no charge imposed on transfers; however, we reserve the right to impose a transfer charge of $15 for each transfer. Transfers our of a Guarantee Period more than 30 days before the Expiration Date or any time after the Expiration Date will be subject to the Market Value Adjustment described below. Under current law, there is no tax liability for transfers.

Requests for Transfers

You may request transfers in writing or by telelphone. If the request is by telephone, it must be made 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. The telephone transfer privilege is available automatically, 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.

Market Timers

The Contracts are not designed for professional market timing organizations or other entities using programmed and frequent transfers. If you wish to employ such strategies, you should not purchase a Contract. Accordingly, transfers may be subject to restrictions if exercised by a market timing firm or any other third party authorized to initiate transfer transactions on behalf of multiple Participants. In imposing such restrictions, we may, among other things, not accept (1) the transfer instructions of any agent acting under a power of attorney on behalf of more than one Participant, or (2) the transfer instructions of individual Participants who have executed preauthorized transfer forms that are submitted at the same time by market timing firms or other third parties on behalf of more than one Participant. We will not impose these restrictions unless our actions are reasonably intended to prevent the use of such transfers in a manner that will disadvantage or potentially impair the Contract rights of other Participants.

In addition, the Series Fund has reserved the right to temporarily or permanently refuse exchange requests from the Variable Account if, in MFS' judgment, a Series would be unable to invest effectively in accordance with its investment objective and policies, or would otherwise potentially be adversely affected. In particular, a pattern of exchanges that coincide with a market timing strategy may be disruptive to a Series and therefore may be refused. Accordingly, the Variable Account may not be in a position to effectuate transfers and may refuse transfer requests without prior notice. We also reserve the right, for similar reasons, to refuse or delay exchange requests involving transfers to or from the Fixed Account.

Waivers; Reduced Charges; Credits; Bonus Guaranteed Interest Rates

We may reduce or waive the annual Account Fee, credit additional amounts, or grant bonus Guaranteed Interest Rates in certain situations. 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 Participant, 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.

Optional Programs

Dollar-Cost Averaging

o	Monthly Dollar-Cost Averaging Option: Amounts allocated will be divided among 12 separate sequentially maturing Guarantee Periods. The first Guarantee Period ends one full calendar month following the date the Purchase Payment is applied and each subsequent Guarantee Period shall end one full calendar month later, sequentially thereafter. The Guarantee Amount at the Expiration Date of each such Guarantee Period will equal 1/12 of the Purchase Payment applied under this option, with the Guarantee Amount at the last Expiration Date including all interest earned in the 12 Guarantee Periods.

o	Quarterly Dollar-Cost Averaging: Amounts allocated will be divided among 4 separate sequentially maturing Guarantee Periods. The first Guarantee Period ends 3 full calendar months following the date the Purchase Payment is applied and each subsequent Guarantee Period shall end 3 full calendar months later, sequentially thereafter. The Guarantee Amount at the Expiration Date of each such Guarantee Period will equal 1/4 of the Purchase Payment applied under this Option, with the Guarantee Amount at the last Expiration Date including all interest earned in the 4 Guarantee Periods.

Only Purchase Payments may be allocated to a dollar-cost averaging program. Previously applied amounts may not be transferred to a dollar-cost averaging program.

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 assure a profit or protect against loss in a declining market.

Asset Allocation

Currently, you may select one of the available asset allocation models, each of which represents a combination of Sub-Accounts with a different level of risk. These 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 programs in the future.

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If you elect an asset alloction program, we will automatically allocate your Purchase Payments among the Sub-Accounts represented in the model you choose. By electing an asset allocation program, you thereby authorize us to automatically reallocate your investment options, as detemrined by the terms of the Asset Allocation Program, to reflect the current composition of the model you have selected, without further instruction, until we receive notification that you wish to terminate the program, or choose a different model.

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Systematic Withdrawal Program

If you have an Account Value of $10,000 or more, you may select our Systematic Withdrawal Program.

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Under the Systematic Withdrawal Program, you determine the amount and frequency of regular withdrawals you would like to receive from your Fixed and/or Variable Account Value and we will effect them automatically; a Market Value Adjustment may be applicable upon withdrawal. Withdrawals under the program may be included in income and subject to a 10% federal tax penalty, as well as all charges and any Market Value Adjustment applicable upon withdrawal. You should consult a qualified tax professional before choosing this option.

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

Portfolio Rebalancing Program

Portfolio Rebalancing does not permit transfers to or from any Guarantee Period.

WITHDRAWALS AND MARKET VALUE ADJUSTMENT

Cash Withdrawals

Requesting a Withdrawal

Withdrawals from your Fixed Account Value may be subject to a Market Value Adjustment (see ''Market Value Adjustment'' below). Upon request we will notify you of the amount we would pay in the event of a full or partial withdrawal. Withdrawals may have adverse federal 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; we deduct the Account Fee for the Account Year in which the withdrawal is made; and finally, we add or subtract the amount of any Market Value Adjustment applicable to your Fixed Account Value.

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

Partial Withdrawals

Time of Payment

o	When the New York Stock Exchange is closed (except weekends and holidays) or when trading on the New York Stock Exchange is restricted;

o	When it is not reasonably practical to dispose of securities held by the Series Fund or to determine the value of the net assets of the Series Fund, because an emergency exists; and

o	When an SEC order permits us to defer payment for the protection of Participants.

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'').

Order of Withdrawal

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When you make a withdrawal, we consider the oldest remaining Purchase Payment to be withdrawn first, then the next oldest remaining, and so forth. Once all Purchase Payments are withdrawn, the balance withdrawn is considered to be accumulated value.

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Market Value Adjustment

We determine the amount of the Market Value Adjustment by multiplying the amount that is subject to the adjustment by the following formula:

[ (1 + I) / (1 + J) ] ^ (N/12) -1

where:

I is the Guaranteed Interest Rate applicable to the Guarantee Amount from which you withdraw, transfer or annuitize;

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J is the Guaranteed Interest Rate we declare at the time of your withdrawal, transfer or annuitization for Guarantee Periods equal to the length of time remaining in the Guarantee Period applicable to your Guarantee Amount, rounded to the next higher number of complete years, for Guarantee Periods of one year or more. For any Guarantee Periods of less than one year, J is the Guaranteed Interest Rate we declare at the time of your withdrawal, transfer or annuitization for a Guaranteed Period of the same length as your Guarantee Period. If, at that time, we do not offer the applicable Guarantee Period, we will use an interest rate determined by straight-line interpolation of the Guaranteed Interest Rates for the Guarantee Periods we do offer; and

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N is the number of complete months remaining in your Guarantee Period.

We will apply the Market Value Adjustment to the amount being withdrawn after deduction of any Account Fee, if applicable.

For examples of how we calculate the Market Value Adjustment, see Appendix C.

CONTRACT CHARGES

Account Fee

Administrative Expense Charge

Mortality and Expense Risk Charge

Premium Taxes

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Series Fund Expenses

There are fees and charges deducted from each Series of the Series Fund. These fees and expenses are described in the Series Fund's prospectus and related Statement of Additional Information.

Modification in the Case of Group Contracts

DEATH BENEFIT

If your spouse is your Beneficiary, upon your death (if you are the Annuitant) your spouse may elect to continue the Contract as the Participant, rather than receive the death benefit. In that case, the death benefit provisions of the Contract will not apply until the death of your spouse (see ''Other Contract Provisions - Death of Participant'').

Amount of Death Benefit

To calculate the amount of your death benefit, we use a ''Death Benefit Date.'' The Death Benefit Date is the date we receive proof of the Annuitant's death in an acceptable form (''Due Proof of Death'') if you have elected a death benefit payment method before the Annuitant's death and it remains effective. Otherwise, the Death Benefit Date is the later of the date we receive Due Proof of Death or the date we receive either the Beneficiary's election of payment method, or if you were the Annuitant and the Beneficiary is your spouse, the Beneficiary's election to continue the Contract. If we do not receive the Beneficiary's election within 60 days after we receive Due Proof of Death, the Death Benefit Date will be the last day of the 60 day period.

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

If the Annuitant was 85 or younger on your Contract Date (the date we accepted your first Purchase Payment), the death benefit will be the greatest of the following amounts:

(1)	Your Account Value for the Valuation Period during which the Death Benefit Date occurs;

(2)	The amount we would pay if you had surrendered your entire Account on the Death Benefit Date; and

(3)	Your total Purchase Payments minus the sum of partial withdrawals from your Account.

If the Annuitant was 86 or older on your Contract Date, the death benefit is equal to amount (2) above; because this amount will reflect any applicable Market Value Adjustment, it may be less than your Account Value.

If the death benefit we pay is amount (2) or (3), your Account Value will be increased by the excess, if any, of that amount over amount (1). 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. Also, any portion of this new Account Value attributed to the Fixed Account will be transferred to the Money Market Sub-Account (without the application of a Market Value Adjustment). The Beneficiary may then transfer to the Fixed Account and begin a new Guarantee Period.

Method of Paying Death Benefit

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During the Accumulation Phase, you may elect the method of payment for the death benefit. These elections are made by sending us at our Service Address an election form, which we will provide. If no such election is in effect on the date of the Annuitant's death, the Beneficiary may elect either a single cash payment or an annuity. If you were the Annuitant and 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, we will pay the death benefit in a single cash payment.

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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 (see ''The Income Phase - Annuity Provisions'').

Neither you nor the Beneficiary may exercise rights that would adversely affect the treatment of the Contract as an annuity contract under the Internal Revenue Code (see ''Other Contract Provisions - Death of Participant'').

Selection and Change of Beneficiary

Payment of Death Benefit

Due Proof of Death

We accept any of the following as proof of any person's death:

o	An original certified copy of an official death certificate;

o	An original certified copy of a decree of a court of competent jurisdiction as to the finding of death; or

o	Any other proof we find satisfactory.

THE INCOME PHASE - ANNUITY PROVISIONS

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

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 below under the heading ''Annuity Options,'' and you cannot change the Annuity Option(s) selected. You may request a full withdrawal before the Annuity Commencement Date, which will be subject to all charges applicable on withdrawals (see ''Withdrawals and Market Value Adjustment'').

Selection of the Annuitant or Co-Annuitant

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

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:

o	The earliest possible Annuity Commencement Date is the first day of the second month following your Contract Date.

o	The latest possible Annuity Commencement Date is the first day of the month following the Annuitant's 95th birthday or, if there is a Co-Annuitant, the 95th birthday of the younger of the Annuitant and Co-Annuitant.

o	The Annuity Commencement Date must always be the first day of a month.

You may change the Annuity Commencement Date from time to time by sending us written notice, with the following additional limitations:

o	We must receive your notice at least 30 days before the current Annuity Commencement Date.

o	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 70 1/2 (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 70 1/2).

Annuity Options

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

Annuity Option C - Joint and Survivor Annuity

Annuity Option D - Monthly Payments for a Specified Period Certain

Annuity Option E - Fixed Payments

Selection of Annuity Option

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 annuity 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

o	We deduct a proportional amount of the annual Account Fee, based on the fraction of the current Account Year that has elapsed.

o	If applicable, we apply the Market Value Adjustment to your Account Value in the Fixed Account, which may result in a deduction, an addition, or no change to your Account Value.

o	We deduct any applicable premium tax or similar tax if not previously deducted.

Variable Annuity Payments

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, which are based on a minimum guaranteed interest rate of 3% per year, compounded annually, 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, 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 $50 in equal amounts from each Variable Annuity payment. We do not deduct the annual Account Fee from Fixed Annuity payments.

Annuity Payment Rates

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 your 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

An Individual Contract belongs to the individual to whom the Contract is issued. A Group Contract belongs to the Owner. In the case of a Group Contract, the Owner may expressly reserve all Contract rights and privileges; otherwise, each Annuitant will be entitled to exercise such rights and privileges. In any case, such 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 during the lifetime of the Annuitant before the Annuity Commencement Date, except as the Contract otherwise provides.

Change of Ownership

Death of Participant

If your Contract is a Non-Qualified Contract and you die prior to the Annuitant and before the Annuity Commencement Date, special distribution rules apply. In that case, your Account Value, plus or minus any Market Value Adjustment, must be distributed to your ''designated beneficiary'' within the meaning of Section 72(s) of the Internal Revenue Code, 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, 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, the Annuitant automatically becomes the designated beneficiary.

If your spouse elects to continue the Contract (whether or not you are the Annuitant), your spouse must give us written notification within 60 days after we receive Due Proof of Death, and the special distribution rules will then apply on the death of your spouse.

If the Participant is not a natural person, these distribution rules apply on a change in, or the death of, any Annuitant or Co-Annuitant.

Voting of Series Fund Shares

We will vote Series Fund shares held by the Sub-Accounts at meetings of shareholders of the Series Fund or in connection with similar solicitations, but will follow 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, except in the case of a Group Contract where the Owner has reserved this right. 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 Series Fund shares for which no timely voting instructions are received in the same proportion as the shares for which we receive instructions from Owners, Participants and Payees, as applicable.

Owners of Qualified Contracts issued on a group basis may be subject to other voting provisions of the particular plan and of the Investment Company Act of 1940. Employees who contribute to plans that are funded by the Contracts may be entitled to instruct the Owners as to how to instruct us to vote the Series Fund shares attributable to their contributions. Such plans may also provide the additional extent, if any, to which the Owners shall follow voting instructions of persons with rights under the plans. If no voting instructions are received from any such person with respect to a particular Participant Account, the Owner may instruct the Company as to how to vote the number of Series Fund shares for which instructions may be given.

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 by the Investment Company Act of 1940, or any duty to inquire as to the instructions received or the authority of Owners, Participants or others, as applicable, to instruct the voting of Series Fund shares. Except as the Variable Account or the Company has actual knowledge to the contrary, the instructions given by Owners under Group Contracts 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 Series 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 Series Fund. We will determine the number of Series Fund shares as to which each such person is entitled to give instructions as of the record date set by the Series Fund 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 Series 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 Participant Account by the net asset value of one Series Fund share as of the same date. On or after the Annuity Commencement Date, the number of Series 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 Series Fund share as of the same date. After the Annuity Commencement Date, the number of Series Fund shares as to which a Payee is entitled to give voting instructions will generally decrease due to the decrease in the reserve.

Periodic Reports

In addition, every person having voting rights will receive such reports or prospectuses concerning the Variable Account and the Series Fund as may be required by the Investment Company Act of 1940 and the Securities Act of 1933. We will also send such statements reflecting transactions in your Account as may be required by applicable laws, rules and regulations.

Upon request, we will provide you with information regarding fixed and variable accumulation values.

Substitution of Securities

Shares of any or all Series of the Series Fund may not always be available for investment under the Contract. We may add or delete Series or other investment companies as variable investment options under the Contracts. We may also substitute shares of another Series or shares of another registered open-end investment company or unit investment trust for the shares held in any Sub-Account, provided that the substitution has been approved, if required, by the SEC. 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 Series 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 we deem necessary and appropriate to effect the change.

Splitting Units

Modification

Upon notice to the Participant, in the case of an Individual Contract, and the Owner and Participant(s), in the case of a Group Contract (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, Participants, or Payees, as applicable. In the event of any such modification, we may make appropriate endorsement in the Contract to reflect such modification.

Limitation or Discontinuance of New Participants

Reservation of Rights

We reserve the right, to the extent permitted by law, to: (1) combine any 2 or more variable accounts; (2) add or delete Series, sub-series thereof or other investment companies and corresponding Sub-Accounts; (3) add or remove Guarantee Periods available at any time for election by a Participant; and (4) restrict or eliminate any of the voting rights of Participants (or Owners) or other persons who have voting rights as to the Variable Account. Where required by law, we will obtain approval of changes from Participants 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 Mailing Address as shown on the cover of this Prospectus within 10 days after it was delivered to you. When we receive the returned Contract, it will be cancelled and we will refund to you your Account Value. However, if applicable state law requires, we will return the full amount of any Purchase Payment(s) we received. State law may also require us to give you a longer ''free look'' period or allow you to return the Contract to your sales representative.

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 Contract 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 a Participant 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 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.

U.S. Federal Income Tax Considerations

The following discussion applies only to those Contracts issued in the United States. For a discussion of tax considerations effecting Contracts issued in Puerto Rico, see ''Puerto Rico Tax Considerations,'' below.

Deductibility of Purchase Payments

Pre-Distribution Taxation of Contracts

Generally, an increase in the value of a Contract will not give rise to a current income tax liability 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).

Distributions and Withdrawals from Non-Qualified Contracts

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.

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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.

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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 59 1/2, to distributions pursuant to the death or disability of the owner, or to distributions that are a part of a series of substantially equal periodic payments made annually under a lifetime annuity, or to distributions under an immediate annuity (as defined above).

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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 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 includible in income. 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.

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Distributions and Withdrawals from Qualified Contracts

o	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;

o	Any required minimum distribution, or

o	Any hardship distribution.

Only you or your spouse may elect to roll over a distribution to an eligible retirement plan.

Withholding

Investment Diversification and Control

The Treasury Department has issued regulations that prescribe investment diversification requirements for 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 Contract 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.

Tax Treatment of the Company and the Variable Account

Qualified Retirement Plans

Pension and Profit-Sharing Plans

Tax-Sheltered 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 Participant attains age 591/2, separates from service 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 Participant 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.

Individual Retirement Accounts

Roth IRAs

Puerto Rico Tax Considerations

The Contract offered by this Prospectus is considered an annuity contract under Section 1022 of the Puerto Rico Internal Revenue Code of 1994, as amended (the ''1994 Code''). Under the current provisions of the 1994 Code, no income tax is payable on increases in value of accumulation shares of annuity units credited to a variable annuity contract until payments are made to the annuitant or other payee under such contract.

The provisions of the 1994 Code with respect to qualified retirement plans described in this Prospectus vary significantly from those under the Internal Revenue Code. Although we currently offer the Contract in Puerto Rico in connection with qualified retirement plans, the text of this Prospectus under the heading ''Federal Tax Status'' dealing with such qualified retirement plans is inapplicable to Puerto Rico and should be disregarded.

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For information regarding the income tax consequences of owning a Contract, you should consult a qualified tax professional.

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ADMINISTRATION OF THE CONTRACTS

DISTRIBUTION OF THE CONTRACTS

We offer the Contracts on a continuous basis. The Contracts are sold by licensed insurance agents in those states where the Contracts 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, Clarendon Insurance Agency, Inc. (''Clarendon''), One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481. Clarendon, 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.

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Commissions and other distribution compensation will be paid by the Company to the selling agents and will not be more than 1.20% 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 Participant 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. We reserve 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 the 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 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 Contracts, 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 this Prospectus under the heading ''Waivers; Reduced Charges; Credits; Bonus Guaranteed Interest Rates.'' During 2002, 2001 and 2000, approximately, $4,474, $73,399 and $106,350 respectively, was paid to and retained by Clarendon in connection with distribution of the Contracts.

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PERFORMANCE INFORMATION

From time to time the Variable Account may publish reports to shareholders, sales literature and advertisements containing performance information relating to the Sub-Accounts. This information may include standardized and non-standardized ''Average Annual Total Return,'' ''Cumulative Growth Rate'' and ''Compound Growth Rate.'' We may also advertise ''yield'' and ''effective yield'' for some Sub-Accounts.

Average Annual Total Return measures the net income of the Sub-Account and any realized or unrealized gains or losses of the Series in which it invests, over the period stated. Average Annual Total Return figures are annualized and represent the average annual percentage change in the value of an investment in a Sub-Account over that period. Standardized Average Annual Total Return information covers the period after the Variable Account was established or, if shorter, the life of the Series. Nonstandardized Average Annual Total Return covers the life of each Series, which may predate the Variable Account. Cumulative Growth Rate represents the cumulative change in the value of an investment in the Sub-Account for the period stated, and is arrived at by calculating the change in the Accumulation Unit Value of a Sub-Account between the first and the last day of the period being measured. The difference is expressed as a percentage of the Accumulation Unit Value at the beginning of the base period. ''Compound Growth Rate'' is an annualized measure, calculated by applying a formula that determines the level of return which, if earned over the entire period, would produce the cumulative return.

The performance figures used by the Variable Account are based on the actual historical performance of the Series Fund for the specified periods, and the figures are not intended to indicate future performance. For periods before the date the Contracts became available, we calculate the performance information for the Sub-Accounts on a hypothetical basis. To do this, we reflect deductions of the current Contract fees and charges from the historical performance of the corresponding Series.

Yield is a measure of the net dividend and interest income earned over a specific one-month or 30-day period (7-day period for the Money Market Sub-Account), expressed as a percentage of the value of the Sub-Account's Accumulation Units. Yield is an annualized figure, which means that we assume that the Sub-Accounts generate the same level of net income over a one-year period and compound that income on a semi-annual basis. We calculate the effective yield for the Money Market Sub-Account similarly, but include the increase due to assumed compounding. The Money Market Sub-Account's effective yield will be slightly higher than its yield as a result of its compounding effect.

The Company may also advertise the ratings and other information assigned to it by independent industry ratings organizations. Some of these organizations are A.M. Best, Moody's Investor's Service, Standard and Poor's Insurance Rating Services, and Fitch. Each year A.M. Best reviews the financial status of thousands of insurers, culminating in the assignment of Best's rating. These ratings reflect A.M. Best's current opinion of the relevant financial strength and operating performance of an insurance company in comparison to the norms of the life/health industry. Best's ratings range from A++ to F. Standard and Poor's and Fitch's ratings measure the ability of an insurance company to meet its obligations under insurance policies it issues. These two ratings do not measure the insurance company's ability to meet non-policy obligations. Ratings in general do not relate to the performance of the Sub-Accounts.

AVAILABLE INFORMATION

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 for the year ended December 31, 2002 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.

STATE REGULATION

The Company is also subject to the insurance laws and regulations of the other states and jurisdictions in which it is licensed to operate. The laws of the various jurisdictions establish supervisory agencies with 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. Each insurance company is required to file detailed annual reports with supervisory agencies in each of the five jurisdictions in which it does business and its operations and accounts are subject to examination by such agencies at regular intervals.

LEGAL PROCEEDINGS

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FINANCIAL STATEMENTS

_______________________

TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION

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Calculation of Performance Data

Non-Standardized Investment Performance

Advertising and Sales Literature

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

Accountants

Financial Statements

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_____________________________________________________________________________________

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

P.O. Box 9133

Wellesley Hills, Massachusetts 02481

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Please send me a Statement of Additional Information for

MFS Regatta Classic Variable and Fixed Annuity

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

Name

Address



City	State Zip

Telephone

APPENDIX A

GLOSSARY

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

ACCOUNT or PARTICIPANT ACCOUNT: An account established for each Participant 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 during

which you make Purchase Payments under the Contract. This is called the ''Accumulation Period'' in the Contract.

*ANNUITANT: The person or persons named in the Application and on whose life the first annuity payment is to be made. In a Non-Qualified Contract, if you name someone other than yourself as Annuitant, you may also name a Co-Annuitant. If you do, all provisions of the Contract based on the death of the Annuitant will be based on the date of death of the last surviving of the persons named. By example, if the Annuitant dies prior to the Annuity Commencement Date, the Co-Annuitant will become the new Annuitant. The death benefit will become due only on the death before the Annuity Commencement Date of the last surviving Annuitant and Co-Annuitant named. These persons are referred to collectively in the Contract as ''Annuitants.'' If you have named both an Annuitant and Co-Annuitant, you may designate one of them to become the sole Annuitant as of the Annuity Commencement Date, if both are living at that time. In the absence of such designation, the Co-Annuitant will become the sole Annuitant during the Income Phase.

*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: Prior to the Annuity Commencement Date, the person or entity having the right to receive the death benefit and, for Non-Qualified Contracts, who, in the event of the Participant's death, is the ''designated beneficiary'' for purposes of Section 72(s) of the Internal Revenue Code. After the Annuity Commencement Date, the person or entity having the right to receive any payments due under the Annuity Option elected, if applicable, upon the death of the Payee.

BUSINESS DAY: Any day the New York Stock Exchange is open for trading.

CERTIFICATE: The document for each Participant which evidences the coverage of the Participant under a Group Contract.

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

CONTRACT DATE: The date on which we issue your Contract. This is called the ''Issue Date'' in the Contract.

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.

GROUP CONTRACT: A Contract issued by the Company on a group basis.

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.

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

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

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 Group 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 Annuitant.

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

SERIES FUND: MFS/Sun Life Series Trust.

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

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.

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

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Appendix B

CONDENSED FINANCIAL INFORMATION - ACCUMULATION UNIT VALUES

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The following information should be read in conjunction with the Variable Account's financial statements appearing in the Statement of Additional Information.

	Accumulation	Accumulation	Number of
	Unit Value	Unit Value	Accumulation
	Beginning	End	Units End
Sub-Account	of Period	of Period	of Period	Year

Bond Series	$ 11.7601	$ 12.7415	126,288	2002
	11.0360	11.7601	44,813	2001
	10.1232	11.0360	29,104	2000
	10.4200	10.1232	48,210	1999
	10.0000	10.4200	35,123	1998

Capital Appreciation Series	12.9551	8.6597	350,012	2002
	17.5473	12.9551	456,549	2001
	20.0351	17.5473	543,964	2000
	15.2806	20.0351	643,838	1999
	11.9926	15.2806	465,812	1998
	9.8765	11.9926	265,497	1997

Capital Opportunities Series	16.2700	11.1961	340,883	2002
	21.9313	16.2700	452,048	2001
	23.3171	21.9313	485,523	2000
	15.9773	23.3171	450,750	1999
	12.7132	15.9773	277,518	1998
	10.1034	12.7132	160,778	1997

Emerging Growth Series	13.7054	8.9188	555,733	2002
	21.1925	13.7054	1,097,098	2001
	26.4915	21.1925	1,263,787	2000
	15.2416	26.4915	1,130,669	1999
	11.5023	15.2416	959,802	1998
	9.5644	11.5023	318,028	1997

Emerging Markets Equity Series	8.8580	8.5876	47,798	2002
	11.9669	8.8580	63,534	2001
	13.1278	11.9669	79,524	2000
	7.8620	11.8522	72,781	1999
	11.3377	7.8620	43,654	1998
	10.4127	11.3377	40,698	1997

Global Asset Allocation Series	11.8040	10.8630	38,974	2002
	13.1098	11.8040	42,786	2001
	13.5725	13.1098	46,359	2000
	11.5822	13.5725	43,343	1999
	10.9812	11.5822	53,167	1998
	10.0430	10.9812	50,531	1997

Global Governments Series	10.4061	12.4093	30,088	2002
	10.7567	10.4061	25,725	2001
	10.7398	10.7567	29,465	2000
	11.4588	10.7398	42,362	1999
	10.0247	11.4588	40,074	1998
	10.0000	10.0247	19,394	1997


Global Growth Series	14.5456	11.5947	105,401	2002
	18.3211	14.5456	126,388	2001
	21.3313	18.3211	161,980	2000
	12.8959	21.3313	135,881	1999
	11.3725	12.8959	121,297	1998
	10.0000	11.3725	85,526	1997

Global Telecommunications Series	4.2134	2.5205	985	2002
	7.2889	4.2134	987	2001
	10.0000	7.2889	987	2000

Global Total Return Series	13.1415	13.0702	87,161	2002
	14.1702	13.1415	83,587	2001
	14.0077	14.1702	103,608	2000
	13.0681	14.0077	118,027	1999
	11.1546	13.0681	91,253	1998
	10.0000	11.1546	45,122	1997

Government Securities Series	13.1319	14.2552	421,478	2002
	12.3626	13.1319	289,128	2001
	11.1508	12.3626	311,094	2000
	11.5012	11.1508	282,054	1999
	10.6850	11.5012	297,310	1998
	9.9631	10.6850	113,243	1997

High Yield Series	10.9881	11.1565	277,672	2002
	10.9236	10.9881	271,428	2001
	11.8516	10.9236	299,513	2000
	11.2212	11.8516	312,392	1999
	11.2665	11.2212	342,363	1998
	10.0910	11.2665	155,306	1997

International Growth Series	9.9505	8.6679	106,610	2002
	11.9669	9.9505	105,871	2001
	13.1278	11.9669	119,386	2000
	9.8139	13.1278	98,698	1999
	9.7271	9.8139	83,820	1998
	10.0270	9.7271	67,892	1997

International Investors Trust Series	12.0269	11.1836	71,143	2002
	14.2429	12.0269	77,070	2001
	14.7561	14.2429	90,031	2000
	12.7274	14.7561	89,652	1999
	10.5716	12.7274	90,582	1998
	10.0000	10.5716	51,038	1997

Managed Sectors Series	12.1193	8.8674	187,283	2002
	19.0125	12.1193	236,606	2001
	24.2876	19.0125	297,796	2000
	13.2363	24.2876	305,995	1999
	11.9091	13.2363	140,324	1998
	10.0000	11.9091	118,243	1997


Massachusetts Investors Growth	11.0839	7.8833	437,746	2002
Stock Series	14.9288	11.0839	585,206	2001
	16.0843	14.9288	730,554	2000
	11.9830	16.0843	501,609	1999
	10.0000	11.9830	232,788	1998

Massachusetts Investors Trust Series	13.7361	10.6973	881,431	2002
	16.4889	13.7361	1,075,588	2001
	16.6602	16.4889	1,238,791	2000
	15.7220	16.6602	1,467,541	1999
	12.8247	15.7220	1,213,193	1998
	9.8549	12.8247	554,216	1997

Mid Cap Growth Series	7.0246	3.6695	33,846	2002
	9.2506	7.0246	40,389	2001
	10.0000	9.2506	17,306	2000

Money Market Series	12.0120	12.0267	538,799	2002
	11.7080	12.0120	656,435	2001
	11.1757	11.7080	292,942	2000
	10.7995	11.1757	1,078,121	1999
	10.3869	10.7995	270,417	1998
	10.0239	10.3869	77,105	1997

New Discovery Series	15.5437	10.2251	136,804	2002
	16.5708	15.5437	171,873	2001
	16.6956	16.5708	225,158	2000
	10.5430	16.6956	99,057	1999
	10.0000	10.5430	29,182	1998

Research Series	12.9619	9.5926	701,427	2002
	16.6799	12.9619	901,484	2001
	17.5948	16.6799	1,050,110	2000
	14.3354	17.5948	963,271	1999
	11.7136	14.3354	872,289	1998
	9.8296	11.7136	553,996	1997

Research Growth and Income Series	12.4566	9.6790	43,285	2002
	14.1418	12.4566	68,454	2001
	13.8731	14.1418	59,489	2000
	12.9744	13.8731	74,418	1999
	10.7281	12.9744	33,882	1998
	10.0000	10.7281	6,085	1997

Research International Series	12.4795	10.9211	68,388	2002
	15.3492	12.4795	68,540	2001
	16.8662	15.3492	71,931	2000
	11.0101	16.8662	28,986	1999
	10.0000	11.0101	2,234	1998

Strategic Growth Series	7.4288	5.1337	55,179	2002
	9.9709	7.4288	66,016	2001
	11.2108	9.9709	124,043	2000
	10.0111	11.2108	5,701	1999


Strategic Income Series	10.6172	11.2823	53,021	2002
	10.3918	10.6172	23,174	2001
	11.2108	10.3918	34,656	2000
	9.8850	11.2108	22,950	1999
	10.0000	9.8850	2,577	1998

Technology Series	4.3751	2.3363	18,443	2002
	7.2387	4.3751	19,746	2001
	10.0000	7.2387	21,219	2000

Total Return Series	15.3698	14.3266	1,808,843	2002
	15.4684	15.3698	1,791,132	2001
	13.3948	15.4684	1,811,237	2000
	13.1773	13.3948	1,987,855	1999
	11.9123	13.1773	1,731,292	1998
	9.9034	11.9123	951,205	1997

Utilities Series	15.2598	11.4877	170,786	2002
	20.3946	15.2598	284,190	2001
	19.2810	20.3946	362,778	2000
	14.8587	19.2810	356,269	1999
	12.7649	14.8587	178,136	1998
	10.0000	12.7649	77,009	1997

Value Series	13.2508	11.3216	125,540	2002
	14.4888	13.2508	126,677	2001
	11.2502	14.4888	89,759	2000
	10.6318	11.2502	74,460	1999
	10.0000	10.6318	12,113	1998

</R>

APPENDIX C

FIXED ACCOUNT - EXAMPLES OF THE MARKET VALUE ADJUSTMENT (''MVA'')

The Market Value Adjustment (''MVA'') Factor is:

[ (1 + I) / (1 + J) ] ^ (N/12) -1

These examples assume the following:

o	The Guarantee Amount was allocated to a one year Guarantee Period with a Guaranteed Interest Rate of 4% or .04.
o	The date of surrender is six months from the Expiration Date (N = 6).
o	The value of the Guarantee Amount on the date of surrender is $40,792.16.
o	No transfers or partial withdrawals affecting this Guarantee Amount have been made.

Example of a Negative MVA:

Assume that on the date of surrender, the current rate (J) is 5% or .05.

The MVA factor	=	[ (1 + I) / (1 + J) ] ^ (N/12) -1
	=	[ (1 + .04) / (1 + .05) ] ^ (6/12) -1
	=	-.0047733

The value of the Guarantee Amount is multiplied by the MVA factor to determine the MVA:

$40,792.16 x -.0047733 = -$194.71

-$194.71 represents the MVA that will be deducted from the value of the Guarantee Amount.

For a partial withdrawal of $2,000 from this Guarantee Amount, the MVA would be

($2,000.00) x (-.0047733) = -$9.55.

$9.55 represents the MVA that will be deducted from the partial withdrawal amount.

Example of a Positive MVA:

Assume that on the date of surrender, the current rate (J) is 3% or .03.

The MVA factor	=	[ (1 + I) / (1 + J) ] ^ (N/12) -1
	=	[ (1 + .04) / (1 + .03) ] ^ (6/12) -1
	=	.00484264

The value of the Guarantee Amount is multiplied by the MVA factor to determine the MVA:

$40,792.16 x .00484264 = $197.54

$197.54 represents the MVA that would be added to the value of the Guarantee Amount.

For a partial withdrawal of $2,000 from this Guarantee Amount, the MVA would be $2,000.00 x .00484264 = $9.69.

$9.69 represents the MVA that would be added to the value of the partial withdrawal amount.

<R>

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

P.O. Box 9133

Wellesley Hills, Massachusetts 02481

</R>

Telephone:

Toll Free (800) 752-7215

General Distributor

Clarendon Insurance Agency, Inc.

One Sun Life Executive Park

Wellesley Hills, Massachusetts 02481

Auditors

Deloitte & Touche LLP

200 Berkeley Street

Boston, Massachusetts 02116

PART B

MAY 1, 2003

FUTURITY FOCUS

AND

MFS REGATTA CLASSIC

VARIABLE AND FIXED ANNUITY

STATEMENT OF ADDITIONAL INFORMATION

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F

TABLE OF CONTENTS

Calculation of Performance Data
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
Accountants
Financial Statements

The Statement of Additional Information sets forth information which may be of interest to prospective purchasers of the Futurity Focus Variable and Fixed Annuity Contract and the MFS Regatta Classic Variable and Fixed Annuity Contract (the "Contracts") issued by Sun Life Assurance Company of Canada (U.S.) (the "Company") in connection with Sun Life of Canada (U.S.) Variable Account F (the "Variable Account") which is not included in the corresponding Prospectus dated May 1, 2003. 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 Assurance Company of Canada (U.S.), c/o Annuity Division, P.O. Box 9133, Wellesley Hills, Massachusetts 02481, or by telephoning (888)-786-2435 for the Futurity Contracts or (800) 752-7215 for the MFS Regatta Contracts.

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.

CALCULATION OF PERFORMANCE DATA

AVERAGE ANNUAL TOTAL RETURN

STANDARDIZED AVERAGE ANNUAL TOTAL RETURN

The Securities and Exchange Commission defines "standardized" total return information to mean Average Annual Total Return, based on a hypothetical initial purchase payment of $1,000 and calculated in accordance with the formula set forth after the table, but presented only for periods subsequent to the date the sub-account was first offered by the separate account.

<R>

The table below shows, for various Sub-Accounts of the Variable Account, the Average Annual Total Return for the stated periods (or shorter period indicated in the table), based upon a hypothetical initial Purchase Payment of $1,000, calculated in accordance with the SEC formula. For purposes of determining these investment results, the actual investment performance of each Sub-Account is reflected from the date the Sub-Account commenced investment operations in the Variable Account (the "Variable Account Inception Date"). No information is shown for Sub-Accounts that had not commenced operations as of December 31, 2002.

FUTURITY FOCUS

STANDARDIZED AVERAGE ANNUAL TOTAL RETURN

PERIOD ENDING DECEMBER 31, 2002

Fund name	Inception Date	1 YR	5 YR	10 YR	Life of Fund*
AIM V.I. Capital Appreciation Fund	2/18/1998	-25.50			-4.59
AIM V.I. Growth Fund	2/17/1998	-32.04			-10.62
AIM V.I. Core Equity Fund	3/26/1998	-16.82			-4.65
AIM V.I. International Growth Fund	2/17/1998	-16.91			-5.38
Alger American Growth Portfolio	3/26/1998	-34.03			-4.43
Alger American Income and Growth Portfolio	3/26/1998	-32.16			-1.49
Alger American Small Capitalization Portfolio	3/26/1998	-27.34			-12.45
First Eagle SoGen Overseas Variable Fund	9/30/2002				11.22
Goldman Sachs VIT CORE Small Cap Equity Fund	2/18/1998	-16.21			-2.21
Goldman Sachs VIT CORE U.S. Equity Fund	2/17/1998	-23.06			-3.87
Goldman Sachs VIT Growth and Income Fund	2/18/1998	-12.63			-6.99
Goldman Sachs VIT International Equity Fund	3/16/1998	-19.54			-6.63
J.P. Morgan International Opportunities Portfolio	3/26/1998	-19.52			-8.32
J.P. Morgan Small Company Portfolio	3/26/1998	-22.82			-6.49
J.P. Morgan U.S. Disciplined Equity Portfolio	3/26/1998	-25.76			-6.78
Lord Abbett Series Fund Growth and Income	3/26/1998	-19.24			-0.33
MFS/Sun Life Capital Appreciation Series	11/30/1989	-33.43	-6.56	4.37	5.92
MFS/Sun Life Emerging Growth Series	5/1/1995	-35.20	-5.19		3.94
MFS/Sun Life Government Securities Series	11/30/1989	8.28	5.66	5.47	6.24
MFS/Sun Life High Yield Series	11/30/1989	1.25	-0.49	4.59	6.07
MFS/Sun Life Massachusetts Investors Growth Stock Series	5/6/1998	-29.15			-5.24
MFS/Sun Life Massachusetts Investors Trust Series	10/31/1991	-22.40	-3.83	6.57	6.97
MFS/Sun Life New Discovery Series	5/6/1998	-34.50			0.24
MFS/Sun Life Total Return Series	11/30/1989	-7.07	3.49	8.11	8.38
MFS/Sun Life Utilities Series	11/16/1993	-25.00	-2.33		5.98
OCC Equity Portfolio	2/17/1998	-22.59			-3.97
OCC Managed Portfolio	12/14/1998	-18.11			-2.39
OCC Mid Cap Portfolio	2/17/1998	-8.47			7.02
OCC Small Cap Portfolio	3/26/1998	-22.81			-1.40
PIMCO Emerging Markets Bond Portfolio	9/30/2002				16.09
PIMCO High Yield Portfolio	9/30/2002				8.14
PIMCO Real Return Portfolio	8/5/2002				6.55
PIMCO Total Return Portfolio	8/5/2002				4.40
SC Davis Financial Fund	7/17/2000	-19.67			-7.22
SC Davis Venture Value Fund	7/17/2000	-17.49			-13.03
SC Blue Chip Mid Cap Fund	9/13/1999	-16.15			6.38
SC Investors Foundation Fund	9/13/1999	-25.97			-10.95
SC Select Equity Fund	9/13/1999	-28.65			-12.34
Sun Capital Investment Grade Bond Fund	12/14/1998	3.73			3.80
Sun Capital Money Market Fund	12/14/1998	-0.30			2.37
Sun Capital Real Estate Fund	12/14/1998	2.63			8.88
Warburg Pincus Emerging Markets Portfolio	2/17/1998	-12.85			-7.42
Warburg Pincus Global Post-Venture Capital Portfolio	3/26/1998	-35.18			-12.08
Warburg Pincus International Equity Portfolio	3/26/1998	-21.09			-10.03
Warburg Pincus Small Company Growth Portfolio	3/26/1998	-34.72			-8.86
SC Alger Growth Fund	3/28/2002				-29.64
SC Alger Income & Growth Fund	3/28/2002				-27.11
SC Alger Small Capitalization Fund	3/28/2002				-24.84
SC Value Equity Fund	7/17/2000	-28.60			-10.03
SC Value Mid Cap Fund	7/17/2000	-7.36			0.03
SC Value Small Cap Fund	7/17/2000	-21.81			0.68
SC Value Managed Fund	7/17/2000	-22.56			-8.23
Templeton Growth Securitites	9/30/2002				5.72
Templeton Foreign Securities Fund	8/5/2002				-8.92

* The Life of Fund calculation for any Fund under a year old is not annualized.

MFS REGATTA CLASSIC

STANDARDIZED AVERAGE ANNUAL TOTAL RETURN

PERIOD ENDING DECEMBER 31, 2002

Fund name	Inception Date	1 YR	5 YR	10 YR	Life of Fund*
Bond	5/5/1998	8.07			5.47
Capital Appreciation	11/30/1989	-33.43	-6.53	4.36	5.91
Capital Opportunities	6/3/1996	-31.46	-2.72		2.78
Emerging Growth	5/1/1995	-35.20	-5.17		4.12
Emerging Markets Equity	6/5/1996	-3.33	-5.74		-3.29
Global Asset Allocation	11/7/1994	-8.25	-0.47		4.86
Global Governments	11/30/1989	18.97	4.10	4.52	5.50
Global Growth	11/16/1993	-20.56	0.18		5.13
Global Telecommunications	8/31/2000	-40.46			-47.70
Global Total Return	11/7/1994	-0.82	2.98		6.81
Government Securities	11/30/1989	8.28	5.68	5.45	6.22
High Yield	11/30/1989	1.25	-0.48	4.57	6.06
International Growth	6/3/1996	-13.17	-2.53		-2.84
International Value	10/2/1995	-7.29	0.90		1.85
Managed Sectors	11/30/1989	-27.11	-5.96	3.23	5.52
Mass Investors Growth Stock	5/5/1998	-29.15			-5.24
Mass Investors Trust	10/31/1991	-22.40	-3.80	6.55	6.96
Mid Cap Growth	8/31/2000	-48.04			-36.08
Money Market	11/30/1989	-0.16	2.72	2.80	3.15
New Discovery	5/5/1998	-34.50			0.25
Research	11/7/1994	-26.27	-4.15		5.77
Research Growth & Income	5/12/1997	-22.58	-2.27		-0.44
Research International	5/5/1998	-12.77			-1.88
Stategic Income	5/6/1998	5.99			2.52
Strategic Growth	11/1/1999	-31.17			-17.22
Technology	6/16/2000	-46.88			-40.46
Total Return	11/30/1989	-7.07	3.52	8.08	8.36
Utilities	11/16/1993	-25.00	-2.31		5.96
Value	5/5/1998	-14.84			2.00

* The Life of Fund calculation for any Fund under a year old is not annualized.

The Average Annual Total Return for each period was determined by finding the average annual compounded rate of return over each period that would equate the initial amount invested to the ending redeemable value for that period, in accordance with the following formula:

P (1 + T) ^ n = ERV

Where:

P =	a hypothetical initial Purchase Payment of $1,000
T =	average annual total return for the period
n =	number of years
ERV =	redeemable value (as of the end of the period) of a hypothetical $1,000 Purchase Payment made at the beginning of the 1-year, 5-year, or 10-year period (or fractional portion thereof)

The formula assumes that: (1) all recurring fees have been deducted from the Participant's Account; (2) all applicable non-recurring Contract charges are deducted at the end of the period, and (3) there will be a full surrender at the end of the period.

The $50 annual Account Fee will be allocated among the Sub-Accounts so that each Sub-Account's allocated portion of the Account Fee is proportional to the percentage of the number of Individual Contracts and Certificates that have amounts allocated to that Sub-Account. Because the impact of the Account Fee on a particular Contract may differ from those assumed in the computation due to differences between actual allocations and the assumed ones, the total return that would have been experienced by an actual Contract over these same time periods may have been different from that shown above.

The Variable Account may illustrate its results over various periods and compare its results to indices and other variable annuities in sales materials including advertisements, brochures and sports. Such results may be computed on a "cumulative" and/or "annualized" basis.

"Cumulative" quotations are arrived at by calculating the change in the Accumulation Unit value of a Sub-Account between the first and last day of the base period being measured, and expressing the difference as a percentage of the Accumulation Unit value at the beginning of the base period.

"Annualized" quotations (described in the following table as "Compound Growth Rate") are calculated by applying a formula which determines the level rate of return which, if earned over the entire base period, would produce the cumulative return.

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, Duff & Phelps 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 59 1/2, 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, and the $50 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:

-	The assumed rate of earnings will be realistic.
-	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.
-	Charts comparing accumulation values for tax-deferred and non-tax-deferred investments will depict the implications of any surrender.
-	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 59 1/2 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 Series 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 Series Fund shares to go "ex-dividend" during the current Valuation Period. $18.38 divided by $18.32 is 1.00327511. Subtracting the one day risk factor for mortality and expense risks and the administrative expense charge of .00003133 (the daily equivalent of the current maximum charge of 1.15% on an annual basis) gives a net investment factor of 1.00324378. 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 14.6118115 (14.5645672 X 1.00324378).

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 12.3847226 (12.3456789 X 1.00324378 (the Net Investment Factor) 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 12.3847226. The first variable annuity payment would be $865.57 (8,765.4321 X 14.5645672 X 6.78 divided by 1,000). The number of annuity units credited would be 70.1112 ($865.57 divided by 12.3456789) and the second variable annuity payment would be $868.31 (70.1112 X 12.3847226).

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 the Company. 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 the Company and its subsidiary, Sun Life Insurance and Annuity Company of New York, and variable life insurance contracts issued by the Company.

Commissions and other distribution compensation will be paid by the Company to the selling agents and will not be more than 1.20% 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 the 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 Contracts, 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 "Waivers; Reduced Charges; Credits; Bonus Guaranteed Interest Rates."

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.

ACCOUNTANTS

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The financial statements included in this Statement of Additional Information have been audited by Deloitte & Touche LLP, independent auditors, as stated in their reports appearing herein (which reports express an unqualified opinion; their report dated February 21, 2003 accompanying the consolidated financial statements of Sun Life Assurance Company of Canada (U.S.) expresses an unqualified opinion and includes an explanatory paragraph relating to the Company's adoption of provisions of Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities, effective January 1, 2001, described in Note 1), and have been so included in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing. Their office is located at 200 Berkeley St, Boston, Massachusetts.

FINANCIAL STATEMENTS

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

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

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

CONSOLIDATED STATEMENTS OF INCOME

(in thousands)

For the years ended December 31,

2002

2001

2000

Revenues

   Premiums and annuity considerations

$ 43,574

$    41,009

$   44,803

   Net investment income

265,277

282,492

287,674

   Net realized investment gains (losses)

136,697

23,694

(19,905)

   Fee and other income

352,403

284,111

297,861

Total revenues

797,951

631,306

610,433

Benefits and expenses

   Policyowner benefits

337,305

309,688

338,328

   Other operating expenses

184,289

151,778

164,870

   Amortization of deferred policy acquisition costs

243,927

120,733

123,832

Total benefits and expenses

765,521

582,199

627,030

Income (loss) from operations

32,430

49,107

(16,597)

   Interest expense

96,497

94,422

44,687

Loss before income tax expense

(64,067)

(45,315)

(61,284)

Income tax (benefit) expense:

Federal

(46,174)

(26,120)

(61,681)

State

1,265

(1,313)

(2,097)

   Income tax benefit

(44,909)

(27,433)

(63,778)

Net (loss) income before cumulative

      effect of change in accounting principle

(19,158)

(17,882)

2,494

Cumulative effect of change in accounting principle, net of tax

-

5 ,198

-

Net (loss) income

$ (19,158)

$       (12,684)

$      2,494

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

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

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

CONSOLIDATED BALANCE SHEETS

(in thousands except share data)

December 31,

ASSETS	2002	2001
Investments
Available-for-sale fixed maturities at fair value (amortized cost of $2,104,081 and $2,072,585 in 2002 and 2001, respectively)	$ 2,211,836	$ 2,130,688
Trading fixed maturities at fair value (amortized cost of $1,354,969 and $1,020,173 in 2002 and 2001, respectively)	1,404,825	1,041,490
Subordinated note from affiliate held-to-maturity (fair value of $616,520 and $619,656 in 2002 and 2001, respectively)	600,000	600,000
Equity investment in affiliate	95,803	-
Short-term investments	171,627	103,296
Mortgage loans	778,962	915,730
Real estate	79,783	83,545
Policy loans	39,317	42,686
Other invested assets	185,440	66,771
Total investments	5,567,593	4,984,206

Cash and cash equivalents	277,104	180,141
Accrued investment income	66,771	63,428
Deferred policy acquisition costs	585,815	765,716
Outstanding premiums	-	3,591
Other assets	124,932	79,527
Separate account assets	13,383,358	16,233,130

Total assets	$ 20,005,573	$ 22,309,739

LIABILITIES

Future contract and policy benefits	$ 677,163	$ 691,406
Contractholder deposit funds and other policy liabilities	3,517,720	3,145,725
Unearned revenue	8,628	11,610
Accrued expenses and taxes	117,519	115,466
Deferred federal income taxes	104,736	99,164
Long-term debt payable to affiliates	645,000	565,000
Partnership Capital Securities	607,826	607,826
Other liabilities	97,123	107,780
Separate account liabilities	13,383,358	16,233,130

Total liabilities	19,159,073	21,577,107

Commitments and contingencies - Note 15

STOCKHOLDER'S EQUITY

Common stock, $1,000 par value - 10,000 shares authorized; 6,437 shares issued and outstanding in 2002 and 2001	$ 6,437	$ 6,437
Additional paid-in capital	388,672	265,411
Accumulated other comprehensive income	47,384	37,619
Retained earnings	404,007	423,165

Total stockholder's equity	846,500	732,632

Total liabilities and stockholder's equity	$ 20,005,573	$ 22,309,739

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

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

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

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

For the years ended December 31,

	2002	2001	2000

Net (loss ) income	$ (19,158)	$ (12,684)	$ 2,494
Other comprehensive income
Net change in unrealized holding gains (losses) on
available-for-sale securities, net of tax and policyholder amounts	27,448	4,589	20,697
Reclassification adjustments of realized investment (gains) losses into net income (loss)	(14,177)	(5,519)	9,725

Other comprehensive income (loss)	13,271	(930)	30,422

Comprehensive (loss) income	$ (5,887)	$ (13,614)	$ 32,916

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

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

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

CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY

(in thousands)

For the years ended December 31,

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

Balance at December 31, 1999	$ 6,437	$ 199,355	$ 8,127	$ 458,355	$ 672,274

Net income				2,494	2,494
Dividends declared				(10,000)	(10,000)
Additional paid-in-capital		66,056			66,056
Other comprehensive income			30,422		30,422

Balance at December 31, 2000	$ 6,437	$ 265,411	$ 38,549	$ 450,849	$ 761,246

Net loss				(12,684)	(12,684)
Dividends declared				(15,000)	(15,000)
Other comprehensive loss			(930)		(930)

Balance at December 31, 2001	$ 6,437	$ 265,411	$ 37,619	$ 423,165	$ 732,632

Net loss				(19,158)	(19,158)
Additional paid-in-capital		100,000			100,000
Other comprehensive income			13,271		13,271
Deconsolidation of SLNY		23,261	(3,506)		19,755

Balance at December 31, 2002	$ 6,437	$ 388,672	$ 47,384	$ 404,007	$ 846,500

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

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

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

For the years ended December 31,

	2002	2001	2000

Cash Flows From Operating Activities:
Net (loss) income from operations	$ (19,158)	$ (12,684)	$ 2,494
Adjustments to reconcile net income (loss) to net cash used
in operating activities:
Amortization of discount and premiums	11,181	3,230	(790)
Depreciation and amortization	1,876	1,602	2,846
Net realized (gains) losses on investments	(136,697)	(23,676)	19,906
Net unrealized (gains) on trading fixed maturities	(47,565)	(8,651)	(14,905)
Interest credited to contractholder deposits	129,610	175,916	195,533
Deferred federal income taxes	28,529	55,700	(53,139)
Cumulative effect of change in accounting principle, net of tax	-	(5,198)	-
Changes in assets and liabilities:
Deferred acquisition costs	148,684	(17,146)	(83,037)
Accrued investment income	(5,324)	1,481	(5,732)
Other assets	(29,116)	(45,919)	14,984
Future contract and policy benefits	26,174	(23,255)	(14,462)
Other, net	25,971	55,150	40,980
Net purchases of trading fixed maturities	(369,794)	(372,352)	(634,365)
Net cash used in operating activities	(235,629)	(215,802)	(529,687)

Cash Flows From Investing Activities:
Sales, maturities and repayments of:
Available-for-sale fixed maturities	1,333,976	1,250,971	1,001,902
Net cash from sale of subsidiary	3,331	-	-
Other invested assets	239,737	4,392	-
Mortgage loans	234,191	112,422	208,542
Real estate	6,036	10,009	35,951
Purchases of:
Available-for-sale fixed maturities	(1,532,791)	(823,289)	(738,259)
Subsidiaries	-	(4,965)	-
Other invested assets	(233,255)	(1,087)	(2,221)
Mortgage loans	(112,479)	(184,787)	(121,897)
Real estate	(3,634)	(16,284)	(14,997)
Changes in other investing activities, net	(8,109)	1,261	2,768
Net change in policy loans	3,098	128	(799)
Net change in short-term investments	(81,713)	8,782	34,924

Net cash (used in) provided by investing activities	(151,612)	357,553	405,914

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

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

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

For the years ended December 31,

	2002	2001	2000

Cash Flows From Financing Activities:
Deposits to contractholder deposit funds	1,178,908	1,557,468	1,962,257
Withdrawals from contractholder deposit funds	(855,834)	(1,894,134)	(1,988,702)
Issuance of long-term debt	80,000
Dividends paid to stockholder	-	(15,000)	(10,000)
Additional capital contributed	100,000	-	-
Net cash provided by (used in) financing activities	503,074	(351,666)	(36,445)

Net change in cash and cash equivalents	115,833	(209,915)	(160,218)

Cash and cash equivalents, beginning of year	180,141	390,056	550,274

Cash from deconsolidation of subsidiary	(18,870)	-	-

Cash and cash equivalents, end of year	$ 277,104	$ 180,141	$ 390,056

Supplemental Cash Flow Information
Interest paid	$ 96,414	$ 94,422	$ 43,266
Income taxes (refunded) paid	(14,904)	10,887	63,692

Non-cash Transactions

On December 21, 2000, the Company's parent, Sun Life of Canada (U.S.) Holdings, Inc., transferred its 100% ownership in Sun Life of Canada (U.S.) Holdings General Partner, Inc. to the Company in exchange for 537 shares of the Company's common stock totaling $537,000 plus $65.5 million of additional paid in capital.

On December 31, 2002, the operations of Sun Life Assurance and Annuity Company of New York, were merged with another affiliated company, Keyport Benefit Life Insurance Company. As a result of this merger Keyport Life Insurance Company, the former parent company of Keyport Benefit Life Insurance Company and an affiliate of the Company, owns 67% of the combined entity and the Company retained a 33% interest in the combined entity.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

GENERAL

Sun Life Assurance Company of Canada (U.S.) (the "Company") was incorporated in 1970 as a life insurance company domiciled in the state of Delaware. As of December 31, 2002, the Company was licensed in 48 states and certain other territories. Effective January 31, 2001, the Company became authorized to do business in 49 states. In addition, the Company's insurance affiliate, Sun Life Insurance and Annuity Company of New York ("SLNY"), is licensed in New York. The Company and its subsidiaries are engaged in the sale of individual and group variable life insurance, individual fixed and variable annuities, group fixed and variable annuities, group pension contracts, guaranteed investment contracts ("GICs"), group life, group disability and stop loss insurance, third party insurance administration, and other asset management services.

The Company is a wholly-owned subsidiary of Sun Life of Canada (U.S.) Holdings, Inc. ("SLC (U.S.) Holdings"), which is an indirect wholly-owned subsidiary of Sun Life Assurance Company of Canada ("SLOC"). SLOC is a life insurance company domiciled in Canada that reorganized from a mutual life insurance company to a stock life insurance company on March 22, 2000. As a result of the demutualization, a new holding company, Sun Life Financial Services of Canada Inc. ("SLF"), is now the ultimate parent of SLOC.

BASIS OF PRESENTATION

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

The consolidated financial statements include the accounts of the Company and its subsidiaries. As of December 31, 2002, the Company owned all of the outstanding shares of Sun Life Financial Services Limited ("SLFSL"), Sun Benefit Services Company, Inc. ("SBSC"), Sun Capital Advisers, Inc. ("SCA"), Sun Life of Canada (U.S.) SPE 97-1, Inc. ("SPE 97-1), Sun Life of Canada (U.S.) Holdings General Partner, Inc. ("the General Partner"), Vision Financial Corporation ("Vision") and Clarendon Insurance Agency, Inc ("Clarendon"). The results are also consolidated with Sun Life of Canada Funding, LLC ("SLOC Funding"), which is owned by a trust sponsored by the Company and Sun Life of Canada (U.S.) Limited Partnership I ("the Partnership"), for which the General Partner is the sole general partner.

On December 31, 2002, the operations of SLNY were merged with another affiliated company, Keyport Benefit Life Insurance Company, ("KBL"). As a result of this merger Keyport Life Insurance Company ("Keyport"), the former parent company of KBL and an affiliate of the Company, owns 67% of the combined entity and the Company retained a 33% interest in the combined entity. For the year ended December 31, 2002, the results of operations for SLNY were consolidated with the Company's results. As of December 31, 2002, the assets and liabilities of SLNY are no longer consolidated with the Company.

On December 18, 2002 the Company sold its interest in its' wholly-owned subsidiary, Sun Life of Canada (U.S.) Distributors, Inc. ("SLD") to another affiliate, Sun Life Financial (U.S.) Holdings, Inc. ("SLF Holdings"), for $10.5 million. No gain or loss was realized on this transaction. Effective January 1, 2003, SLD changed its name to MFS/Sun Life Financial Distributors, Inc. ("MFSLF") and thereafter Massachusetts Financial Services Company ("MFS"), an affiliate of the Company, acquired a 50% ownership interest in MFSLF.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

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

SLNY is engaged in the sale of individual fixed and variable annuity contracts and group life, group disability insurance and stop loss contracts in its state of domicile, New York. SLFSL serves as the marketing administrator for the distribution of the offshore products of SLOC, an affiliate. SCA is a registered investment adviser. SPE 97-I, was organized for the purpose of engaging in activities incidental to securitizing mortgage loans. The General Partner is the sole general partner of the Partnership. Clarendon is a registered broker-dealer that acts as the general distributor of certain annuity and life insurance contracts issued by the Company and its affiliates. As of December 31, 2002, SBSC was inactive. SLOC Funding, was organized for the purpose of engaging in activities incidental to establishing the new guaranteed investment products of the Company. The Partnership was established to purchase subordinated debentures issued by the Company's parent, SLF Holdings, and to issue Partnership capital securities to an affiliated business trust, Sun Life of Canada (U.S.) Capital Trust I, ("Capital Trust I").

On March 12, 2001, the Company purchased Vision for approximately $5.0 million. Vision, based in Keene, N.H., is a third-party administrator that specializes in the administration of insurance products sold at the worksite. The Company has recorded the acquisition using the purchase method of accounting and in connection with the acquisition recorded approximately $1.6 million of goodwill. The results of operations of Vision for the years ended December 31, 2002 and 2001 were not material to the consolidated financial statements.

In June 2000, the Company sold Sun Life Information Services Ireland, Limited ("SLISL") to SLOC. SLISL provides information systems development services to SLOC and its subsidiaries.

USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP 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 amount of revenues and expenses during the reporting period. The most significant estimates are those used in determining deferred policy acquisition costs ("DAC"), investment allowances and the liabilities for future policyholder benefits. Actual results could differ from those estimates.

FINANCIAL INSTRUMENTS

In the normal course of business, the Company enters into transactions involving various types of financial instruments, including cash and cash equivalents, investments such as fixed maturities, mortgage loans and equity securities, off balance sheet financial instruments, debt, loan commitments and financial guarantees. These instruments involve credit risk and also may be subject to risk of loss due to interest rate fluctuation. The Company evaluates and monitors each financial instrument individually and, when appropriate, obtains collateral or other security to minimize losses. Financial instruments are more fully described in Note 6.

CASH AND CASH EQUIVALENTS

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

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 intent, as held-to-maturity, trading, or available-for-sale. In order for the security to be classified as held-to-maturity, the Company must have positive intent and ability to hold the securities to maturity. Securities held-to-maturity are stated at cost adjusted for amortization of premiums and accretion of discounts. Securities that are bought and held principally for the purpose of selling them in the near term are classified as trading. Securities that do not meet this criterion are classified as available-for-sale. Available-for-sale securities are carried at aggregate fair value with changes in unrealized gains or losses reported net of amortization of DAC and of deferred income taxes in a separate component of other comprehensive income. Trading securities are carried at aggregate fair value with changes in unrealized gains or losses reported as a component of net investment income. Fair values for publicly traded securities are obtained from external market quotations. For privately placed fixed maturities, fair values are estimated by taking into account prices for publicly traded securities of similar credit risk, maturities repayment and liquidity characteristics. All security transactions are recorded on a trade date basis.

The Company's accounting policy for impairment requires recognition of an other-than-temporary impairment write-down on a security if it is determined that the Company is unable to recover all amounts due under the contractual obligations of the security. In addition, for securities expected to be sold, an other-than-temporary impairment charge is recognized if the Company does not expect the fair value of a security to recover to cost or amortized cost prior to the expected date of sale. Once an impairment charge has been recorded, the Company then continues to review the other-than-temporarily impaired securities for additional impairment, if necessary.

Mortgage loans are stated at unpaid principal balances, net of provisions for estimated losses. Mortgage loans acquired at a premium or discount are carried at amortized values net of provisions for estimated losses. Mortgage loans, which include primarily commercial first mortgages, are diversified by property type and geographic area throughout the United States. Mortgage loans are collateralized by the related properties and generally are no more than 70% of the properties' value at the time that the original loan is made.

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

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

Policy loans are carried at the amount of outstanding principal balance not in excess of net cash surrender values of the related insurance policies.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

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

Other invested assets consist primarily of a leveraged lease, derivative investments and tax credit partnerships.

The Company uses derivative financial instruments including swaps and options as a means of hedging exposure to interest rate, currency and equity price risk.

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

Interest income on loans is recorded on the accrual basis. Loans 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 a loan is placed in non-accrual status, all interest previously accrued is reversed against current period interest income. Interest accruals are resumed on such loans only when they are brought fully current with respect to principal and interest, have performed on a sustained basis for a reasonable period of time, and when, in the judgment of management, the loans 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, which vary with and are primarily related to the production of new business. Acquisition costs related to investment-type contracts, primarily deferred annuity and guaranteed investment contracts, and universal and variable life products are deferred and amortized with interest in proportion to the present value of estimated gross profits to be realized over the estimated lives of the contracts. Estimated gross profits are composed of net investment income, net realized investment gains and losses, life and variable annuity fees, surrender charges and direct variable administrative expenses. This amortization is reviewed quarterly and adjusted retrospectively when the Company revises its estimate of current or future gross profits to be realized from this group of products, including realized and unrealized gains and losses from investments.

Deferred acquisition costs for each product are reviewed to determine if they are recoverable from future income, including investment income. If such costs are determined to be unrecoverable, they are expensed at the time of determination. Although realization of DAC is not assured, the Company believes it is more likely than not that all of these costs will be realized. The amount of DAC considered realizable, however, could be reduced in the near term if the estimates of gross profits or total revenues discussed above are reduced.

OTHER ASSETS

Property, equipment, leasehold improvements and capitalized software costs that are included in other assets are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are 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 provided using the straight-line method over the lesser of the term of the leases or the estimated useful life of the improvements. Reinsurance receivables from reinsurance ceded are also included in other assets.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

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

POLICY LIABILITIES AND ACCRUALS

Future policy benefits are liabilities for traditional life and, health products. Such liabilities are established in amounts adequate to meet the estimated future obligations of policies in force. The liabilities associated with traditional life insurance, annuity and disability insurance products are computed using the net level premium method based on assumptions about future investment yields, mortality, morbidity and persistency. The assumptions used are based upon the Company's experience and industry standards.

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 and guaranteed investment contracts ("GICS"). The liabilities are determined using the retrospective deposit method and consist of net deposits and investment earnings less administrative charges. The liability is before the deduction of any applicable surrender charges.

Other policy liabilities include liabilities for policy and contract claims. These amounts consist of the estimated amount payable for claims reported but not yet settled and an estimate of claims incurred but not reported. The amount reported is based upon historical experience, adjusted for trends and current circumstances. Management believes that the recorded liability is sufficient to provide for the associated claims adjustment expenses. Revisions of these estimates are included in operations in the year such refinements are made.

REVENUE AND EXPENSES

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

Other than DAC, 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 spread income recognition over expected policy lives. For universal life-type and investment-type contracts, benefits include interest credited to policyholders' accounts and death benefits in excess of account values, which are recognized as incurred.

Fees from investment advisory services are recognized as revenues when the services are provided. Revenues from fixed and variable annuities and single-premium whole life policies include mortality charges, surrender charges, policy fees and contract fees and are recognized when earned.

INCOME TAXES

The Company and its subsidiaries participate in a consolidated federal income tax return with Sun Life Assurance Company of Canada - U.S. Operations Holdings, Inc. and other affiliates. 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 result primarily from policy reserves, policy acquisition expenses and unrealized gains or losses on investments.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

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

SEPARATE ACCOUNTS

The Company has established separate accounts applicable to various classes of contracts providing for variable benefits. Separate account assets are subject to general account claims only to the extent the value of such assets exceeds the separate account liabilities. Contracts for which funds are invested in separate accounts include variable life insurance and individual and group qualified and non-qualified variable annuity contracts. 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 financial statements. Assets held in the separate accounts are carried at market value and the investment risk of such securities is retained by the contractholder.

RECLASSIFICATIONS

Certain amounts in the prior years' financial statements have been reclassified to conform to the 2002 presentation.

NEW ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities". SFAS No. 133 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities including fair value hedges and cash flow hedges. All derivatives, whether designated in hedging relationships or not, will be required to be recorded on the balance sheet at fair value. For a derivative that does not qualify as a hedge, changes in fair value are recognized in earnings.

The Company applied SFAS No. 133, as amended by SFAS No. 137 and SFAS No. 138, on January 1, 2001. As a result, the Company recorded as a change in accounting principle in the accompanying consolidated statements of income, a cumulative transition adjustment of $5.2 million, net of tax, that increased earnings relating to embedded derivatives. Prior to the adoption of SFAS No. 133, the Company had been recognizing changes in fair value of derivatives in earnings; however, embedded derivatives in insurance contracts had not been accounted for separately.

In July 2001, the FASB issued SFAS No. 141, "Business Combinations," and SFAS No. 142, "Goodwill and Other Intangible Assets". These Statements changed the accounting for business combinations and goodwill in two significant ways. First, SFAS No. 141 requires that the purchase method of accounting be used for all business combinations completed after June 30, 2001. Use of the pooling-of-interests method is prohibited. Second, SFAS No. 142 changed the accounting for goodwill from an amortization method to an impairment-only approach. Thus, amortization of goodwill, including goodwill recorded in past business combinations, ceased upon adoption of SFAS No. 142, which was January 1, 2002. Adopting SFAS No. 141 and SFAS No. 142 did not have a material impact on the Company.

In November of 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees Including Indirect Guarantees of Indebtedness of Others" ("FIN No. 45"). FIN No. 45 requires entities to establish liabilities for certain types of guarantees, and expands financial statement disclosures for others. Disclosure requirements under FIN No. 45 are effective for financial statements of annual periods ending after December 15, 2002 and are applicable to all guarantees issued by the guarantor subject to the provisions of FIN No. 45. The initial recognition and measurement provisions of FIN No. 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The Company does not expect the adoption of FIN No. 45 to have a significant impact on the Company's consolidated financial statements. FIN No. 45 did not require the Company to include any additional disclosures related to guarantees in the financial statements for the year ended December 31, 2002.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

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

In January of 2003 the FASB issued FASB Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN No. 46"). FIN No. 46 addresses off-balance sheet financing entities. The Company will adopt FIN No. 46 as required in fiscal 2003 and is currently evaluating its effect on the consolidated financial statements. Although the Company is still evaluating the effect of FIN No. 46, it is reasonably possible that FIN No. 46 may require consolidation of, or additional disclosures related to, the entity described below.

The Company, through its subsidiary, SCA, may have to consolidate, Solar Investment Grade CBO II Limited, the special purpose entity ("SPE") used to facilitate the collateralized debt offering SOLAR CBO II. As of December 31, 2002 the assets and liabilities of this entity were approximately $409.0 million and $407.0 million, respectively. The actual amount that may be consolidated is dependent on the analysis of expected losses and residual returns as compared to the other equity holders and sub-collateral managers. The Company's maximum exposure to loss as a result of its investment is approximately $9.8 million at December 31, 2002.

Additionally, the Company and its affiliates act as collateral manager in several other collateralized debt and mortgage obligation transactions in which the Company is the transferor of assets to a Qualified SPE. In these transactions, the Company establishes a trust, as a Qualified SPE, that purchases a portfolio of assets and issues trust certificates that represent interests in the portfolio of assets. In addition to receiving variable compensation for managing the portfolio, the Company also may retain certain trust certificates. These transactions will not require consolidation because a Qualified SPE was used to facilitate the transactions.

In July 2002, the American Institute of Certified Public Accountants ("AICPA") issued a proposed Statement of Position ("SOP"), "Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Separate Accounts." This SOP provides guidance on accounting and reporting by insurance enterprises for certain nontraditional long-duration contracts and for separate accounts. The Company is in the process of evaluating the provisions of this SOP and its impact to the Company's financial position or results of operations.

2. SIGNIFICANT TRANSACTIONS WITH AFFILIATES

On December 31, 2002, KBL, a wholly owned subsidiary of Keyport, an affiliate, merged with and into the Company's wholly-owned life insurance subsidiary, SLNY. Keyport and its subsidiaries, including KBL, were purchased on October 31, 2001 by SLC (U.S.) Holdings, an upstream parent of the Company. As a result of the merger, the Company continued to hold 2,000 shares of SLNY's common stock; however, the par value of the common stock was converted to $350 per share. In exchange for its investment in KBL, SLNY issued Keyport 4,001 shares of its common stock valued at $350 per share. As a result of the share issuance and change in par value, the Company's ownership percentage of SLNY became 33%, with Keyport holding the remaining 67%. The accounting for this transaction resulted in $23.3 million of additional paid-in-capital to the Company.

On December 31, 2002, prior to the completion of the merger, the Company contributed capital in the amount of $14.85 million to SLNY. Keyport contributed capital totaling $30.15 million to KBL. These contributions were approved by the respective boards of directors in anticipation of the merger transaction.

On December 18, 2002 the Company sold its' wholly-owned subsidiary, SLD to another affiliate, SLF Holdings, for $10.5 million. No gain or loss was realized on this transaction.

On September 24, 2002, the Company received a $100 million capital contribution from its parent, SLC (U.S.) Holdings.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

2. SIGNIFICANT TRANSACTIONS WITH AFFILIATES (CONTINUED)

The Company has an administrative services agreement with Sun Life Assurance Company of Canada - U.S. Operations Holdings, Inc., under which the Company provides administrative and investor services with respect to certain open-end management investment companies for which MFS serves as the investment adviser, and which are offered to certain of the Company's separate accounts established in connection with the variable annuity contracts issued by the Company. Amounts received under this agreement amounted to approximately $24.0 million and $13.8 million for the years ended December 31, 2002 and 2001, respectively.

The Company has agreements with Keyport and certain of its subsidiaries under which the Company provides wholesale distribution services in connection with certain annuity products offered by Keyport. Amounts received under this agreement amounted to approximately $22.4 million for the year ended December 31, 2002.

On January 14, 2000, the Company purchased two separate $100 million notes from MFS, one with an interest rate of 8.60% due August 11, 2004, and the other with an interest rate of 7.93% due August 11, 2003. On November 1, 2000, MFS repaid the $100 million note with an original maturity of August 11, 2003.

On May 29, 2002, the Company sold its $100 million note from MFS, an affiliate, to Keyport, another affiliate, for approximately $108 million. The note was included in fixed maturities available-for-sale at December 31, 2001. The note was sold at a gain of $8 million.

On June 27, 2000, the Company sold SLISL to SLOC. The Company realized a pretax gain of $451,000 on the sale.

During 2001 and 2000, the Company declared and paid dividends in the amount of $15 million, and $10 million, respectively, to its parent, SLC (U.S.) Holdings. The Company did not make any dividend payments in 2002.

The Company and its subsidiaries have management services agreements with SLOC which provide that SLOC will furnish, as requested, certain services and facilities on a cost-reimbursement basis. Expenses under these agreements amounted to approximately $37.1 million in 2002, $40.3 million in 2001, and $31.9 million in 2000.

On December 21, 2000, the Company's parent, SLC (U.S.) Holdings, transferred its ownership in all 200 shares issued and outstanding of the General Partner to the Company in exchange for 537 shares of the Company's common stock totaling $537,000, plus $65.5 million of additional paid in capital. As a result of the acquisition of the General Partner on December 21, 2000, and its ownership interest in the Partnership, the Company became the owner of a $600 million 8.526% subordinated debenture due May 6, 2027 issued by the Company's parent, SLC (U.S.) Holdings. The Company also assumed the liability of the partnership capital securities issued to Capital Trust I, a Delaware business trust sponsored by the Company's parent. Partnership capital securities issued of $600.01 million accrue interest at 8.526% and have no scheduled maturity date. The partnership capital securities, which represent the limited partner interest of the Partnership, may be redeemed on or after May 6, 2027. The Company has accounted for the acquisition of the General Partner using the purchase method of accounting.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

2. SIGNIFICANT TRANSACTIONS WITH AFFILIATES (CONTINUED)

The following proforma statement of income for the year ended December 31, 2000 illustrates the Company's results of operations as if the acquisition of the General Partner took place at the beginning of the year.

Proforma

2000

Revenues

Premiums and annuity considerations

$                 45

Net investment income

339

Net realized investment gains (losses)

(20)

Fee and other income

298

Total revenues

662

Benefits and expenses

Policyowner benefits

338

Other operating expenses

165

Amortization of deferred policy acquisition costs

124

Total benefits and expenses

627

Income (loss) from operations

35

   Interest expense

95

Income (loss) before income tax expense and discontinued

Operations

(60)

Income tax expense (benefit):

   Federal

(62)

   State

(2)

   Income tax expense (benefit)

(64)

Net income from continuing operations

4

Net loss on disposal of subsidiaries, after tax

-

Discontinued operations

-

Net income

$                   4

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

2. SIGNIFICANT TRANSACTIONS WITH AFFILIATES (CONTINUED)

Effective January 2002, essentially all United States employees of Keyport, an affiliate, and SLOC became employees of the Company. As a result, the Company has assumed most of the operating expenses of Keyport, including salaries and benefits, as well as the salaries and benefits previously incurred by SLOC in the United States. In accordance with a tri-party management service agreement between the Company, Keyport, and SLOC, the Company provides personnel and certain services to Keyport and SLOC, as requested. Reimbursements under this agreement, which are recorded as a reduction of other operating expenses, were approximately $51.7 million for the year ended December 31, 2002. Management believes inter-company revenues and expenses are calculated on a reasonable basis, however, these amounts may not necessarily be indicative of the costs that would be incurred if the Company operated on a standalone basis.

The Company leases office space to SLOC under lease agreements with terms expiring in September 2005 and options to extend the terms for each of twelve successive five year terms at fair market value of the fixed rent for the term which is ending. Rent received by the Company under the leases amounted to approximately $11.7 million, $8.8 million, and $7.8 million in 2002, 2001 and 2000, respectively.

As more fully described in Note 7, the Company has been involved in several reinsurance transactions with SLOC.

On July 25, 2002, the Company issued an $80 million promissory note at 5.71%, maturing June 30, 2012 to an affiliate, Sun Life (Hungary) Group Financing Limited Liability Company ("Sun Life (Hungary) Ltd"). The Company pays interest semi-annually to Sun Life (Hungary), Ltd. On December 31, 2002 the Company paid $1.9 million in interest. The proceeds of the note were used to purchase fixed rate government and corporate bonds.

The Company had $565 million of surplus notes issued to its parent, SLC (U.S.) Holdings, as of December 31, 2000. In October 2001, SLC (U.S.) Holdings transferred its ownership in the Company's surplus notes totaling $565 million to Sun Life Financial (U.S.) Finance, Inc., an affiliate of the Company, at book value.

The Company has accrued $4.3 million for unpaid interest on surplus notes held by an affiliate at December 31, 2002 and 2001, respectively. The Company expensed $43.3 million for interest on these surplus notes for the years ended December 31, 2002, 2001 and 2000, respectively.

The following table lists the details of notes due to affiliates:

Principal

Maturity

Rate

$ 150,000

12/15/07

6.625%

150,000

12/15/15

7.250%

7,500

12/15/15

6.125%

7,500

12/15/07

5.750%

80,000

06/30/12

5.710%

250,000

11/06/27

8.625%

$ 645,000

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

3. INVESTMENTS

FIXED MATURITIES

The amortized cost and fair value of fixed maturities were as follows:

December 31, 2002

Gross

Gross

Estimated

Amortized

Unrealized

Unrealized

Fair

Cost

Gains

Losses

Value

Available-for-sale fixed maturities:

Asset Backed and Mortgage Backed Securities

$ 357,446

$ 11,085

$ (1,584)

$ 366,947

Foreign Government & Agency Securities

25,303

2,062

-

27,365

States & Political Subdivisions

500

15

-

515

U.S. Treasury & Agency Securities

311,947

11,825

(256)

323,516

Corporate securities:

Basic Industry

101,266

10,283

(1,178)

110,371

Capital Goods

96,485

10,681

(289)

106,877

Communications

84,698

4,658

(3,271)

86,085

Consumer Cyclical

111,070

6,837

(3,286)

114,621

Consumer Noncyclical

111,617

14,240

(2,924)

122,933

Energy

70,451

8,566

(1,830)

77,187

Finance

337,750

17,911

(4,737)

350,924

Industrial Other

68,302

10,677

(79)

78,900

Technology

4,782

161

-

4,943

Transportation

134,799

8,140

(14,005)

128,934

Utilities

287,665

28,129

(4,076)

311,718

Total Corporate

1,408,885

120,283

(35,675)

1,493,493

Total available-for-sale fixed maturities

$ 2,104,081

$ 145,270

$ (37,515)

$ 2,211,836

Trading fixed maturities

Asset Backed and Mortgage Backed Securities

$ 87,470

$ 8,017

$ -

$ 95,487

Foreign Government & Agency Securities

4,568

1,012

-

5,580

States & Political Subdivisions

-

-

-

-

U.S. Treasury & Agency Securities

23,491

423

-

23,914

Corporate securities:

Basic Industry

59,201

6,283

(297)

65,187

Capital Goods

56,432

5,255

(1,600)

60,087

Communications

120,120

10,688

(620)

130,188

Consumer Cyclical

146,174

12,244

(207)

158,211

Consumer Noncyclical

25,106

675

(2,951)

22,830

Energy

90,471

7,428

(3,405)

94,494

Finance

351,478

27,364

(688)

378,154

Industrial Other

64,185

5,606

(119)

69,672

Technology

3,805

-

(155)

3,650

Transportation

80,555

6,481

(10,711)

76,325

Utilities

241,913

10,081

(30,948)

221,046

Total Corporate

1,239,440

92,105

(51,701)

1,279,844

Total trading fixed maturities

$ 1,354,969

$ 101,557

$ (51,701)

$ 1,404,825

Held-to-maturity fixed maturities:

Sun Life of Canada (U.S.) Holdings, Inc.,

8.526% subordinated debt, due 2027

$        600,000

$     16,520

$                 -

$   616,520

Total held-to-maturity fixed maturities

$        600,000

$ 16,520

$                 -

$   616,520

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

3. INVESTMENTS (CONTINUED)

December 31, 2001

Gross

Gross

Estimated

Amortized

Unrealized

Unrealized

Fair

Cost

Gains

Losses

Value

Available-for-sale fixed maturities:

Asset Backed and Mortgage Backed Securities

$ 282,151

$ 5,123

$ (2,352)

$ 284,922

Foreign Government & Agency Securities

24,105

1,344

-

25,449

States & Political Subdivisions

254

15

-

269

U.S. Treasury & Agency Securities

142,892

5,695

(951)

147,636

Corporate securities:

Basic Industry

102,983

5,935

(7,092)

101,826

Capital Goods

132,343

7,406

(90)

139,659

Communications

108,810

5,926

(517)

114,219

Consumer Cyclical

138,538

6,688

(2,080)

143,146

Consumer Noncyclical

121,149

9,243

(904)

129,488

Energy

82,913

5,029

(1,245)

86,697

Finance

378,522

11,257

(3,518)

386,261

Industrial Other

80,099

6,791

(294)

86,596

Technology

6,988

280

-

7,268

Transportation

151,613

9,663

(15,697)

145,579

Utilities

319,225

18,200

(5,752)

331,673

Total Corporate

1,623,183

86,418

(37,189)

1,672,412

Total available-for-sale fixed maturities

$ 2,072,585

$ 98,595

$ (40,492)

$ 2,130,688

Trading fixed maturities

Asset Backed and Mortgage Backed Securities

$ 84,928

$ 1,336

$ (283)

$ 85,981

Foreign Government & Agency Securities

4,513

453

-

4,966

States & Political Subdivisions

-

-

-

-

U.S. Treasury & Agency Securities

-

-

-

-

Corporate securities:

Basic Industry

46,541

1,916

(319)

48,138

Capital Goods

41,396

2,315

(70)

43,641

Communications

131,840

4,847

(3,913)

132,774

Consumer Cyclical

117,892

4,351

(1,186)

121,057

Consumer Noncyclical

21,539

1,146

(62)

22,623

Energy

76,145

2,019

(1,793)

76,371

Finance

267,355

12,355

(929)

278,781

Industrial Other

45,959

1,746

(430)

47,275

Technology

2,977

3

-

2,980

Transportation

82,740

2,974

(2,635)

83,079

Utilities

96,348

1,626

(4,150)

93,824

Total Corporate

930,732

35,298

(15,487)

950,543

Total trading fixed maturities

$ 1,020,173

37,087

(15,770)

1,041,490

Held-to-maturity fixed maturities:

Sun Life of Canada (U.S.) Holdings, Inc.,

8.526% subordinated debt, due 2027

$        600,000

$     19,656

$                 -

$   619,656

Total held-to-maturity fixed maturities

$        600,000

$     19,656

$                 -

$   619,656

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

3. INVESTMENTS (CONTINUED)

The amortized cost and estimated fair value by maturity periods for fixed maturity investments are shown below. Actual maturities may differ from contractual maturities on asset-backed securities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties, or the Company may have the right to put or sell the obligations back to the issuers.

			December 31, 2002
			Amortized Cost	Estimated Fair Value

Maturities of available-for-sale fixed securities:
	Due in one year or less		$ 85,272	$ 86,299
	Due after one year through five years		597,290	619,761
	Due after five years through ten years		653,675	702,306
	Due after ten years		410,398	436,523
Subtotal - Maturities available-for-sale			$ 1,746,635	$ 1,844,889
Asset-backed securities			357,446	366,947
Total Available-for-sale			$ 2,104,081	$ 2,211,836

Maturities of trading fixed securities:
	Due in one year or less		$ 11,122	$ 11,007
	Due after one year through five years		482,935	492,081
	Due after five years through ten years		529,771	541,779
	Due after ten years		243,671	264,471
	Subtotal - Maturities of trading		$ 1,267,499	$ 1,309,338
Asset-backed securities			87,470	95,487
	Total Trading		$ 1,354,969	$ 1,404,825

Maturities of held-to-maturity fixed securities:
		Due after ten years	$ 600,000	$ 616,520

Gross gains of $28.1 million, $15.5 million and $9.1 million and gross losses of $6.3 million, $7.0 million and $24.0 were realized on the voluntary sale of fixed maturities for the years ended December 31, 2002, 2001, and 2000, respectively.

Fixed maturities with an amortized cost of approximately $2.7 million and $3.1 million at December 31, 2002 and 2001, respectively, were on deposit with federal and state governmental authorities as required by law.

At December 31, 2002 and 2001, $37.0 million and $32.9 million of fixed maturities were pledged as collateral and are included with fixed maturities.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

3. INVESTMENTS (CONTINUED)

As of December 31, 2002 and 2001, 93% and 96%, respectively, of the Company's fixed maturities were investment grade. Investment grade securities are those that are rated "BBB" or better by nationally recognized rating agencies. During 2002, 2001, and 2000 the Company incurred realized losses totaling $27.5 million, $5.5 million, and $15.0 million, respectively for other than temporary impairment of value of some of its fixed maturities after determining that not all of the unrealized losses were temporary in nature. During 2002, $1.4 million of the 2001 losses was recovered and is included in realized gains. The Company has stopped accruing income on several of its holdings for issuers that are in default. $1.9 million, $0.4 million and $0.2 million of interest income on these holdings was not accrued during 2002, 2001, and 2000, respectively.

MORTGAGE LOANS AND REAL ESTATE

The Company invests in commercial first mortgage loans and real estate throughout the United States. Investments are diversified by property type and geographic area. Mortgage loans are collateralized by the related properties and generally are no more than 70% of the properties' value at the time that the original loan is made. Real estate investments classified as held-for-sale have been obtained primarily through foreclosure. The carrying value of mortgage loans and real estate investments net of applicable reserves and accumulated depreciation on real estate were as follows:

December 31,

2002

2001

Total mortgage loans

$        778,962

$         915,730

Real estate:

Held-for-sale

-

1,490

Held for production of income

79,783

82,055

Total real estate

$         79,783

$           83,545

Real estate held for the production of income primarily consists of the Sun Life office park located in Wellesley Hills, MA. Accumulated depreciation on real estate was $17.9 million and $16.1 million at December 31, 2002 and 2001, respectively.

The Company monitors the condition of the mortgage loans in its portfolio. In those cases where mortgages have been restructured, values are impaired or values are impaired but mortgages are performing, appropriate allowances for losses have been made. The Company has restructured mortgage loans, impaired mortgage loans and impaired but performing mortgage loans totaling $9.0 million and $17.9 million at December 31, 2002 and 2001, respectively, against which there are allowances for losses of $7.0 million and $7.1 million, respectively.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

3. INVESTMENTS (CONTINUED)

The investment valuation allowances, which have been deducted in arriving at investment carrying values as presented in the consolidated balance sheets, were as follows:

Balance at

Balance at

January 1,

Additions

Subtractions

December 31,

2002

Mortgage loans

$ 7,140

$        483

$ (607)

$ 7,016

2001

Mortgage loans

$              4,675

$              3,095

$             (630)

$               7,140

Mortgage loans and real estate investments comprise the following property types and geographic regions:

December 31,

2002

2001

Property Type:

Office building

$    322,957

$     369,535

Residential

32,114

39,254

Retail

314,750

389,972

Industrial/warehouse

178,777

190,672

Other

17,163

16,982

Valuation allowances

(7,016)

(7,140)

Total

$      858,745

$      999,275

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

3. INVESTMENTS (CONTINUED)

December 31,

2002

2001

Geographic region:

Arizona

$ 17,999

$ 21,221

California

70,370

95,861

Colorado

7,324

8,245

Connecticut

26,418

37,208

Delaware

6,322

6,707

Florida

32,009

40,359

Georgia

61,742

71,037

Indiana

13,295

15,015

Kentucky

9,537

13,824

Louisiana

14,101

15,221

Maryland

14,545

19,730

Massachusetts

114,019

116,971

Michigan

35,662

44,549

Nevada

4,581

3,891

New Jersey

16,333

24,047

New York

94,205

88,812

North Carolina

23,479

14,889

Ohio

39,405

29,137

Oregon

5,415

8,131

Pennsylvania

98,990

122,275

Tennessee

9,236

15,345

Texas

17,351

29,071

Utah

16,582

18,179

Virginia

24,433

27,840

Washington

52,207

62,439

All other

40,201

56,411

Valuation allowances

(7,016)

(7,140)

Total

$ 858,745

$ 999,275

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

3. INVESTMENTS (CONTINUED)

At December 31, 2002, scheduled mortgage loan maturities were as follows:

2003

$ 22,707

2004

27,585

2005

64,054

2006

25,711

2007

69,860

Thereafter

569,045

Total

$ 778,962

Actual maturities could differ from contractual maturities because borrowers may have the right to prepay obligations with or without prepayment penalties and loans may be refinanced.

The Company has made commitments of mortgage loans on real estate and other loans into the future. The outstanding commitments for these mortgages amount to $12.1 million and $39.8 million at December 31, 2002 and 2001, respectively.

During 2002 and 2000, the Company sold commercial mortgage loans in securitization transactions. In these transactions the Company established a trust, as a Qualified SPE to purchase the assets and issue the trust certificates. In the transactions, the Company retained investment tranches as well as servicing rights. The investors in the securitization trusts have no recourse to the Company's other assets for failure of debtors to pay when due. The value of the Company's retained interest is subject to credit and interest rate risk on the transferred financial assets. The Company recognized a pretax gain of $4.5 million and $763,000 for the 2002 and 2000 securitization transactions, respectively.

Key economic assumptions used in measuring the retained interests at the date of securitization resulting from securitizations completed during the year ended December 31, 2002 were as follows:

	Class AA	Class A	Class BBB
Prepayment speed	0	0	0
Weighted average life in years	6.532	6.843	8.417
Expected credit losses	0	0	0
Residual cash flows discount rate	6.064%	6.511%	7.562%
Treasury rate interpolated for average life	4.571%	4.600%	4.682%
Spread over treasuries	1.493%	1.911%	2.880%
Duration in years	5.22	5.263	6.013

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

3. INVESTMENTS (CONTINUED)

Key economic assumptions and the sensitivity of the current fair value of cash flows in those assumptions are as follows:

Commercial Mortgages

Class AA

Class A

Class BBB

Carrying amount of retained

Interests

$ 2,911

$ 1,391

$ 1,980

Fair value of retained interests

3,427

1,599

2,282

Weighted average life in years

4.99

5.04

5.76

Expected Credit Losses

Impact on fair value of .20% of adverse change

2,862

1,269

1,725

Impact on fair value of .30% of adverse change

2,861

1,267

1,616

Residual Cash flows Discount Rate

Impact on fair value of 10% of adverse change

2,811

1,248

1,768

Impact on fair value of 20% of adverse change

2,760

1,224

1,734

The total principal amount of the commercial mortgage loans was $72.7 million at December 31, 2002, none of which were 60 days or more past due. There were no net credit losses incurred relating to the commercial mortgage loans at the date of securitization and at December 31, 2002.

Key economic assumptions used in measuring the retained interests at the date of securitization resulting from securitizations completed during the year ended December 31, 2000 were as follows:

Class B

Class I

Prepayment speed

0

0

Weighted average life in years

7.25

4.54

Expected credit losses

0

0

Residual cash flows discount rate

7.798

8.844

Treasury rate interpolated for average life

4.97

4.96

Spread over treasuries

2.83%

3.88%

Duration in years

5.201

3.611

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

3. INVESTMENTS (CONTINUED)

Key economic assumptions and the sensitivity of the current fair value of cash flows in those assumptions are as follows:

Commercial Mortgages

Class B

Class I

Carrying amount of retained

Interests

$ 14,933

$ 8,818

Fair value of retained interests

16,460

8,099

Weighted average life in years

9.57

3.80

Expected Credit Losses

Impact on fair value of .025% of adverse change

0

0

Impact on fair value of 20% of adverse change

0

0

Residual Cash flows Discount Rate

Impact on fair value of 10% of adverse change

16,250

7,810

Impact on fair value of 20% of adverse change

16,037

7,754

The total principal amount of the commercial mortgage loans was $165.8 million at December 31, 2002, none of which were 60 days or more past due. There were no net credit losses incurred relating to the commercial mortgage loans at the date of securitization and at December 31, 2002.

SECURITIES LENDING

The Company has a securities lending program operated on its behalf by the Company's primary custodian, Chase Manhattan Bank of New York. The custodian has indemnified the Company against losses arising from this program. There were no securities out on loan at December 31, 2002 and 2001. The income resulting from this program was $252,000, $126,000, and $48,000 for the years ended December 31, 2002, 2001 and 2000, respectively.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

3. INVESTMENTS (CONTINUED)

LEVERAGED LEASES

The Company is a lessor in a leverage lease agreement entered into on October 21, 1994, under which equipment having an estimated economic life of 25-40 years was originally leased for a term of 9.78 years. During 2001, the lease term was extended until 2010. The Company's equity investment represented 22.9% of the purchase price of the equipment. The balance of the purchase price was furnished by third-party long-term debt financing, collateralized by the equipment and non-recourse to the Company. At the end of the lease term, the master lessee may exercise a fixed price purchase option to purchase the equipment. The Company's net investment in leveraged leases is composed of the following elements:

Year ended December 31,

2002

2001

Lease contract receivable

$     56,760

$     68,418

Less: non-recourse debt

(23,485)

(36,096)

Net Receivable

33,275

32,322

Estimated value of leased assets

21,420

21,420

Less: unearned and deferred income

(17,323)

(18,231)

Investment in leveraged leases

37,372

35,511

Less: fees

(187)

(212)

Net investment in leveraged leases

$    37,185

$     35,299

DERIVATIVES

The Company uses derivative financial instruments for risk management purposes to hedge against specific interest rate risk, to alter investment rate exposures arising from mismatches between assets and liabilities, and to minimize the Company's exposure to fluctuations in interest rates, foreign currency exchange rates and general market conditions. The derivative financial instruments used by the Company include swaps and options. The Company does not hold or issue any derivative instruments for trading purposes.

SWAPS

Swap agreements are contracts with other parties to exchange at specified intervals, the difference between fixed and floating rate interest amounts based upon a notional principal amount. No cash is exchanged at the outset of the contract and no principal payments are made by either party. A single net payment is usually made by one counter-party at each interest payment date. The Company enters into interest rate swap agreements to hedge against exposure to interest rate fluctuations. Because the underlying principal is not exchanged, the Company's maximum exposure to counterparty credit risk is the difference in payments exchanged. The net payable/receivable is recognized over the life of the swap contract as an adjustment to net investment income.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

3. INVESTMENTS (CONTINUED)

In 2000, the Company launched a new GIC program. Each deal is highly-individualized but typically involves the issuance of foreign currency denominated contracts backed by cross currency swaps or equity linked cross currency swaps. The combination of these swaps with interest rate swaps allows the Company to lock in U.S. dollar fixed rate payments for the life of the contract.

The net (decrease) increase in net investment income related to swap settlement payments was $(34.2) million, $(23.5) million, and $.2 million for the years ended December 31, 2002, 2001 and 2000, respectively.

The Company does not employ hedge accounting treatment. As a result, changes in the fair value of swaps are reported in current period operations as a component of net investment income. The net decrease to net investment income due to changes in the fair value of swaps was $73.1 million, $64.3 million and $53.4 million for the years ended December 31, 2002, 2001 and 2000, respectively.

The Company recognized gross realized gains on swaps of $3.9 million, $6.2 million and $3.9 million in 2002, 2001, and 2000, respectively, as well as gross realized losses of $12.0 million, $8.9 million, and $1.2 million during 2002, 2001, and 2000, respectively.

The Company's primary risks associated with these transactions are exposure to potential credit loss in the event of non-performance by counter-parties and market risk. The Company regularly assesses the strength of the counter-parties and generally enters into transactions with counter-parties rated "A" or better by nationally recognized ratings agencies. Management believes that the risk of incurring losses related to credit risk is remote. As of December 31, 2002 and 2001, the Company's derivatives had no significant concentration of credit risk.

The Company is required to pledge and receive collateral for open derivative contracts. The amount of collateral that is required is determined by agreed upon thresholds with the counter-parties. The Company currently pledges cash and U.S. Treasury bonds to satisfy this collateral requirement. At December 31, 2002 and 2001, $37.0 million and $32.9 million, respectively, of fixed maturities were pledged as collateral and are included with fixed maturities.

OPTIONS

Options are legal contracts that give the contractholder the right to buy or sell a specific amount of the underlying interest at a strike price upon exercise of the option. The Company also utilizes options to hedge against stock market exposure inherent in the mortality and expense risk charges and guaranteed minimum death benefit features of the Company's variable annuities.

The net increase (decrease) in net investment income related to changes in the fair value of options was $9.0 million, $(28.9) million and $(13.5) million for the years ended December 31, 2002, 2001 and 2000, respectively. The Company does not employ hedge accounting treatment. As a result, changes in the fair value of swaps are reported in current period operations as a component of net investment income.

The Company recognized gross realized gains on options of $140.5 million, $4.0 million and $0 in 2002, 2001, and 2000, respectively, as well as gross realized losses of $10.9 million, $0, and $0 during 2002, 2001, and 2000, respectively.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

3. INVESTMENTS (CONTINUED)

The Company's underlying notional or principal amounts associated with open derivatives positions were as follows:

Outstanding at
December 31, 2002

Notional

Fair Value

Principal

Asset (Liability)

Amounts

Interest rate swaps

$

1,683,250

$ (182,204)

Currency swaps

761,424

97,398

Equity swaps

293,994

(3,171)

Equity index options

1,153,168

213,174

Total

$

3,891,836

$ 125,197

Outstanding at
December 31, 2001

Notional Principal Amounts
Fair Value

Asset (Liability)

Interest rate swaps

$

1,327,496

$ (73,495)

Currency swaps

697,557

(22,918)

Equity swaps

259,607

(34,008)

Equity index options

1,428,323

81,000

Total

$

3,712,983

$ (49,421)

At December 31, 2002, the net unrealized gains on derivatives are included with other invested assets. As of December 31, 2001, the net unrealized losses are included with other liabilities on the financial statements.

4. NET REALIZED INVESTMENT GAINS AND LOSSES

Net realized investment gains (losses) consisted of the following:

2002

2001

2000

Fixed maturities

$        37,633

$        29,694

$      (14,962)

Mortgage and other loans

4,648

(2,557)

2,057

Real estate

514

1,150

5,211

Derivative instruments

121,445

1,261

2,768

Short term investments

2

196

(22)

Write-down of fixed maturities

(27,545)

(6,050)

(14,957)

Total

$       136,697

$        23,694

$      (19,905)

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

5. NET INVESTMENT INCOME

Net investment income consisted of the following:

2002

2001

2000

Fixed maturities

$        289,196

$        320,810

$       265,608

Equity securities

-

-

-

Mortgage and other loans

69,802

73,050

77,807

Real estate

7,855

5,961

8,868

Policy loans

2,645

2,967

3,047

Derivatives

(98,363)

(116,779)

(66,944)

Other

(2,714)

189

4,798

Gross investment income

268,421

286,198

293,184

Less: Investment expenses

3,144

3,706

5,510

Net investment income

$      265,277

$        282,492

$       287,674

6. FAIR VALUE OF FINANCIAL INSTRUMENTS

SFAS No. 107, "Disclosure about Fair Value of Financial Instruments", excludes certain insurance liabilities and other non-financial instruments from its disclosure requirements. The fair value amounts presented herein do not include the expected interest margin (interest earnings over interest credited) to be earned in the future on investment-type products or other intangible items. Accordingly, the aggregate fair value amounts presented herein do not necessarily represent the underlying value to the Company. Likewise, care should be exercised in deriving conclusions about the Company's business or financial condition based on the fair value information presented herein.

The following table presents the carrying amounts and estimated fair values of the Company's financial instruments at December 31, 2002 and 2001:

December 31, 2002

December 31, 2001

Carrying

Estimated

Carrying

Estimated

Amount

Fair Value

Amount

Fair Value

Financial assets:

Cash and cash equivalents

$       277,104

$         277,104

$        180,141

$         180,141

Fixed maturities

4,216,661

4,233,181

3,772,178

3,791,834

Short-term investments

171,627

171,627

103,296

103,296

Mortgages

778,962

894,608

915,730

977,857

Derivatives

125,197

125,197

(49,421)

(49,421)

Policy loans

39,317

39,317

42,686

42,686

Other invested assets

60,243

60,243

66,771

66,771

Financial liabilities:

Guaranteed investment contracts

$     1,768,854

$       1,681,797

$      1,320,278

$       1,336,594

Contractholder deposit funds

1,507,601

1,522,820

1,603,391

1,591,474

Fixed annuity contracts

71,517

70,977

88,400

86,031

Interest sensitive life insurance

116,086

121,908

116,967

117,045

Long-term debt

645,000

688,647

565,000

596,218

Partnership Capital Securities

607,826

616,520

607,826

619,656

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

6. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

The fair values of cash and cash equivalents are estimated to be cost plus accrued interest. The fair values of short-term bonds are estimated to be amortized cost. The fair values of publicly traded fixed maturities are based upon market prices or dealer quotes. For privately placed fixed maturities, fair values are estimated by taking into account prices for publicly traded securities of similar credit risk, maturity, repayment and liquidity characteristics. The fair 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 are stated at unpaid principal balances, which approximate fair value.

The fair values of the Company's general account insurance reserves and contractholder deposits under investment-type contracts (insurance, annuity and pension contracts that do not involve mortality or morbidity risks) are estimated using discounted cash flow analyses or surrender values based on interest rates currently being offered for similar contracts with maturities consistent with those remaining for all contracts being valued. Those contracts that are deemed to have short-term guarantees have a carrying amount equal to the estimated market value.

The fair values of other deposits with future maturity dates are estimated using discounted cash flows.

The fair value of notes payable and other borrowings are estimated using discounted cash flow analyses based upon the Company's current incremental borrowing rates for similar types of borrowings. The carrying amount of all other assets is assumed to approximate fair value.

7. REINSURANCE

INDIVIDUAL INSURANCE

The Company has agreements with SLOC and several unrelated companies which provide for reinsurance of portions of the net-amount-at-risk under certain individual variable universal life, bank owned life insurance ("BOLI"), and corporate owned life insurance ("COLI") policies. These amounts are reinsured on either a monthly renewable or a yearly renewable term basis.

The Company also acts as the reinsurer of risk under the lapse protection benefit under certain universal life contracts issued by SLOC. One hundred percent of such risk is retroceded to Sun Life Financial Insurance and Annuity Company (Bermuda) Ltd.

GROUP INSURANCE

SLNY has an agreement with SLOC whereby SLOC reinsures the mortality risks of the group life insurance contracts. Under this agreement, certain death benefits are reinsured on a yearly renewable term basis. The agreement provides that SLOC will reinsure mortality risks in excess of $50,000 per claim for group life contracts ceded by SLNY.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

7. REINSURANCE (CONTINUED)

SLNY has an agreement with an unrelated company whereby the unrelated company reinsures the morbidity risks of SLNY's group long-term disability contracts. Under this agreement, certain long-term disability benefits are reinsured on a yearly renewable term basis. The agreement provides that the unrelated company will reinsure amounts in excess of $4,000 per claim per month for long-term disability contracts ceded by SLNY.

The effects of reinsurance were as follows:

		For the Years Ended December 31,
			2002	2001	2000

Insurance premiums:
	Direct		$ 49,190	$ 43,980	$ 51,058
	Assumed		-	-	-
	Ceded		5,616	2,971	6,255
Net premiums			$ 43,574	$ 41,009	$ 44,803

Insurance and other individual policy benefits and Claims:
	Direct		$ 341,429	$ 314,750	$ 346,411
	Assumed		-	-	-
	Ceded		4,125	5,063	8,077
Net policy benefits and claims			$ 337,304	$ 309,687	$ 338,334

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 evaluates the financial condition of its reinsurers and monitors concentration of credit risk.

8. RETIREMENT PLANS

PENSION PLANS

Through December 31, 2001, the Company was a participant in a non-contributory defined benefit pension plan for employees sponsored by SLOC. Consistent with the transfer of all employees to Sun Life of Canada U.S. on January 1, 2002, the plan sponsorship for the employee and the agent pension plan was transferred to the Company. Expenses are allocated to participating companies based on a manner consistent with the allocation of employee compensation expenses.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

8. RETIREMENT PLANS (CONTINUED)

The Company's funding policies for the pension plans are to contribute amounts which at least satisfy the minimum amount

required by the Employee Retirement Income Security Act of 1974 ("ERISA"); currently the plans are fully-funded. Most pension plan assets consist of separate accounts of SLOC or other insurance company contracts.

The following table sets forth the change in the pension plan's projected benefit obligations and assets, as well as the plan's funded status at December 31 (in 000's):

2002

Change in projected benefit obligation:

Projected benefit obligation at beginning of year

$        149,595

Service cost

8,436

Interest cost

10,673

Actuarial (gain)

(8,075)

Benefits paid

(4,925)

Plan amendments

3,946

Projected benefit obligation at end of year

$ 159,650

Change in fair value of plan assets:

Fair value of plan assets at beginning of year

$        212,965

Other

(888)

Actual return on plan assets

(27,682)

Benefits paid

(4,925)

Transfer due to change in plan sponsor

-

Fair value of plan assets at end of year

$        179,470

Funded status

$         19,820

Unrecognized net actuarial loss

38,632

Unrecognized transition obligation

(19,545)

Unrecognized prior service cost

9,132

Prepaid benefit cost

$         48,039

The Company's share of the projected benefit obligation for the years ended December 31, 2001 and 2000 was $140.6 million and $109.7 million, respectively.

The Company's share of the fair value of plan assets at December 31, 2001 and 2000 was $177.3 million and $163.2 million, respectively.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

8. RETIREMENT PLANS (CONTINUED)

The Company's share of the prepaid benefit costs at December 31, 2001 and 2000 was $29.2 million and $26.8 million, respectively.

The following table sets forth the components of the net periodic pension cost for the year ended December 31 (in 000's)

2002

Components of net periodic benefit cost:

Service cost

$          8,437

Interest cost

10,674

Expected return on plan assets

(18,395)

Amortization of transition obligation asset

(3,051)

Amortization of prior service cost

216

Recognized net actuarial loss (gain)

120

Net periodic benefit cost

$          (1,999)

The Company's share of net periodic benefit cost

$            3,834

The projected benefit obligations were based on calculations that utilize certain assumptions. The assumed weighted average discount rate was 6.75%, 7.00% and 7.50% for the years ended December 31, 2002, 2001 and 2000, respectively. The expected return on plan assets for 2002, 2001 and 2000 was 8.75% and the assumed rate of compensation increase was 4.0% for 2002, and 4.5% for 2001 and 2000. The Company's share of the net periodic benefit costs for the years ended December 31, 2001 and 2000 were $1.0 million and $0.81 million, respectively.

The Company sponsors and participates in a 401(k) savings plan for which substantially all employees of at least age 21 are eligible for at date of hire. Under the plan, the Company matches up to specified amounts, the employees' contributions to the plan. The amount of the 2002 employer contributions under plan sponsorship for the Company and its affiliates was $4.03 million. Amounts are allocated to affiliates based on employees' contributions. The Company's portion of the expense was $956,000, $462,000 and $354,000 for the years ended December 31, 2002, 2001, and 2000, respectively.

OTHER POST-RETIREMENT BENEFIT PLANS

Through December 31, 2001, the Company was a participant in a post-retirement benefit pension plan for employees sponsored by SLOC providing certain health, dental, and life insurance benefits ("post-retirement benefits") for retired employees and dependents. Consistent with the transfer of all employees to Sun Life of Canada U.S. on January 1, 2002, the plan sponsorship was transferred to the Company. Expenses are allocated to participating companies based on the number of participants.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

8. RETIREMENT PLANS (CONTINUED)

Substantially all employees of the participating companies may become eligible for these benefits if they reach normal retirement age while working for the Company, or retire early upon satisfying an alternate age plus service condition. Life insurance benefits are generally set at a fixed amount. The following table sets forth the change in other post-retirement benefit plans' obligations and assets, as well as the plans' funded status at December 31, 2002 (in 000's):

Change in benefit obligation:

Benefit obligation at beginning of year

$        45,515

Service cost

1,195

Interest cost

2,488

Actuarial (gain)

(7,586)

Benefits paid

(2,202)

Plan Amendments

(3,429)

Benefit obligation at end of year

$          35,981

Change in fair value of plan assets:

Fair value of plan assets at beginning of year

$      -

Employer contributions

2,202

Benefits paid

(2,202)

Fair value of plan assets at end of year

$                  -

Funded Status

$          (35,981)

Unrecognized net actuarial loss

12,477

Unrecognized prior service cost

(3,138)

Accrued benefit cost

$          (26,642)

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

8. RETIREMENT PLANS (CONTINUED)

The following table sets forth the components of the net periodic post-retirement benefit costs for the year ended December 31 (in 000's):

2002

Components of net periodic benefit cost

Service cost

$ 1,195

Interest cost

2,488

Amortization of prior service cost

(241)

Recognized net actuarial loss

933

Net periodic benefit cost

$ 4,375

The Company's share of net periodic benefit cost

$ 380

The Company's share of the benefit obligation for the years ended December 31, 2001 and 2000 was $29.2 million and $17.1 million, respectively.

The Company's share of the accrued benefit cost at December 31, 2001 and 2000 was $13.4 million and $12.1 million, respectively.

The Company's share of the net periodic benefit costs for the years ended December 31, 2001 and 2000 was $256,000 and $219,000 respectively.

In order to measure the post-retirement benefit obligation at December 31, 2002, the Company assumed a 12.0% annual rate of increase in the per capita cost of covered health care benefits. In addition, medical cost inflation is assumed to be 11% in 2003 and assumed to decrease gradually to 5.5% for 2013 and remain at that level thereafter. Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. For example, increasing the health care cost trend rate assumptions by one percentage point in each year would increase the accumulated post-retirement benefit obligation at December 31, 2002 by $4.3 million, and the aggregate of the service and interest cost components of net periodic post-retirement benefit expense for 2002 by $0.6 million. Conversely, decreasing assumed rates by one percentage point in each year would decrease the accumulated post-retirement benefit obligation at December 31, 2002 by $3.6 million, and the aggregate of the service and interest cost components of net periodic post-retirement benefit expense for 2002 by $0.5 million. The assumed weighted average discount rate used in determining the post-retirement benefit obligation was 6.75% for 2002, 7.00% for 2001 and 7.50% for 2000.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

9. FEDERAL INCOME TAXES

The Company and its subsidiaries file a consolidated federal income tax return with Sun Life Assurance Company of Canada- U.S. Operations Holdings, Inc. Federal income taxes are calculated as if the Company was filing a separate federal income tax return. A summary of the components of federal income tax expense (benefit) in the consolidated statements of income for the years ended December 31 was as follows:

2002

2001

2000

Federal income tax expense (benefit):

Current

$

(74,702)

$

(81,820)

$

(8,536)

Deferred

28,528

58,498

(53,145)

Total

$

(46,174)

$

(23,322)

$

(61,681)

Federal income taxes attributable to the consolidated operations are different from the amounts determined by multiplying income before federal income taxes by the expected federal income tax rate of 35%. The Company's effective rate differs from the federal income tax rate as follows:

		2002		2001		2000

Expected federal income tax benefit	$	(22,423)	$	(13,435)	$	(21,455)
Low income housing credit		(6,138)		(6,138)		(5,805)
Additional tax benefit		(16,700)		(4,200)		(35,897)
Other		(913)		451		1,476

Federal income tax benefit	$	(46,174)	$	(23,322)	$	(61,681)

The deferred income tax (asset) liability represents the tax effects of temporary differences between the carrying amounts of assets and liabilities used for financial reporting purposes and the amounts used for income tax purposes. The components of the Company's deferred tax (assets) and liabilities as of December 31, 2002 and 2001 were as follows:

	2002	2001

Deferred tax assets:
Actuarial liabilities	$ 54,928	$ 92,323
Other	18,462	38,870
Total deferred tax assets	$ 73,390	$ 131,193

Deferred tax liabilities:
Deferred policy acquisition costs	(104,199)	(181,647)
Investments, net	(73,927)	(48,710)
Total deferred tax liabilities	$ (178,126)	$ (230,357)

Net deferred tax liabilities	$ (104,736)	$ (99,164)

The Company makes payments under the tax sharing agreements as if it were filing as a separate company.

The Company's federal income tax returns are routinely audited by the Internal Revenue Service, and provisions are made in the consolidated financial statements in anticipation of the results of these audits. The Company is currently under audit by the IRS for the years 1998 through 2000. In the Company's opinion, adequate tax liabilities have been established for all years and any adjustments that might be required for the years under audit will not have a material effect on the Company's financial statements. However, the amounts of these tax liabilities could be revised in the future if estimates of the Company's ultimate liability are revised.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

10. LIABILITY FOR UNPAID CLAIMS AND CLAIMS ADJUSTMENT EXPENSES

Activity in the liability for unpaid claims and claims adjustment expenses related to the Company's group life and group disability products is summarized below:

2002

2001

Balance at January 1

$ 23,615

$ 20,574

Less reinsurance recoverable

(6,078)

(5,067)

Net balance at January 1

17,537

15,507

Incurred related to:

Current year

12,062

11,354

Prior years

(1,946)

(786)

Total incurred

10,116

10,568

Paid losses related to:

Current year

(6,660)

(5,446)

Prior years

(3,320)

(3,092)

Total paid

(9,980)

(8,538)

Balance at December 31

24,294

23,615

Less reinsurance recoverable

(6,621)

(6,078)

Deconsolidation of SLNY

(17,673)

-

Net balance at December 31

$ -

$ 17,537

The Company regularly updates its estimates of liabilities for unpaid claims and claims adjustment expenses as new information becomes available and further events occur which may impact the resolution of unsettled claims for its group disability lines of business. Changes in prior estimates are recorded in results of operations in the year such changes are determined to be needed. As a result of the merger of SLNY and KBL, the liabilities of SLNY, including all of the group liabilities for Company, are no longer consolidated with the liabilities of the Company.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

11. DEFERRED POLICY ACQUISITION COSTS

The following illustrates the changes to the DAC:

2002

2001

Balance at January 1

$          765,716

$          761,988

Acquisition costs deferred

95,244

137,879

Amortized to expense during the year

(243,927)

(120,733)

Adjustment for unrealized investment gains (losses) during the year

(19,059)

(13,418)

Deconsolidation of SLNY

(12,159)

-

Balance at December 31

$         585,815

$          765,716

During 2002, DAC amortization was increased as a result of actual results and revised estimates of future gross profits. The change in the market value of separate accounts assets (approximately $57.0 million) and revised cash flow assumptions (approximately $39.0 million) were the major items affecting the change in gross profit assumptions.

12. SEGMENT INFORMATION

The Company offers financial products and services such as fixed and variable annuities, guaranteed investment contracts, retirement plan services, and life insurance on an individual and group basis, as well as disability insurance on a group basis. Within these areas, the Company conducts business principally in three operating segments and maintains a Corporate segment to provide for the capital needs of the three operating segments and to engage in other financing related activities. Net investment income is allocated based on segmented assets by line of business.

Management evaluates the results of the operating segments on an after-tax basis. The Company does not depend on one or a few customers, brokers or agents for a significant portion of its operations.

The Wealth Management segment markets and administers individual and group variable annuity products, individual and group fixed annuity products which include market value adjusted annuities, and other retirement benefit products. The Company began offering GICS to unrelated third parties in overseas markets during the second quarter of 2000. These contracts may contain any of a number of features including variable or fixed interest rates and equity index options and may be denominated in foreign currencies. The Company uses derivative instruments to manage the risks inherent in the contract options.

The Individual Protection segment markets and administers a variety of life insurance products sold to individuals and corporate owners of life insurance. The products include whole life, universal life and variable life products.

The Group Protection segment markets and administers group life, long-term disability and stop loss insurance to small and mid-size employers in the State of New York. As of December 31, 2002, as a result of the SLNY/KBL merger, the results of the Group Protection segment will no longer be consolidated with the Company.

The Corporate segment includes the unallocated capital of the Company, its debt financing, and items not otherwise attributable to the other segments.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

12. SEGMENT INFORMATION (CONTINUED)

The following amounts pertain to the various business segments. Prior years segmented results have been restated to include the results of the Company's investment advisor subsidiary, SCA, with the Wealth Management segment instead of the Corporate segment:

Year ended December 31, 2002

Wealth

Individual

Group

Management

Protection

Protection

Corporate

Totals

Total Revenues

$ 584,408

$ 62,030

$ 20,181

$ 131,332

$ 797,951

Total Expenditures

696,458

61,445

15,630

88,485

862,018

Pretax Income (Loss)

(112,050)

585

4,551

42,847

(64,067)

Net Operating Income (Loss)

(71,691)

464

3,195

48,874

(19,158)

Total Assets

$ 16,659,420

$ 2,704,635

$ -

$ 641,518

$ 20,005,573

Year ended December 31, 2001

Total Revenues

$     500,992

$           32,345

$ 19,407

$          78,562

$   631,306

Total Expenditures

530,671

28,383

15,930

101,637

676,621

Pretax Income (Loss)

(29,679)

3,962

3,477

(23,075)

(45,315)

Net Operating Income (Loss)

(11,093)

3,443

2,641

(12,873)

(17,882)

Total Assets

$20,286,398

$        1,685,589

$ 38,105

$        299,647

$  22,309,739

Year ended December 31, 2000

Total Revenues

$     536,630

$          44,206

$ 17,194

$          12,403

$   610,433

Total Expenditures

558,375

44,477

15,350

53,515

671,717

Pretax Income (Loss)

(21,745)

(271)

1,844

(41,112)

(61,284)

Net Operating Income (Loss)

(5,971)

(176)

1,199

7,442

2,494

Total Assets

$22,098,372

$        1,242,549

$    30,514

$         686,233

$ 24,057,668

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

13. REGULATORY FINANCIAL INFORMATION

The insurance subsidiaries are required to file annual statements with state regulatory authorities prepared on an accounting basis prescribed or permitted by such authorities (statutory basis). Statutory surplus differs from shareholder's equity reported in accordance with GAAP for stock life insurance companies primarily because policy acquisition costs are expensed when incurred, reserves are based on different assumptions, investments are valued differently, post-retirement benefit costs are based on different assumptions and reflect a different method of adoption, and deferred income taxes are calculated differently. The statutory financials are not prepared on a consolidated basis.

The Company's statutory surplus and net income (loss) were as follows:


	Year ended December 31,
	2002	2001	2000

Statutory surplus and capital	$ 686,561	$ 769,520	$ 940,335
Statutory net loss	$ (131,012)	$ (137,139)	$ (236)

The Company prepares its statutory financial statements in conformity with accounting practices prescribed or permitted by the State of Delaware. Effective January 1, 2001, the State of Delaware required that insurance companies domiciled in the State of Delaware prepare their statutory basis financial statements in accordance with the NAIC Accounting Practices and Procedures manual, version effective January 1, 2001, subject to any deviations prescribed or permitted by the Delaware Commissioner of Insurance.

Accounting changes adopted to conform to the provisions of the NAIC Accounting Practices and Procedures manual, version effective January 1, 2001, are reported as changes in accounting principles in the statutory financial statements. The cumulative effect of changes in accounting principles is reported as an adjustment to unassigned funds (surplus) in the period of the change in accounting principle. The cumulative effect is the difference between the amount of capital and surplus at the beginning of the year and the amount of capital and surplus that would have been reported at that date if the new accounting principles had been applied retroactively for all prior periods. As a result of these changes, the Company reported a change of accounting principle in its statutory financial statements, as an adjustment that increased unassigned funds (surplus), by $25.9 million as of January 1, 2001. This adjustment is due to $25.5 million of net deferred tax assets established as of January 1, 2001, offset by a decrease of $470,000 in the valuation of the Company's obligation for post-retirement benefits other than pensions on an NAIC basis as of January 1, 2001.

14. DIVIDEND RESTRICTIONS

The Company's and its insurance affiliate's ability to pay dividends are subject to certain restrictions. Delaware and New York have enacted laws governing the payment of dividends to stockholders by insurers. These laws affect the dividend paying ability of the Company and SLNY. Pursuant to Delaware's statute, the maximum amount of dividends and other distributions that an insurer may pay in any twelve-month period, without prior approval of the Delaware Commissioner of Insurance, is limited to the greater of (i) 10% of its statutory surplus as of the preceding December 31, or (ii) the individual company's statutory net gain from operations for the preceding calendar year (if such insurer is a life company), or its net income (not including realized capital gains) for the preceding calendar year (if such insurer is not a life company). Any dividends to be paid by an insurer, whether or not in excess of the aforementioned threshold, from a source other than statutory surplus, would also require the prior approval of the Delaware Commissioner of Insurance. The Company did not pay any dividends in 2002 and paid $15.0 million and $10.0 million of dividends to its parent, SLC (U.S.) Holdings, during 2001, and 2000, respectively.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

14. DIVIDEND RESTRICTIONS (CONTINUED)

On September 20, 2000, New York insurance law was amended to permit a domestic stock life insurance company to distribute a dividend to its shareholders, without notice to the New York Superintendent of Insurance, where the aggregate amount of such dividend in any calendar year does not exceed the lesser of: (1) ten percent of its surplus to policyholders as of the immediately preceding calendar year; or (2) its net gain from operations for the immediately preceding calendar year, not including realized capital gains. Under the previous law, domestic stock life insurers were prohibited from distributing any dividends to shareholders unless the insurer filed a notice of its intention to declare a dividend and its amount with the superintendent at least 30 days in advance of the proposed declaration, and such proposed distribution was not disapproved by the superintendent. No dividends were paid during 2002 or 2001. Dividends in the amount of $4.7 million were declared and paid during 2000 by the SLNY to the Company. These dividends were approved by the Board of Directors and the State of New York Insurance Department.

15. COMMITMENTS AND CONTINGENCIES

REGULATORY AND INDUSTRY DEVELOPMENTS

Unfavorable economic conditions may contribute to an increase in the number of insurance companies that are under regulatory supervision. This may result in an increase in mandatory assessments by state guaranty funds, or voluntary payments by solvent insurance companies to cover losses to policyholders of insolvent or rehabilitated companies. Mandatory assessments, which are subject to statutory limits, can be partially recovered through reduction in future premium taxes in some states. Under insurance guaranty fund laws in each state, the District of Columbia and Puerto Rico, insurers licensed to do business can be assessed by state insurance guaranty associations for certain obligations of insolvent insurance companies to policyholders and claimants. Most of these laws do provide, however, that an assessment may be excused or deferred if it would threaten an insurer's solvency and further provide annual limits on such assessments. Part of the assessments paid by the Company pursuant to these laws may be used as credits for a portion of the associated premium taxes.

LITIGATION

The Company is not aware of any contingent liabilities arising from litigation, income taxes and other matters that could have a material effect upon the financial condition of the Company.

LINES OF CREDIT

The Company has syndicated two lines of credit each in the amount of $250 million. There are 15 banks in the syndicate of lenders. The banks have committed to lend funds of up to $500 million when requested by the Company at prevailing rates determined in accordance with the line of credit agreements. One line of credit terminates October 2003, the other in October 2007. As of December 31, 2002, no amounts have been borrowed.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2002, 2001 and 2000

LEASE COMMITMENTS

The Company leases various facilities and equipment under operating leases with terms of up to 25 years. As of December 31, 2002, minimum future lease payments under such leases are as follows:


2003	241
2004	243
2005	250
2006	257
2007	264
Thereafter	202
Total	$ 1,457

Total rental expense for the years ended December 31, 2002, 2001 and 2000 was $7.6 million, $6.9 million and $5.0 million, respectively.

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholder of Sun Life Assurance Company of Canada (U.S.)

Wellesley, Massachusetts

We have audited the accompanying consolidated balance sheets of Sun Life Assurance Company of Canada (U.S.) and its subsidiaries (the "Company") as of December 31, 2002 and 2001, 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, 2002. 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 auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Sun life Assurance Company of Canada (U.S.) and its subsidiaries as of December 31, 2002 and 2001, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2002, 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, 2001, the Company adopted the provisions of Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities".

Deloitte & Touche LLP

Boston, Massachusetts

February 21, 2003

Independent Auditors' Report

To the Participants in Regatta, Regatta Gold, Regatta Classic, Regatta Platinum, Regatta Extra, Regatta Access, Regatta Choice, Regatta Flex 4, Regatta Flex II, Regatta Choice II, Regatta Masters Extra, Regatta Masters Choice, Regatta Masters Access and Regatta Masters Flex Sub-Accounts and the Board of Directors of Sun Life Assurance Company of Canada (U.S.):

We have audited the accompanying statements of condition of Franklin Templeton VIP Mutual Shares Securities Sub-Account, Franklin Templeton VIP Value Securities Sub-Account, Franklin Templeton VIP International Securities Sub-Account, Lord Abbett Growth & Income Sub-Account, Lord Abbett Mid Cap Value Sub-Account, MFS/Sun Life Bond Sub-Account, MFS/Sun Life Capital Appreciation Sub-Account, MFS/Sun Life Capital Appreciation S Sub-Account, MFS/Sun Life Capital Opportunities S Sub-Account, MFS/Sun Life Capital Opportunities Sub-Account, MFS/Sun Life Emerging Growth Sub-Account, MFS/Sun Life Emerging Growth S Sub-Account, MFS/Sun Life Emerging Markets Equity S Sub-Account, MFS/Sun Life Emerging Markets Equity Sub-Account, MFS/Sun Life International Growth Sub-Account, MFS/Sun Life Global Asset Allocation S Sub-Account, MFS/Sun Life Global Asset Allocation Sub-Account, MFS/Sun Life Global Governments S Sub-Account, MFS/Sun Life Global Growth Sub-Account, MFS/Sun Life Global Growth S Sub-Account MFS/Sun Life Global Governments Sub-Account, MFS/Sun Life Government Securities Sub-Account, MFS/Sun Life Global Telecommunications S Sub-Account, MFS/Sun Life Global Total Return S Sub-Account, MFS/Sun Life Global Total Return Sub-Account, MFS/Sun Life Global Telecommunications Sub-Account, MFS/Sun Life High Yield Sub-Account, MFS/Sun Life International Growth S Sub-Account, MFS/Sun Life New Discovery S Sub-Account, MFS/Sun Life Massachusetts Investors Growth Stock S Sub-Account, MFS/Sun Life Mid Cap Growth S Sub-Account, MFS/Sun Life Mid Cap Growth Sub-Account, MFS/Sun Life Bond S Sub-Account, MFS/Sun Life High Yield S Sub-Account, MFS/Sun Life Utilities S Sub-Account, MFS/Sun Life Government Securities S Sub-Account, MFS/Sun Life Massachusetts Investors Trust S Sub-Account, MFS/Sun Life International Investors Trust S Sub-Account, MFS/Sun Life International Investors Trust Sub-Account, MFS/Sun Life Massachusetts Investors Growth Stock Sub-Account, MFS/Sun Life Massachusetts Investors Trust Sub-Account, MFS/Sun Life Money Market S Sub-Account, MFS/Sun Life Money Market Sub-Account, MFS/Sun Life Managed Sectors S Sub-Account, MFS/Sun Life Managed Sectors Sub-Account, MFS/Sun Life Value S Sub-Account, MFS/Sun Life Value Sub-Account, MFS/Sun Life New Discovery Sub-Account, MFS/Sun Life Research S Sub-Account, MFS/Sun Life Research Sub-Account, MFS/Sun Life Research Growth and Income S Sub-Account, MFS/Sun Life Research Growth and Income Sub-Account, MFS/Sun Life Research International S Sub-Account, MFS/Sun Life Research International Sub-Account, MFS/Sun Life Strategic Growth S Sub-Account, MFS/Sun Life Strategic Growth Sub-Account, MFS/Sun Life Strategic Income S Sub-Account, MFS/Sun Life Strategic Income Sub-Account, MFS/Sun Life Technology S Sub-Account, MFS/Sun Life Technology Sub-Account, MFS/Sun Life Total Return Sub-Account, MFS/Sun Total Return S Sub-Account, MFS/Sun Life Utilities Sub-Account, MFS/Sun Life Mid Cap Value S Sub-Account, MFS/Sun Life Strategic Value S Sub-Account, Oppenheimer Main St. Small Cap Growth Sub-Account, Oppenheimer Main St. Growth & Income Sub-Account, Oppenheimer Capital Appreciation Sub-Account, PIMCO VIT Real Return Bond Sub-Account, PIMCO VIT Total Return Bond Sub-Account, and Sun Capital Real Estate Sub-Account of Sun Life of Canada (U.S.) Variable Account F (the "Sub-Accounts") as of December 31, 2002, the related statements of operations for the year then ended and the statements of changes in net assets for each of the two years in the period then ended. These financial statements are the responsibility of management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities held at December 31, 2002 by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Sub-Accounts as of December 31, 2002 and the results of their operations for the year then ended and the changes in their net assets for each of the two years in the period then ended in conformity with accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP

Boston, Massachusetts

March 21, 2003

Regatta, Regatta Gold, Regatta Classic, Regatta Platinum, Regatta Extra, Regatta Access, Regatta Choice, Regatta Flex 4, Regatta Flex II, Regatta Choice II, Regatta Masters Extra, Regatta Masters Choice, Regatta Masters Access and Regatta Masters Flex Sub-Accounts Included in Sun Life of Canada (U.S.) Variable Account F
Statements of Condition - December 31, 2002

Assets:
Investment in	Shares	Cost		Value
Franklin Templeton Variable Insurance Products Trust
Mutual Shares Securities Fund (FMS)	29,780	$	356,569	$	357,959
Templeton International Securities Fund (FTI)	111,464	1,058,766		1,049,989
Franklin Value Securities Fund (FVS)	22,053	207,753		211,927
Lord Abbett Series Fund, Inc.
Growth & Income Portfolio (LA1)	19,045	365,517		358,622
Mid-Cap Value (LA2)	20,504	284,210		284,181
MFS/Sun Life Series Trust:
Bond S Class (MF7)	3,119,520	35,182,386		36,841,535
Bond Series (BDS)	17,670,435	196,364,396		209,394,657
Capital Appreciation S Class (MFD)	1,523,118	26,077,494		20,470,703
Capital Appreciation Series (CAS)	41,596,847	1,285,782,700		560,725,499
Capital Opportunities S Class (CO1)	1,176,250	14,013,230		10,868,551
Capital Opportunities Series (COS)	26,813,596	530,788,734		248,562,031
Emerging Growth S Class (MFF)	930,871	12,634,419		9,746,218
Emerging Growth Series (EGS)	35,252,497	883,787,403		370,503,740
Emerging Markets Equity S Class (EM1)	241,057	2,180,083		2,036,932
Emerging Markets Equity Series (FCE)	3,550,164	35,013,644		30,105,387
Global Asset Allocation S Class (GA1)	177,315	1,970,721		1,874,220
Global Asset Allocation Series (GAA)	5,735,624	80,445,836		60,797,613
Global Governments S Class (GG1)	339,026	3,695,627		3,969,999
Global Governments Series (GGS)	5,508,812	58,905,598		64,728,545
Global Growth S Class (GG2)	470,062	4,147,658		3,713,489
Global Growth Series (GGR)	19,866,300	286,892,684		157,738,424
Global Telecommunications S Class (GT1)	160,078	485,864		372,982
Global Telecommunications Series (GTS)	594,396	2,393,503		1,390,888
Global Total Return S Class (GT2)	423,878	5,527,820		5,544,326
Global Total Return Series (GTR)	5,876,026	86,274,695		77,034,704
Government Securities S Class (MFK)	6,755,154	90,335,797		93,288,670
Government Securities Series (GSS)	53,696,421	698,531,229		743,695,427
High Yield S Class (MFC)	4,993,075	32,428,490		32,604,779
High Yield Series (HYS)	39,250,563	290,519,646		257,483,692
International Growth S Class (IG1)	1,254,874	11,252,135		10,428,002
International Growth Series (FCG)	10,476,879	116,657,057		87,272,404
International Investors Trust S Class (MI1)	237,150	2,281,287		2,198,379
International Investors Trust Series (MII)	5,220,234	64,107,894		48,443,772
Managed Sectors S Class (MS1)	170,192	2,666,223		2,241,427
Managed Sectors Series (MSS)	10,902,349	345,082,724		144,020,033
Massachusetts Investors Growth Stock S Class (M1B)	4,223,056	36,474,474		29,392,471
Massachusetts Investors Growth Stock Series (MIS)	58,998,726	793,640,014		411,221,117
Massachusetts Investors Trust S Class (MFL)	2,236,971	55,221,869		46,842,173
Massachusetts Investors Trust Series (MIT)	48,931,420	1,657,211,388		1,028,049,127
Mid Cap Growth S Class (MC1)	3,819,778	19,761,369		14,018,585
Mid Cap Growth Series (MCS)	10,873,817	68,835,823		39,906,909
Mid Cap Value S Class (MCV)	88,720	705,069		703,547
Money Market S Class (MM1)	52,742,601	52,742,601		52,742,601
Money Market Series (MMS)	581,957,305	581,957,305		581,957,305
New Discovery S Class (M1A)	1,832,089	21,713,793		17,111,716
New Discovery Series (NWD)	15,179,678	224,168,076		142,385,383
Research S Class (RE1)	642,410	8,690,410		7,124,327
Research Series (RES)	39,695,955	825,671,850		442,212,938
Research Growth and Income S Class (RG1)	647,580	7,507,977		6,404,569
Research Growth and Income Series (RGS)	6,226,849	82,024,000		61,770,347
Research International S Class (RI1)	639,469	6,166,228		5,755,219
Research International Series (RSS)	6,841,858	82,883,790		61,781,978
Strategic Growth S Class (SG1)	889,197	6,068,173		4,997,289
Strategic Growth Series (SGS)	6,784,359	64,407,688		38,195,939
Strategic Income S Class (SI1)	1,255,328	12,524,241		12,904,773
Strategic Income Series (SIS)	5,452,007	54,508,470		56,210,197
Strategic Value S Class (SVS)	135,709	1,089,756		1,072,102

See notes to financial statements.

- 2 -

Statements of Condition - December 31, 2002 - continued

Investment in
MFS/Sun Life Series Trust - continued	Shares	Cost		Value
Technology S Class (TE1)	538,493	$	2,178,832	$	1,507,781
Technology Series (TEC)	4,974,330		29,002,970	14,027,609
Total Return S Class (MFJ)	7,616,972		130,260,358	120,729,010
Total Return Series (TRS)	90,003,100		1,691,774,026	1,431,049,257
Utilities S Class (MFE)	1,009,862		11,107,521	9,331,126
Utilities Series (UTS)	22,721,822		387,513,838	210,858,505
Value S Class (MV1)	4,215,492		52,031,839	46,412,571
Value Series (MVS)	23,641,000		304,324,837	261,233,052
Oppenheimer Variable Account Funds
Capital Appreciation Fund (OCA)	6,729		180,011	178,514
Main St. Growth and Income (OMG)	11,845		184,971	180,752
Main St. Small Cap Growth Fund (OMS)	16,583		157,190	154,060
PIMCO Variable Insurance Trust
Real Return Bond Portfolio (PRR)	42,944		498,666	511,033
Total Return Bond Portfolio (PTR)	146,133		1,488,329	1,494,944
Sun Capital Advisers Trust
Sun Capital Real Estate Fund (SC3)	24,681		287,201	273,956
		$	12,483,664,745	$	8,461,062,488
Liability:
Payable to Sponsor				(2,491,586		)
Net Assets				$	8,458,570,902

Net Assets Applicable to Contract Owners:	Applicable to Owners of					Reserve for
	Deferred Variable Annuity Contracts					Variable
	Units		Value			Annuities		Total
MFS Consolidated Regatta Contracts:
Franklin Templeton Variable Insurance Products Trust
FMS		35,337	$	357,959	$		-	$	357,959
FTI		109,241	1,049,989				-		1,049,989
FVS		20,281	211,927				-		211,927
Lord Abbett Series Fund, Inc.
LA1		33,508	358,622				-		358,622
LA2		26,664	284,181				-		284,181
MFS/Sun Life Series Trust:
BDS		16,672,091	208,744,678				550,435		209,295,113
CAS		53,276,821	557,305,635				2,993,088		560,298,723
CO1		1,659,796	10,825,561				42,680		10,868,241
COS		36,579,889	248,229,061				301,650		248,530,711
EGS		50,696,788	369,614,662				823,356		370,438,018
EM1		204,949	2,036,932				-		2,036,932
FCE		3,685,145	29,937,981				138,651		30,076,632
FCG		11,708,342	87,133,782				127,113		87,260,895
GA1		210,153	1,874,220				-		1,874,220
GAA		4,636,581	60,359,017				395,293		60,754,310
GG1		344,004	3,955,950				13,945		3,969,895
GG2		468,329	3,713,489				-		3,713,489
GGR		13,695,036	157,184,892				537,866		157,722,758
GGS		4,610,834	64,500,757				208,811		64,709,568
GSS		50,577,174	741,861,716				1,858,553		743,720,269
GT1		66,336	372,982				-		372,982
GT2		575,530	5,544,326				-		5,544,326
GTR		5,490,465	76,607,689				379,658		76,987,347
GTS		555,343	1,390,888				-		1,390,888
HYS		20,985,015	256,423,330				870,503		257,293,833
IG1		1,265,240	10,426,683				1,270		10,427,953
M1A		2,530,871	17,084,957				26,516		17,111,473
M1B		4,230,272	29,392,471				-		29,392,471
MC1		2,772,461	14,009,338				9,143		14,018,481

See notes to financial statements.

- 3 -

Statements of Condition - December 31, 2002 - continued

	Applicable to Owners of					Reserve for
	Deferred Variable Annuity Contracts					Variable
	Units		Value			Annuities			Total
MFS/Sun Life Series Trust - continued
MCS		10,939,748		$	39,852,323		$	54,142		$	39,906,465
MCV		86,168		703,547				-			703,547
MF7		3,399,082		36,828,051				13,384			36,841,435
MFC		3,266,770		32,595,032				9,684			32,604,716
MFD		3,163,343		20,457,935				12,599			20,470,534
MFE		1,391,497		9,313,477				17,526			9,331,003
MFF		1,550,123		9,745,241				941			9,746,182
MFJ		13,048,289		120,678,503				50,130			120,728,633
MFK		8,558,119		93,261,962				26,509			93,288,471
MFL		6,235,850		46,839,279				2,786			46,842,065
MI1		253,434		2,198,379				-			2,198,379
MII		4,845,066		48,340,906				82,110			48,423,016
MIS		65,830,913		410,598,093				622,188			411,220,281
MIT		93,484,847		1,024,231,285				3,621,136			1,027,852,421
MM1		5,279,063		52,630,742				118,205			52,748,947
MMS		47,957,226		578,794,451				2,776,559			581,571,010
MS1		320,127		2,241,427				-			2,241,427
MSS		14,253,338		143,616,226				354,861			143,971,087
MV1		5,567,204		46,388,105				24,284			46,412,389
MVS		25,236,732		260,843,056				400,085			261,243,141
NWD		18,934,627		142,173,306				221,853			142,395,159
RE1		998,378		7,113,370				10,875			7,124,245
RES		40,346,263		440,226,760				1,848,387			442,075,147
RG1		836,210		6,404,569				-			6,404,569
RGS		7,794,225		61,672,325				113,185			61,785,510
RI1		688,316		5,755,219				-			5,755,219
RSS		8,305,636		61,757,531				62,394			61,819,925
SG1		729,461		4,997,289				-			4,997,289
SGS		8,056,046		38,149,608				43,453			38,193,061
SI1		1,211,192		12,894,543				10,163			12,904,706
SIS		5,060,468		56,065,465				147,675			56,213,140
SVS		131,129		1,072,102				-			1,072,102
TE1		292,860		1,507,781				-			1,507,781
TEC		5,811,547		14,011,854				15,080			14,026,934
TRS		86,032,615		1,423,669,699				6,601,385			1,430,271,084
UTS		22,902,575		210,330,776				483,642			210,814,418
Oppenheimer Variable Account Fund
OCA		16,503		178,514				-			178,514
OMG		17,855		180,752				-			180,752
OMS		15,242		154,060				-			154,060
PIMCO Variable Insurance Trust
PRR		48,547		511,033				-			511,033
PTR		144,063		1,494,943				-			1,494,943
Sun Capital Advisers Trust
SC3		27,198		273,956				-			273,956
				$	8,431,547,150		$	27,023,752		$	8,458,570,902

See notes to financial statements.

- 4 -

	FMS			FTI					FVS							LA1				LA2
	Sub-Account(b)			Sub-Account(b)						Sub-Account(b)					Sub-Account(b)						Sub-Account(b)
Income and Expenses:
Dividend income	$	-		$		-			$			-				$	1,805			$		894
Mortality and expense risk charges		(511	)			(1,213	)					(335	)				(583		)			(261		)
Distribution and administrative expense charges		(61	)			(146	)					(41	)				(70		)			(31		)
Net investment income (loss)	$	(572	)	$		(1,359	)		$			(376	)			$	1,152			$		602

Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sales of fund shares	$	218		$		53			$			194				$	93			$		24
Realized gain distributions		-				-						-					40					-
Net realized gains (losses)	$	218		$		53			$			194				$	133			$		24

Net unrealized appreciation (depreciation) on investments:
End of year	$	1,390		$		(8,777	)		$			4,174				$	(6,895		)	$		(29		)
Beginning of year		-				-						-					-					-
Change in unrealized appreciation (depreciation)	$	1,390		$		(8,777	)		$			4,174				$	(6,895		)	$		(29		)

Realized and unrealized gains (losses)	$	1,608		$		(8,724	)		$			4,368				$	(6,762		)	$		(5		)
Increase (Decrease) in net assets from operations	$	1,036		$		(10,083	)		$			3,992				$	(5,610		)	$		597



	BDS			CAS						CO1					COS						EGS
	Sub-Account			Sub-Account						Sub-Account					Sub-Account						Sub-Account
Income and Expenses:
Dividend income	$	6,750,259		$	1,339,103					$	5,723				$			306,500			$	-
Mortality and expense risk charges		(2,371,898	)		(9,388,497			)			(137,370			)				(4,557,237	)			(6,684,734	)
Distribution and administrative expense charges		(284,628	)		(1,126,620			)			(16,484			)				(546,868	)			(802,169	)
Net investment income (loss)	$	4,093,733		$	(9,176,014			)		$	(148,131			)	$			(4,797,605	)		$	(7,486,903	)

Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	2,605,564		$	(382,909,764			)		$	(371,827			)	$			(108,712,383	)		$	(171,071,995	)
Realized gain distributions		1,049,023			-						-							-				-
Net realized gains (losses)	$	3,654,587		$	(382,909,764			)		$	(371,827			)	$			(108,712,383	)		$	(171,071,995	)

Net unrealized appreciation (depreciation) on investments:
End of year	$	13,030,261		$	(725,057,201			)		$	(3,144,679			)	$			(282,226,703	)		$	(513,283,663	)
Beginning of year		5,799,672			(785,519,636			)			428,718							(252,637,713	)			(444,623,841	)
Change in unrealized appreciation (depreciation)	$	7,230,589		$	60,462,435					$	(3,573,397			)	$			(29,588,990	)		$	(68,659,822	)

Realized and unrealized gains (losses)	$	10,885,176		$	(322,447,329			)		$	(3,945,224			)	$			(138,301,373	)		$	(239,731,817	)
Increase (Decrease) in net assets from operations	$	14,978,909		$	(331,623,343			)		$	(4,093,355			)	$			(143,098,978	)		$	(247,218,720	)

(b) For the period August 05, 2002 (commencement of operations) through December 31, 2002.

See notes to financial statements.

- 5 -

Statements of Operations - Year Ended December 31, 2002 - continued

	EM1			FCE				FCG								GA1				GAA
	Sub-Account			Sub-Account					Sub-Account						Sub-Account					Sub-Account
Income and Expenses:
Dividend income	$	20,437		$	440,065			$				572,569				$	38,365			$	2,498,892
Mortality and expense risk charges		(24,510	)		(457,697	)						(1,315,228	)				(17,542		)		(891,739		)
Distribution and administrative expense charges		(2,941	)		(54,924	)						(157,827	)				(2,105		)		(107,009		)
Net investment income (loss)	$	(7,014	)	$	(72,556	)		$				(900,486	)			$	18,718			$	1,500,144

Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	(114,030	)	$	(1,409,605	)		$				(8,001,430	)			$	(16,733		)	$	(6,888,095		)
Realized gain distributions		-			-							-					-				-
Net realized gains (losses)	$	(114,030	)	$	(1,409,605	)		$				(8,001,430	)			$	(16,733		)	$	(6,888,095		)

Net unrealized appreciation (depreciation) on investments:
End of year	$	(143,151	)	$	(4,908,257	)		$				(29,384,653	)			$	(96,501		)	$	(19,648,223		)
Beginning of year		22,077			(4,199,144	)						(23,976,161	)				10,282				(18,511,417		)
Change in unrealized appreciation (depreciation)	$	(165,228	)	$	(709,113	)		$				(5,408,492	)			$	(106,783		)	$	(1,136,806		)

Realized and unrealized gains (losses)	$	(279,258	)	$	(2,118,718	)		$				(13,409,922	)			$	(123,516		)	$	(8,024,901		)
Increase (Decrease) in net assets from operations	$	(286,272	)	$	(2,191,274	)		$				(14,310,408	)			$	(104,798		)	$	(6,524,757		)



	GG1			GG2						GGR					GGS					GSS
	Sub-Account			Sub-Account						Sub-Account					Sub-Account					Sub-Account
Income and Expenses:
Dividend income	$	-		$	6,616					$	568,605				$			-		$	29,541,821
Mortality and expense risk charges		(24,302	)		(35,680		)				(2,548,801			)				(620,013	)		(8,266,544	)
Distribution and administrative expense charges		(2,916	)		(4,282		)				(305,856			)				(74,402	)		(991,985	)
Net investment income (loss)	$	(27,218	)	$	(33,346		)			$	(2,286,052			)	$			(694,415	)	$	20,283,292

Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	75,289		$	(96,558		)			$	(56,684,239			)	$			96,097		$	4,528,114
Realized gain distributions		-			-						-							-			-
Net realized gains (losses)	$	75,289		$	(96,558		)			$	(56,684,239			)	$			96,097		$	4,528,114

Net unrealized appreciation (depreciation) on investments:
End of year	$	274,372		$	(434,169		)			$	(129,154,260			)	$			5,822,947		$	45,164,198
Beginning of year		(4,940	)		36,251						(140,388,530			)				(3,418,046	)		17,946,429
Change in unrealized appreciation (depreciation)	$	279,312		$	(470,420		)			$	11,234,270				$			9,240,993		$	27,217,769

Realized and unrealized gains (losses)	$	354,601		$	(566,978		)			$	(45,449,969			)	$			9,337,090		$	31,745,883
Increase (Decrease) in net assets from operations	$	327,383		$	(600,324		)			$	(47,736,021			)	$			8,642,675		$	52,029,175

See notes to financial statements.

- 6 -

Statements of Operations - Year Ended December 31, 2002 - continued

	GT1			GT2				GTR							GTS				HYS
	Sub-Account			Sub-Account					Sub-Account					Sub-Account						Sub-Account
Income and Expenses:
Dividend income	$	-		$	62,956			$			1,537,162				$	-			$		27,938,295
Mortality and expense risk charges		(4,370	)		(49,511	)					(997,996	)				(25,214		)			(3,428,412		)
Distribution and administrative expense charges		(525	)		(5,941	)					(119,760	)				(3,026		)			(411,409		)
Net investment income (loss)	$	(4,895	)	$	7,504			$			419,406				$	(28,240		)	$		24,098,474

Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	(25,215	)	$	(30,105	)		$			(2,777,769	)			$	(1,077,797		)	$		(33,156,854		)
Realized gain distributions		-			-						-					-					-
Net realized gains (losses)	$	(25,215	)	$	(30,105	)		$			(2,777,769	)			$	(1,077,797		)	$		(33,156,854		)

Net unrealized appreciation (depreciation) on investments:
End of year	$	(112,882	)	$	16,506			$			(9,239,991	)			$	(1,002,615		)	$		(33,035,954		)
Beginning of year		17,418			12,982						(10,839,592	)				(927,110		)			(44,853,159		)
Change in unrealized appreciation (depreciation)	$	(130,300	)	$	3,524			$			1,599,601				$	(75,505		)	$		11,817,205

Realized and unrealized gains (losses)	$	(155,515	)	$	(26,581	)		$			(1,178,168	)			$	(1,153,302		)	$		(21,339,649		)
Increase (Decrease) in net assets from operations	$	(160,410	)	$	(19,077	)		$			(758,762	)			$	(1,181,542		)	$		2,758,825



	IG1			M1A					M1B					MC1						MCS
	Sub-Account			Sub-Account					Sub-Account					Sub-Account						Sub-Account
Income and Expenses:
Dividend income	$	57,711		$	-				$	29,935				$			-			$	-
Mortality and expense risk charges		(122,841	)		(194,475		)			(335,134			)				(163,966	)			(689,105	)
Distribution and administrative expense charges		(14,741	)		(23,337		)			(40,216			)				(19,676	)			(82,692	)
Net investment income (loss)	$	(79,871	)	$	(217,812		)		$	(345,415			)	$			(183,642	)		$	(771,797	)

Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	1,032,560		$	(731,683		)		$	(798,785			)	$			(1,705,465	)		$	(21,346,885	)
Realized gain distributions		-			-					-							-				-
Net realized gains (losses)	$	1,032,560		$	(731,683		)		$	(798,785			)	$			(1,705,465	)		$	(21,346,885	)

Net unrealized appreciation (depreciation) on investments:
End of year	$	(824,133	)	$	(4,602,077		)		$	(7,082,003			)	$			(5,742,784	)		$	(28,928,914	)
Beginning of year		93,985			763,760					575,726							469,217				(12,006,258	)
Change in unrealized appreciation (depreciation)	$	(918,118	)	$	(5,365,837		)		$	(7,657,729			)	$			(6,212,001	)		$	(16,922,656	)

Realized and unrealized gains (losses)	$	114,442		$	(6,097,520		)		$	(8,456,514			)	$			(7,917,466	)		$	(38,269,541	)
Increase (Decrease) in net assets from operations	$	34,571		$	(6,315,332		)		$	(8,801,929			)	$			(8,101,108	)		$	(39,041,338	)

See notes to financial statements.

- 7 -

Statements of Operations - Year Ended December 31, 2002 - continued

	MCV			MF7				MFC							MFD				MFE
	Sub-Account (c)			Sub-Account					Sub-Account					Sub-Account						Sub-Account
Income and Expenses:
Dividend income	$	-		$	859,864			$			1,851,970				$	26,450			$		308,054
Mortality and expense risk charges		(2,780	)		(332,015	)					(258,678	)				(238,305		)			(109,407		)
Distribution and administrative expense charges		(334	)		(39,842	)					(31,042	)				(28,597		)			(13,129		)
Net investment income (loss)	$	(3,114	)	$	488,007			$			1,562,250				$	(240,452		)	$		185,518

Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	(1,361	)	$	(36,842	)		$			(1,000,412	)			$	(802,353		)	$		(765,472		)
Realized gain distributions		-			134,159						-					-					-
Net realized gains (losses)	$	(1,361	)	$	97,317			$			(1,000,412	)			$	(802,353		)	$		(765,472		)

Net unrealized appreciation (depreciation) on investments:
End of year	$	(1,522	)	$	1,659,149			$			176,289				$	(5,606,791		)	$		(1,776,395		)
Beginning of year		-			(5,827	)					104,223					505,361					(27,434		)
Change in unrealized appreciation (depreciation)	$	(1,522	)	$	1,664,976			$			72,066				$	(6,112,152		)	$		(1,748,961		)

Realized and unrealized gains (losses)	$	(2,883	)	$	1,762,293			$			(928,346	)			$	(6,914,505		)	$		(2,514,433		)
Increase (Decrease) in net assets from operations	$	(5,997	)	$	2,250,300			$			633,904				$	(7,154,957		)	$		(2,328,915		)



	MFF			MFJ					MFK					MFL						MI1
	Sub-Account			Sub-Account					Sub-Account					Sub-Account						Sub-Account
Income and Expenses:
Dividend income	$	-		$	2,415,989				$	2,252,653				$			351,392			$	17,086
Mortality and expense risk charges		(121,550	)		(1,131,851		)			(765,032			)				(500,475	)			(25,229	)
Distribution and administrative expense charges		(14,586	)		(135,822		)			(91,804			)				(60,057	)			(3,027	)
Net investment income (loss)	$	(136,136	)	$	1,148,316				$	1,395,817				$			(209,140	)		$	(11,170	)

Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	(652,171	)	$	(766,622		)		$	(9,501			)	$			(751,300	)		$	158,321
Realized gain distributions		-			2,506,019					-							-				-
Net realized gains (losses)	$	(652,171	)	$	1,739,397				$	(9,501			)	$			(751,300	)		$	158,321

Net unrealized appreciation (depreciation) on investments:
End of year	$	(2,888,201	)	$	(9,531,348		)		$	2,952,873				$			(8,379,696	)		$	(82,908	)
Beginning of year		279,763			782,663					(143,144			)				491,228				4,445
Change in unrealized appreciation (depreciation)	$	(3,167,964	)	$	(10,314,011		)		$	3,096,017				$			(8,870,924	)		$	(87,353	)

Realized and unrealized gains (losses)	$	(3,820,135	)	$	(8,574,614		)		$	3,086,516				$			(9,622,224	)		$	70,968
Increase (Decrease) in net assets from operations	$	(3,956,271	)	$	(7,426,298		)		$	4,482,333				$			(9,831,364	)		$	59,798

See notes to financial statements.

- 8 -

Statements of Operations - Year Ended December 31, 2002 - continued

	MII			MIS				MIT						MM1				MMS
	Sub-Account			Sub-Account				Sub-Account					Sub-Account					Sub-Account
Income and Expenses:
Dividend income	$	447,192		$	815,066			$		13,778,202				$	421,420			$	7,784,560
Mortality and expense risk charges		(696,380	)		(7,097,809	)				(16,659,168	)				(568,533		)		(7,761,178		)
Distribution and administrative expense charges		(83,566	)		(851,737	)				(1,999,100	)				(68,224		)		(931,341		)
Net investment income (loss)	$	(332,754	)	$	(7,134,480	)		$		(4,880,066	)			$	(215,337		)	$	(907,959		)

Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	(5,788,484	)	$	(119,932,703	)		$		(149,023,111	)			$	-			$	-
Realized gain distributions		-			-					-					-				-
Net realized gains (losses)	$	(5,788,484	)	$	(119,932,703	)		$		(149,023,111	)			$	-			$	-

Net unrealized appreciation (depreciation) on investments:
End of year	$	(15,664,122	)	$	(382,418,897	)		$		(629,162,261	)			$	-			$	-
Beginning of year		(17,374,873	)		(310,487,444	)				(435,764,972	)				-				-
Change in unrealized appreciation (depreciation)	$	1,710,751		$	(71,931,453	)		$		(193,397,289	)			$	-			$	-

Realized and unrealized gains (losses)	$	(4,077,733	)	$	(191,864,156	)		$		(342,420,400	)			$	-			$	-
Increase (Decrease) in net assets from operations	$	(4,410,487	)	$	(198,998,636	)		$		(347,300,466	)			$	(215,337		)	$	(907,959		)



	MS1			MSS				MV1					MVS					NWD
	Sub-Account			Sub-Account				Sub-Account					Sub-Account					Sub-Account
Income and Expenses:
Dividend income	$	-		$	-			$	276,248				$			2,408,288		$	-
Mortality and expense risk charges		(24,601	)		(2,414,896		)		(503,976			)				(3,747,085	)		(2,424,056	)
Distribution and administrative expense charges		(2,952	)		(289,787		)		(60,477			)				(449,650	)		(290,887	)
Net investment income (loss)	$	(27,553	)	$	(2,704,683		)	$	(288,205			)	$			(1,788,447	)	$	(2,714,943	)

Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	(84,808	)	$	(74,284,868		)	$	(445,012			)	$			(7,695,407	)	$	(30,404,508	)
Realized gain distributions		-			-				-							-			-
Net realized gains (losses)	$	(84,808	)	$	(74,284,868		)	$	(445,012			)	$			(7,695,407	)	$	(30,404,508	)

Net unrealized appreciation (depreciation) on investments:
End of year	$	(424,796	)	$	(201,062,691		)	$	(5,619,268			)	$			(43,091,785	)	$	(81,782,693	)
Beginning of year		44,756			(213,870,768		)		606,318							(1,796,719	)		(31,457,775	)
Change in unrealized appreciation (depreciation)	$	(469,552	)	$	12,808,077			$	(6,225,586			)	$			(41,295,066	)	$	(50,324,918	)

Realized and unrealized gains (losses)	$	(554,360	)	$	(61,476,791		)	$	(6,670,598			)	$			(48,990,473	)	$	(80,729,426	)
Increase (Decrease) in net assets from operations	$	(581,913	)	$	(64,181,474		)	$	(6,958,803			)	$			(50,778,920	)	$	(83,444,369	)

See notes to financial statements.

- 9 -

Statements of Operations - Year Ended December 31, 2002 - continued

	RE1			RES			RG1				RGS				RI1
	Sub-Account			Sub-Account			Sub-Account			Sub-Account					Sub-Account
Income and Expenses:
Dividend income	$	23,472		$	2,552,835		$	36,281			$	543,570			$		12,445
Mortality and expense risk charges		(81,483	)		(7,510,078	)		(73,411	)			(981,107		)			(59,613	)
Distribution and administrative expense charges		(9,778	)		(901,209	)		(8,809	)			(117,733		)			(7,154	)
Net investment income (loss)	$	(67,789	)	$	(5,858,452	)	$	(45,939	)		$	(555,270		)	$		(54,322	)

Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	(254,138	)	$	(108,793,269	)	$	(230,597	)		$	(7,741,158		)	$		58,965
Realized gain distributions		-			-			-				-					-
Net realized gains (losses)	$	(254,138	)	$	(108,793,269	)	$	(230,597	)		$	(7,741,158		)	$		58,965

Net unrealized appreciation (depreciation) on investments:
End of year	$	(1,566,083	)	$	(383,458,912	)	$	(1,103,408	)		$	(20,253,653		)	$		(411,009	)
Beginning of year		130,966			(306,794,969	)		115,329				(8,193,525		)			45,160
Change in unrealized appreciation (depreciation)	$	(1,697,049	)	$	(76,663,943	)	$	(1,218,737	)		$	(12,060,128		)	$		(456,169	)

Realized and unrealized gains (losses)	$	(1,951,187	)	$	(185,457,212	)	$	(1,449,334	)		$	(19,801,286		)	$		(397,204	)
Increase (Decrease) in net assets from operations	$	(2,018,976	)	$	(191,315,664	)	$	(1,495,273	)		$	(20,356,556		)	$		(451,526	)



	RSS			SG1			SGS			SI1					SIS
	Sub-Account			Sub-Account			Sub-Account			Sub-Account					Sub-Account
Income and Expenses:
Dividend income	$	185,639		$	-		$	-		$			315,155		$	2,307,204
Mortality and expense risk charges		(936,348	)		(55,145	)		(669,776	)				(109,983	)		(672,433		)
Distribution and administrative expense charges		(112,362	)		(6,617	)		(80,373	)				(13,198	)		(80,692		)
Net investment income (loss)	$	(863,071	)	$	(61,762	)	$	(750,149	)	$			191,974		$	1,554,079

Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	(7,463,512	)	$	(185,417	)	$	(20,806,722	)	$			(6,301	)	$	(136,444		)
Realized gain distributions		-			-			-					-			-
Net realized gains (losses)	$	(7,463,512	)	$	(185,417	)	$	(20,806,722	)	$			(6,301	)	$	(136,444		)

Net unrealized appreciation (depreciation) on investments:
End of year	$	(21,101,812	)	$	(1,070,884	)	$	(26,211,749	)	$			380,532		$	1,701,727
Beginning of year		(19,506,007	)		133,618			(26,083,609	)				6,560			28,351
Change in unrealized appreciation (depreciation)	$	(1,595,805	)	$	(1,204,502	)	$	(128,140	)	$			373,972		$	1,673,376

Realized and unrealized gains (losses)	$	(9,059,317	)	$	(1,389,919	)	$	(20,934,862	)	$			367,671		$	1,536,932
Increase (Decrease) in net assets from operations	$	(9,922,388	)	$	(1,451,681	)	$	(21,685,011	)	$			559,645		$	3,091,011

See notes to financial statements.

- 10 -

Statements of Operations - Year Ended December 31, 2002 - continued

	SVS			TE1				TEC					TRS				UTS
	Sub-Account			Sub-Account				Sub-Account					Sub-Account				Sub-Account
Income and Expenses:
Dividend income	$	-		$	-			$		-			$	51,682,538			$	10,756,481
Mortality and expense risk charges		(4,371	)		(21,664	)				(276,789	)			(19,845,715		)		(3,532,061		)
Distribution and administrative expense charges		(525	)		(2,600	)				(33,215	)			(2,381,486		)		(423,847		)
Net investment income (loss)	$	(4,896	)	$	(24,264	)		$		(310,004	)		$	29,455,337			$	6,800,573

Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	(14,385	)	$	(581,207	)		$		(15,007,510	)		$	(53,109,598		)	$	(81,991,651		)
Realized gain distributions		-			-					-				53,369,285				-
Net realized gains (losses)	$	(14,385	)	$	(581,207	)		$		(15,007,510	)		$	259,687			$	(81,991,651		)

Net unrealized appreciation (depreciation) on investments:
End of year	$	(17,654	)	$	(671,051	)		$		(14,975,361	)		$	(260,724,769		)	$	(176,655,333		)
Beginning of year		-			69,805					(15,260,406	)			(109,762,974		)		(155,955,543		)
Change in unrealized appreciation (depreciation)	$	(17,654	)	$	(740,856	)		$		285,045			$	(150,961,795		)	$	(20,699,790		)

Realized and unrealized gains (losses)	$	(32,039	)	$	(1,322,063	)		$		(14,722,465	)		$	(150,702,108		)	$	(102,691,441		)
Increase (Decrease) in net assets from operations	$	(36,935	)	$	(1,346,327	)		$		(15,032,469	)		$	(121,246,771		)	$	(95,890,868		)



	OCA			OMG				OMS					PRR				PTR
	Sub-Account			Sub-Account				Sub-Account					Sub-Account				Sub-Account
Income and Expenses:
Dividend income	$	-		$	-			$	-				$		1,777		$	5,532
Mortality and expense risk charges		(412	)		(354		)		(278			)			(860	)		(2,113	)
Distribution and administrative expense charges		(50	)		(42		)		(34			)			(103	)		(254	)
Net investment income (loss)	$	(462	)	$	(396		)	$	(312			)	$		814		$	3,165

Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	36		$	(18		)	$	3				$		109		$	38
Realized gain distributions		-			-				-						788			12,215
Net realized gains (losses)	$	36		$	(18		)	$	3				$		897		$	12,253

Net unrealized appreciation (depreciation) on investments:
End of year	$	(1,497	)	$	(4,219		)	$	(3,130			)	$		12,367		$	6,615
Beginning of year		-			-				-						-			-
Change in unrealized appreciation (depreciation)	$	(1,497	)	$	(4,219		)	$	(3,130			)	$		12,367		$	6,615

Realized and unrealized gains (losses)	$	(1,461	)	$	(4,237		)	$	(3,127			)	$		13,264		$	18,868
Increase (Decrease) in net assets from operations	$	(1,923	)	$	(4,633		)	$	(3,439			)	$		14,078		$	22,033

See notes to financial statements.

- 11 -

Statements of Operations - Year Ended December 31, 2002 - continued

	SC3
	Sub-Account
Income and Expenses:
Dividend income	$	9,897
Mortality and expense risk charges		(438	)
Distribution and administrative expense charges		(53	)
Net investment income (loss)	$	9,406

Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	(8	)
Realized gain distributions		10,631
Net realized gains (losses)	$	10,623

Net unrealized appreciation (depreciation) on investments:
End of year	$	(13,245	)
Beginning of year		-
Change in unrealized appreciation (depreciation)	$	(13,245	)

Realized and unrealized gains (losses)	$	(2,622	)
Increase (Decrease) in net assets from operations	$	6,784

See notes to financial statements.

- 12 -

FMS

FTI

FVS

LA1

LA2

Sub-Account

Sub-Account

Sub-Account

Sub-Account

Sub-Account

Period Ended

Period Ended

Period Ended

Period Ended

Period Ended

December 31,

December 31,

December 31,

December 31,

December 31,

2002 (b)

2002 (b)

2002 (b)

2002 (b)

2002 (b)

Operations:

Net investment income (loss)

$

(572

)

$

(1,359

)

$

(376

)

$

1,152

$

602

Net realized gains (losses)

218

53

194

133

24

Net unrealized gains (losses)

1,390

(8,777

)

4,174

(6,895

)

(29

)

Increase (Decrease) in net assets from operations

$

1,036

$

(10,083

)

$

3,992

$

(5,610

)

$

597

Contract Owner Transactions:

Accumulation Activity:

Purchase payments received

$

273,329

$

403,127

$

143,641

$

276,744

$

260,168

Net transfers between Sub-Accounts and Fixed Account

83,594

657,800

64,445

87,905

23,567

Withdrawals, surrenders, annuitizations and
contract charges

-

(855

)

(151

)

(417

)

(151

)

Net accumulation activity

$

356,923

$

1,060,072

$

207,935

$

364,232

$

283,584

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

$

356,923

$

1,060,072

$

207,935

$

364,232

$

283,584

Increase (Decrease) in net assets

$

357,959

$

1,049,989

$

211,927

$

358,622

$

284,181

Net Assets:

Beginning of year

$

-

$

-

$

-

$

-

$

-

End of year

$

357,959

$

1,049,989

$

211,927

$

358,622

$

284,181

Units Transactions:

Beginning of year

-

-

-

-

-

Purchase

27,010

41,692

14,088

25,450

24,477

Transferred between Sub-Accounts and Fixed Accumulation Account

8,327

67,637

6,207

8,096

2,201

Withdrawn, Surrendered and Annuitized

-

(88

)

(14

)

(38

)

(14

)

End of year

35,337

109,241

20,281

33,508

26,664

(b) For the period August 5, 2002 (commencement of operations) through December 31, 2002.

See notes to financial statements

- 13 -

Statements of Changes in Net Assets - continued

BDS

CAS

CO1

Sub-Account

Sub-Account

Sub-Account

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

Period Ended

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

2002

2001

2002

2001

2002

2001 (a)

Operations:

Net investment income (loss)

$

4,093,733

$

2,277,102

$

(9,176,014

)

$

(12,778,919

)

$

(148,131)

$

(16,090

)

Net realized gains (losses)

3,654,587

1,881,580

(382,909,764

)

300,129,955

(371,827)

(9,646

)

Net unrealized gains (losses)

7,230,589

2,483,769

60,462,435

(713,894,051

)

(3,573,397)

428,718

Increase (Decrease) in net assets from operations

$

14,978,909

$

6,642,451

$

(331,623,343

)

$

(426,543,015

)

$

(4,093,355)

$

402,982

Contract Owner Transactions:

Accumulation Activity:

Purchase payments received

$

1,564,689

$

21,602,569

$

7,984,994

$

49,483,582

$

5,596,537

$

4,762,819

Net transfers between Sub-Accounts and
Fixed Account

49,409,135

81,026,874

(57,513,980

)

43,697,162

3,224,381

1,580,207

Withdrawals, surrenders, annuitizations and contract charges

(25,678,851

)

(15,999,370

)

(120,030,608

)

(167,306,131

)

(636,251

)

(17,256

)

Net accumulation activity

$

25,294,973

$

86,630,073

$

(169,559,594

)

$

(74,125,387

)

$

8,184,667

$

6,325,770

Annuitization Activity:

Annuitizations

$

-

$

164,649

$

153,993

$

787,719

$

53,623

$

-

Annuity payments and contract charges

(82,823

)

(34,804

)

(747,430

)

(1,428,760

)

(5,136

)

-

Net transfers between Sub-Accounts

-

-

-

-

-

-

Adjustments to annuity reserves

(34,509

)

(2,727

)

81,414

(199,438

)

(310

)

-

Net annuitization activity

$

(117,332

)

$

127,118

$

(512,023

)

$

(840,479

)

$

48,177

$

-

Increase (Decrease) in net assets from contract owner transactions

$

25,177,641

$

86,757,191

$

(170,071,617

)

$

(74,965,866

)

$

8,232,844

$

6,325,770

Increase (Decrease) in net assets

$

40,156,550

$

93,399,642

$

(501,694,960

)

$

(501,508,881

)

$

4,139,489

$

6,728,752

Net Assets:

Beginning of year

$

169,138,563

$

75,738,921

$

1,061,993,683

$

1,563,502,564

$

6,728,752

$

-

End of year

$

209,295,113

$

169,138,563

$

560,298,723

$

1,061,993,683

$

10,868,241

$

6,728,752

Units Transactions:

Beginning of year

14,562,283

6,882,376

64,553,284

60,852,212

707,598

-

Purchase

130,651

1,983,536

942,516

6,160,711

669,166

533,188

Transferred between Sub-Accounts and Fixed Accumulation Account

4,129,823

7,104,168

(4,262,327

)

5,198,633

384,672

176,982

Withdrawn, Surrendered and Annuitized

(2,150,666

)

(1,407,797

)

(7,956,652

)

(7,658,272

)

(101,640

)

(2,572

)

End of year

16,672,091

14,562,283

53,276,821

64,553,284

1,659,796

707,598

For the period August 27, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 14 -

Statements of Changes in Net Assets - continued

COS

EGS

EM1

Sub-Accounts

Sub-Accounts

Sub-Accounts

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

Period End

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

2002

2001

2002

2001

2002

2001 (a)

Operations:

Net investment income (loss)

$

(4,797,605

)

$

(8,342,542

)

$

(7,486,903

)

$

(12,862,147

)

$

(7,014

)

$

(672

)

Net realized gains (losses)

(108,712,383

)

70,666,441

(171,071,995

)

155,218,178

(114,030

)

381

Net unrealized gains (losses)

(29,588,990

)

(253,104,530

)

(68,659,822

)

(613,045,438

)

(165,228

)

22,077

Increase (Decrease) in net assets from operations

$

(143,098,978

)

$

(190,780,631

)

$

(247,218,720

)

$

(470,689,407

)

$

(286,272

)

$

21,786

Contract Owner Transactions:

Accumulation Activity:

Purchase payments received

$

3,474,022

$

63,680,946

$

4,533,694

$

51,612,787

$

1,264,490

$

277,227

Net transfers between Sub-Accounts and Fixed Account

(66,309,026

)

(5,451,267

)

(81,392,865

)

(27,891,645

)

761,872

80,026

Withdrawals, surrenders, annuitizations
and contract charges

(39,720,495

)

(51,682,839

)

(68,678,141

)

(84,256,673

)

(80,774

)

(1,423

)

Net accumulation activity

$

(102,555,499

)

$

6,546,840

$

(145,537,312

)

$

(60,535,531

)

$

1,945,588

$

355,830

Annuitization Activity:

Annuitizations

$

-

$

227,183

$

45,741

$

478,068

$

-

$

-

Annuity payments and contract charges

(117,999

)

(215,224

)

(327,463

)

(473,538

)

-

-

Net transfers between Sub-Accounts

-

-

-

-

-

-

Adjustments to annuity reserves

1,680

(180,402

)

(3,632

)

(309,532

)

-

-

Net annuitization activity

$

(116,319

)

$

(168,443

)

$

(285,354

)

$

(305,002

)

$

-

$

-

Increase (Decrease) in net assets from
contract owner transactions

$

(102,671,818

)

$

6,378,397

$

(145,822,666

)

$

(60,840,533

)

$

1,945,588

$

355,830

Increase (Decrease) in net assets

$

(245,770,796

)

$

(184,402,234

)

$

(393,041,386

)

$

(531,529,940

)

$

1,659,316

$

377,616

Net Assets:

Beginning of year

$

494,301,507

$

678,703,741

$

763,479,404

$

1,295,009,344

$

377,616

$

-

End of year

$

248,530,711

$

494,301,507

$

370,438,018

$

763,479,404

$

2,036,932

$

377,616

Units Transactions:

Beginning of year

49,296,039

43,724,458

65,948,379

61,880,135

36,622

-

Purchase

468,094

7,793,885

629,726

7,300,234

114,419

28,514

Transferred between Sub-Accounts and Fixed Accumulation Account

(8,863,967

)

1,822,678

(9,243,938

)

2,175,012

61,923

8,274

Withdrawn, Surrendered and Annuitized

(4,320,277

)

(4,044,982

)

(6,637,379

)

(5,407,002

)

(8,015

)

(166

)

End of year

36,579,889

49,296,039

50,696,788

65,948,379

204,949

36,622

(a) For the period August 27, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 15 -

Statements of Changes in Net Assets - continued

FCE

FCG

GA1

Sub-Account

Sub-Account

Sub-Account

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

Period End

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

2002

2001

2002

2001

2002

2001 (a)

Operations:

Net investment income (loss)

$

(72,556

)

$

(488,990

)

$

(900,486

)

$

(882,986

)

$

18,718

$

(878

)

Net realized gains (losses)

(1,409,605

)

(2,521,212

)

(8,001,430

)

2,248,595

(16,733

)

(245

)

Net unrealized gains (losses)

(709,113

)

1,665,038

(5,408,492

)

(23,843,213

)

(106,783

)

10,282

Increase (Decrease) in net assets
from operations

$

(2,191,274

)

$

(1,345,164

)

$

(14,310,408

)

$

(22,477,604

)

$

(104,798

)

$

9,159

Contract Owner Transactions:

Accumulation Activity:

Purchase payments received

$

336,047

$

3,247,277

$

1,325,782

$

14,779,339

$

1,050,377

$

365,610

Net transfers between Sub-Accounts
and Fixed Account

4,848,897

(2,616,209

)

(5,950,235

)

17,818,382

556,629

127,818

Withdrawals, surrenders, annuitizations and contract charges

(4,844,186

)

(3,503,652

)

(10,712,751

)

(9,324,452

)

(129,174

)

(1,401

)

Net accumulation activity

$

340,758

$

(2,872,584

)

$

(15,337,204

)

$

23,273,269

$

1,477,832

$

492,027

Annuitization Activity:

Annuitizations

$

-

$

32,295

$

7,928

$

69,817

$

-

$

-

Annuity payments and contract charges

(15,279

)

(15,787

)

(21,548

)

(22,866

)

-

-

Net transfers between Sub-Accounts

-

-

-

-

-

-

Adjustments to annuity reserves

(21,052

)

(85,031

)

(4,563

)

3,793

-

-

Net annuitization activity

$

(36,331

)

$

(68,523

)

$

(18,183

)

$

50,744

$

-

$

-

Increase (Decrease) in net assets from contract owner transactions

$

304,427

$

(2,941,107

)

$

(15,355,387

)

$

23,324,013

$

1,477,832

$

492,027

Increase (Decrease) in net assets

$

(1,886,847

)

$

(4,286,271

)

$

(29,665,795

)

$

846,409

$

1,373,034

$

501,186

Net Assets:

Beginning of year

$

31,963,479

$

36,249,750

$

116,926,690

$

116,080,281

$

501,186

$

-

End of year

$

30,076,632

$

31,963,479

$

87,260,895

$

116,926,690

$

1,874,220

$

501,186

Units Transactions:

Beginning of year

3,800,561

4,136,671

13,618,628

10,704,387

51,398

-

Purchase

37,755

397,540

171,778

1,742,164

111,138

38,223

Transferred between Sub-Accounts and Fixed Accumulation Account

403,000

(311,285

)

(759,280

)

2,182,554

61,335

13,320

Withdrawn, Surrendered and Annuitized

(556,171

)

(422,365

)

(1,322,784

)

(1,010,477

)

(13,718

)

(145

)

End of year

3,685,145

3,800,561

11,708,342

13,618,628

210,153

51,398

(a) For the period August 27, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 16 -

Statements of Changes in Net Assets - continued

GAA

GG1

GG2

Sub-Account

Sub-Account

Sub-Account

Year Ended

Year Ended

Year Ended

Period End

Year Ended

Period End

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

2002

2001

2002

2001 (a)

2002

2001 (a)

Operations:

Net investment income (loss)

$

1,500,144

$

3,483,476

$

(27,218

)

$

(386

)

$

(33,346

)

$

(3,713

)

Net realized gains (losses)

(6,888,095

)

6,222,020

75,289

6

(96,558

)

5,560

Net unrealized gains (losses)

(1,136,806

)

(20,927,104

)

279,312

(4,940

)

(470,420

)

36,251

Increase (Decrease) in net assets from operations

$

(6,524,757

)

$

(11,221,608

)

$

327,383

$

(5,320

)

$

(600,324

)

$

38,098

Contract Owner Transactions:

Accumulation Activity:

Purchase payments received

$

669,302

$

2,245,118

$

2,025,641

$

118,021

$

1,579,033

$

1,090,338

Net transfers between Sub-Accounts and Fixed Account

(6,033,872

)

(6,122,870

)

1,631,290

55,079

1,559,952

234,365

Withdrawals, surrenders, annuitizations
and contract charges

(11,822,887

)

(12,385,431

)

(193,294

)

(1,687

)

(182,302

)

(5,671

)

Net accumulation activity

$

(17,187,457

)

$

(16,263,183

)

$

3,463,637

$

171,413

$

2,956,683

$

1,319,032

Annuitization Activity:

Annuitizations

$

108,915

$

64,460

$

14,540

$

-

$

-

$

-

Annuity payments and contract charges

(122,309

)

(142,822

)

(1,654

)

-

-

-

Net transfers between Sub-Accounts

-

-

-

-

-

-

Adjustments to annuity reserves

(25,069

)

6,590

(104

)

-

-

-

Net annuitization activity

$

(38,463

)

$

(71,772

)

$

12,782

$

-

$

-

$

-

Increase (Decrease) in net assets from
contract owner transactions

$

(17,225,920

)

$

(16,334,955

)

$

3,476,419

$

171,413

$

2,956,683

$

1,319,032

Increase (Decrease) in net assets

$

(23,750,677

)

$

(27,556,563

)

$

3,803,802

$

166,093

$

2,356,359

$

1,357,130

Net Assets:

Beginning of year

$

84,504,987

$

112,061,550

$

166,093

$

-

$

1,357,130

$

-

End of year

$

60,754,310

$

84,504,987

$

3,969,895

$

166,093

$

3,713,489

$

1,357,130

Units Transactions:

Beginning of year

5,837,945

6,729,316

17,109

-

140,349

-

Purchase

61,866

217,079

194,946

11,772

175,879

115,733

Transferred between Sub-Accounts and
Fixed Accumulation Account

(441,120

)

(297,027

)

149,769

5,531

175,009

25,224

Withdrawn, Surrendered and Annuitized

(822,110

)

(811,423

)

(17,820

)

(194

)

(22,908

)

(608

)

End of year

4,636,581

5,837,945

344,004

17,109

468,329

140,349

(a) For the period August 27, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 17 -

Statements of Changes in Net Assets - continued

GGR

GGS

GSS

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,

2002

2001

2002

2001

2002

2001

Operations:

Net investment income (loss)

$

(2,286,052

)

$

(2,169,924

)

$

(694,415

)

$

(704,141

)

$

20,283,292

$

21,132,259

Net realized gains (losses)

(56,684,239

)

92,727,026

96,097

(1,057,832

)

4,528,114

4,046,946

Net unrealized gains (losses)

11,234,270

(170,242,925

)

9,240,993

14,006

27,217,769

3,763,939

Increase (Decrease) in net assets from operations

$

(47,736,021

)

$

(79,685,823

)

$

8,642,675

$

(1,747,967

)

$

52,029,175

$

28,943,144

Contract Owner Transactions:

Accumulation Activity:

Purchase payments received

$

2,197,195

$

11,795,697

$

837,429

$

2,973,311

$

19,413,929

$

68,003,893

Net transfers between Sub-Accounts and Fixed Account

(27,098,041

)

(18,114,536

)

20,849,237

(2,898,351

)

189,926,837

81,931,003

Withdrawals, surrenders, annuitizations
and contract charges

(30,247,996

)

(39,996,781

)

(10,404,311

)

(8,291,944

)

(112,973,131

)

(66,588,445

)

Net accumulation activity

$

(55,148,842

)

$

(46,315,620

)

$

11,282,355

$

(8,216,984

)

$

96,367,635

$

83,346,451

Annuitization Activity:

Annuitizations

$

6,939

$

131,880

$

13,422

$

57,248

$

141,946

$

444,447

Annuity payments and contract charges

(136,935

)

(241,458

)

(78,834

)

(175,299

)

(660,933

)

(596,840

)

Net transfers between Sub-Accounts

-

-

-

-

-

-

Adjustments to annuity reserves

(13,486

)

(12,393

)

(32,096

)

(129,104

)

(69,314

)

107,348

Net annuitization activity

$

(143,482

)

$

(121,971

)

$

(97,508

)

$

(247,155

)

$

(588,301

)

$

(45,045

)

Increase (Decrease) in net assets from
contract owner transactions

$

(55,292,324

)

$

(46,437,591

)

$

11,184,847

$

(8,464,139

)

$

95,779,334

$

83,301,406

Increase (Decrease) in net assets

$

(103,028,345

)

$

(126,123,414

)

$

19,827,522

$

(10,212,106

)

$

147,808,509

$

112,244,550

Net Assets:

Beginning of year

$

260,751,103

$

386,874,517

$

44,882,046

$

55,094,152

$

595,911,760

$

483,667,210

End of year

$

157,722,758

$

260,751,103

$

64,709,568

$

44,882,046

$

743,720,269

$

595,911,760

Units Transactions:

Beginning of year

17,723,668

19,042,715

3,647,399

4,205,253

43,557,072

34,436,408

Purchase

234,808

1,332,446

70,005

284,386

1,601,821

6,198,376

Transferred between Sub-Accounts and
Fixed Accumulation Account

(2,282,798

)

(516,326

)

1,677,469

(216,162

)

12,927,838

7,481,539

Withdrawn, Surrendered and Annuitized

(1,980,642

)

(2,135,167

)

(784,039

)

(626,078

)

(7,509,557

)

(4,559,251

)

End of year

13,695,036

17,723,668

4,610,834

3,647,399

50,577,174

43,557,072

See notes to financial statements

- 18 -

Statements of Changes in Net Assets - continued

GT1

GT2

GTR

Sub-Account

Sub-Account

Sub-Account

Year Ended

Period End

Year Ended

Period End

Year Ended

Year Ended

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

2002

2001 (a)

2002

2001 (a)

2002

2001

Operations:

Net investment income (loss)

$

(4,895

)

$

(470

)

$

7,504

$

(2,641

)

$

419,406

$

2,484,126

Net realized gains (losses)

(25,215

)

181

(30,105

)

(233

)

(2,777,769

)

5,232,287

Net unrealized gains (losses)

(130,300

)

17,418

3,524

12,982

1,599,601

(15,002,474

)

Increase (Decrease) in net assets from operations

$

(160,410

)

$

17,129

$

(19,077

)

$

10,108

$

(758,762

)

$

(7,286,061

)

Contract Owner Transactions:

Accumulation Activity:

Purchase payments received

$

222,175

$

212,751

$

2,288,946

$

1,131,071

$

923,510

$

3,685,853

Net transfers between Sub-Accounts and
Fixed Account

82,773

5,898

1,869,065

332,274

4,646,419

(425,868

)

Withdrawals, surrenders, annuitizations and contract charges

(6,571

)

(763

)

(67,406

)

(655

)

(11,905,476

)

(8,948,404

)

Net accumulation activity

$

298,377

$

217,886

$

4,090,605

$

1,462,690

$

(6,335,547

)

$

(5,688,419

)

Annuitization Activity:

Annuitizations

$

-

$

-

$

-

$

-

$

22,199

$

20,585

Annuity payments and contract charges

-

-

-

-

(72,879

)

(72,608

)

Net transfers between Sub-Accounts

-

-

-

-

-

-

Adjustments to annuity reserves

-

-

-

-

(39,313

)

(15,084

)

Net annuitization activity

$

-

$

-

$

-

$

-

$

(89,993

)

$

(67,107

)

Increase (Decrease) in net assets from contract owner transactions

$

298,377

$

217,886

$

4,090,605

$

1,462,690

$

(6,425,540

)

$

(5,755,526

)

Increase (Decrease) in net assets

$

137,967

$

235,015

$

4,071,528

$

1,472,798

$

(7,184,302

)

$

(13,041,587

)

Net Assets:

Beginning of year

$

235,015

$

-

$

1,472,798

$

-

$

84,171,649

$

97,213,236

End of year

$

372,982

$

235,015

$

5,544,326

$

1,472,798

$

76,987,347

$

84,171,649

Units Transactions:

Beginning of year

24,957

-

151,199

-

5,780,805

5,859,411

Purchase

33,670

24,434

240,584

116,859

78,902

365,101

Transferred between Sub-Accounts and Fixed Accumulation Account

12,857

610

194,806

34,406

432,986

114,156

Withdrawn, Surrendered and Annuitized

(5,148

)

(87

)

(11,059

)

(66

)

(802,228

)

(557,863

)

End of year

66,336

24,957

575,530

151,199

5,490,465

5,780,805

(a) For the period August 27, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 19 -

Statements of Changes in Net Assets - continued

GTS

HYS

IG1

Sub-Account

Sub-Account

Sub-Account

Year Ended

Period End

Year Ended

Year Ended

Year Ended

Period End

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

2002

2001

2002

2001

2002

2001 (a)

Operations:

Net investment income (loss)

$

(28,240

)

$

(37,645

)

$

24,098,474

$

24,591,094

$

(79,871

)

$

(7,197

)

Net realized gains (losses)

(1,077,797

)

(1,126,221

)

(33,156,854

)

(20,611,540

)

1,032,560

8,289

Net unrealized gains (losses)

(75,505

)

(645,673

)

11,817,205

(4,446,806

)

(918,118

)

93,985

Increase (Decrease) in net assets from operations

$

(1,181,542

)

$

(1,809,539

)

$

2,758,825

$

(467,252

)

$

34,571

$

95,077

Contract Owner Transactions:

Accumulation Activity:

Purchase payments received

$

54,175

$

1,165,042

$

2,612,480

$

25,313,847

$

4,527,332

$

2,115,028

Net transfers between Sub-Accounts and Fixed Account

(40,601

)

2,302,209

(10,818,426

)

36,097,676

4,848,362

905,065

Withdrawals, surrenders, annuitizations and contract charges

(218,548

)

(279,960

)

(38,199,666

)

(38,386,294

)

(2,087,732

)

(11,130

)

Net accumulation activity

$

(204,974

)

$

3,187,291

$

(46,405,612

)

$

23,025,229

$

7,287,962

$

3,008,963

Annuitization Activity:

Annuitizations

$

-

$

-

$

168,718

$

348,049

$

1,534

$

-

Annuity payments and contract charges

-

-

(287,181

)

(347,667

)

(105

)

-

Net transfers between Sub-Accounts

-

-

-

-

-

-

Adjustments to annuity reserves

-

-

(36,001

)

(32,276

)

(49

)

-

Net annuitization activity

$

-

$

-

$

(154,464

)

$

(31,894

)

$

1,380

$

-

Increase (Decrease) in net assets from contract owner transactions

$

(204,974

)

$

3,187,291

$

(46,560,076

)

$

22,993,335

$

7,289,342

$

3,008,963

Increase (Decrease) in net assets

$

(1,386,516

)

$

1,377,752

$

(43,801,251

)

$

22,526,083

$

7,323,913

$

3,104,040

Net Assets:

Beginning of year

$

2,777,404

$

1,399,652

$

301,095,084

$

278,569,001

$

3,104,040

$

-

End of year

$

1,390,888

$

2,777,404

$

257,293,833

$

301,095,084

$

10,427,953

$

3,104,040

Units Transactions:

Beginning of year

662,983

192,652

24,640,912

21,080,519

326,874

-

Purchase

17,643

194,248

248,178

2,599,677

501,152

229,953

Transferred between Sub-Accounts and Fixed
Accumulation Account

(47,757

)

340,601

(987,124

)

3,663,203

670,533

98,206

Withdrawn, Surrendered and Annuitized

(77,526

)

(64,518

)

(2,916,951

)

(2,702,487

)

(233,319

)

(1,285

)

End of year

555,343

662,983

20,985,015

24,640,912

1,265,240

326,874

For the period August 27, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 20 -

Statements of Changes in Net Assets - continued

M1A

M1B

MC1

Sub-Account

Sub-Account

Sub-Account

Year Ended

Period End

Year Ended

Period End

Year Ended

Period End

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

2002

2001 (a)

2002

2001 (a)

2002

2001 (a)

Operations:

Net investment income (loss)

$

(217,812

)

$

(15,700

)

$

(345,415

)

$

(29,540

)

$

(183,642

)

$

(15,181

)

Net realized gains (losses)

(731,683

)

(6,631

)

(798,785

)

(4,965

)

(1,705,465

)

(2,497

)

Net unrealized gains (losses)

(5,365,837

)

763,760

(7,657,729

)

575,726

(6,212,001

)

469,217

Increase (Decrease) in net assets from operations

$

(6,315,332

)

$

741,429

$

(8,801,929

)

$

541,221

$

(8,101,108

)

$

451,539

Contract Owner Transactions:

Accumulation Activity:

Purchase payments received

$

9,269,451

$

5,422,456

$

15,870,561

$

10,459,061

$

9,276,606

$

5,080,329

Net transfers between Sub-Accounts and Fixed Account

7,331,325

1,516,318

9,667,852

2,911,664

6,572,293

1,460,830

Withdrawals, surrenders, annuitizations and contract charges

(870,069

)

(16,001

)

(1,208,871

)

(47,088

)

(718,323

)

(14,922

)

Net accumulation activity

$

15,730,707

$

6,922,773

$

24,329,542

$

13,323,637

$

15,130,576

$

6,526,237

Annuitization Activity:

Annuitizations

$

35,680

$

-

$

-

$

-

$

12,591

$

-

Annuity payments and contract charges

(3,542

)

-

-

-

(1,249

)

-

Net transfers between Sub-Accounts

-

-

-

-

-

-

Adjustments to annuity reserves

(242

)

-

-

-

(105

)

-

Net annuitization activity

$

31,896

$

-

$

-

$

-

$

11,237

$

-

Increase (Decrease) in net assets from contract owner transactions

$

15,762,603

$

6,922,773

$

24,329,542

$

13,323,637

$

15,141,813

$

6,526,237

Increase (Decrease) in net assets

$

9,447,271

$

7,664,202

$

15,527,613

$

13,864,858

$

7,040,705

$

6,977,776

Net Assets:

Beginning of year

$

7,664,202

$

-

$

13,864,858

$

-

$

6,977,776

$

-

End of year

$

17,111,473

$

7,664,202

$

29,392,471

$

13,864,858

$

14,018,481

$

6,977,776

Units Transactions:

Beginning of year

744,162

-

1,419,642

-

723,935

-

Purchase

1,038,386

583,286

1,821,934

1,116,248

1,243,210

563,457

Transferred between Sub-Accounts and Fixed
Accumulation Account

867,033

162,646

1,153,027

309,368

939,270

162,126

Withdrawn, Surrendered and Annuitized

(118,710

)

(1,770

)

(164,331

)

(5,974

)

(133,954

)

(1,648

)

End of year

2,530,871

744,162

4,230,272

1,419,642

2,772,461

723,935

For the period August 27, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 21 -

Statements of Changes in Net Assets - continued

MCS

MCV

MF7

Sub-Account

Sub-Account

Sub-Account

Sub-Account

Year Ended

Year Ended

Period Ended

Year Ended

Period End

December 31,

December 31,

December 31,

December 31,

December 31,

2002

2001

2002 (c)

2002

2001 (a)

Operations:

Net investment income (loss)

$

(771,797

)

$

(810,794

)

$

(3,114

)

$

488,007

$

(21,736

)

Net realized gains (losses)

(21,346,885

)

(5,583,340

)

(1,361

)

97,317

2,485

Net unrealized gains (losses)

(16,922,656

)

(10,809,262

)

(1,522

)

1,664,976

(5,827

)

Increase (Decrease) in net assets from operations

$

(39,041,338

)

$

(17,203,396

)

$

(5,997

)

$

2,250,300

$

(25,078

)

Contract Owner Transactions:

Accumulation Activity:

Purchase payments received

$

577,381

$

19,252,187

$

320,249

$

14,086,132

$

8,391,627

Net transfers between Sub-Accounts and Fixed Account

8,776,726

51,511,542

394,325

12,078,989

2,139,891

Withdrawals, surrenders, annuitizations and contract charges

(5,828,964

)

(4,541,036

)

(5,030

)

(2,051,922

)

(40,951

)

Net accumulation activity

$

3,525,143

$

66,222,693

$

709,544

$

24,113,199

$

10,490,567

Annuitization Activity:

Annuitizations

$

4,156

$

55,031

$

-

$

14,159

$

-

Annuity payments and contract charges

(6,171

)

(1,822

)

-

(1,612

)

-

Net transfers between Sub-Accounts

-

-

-

-

-

Adjustments to annuity reserves

(1,302

)

858

-

(100

)

-

Net annuitization activity

$

(3,317

)

$

54,067

$

-

$

12,447

$

-

Increase (Decrease) in net assets from contract owner transactions

$

3,521,826

$

66,276,760

$

709,544

$

24,125,646

$

10,490,567

Increase (Decrease) in net assets

$

(35,519,512

)

$

49,073,364

$

703,547

$

26,375,946

$

10,465,489

Net Assets:

Beginning of year

$

75,425,977

$

26,352,613

$

-

$

10,465,489

$

-

End of year

$

39,906,465

$

75,425,977

$

703,547

$

36,841,435

$

10,465,489

Units Transactions:

Beginning of year

10,773,649

2,851,533

-

1,039,445

-

Purchase

115,995

2,347,222

39,705

1,390,968

834,296

Transferred between Sub-Accounts and Fixed Accumulation
Account

1,306,324

6,188,835

47,078

1,174,965

211,901

Withdrawn, Surrendered and Annuitized

(1,256,220

)

(613,941

)

(615

)

(206,296

)

(6,752

)

End of year

10,939,748

10,773,649

86,168

3,399,082

1,039,445

(a) For the period August 27, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 22 -

Statements of Changes in Net Assets - continued

MFC

MFD

MFE

Sub-Account

Sub-Account

Sub-Account

Year Ended

Period End

Year Ended

Period End

Year Ended

Period End

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

2002

2001 (a)

2002

2001 (a)

2002

2001 (a)

Operations:

Net investment income (loss)

$

1,562,250

$

(17,247

)

$

(240,452

)

$

(23,645

)

$

185,518

$

(12,654

)

Net realized gains (losses)

(1,000,412

)

5,466

(802,353

)

(1,327

)

(765,472

)

(5,691

)

Net unrealized gains (losses)

72,066

104,223

(6,112,152

)

505,361

(1,748,961

)

(27,434

)

Increase (Decrease) in net assets from operations

$

633,904

$

92,442

$

(7,154,957

)

$

480,389

$

(2,328,915

)

$

(45,779

)

Contract Owner Transactions:

Accumulation Activity:

Purchase payments received

$

13,016,093

$

5,291,548

$

9,979,560

$

7,920,862

$

3,856,688

$

3,911,698

Net transfers between Sub-Accounts and Fixed Account

12,022,299

2,943,090

7,054,616

3,111,617

2,841,058

1,548,081

Withdrawals, surrenders, annuitizations and

contract charges

(1,357,205

)

(46,593

)

(870,610

)

(66,008

)

(455,394

)

(13,912

)

Net accumulation activity

$

23,681,187

$

8,188,045

$

16,163,566

$

10,966,471

$

6,242,352

$

5,445,867

Annuitization Activity:

Annuitizations

$

9,671

$

-

$

16,904

$

-

$

19,227

$

-

Annuity payments and contract charges

(470

)

-

(1,669

)

-

(1,626

)

-

Net transfers between Sub-Accounts

-

-

-

-

-

-

Adjustments to annuity reserves

(63

)

-

(170

)

-

(123

)

-

Net annuitization activity

$

9,138

$

-

$

15,065

$

-

$

17,478

$

-

Increase (Decrease) in net assets from contract

owner transactions

$

23,690,325

$

8,188,045

$

16,178,631

$

10,966,471

$

6,259,830

$

5,445,867

Increase (Decrease) in net assets

$

24,324,229

$

8,280,487

$

9,023,674

$

11,446,860

$

3,930,915

$

5,400,088

Net Assets:

Beginning of year

$

8,280,487

$

-

$

11,446,860

$

-

$

5,400,088

$

-

End of year

$

32,604,716

$

8,280,487

$

20,470,534

$

11,446,860

$

9,331,003

$

5,400,088

Units Transactions:

Beginning of year

838,150

-

1,178,384

-

605,177

-

Purchase

1,321,172

541,269

1,195,273

860,728

494,247

433,053

Transferred between Sub-Accounts and Fixed

Accumulation Account

1,246,987

301,734

914,462

325,336

359,375

173,796

Withdrawn, Surrendered and Annuitized

(139,539

)

(4,853

)

(124,776

)

(7,680

)

(67,302

)

(1,672

)

End of year

3,266,770

838,150

3,163,343

1,178,384

1,391,497

605,177

(a) For the period August 27, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 23 -

Statements of Changes in Net Assets - continued

MFF

MFJ

MFK

Sub-Account

Sub-Account

Sub-Account

Year Ended

Period End

Year Ended

Period End

Year Ended

Period End

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

2002

2001 (a)

2002

2001 (a)

2002

2001 (a)

Operations:

Net investment income (loss)

$

(136,136

)

$

(10,929

)

$

1,148,316

$

(65,275

)

$

1,395,817

$

(56,822

)

Net realized gains (losses)

(652,171

)

(1,123

)

1,739,397

(9,727

)

(9,501

)

4,476

Net unrealized gains (losses)

(3,167,964

)

279,763

(10,314,011

)

782,663

3,096,017

(143,144

)

Increase (Decrease) in net assets from

operations

$

(3,956,271

)

$

267,711

$

(7,426,298

)

$

707,661

$

4,482,333

$

(195,490

)

Contract Owner Transactions:

Accumulation Activity:

Purchase payments received

$

6,120,600

$

3,936,656

$

59,652,592

$

22,840,059

$

32,428,415

$

22,105,464

Net transfers between Sub-Accounts and Fixed Account

3,111,019

920,802

42,745,374

6,927,475

36,864,681

2,013,815

Withdrawals, surrenders, annuitizations and

contract charges

(643,652

)

(12,073

)

(4,649,697

)

(120,919

)

(4,331,047

)

(104,814

)

Net accumulation activity

$

8,587,967

$

4,845,385

$

97,748,269

$

29,646,615

$

64,962,049

$

24,014,465

Annuitization Activity:

Annuitizations

$

1,514

$

-

$

59,472

$

-

$

28,565

$

-

Annuity payments and contract charges

(87

)

-

(6,709

)

-

(3,252

)

-

Net transfers between Sub-Accounts

-

-

-

-

-

-

Adjustments to annuity reserves

(37

)

-

(377

)

-

(199

)

-

Net annuitization activity

$

1,390

$

-

$

52,386

$

-

$

25,114

$

-

Increase (Decrease) in net assets from contract

owner transactions

$

8,589,357

$

4,845,385

$

97,800,655

$

29,646,615

$

64,987,163

$

24,014,465

Increase (Decrease) in net assets

$

4,633,086

$

5,113,096

$

90,374,357

$

30,354,276

$

69,469,496

$

23,818,975

Net Assets:

Beginning of year

$

5,113,096

$

-

$

30,354,276

$

-

$

23,818,975

$

-

End of year

$

9,746,182

$

5,113,096

$

120,728,633

$

30,354,276

$

93,288,471

$

23,818,975

Units Transactions:

Beginning of year

526,836

-

3,047,596

-

2,355,604

-

Purchase

736,254

427,885

6,122,165

2,353,498

3,198,551

2,170,001

Transferred between Sub-Accounts and Fixed

Accumulation Account

380,778

100,322

4,426,034

710,260

3,497,333

196,430

Withdrawn, Surrendered and Annuitized

(93,745

)

(1,371

)

(547,506

)

(16,162

)

(493,369

)

(10,827

)

End of year

1,550,123

526,836

13,048,289

3,047,596

8,558,119

2,355,604

(a) For the period August 27, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 24 -

Statements of Changes in Net Assets - continued

MFL

MI1

MII

Sub-Account

Sub-Account

Sub-Account

Year Ended

Period End

Year Ended

Year Ended

Year Ended

Year Ended

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

2002

2001 (a)

2002

2001 (a)

2002

2001

Operations:

Net investment income (loss)

$

(209,140

)

$

(43,338

)

$

(11,170

)

$

(1,204

)

$

(332,754

)

$

455,191

Net realized gains (losses)

(751,300

)

(4,160

)

158,321

1,655

(5,788,484

)

4,462,907

Net unrealized gains (losses)

(8,870,924

)

491,228

(87,353

)

4,445

1,710,751

(17,523,716

)

Increase (Decrease) in net assets from

operations

$

(9,831,364

)

$

443,730

$

59,798

$

4,896

$

(4,410,487

)

$

(12,605,618

)

Contract Owner Transactions:

Accumulation Activity:

Purchase payments received

$

21,868,525

$

13,956,914

$

1,096,678

$

411,528

$

421,727

$

3,631,371

Net transfers between Sub-Accounts and Fixed

Account

17,725,359

4,583,160

666,775

6,166

(1,131,388

)

(1,920,625

)

Withdrawals, surrenders, annuitizations and

contract charges

(1,865,378

)

(42,414

)

(47,221

)

(241

)

(7,941,573

)

(7,297,037

)

Net accumulation activity

$

37,728,506

$

18,497,660

$

1,716,232

$

417,453

$

(8,651,234

)

$

(5,586,291

)

Annuitization Activity:

Annuitizations

$

3,883

$

-

$

-

$

-

$

-

$

3,600

Annuity payments and contract charges

(242

)

-

-

-

(29,483

)

(26,064

)

Net transfers between Sub-Accounts

-

-

-

-

-

-

Adjustments to annuity reserves

(108

)

-

-

-

(12,135

)

5,673

Net annuitization activity

$

3,533

$

-

$

-

$

-

$

(41,618

)

$

(16,791

)

Increase (Decrease) in net assets from contract

owner transactions

$

37,732,039

$

18,497,660

$

1,716,232

$

417,453

$

(8,692,852

)

$

(5,603,082

)

Increase (Decrease) in net assets

$

27,900,675

$

18,941,390

$

1,776,030

$

422,349

$

(13,103,339

)

$

(18,208,700

)

Net Assets:

Beginning of year

$

18,941,390

$

-

$

422,349

$

-

$

61,526,355

$

79,735,055

End of year

$

46,842,065

$

18,941,390

$

2,198,379

$

422,349

$

48,423,016

$

61,526,355

Units Transactions:

Beginning of year

1,960,395

-

45,114

-

5,653,736

5,941,691

Purchase

2,467,270

1,483,159

117,862

44,414

40,036

400,258

Transferred between Sub-Accounts and Fixed

Accumulation Account

2,059,574

482,689

95,885

749

(114,421

)

(86,482

)

Withdrawn, Surrendered and Annuitized

(251,389

)

(5,453

)

(5,427

)

(49

)

(734,285

)

(601,731

)

End of year

6,235,850

1,960,395

253,434

45,114

4,845,066

5,653,736

(a) For the period August 27, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 25 -

Statements of Changes in Net Assets - continued

MIS

MIT

MM1

Sub-Account

Sub-Account

Sub-Account

Year Ended

Year Ended

Year Ended

Year Ended

Year Ended

Period End

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

2002

2001

2002

2001

2002

2001 (a)

Operations:

Net investment income (loss)

$

(7,134,480

)

$

(10,560,506

)

$

(4,880,066

)

$

(11,131,153

)

$

(215,337

)

$

11,373

Net realized gains (losses)

(119,932,703

)

57,468,214

(149,023,111

)

150,337,332

-

-

Net unrealized gains (losses)

(71,931,453

)

(306,123,669

)

(193,397,289

)

(504,032,324

)

-

-

Increase (Decrease) in net assets from

operations

$

(198,998,636

)

$

(259,215,961

)

$

(347,300,466

)

$

(364,826,145

)

$

(215,337

)

$

11,373

Contract Owner Transactions:

Accumulation Activity:

Purchase payments received

$

5,247,825

$

93,725,331

$

13,205,858

$

102,958,111

$

78,441,041

$

22,578,965

Net transfers between Sub-Accounts and

Fixed Account

(73,387,309

)

41,379,579

(131,535,540

)

16,368,069

11,644,385

(1,496,530

)

Withdrawals, surrenders, annuitizations and

contract charges

(54,468,052

)

(59,511,624

)

(177,865,737

)

(198,691,283

)

(57,616,155

)

(715,868

)

Net accumulation activity

$

(122,607,536

)

$

75,593,286

$

(296,195,419

)

$

(79,365,103

)

$

32,469,271

$

20,366,567

Annuitization Activity:

Annuitizations

$

13,393

$

355,145

$

123,802

$

1,423,428

$

13,887

$

112,057

Annuity payments and contract charges

(198,590

)

(236,630

)

(1,112,911

)

(1,412,825

)

(15,218

)

-

Net transfers between Sub-Accounts

-

-

-

-

-

-

Adjustments to annuity reserves

(32,966

)

(182,032

)

(10,444

)

(225,568

)

11,950

(5,603

)

Net annuitization activity

$

(218,163

)

$

(63,517

)

$

(999,553

)

$

(214,965

)

$

10,619

$

106,454

Increase (Decrease) in net assets from contract

owner transactions

$

(122,825,699

)

$

75,529,769

$

(297,194,972

)

$

(79,580,068

)

$

32,479,890

$

20,473,021

Increase (Decrease) in net assets

$

(321,824,335

)

$

(183,686,192

)

$

(644,495,438

)

$

(444,406,213

)

$

32,264,553

$

20,484,394

Net Assets:

Beginning of year

$

733,044,616

$

916,730,808

$

1,672,347,859

$

2,116,754,072

$

20,484,394

$

-

End of year

$

411,220,281

$

733,044,616

$

1,027,852,421

$

1,672,347,859

$

52,748,947

$

20,484,394

Units Transactions:

Beginning of year

82,854,696

70,352,554

114,934,813

107,858,561

2,033,294

-

Purchase

734,385

11,737,512

1,264,050

10,770,919

7,923,676

2,254,021

Transferred between Sub-Accounts and Fixed

Accumulation Account

(10,701,366

)

6,640,237

(10,650,348

)

6,780,367

1,163,800

(149,287

)

Withdrawn, Surrendered and Annuitized

(7,056,802

)

(5,875,607

)

(12,063,668

)

(10,475,034

)

(5,841,707

)

(71,440

)

End of year

65,830,913

82,854,696

93,484,847

114,934,813

5,279,063

2,033,294

(a) For the period August 27, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 26 -

Statements of Changes in Net Assets - continued

MMS

MS1

MSS

Sub-Account

Sub-Account

Sub-Account

Year Ended

Year Ended

Year Ended

Period End

Year Ended

Year Ended

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

2002

2001

2002

2001 (a)

2002

2001

Operations:

Net investment income (loss)

$

(907,959

)

$

11,660,134

$

(27,553

)

$

(2,332

)

$

(2,704,683

)

$

(4,613,849

)

Net realized gains (losses)

-

-

(84,808

)

(321

)

(74,284,868

)

20,072,878

Net unrealized gains (losses)

-

-

(469,552

)

44,756

12,808,077

(197,494,828

)

Increase (Decrease) in net assets from

operations

$

(907,959

)

$

11,660,134

$

(581,913

)

$

42,103

$

(64,181,474

)

$

(182,035,799

)

Contract Owner Transactions:

Accumulation Activity:

Purchase payments received

$

27,424,518

$

120,144,574

$

1,275,192

$

623,414

$

2,123,359

$

11,289,111

Net transfers between Sub-Accounts and Fixed

Account

304,930,662

398,556,666

832,853

90,928

(28,773,717

)

(38,232,278

)

Withdrawals, surrenders, annuitizations and

contract charges

(404,066,221

)

(284,802,038

)

(40,892

)

(258

)

(27,745,455

)

(43,762,901

)

Net accumulation activity

$

(71,711,041

)

$

233,899,202

$

2,067,153

$

714,084

$

(54,395,813

)

$

(70,706,068

)

Annuitization Activity:

Annuitizations

$

405,606

$

2,296,745

$

-

$

-

$

17,607

$

96,446

Annuity payments and contract charges

(523,684

)

(436,283

)

-

-

(128,925

)

(308,911

)

Net transfers between Sub-Accounts

-

-

-

-

-

-

Adjustments to annuity reserves

(188,394

)

83,978

-

-

49,975

34,088

Net annuitization activity

$

(306,472

)

$

1,944,440

$

-

$

-

$

(61,343

)

$

(178,377

)

Increase (Decrease) in net assets from contract

owner transactions

$

(72,017,513

)

$

235,843,642

$

2,067,153

$

714,084

$

(54,457,156

)

$

(70,884,445

)

Increase (Decrease) in net assets

$

(72,925,472

)

$

247,503,776

$

1,485,240

$

756,187

$

(118,638,630

)

$

(252,920,244

)

Net Assets:

Beginning of year

$

654,496,482

$

406,992,706

$

756,187

$

-

$

262,609,717

$

515,529,961

End of year

$

581,571,010

$

654,496,482

$

2,241,427

$

756,187

$

143,971,087

$

262,609,717

Units Transactions:

Beginning of year

53,824,814

33,305,762

78,580

-

18,605,449

20,880,787

Purchase

2,326,155

11,568,946

148,920

69,314

196,173

1,469,485

Transferred between Sub-Accounts and Fixed

Accumulation Account

23,907,421

31,706,938

98,110

9,746

(2,525,023

)

(1,469,955

)

Withdrawn, Surrendered and Annuitized

(32,101,164

)

(22,756,832

)

(5,483

)

(480

)

(2,023,261

)

(2,274,868

)

End of year

47,957,226

53,824,814

320,127

78,580

14,253,338

18,605,449

(a) For the period August 27, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 27 -

Statements of Changes in Net Assets - continued

MV1

MVS

NWD

Sub-Account

Sub-Account

Sub-Account

Year Ended

Period End

Year Ended

Year Ended

Year Ended

Year Ended

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

2002

2001 (a)

2002

2001

2002

2001

Operations:

Net investment income (loss)

$

(288,205

)

$

(35,018

)

$

(1,788,447

)

$

(2,010,422

)

$

(2,714,943

)

$

(3,165,736

)

Net realized gains (losses)

(445,012

)

(5,510

)

(7,695,407

)

8,023,884

(30,404,508

)

14,119,555

Net unrealized gains (losses)

(6,225,586

)

606,318

(41,295,066

)

(21,401,182

)

(50,324,918

)

(25,561,298

)

Increase (Decrease) in net assets from

operations

$

(6,958,803

)

$

565,790

$

(50,778,920

)

$

(15,387,720

)

$

(83,444,369

)

$

(14,607,479

)

Contract Owner Transactions:

Accumulation Activity:

Purchase payments received

$

23,502,723

$

12,101,250

$

3,408,819

$

51,364,831

$

2,090,760

$

27,155,543

Net transfers between Sub-Accounts and

Fixed Account

15,143,367

3,838,708

59,392,114

142,328,767

5,369,734

39,309,158

Withdrawals, surrenders, annuitizations and

contract charges

(1,780,238

)

(27,665

)

(34,569,709

)

(17,617,507

)

(20,081,316

)

(16,785,806

)

Net accumulation activity

$

36,865,852

$

15,912,293

$

28,231,224

$

176,076,091

$

(12,620,822

)

$

49,678,895

Annuitization Activity:

Annuitizations

$

30,917

$

-

$

53,981

$

55,386

$

7,955

$

51,708

Annuity payments and contract charges

(3,478

)

-

(83,781

)

(29,404

)

(53,628

)

(63,397

)

Net transfers between Sub-Accounts

-

-

-

-

-

-

Adjustments to annuity reserves

(182

)

-

9,520

503

10,363

(170,947

)

Net annuitization activity

$

27,257

$

-

$

(20,280

)

$

26,485

$

(35,310

)

$

(182,636

)

Increase (Decrease) in net assets from contract

owner transactions

$

36,893,109

$

15,912,293

$

28,210,944

$

176,102,576

$

(12,656,132

)

$

49,496,259

Increase (Decrease) in net assets

$

29,934,306

$

16,478,083

$

(22,567,976

)

$

160,714,856

$

(96,100,501

)

$

34,888,780

Net Assets:

Beginning of year

$

16,478,083

$

-

$

283,811,117

$

123,096,261

$

238,495,660

$

203,606,880

End of year

$

46,412,389

$

16,478,083

$

261,243,141

$

283,811,117

$

142,395,159

$

238,495,660

Units Transactions:

Beginning of year

1,683,747

-

23,493,630

9,015,915

20,720,859

15,196,096

Purchase

2,487,816

1,280,991

300,117

4,442,378

233,498

2,983,543

Transferred between Sub-Accounts and Fixed

Accumulation Account

1,606,037

406,378

4,497,497

11,476,970

58,334

3,954,406

Withdrawn, Surrendered and Annuitized

(210,396

)

(3,622

)

(3,054,512

)

(1,441,633

)

(2,078,064

)

(1,413,186

)

End of year

5,567,204

1,683,747

25,236,732

23,493,630

18,934,627

20,720,859

(a) For the period August 27, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 28 -

Statements of Changes in Net Assets - continued

RE1

RES

RG1

Sub-Account

Sub-Account

Sub-Account

Year Ended

Period End

Year Ended

Year Ended

Period End

Period End

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

2002

2001 (a)

2002

2001

2002

2001 (a)

Operations:

Net investment income (loss)

$

(67,789

)

$

(6,410

)

$

(5,858,452

)

$

(12,892,474

)

$

(45,939

)

$

(6,171

)

Net realized gains (losses)

(254,138

)

(1,901

)

(108,793,269

)

186,687,243

(230,597

)

(310

)

Net unrealized gains (losses)

(1,697,049

)

130,966

(76,663,943

)

(436,949,645

)

(1,218,737

)

115,329

Increase (Decrease) in net assets from

operations

$

(2,018,976

)

$

122,655

$

(191,315,664

)

$

(263,154,876

)

$

(1,495,273

)

$

108,848

Contract Owner Transactions:

Accumulation Activity:

Purchase payments received

$

4,242,954

$

2,324,180

$

5,472,218

$

33,023,849

$

3,010,742

$

2,232,502

Net transfers between Sub-Accounts and

Fixed Account

2,140,618

665,758

(88,792,346

)

(48,545,569

)

1,913,779

812,849

Withdrawals, surrenders, annuitizations and

contract charges

(358,358

)

(7,022

)

(80,061,036

)

(89,556,168

)

(176,671

)

(2,207

)

Net accumulation activity

$

6,025,214

$

2,982,916

$

(163,381,164

)

$

(105,077,888

)

$

4,747,850

$

3,043,144

Annuitization Activity:

Annuitizations

$

14,080

$

-

$

205,089

$

695,890

$

-

$

-

Annuity payments and contract charges

(1,562

)

-

(443,321

)

(583,897

)

-

-

Net transfers between Sub-Accounts

-

-

-

-

-

-

Adjustments to annuity reserves

(82

)

-

(11,367

)

(50,656

)

-

-

Net annuitization activity

$

12,436

$

-

$

(249,599

)

$

61,337

$

-

$

-

Increase (Decrease) in net assets from contract

owner transactions

$

6,037,650

$

2,982,916

$

(163,630,763

)

$

(105,016,551

)

$

4,747,850

$

3,043,144

Increase (Decrease) in net assets

$

4,018,674

$

3,105,571

$

(354,946,427

)

$

(368,171,427

)

$

3,252,577

$

3,151,992

Net Assets:

Beginning of year

$

3,105,571

$

-

$

797,021,574

$

1,165,193,001

$

3,151,992

$

-

End of year

$

7,124,245

$

3,105,571

$

442,075,147

$

797,021,574

$

6,404,569

$

3,151,992

Units Transactions:

Beginning of year

322,046

-

52,722,243

55,319,325

317,814

-

Purchase

470,796

251,194

561,796

3,561,995

327,374

232,777

Transferred between Sub-Accounts and Fixed

Accumulation Account

251,596

71,606

(7,211,797

)

(1,321,457

)

213,503

85,267

Withdrawn, Surrendered and Annuitized

(46,060

)

(754

)

(5,725,979

)

(4,837,620

)

(22,481

)

(230

)

End of year

998,378

322,046

40,346,263

52,722,243

836,210

317,814

(a) For the period August 27, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 29 -

Statements of Changes in Net Assets - continued

RGS

RI1

RSS

Sub-Account

Sub-Account

Sub-Account

Year Ended

Year Ended

Year Ended

Period End

Year Ended

Year Ended

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

2002

2001

2002

2001 (a)

2002

2001

Operations:

Net investment income (loss)

$

(555,270

)

$

(906,833

)

$

(54,322

)

$

(4,688

)

$

(863,071

)

$

(537,585

)

Net realized gains (losses)

(7,741,158

)

1,336,577

58,965

3,692

(7,463,512

)

(1,661,301

)

Net unrealized gains (losses)

(12,060,128

)

(12,327,169

)

(456,169

)

45,160

(1,595,805

)

(15,932,390

)

Increase (Decrease) in net assets from

operations

$

(20,356,556

)

$

(11,897,425

)

$

(451,526

)

$

44,164

$

(9,922,388

)

$

(18,131,276

)

Contract Owner Transactions:

Accumulation Activity:

Purchase payments received

$

1,048,639

$

9,914,663

$

2,533,779

$

1,932,638

$

697,367

$

11,956,162

Net transfers between Sub-Accounts and

Fixed Account

(2,307,270

)

14,277,369

1,350,318

559,724

(2,491,157

)

9,630,619

Withdrawals, surrenders, annuitizations and

contract charges

(8,701,049

)

(9,102,663

)

(210,884

)

(2,994

)

(6,390,353

)

(5,629,245

)

Net accumulation activity

$

(9,959,680

)

$

15,089,369

$

3,673,213

$

2,489,368

$

(8,184,143

)

$

15,957,536

Annuitization Activity:

Annuitizations

$

2,713

$

73,209

$

-

$

-

$

2,014

$

20,666

Annuity payments and contract charges

(30,608

)

(31,866

)

-

-

(12,224

)

(15,206

)

Net transfers between Sub-Accounts

-

-

-

-

-

-

Adjustments to annuity reserves

9,199

10,366

-

-

17,684

(165,002

)

Net annuitization activity

$

(18,696

)

$

51,709

$

-

$

-

$

7,474

$

(159,542

)

Increase (Decrease) in net assets from contract

owner transactions

$

(9,978,376

)

$

15,141,078

$

3,673,213

$

2,489,368

$

(8,176,669

)

$

15,797,994

Increase (Decrease) in net assets

$

(30,334,932

)

$

3,243,653

$

3,221,687

$

2,533,532

$

(18,099,057

)

$

(2,333,282

)

Net Assets:

Beginning of year

$

92,120,442

$

88,876,789

$

2,533,532

$

-

$

79,918,982

$

82,252,264

End of year

$

61,785,510

$

92,120,442

$

5,755,219

$

2,533,532

$

61,819,925

$

79,918,982

Units Transactions:

Beginning of year

8,941,881

7,294,221

269,147

-

9,379,991

7,446,099

Purchase

124,729

1,032,466

282,860

208,862

87,486

1,417,311

Transferred between Sub-Accounts and Fixed

Accumulation Account

(338,644

)

1,430,384

160,946

60,618

(389,802

)

1,122,269

Withdrawn, Surrendered and Annuitized

(933,741

)

(815,190

)

(24,637

)

(333

)

(772,039

)

(605,688

)

End of year

7,794,225

8,941,881

688,316

269,147

8,305,636

9,379,991

(a) For the period August 27, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 30 -

Statements of Changes in Net Assets - continued

SG1

SGS

SI1

Sub-Account

Sub-Account

Sub-Account

Year Ended

Period End

Year Ended

Year Ended

Year Ended

Period End

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

2002

2001 (a)

2002

2001

2002

2001 (a)

Operations:

Net investment income (loss)

$

(61,762

)

(4,654

)

$

(750,149

)

$

(1,165,779

)

$

191,974

$

(4,694

)

Net realized gains (losses)

(185,417

)

377

(20,806,722

)

(11,626,352

)

(6,301

)

4

Net unrealized gains (losses)

(1,204,502

)

133,618

(128,140

)

(13,724,652

)

373,972

6,560

Increase (Decrease) in net assets from

operations

$

(1,451,681

)

$

129,341

$

(21,685,011

)

$

(26,516,783

)

$

559,645

$

1,870

Contract Owner Transactions:

Accumulation Activity:

Purchase payments received

$

2,883,270

$

1,461,889

$

585,833

$

16,018,990

$

4,963,366

$

1,900,686

Net transfers between Sub-Accounts and

Fixed Account

1,790,560

397,812

(9,899,150

)

3,864,073

5,231,040

687,480

Withdrawals, surrenders, annuitizations and

contract charges

(210,774

)

(3,128

)

(4,686,831

)

(6,162,377

)

(440,592

)

(8,373

)

Net accumulation activity

$

4,463,056

$

1,856,573

$

(14,000,148

)

$

13,720,686

$

9,753,814

$

2,579,793

Annuitization Activity:

Annuitizations

$

-

$

-

$

-

$

-

$

10,146

$

-

Annuity payments and contract charges

-

-

(18,603

)

(30,441

)

(495

)

-

Net transfers between Sub-Accounts

-

-

-

-

-

-

Adjustments to annuity reserves

-

-

184

(1,559

)

(67

)

-

Net annuitization activity

$

-

$

-

$

(18,419

)

$

(32,000

)

$

9,584

$

-

Increase (Decrease) in net assets from contract

owner transactions

$

4,463,056

$

1,856,573

$

(14,018,567

)

$

13,688,686

$

9,763,398

$

2,579,793

Increase (Decrease) in net assets

$

3,011,375

$

1,985,914

$

(35,703,578

)

$

(12,828,097

)

$

10,323,043

$

2,581,663

Net Assets:

Beginning of year

$

1,985,914

$

-

$

73,896,639

$

86,724,736

$

2,581,663

$

-

End of year

$

4,997,289

$

1,985,914

$

38,193,061

$

73,896,639

$

12,904,706

$

2,581,663

Units Transactions:

Beginning of year

204,017

-

10,760,916

9,076,449

256,166

-

Purchase

338,189

161,338

105,257

2,085,736

487,952

188,852

Transferred between Sub-Accounts and Fixed

Accumulation Account

216,838

43,013

(1,965,055

)

423,866

510,730

68,301

Withdrawn, Surrendered and Annuitized

(29,583

)

(334

)

(845,072

)

(825,135

)

(43,656

)

(987

)

End of year

729,461

204,017

8,056,046

10,760,916

1,211,192

256,166

(a) For the period August 27, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 31 -

Statements of Changes in Net Assets - continued

SIS

SVS

TE1

Sub-Account

Sub-Account

Sub-Account

Year Ended

Year Ended

Period Ended

Year Ended

Period End

December 31,

December 31,

December 31,

December 31,

December 31,

2002

2001

2002 (c)

2002

2001 (a)

Operations:

Net investment income (loss)

$

1,554,079

$

789,749

$

(4,896

)

$

(24,264

)

$

(1,807

)

Net realized gains (losses)

(136,444

)

134,823

(14,385

)

(581,207

)

623

Net unrealized gains (losses)

1,673,376

(228,750

)

(17,654

)

(740,856

)

69,805

Increase (Decrease) in net assets from operations

$

3,091,011

$

695,822

$

(36,935

)

$

(1,346,327

)

$

68,621

Contract Owner Transactions:

Accumulation Activity:

Purchase payments received

$

610,153

$

6,354,621

$

634,920

$

965,988

$

674,130

Net transfers between Sub-Accounts and Fixed Account

12,069,495

11,423,229

477,067

1,013,832

204,254

Withdrawals, surrenders, annuitizations and contract

charges

(6,867,834

)

(4,217,706

)

(2,950

)

(69,702

)

(3,015

)

Net accumulation activity

$

5,811,814

$

13,560,144

$

1,109,037

$

1,910,118

$

875,369

Annuitization Activity:

Annuitizations

$

18,058

$

79,128

$

-

$

-

$

-

Annuity payments and contract charges

(15,382

)

(3,898

)

-

-

-

Net transfers between Sub-Accounts

-

-

-

-

-

Adjustments to annuity reserves

2,990

(166

)

-

-

-

Net annuitization activity

$

5,666

$

75,064

$

-

$

-

$

-

Increase (Decrease) in net assets from contract owner

ransactions

$

5,817,480

$

13,635,208

$

1,109,037

$

1,910,118

$

875,369

Increase (Decrease) in net assets

$

8,908,491

$

14,331,030

$

1,072,102

$

563,791

$

943,990

Net Assets:

Beginning of year

$

47,304,649

$

32,973,619

$

-

$

943,990

$

-

End of year

$

56,213,140

$

47,304,649

$

1,072,102

$

1,507,781

$

943,990

Units Transactions:

Beginning of year

4,516,487

3,196,230

-

97,036

-

Purchase

57,637

622,153

73,782

127,501

75,537

Transferred between Sub-Accounts and Fixed

Accumulation Account

1,128,600

1,104,586

57,721

83,609

21,813

Withdrawn, Surrendered and Annuitized

(642,256

)

(406,482

)

(374

)

(15,286

)

(314

)

End of year

5,060,468

4,516,487

131,129

292,860

97,036

(a) For the period August 27, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 32 -

Statements of Changes in Net Assets - continued

TEC

TRS

UTS

Sub-Account

Sub-Account

Sub-Account

Year Ended

Period End

Year Ended

Year Ended

Year Ended

Year Ended

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

2002

2001

2002

2001

2002

2001

Operations:

Net investment income (loss)

$

(310,004

)

$

(491,062

)

$

29,455,337

$

34,428,747

$

6,800,573

$

11,839,281

Net realized gains (losses)

(15,007,510

)

(10,062,301

)

259,687

98,329,047

(81,991,651

)

47,384,065

Net unrealized gains (losses)

285,045

(7,913,413

)

(150,961,795

)

(150,652,905

)

(20,699,790

)

(205,731,165

)

Increase (Decrease) in net assets from

operations

$

(15,032,469

)

$

(18,466,776

)

$

(121,246,771

)

$

(17,895,111

)

$

(95,890,868

)

$

(146,507,819

)

Contract Owner Transactions:

Accumulation Activity:

Purchase payments received

$

326,349

$

11,041,196

$

22,336,098

$

112,697,930

$

3,077,015

$

42,189,616

Net transfers between Sub-Accounts and

Fixed Account

(2,765,518

)

11,130,923

66,326,479

164,008,436

(62,977,839

)

12,685,526

Withdrawals, surrenders, annuitizations and

contract charges

(2,361,729

)

(1,853,689

)

(254,641,685

)

(253,192,238

)

(39,387,069

)

(52,983,808

)

Net accumulation activity

$

(4,800,898

)

$

20,318,430

$

(165,979,108

)

$

23,514,128

$

(99,287,893

)

$

1,891,334

Annuitization Activity:

Annuitizations

$

4,047

$

31,203

$

857,592

$

1,646,637

$

78,444

$

288,905

Annuity payments and contract charges

(1,602

)

(1,584

)

(1,899,909

)

(2,139,784

)

(159,469

)

(282,580

)

Net transfers between Sub-Accounts

-

-

-

-

-

-

Adjustments to annuity reserves

(1,820

)

4,387

(225,182

)

(101,431

)

(965

)

(29,847

)

Net annuitization activity

$

625

$

34,006

$

(1,267,499

)

$

(594,578

)

$

(81,990

)

$

(23,522

)

Increase (Decrease) in net assets from contract

owner transactions

$

(4,800,273

)

$

20,352,436

$

(167,246,607

)

$

22,919,550

$

(99,369,883

)

$

1,867,812

Increase (Decrease) in net assets

$

(19,832,742

)

$

1,885,660

$

(288,493,378

)

$

5,024,439

$

(195,260,751

)

$

(144,640,007

)

Net Assets:

Beginning of year

$

33,859,676

$

31,974,016

$

1,718,764,462

$

1,713,740,023

$

406,075,169

$

550,715,176

End of year

$

14,026,934

$

33,859,676

$

1,430,271,084

$

1,718,764,462

$

210,814,418

$

406,075,169

Units Transactions:

Beginning of year

7,440,220

4,222,099

92,999,406

83,439,751

32,768,627

28,782,441

Purchase

98,644

1,807,292

1,571,661

9,552,696

329,869

4,290,031

Transferred between Sub-Accounts and Fixed

Accumulation Account

(997,372

)

1,799,240

4,835,599

12,131,675

(6,709,518

)

2,686,643

Withdrawn, Surrendered and Annuitized

(729,945

)

(388,411

)

(13,374,051

)

(12,124,716

)

(3,486,403

)

(2,990,488

)

End of year

5,811,547

7,440,220

86,032,615

92,999,406

22,902,575

32,768,627

See notes to financial statements

- 33 -

Statements of Changes in Net Assets - continued

OCA

OMG

OMS

PRR

PTR

SC3

Sub-Account

Sub-Account

Sub-Account

Sub-Account

Sub-Account

Sub-Account

Period Ended

Year Ended

Period Ended

Period Ended

Period Ended

Period Ended

December 31,

December 31,

December 31,

December 31,

December 31,

December 31,

2002 (b)

2002 (b)

2002 (b)

2002 (b)

2002 (b)

2002 (b)

Operations:

Net investment income (loss)

$

(462

)

$

(396

)

$

(312

)

$

814

$

3,165

$

9,406

Net realized gains (losses)

36

(18

)

3

897

12,253

10,623

Net unrealized gains (losses)

(1,497

)

(4,219

)

(3,130

)

12,367

6,615

(13,245

)

Increase (Decrease) in net assets from

operations

$

(1,923

)

$

(4,633

)

$

(3,439

)

$

14,078

$

22,033

$

6,784

Contract Owner Transactions:

Accumulation Activity:

Purchase payments received

$

156,995

$

156,268

$

134,786

$

341,636

$

856,459

$

152,857

Net transfers between Sub-Accounts and

Fixed Account

23,442

29,117

22,872

158,847

621,396

114,892

Withdrawals, surrenders, annuitizations and

contract charges

-

-

(159

)

(3,528

)

(4,945

)

(577

)

Net accumulation activity

$

180,437

$

185,385

$

157,499

$

496,955

$

1,472,910

$

267,172

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

$

180,437

$

185,385

$

157,499

$

496,955

$

1,472,910

$

267,172

Increase (Decrease) in net assets

$

178,514

$

180,752

$

154,060

$

511,033

$

1,494,943

$

273,956

Net Assets:

Beginning of year

$

-

$

-

$

-

$

-

$

-

$

-

End of year

$

178,514

$

180,752

$

154,060

$

511,033

$

1,494,943

$

273,956

Units Transactions:

Beginning of year

-

-

-

-

-

-

Purchase

14,308

15,060

13,047

33,401

83,697

15,514

Transferred between Sub-Accounts and Fixed

Accumulation Account

2,195

2,795

2,210

15,485

60,923

11,742

Withdrawn, Surrendered and Annuitized

-

-

(15

)

(339

)

(557

)

(58

)

End of year

16,503

17,855

15,242

48,547

144,063

27,198

(b) For the period August 05, 2002 (commencement of operations) through December 31, 2002.

See notes to financial statements

- 34 -

Sun Life of Canada (U.S.) Variable Account F (the "Variable Account"), a separate account of Sun Life Assurance Company of Canada (U.S.) (the "Sponsor"), was established on July 13, 1989 as a funding vehicle for the variable portion of Regatta contracts, Regatta Gold contracts, Regatta Classic contracts, Regatta Platinum contracts, Regatta Extra contracts, Regatta Access contracts, Regatta Choice contracts, Regatta Flex 4 contracts, Regatta Flex II contracts, Regatta Choice II contracts, Regatta Masters Extra contracts, Regatta Masters Choice contracts, Regatta Masters Access contracts and Regatta Masters Flex 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 exist in accordance with the regulations of the Delaware 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 Act of 1940. With respect to the Regatta contracts, Regatta Gold contracts, Regatta Classic contracts, Regatta Platinum contracts, Regatta Extra contracts, Regatta Access contracts, Regatta Choice contracts, Regatta Flex 4 contracts, Regatta Flex II contracts and the Regatta Choice II contracts, the Funds are: MFS/Sun Life Series Trust (the "Series Trust"). With respect to the Regatta Masters Extra contracts, Regatta Masters Choice contracts, Regatta Masters Access contracts and Regatta Masters Flex contracts, the funds are: Franklin Templeton Variable Insurance Products Trust, Lord Abbett Series Fund, Inc., MFS/Sun Life Series Trust, Oppenheimer Variable Account Funds, PIMCO Variable Insurance Funds and Sun Capital Advisers 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 the Sponsor's management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue 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 values 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 Funds shares and are recognized on the ex-dividend date.

Exchanges between Sub-Accounts requested by participants under the Contracts are recorded in the new Sub-Account upon receipt of the redemption proceeds.

- 35 -

Notes to Financial Statements - continued

(2) Significant Accounting Policies - continued

Federal Income Tax Status

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

(3) Contract Charges and Related Party Transactions

A mortality and expense risk charge based on the value of the Variable Account is deducted from the Variable Account at the end of each valuation period for the mortality and expense risks assumed by the Sponsor. The 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	Level 6

Regatta contracts	1.25%	-	-	-	-	-
Regatta Gold contracts	1.25%	-	-	-	-	-
Regatta Classic contracts	1.00%	-	-	-	-	-
Regatta Platinum contracts	1.25%	-	-	-	-	-
Regatta Extra contracts	1.30%	1.45%	1.55%	1.70%	-	-
Regatta Choice contracts	0.85%	1.00%	1.10%	1.15%	1.25%	1.40%
Regatta Access contracts	1.00%	1.15%	1.25%	1.40%	1.50%	1.65%
Regatta Flex 4 contracts	0.95%	1.10%	1.20%	1.35%	1.45%	1.60%
Regatta Flex II contracts	1.30%	1.50%	1.55%	1.70%	1.75%	1.90%
Regatta Choice II contracts	1.05%	1.25%	1.30%	1.45%	1.50%	1.65%
Regatta Masters Extra contracts	1.40%	1.60%	1.65%	1.80%	1.85%	2.00%
Regatta Masters Choice contracts	1.05%	1.25%	1.30%	1.45%	1.50%	1.65%
Regatta Masters Access contracts	1.35%	1.55%	1.60%	1.75%	1.80%	1.95%
Regatta Masters Flex contracts	1.30%	1.50%	1.55%	1.70%	1.75%	1.90%

Each year on the account anniversary, an account administration fee ("Account Fee") is equal to $30 in the case of Regatta contracts, the lesser of $30 or 2% of the participant's account value in the case of Regatta Gold contracts, the lesser of $35 or 2% of the participant's account value in the case of Regatta Platinum contracts, $35 in the case of Regatta Extra and Regatta Choice contracts, and $50 in the case of Regatta Classic, Regatta Access, Regatta Flex 4, Regatta Flex II, Regatta Choice II, Regatta Masters Extra, Regatta Masters Choice, Regatta Masters Access and Regatta Masters Flex contracts (after account year 5, the account fee, for Regatta Gold, Regatta Platinum, Regatta Extra and Regatta Choice contracts, may be changed annually, but it may not exceed the lesser of $50 or 2% of the participant's account value) is deducted from the participant's account to reimburse the Sponsor for certain administrative expenses. After the annuity commencement date, the Account Fee will be deducted pro rata from each variable annuity payment made during the year.

Massachusetts Financial Services Company, an affiliate of the Sponsor, is the investment adviser to the Series Trust. Sun Capital Advisers, Inc. 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 .58% to 1.82% and 1.25% of the funds net assets, respectively.

- 36 -

Notes to Financial Statements - continued

(3) Contract Charges and Related Party Transactions - continued

The Sponsor does not deduct a sales charge from purchase payments. However, in the case of Regatta Platinum and Regatta Flex 4 a withdrawal charge (contingent deferred sales charge) of up to 6% of certain amounts withdrawn, when applicable, may be deducted to cover certain expenses relating to the sale of the contracts and certificates. In the case of Regatta Choice a withdrawal charge of up to 7% and in the case of Regatta, Regatta Gold, Regatta Extra, Regatta Flex II, Regatta Choice II, Regatta Masters Extra, Regatta Masters Choice, and Regatta Masters Flex contracts, a withdrawal charge of up to 8% of certain amounts withdrawn, when applicable, may be deducted to cover certain expenses relating to the sale of the contracts and certificates. In the case of Regatta Classic contracts, a withdrawal charge of 1% is applied to purchase payments withdrawn which have been credited to a participant's account for less than one year.

For assuming the risk that withdrawal charges may be insufficient to compensate it for the costs of distributing the contracts, the Sponsor makes a deduction from the Variable Account at the end of each valuation period for the first seven account years at an effective annual rate of 0.15% of the net assets attributable to Regatta, Regatta Gold, Regatta Platinum, Regatta Masters Extra and Regatta Masters Choice and an effective annual rate of 0.20% of the net assets attributable to Regatta Masters Access and Regatta Masters Flex contracts.

As reimbursement for administrative expenses attributable to Regatta Gold, Regatta Classic, Regatta Platinum, Regatta Extra, Regatta Access, Regatta Choice, Regatta Flex 4, Regatta Flex II, Regatta Choice II, Regatta Masters Extra, Regatta Masters Choice, Regatta Masters Access and Regatta Masters Flex contracts, which exceed the revenues received from the Account Fees described above derived from such contracts, the Sponsor makes a deduction from the Variable Account at the end of each valuation period at an effective annual rate of 0.15% of the net assets attributable to such contracts.

For the year ended December 31, 2002, 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 Statement of Changes in Net Assets.

MFS/Sun Life Series Trust:	Contract Charges		Surrender Charges
Bond S Class	$	3,044	$	15,759
Bond Series		50,736		193,201
Capital Appreciation S Class		3,639		12,527
Capital Appreciation Series		455,489		764,197
Capital Opportunities S Class		2,622		4,224
Capital Opportunities Series		195,898		349,034
Emerging Growth S Class		2,819		8,362
Emerging Growth Series		369,832		237,135
Emerging Markets Equity S Class		461		1,158
Emerging Markets Equity Series		23,717		36,481
Global Asset Allocation S Class		172		740
Global Asset Allocation Series		35,534		70,306
Global Governments S Class		367		4,963
Global Governments Series		29,295		78,012
Global Growth S Class		639		1,872
Global Growth Series		106,987		315,751
Global Telecommunications S Class		163		-
Global Telecommunications Series		1,857		343
Global Total Return S Class		559		756
Global Total Return Series		34,896		54,652
Government Securities S Class		7,273		60,617
Government Securities Series		211,668		1,269,121
High Yield S Class		3,906		15,357
High Yield Series		119,441		360,395
International Growth Series		59,398		53,975
International Growth S Class		2,110		3,687
International Investors Trust S Class		223		1,774
International Investors Trust Series		28,208		30,381
Managed Sectors S Class		273		181
Managed Sectors Series		136,841		245,331

37 -

Notes to Financial Statements - continued

(3) Contract Charges and Related Party Transactions - continued

MFS/Sun Life Series Trust - continued	Contract Charges		Surrender Charges
Massachusetts Investors Growth Stock S Class	$	5,284	$	25,120
Massachusetts Investors Growth Stock Series		291,676		660,126
Massachusetts Investors Trust S Class		7,213		27,852
Massachusetts Investors Trust Series		622,715		2,553,766
Mid Cap Growth S Class		3,087		1,969
Mid Cap Growth Series		27,825		19,422
Money Market S Class		6,269		102,019
Money Market Series		229,586		3,738,814
New Discovery S Class		3,655		7,556
New Discovery Series		89,300		290,057
Research S Class		1,411		6,208
Research Series		352,732		378,705
Research Growth & Income S Class		1,025		3,262
Research Growth & Income Series		36,047		70,124
Research International S Class		981		3,468
Research International Series		28,887		106,581
Strategic Growth S Class		898		2,272
Strategic Growth Series		30,264		14,624
Strategic Income S Class		923		9,680
Strategic Income Series		14,659		111,051
Technology S Class		631		1,969
Technology Series		17,957		46,552
Total Return S Class		13,695		58,438
Total Return Series		598,566		2,244,553
Utilities S Class		2,531		11,823
Utilities Series		166,961		469,658
Value S Class		5,897		29,331
Value Series		98,692		343,262

(4) Annuity Reserves

Annuity reserves are calculated using the 1983 Individual Annuitant Mortality Table and an assumed interest rate of at least 3% or 4%, for Regatta, Regatta Gold, Regatta Classic and Regatta Platinum as stated in each participant's contract or certificate, as applicable, and the 2000 Individual Annuitant Mortality Table and an assumed rate of 3% for Regatta Extra, Regatta Access, Regatta Choice, Regatta Flex 4 and due to demographics of Regatta Flex II, Regatta Masters Extra, Regatta Choice II, Regatta Masters Choice, Regatta Masters Flex and Regatta Masters Access, no reserves were required at year-end. Required adjustments to the reserves are accomplished by transfers to or from the Sponsor.

- 38 -

Notes to Financial Statements - continued

(5) Investment Purchases and Sales

The following table shows the aggregate cost of shares purchased and proceeds from the sales of shares for each Sub-Account for the year ended December 31, 2002:

		Purchases		Sales

Franklin Templeton Variable Insurance Products Trust
Mutual Shares Securities Fund		$	360,016	$		3,665
Templeton International Securities Fund	1,060,186				1,473
Franklin Value Securities Fund	209,319				1,760
Growth & Income Portfolio	366,355				931
Lord Abbett Series Fund, Inc.
Mid-Cap Value	286,709				2,523
Bond S Class	31,471,622				6,723,710
MFS/Sun Life Series Trust
Bond Series	81,451,650				51,096,744
Capital Appreciation S Class	20,359,941				4,421,593
Capital Appreciation Series	40,253,114				219,582,159
Capital Opportunities S Class	9,782,832				1,697,809
Capital Opportunities Series	9,851,759				117,322,862
Emerging Growth S Class	11,129,960				2,676,703
Emerging Growth Series	22,679,748				175,985,685
Emerging Markets Equity S Class	4,470,655				2,532,081
Emerging Markets Equity Series	17,120,696				16,867,772
Global Asset Allocation S Class	4,420,487				2,923,937
Global Asset Allocation Series	5,080,118				20,780,825
Global Governments S Class	4,873,156				1,423,851
Global Governments Series	26,016,027				15,493,499
Global Growth S Class	12,583,556				9,660,219
Global Growth Series	4,189,188				61,754,077
Global Telecommunications S Class	372,427				78,945
Global Telecommunications Series	702,925				936,139
Global Total Return S Class	7,202,352				3,104,243
Global Total Return Series	13,372,673				19,339,494
Government Securities S Class	85,426,408				19,043,229
Government Securities Series	281,525,591				165,393,652
High Yield S Class	40,551,508				15,298,870
High Yield Series	77,726,004				100,151,604
International Growth S Class	115,902,440				108,692,920
International Growth Series	19,470,531				35,721,840
International Investors Trust S Class	34,744,595				33,039,533
International Investors Trust Series	7,756,417				16,769,889
Managed Sectors S Class	2,456,709				417,109
Managed Sectors Series	5,417,768				62,629,582
Massachusetts Investors Growth Stock S Class	28,319,362				4,335,235
Massachusetts Investors Growth Stock Series	26,690,985				156,618,198
Massachusetts Investors Trust S Class	42,115,655				4,592,648
Massachusetts Investors Trust Series	38,026,191				340,090,787
Mid Cap Growth S Class	17,999,591				3,041,316
Mid Cap Growth Series	25,955,456				23,204,125
Mid Cap Value S Class	717,108				10,678

- 39 -

Notes to Financial Statements - continued

(5) Investment Purchases and Sales - continued

MFS/Sun Life Series Trust - continued		Purchases		Sales
Money Market S Class	$ 265,485,624		$ 233,233,020
Money Market Series	389,702,814		462,439,892
New Discovery S Class	19,367,602		3,822,568
New Discovery Series	34,829,549		50,210,986
Research S Class	7,273,365		1,303,422
Research Series	13,811,422		183,289,271
Research Growth and Income S Class	6,220,487		1,518,576
Research Growth and Income Series	14,018,931		24,561,775
Research International S Class	28,991,135		25,372,244
Research International Series	9,324,746		18,382,171
Strategic Growth S Class	5,238,139		836,845
Strategic Growth Series	6,539,168		21,308,068
Strategic Income S Class	11,347,697		1,392,258
Strategic Income Series	22,696,894		15,328,325
Strategic Value S Class	1,170,908		66,767
Technology S Class	4,591,996		2,706,142
Technology Series	4,029,742		9,138,199
Total Return S Class	108,972,881		7,517,514
Total Return Series	208,010,042		292,206,845
Utilities S Class	8,399,378		1,953,907
Utilities Series	15,252,446		107,820,791
Value S Class	43,554,841		6,949,755
Value Series	88,706,639		62,293,662
Oppenheimer Variable Account Funds
Capital Appreciation Fund	180,362		387
Main St. Growth and Income	187,013		2,024
Main St. Small Cap Growth Fund	157,612		425
PIMCO Variable Insurance Trust
Real Return Bond Portfolio	503,055		4,498
Total Return Bond Portfolio	1,498,239		9,948
Sun Capital Advisers Trust
Real Estate Fund	288,850		1,641

- 40 -

Notes to Financial Statements - continued

(6) Financial Highlights

The summary of unit values and units outstanding for variable annuity contracts and the expense ratios, excluding expenses of the underlying funds, for the year ended December 31, 2002, follows.

		At December 31							For year ended December 31
		Units	Unit Fair Value lowest to highest				Net Assets		Investment Income Ratio*	Expense Ratio lowest to highest**			Total Return lowest to highest***
FMS
	December 31, 2002 (b)	35,337	$	10.1163	to	10.1476	$	357,959	-%	1.35%	to	2.30%	1.16%	to	1.48%
FTI
	December 31, 2002 (b)	109,241	9.5923		to	9.6281	1,049,989		-	1.35	to	2.30	(4.08)	to	(3.72)
FVS
	December 31, 2002 (b)	20,281	10.4355		to	10.4678	211,927		-	1.35	to	2.30	4.35	to	4.68
LA1
	December 31, 2002 (b)	33,508	10.6887		to	10.7219	358,622		4.77	1.35	to	2.30	6.89	to	7.22
LA2
	December 31, 2002 (b)	26,664	10.6397		to	10.6794	284,181		3.92	1.35	to	2.30	6.40	to	6.79
BDS
	December 31, 2002	16,672,091	11.8359		to	12.8247	209,295,113		3.62	1.00	to	1.85	7.56	to	8.50
	December 31, 2001	14,562,283	10.9924		to	11.8661	169,138,563		3.26	1.00	to	1.85	5.79	to	6.71
CAS
	December 31, 2002	53,276,821	3.9494		to	19.5203	560,298,723		0.17	1.00	to	1.85	(80.74)	to	(33.06)
	December 31, 2001	64,553,284	5.9333		to	32.0464	1,061,993,683		0.36	1.00	to	1.85	(26.71)	to	(26.07)
CO1
	December 31, 2002	1,659,796	6.4740		to	10.6299	10,868,241		0.06	1.10	to	2.30	(31.83)	to	6.30
	December 31, 2001 (a)	707,598	9.4967		to	9.5218	6,728,752		-	1.10	to	1.85	(5.03)	to	(4.80)
COS
	December 31, 2002	36,579,889	4.1530		to	11.9403	248,530,711		0.09	1.00	to	1.85	(31.68)	to	(31.09)
	December 31, 2001	49,296,039	6.0616		to	17.3945	494,301,507		-	1.00	to	1.85	(26.32)	to	(25.71)
EGS
	December 31, 2002	50,696,788	3.2151		to	13.3500	370,438,018		-	1.00	to	1.85	(35.40)	to	(34.83)
	December 31, 2001	65,948,379	4.9741		to	20.5656	763,479,404		-	1.00	to	1.85	(35.80)	to	(35.24)
EM1
	December 31, 2002	204,949	9.8964		to	10.1593	2,036,932		1.18	1.15		1.85	(3.93)	to	1.59
	December 31, 2001 (a)	36,622	10.3013		to	10.3266	377,616		-	1.15	to	1.85	3.01	to	3.27
FCE
	December 31, 2002	3,685,145	7.6143		to	8.8861	30,076,632		1.24	1.00	to	1.85	(3.75)	to	(2.92)
	December 31, 2001	3,800,561	7.9111		to	9.1857	31,963,479		-	1.00	to	1.85	(2.88)	to	(2.03)
FCG
	December 31, 2002	11,708,342	6.5089		to	8.6679	87,260,895		0.56	1.00	to	1.85	(13.52)	to	(12.77)
	December 31, 2001	13,618,628	7.5216		to	9.9505	116,926,690		0.71	1.00	to	1.85	(17.45)	to	(16.85)
GA1
	December 31, 2002	210,153	8.8758		to	8.9612	1,874,220		2.98	1.15	to	1.85	(8.64)	to	(7.97)
	December 31, 2001 (a)	51,398	9.7382		to	9.7621	501,186		-	1.15	to	1.85	(2.62)	to	(2.38)
GAA
	December 31, 2002	4,636,581	7.7172		to	14.6922	60,754,310		3.47	1.15	to	1.85	(8.85)	to	(8.20)
	December 31, 2001	5,837,945	8.4423		to	16.0044	84,504,987		5.02	1.15	to	1.85	(10.61)	to	(9.96)
GG1
	December 31, 2002	344,004	10.5848		to	11.5577	3,969,895		-	1.15	to	2.05	5.85	to	18.91
	December 31, 2001 (a)	17,109	9.6962		to	9.7200	166,093		-	1.15	to	1.85	(3.04)	to	(2.80)
GG2
	December 31, 2002	468,329	7.6154		to	10.2750	3,713,489		0.25	1.00	to	1.85	(21.15)	to	2.75
	December 31, 2001 (a)	140,349	9.6585		to	9.6823	1,357,130		-	1.15	to	1.85	(3.41)	to	(3.18)
GGR
	December 31, 2002	13,695,036	5.2372		to	15.7288	157,722,758		0.28	1.15	to	1.85	(20.86)	to	(20.29)
	December 31, 2001	17,723,668	6.6146		to	19.7806	260,751,103		0.71	1.15	to	1.85	(21.18)	to	(20.61)
GGS
	December 31, 2002	4,610,834	11.7112		to	16.3444	64,709,568		-	1.00	to	1.85	18.39	to	19.25
	December 31, 2001	3,647,399	9.8795		to	13.7399	44,882,046		-	1.15	to	1.85	(3.96)	to	(3.11)
GSS
	December 31, 2002	50,577,174	11.8031		to	18.5247	743,720,269		4.46	1.00	to	1.85	7.77	to	8.71
	December 31, 2001	43,557,072	10.9408		to	20.2862	595,911,760		5.36	1.00	to	1.85	5.45	to	6.37
GT1
	December 31, 2002	66,336	5.5809		to	6.8170	372,982		-	1.15	to	1.85	(40.69)	to	(31.83)
	December 31, 2001 (a)	24,957	9.4099		to	9.4331	235,015		-	1.15	to	1.85	(5.90)	to	(5.67)
GT2
	December 31, 2002	575,530	9.5864		to	9.6983	5,544,326		1.70	1.00	to	1.85	(1.45)	to	(0.60)
	December 31, 2001 (a)	151,199	9.7279		to	9.7518	1,472,798		-	1.15	to	1.85	(2.72)	to	(2.48)
GTR
	December 31, 2002	5,490,465	9.0578		to	17.0082	76,987,347		1.91	1.15	to	1.85	(1.26)	to	(0.54)
	December 31, 2001	5,780,805	9.1687		to	17.1432	84,171,649		4.19	1.15	to	1.85	(7.93)	to	(7.26)
GTS
	December 31, 2002	555,343	2.4709		to	2.6057	1,390,888		-	1.15	to	1.85	(40.61)	to	(40.18)
	December 31, 2001	662,983	4.1415		to	4.3653	2,777,404		0.06	1.15	to	1.85	(42.62)	to	(42.19)
HYS
	December 31, 2002	20,985,015	9.2403		to	17.7408	257,293,833		10.19	1.00	to	1.85	0.80	to	1.67
	December 31, 2001	24,640,912	9.1623		to	17.5162	301,095,084		9.61	1.00	to	1.85	(0.14)	to	0.73

- 41 -

Notes to Financial Statements - continued

(6) Financial Highlights - continued

		At December 31					For year ended December 31
		Units	Unit Fair Value lowest to highest			Net Assets	Investment Income Ratio*		Expense Ratio lowest to highest**			Total Return lowest to highest***
IG1
	December 31, 2002	1,265,240	$ 8.1908	to	10.2091	$10,427,953	0.64	%	1.15%	to	1.85%	(14.25)%	to	2.09%
	December 31, 2001	326,874	9.4853	to	9.5087	3,104,040	-		1.15	to	1.85	(5.15)	to	(4.91)
M1A
	December 31, 2002	2,530,871	6.6917	to	10.2978	17,111,473	-		1.00	to	2.05	(34.89)	to	2.98
	December 31, 2001 (a)	744,162	10.2864	to	10.3117	7,664,202	-		1.15	to	1.85	2.86	to	3.12
M1B
	December 31, 2002	4,230,272	6.8823	to	10.2607	29,392,471	0.12		1.00	to	2.10	(29.45)	to	2.61
	December 31, 2001	1,419,642	9.7550	to	9.7807	13,864,858	-		1.10	to	1.85	(2.45)	to	(2.21)
MC1
	December 31, 2002	2,772,461	4.9917	to	10.6720	14,018,481	-		1.00	to	2.25	(48.15)	to	6.72
	December 31, 2001 (a)	723,935	9.6268	to	9.6505	6,977,776	-		1.15	to	1.85	(3.73)	to	(3.50)
MCS
	December 31, 2002	10,939,748	3.4780	to	3.6695	39,906,465	-		1.15	to	1.85	(48.14)	to	(47.76)
	December 31, 2001	10,773,649	6.6995	to	7.0246	75,425,977	0.07		1.15	to	1.85	(24.62)	to	(24.06)
MCV
	December 31, 2002 (c)	86,168	7.8310	to	10.3969	703,547	-		1.15	to	2.05	(21.69)	to	3.97
MF7
	December 31, 2002	3,399,082	10.558	to	10.9115	36,841,435	3.50		1.00	to	2.10	5.58	to	8.81
	December 31, 2001 (a)	1,039,445	10.0563	to	10.0810	10,465,489	-		1.15	to	1.85	0.56	to	0.81
MFC
	December 31, 2002	3,266,770	9.9081	to	10.6087	32,604,716	9.43		1.00	to	2.25	0.07	to	6.09
	December 31, 2001 (a)	838,150	9.8665	to	9.8907	8,280,487	-		1.15	to	1.85	(1.34)	to	(1.09)
MFD
	December 31, 2002	3,163,343	6.4212	to	10.5642	20,470,534	0.15		1.00	to	2.10	(33.81)	to	5.64
	December 31, 2001 (a)	1,178,384	9.7010	to	9.7249	11,446,860	-		1.15	to	1.85	(2.99)	to	(2.75)
MFE
	December 31, 2002	1,391,497	6.6338	to	11.0847	9,331,003	3.74		1.00	to	2.05	(25.56)	to	10.85
	December 31, 2001 (a)	605,177	8.9110	to	8.9330	5,400,088	-		1.15	to	1.85	(10.89)	to	(10.67)
MFF
	December 31, 2002	1,550,123	6.2456	to	10.4817	9,746,182	-		1.15	to	1.90	(35.57)	to	4.82
	December 31, 2001 (a)	526,836	9.6936	to	9.7174	5,113,096	-		1.15	to	1.85	(3.06)	to	(2.83)
MFJ
	December 31, 2002	13,048,289	9.0028	to	10.5361	120,728,633	2.87		1.00	to	2.30	(9.97)	to	5.36
	December 31, 2001 (a)	3,047,596	9.9469	to	9.9714	30,354,276	-		1.15	to	1.85	(0.53)	to	(0.29)
MFK
	December 31, 2002	8,558,119	10.2092	to	10.9594	93,288,471	3.90		1.00	to	2.30	2.09	to	8.34
	December 31, 2001 (a)	2,355,604	10.0990	to	10.1238	23,818,975	-		1.15	to	1.85	0.99	to	1.24
MFL
	December 31, 2002	6,235,850	7.4454	to	10.4607	46,842,065	0.95		1.00	to	2.10	(22.85)	to	4.61
	December 31, 2001 (a)	1,960,395	9.6506	to	9.6760	18,941,390	-		1.15	to	1.85	(3.49)	to	(3.26)
MI1
	December 31, 2002	253,434	8.6349	to	10.2839	2,198,379	0.97		1.15	to	1.85	(7.70)	to	2.84
	December 31, 2001 (a)	45,114	9.3555	to	9.3785	422,349	-		1.15	to	1.85	(6.45)	to	(6.21)
MII
	December 31, 2002	4,845,066	7.3979	to	11.4447	48,423,016	0.81		1.15	to	1.85	(7.68)	to	(7.01)
	December 31, 2001	5,653,736	8.0095	to	12.3381	61,526,355	1.98		1.15	to	1.85	(16.17)	to	(15.56)
MIS
	December 31, 2002	65,830,913	4.5242	to	7.8833	411,220,281	0.15		1.00	to	1.85	(29.39)	to	(28.78)
	December 31, 2001	82,854,696	6.4040	to	11.0839	733,044,616	0.11		1.00	to	1.85	(26.29)	to	(25.65)
MIT
	December 31, 2002	93,484,847	6.1232	to	21.3640	1,027,852,421	1.03		1.00	to	1.85	(22.69)	to	(22.01)
	December 31, 2001	114,934,813	7.9158	to	27.5009	1,672,347,859	0.81		1.00	to	1.85	(17.30)	to	(16.58)
MM1
	December 31, 2002	5,279,063	9.9247	to	10.0406	52,748,947	1.00		1.00	to	2.10	(0.85)	to	0.01
	December 31, 2001 (a)	2,033,294	10.0094	to	10.0340	20,484,394	0.52		1.15	to	1.85	0.09	to	0.34
MMS
	December 31, 2002	47,957,226	10.2453	to	13.4839	581,571,010	1.26		1.00	to	1.85	(55.73)	to	0.26
	December 31, 2001	53,824,814	10.2809	to	15.0699	654,496,482	3.49		1.00	to	1.85	1.85	to	2.74
MS1
	December 31, 2002	320,127	6.9685	to	10.6549	2,241,427	-		1.00	to	1.85	(27.52)	to	6.55
	December 31, 2001 (a)	78,580	9.6140	to	9.6377	756,187	-		1.15	to	1.85	(3.86)	to	(2.00)
MSS
	December 31, 2002	14,253,338	3.8027	to	16.8759	143,971,087	-		1.15	to	1.85	(77.23)	to	(26.83)
	December 31, 2001	18,605,449	5.2351	to	27.4680	262,609,717	-		1.15	to	1.85	(36.72)	to	(36.26)
MV1
	December 31, 2002	5,567,204	8.2070	to	10.4844	46,412,389	0.75		1.00	to	2.10	(17.93)	to	4.84
	December 31, 2001 (a)	1,683,747	9.7757	to	9.8015	16,478,083	-		1.10	to	1.85	(2.24)	to	(1.98)
MVS
	December 31, 2002	25,236,732	8.1828	to	11.3216	261,243,141	0.83		1.00	to	1.85	(15.18)	to	(14.44)
	December 31, 2001	23,493,630	9.6370	to	13.2508	283,811,117	0.50		1.00	to	1.85	(9.21)	to	8.42

- 42 -

Notes to Financial Statements - continued

(6) Financial Highlights - continued

		At December 31					For year ended December 31
		Units	Unit Fair Value lowest to highest			Net Assets	Investment Income Ratio*		Expense Ratio lowest to highest**			Total Return lowest to highest***
NWD
	December 31, 2002	18,934,627	$ 5.2482	to	10.2251	$ 142,395,159	-	%	1.00%	to	1.85%	(34.69)%	to	(34.13)%
	December 31, 2001	20,720,859	8.0117	to	15.5437	238,495,660	-		1.00	to	1.85	(6.88)	to	(6.20)
RE1
	December 31, 2002	998,378	7.0555	to	10.4308	7,124,245	0.39		1.10	to	2.05	(26.73)	to	4.31
	December 31, 2001 (a)	322,046	9.6300	to	9.6554	3,105,571	-		1.10	to	1.85	(3.70)	to	(3.46)
RES
	December 31, 2002	40,346,263	4.8348	to	15.7110	442,075,147	0.42		1.00	to	1.85	(26.53)	to	(25.99)
	December 31, 2001	52,722,243	6.5771	to	21.2818	797,021,574	0.03		1.15	to	1.85	(22.86)	to	(22.29)
RG1
	December 31, 2002	836,210	7.6204	to	10.4365	6,404,569	0.67		1.10	to	1.85	(23.54)	to	4.37
	December 31, 2001 (a)	317,814	9.9056	to	9.9300	3,151,992	-		1.10	to	1.85	(0.94)	to	(0.70)
RGS
	December 31, 2002	7,794,225	6.5327	to	9.7214	61,785,510	0.71		1.15	to	1.85	(22.86)	to	(22.30)
	December 31, 2001	8,941,881	8.4599	to	12.5421	92,120,442	0.43		1.15	to	1.85	(12.56)	to	(11.92)
RI1
	December 31, 2002	688,316	8.1535	to	10.1312	5,755,219	0.28		1.15	to	2.10	(13.67)	to	1.31
	December 31, 2001 (a)	269,147	9.4009	to	9.4240	2,533,532	-		1.15	to	1.85	(5.99)	to	(5.76)
RSS
	December 31, 2002	8,305,636	6.2814	to	10.9211	61,819,925	0.26		1.15	to	1.85	(13.12)	to	(12.49)
	December 31, 2001	9,379,991	7.2078	to	12.4795	79,918,982	0.83		1.15	to	1.85	(19.29)	to	(18.70)
SG1
	December 31, 2002	729,461	6.6667	to	11.1313	4,997,289	-		1.00	to	2.05	(31.44)	to	11.31
	December 31, 2001 (a)	204,017	9.7238	to	9.7478	1,985,914	-		1.15	to	1.85	(2.76)	to	(2.52)
SGS
	December 31, 2002	8,056,046	4.2359	to	5.5475	38,193,061	-		1.00	to	1.85	(31.40)	to	(30.80)
	December 31, 2001	10,790,691	6.1712	to	9.7341	73,896,639	-		1.00	to	1.85	(26.04)	to	(25.39)

SI1
	December 31, 2002	1,211,192	10.4234	to	10.6959	12,904,706	3.83		1.00	to	2.05	4.23	to	6.23
	December 31, 2001 (a)	256,166	10.0643	to	10.0890	2,581,663	-		1.15	to	1.85	0.64	to	0.89
SIS
	December 31, 2002	5,060,468	10.7476	to	11.2823	56,213,140	4.38		1.00	to	1.85	5.50	to	6.26
	December 31, 2001	4,516,487	10.1823	to	10.6172	47,304,649	3.32		1.00	to	1.85	1.43	to	17.49
SVS
	December 31, 2002 (c)	131,129	7.8014	to	10.8817	1,072,102	-		1.15	to	2.10	(21.99)	to	8.82
TE1
	December 31, 2002	292,860	5.1135	to	10.9267	1,507,781	-		1.15	to	1.85	(47.37)	to	9.27
	December 31, 2001 (a)	97,036	9.7162	to	9.7402	943,990	-		1.15	to	1.85	(2.84)	to	(2.60)
TEC
	December 31, 2002	5,811,547	2.2680	to	2.5067	14,026,934	-		1.00	to	1.85	(46.99)	to	(46.53)
	December 31, 2001	7,440,220	4.2737	to	4.6876	33,859,676	0.02		1.00	to	1.85	(40.00)	to	(39.48)
TRS
	December 31, 2002	86,032,615	9.4901	to	23.8208	1,430,271,084	3.22		1.00	to	1.85	(68.81)	to	(6.66)
	December 31, 2001	92,999,406	10.2447	to	30.7555	1,718,764,462	3.41		1.00	to	1.85	(1.36)	to	(0.64)
UTS
	December 31, 2002	22,902,575	5.4038	to	16.8792	210,814,418	3.79		1.00	to	1.85	(25.26)	to	(24.72)
	December 31, 2001	32,768,627	7.2083	to	22.4771	406,075,169	3.81		1.00	to	1.85	(25.72)	to	(25.18)
OCA
	December 31, 2002 (b)	16,503	10.8085	to	10.8398	178,514	-		1.35	to	2.05	8.09	to	8.40
OMG
	December 31, 2002 (b)	17,855	9.5579	to	10.1512	180,752	-		1.35	to	2.25	(4.42)	to	1.51
OMS
	December 31, 2002 (b)	15,242	10.0990	to	10.1304	154,060	-		1.35	to	2.10	0.99	to	1.30
PRR
	December 31, 2002 (b)	48,547	10.5171	to	10.5497	511,033	3.18		1.35	to	2.10	5.17	to	5.50
PTR
	December 31, 2002 (b)	144,063	10.3584	to	10.4113	1,494,943	3.71		1.35	to	2.25	3.58	to	4.11
SC3
	December 31, 2002 (b)	27,198	10.0602	to	10.0914	273,956	34.66		1.35	to	2.10	0.60	to	0.91

* Represents the dividends, excluding distributions of capital gains, received by the subaccount 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 subaccount is affected by the timing of the declaration of dividends by the underlying fund in which the subaccounts 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 expenses 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 expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction in the total return presented. Investment options with a date notation indicate the effective date of that investment option in the variable account. The total return is calculated for the period indicated or from the effective date through the end of the reporting period.

(a) For the period August 27, 2001 (commencement of operations) through December 31, 2001.

(b) For the period August 5, 2002 (commencement of operations) through December 31, 2002.

- 43 -

Independent Auditors' Report

To the Participants in Futurity, Futurity II, Futurity Focus, Futurity Accolade, Futurity Focus II, Futurity III, Futurity Select Four, Futurity Select Four Plus, Futurity Select Seven, Futurity Select Freedom and Futurity Select Incentive and the Board of Directors of Sun Life Assurance Company of Canada (U.S.):

We have audited the accompanying statements of condition of AIM V.I. Growth Series 2 Sub-Account, AIM V.I. Core Equity Series 2 Sub-Account, AIM V.I. Capital Appreciation Sub-Account, AIM V.I. Growth Sub-Account, AIM V.I. Growth and Income Sub-Account, AIM V.I. International Equity Sub-Account, AIM V.I Value Sub-Account, AIM V.I. Capital Appreciation Series 2 Sub-Account, AIM V.I. International Growth Series 2 Sub-Account, AIM V.I. Premier Equity Series 2 Sub-Account, Arnhold and S. Bleichroader First Eagle SoGen Overseas Variable Sub-Account, Alger American Growth Sub-Account, Alger American Income and Growth Sub-Account, Alger American Small Capitalization Sub-Account, Alliance VP Premier Growth Sub-Account, Alliance VP Technology Sub-Account, Alliance VP Growth and Income Sub-Account, Alliance VP Worldwide Privatization Sub-Account, Alliance VP Quasar Sub-Account, Credit Suisse Institutional Emerging Markets Sub-Account, Credit Suisse Institutional International Equity Sub-Account, Credit Suisse Institutional Global Post-Venture Capital Sub-Account, Credit Suisse Institutional Small Company Growth Sub-Account, Fidelity VIP Contrafund Sub-Account, Fidelity VIP Overseas Sub-Account, Fidelity VIP Growth Sub-Account, Franklin Templeton VIP Foreign Securities Class 2 Sub-Account, Franklin Templeton VIP Growth Securities Class 2 Sub-Account, Goldman Sachs VIT CORE Large Cap Growth Sub-Account, Goldman Sachs VIT CORE Small Cap Equity Sub-Account, Goldman Sachs VIT CORE U.S. Equity Sub-Account, Goldman Sachs VIT Growth and Income Sub-Account, Goldman Sachs VIT International Equity Sub-Account, Goldman Sachs VIT Internet Tollkeeper Sub-Account, Goldman Sachs VIT Capital Growth Sub-Account, INVESCO VIF Dynamics Sub-Account, INVESCO VIF Small Company Growth Sub-Account, J.P. Morgan Trust II U.S. Disciplined Equity Sub-Account, J.P. Morgan Trust II International Opportunities Sub-Account, J.P. Morgan Trust II Small Company Sub-Account, Lord Abbett Growth and Income Sub-Account, Lord Abbett Mid Cap Value Sub-Account, Lord Abbett International Sub-Account, MFS/Sun Life Capital Appreciation Sub-Account, MFS/Sun Life Emerging Growth Sub-Account, MFS/Sun Life Government Securities Sub-Account, MFS/Sun Life High Yield Sub-Account, MFS/Sun Life New Discovery S Sub-Account, MFS/Sun Life Massachusetts Investors Growth Stock S Sub-Account, MFS/Sun Life High Yield S Sub-Account, MFS/Sun Life Capital Appreciation S Sub-Account, MFS/Sun Life Utilities S Sub-Account, MFS/Sun Life Emerging Growth S Sub-Account, MFS/Sun Life Total Return S Sub-Account, MFS/Sun Life Government Securities S Sub-Account, MFS/Sun Life Massachusetts Investors Trust S Sub-Account, MFS/Sun Life Massachusetts Investors Growth Stock Sub-Account, MFS/Sun Life Massachusetts Investors Trust Sub-Account, MFS/Sun Life Money Market Sub-Account, MFS/Sun Life New Discovery Sub-Account, MFS/Sun Life Total Return Sub-Account, MFS/Sun Life Utilities Sub-Account, OCC Accumulation Equity Sub-Account, OCC Accumulation Mid Cap Sub-Account, OCC Accumulation Small Cap Sub-Account, OCC Accumulation Managed Sub-Account, PIMCO VIT Emerging Markets Bond Sub-Account, PIMCO VIT High Yield Sub-Account, PIMCO VIT Real Return Sub-Account, PIMCO VIT Total Return Sub-Account, Rydex VT Nova Sub-Account, Rydex VT OTC Sub-Account, Salomon Brothers VS Capital Sub-Account, Salomon Brothers VS Investors Sub-Account, Salomon Brothers VS Strategic Bond Sub-Account, Salomon Brothers VS Total Return Sub-Account, Sun Capital Money Market Sub-Account, Sun Capital Investment Grade Bond Sub-Account, Sun Capital Real Estate Sub-Account, SC Select Equity Sub-Account, SC Blue Chip Mid Cap Sub-Account, SC Investors Foundation Sub-Account, SC Davis Venture Value Sub-Account, SC Davis Financial Sub-Account, SC Value Equity Sub-Account, SC Value Mid Cap Sub-Account, SC Value Small Cap Sub-Account, SC Value Managed Sub-Account, SC INVESCO Technology Sub-Account, SC INVESCO Telecommunications Sub-Account, SC INVESCO Health Sciences Sub-Account, SC INVESCO Energy Sub-Account, SC Neuberger Berman Mid Cap Growth Sub-Account, SC Neuberger Berman Mid Cap Value Sub-Account, SC Alger Growth Sub-Account, SC Alger Income & Growth Sub-Account, SC Alger Small Capitalization Sub-Account, Sun Capital All Cap Sub-Account, of Sun Life of Canada (U.S.) Variable Account F, (the ''Sub-Accounts'') as of December 31, 2002, the related statements of operations for the year then ended and the statements of changes in net assets for the two years in the period then ended. These financial statements are the responsibility of management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities held at December 31, 2002 by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believed that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above presents fairly, in all material respects, the financial position of the Sub-Accounts as of December 31, 2002, the results of their operations for the year then ended and the changes in their net assets for the two years in the period then ended in conformity with accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP

Boston, Massachusetts

March 21, 2003

Futurity, Futurity II, Futurity Focus, Futurity Accolade, Futurity Focus II, Futurity III, Futurity Select Four

Futurity Select Four Plus, Futurity Select Seven, Futurity Select Freedom and Futurity Select Incentive Sub-Accounts

Included in Sun Life of Canada (U.S.) Variable Account F

Statements of Condition - December 31, 2002

Assets:
Investments in:
AIM Variable Insurance Fund, Inc.	Shares		Cost			Value
V.I. Growth Fund Series 2 (AG2)	6,471		$	76,636		$	72,925
V.I. Core Equity Fund Series 2 (AG3)	6,133		106,844			103,888
V.I. Capital Appreciation Fund (AI1)	1,614,044		41,976,179			26,518,750
V.I. Growth Fund (AI2)	3,017,722		52,510,756			34,100,265
V.I. Growth and Income Fund (AI3)	2,125,315		54,125,398			36,109,101
V.I. International Equity Fund (AI4)	2,039,908		31,460,103			25,478,456
V.I. Value Fund (AI5)	308,948		6,491,122			5,011,133
V.I. Capital Appreciation Fund Series 2 (AI7)	7,176		121,959			117,551
V.I. International Growth Fund Series 2 (AI8)	2,763		33,185			34,395
V.I. Premier Equity Fund Series 2 (AI9)	1,114		18,871			18,018
Arnhold and S. Bleichroader Advisers, Inc.
First Eagle SoGen Overseas Variable Fund (SGI)	2,976,390		40,651,748			44,526,796
The Alger American Fund
Growth Portfolio (AL1)	1,846,858		83,164,775			45,488,122
Income and Growth Portfolio (AL2)	4,263,761		51,167,868			30,869,631
Small Capitalization Portfolio (AL3)	602,180		11,925,303			7,352,617
Alliance Variable Products Series Fund, Inc.
Premier Growth Fund (AN1)	358,665		7,911,104			6,201,326
Technology Fund (AN2)	144,312		2,027,140			1,440,238
Growth and Income Fund (AN3)	1,669,957		33,046,890			27,537,588
Worldwide Privatization Fund (AN4)	205,639		2,435,043			2,358,677
Quasar Fund (AN5)	71,365		567,093			483,853
Credit Suisse Institutional
Emerging Markets Portfolio (CS1)	131,179		1,462,768			975,973
International Equity Portfolio (CS2)	76,147		939,756			508,665
Global Post-Venture Capital Portfolio (CS3)	44,067		692,431			282,030
Small Company Growth Portfolio (CS4)	112,504		1,302,903			1,045,159
Fidelity Variable Insurance Products Funds
VIP Contrafund (FL1)	669,422		12,693,924			12,016,131
VIP Overseas Fund (FL2)	538,791		6,158,166			5,872,825
VIP Growth Fund (FL3)	1,310,676		37,023,973			30,420,785
Franklin Templeton Variable Insurance Products Trust
Growth Securities Fund Class 2 (FTG)	2,868		25,097			24,668
Foreign Securities Fund Class 2 (FTI)	60,725		585,554			572,025
Goldman Sachs Variable Insurance Trust
VIT CORE Large Cap Growth Fund (GS1)	-		-			-
VIT CORE Small Cap Equity Fund (GS2)	534,462		5,614,385			4,911,703
VIT CORE US Equity Fund (GS3)	1,667,118		19,628,844			14,153,831
VIT Growth and Income Fund (GS4)	660,321		6,719,291			5,375,016
VIT International Equity Fund (GS5)	929,498		10,142,403			6,738,859
VIT Internet Tollkeeper Fund (GS6)	-	-			-
VIT Capital Growth Fund (GS7)	251,108	2,301,088			1,951,108
INVESCO Variable Investment Funds, Inc.
Dynamics Fund (IV1)	250,042	2,572,323			2,135,358
Small Company Growth Fund (IV2)	135,535	1,700,049			1,374,325
J.P. Morgan Series Trust II
U.S. Disciplined Equity Portfolio (JP1)	1,128,237	17,061,075			11,101,854
International Opportunities Portfolio (JP2)	621,327	6,637,177			4,473,552
Small Company Portfolio (JP3)	427,422	5,913,877			4,419,549
Lord Abbett Series Fund, Inc.
Growth and Income Portfolio (LA1)	6,184,362	139,064,113			116,451,533
Mid Cap Value (LA2)	3,232,116	47,856,389			44,797,132
International Portfolio (LA3)	200,272	1,161,486			1,021,388
MFS/Sun Life Series Trust
Capital Appreciation Series (CAS)	914,912	23,077,008			12,333,011
Emerging Growth Series (EGS)	2,255,008	42,552,191			23,700,136
Government Securities Series (GSS)	5,463,275	72,658,944			75,666,364
High Yield Series (HYS)	3,678,537	25,122,652			24,131,202

See notes to financial statements.

- 2 -

Statements of Condition - December 31, 2002 - continued

MFS/Sun Life Series Trust - continued	Shares	Cost		Value
New Discovery S Class (M1A)	1,852,171	$	19,123,900	$	17,299,281
Massachusetts Investors Growth Stock S Class (M1B)	1,092,737	9,486,274		7,605,453
High Yield S Class (MFC)	1,815,888	11,480,967		11,857,747
Capital Appreciation S Class (MFD)	84,392	1,456,244		1,134,232
Utilities S Class (MFE)	370,202	4,006,028		3,420,667
Emerging Growth S Class (MFF)	118,754	1,574,030		1,243,360
Total Return S Class (MFJ)	1,948,261	33,039,801		30,879,937
Government Securities S Class (MFK)	2,696,578	36,150,907		37,239,740
Massachusetts Investors Trust S Class (MFL)	235,165	5,851,398		4,924,354
Massachusetts Investors Growth Stock Series (MIS)	4,452,022	51,793,166		31,030,595
Massachusetts Investors Trust Series (MIT)	1,169,738	35,610,591		24,576,204
Money Market (MMS)	5,650,249	5,650,249		5,650,249
New Discovery Series (NWD)	3,378,612	38,919,224		31,691,379
Total Return Series (TRS)	3,010,596	52,621,903		47,868,482
Utilities Series (UTS)	2,498,245	39,302,857		23,183,715
OCC Accumulation Trust
Equity Portfolio (OP1)	221,467	7,437,283		5,676,209
Mid Cap Portfolio (OP2)	710,524	9,399,084		8,618,651
Small Cap Portfolio (OP3)	170,176	4,901,402		3,662,197
Managed Portfolio (OP4)	56,761	2,234,156		1,860,060
PIMCO Variable Insurance Trust
High Yield Portfolio (PHY)	4,175,588	28,069,589		29,938,965
Emerging Markets Bond Portfolio (PMB)	2,728,402	28,502,267		31,322,058
Real Return Portfolio (PRR)	139,505	1,620,993		1,660,108
Total Return Portfolio (PTR)	4,166,294	42,277,418		42,621,187
Rydex Variable Trust
Nova Fund (RX1)	180,985	987,568		937,500
OTC Fund (RX2)	100,074	1,035,242		905,669
Salomon Brothers Variable Series Funds, Inc.
Capital Fund (SB1)	50,545	742,253		569,133
Investors Fund (SB2)	41,757	542,608		405,465
Strategic Bond Fund (SB3)	322,020	3,255,644		3,345,792
Total Return Fund (SB4)	285,455	2,985,035		2,720,389
Sun Capital Advisers Trust
Sun Capital Money Market Fund (SC1)	143,095,823	143,095,823		143,095,823
Sun Capital Investment Grade Bond Fund (SC2)	6,649,756	63,496,859		64,037,148
Sun Capital Real Estate Fund (SC3)	3,817,035	45,905,632		42,369,085
SC Select Equity Fund (SC4)	883,532	7,433,551		5,840,146
SC Blue Chip Mid Cap Fund (SC5)	4,479,127	56,733,483		51,375,585
SC Investors Foundation Fund (SC6)	537,755	4,607,210		3,586,825
SC Davis Venture Value Fund (SC7)	4,327,881	36,472,410		31,680,089
SC Davis Financial Fund (SC8)	713,659	7,003,396		6,094,649
SC Value Equity Fund (SC9)	450,914	4,454,870		3,390,873
SC Value Mid Cap Fund (SCA)	1,270,186	12,976,882		13,108,321
SC Value Small Cap Fund (SCB)	4,309,071	46,526,146		42,832,167
SC Value Managed Fund ( SCC)	315,821	3,103,563		2,580,261
SC INVESCO Technology Fund (SCD)	-	-		-
SC INVESCO Telecommunications Fund (SCE)	2	5		-
SC INVESCO Health Sciences Fund (SCF)	-	2		-
SC INVESCO Energy Fund (SCG)	-	4		-
SC Neuberger Berman Mid Cap Value Fund (SCH)	543,422	5,194,259		4,841,894
SC Neuberger Berman Mid Cap Growth Fund (SCI)	455,304	3,456,636		2,818,332
SC Alger Growth Fund (SCJ)	797,924	6,100,874		5,681,218
SC Alger Income & Growth Fund (SCK)	601,097	4,670,651		4,424,076
SC Alger Small Capitalization Fund (SCL)	283,997	2,163,952		2,161,213
Sun Capital All Cap Fund (SCM)	18,069	132,026		136,243

		$	1,844,072,199	1,544,180,238
Liability:
Payable to sponsor				(85,864)
Net assets				$		1,544,094,374

See notes to financial statements.

- 3 -

Statements of Condition - December 31, 2002 - continued

	Applicable to Owners of			Reserve for
Net Assets Applicable Contract Owners:	Deferred Variable Annuity Contracts			Variable
Consoldated Futurity Contracts:		Units	Value	Annuities	Total
AIM Variable Insurance Fund, Inc.
AG2		9,933	$ 72,925	$ -	$ 72,925
AG3		11,314	103,888	-	103,888
AI1		4,517,822	26,486,380	30,144	26,516,524
AI2		8,105,745	34,024,118	72,067	34,096,185
AI3		5,737,435	35,989,088	119,655	36,108,743
AI4		4,224,313	25,418,898	56,059	25,474,957
AI5		824,629	5,011,133	-	5,011,133
AI7		14,094	117,551	-	117,551
AI8		4,093	34,395	-	34,395
AI9		2,289	18,018	-	18,018
Arnhold and S. Bleichroader Advisers, Inc.
SG1		3,996,990	44,526,797	-	44,526,797
The Alger American Fund
AL1		8,205,394	45,388,641	97,279	45,485,920
AL2		4,500,052	30,707,619	150,764	30,858,383
AL3		1,566,452	7,326,736	24,835	7,351,571
Alliance Variable Products Series Fund, Inc.
AN1		1,052,237	6,201,326	-	6,201,326
AN2		304,747	1,440,238	-	1,440,238
AN3		3,865,669	27,508,188	28,150	27,536,338
AN4		287,342	2,331,665	32,089	2,363,754
AN5		75,132	483,853	-	483,853
Credit Suisse Institutional Fund, Inc.
CS1		107,756	960,829	14,372	975,201
CS2		76,619	508,044	592	508,636
CS3		43,870	271,499	9,173	280,672
CS4		139,231	1,042,956	2,060	1,045,016
Fidelity Variable Insurance Products Funds
FL1		1,422,859	12,015,746	28,053	12,043,799
FL2		923,348	5,872,825	-	5,872,825
FL3		5,065,258	30,402,712	18,174	30,420,886
Franklin Templeton Variable Insurance Products Trust
FTG		2,357	24,668	-	24,668
FTI		54,719	572,025	-	572,025
Goldman Sachs Variable Insurance Trust
GS1		-	-	-	-
GS2		505,836	4,864,488	44,822	4,909,310
GS3		1,993,373	14,074,233	76,684	14,150,917
GS4		703,658	5,360,480	14,592	5,375,072
GS5		1,048,203	6,710,504	27,337	6,737,841
GS6		-	-	-	-
GS7		294,424	1,951,108	-	1,951,108
INVESCO Variable Investment Funds, Inc.
IV1		393,726	2,135,358	-	2,135,358
IV2		227,469	1,374,325	-	1,374,325
J.P. Morgan Series Trust II
JP1		1,646,234	11,019,004	80,922	11,099,926
JP2		691,691	4,459,173	13,327	4,472,500
JP3		565,247	4,388,064	30,683	4,418,747
Lord Abbett Series Fund, Inc.
LA1		12,899,028	116,305,243	145,182	116,450,425
LA2		4,868,436	44,732,325	64,999	44,797,324
LA3		158,181	1,021,388	-	1,021,388
MFS/Sun Life Series Trust
CAS		2,385,864	12,294,335	36,630	12,330,965
EGS		4,741,685	23,602,706	92,114	23,694,820
GSS		6,101,434	75,573,816	86,691	75,660,507

See notes to financial statements.

- 4 -

Statements of Condition - December 31, 2002 - continued

	Applicable to Owners of			Reserve for
	Deferred Variable Annuity Contracts			Variable
		Units	Value	Annuities	Total
MFS/Sun Life Series Trust - continued
HYS		2,506,679	$ 24,023,858	$ 103,209	$ 24,127,067
M1A		2,563,610	17,299,131	149	17,299,280
M1B		1,096,685	7,605,453	-	7,605,453
MFC		1,187,722	11,836,857	20,766	11,857,623
MFD		175,129	1,134,232	-	1,134,232
MFE		510,083	3,420,493	172	3,420,665
MFF		196,254	1,243,360	-	1,243,360
MFJ		3,318,943	30,695,998	182,559	30,878,557
MFK		3,416,760	37,239,740	-	37,239,740
MFL		656,869	4,924,354	-	4,924,354
MIS		5,812,738	30,953,849	77,781	31,031,630
MIT		3,718,258	24,449,985	113,918	24,563,903
MMS		496,876	5,650,249	-	5,650,249
NWD		4,545,469	31,688,539	2,643	31,691,182
TRS		4,565,050	47,783,949	80,760	47,864,709
UTS		3,365,478	22,994,273	182,570	23,176,843
OCC Accumulation Trust
OP1		687,993	5,657,881	17,861	5,675,742
OP2		579,459	8,571,598	44,008	8,615,606
OP3		330,269	3,633,081	27,188	3,660,269
OP4		206,097	1,860,060	-	1,860,060
PIMCO Variable Insurance Trust
PHY		2,764,653	29,938,965	-	29,938,965
PMB		2,694,865	31,322,058	-	31,322,058
PRR		161,628	1,629,488	30,793	1,660,281
PTR		4,171,216	42,601,121	20,180	42,621,301
Rydex Variable Trust
RX1		178,307	937,500	-	937,500
RX2		184,922	905,669	-	905,669
Salomon Brothers Variable Series Funds, Inc.
SB1		50,322	569,133	-	569,133
SB2		44,173	405,465	-	405,465
SB3		266,350	3,312,936	30,655	3,343,591
SB4		280,674	2,706,892	12,646	2,719,538
Sun Capital Advisers Trust
SC1		13,525,823	142,901,532	187,108	143,088,640
SC2		5,494,856	63,796,460	226,116	64,022,576
SC3		3,241,508	42,326,541	41,845	42,368,386
SC4		1,023,813	5,838,591	1,311	5,839,902
SC5		5,545,133	51,303,238	64,993	51,368,231
SC6		557,939	3,578,477	7,951	3,586,428
SC7		4,409,222	31,597,397	81,366	31,678,763
SC8		734,726	6,074,986	19,143	6,094,129
SC9		449,981	3,390,869	-	3,390,869
SCA		1,323,897	13,075,573	33,343	13,108,916
SCB		4,469,212	42,800,106	32,598	42,832,704
SCC		324,332	2,580,261	-	2,580,261
SCD		-	-	-	-
SCE		-	-	-	-
SCF		-	-	-	-
SCG		-	-	-	-
SCH		550,836	4,813,734	28,968	4,842,702
SCI		461,060	2,818,332	-	2,818,332
SCJ		760,555	5,681,218	-	5,681,218
SCK		568,391	4,424,076	-	4,424,076
SCL		282,059	2,161,213	-	2,161,213
SCM		18,231	136,243	-	136,243

			$ 1,541,024,325	$ 3,070,049	$ 1,544,094,374

See notes to financial statements.

- 5 -

Statements of Operations - Year Ended December 31, 2002

AG2

Sub-

Account

AG3

Sub-

Account

AI1

Sub-

Account

AI2

Sub-

Account

AI3

Sub-

Account

AI4

Sub-

Account

Income and expenses:

Dividend income

$

-

$

223

$

-

$

-

$

135,562

$

174,509

Mortality and expense risk charges

(137

)

(395

)

(456,996

)

(494,605

)

(594,176

)

(641,787

)

Distribution expense charges

(16

)

(47

)

(54,839

)

(59,353

)

(71,301

)

(77,014

)

Net investment income (loss)

$

(153

)

$

(219

)

$

(511,835

)

$

(553,958

)

$

(529,915

)

$

(544,292

)

Realized and unrealized gains (losses):

Realized gains (losses) on investment transactions:

Realized gains (losses) on sale of fund shares

$

(22

)

$

(61

)

$

(14,113,204

)

$

(20,257,517

)

$

(10,251,685

)

$

(20,227,544

)

Realized gain distribution

-

-

-

-

-

-

Net realized gains (losses)

$

(22

)

$

(61

)

$

(14,113,204

)

$

(20,257,517

)

$

(10,251,685

)

$

(20,227,544

)

Net unrealized appreciation (depreciation) on
investments:

End of year

$

(3,711

)

$

(2,956

)

$

(15,457,429

)

$

(18,410,491

)

$

(18,016,297

)

$

(5,981,647

)

Beginning of year

-

-

(19,289,829

)

(23,256,803

)

(19,963,976

)

(16,287,879

)

Change in unrealized appreciation (depreciation)

$

(3,711

)

$

(2,956

)

$

3,832,400

$

4,846,312

$

1,947,679

$

10,306,232

Realized and unrealized gains (losses)

$

(3,733

)

$

(3,017

)

$

(10,280,804

)

$

(15,411,205

)

$

(8,304,006

)

$

(9,921,312

)

Increase (Decrease) in net assets from operations

$

(3,886

)

$

(3,236

)

$

(10,792,639

)

$

(15,965,163

)

$

(8,833,921

)

$

(10,465,604

)

AI5

Sub-

Account

AI7

Sub-

Account

AI8

Sub-

Account

AI9

Sub-

Account

SGI

Sub-

Account

AL1

Sub-

Account

Income and expenses:

Dividend income

$

20,404

$

-

$

281

$

69

$

113,708

$

27,813

Mortality and expense risk charges

(69,126

)

(246

)

(1,498

)

(88

)

(125,722

)

(850,269

)

Distribution expense charges

(8,295

)

(29

)

(180

)

(11

)

(15,087

)

(102,032

)

Net investment income (loss)

$

(57,017

)

$

(275

)

$

(1,397

)

$

(30

)

$

(27,101

)

$

(924,488

)

Realzed and unrealized gains (losses):

Realized gains (losses) on investment transactions:

Realized gains (losses) on sale of fund shares

$

(535,310

)

$

(23

)

$

(50,508

)

$

(1,933

)

$

94,995

$

(20,570,282

)

Realized gain distribution

-

-

-

-

625,393

-

Net realized gains (losses)

$

(535,310

)

$

(23

)

$

(50,508

)

$

(1,933

)

$

720,388

$

(20,570,282

)

Net unrealized appreciation (depreciation) on
investments:

End of year

$

(1,479,989

)

$

(4,408

)

$

1,210

$

(853

)

$

3,875,048

$

(37,676,653

)

Beginning of year

(36,876

)

-

-

-

-

(30,743,804

)

Change in unrealized appreciation (depreciation)

$

(1,443,113

)

$

(4,408

)

$

1,210

$

(853

)

$

3,875,048

$

(6,932,849

)

Realized and unrealized gains (losses)

$

(1,978,423

)

$

(4,431

)

$

(49,298

)

$

(2,786

)

$

4,595,436

$

(27,503,131

)

Increase (Decrease) in net assets from operations

$

(2,035,440

)

$

(4,706

)

$

(50,695

)

$

(2,816

)

$

4,568,335

$

(28,427,619

)

See notes to financial statements.

- 6 -

Statements of Operations - Year Ended December 31, 2002 - continued

		AL2 Sub- Account			AL3 Sub- Account			AN1 Sub- Account			AN2 Sub- Account			AN3 Sub- Account			AN4 Sub- Account
Income and expenses:
Dividend income	$	300,031		$	-		$	-		$	-		$	142,890		$	29,213	)
Mortality and expense risk charges		(579,839	)		(130,734	)		(81,587	)		(19,167	)		(326,452	)		(17,477	)
Distribution expense charges		(69,581	)		(15,688	)		(9,790	)		(2,300	)		(39,174	)		(2,097	)
Net investment income (loss)	$	(349,389	)	$	(146,422	)	$	(91,377	)	$	(21,467	)	$	(222,736	)	$	9,639

Realized and unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	(11,535,235	)	$	(3,099,156	)	$	(577,551	)	$	(229,950	)	$	(1,884,559	)	$	(94,121	)
Realized gain distribution		-			-			-			-			878,358			-
Net realized gains (losses)	$	(11,535,235	)	$	(3,099,156	)	$	(577,551	)	$	(229,950	)	$	(1,006,201	)	$	(94,121	)

Net unrealized appreciation (depreciation) on investments:
End of year	$	(20,298,237	)	$	(4,572,686	)	$	(1,709,778	)	$	(586,902	)	$	(5,509,302	)	$	(76,366	)
Beginning of year		(13,957,724	)		(4,363,389	)		56,136			16,860			342,231			7,209
Change in unrealized appreciation (depreciation)	$	(6,340,513	)	$	(209,297	)	$	(1,765,914	)	$	(603,762	)	$	(5,851,533	)	$	(83,575	)

Realized and unrealized gains (losses)	$	(17,875,748	)	$	(3,308,453	)	$	(2,343,465	)	$	(833,712	)	$	(6,857,734	)	$	(177,696	)
Increase (Decrease) in net assets from operations	$	(18,225,137	)	$	(3,454,875	)	$	(2,434,842	)	$	(855,179	)	$	(7,080,470	)	$	(168,057	)


		AN5 Sub- Account			CS1 Sub- Account			CS2 Sub- Account			CS3 Sub- Account			CS4 Sub- Account			FL1 Sub- Account
Income and expenses:
Dividend income	$	-		$	2,086		$	-		$	-		$	-		$	26,967
Mortality and expense risk charges		(15,557	)		(14,744	)		(8,651	)		(4,976	)		(21,481	)		(96,973	)
Distribution expense charges		(1,867	)		(1,769	)		(1,038	)		(597	)		(2,578	)		(11,637	)
Net investment income (loss)	$	(17,424	)	$	(14,427	)	$	(9,689	)	$	(5,573	)	$	(24,059	)	$	(81,643	)

Realzed and unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	(714,116	)	$	(233,550	)	$	(327,627	)	$	(168,636	)	$	(665,130	)	$	(181,390	)
Realized gain distribution		-			-			-			-			-			-
Net realized gains (losses)	$	(714,116	)	$	(233,550	)	$	(327,627	)	$	(168,636	)	$	(665,130	)	$	(181,390	)

Net unrealized appreciation (depreciation) on investments:
End of year	$	(83,240	)	$	(486,795	)	$	(431,091	)	$	(410,401	)	$	(257,744	)	$	(677,793	)
Beginning of year		(226,228	)		(589,429	)		(613,154	)		(413,135	)		(92,023	)		67,947
Change in unrealized appreciation (depreciation)	$	142,988		$	102,634		$	182,063		$	2,734		$	(165,721	)	$	(745,740	)

Realized and unrealized gains (losses)	$	(571,128	)	$	(130,916	)	$	(145,564	)	$	(165,902	)	$	(830,851	)	$	(927,130	)
Increase (Decrease) in net assets from operations	$	(588,552	)	$	(145,343	)	$	(155,253	)	$	(171,475	)	$	(854,910	)	$	(1,008,773	)

See notes to financial statements.

- 7 -

Statements of Operations - Year Ended December 31, 2002 - continued

		FL2 Sub- Account			FL3 Sub- Account			FTG Sub- Account			FTI Sub- Account			GS1 Sub- Account			GS2 Sub- Account
Income and expenses:
Dividend income	$	188,312		$	42,552		$	-		$	-		$	-		$	14,872
Mortality and expense risk charges		(334,150	)		(484,287	)		(20	)		(824	)		(89,658	)		(81,430	)
Distribution expense charges		(40,098	)		(58,114	)		(2	)		(99	)		(10,759	)		(9,772	)
Net investment income (loss)	$	(185,936	)	$	(499,849	)	$	(22	)	$	(923	)	$	(100,417	)	$	(76,330	)

Realized and unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	(9,388,850	)	$	(9,566,138	)	$	19		$	102		$	(11,680,900	)	$	(31,644	)
Realized gain distribution		-			-			-			-			-			-
Net realized gains (losses)	$	(9,388,850	)	$	(9,566,138	)	$	19		$	102		$	(11,680,900	)	$	(31,644	)

Net unrealized appreciation (depreciation) on investments:
End of year	$	(285,341	)	$	(6,603,188	)	$	(429	)	$	(13,529	)	$	-		$	(702,682	)
Beginning of year		87,436			104,360			-			-			(9,594,975	)		315,724
Change in unrealized appreciation (depreciation)	$	(372,777	)	$	(6,707,548	)	$	(429	)	$	(13,529	)	$	9,594,975		$	(1,018,406	)

Realized and unrealized gains (losses)	$	(9,761,627	)	$	(16,273,686	)	$	(410	)	$	(13,427	)	$	(2,085,925	)	$	(1,050,050	)
Increase (Decrease) in net assets from operations	$	(9,947,563	)	$	(16,773,535	)	$	(432	)	$	(14,350	)	$	(2,186,342	)	$	(1,126,380	)


		GS3 Sub- Account			GS4 Sub- Account			GS5 Sub- Account			GS6 Sub- Account			GS7 Sub- Account			IV1 Sub- Account
Income and expenses:
Dividend income	$	92,425		$	87,622		$	83,238		$	-		$	4,145		$	-
Mortality and expense risk charges		(213,037	)		(83,636	)		(108,129	)		(1,507	)		(20,501	)		(22,849	)
Distribution expense charges		(25,564	)		(10,036	)		(12,976	)		(181	)		(2,460	)		(2,742	)
Net investment income (loss)	$	(146,176	)	$	(6,050	)	$	(37,867	)	$	(1,688	)	$	(18,816	)	$	(25,591	)

Realzed and unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	(2,239,211	)	$	(533,536	)	$	(1,804,739	)	$	(68,311	)	$	(86,049	)	$	(266,168	)
Realized gain distribution		-			-			-			-			-			-
Net realized gains (losses)	$	(2,239,211	)	$	(533,536	)	$	(1,804,739	)	$	(68,311	)	$	(86,049	)	$	(266,168	)

Net unrealized appreciation (depreciation) on investments:
End of year	$	(5,475,013	)	$	(1,344,275	)	$	(3,403,544	)	$	-		$	(349,980	)	$	(436,965	)
Beginning of year		(3,312,092	)		(967,639	)		(3,367,882	)		3,771			(3,286	)		43,710
Change in unrealized appreciation (depreciation)	$	(2,162,921	)	$	(376,636	)	$	(35,662	)	$	(3,771	)	$	(346,694	)	$	(480,675	)

Realized and unrealized gains (losses)	$	(4,402,132	)	$	(910,172	)	$	(1,840,401	)	$	(72,082	)	$	(432,743	)	$	(746,843	)
Increase (Decrease) in net assets from operations	$	(4,548,308	)	$	(916,222	)	$	(1,878,268	)	$	(73,770	)	$	(451,559	)	$	(772,434	)

See notes to financial statements.

- 8 -

Statements of Operations - Year Ended December 31, 2002 - continued

		IV2 Sub- Account			JP1 Sub- Account			JP2 Sub- Account			JP3 Sub- Account			LA1 Sub- Account			LA2 Sub- Account
Income and expenses:
Dividend income	$	-		$	7,480		$	29,291		$	12,222		$	689,194		$	252,660
Mortality and expense risk charges		(18,511	)		(189,708	)		(76,229	)		(74,733	)		(1,742,538	)		(480,572	)
Distribution expense charges		(2,221	)		(22,765	)		(9,147	)		(8,968	)		(209,105	)		(57,669	)
Net investment income (loss)	$	(20,732	)	$	(204,993	)	$	(56,085	)	$	(71,479	)	$	(1,262,449	)	$	(285,581	)

Realized and unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	(178,760	)	$	(2,568,239	)	$	(1,139,542	)	$	(537,148	)	$	(9,973,743	)	$	(531,610	)
Realized gain distribution		-			-			-			-			15,411			-
Net realized gains (losses)	$	(178,760	)	$	(2,568,239	)	$	(1,139,542	)	$	(537,148	)	$	(9,958,332	)	$	(531,610	)

Net unrealized appreciation (depreciation) on investments:
End of year	$	(325,724	)	$	(5,959,221	)	$	(2,163,625	)	$	(1,494,328	)	$	(22,612,580	)	$	(3,059,257	)
Beginning of year		33,775			(4,204,793	)		(2,067,752	)		(613,618	)		(840,914	)		729,007
Change in unrealized appreciation (depreciation)	$	(359,499	)	$	(1,754,428	)	$	(95,873	)	$	(880,710	)	$	(21,771,666	)	$	(3,788,264	)

Realized and unrealized gains (losses)	$	(538,259	)	$	(4,322,667	)	$	(1,235,415	)	$	(1,417,858	)	$	(31,729,998	)	$	(4,319,874	)
Increase (Decrease) in net assets from operations	$	(558,991	)	$	(4,527,660	)	$	(1,291,500	)	$	(1,489,337	)	$	(32,992,447	)	$	(4,605,455	)


		LA3 Sub- Account			CAS Sub- Account			EGS Sub- Account			GSS Sub- Account			HYS Sub- Account			M1A Sub- Account
Income and expenses:
Dividend income	$	9,516		$	33,312		$	-		$	2,556,633		$	4,232,519		$	-
Mortality and expense risk charges		(9,837	)		(232,857	)		(466,820	)		(782,028	)		(474,933	)		(107,996	)
Distribution expense charges		(1,180	)		(27,943	)		(56,019	)		(93,843	)		(56,992	)		(12,960	)
Net investment income (loss)	$	(1,501	)	$	(227,488	)	$	(522,839	)	$	1,680,762		$	3,700,594		$	(120,956	)

Realzed and unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	(36,117	)	$	(13,917,750	)	$	(26,523,794	)	$	1,046,022		$	(6,315,314	)	$	(231,333	)
Realized gain distribution		-			-			-			-			-			-
Net realized gains (losses)	$	(36,117	)	$	(13,917,750	)	$	(26,523,794	)	$	1,046,022		$	(6,315,314	)	$	(231,333	)

Net unrealized appreciation (depreciation) on investments:
End of year	$	(140,098	)	$	(10,743,997	)	$	(18,852,055	)	$	3,007,420		$	(991,450	)	$	(1,824,619	)
Beginning of year		(3,026	)		(16,711,126	)		(28,422,551	)		979,569			(3,320,165	)		228,510
Change in unrealized appreciation (depreciation)	$	(137,072	)	$	5,967,129		$	9,570,496		$	2,027,851		$	2,328,715		$	(2,053,129	)

Realized and unrealized gains (losses)	$	(173,189	)	$	(7,950,621	)	$	(16,953,298	)	$	3,073,873		$	(3,986,599	)	$	(2,284,462	)
Increase (Decrease) in net assets from operations	$	(174,690	)	$	(8,178,109	)	$	(17,476,137	)	$	4,754,635		$	(286,005	)	$	(2,405,418	)

See notes to financial statements.

- 9 -

Statements of Operations - Year Ended December 31, 2002 - continued

		MIB Sub- Account			MFC Sub- Account			MFD Sub- Account			MFE Sub- Account			MFF Sub- Account			MFJ Sub- Account
Income and expenses:
Dividend income	$	8,274		$	1,168,073		$	1,794		$	139,805		$	-		$	607,795
Mortality and expense risk charges		(87,411	)		(157,516	)		(14,517	)		(44,852	)		(15,742	)		(285,768	)
Distribution expense charges		(10,489	)		(18,902	)		(1,742	)		(5,382	)		(1,889	)		(34,292	)
Net investment income (loss)	$	(89,626	)	$	991,655		$	(14,465	)	$	89,571		$	(17,631	)	$	287,735

Realized and unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	(253,264	)	$	(1,502,594	)	$	(110,222	)	$	(556,741	)	$	(161,275	)	$	(500,955	)
Realized gain distribution		-			-			-			-			-			630,443
Net realized gains (losses)	$	(253,264	)	$	(1,502,594	)	$	(110,222	)	$	(556,741	)	$	(161,275	)	$	129,488

Net unrealized appreciation (depreciation) on investments:
End of year	$	(1,880,821	)	$	376,780		$	(322,012	)	$	(585,361	)	$	(330,670	)	$	(2,159,864	)
Beginning of year		137,455			48,150			32,632			10,354			35,101			212,888
Change in unrealized appreciation (depreciation)	$	(2,018,276	)	$	328,630		$	(354,644	)	$	(595,715	)	$	(365,771	)	$	(2,372,752	)

Realized and unrealized gains (losses)	$	(2,271,540	)	$	(1,173,964	)	$	(464,866	)	$	(1,152,456	)	$	(527,046	)	$	(2,243,264	)
Increase (Decrease) in net assets from operations	$	(2,361,166	)	$	(182,309	)	$	(479,331	)	$	(1,062,885	)	$	(544,677	)	$	(1,955,529	)


		MFK Sub- Account			MFL Sub- Account			MIS Sub- Account			MIT Sub- Account			MMS Sub- Account			NWD Sub- Account
Income and expenses:
Dividend income	$	731,966		$	40,478		$	62,657		$	340,094		$	81,194		$	-
Mortality and expense risk charges		(275,223	)		(55,271	)		(551,881	)		(418,369	)		(79,413	)		(369,902	)
Distribution expense charges		(33,027	)		(6,633	)		(66,226	)		(50,204	)		(9,530	)		(44,388	)
Net investment income (loss)	$	423,716		$	(21,426	)	$	(555,450	)	$	(128,479	)	$	(7,749	)	$	(414,290	)

Realzed and unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	107,010		$	(119,219	)	$	(14,895,496	)	$	(5,784,582	)	$	-		$	(4,769,173	)
Realized gain distribution		-			-			-			-			-			-
Net realized gains (losses)	$	107,010		$	(119,219	)	$	(14,895,496	)	$	(5,784,582	)	$	-		$	(4,769,173	)

Net unrealized appreciation (depreciation) on investments:
End of year	$	1,088,833		$	(927,044	)	$	(20,762,571	)	$	(11,034,387	)	$	-		$	(7,227,845)
Beginning of year		(27,168	)		64,437			(20,687,760	)		(8,400,282	)		-			(1,423,676)
Change in unrealized appreciation (depreciation)	$	1,116,001		$	(991,481	)	$	(74,811	)	$	(2,634,105	)	$	-		$	(5,804,169	)

Realized and unrealized gains (losses)	$	1,223,011		$	(1,110,700	)	$	(14,970,307	)	$	(8,418,687	)	$	-		$	(10,573,342	)
Increase (Decrease) in net assets from operations	$	1,646,727		$	(1,132,126	)	$	(15,525,757	)	$	(8,547,166	)	$	(7,749	)	$	(10,987,632	)

See notes to financial statements.

- 10 -

Statements of Operations - Year Ended December 31, 2002 - continued

	TRS Sub- Account			UTS Sub- Account			OP1 Sub- Account					OP2 Sub- Account				OP3 Sub- Account						OP4 Sub- Account
Income and expenses:
Dividend income	$	1,558,563		$	1,220,436		$		83,133			$	-				$	4,961				$		58,318
Mortality and expense risk charges		(637,280	)		(404,592	)			(102,572		)		(150,830	)				(78,870			)			(33,773	)
Distribution expense charges		(76,474	)		(48,551	)			(12,309		)		(18,100	)				(9,464			)			(4,053	)
Net investment income (loss)	$	844,809		$	767,293		$		(31,748		)	$	(168,930	)			$	(83,373			)	$		20,492

Realized and unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	(2,633,523	)	$	(13,644,842	)	$		(663,846		)	$	(78,798	)			$	(566,139			)	$		(215,549	)
Realized gain distributions		1,609,429			-				74,199				254,971					1,076,818						-
Net realized gains (losses)	$	(1,024,094	)	$	(13,644,842	)	$		(589,647		)	$	176,173				$	510,679				$		(215,549	)

Net unrealized appreciation (depreciation) on investments:
End of year	$	(4,753,421	)	$	(16,119,142	)	$		(1,761,074		)	$	(780,433	)			$	(1,239,205			)	$		(374,096	)
Beginning of year		(1,103,596	)		(17,927,375	)			(217,662		)		573,762					729,690						(31,262	)
Change in unrealized appreciation (depreciation)	$	(3,649,825	)	$	1,853,233		$		(1,543,412		)	$	(1,354,195	)			$	(1,968,895			)	$		(342,834	)

Realized and unrealized gains (losses)	$	(4,673,919	)	$	(11,791,609	)	$		(2,133,059		)	$	(1,178,022	)			$	(1,458,216			)	$		(558,383	)
Increase (Decrease) in net assets from operations	$	(3,829,110	)	$	(11,024,316	)	$		(2,164,807		)	$	(1,346,952	)			$	(1,541,589			)	$		(537,891	)


	PHY Sub- Account			PMB Sub- Account			PRR Sub- Account					PTR Sub- Account				RX1 Sub- Account						RX2 Sub- Account
Income and expenses:
Dividend income	$	536,983		$	438,887		$	6,037				$	186,773			$			14,632			$	-
Mortality and expense risk charges		(83,034	)		(88,809	)		(2,080		)			(61,674		)				(5,706	)			(16,975		)
Distribution expense charges		(9,964	)		(10,657	)		(250		)			(7,401		)				(685	)			(2,037		)
Net investment income (loss)	$	443,985		$	339,421		$	3,707				$	117,698			$			8,241			$	(19,012		)

Realized and unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	20,814		$	78,162		$	(127		)		$	(1,222		)	$			(229,567	)		$	(758,725		)
Realized gain distributions		-			-			2,452					193,741						-				-
Net realized gains (losses)	$	20,814		$	78,162		$	2,325				$	192,519			$			(229,567	)		$	(758,725		)

Net unrealized appreciation (depreciation) on investments:
End of year	$	1,869,376		$	2,819,791		$	39,115				$	343,769			$			(50,068	)		$	(129,573		)
Beginning of year		-			-			-					-						7,255				(53,260		)
Change in unrealized appreciation (depreciation)	$	1,869,376		$	2,819,791		$	39,115				$	343,769			$			(57,323	)		$	(76,313		)

Realized and unrealized gains (losses)	$	1,890,190		$	2,897,953		$	41,440				$	536,288			$			(286,890	)		$	(835,038		)
Increase (Decrease) in net assets from operations	$	2,334,175		$	3,237,374		$	45,147				$	653,986			$			(278,649	)		$	(854,050		)

See notes to financial statements

- 11 -

Statements of Operations - Year Ended December 31, 2002 - continued

SB1

Sub-

Account

SB2

Sub-

Account

SB3

Sub-

Account

SB4

Sub-

Account

SC1

Sub-

Account

SC2

Sub-

Account

Income and expenses:

Dividend income

$

2,812

$

5,399

$

167,528

$

41,649

$

1,410,329

$

5,371,677

Mortality and expense risk charges

(9,662

)

(6,069

)

(45,525

)

(41,118

)

(1,638,334

)

(1,253,982

)

Distribution expense charges

(1,159

)

(728

)

(5,463

)

(4,934

)

(196,600

)

(150,478

)

Net investment income (loss)

$

(8,009

)

$

(1,398

)

$

116,540

$

(4,403

)

$

(424,605

)

$

3,967,217

Realized and unrealized gains (losses):

Realized gains (losses) on investment transactions:

Realized gains (losses) on sale of fund shares

$

(23,728

)

$

(7,978

)

$

58,790

$

(97,970

)

$

-

$

(809,059

)

Realized gain distributions

-

-

-

-

-

-

Net realized gains (losses)

$

(23,728

)

$

(7,978

)

$

58,790

$

(97,970

)

$

$

(809,059

)

Net unrealized appreciation (depreciation) on investments:

End of year

$

(173,120

)

$

(137,143

)

$

90,148

$

(264,646

)

$

-

$

540,289

Beginning of year

39,904

(8,410

)

16,703

(78,415

)

-

304,709

Change in unrealized appreciation (depreciation)

$

(213,024

)

$

(128,733

)

$

73,445

$

(186,231

)

$

-

$

235,580

Realized and unrealized gains (losses)

$

(236,752

)

$

(136,711

)

$

132,235

$

(284,201

)

$

-

$

(573,479

)

Increase (Decrease) in net assets from operations

$

(246,761

)

$

(138,109

)

$

248,775

$

(288,604

)

$

(424,605

)

$

3,393,738

SC3

Sub-

Account

SC4
Sub-
Account

SC5
Sub-

Account

SC6

Sub-

Account

SC7

Sub-

Account

SC8

Sub-

Account

Income and expenses:

Dividend income

$

1,778,116

$

10,114

$

-

$

18,799

$

1,135

$

10,936

Mortality and expense risk charges

(384,301

)

(92,534

)

(689,282

)

(48,492

)

(422,063

)

(95,213

)

Distribution expense charges

(46,116

)

(11,104

)

(82,714

)

(5,819

)

(50,648

)

(11,426

)

Net investment income (loss)

$

1,347,699

$

(93,524

)

$

(771,996

)

$

(35,512

)

$

(471,576

)

$

(95,703

)

Realized and unrealized gains (losses):

Realized gains (losses) on investment transactions:

Realized gains (losses) on sale of fund shares

$

761,049

$

(609,706

)

$

(2,548,887

)

$

(337,695

)

$

(1,400,119

)

$

(873,219

)

Realized gain distributions

2,288,112

-

-

-

-

-

Net realized gains (losses)

$

3,049,161

$

(609,706

)

$

(2,548,887

)

$

(337,695

)

$

(1,400,119

)

$

(873,219

)

Net unrealized appreciation (depreciation) on investments:

End of year

$

(3,536,547

)

$

(1,593,405

)

$

(5,357,898

)

$

(1,020,385

)

$

(4,792,321

)

$

(908,747

)

Beginning of year

357,953

276,052

495,743

(198,397

)

24,003

(60,580

)

Change in unrealized appreciation (depreciation)

$

(3,894,500

)

$

(1,869,457

)

$

(5,853,641

)

$

(821,988

)

$

(4,816,324

)

$

(848,167

)

Realized and unrealized gains (losses)

$

(845,339

)

$

(2,479,163

)

$

(8,402,528

)

$

(1,159,683

)

$

(6,216,443

)

$

(1,721,386

)

Increase (Decrease) in net assets from operations

$

502,360

$

(2,572,687

)

$

(9,174,524

)

$

(1,195,195

)

$

(6,688,019

)

$

(1,817,089

)

See notes to financial statements

- 12 -

Statements of Operations - Year Ended December 31, 2002 - continued

	SC9 Sub- Account			SCA Sub- Account			SCB Sub- Account					SCC Sub- Account				SCD Sub- Account						SCE Sub- Account
Income and expenses:
Dividend income	$	31,322		$	8,116		$		-			$	22,101				$	-				$		-
Mortality and expense risk charges		(47,330	)		(169,222	)			(336,633		)		(31,587	)				(20,912			)			(4,918	)
Distribution expense charges		(5,680	)		(20,307	)			(40,396		)		(3,790	)				(2,509			)			(590	)
Net investment income (loss)	$	(21,688	)	$	(181,413	)	$		(377,029		)	$	(13,276	)			$	(23,421			)	$		(5,508	)

Realized and unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	(668,923	)	$	(331,103	)	$		(1,051,344		)	$	(240,791	)			$	(1,201,719			)	$		(281,006	)
Realized gain distributions		-			-	-			619,944				-					-				-		-
Net realized gains (losses)	$	(668,923	)	$	(331,103	)	$		(431,400		)	$	(240,791	)			$	(1,201,719			)	$		(281,006	)

Net unrealized appreciation (depreciation) on investments:
End of year	$	(1,063,997	)	$	131,439		$		(3,693,979		)	$	(523,302	)			$	-				$		(5	)
Beginning of year		(304,911	)		935,930				1,216,421				(99,052	)				(107,959			)			(17,453	)
Change in unrealized appreciation (depreciation)	$	(759,086	)	$	(804,491	)	$		(4,910,400		)	$	(424,250	)			$	107,959				$		17,448

Realized and unrealized gains (losses)	$	(1,428,009	)	$	(1,135,594	)	$		(5,341,800		)	$	(665,041	)			$	(1,093,760			)	$		(263,558	)
Increase (Decrease) in net assets from operations	$	(1,449,697	)	$	(1,317,007	)	$		(5,718,829		)	$	(678,317	)			$	(1,117,181			)	$		(269,066	)


	SCF Sub- Account			SCG Sub- Account			SCH Sub- Account					SCI Sub- Account				SCJ Sub- Account						SCK Sub- Account
Income and expenses:
Dividend income	$	-		$	-		$	5,550				$	-			$			3,119			$	8,155
Mortality and expense risk charges		(68,503	)		(23,408	)		(44,492		)			(37,522		)				(29,640	)			(22,275		)
Distribution expense charges		(8,220	)		(2,809	)		(5,339		)			(4,503		)				(3,557	)			(2,673		)
Net investment income (loss)	$	(76,723	)	$	(26,217	)	$	(44,281		)		$	(42,025		)	$			(30,078	)		$	(16,793		)

Realized and unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	(1,545,825	)	$	(306,876	)	$	(93,940		)		$	(566,365		)	$			(445,030	)		$	(347,530		)
Realized gain distributions		-			-			-					-						-				-
Net realized gains (losses)	$	(1,545,825	)	$	(306,876	)	$	(93,940		)		$	(566,365		)	$			(445,030	)		$	(347,530		)

Net unrealized appreciation (depreciation) on investments:
End of year	$	(2	)	$	(4	)	$	(352,365		)		$	(638,304		)	$			(419,656	)		$	(246,575		)
Beginning of year		32,831			13,895			57,560					(119,683		)				-				-
Change in unrealized appreciation (depreciation)	$	(32,833	)	$	(13,899	)	$	(409,925		)		$	(518,621		)	$			(419,656	)		$	(246,575		)

Realized and unrealized gains (losses)	$	(1,578,658	)	$	(320,775	)	$	(503,865		)		$	(1,084,986		)	$			(864,686	)		$	(594,105		)
Increase (Decrease) in net assets from operations	$	(1,655,381	)	$	(346,992	)	$	(548,146		)		$	(1,127,011		)	$			(894,764	)		$	(610,898		)

See notes to financial statements

- 13 -

Statements of Operations - Year Ended December 31, 2002 - continued

SCL

Sub-

Account

SCM

Sub-

Account

Income and expenses:

Dividend income

$

-

$

204

Mortality and expense risk charges

(8,114

)

(386

)

Distribution expense charges

(974

)

(46

)

Net investment income (loss)

$

(9,088

)

$

(228

)

Realized and unrealized gains (losses):

Realized gains (losses) on investment transactions:

Realized gains (losses) on sale of fund shares

$

(116,851

)

$

(981

)

Realized gain distributions

-

-

-

Net realized gains (losses)

$

(116,851

)

$

(981

)

Net unrealized appreciation (depreciation) on investments:

End of year

$

(2,739

)

$

4,217

Beginning of year

-

-

Change in unrealized appreciation (depreciation)

$

(2,739

)

$

4,217

Realized and unrealized gains (losses)

$

(119,590

)

$

3,236

Increase (Decrease) in net assets from operations

$

(128,678

)

$

3,008

See notes to financial statements

- 14 -

	AG2 Sub-Account			AG3 Sub-Account				AI1 Sub-Account						AI2 Sub-Account						AI3 Sub-Account						AI4 Sub-Account
	Period Ended December 31, 2002 (c)				Period Ended December 31, 2002 (c)			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001
Operations:
Net investment income (loss)	$	(153	)		$	(219	)	$	(511,835	)	$	(658,832	)	$	(553,958	)	$	(571,949	)	$	(529,915	)	$	(832,252	)	$	(544,292	)	$	(637,001	)
Net realized gains (losses)		(22	)			(61	)		(14,113,204	)		(426,522	)		(20,257,517	)		(12,363,043	)		(10,251,685	)		(4,712,967	)		(20,227,544	)		(12,085,200	)
Net unrealized gains (losses)		(3,711	)			(2,956	)		3,832,400			(11,895,772	)		4,846,312			(8,730,945	)		1,947,679			(11,446,923	)		10,306,232			(3,400,422	)
Increase (Decrease) in net assets from operations	$	(3,886	)		$	(3,236	)	$	(10,792,639	)	$	(12,981,126	)	$	(15,965,163	)	$	(21,665,937	)	$	(8,833,921	)	$	(16,992,142	)	$	(10,465,604	)	$	(16,122,623	)

Participant transactions:
Accumulation activity:
Purchase payments received	$	73,547			$	87,744		$	1,480,808		$	9,069,351		$	1,101,903		$	6,385,648		$	1,540,760		$	9,070,325		$	7,896,162		$	13,916,472
Net transfers between Sub-Accounts and Fixed Account		3,264				19,380			(5,476,534	)		7,208,429			15,360,551			(2,270,995	)		(7,148,123	)		4,353,523			(20,609,157	)		4,396,760
Withdrawals, surrenders, annuitizations and contract charges									(3,179,164	)		(3,218,798	)		(3,890,351	)		(3,293,567	)		(4,893,248	)		(4,753,525	)		(5,509,207	)		(4,341,938	)
Net accumulation activity	$	76,811			$	107,124		$	(7,174,890	)	$	13,058,982		$	12,572,103		$	821,086		$	(10,500,611	)	$	8,670,323		$	(18,222,202	)	$	13,971,294

Annuitization activity:
Annuitizations	$	-			$	-		$	-		$	15,613		$	-		$	12,750		$	-		$	49,529		$	-		$	14,994
Annuity payments and contract charges		-				-			(3,407	)		(3,984	)		(12,320	)		(11,604	)		(14,096	)		(11,007	)		(19,695	)		(24,439	)
Annuity transfers		-				-			-			-			-			-			-			-			-			-
Net transfers between Sub-Accounts		-				-			-			-			-						-			-			-			-
Adjustments to annuity reserve		-							(265	)		378			(2,287	)		2,056			(6,222	)		2,889			(738	)		5,887
Net annuitization activity	$	-			$	-		$	(3,672	)	$	12,007		$	(14,607	)	$	3,202		$	(20,318	)	$	41,411		$	(20,433	)	$	(3,558	)
Increase (Decrease) in net assets from participant transactions	$	76,811			$	107,124		$	(7,178,562	)	$	13,070,989		$	12,557,496		$	824,288		$	(10,520,929	)	$	8,711,734		$	(18,242,635	)	$	13,967,736

Increase (Decrease) in net assets	$	72,925			$	103,888		$	(17,971,201	)	$	89,863		$	(3,407,667	)	$	(20,841,649	)	$	(19,354,850	)	$	(8,280,408	)	$	(28,708,239	)	$	(2,154,887	)

Net assets:
Beginning of year	$	-			$	-		$	44,487,725		$	44,397,862		$	37,503,852		$	58,345,501		$	55,463,593		$	63,744,001		$	54,183,196		$	56,338,083
End of year	$	72,925			$	103,888		$	26,516,524		$	44,487,725		$	34,096,185		$	37,503,852		$	36,108,743		$	55,463,593		$	25,474,957		$	54,183,196

Units Transactions:
Beginning of year		-				-			5,563,655			3,782,520			5,978,099			5,515,990			7,175,804			5,731,443			7,454,026			5,285,140
Purchase		9,490				9,205			265,268			1,153,469			250,799			990,134			246,481			1,204,663			1,340,486			1,863,033
Transferred between Sub-Accounts and Fixed Accumulation Account		443				2,109			(840,386	)		989,260			2,619,909			(81,464	)		(1,016,349	)		780,045			(3,671,369	)		829,826
Withdrawn, surrendered and annuitized		-				-			(470,715	)		(361,594	)		(743,062	)		(446,561	)		(668,501	)		(540,347	)		(898,830	)		(523,973	)
End of year		9,933				11,314			4,517,822			5,563,655			8,105,745			5,978,099			5,737,435			7,175,804			4,224,313			7,454,026

See notes to financial statements

- 15 -

Statements of Changes in Net Assets - continued

	AI5 Sub-Account						AI7 Sub-Account				AI8 Sub-Account			AI9 Sub-Account			SGI Sub-Account				AL1 Sub-Account							AL2 Sub-Account
	Year Ended December 31, 2002			Period Ended December 31, 2001 (a)			Period Ended December 31, 2002 (c)			Period Ended December 31, 2002 (c)				Period Ended December 31, 2002 (c)				Period Ended December 31, 2002 (d)				Year Ended December 31, 2002			Year Ended December 31, 2001				Year Ended December 31, 2002			Year Ended December 31, 2001
Operations:
Net investment income (loss)	$	(57,017	)	$	(9,775	)	$	(275	)	$		(1,397	)	$	(30	)		$	(27,101	)		$	(924,488	)	$	(1,076,397	)		$	(349,389	)	$	(609,691	)
Net realized gains (losses)		(535,310	)		44,678			(23	)			(50,508	)		(1,933	)			720,388				(20,570,282	)		1,341,023				(11,535,235	)		(202,477	)
Net unrealized gains (losses)		(1,443,113	)		(36,876	)		(4,408	)			1,210			(853	)			3,875,048				(6,932,849	)		(13,580,745	)			(6,340,513	)		(8,875,038	)
Increase (Decrease) in net assets from operations	$	(2,035,440	)	$	(1,973	)	$	(4,706	)	$		(50,695	)	$	(2,816	)		$	4,568,335			$	(28,427,619	)	$	(13,316,119	)		$	(18,225,137	)	$	(9,687,206	)

Participant transactions:
Accumulation activity:
Purchase payments received	$	2,090,995		$	2,553,635		$	92,294		$		243,236		$	39,562			$	1,927,941			$	2,325,030		$	12,644,308			$	1,791,595		$	12,919,834
Net transfers between Sub-Accounts and Fixed Account		1,777,256			1,079,264			29,963				(145,744	)		(18,728	)			38,786,983				(10,058,224	)		9,886,160				(8,023,993	)		7,664,899
Withdrawals, surrenders, annuitizations and contract charges		(425,226	)		(27,378	)						(12,402	)						(756,462	)			(5,697,963	)		(6,265,259	)			(3,956,094	)		(4,232,827	)
Net accumulation activity	$	3,443,025		$	3,605,521		$	122,257		$		85,090		$	20,834			$	39,958,462			$	(13,431,157	)	$	16,265,209			$	(10,188,492	)	$	16,351,906

Annuitization activity:
Annuitizations	$	-		$	-		$	-		$		-		$	-			$	-			$	-		$	49,043			$	-		$	221,920
Annuity payments and contract charges		-			-			-				-			-				-				(12,553	)		(16,525	)			(37,187	)		(52,353	)
Annuity transfers		-			-			-				-			-				-				-			-				-			-
Net transfers between Sub-Accounts		-			-			-				-			-				-				-			-				-			-
Adjustments to annuity reserve		-			-			-				-			-				-				(7,945	)		8,195				(666	)		(5,896	)
Net annuitization activity	$	-		$	-		$	-		$		-		$	-			$	-			$	(20,498	)	$	40,713			$	(37,853	)	$	163,671
Increase (Decrease) in net assets from participant transactions	$	3,443,025		$	3,605,521		$	122,257		$		85,090		$	20,834			$	39,958,462			$	(13,451,655	)	$	16,305,922			$	(10,226,345	)	$	16,515,577

Increase (Decrease) in net assets	$	1,407,585		$	3,603,548		$	117,551		$		34,395		$	18,018			$	44,526,797			$	(41,879,274	)	$	2,989,803			$	(28,451,482	)	$	6,828,371

Net assets:
Beginning of year	$	3,603,548		$	-		$	-		$		-		$	-			$	-			$	87,365,194		$	84,375,391			$	59,309,865		$	52,481,494
End of year	$	5,011,133		$	3,603,548		$	117,551		$		34,395		$	18,018			$	44,526,797			$	45,485,920		$	87,365,194			$	30,858,383		$	59,309,865

Units Transactions:
Beginning of year		407,446			-			-				-			-				-				10,169,607			7,685,325				5,785,259			3,797,802
Purchase		261,724			286,101			10,463				25,480			4,554				181,350				325,620			1,578,176				228,461			1,390,742
Transferred between Sub-Accounts and Fixed Accumulation Account		216,206			124,503			3,631				(19,972	)		(2,265	)			3,887,316				(1,536,153	)		1,556,768				(1,047,586	)		975,093
Withdrawn, surrendered and annuitized		(60,747	)		(3,158	)		-				(1,415	)		-				(71,676	)			(753,680	)		(650,662	)			(466,082	)		(378,378	)
End of year		824,629			407,446			14,094				4,093			2,289				3,996,990				8,205,394			10,169,607				4,500,052			5,785,259

(a) For the period May 1, 2001 (commencement of operations) through December 31, 2001.

(d) For the period September 30, 2002 (commencement of operations) through December 31, 2002

See notes to financial statements

- 16 -

Statements of Changes in Net Assets - continued

	AL3 Sub-Account						AN1 Sub-Account						AN2 Sub-Account						AN3 Sub-Account						AN4 Sub-Account
	Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Period Ended December 31, 2001 (a)			Year Ended December 31, 2002			Period Ended December 31, 2001 (a)			Year Ended December 31, 2002			Period Ended December 31, 2001 (a)			Year Ended December 31, 2002			Period Ended December 31, 2001 (a)
Operations:
Net investment income (loss)	$	(146,422	)	$	(188,191	)	$	(91,377	)	$	(20,493	)	$	(21,467	)	$	(4,744	)	$	(222,736	)	$	(52,062	)	$	9,639		$	(986	)
Net realized gains (losses)		(3,099,156	)		(8,819,442	)		(577,551	)		(61,817	)		(229,950	)		(7,083	)		(1,006,201	)		(84,994	)		(94,121	)		(607	)
Net unrealized gains (losses)		(209,297	)		3,667,006			(1,765,914	)		56,136			(603,762	)		16,860			(5,851,533	)		342,231			(83,575	)		7,209
Increase (Decrease) in net assets from Operations	$	(3,454,875	)	$	(5,340,627	)	$	(2,434,842	)	$	(26,174	)	$	(855,179	)	$	5,033		$	(7,080,470	)	$	205,175		$	(168,057	)	$	5,616

Participant transactions:
Accumulation activity:
Purchase payments received	$	511,861		$	1,623,055		$	2,532,582		$	3,145,091		$	522,019		$	869,767		$	9,850,663		$	7,221,756		$	959,069		$	175,284
Net transfers between Sub-Accounts and Fixed Account		(1,619,998	)		1,356,261			1,428,205			2,060,138			624,738			409,940			10,333,115			8,356,827			1,320,812			146,594
Withdrawals, surrenders, annuitizations and contract charges		(1,044,710	)		(1,102,905	)		(469,118	)		(34,556	)		(120,596	)		(15,484	)		(1,241,270	)		(149,907	)		(75,087	)		(5,713	)
Net accumulation activity	$	(2,152,847	)	$	1,876,411		$	3,491,669		$	5,170,673		$	1,026,161		$	1,264,223		$	18,942,508		$	15,428,676		$	2,204,794		$	316,165

Annuitization activity:
Annuitizations	$	-		$	12,498		$	-		$	-		$	-		$	-		$	-		$	43,576		$	199		$	-
Annuity payments and contract charges		(3,828	)		(4,754	)		-			-			-			-			(1,473	)		(404	)		(40	)		-
Annuity transfers
Net transfers between Sub-Accounts		-			-			-			-			-			-			-			-			-			-
Adjustments to annuity reserve		(304	)		(231	)		-			-			-			-			3,505			(4,755	)		5,077			-
Net annuitization activity	$	(4,132	)	$	7,513		$	-		$	-		$	-		$	-		$	2,032		$	38,417		$	5,236		$	-
Increase (Decrease) in net assets from participant transactions	$	(2,156,979	)	$	1,883,924		$	3,491,669		$	5,170,673		$	1,026,161		$	1,264,223		$	18,944,540		$	15,467,093		$	2,210,030		$	316,165

Increase (Decrease) in net assets	$	(5,611,854	)	$	(3,456,703	)	$	1,056,827		$	5,144,499		$	170,982		$	1,269,256		$	11,864,070		$	15,672,268		$	2,041,973		$	321,781

Net assets:
Beginning of year	$	12,963,425		$	16,420,128		$	5,144,499		$	-		$	1,269,256		$	-		$	15,672,268		$	-		$	321,781		$	-
End of year	$	7,351,571		$	12,963,425		$	6,201,326		$	5,144,499		$	1,440,238		$	1,269,256		$	27,536,338		$	15,672,268		$	2,363,754		$	321,781

Units Transactions:
Beginning of year		1,962,751			1,607,165			601,780			-			157,358			-			1,689,129			-			37,676			-
Purchase		97,034			267,239			327,968			366,824			72,865			106,468			1,138,886			788,402			110,383			20,922
Transferred between Sub-Accounts and Fixed Accumulation Account		(299,952	)		240,031			191,456			239,074			97,030			53,364			1,204,818			918,557			148,078			17,437
Withdrawn, surrendered and annuitized		(193,381	)		(151,684	)		(68,967	)		(4,118	)		(22,506	)		(2,474	)		(167,164	)		(17,830	)		(8,795	)		(683	)
End of year		1,566,452			1,962,751			1,052,237			601,780			304,747			157,358			3,865,669			1,689,129			287,342			37,676

(a) For the period May 1, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 17 -

Statements of Changes in Net Assets - continued

	AN5 Sub-Account						CS1 Sub-Account						CS2 Sub-Account						CS3 Sub-Account						CS4 Sub-Account
	Year Ended December 31, 2002			Period Ended December 31, 2001 (a)			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001
Operations:
Net investment income (loss)	$	(17,424	)	$	(13,542	)	$	(14,427	)	$	(23,201	)	$	(9,689	)	$	(16,161	)	$	(5,573	)	$	(10,626	)	$	(24,059	)	$	(37,790	)
Net realized gains (losses)		(714,116	)		35,819			(233,550	)		(442,082	)		(327,627	)		(240,319	)		(168,636	)		(246,926	)		(665,130	)		(2,089,599	)
Net unrealized gains (losses)		142,988			(226,228	)		102,634	)		260,451			182,063			(100,987	)		2,734			(59,322	)		(165,721	)		1,424,731
Increase (Decrease) in net assets from operations	$	(588,552	)	$	(203,951	)	$	(145,343	)	$	(204,832	)	$	(155,253	)	$	(357,467	)	$	(171,475	)	$	(316,874	)	$	(854,910	)	$	(702,658	)

Participant transactions:
Accumulation activity:
Purchase payments received	$	374,627		$	206,948		$	4,473		$	24,020		$	(1,051	)	$	1,697		$	(546	)	$	153,860		$	927		$	65,146
Net transfers between Sub-Accounts and Fixed Account		(1,196,418	)		2,045,808			(80,111	)		(482,477	)		(147,356	)		(278,217	)		(89,696	)		(158,953	)		(881,464	)		391,031
Withdrawals, surrenders, annuitizations and contract charges		(56,345	)		(98,264	)		(109,796	)		(130,874	)		(71,202	)		(32,290	)		(33,915	)		(51,029	)		(171,472	)		(192,858	)
Net accumulation activity	$	(878,136	)	$	2,154,492		$	(185,434	)	$	(589,331	)	$	(219,609	)	$	(308,810	)	$	(124,157	)	$	(56,122	)	$	(1,052,009	)	$	263,319

Annuitization activity:
Annuitizations	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-
Annuity payments and contract charges		-			-			(1,595	)		(1,768	)		(108	)		(132	)		(891	)		(1,229	)		(190	)		(241	)
Annuity transfers		-			-			-			-			-			-			-			-			-			-
Net transfers between Sub-Accounts		-			-			-			-			-			-			-			-			-			-
Adjustments to annuity reserve		-			-			(559	)		255			(4	)		(10	)		347			655			28			(29	)
Net annuitization activity	$	-		$	-		$	(2,154	)	$	(1,513	)	$	(112	)	$	(142	)	$	(544	)	$	(574	)	$	(162	)	$	(270	)
Increase (Decrease) in net assets from participant transactions	$	(878,136	)	$	2,154,492		$	(187,588	)	$	(590,844	)	$	(219,721	)	$	(308,952	)	$	(124,701	)	$	(56,696	)	$	(1,052,171	)	$	263,049

Increase (Decrease) in net assets	$	(1,466,688	)	$	1,950,541		$	(332,931	)	$	(795,676	)	$	(374,974	)	$	(666,419	)	$	(296,176	)	$	(373,570	)	$	(1,907,081	)	$	(439,609	)

Net assets:
Beginning of year	$	1,950,541		$	-		$	1,308,132		$	2,103,808		$	883,610		$	1,550,029		$	576,848		$	950,418		$	2,952,097		$	3,391,706
End of year	$	483,853		$	1,950,541		$	975,201		$	1,308,132		$	508,636		$	883,610		$	280,672		$	576,848		$	1,045,016		$	2,952,097

Units Transactions:
Beginning of year		207,369			-			124,190			176,779			104,918			141,172			58,715			68,882			252,504			242,980
Purchase		43,930			22,065			621			2,149			5			39			240			12,387			407			5,108
Transferred between Sub-Accounts and Fixed Accumulation Account		(169,625	)		196,033			(6,687	)		(43,230	)		(19,556	)		(32,799	)		(11,179	)		(17,521	)		(93,148	)		22,426
Withdrawn, surrendered and annuitized		(6,542	)		(10,729	)		(10,368	)		(11,508	)		(8,748	)		(3,494	)		(3,906	)		(5,033	)		(20,532	)		(18,010	)
End of year		75,132			207,369			107,756			124,190			76,619			104,918			43,870			58,715			139,231			252,504

(a) For the period May 1, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 18 -

Statements of Changes in Net Assets - continued

	FL1 Sub-Account						FL2 Sub-Account						FL3 Sub-Account						FTG Sub-Account				FTI Sub-Account			GSI Sub-Account
	Year Ended December 31, 2002			Period Ended December 31, 2001 (a)			Year Ended December 31, 2002			Period Ended December 31, 2001 (a)			Year Ended December 31, 2002			Period Ended December 31, 2001 (a)			Period Ended December 31, 2002 (d)			Period Ended December 31, 2002 (d)				Year Ended December 31, 2002			Year Ended December 31, 2001
Operations:
Net investment income (loss)	$	(81,643	)	$	(9,645	)	$	(185,936	)	$	(22,429	)	$	(499,849	)	$	(32,444	)	$	(22	)	$		(923	)	$	(100,417	)	$	(326,317	)
Net realized gains (losses)		(181,390	)		(17,391	)		(9,388,850	)		(46,110	)		(9,566,138	)		(26,762	)		19				102			(11,680,900	)		(2,947,915	)
Net unrealized gains (losses)		(745,740	)		67,947			(372,777	)		87,436			(6,707,548	)		104,360			(429	)			(13,529	)		9,594,975			(2,764,334	)
Increase (Decrease) in net assets from operations	$	(1,008,773	)	$	40,911		$	(9,947,563	)	$	18,897		$	(16,773,535	)	$	45,154		$	(432	)	$		(14,350	)	$	(2,186,342	)	$	(6,038,566	)

Participant transactions:
Accumulation activity:
Purchase payments received	$	4,000,417		$	1,576,234		$	8,296,726		$	980,103		$	10,759,901		$	1,554,207		$	5,184		$		84,362		$	887,449		$	3,339,083
Net transfers between Sub-Accounts and Fixed Account		6,567,291			1,261,424			(14,899,613	)		23,129,702			6,040,715			31,331,166			20,183				506,476			(19,807,927	)		1,359,107
Withdrawals, surrenders, annuitizations and contract charges		(394,022	)		(26,587	)		(1,628,489	)		(76,938	)		(2,337,019	)		(199,804	)		(267	)			(4,463	)		(463,910	)		(2,137,541	)
Net accumulation activity	$	10,173,686		$	2,811,071		$	(8,231,376	)	$	24,032,867		$	14,463,597		$	32,685,569		$	25,100		$		586,375		$	(19,384,388	)	$	2,560,649

Annuitization activity:
Annuitizations	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$		-		$	-		$	-
Annuity payments and contract charges		(764	)		-			-			-			-			-			-				-			(3,048	)		(11,056	)
Annuity transfers		-			-			-			-			-			-			-				-			-			-
Net transfers between Sub-Accounts		-			-			-			-			-			-			-				-			-			-
Adjustments to annuity reserve		27,668			-			-			-			101			-			-				-			3,399			(521	)
Net annuitization activity	$	26,904		$	-		$	-		$	-		$	101		$	-		$	-		$		-		$	351		$	(11,577	)
Increase (Decrease) in net assets from participant transactions	$	10,200,590		$	2,811,071		$	(8,231,376	)	$	24,032,867		$	14,463,698		$	32,685,569		$	25,100		$		586,375		$	(19,384,037	)	$	2,549,072

Increase (Decrease) in net assets	$	9,191,817		$	2,851,982		$	(18,178,939	)	$	24,051,764		$	(2,309,837	)	$	32,730,723		$	24,668		$		572,025		$	(21,570,379	)	$	(3,489,494	)

Net assets:
Beginning of year	$	2,851,982		$	-		$	24,051,764		$	-		$	32,730,723		$	-		$	-		$		-		$	21,570,379		$	25,059,873
End of year	$	12,043,799		$	2,851,982		$	5,872,825		$	24,051,764		$	30,420,886		$	32,730,723		$	24,668		$		572,025		$	-		$	21,570,379

Units Transactions:
Beginning of year		301,559			-			2,991,637			-			3,773,079			-			-				-			2,906,746			2,391,285
Purchase		438,471			169,415			1,068,915			117,679			1,433,360			182,099			522				7,853			142,492			479,580
Transferred between Sub-Accounts and Fixed Accumulation Account		728,340			135,038			(2,912,712	)		2,883,617			207,889			3,615,954			1,859				47,286			(2,984,172	)		281,793
Withdrawn, surrendered and annuitized		(45,511	)		(2,894	)		(224,492	)		(9,659	)		(349,070	)		(24,974	)		(24	)			(420	)		(65,066	)		(245,912	)
End of year		1,422,859			301,559			923,348			2,991,637			5,065,258			3,773,079			2,357				54,719			-			2,906,746

(a) For the period May 1, 2001 (commencement of operations) through December 31, 2001.

(d) For the period September 30, 2002 (commencement of operations) through December 31, 2002.

See notes to financial statements

- 19 -

Statements of Changes in Net Assets - continued

	GS2 Sub-Account						GS3 Sub-Account						GS4 Sub-Account						GS5 Sub-Account						GS6 Sub-Account
	Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Period Ended December 31, 2001 (a)
Operations:
Net investment income (loss)	$	(76,330	)	$	(79,875	)	$	(146,176	)	$	(205,196	)	$	(6,050	)	$	(79,670	)	$	(37,867	)	$	501		$	(1,688	)	$	(1,066	)
Net realized gains (losses)		(31,644	)		(21,462	)		(2,239,211	)		(857,346	)		(533,536	)		(312,276	)		(1,804,739	)		(1,037,025	)		(68,311	)		(537	)
Net unrealized gains (losses)		(1,018,406	)		291,405			(2,162,921	)		(1,993,085	)		(376,636	)		(606,478	)		(35,662	)		(1,797,124	)		(3,771	)		3,771
Increase (Decrease) in net assets from operations	$	(1,126,380	)	$	190,068		$	(4,548,308	)	$	(3,055,627	)	$	(916,222	)	$	(998,424	)	$	(1,878,268	)	$	(2,833,648	)	$	(73,770	)	$	2,168

Participant transactions:
Accumulation activity:
Purchase payments received	$	19,651		$	1,167,164		$	988,189		$	2,652,718		$	4,995		$	1,236,714		$	11,206		$	2,029,107		$	43,087		$	178,969
Net transfers between Sub-Accounts and Fixed Account		(549,908	)		874,082			(1,122,719	)		1,054,622			(447,710	)		283,066			(894,054	)		1,676,050			(296,226	)		154,740
Withdrawals, surrenders, annuitizations and contract charges		(1,124,905	)		(531,536	)		(1,491,983	)		(1,986,959	)		(1,028,321	)		(753,419	)		(956,529	)		(969,120	)		(8,217	)		(751	)
Net accumulation activity	$	(1,655,162	)	$	1,509,710		$	(1,626,513	)	$	1,720,381		$	(1,471,036	)	$	766,361		$	(1,839,377	)	$	2,736,037		$	(261,356	)	$	332,958

Annuitization activity:
Annuitizations	$	-		$	22,308		$	11,226		$	92,093		$	-		$	27,224		$	-		$	-		$	-		$	-
Annuity payments and contract charges		(3,079	)		(1,180	)		(19,712	)		(30,313	)		(970	)		(255	)		(2,235	)		(2,827	)		-			-
Annuity transfers		-			-			-			-			-			-			-			-			-			-
Net transfers between Sub-Accounts		-			-			-			-			-			-			-			-			-			-
Adjustments to annuity reserve		2,904			(2,678	)		1,160			(2,673	)		3,052			(2,997	)		(999	)		898			-			-
Net annuitization activity	$	(175	)	$	18,450		$	(7,326	)	$	59,107		$	2,082		$	23,972		$	(3,234	)	$	(1,929	)	$	-		$	-
Increase (Decrease) in net assets from participant transactions	$	(1,655,337	)	$	1,528,160		$	(1,633,839	)	$	1,779,488		$	(1,468,954	)	$	790,333		$	(1,842,611	)	$	2,734,108		$	(261,356	)	$	332,958

Increase (Decrease) in net assets	$	(2,781,717	)	$	1,718,228		$	(6,182,147	)	$	(1,276,139	)	$	(2,385,176	)	$	(208,091	)	$	(3,720,879	)	$	(99,540	)	$	(335,126	)	$	335,126

Net assets:
Beginning of year	$	7,691,027		$	5,972,799		$	20,333,064		$	21,609,203		$	7,760,248		$	7,968,339		$	10,458,720		$	10,558,260		$	335,126		$	-
End of year	$	4,909,310		$	7,691,027		$	14,150,917		$	20,333,064		$	5,375,072		$	7,760,248		$	6,737,841		$	10,458,720		$	-		$	335,126

Units Transactions:
Beginning of year		668,766			516,148			2,154,860			1,869,586			887,554			819,255			1,311,340			978,067			46,526			-
Purchase		3,177			112,355			140,525			306,211			577			131,064			3,032			238,270			7,008			23,922
Transferred between Sub-Accounts and Fixed Accumulation Account		(59,395	)		90,117			(123,551	)		177,712			(54,896	)		25,120			(137,870	)		204,864			(52,153	)		22,714
Withdrawn, surrendered and annuitized		(106,712	)		(49,854	)		(178,461	)		(198,649	)		(129,577	)		(87,885	)		(128,299	)		(109,861	)		(1,381	)		(110	)
End of year		505,836			668,766			1,993,373			2,154,860			703,658			887,554			1,048,203			1,311,340			-			46,526

(a) For the period May 1, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 20 -

Statements of Changes in Net Assets - continued

	GS7 Sub-Account						IVI Sub-Account						IV2 Sub-Account						JP1 Sub-Account						JP2 Sub-Account
	Year Ended December 31, 2002			Period Ended December 31, 2001 (a)			Year Ended December 31, 2002			Period Ended December 31, 2001 (a)			Year Ended December 31, 2002			Period Ended December 31, 2001 (a)			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001
Operations:
Net investment income (loss)	$	(18,816	)	$	(2,039	)	$	(25,591	)	$	(8,297	)	$	(20,732	)	$	(3,407	)	$	(204,993	)	$	(197,405	)	$	(56,085	)	$	(42,149	)
Net realized gains (losses)		(86,049	)		(731	)		(266,168	)		(408,794	)		(178,760	)		(8,348	)		(2,568,239	)		(1,412,610	)		(1,139,542	)		(878,188	)
Net unrealized gains (losses)		(346,694	)		(3,286	)		(480,675	)		43,710			(359,499	)		33,775			(1,754,428	)		(1,559,788	)		(95,873	)		(1,055,546	)
Increase (Decrease) in net assets from operations	$	(451,559	)	$	(6,056	)	$	(772,434	)	$	(373,381	)	$	(558,991	)	$	22,020		$	(4,527,660	)	$	(3,169,803	)	$	(1,291,500	)	$	(1,975,883	)

Participant transactions:
Accumulation activity:
Purchase payments received	$	824,536		$	426,835		$	699,100		$	725,546		$	681,584		$	330,703		$	60,587		$	1,079,481		$	18,059		$	1,211,339
Net transfers between Sub-Accounts and Fixed Account		826,655			378,112			945,536			1,081,188			422,791			589,410			(1,542,045	)		1,081,450			(1,284,362	)		(127,519	)
Withdrawals, surrenders, annuitizations and contract charges		(47,380	)		(35	)		(108,318	)		(61,879	)		(104,499	)		(8,693	)		(1,706,551	)		(1,805,759	)		(395,083	)		(536,614	)
Net accumulation activity	$	1,603,811		$	804,912		$	1,536,318		$	1,744,855		$	999,876		$	911,420		$	(3,188,009	)	$	355,172		$	(1,661,386	)	$	547,206

Annuitization activity:
Annuitizations	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	93,202		$	-		$	-
Annuity payments and contract charges		-			-			-			-			-			-			(14,066	)		(18,975	)		(2,255	)		(2,758	)
Annuity transfers		-			-			-			-			-			-			-			-			-			-
Net transfers between Sub-Accounts		-			-			-			-			-			-			-			-			-			-
Adjustments to annuity reserve		-			-			-			-			-			-			(3,041	)		1,764			(334	)		(25	)
Net annuitization activity	$	-		$	-		$	-		$	-		$	-		$	-		$	(17,107	)	$	75,991		$	(2,589	)	$	(2,783	)
Increase (Decrease) in net assets from participant transactions	$	1,603,811		$	804,912		$	1,536,318		$	1,744,855		$	999,876		$	911,420		$	(3,205,116	)	$	431,163		$	(1,663,975	)	$	544,423

Increase (Decrease) in net assets	$	1,152,252		$	798,856		$	763,884		$	1,371,474		$	440,885		$	933,440		$	(7,732,776	)	$	(2,738,640	)	$	(2,955,475	)	$	(1,431,460	)

Net assets:
Beginning of year	$	798,856		$	-		$	1,371,474		$	-		$	933,440		$	-		$	18,832,702		$	21,571,342		$	7,427,975		$	8,859,435
End of year	$	1,951,108		$	798,856		$	2,135,358		$	1,371,474		$	1,374,325		$	933,440		$	11,099,926		$	18,832,702		$	4,472,500		$	7,427,975

Units Transactions:
Beginning of year		90,647			-			170,065			-			105,665			-			2,063,692			2,005,110			915,732			829,740
Purchase		106,239			47,883			97,256			89,058			91,712			42,980			8,698			119,936			3,239			142,881
Transferred between Sub-Accounts and Fixed Accumulation Account		103,859			42,768			143,874			88,649			45,882			68,153			(213,710	)		127,091			(172,930	)		5,219
Withdrawn, surrendered and annuitized		(6,321	)		(4	)		(17,469	)		(7,642	)		(15,790	)		(5,468	)		(212,446	)		(188,445	)		(54,350	)		(62,108	)
End of year		294,424			90,647			393,726			170,065			227,469			105,665			1,646,234			2,063,692			691,691			915,732

(a) For the period May 1, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 21 -

Statements of Changes in Net Assets - continued

	JP3 Sub-Account						LA1 Sub-Account						LA2 Sub-Account						LA3 Sub-Account						CAS Sub-Account
	Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Period Ended December 31, 2001 (a)			Year Ended December 31, 2002			Period Ended December 31, 2001 (a)			Year Ended December 31, 2002			Year Ended December 31, 2001
Operations:
Net investment income (loss)	$	(71,479	)	$	(94,336	)	$	(1,262,449	)	$	(444,708	)	$	(285,581	)	$	9,113		$	(1,501	)	$	(382	)	$	(227,488	)	$	(310,032	)
Net realized gains (losses)		(537,148	)		(461,124	)		(9,958,332	)		2,964,159			(531,610	)		14,232			(36,117	)		(170	)		(13,917,750	)		2,748,020
Net unrealized gains (losses)		(880,710	)		(117,503	)		(21,771,666	)		(6,694,842	)		(3,788,264	)		729,007			(137,072	)		(3,026	)		5,967,129			(12,001,293	)
Increase (Decrease) in net assets from operations	$	(1,489,337	)	$	(672,963	)	$	(32,992,447	)	$	(4,175,391	)	$	(4,605,455	)	$	752,352		$	(174,690	)	$	(3,578	)	$	(8,178,109	)	$	(9,563,305	)

Participant transactions:
Accumulation activity:
Purchase payments received	$	29,309		$	1,556,323		$	22,669,179		$	25,513,511		$	10,569,950		$	4,669,897		$	418,417		$	143,774		$	294,912		$	4,256,102
Net transfers between Sub-Accounts and Fixed Account		(500,407	)		36,023			7,153,448			64,686,774			17,450,780			18,527,564			508,910			193,719			(3,154,292	)		(1,548,564	)
Withdrawals, surrenders, annuitizations and contract charges		(376,276	)		(416,860	)		(10,793,196	)		(5,676,977	)		(2,316,289	)		(292,869	)		(64,186	)		(978	)		(2,608,516	)		(2,465,502	)
Net accumulation activity	$	(847,374	)	$	1,175,486		$	19,029,431		$	84,523,308		$	25,704,441		$	22,904,592		$	863,141		$	336,515		$	(5,467,896	)	$	242,036

Annuitization activity:
Annuitizations	$	-		$	-		$	61,569		$	105,138		$	283		$	44,112		$	-		$	-		$	-		$	18,417
Annuity payments and contract charges		(1,591	)		(1,256	)		(16,441	)		(5,997	)		(2,781	)		(413	)		-			-			(6,283	)		(9,073	)
Annuity transfers		-			-			-			-			-			-			-			-			-			-
Net transfers between Sub-Accounts		-			-			-			-			-			-			-			-			-			-
Adjustments to annuity reserve		(669	)		(68	)		2,552			(3,660	)		5,077			(4,884	)		-			-			(601	)		946
Net annuitization activity	$	(2,260	)	$	(1,324	)	$	47,680		$	95,481		$	2,579		$	38,815		$	-		$	-		$	(6,884	)	$	10,290
Increase (Decrease) in net assets from participant transactions	$	(849,634	)	$	1,174,162		$	19,077,111		$	84,618,789		$	25,707,020		$	22,943,407		$	863,141		$	336,515		$	(5,474,780	)	$	252,326

Increase (Decrease) in net assets	$	(2,338,971	)	$	501,199		$	(13,915,336	)	$	80,443,398		$	21,101,565		$	23,695,759		$	688,451		$	332,937		$	(13,652,889	)	$	(9,310,979	)

Net assets:
Beginning of year	$	6,757,718		$	6,256,519		$	130,365,761		$	49,922,363		$	23,695,759		$	-		$	332,937		$	-		$	25,983,854		$	35,294,833
End of year	$	4,418,747		$	6,757,718		$	116,450,425		$	130,365,761		$	44,797,324		$	23,695,759		$	1,021,388		$	332,937		$	12,330,965		$	25,983,854

Units Transactions:
Beginning of year		664,931			528,692			11,399,173			3,748,722			2,281,117			-			42,292			-			3,296,185			3,012,019
Purchase		4,962			155,424			2,280,712			2,347,933			1,057,580			473,618			55,457			18,181			51,059			534,808
Transferred between Sub-Accounts and Fixed Accumulation Account		(62,447	)		20,692			299,183			5,790,566			1,777,275			1,839,608			70,324			24,233			(552,126	)		11,533
Withdrawn, surrendered and annuitized		(42,199	)		(39,877	)		(1,080,040	)		(488,048	)		(247,536	)		(32,109	)		(9,892	)		(122	)		(409,254	)		(262,175	)
End of year		565,247			664,931			12,899,028			11,399,173			4,868,436			2,281,117			158,181			42,292			2,385,864			3,296,185

(a) For the period May 1, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 22 -

Statements of Changes in Net Assets - continued

	EGS Sub-Account						GSS Sub-Account						HYS Sub-Account						M1A Sub-Account						M1B Sub-Account
	Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Period Ended December 31, 2001 (b)			Year Ended December 31, 2002			Period Ended December 31, 2001 (b)
Operations:
Net investment income (loss)	$	(522,839	)	$	(932,315	)	$	1,680,762		$	1,484,213		$	3,700,594		$	2,561,266		$	(120,956	)	$	(5,667	)	$	(89,626	)	$	(6,640	)
Net realized gains (losses)		(26,523,794	)		(15,049,458	)		1,046,022			626,904			(6,315,314	)		(2,059,128	)		(231,333	)		38,568			(253,264	)		6,150
Net unrealized gains (losses)		9,570,496	)		(15,685,416	)		2,027,851			(210,987	)		2,328,715			(857,711	)		(2,053,129	)		228,510			(2,018,276	)		137,455
Increase (Decrease) in net assets from operations	$	(17,476,137	)	$	(31,667,189	)	$	4,754,635		$	1,900,130		$	(286,005	)	$	(355,573	)	$	(2,405,418	)	$	261,411		$	(2,361,166	)	$	136,965

Participant transactions:
Accumulation activity:
Purchase payments received	$	415,940		$	9,892,101		$	436,934		$	9,453,621		$	356,815		$	8,003,059		$	4,509,906		$	1,943,665		$	3,713,902		$	2,395,046
Net transfers between Sub-Accounts and Fixed Account		(7,321,409	)		1,402,676			24,338,725			20,829,710			(13,047,781	)		10,394,586			13,134,435			221,914			3,247,176			980,238
Withdrawals, surrenders, annuitizations and contract charges		(4,394,744	)		(5,174,345	)		(7,051,300	)		(3,382,064	)		(4,318,203	)		(2,929,644	)		(356,929	)		(9,859	)		(438,360	)		(68,348	)
Net accumulation activity	$	(11,300,213	)	$	6,120,432		$	17,724,359		$	26,901,267		$	(17,009,169	)	$	15,468,001		$	17,287,412		$	2,155,720		$	6,522,718		$	3,306,936

Annuitization activity:
Annuitizations	$	-		$	58,693		$	-		$	-		$	34,270		$	-		$	171		$	-		$	-		$	-
Annuity payments and contract charges		(15,385	)		(19,232	)		(10,571	)		(26,017	)		(18,237	)		(14,679	)		(15	)		-			-			-
Annuity transfers		-			-			-			-			-			-			-			-			-			-
Net transfers between Sub-Accounts		-			-			-			-			-			-			-			-			-			-
Adjustments to annuity reserve		(5,883	)		3,650			(6,216	)		2,079			(1,313	)		(1,325	)		(1	)		-			-			-
Net annuitization activity	$	(21,268	)	$	43,111		$	(16,787	)	$	(23,938	)	$	14,720		$	(16,004	)	$	155		$	-		$	-		$	-
Increase (Decrease) in net assets from participant transactions	$	(11,321,481	)	$	6,163,543		$	17,707,572		$	26,877,329		$	(16,994,449	)	$	15,451,997		$	17,287,567		$	2,155,720		$	6,522,718		$	3,306,936

Increase (Decrease) in net assets	$	(28,797,618	)	$	(25,503,646	)	$	22,462,207		$	28,777,459		$	(17,280,454	)	$	15,096,424		$	14,882,149		$	2,417,131		$	4,161,552		$	3,443,901

Net assets:
Beginning of year	$	52,492,438		$	77,996,084		$	53,198,300		$	24,420,841		$	41,407,521		$	26,311,097		$	2,417,131		$	-		$	3,443,901		$	-
End of year	$	23,694,820		$	52,492,438		$	75,660,507		$	53,198,300		$	24,127,067		$	41,407,521		$	17,299,280		$	2,417,131		$	7,605,453		$	3,443,901

Units Transactions:
Beginning of year		6,733,222			5,852,943			4,640,049			2,237,108			4,366,787			2,753,248			234,663			-			352,547			-
Purchase		84,025			1,351,013			37,469			867,479			38,363			836,734			522,614			208,336			424,069			255,293
Transferred between Sub-Accounts and Fixed Accumulation Account		(1,361,716	)		126,324			2,011,804			1,838,299			(1,438,671	)		1,092,045			1,859,659			27,373			380,981			104,299
Withdrawn, surrendered and annuitized		(713,846	)		(597,058	)		(587,888	)		(302,837	)		(459,800	)		(315,240	)		(53,326	)		(1,046	)		(60,912	)		(7,045	)
End of year		4,741,685			6,733,222			6,101,434			4,640,049			2,506,679			4,366,787			2,563,610			234,663			1,096,685			352,547

(b) For the period August 27, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 23 -

Statements of Changes in Net Assets - continued

	MFC Sub-Account						MFD Sub-Account						MFE Sub-Account						MFF Sub-Account						MFJ Sub-Account
	Year Ended December 31, 2002			Period Ended December 31, 2001 (b)			Year Ended December 31, 2002			Period Ended December 31, 2001 (b)			Year Ended December 31, 2002			Period Ended December 31, 2001 (b)			Year Ended December 31, 2002			Period Ended December 31, 2001 (b)			Year Ended December 31, 2002			Period Ended December 31, 2001 (b)
Operations:
Net investment income (loss)	$	991,655		$	(8,306	)	$	(14,465	)	$	(1,363	)	$	89,571		$	(5,666	)	$	(17,631	)	$	(2,738	)	$	287,735		$	(17,341	)
Net realized gains (losses)		(1,502,594	)		3,467			(110,222	)		(2,320	)		(556,741	)		(7,276	)		(161,275	)		45,307			129,488			(618	)
Net unrealized gains (losses)		328,630			48,150			(354,644	)		32,632			(595,715	)		10,354			(365,771	)		35,101			(2,372,752	)		212,888
Increase (Decrease) in net assets from operations	$	(182,309	)	$	43,311		$	(479,331	)	$	28,949		$	(1,062,885	)	$	(2,588	)	$	(544,677	)	$	77,670		$	(1,955,529	)	$	194,929

Participant transactions:
Accumulation activity:
Purchase payments received	$	9,580,318		$	2,529,142		$	693,571		$	546,566		$	1,641,976		$	2,060,615		$	684,695		$	1,101,830		$	14,545,950		$	6,603,339
Net transfers between Sub-Accounts and Fixed Account		(764,035	)		1,145,090			253,901			165,064			544,925			467,211			218,077			(202,865	)		11,072,771			1,907,667
Withdrawals, surrenders, annuitizations and contract charges		(502,816	)		(10,676	)		(71,044	)		(3,444	)		(220,627	)		(8,124	)		(87,783	)		(3,587	)		(1,585,572	)		(48,421	)
Net accumulation activity	$	8,313,467		$	3,663,556		$	876,428		$	708,186		$	1,966,274		$	2,519,702		$	814,989		$	895,378		$	24,033,149		$	8,462,585

Annuitization activity:
Annuitizations	$	20,579		$	-		$	-		$	-		$	179		$	-		$	-		$	-		$	157,453		$	-

Annuity payments and contract charges		(857	)		-			-			-			(16	)		-			-			-			(12,650	)		-
Annuity transfers		-			-			-			-			-			-			-			-			-			-
Net transfers between Sub-Accounts		-			-			-			-			-			-			-			-			-			-
Adjustments to annuity reserve		(124	)		-			-			-			(1	)		-			-			-			(1,380	)		-
Net annuitization activity	$	19,598		$	-		$	-		$	-		$	162		$	-		$	-		$	-		$	143,423		$	-
Increase (Decrease) in net assets from participant transactions	$	8,333,065		$	3,663,556		$	876,428		$	708,186		$	1,966,436		$	2,519,702		$	814,989		$	895,378		$	24,176,572		$	8,462,585

Increase (Decrease) in net assets	$	8,150,756		$	3,706,867		$	397,097		$	737,135		$	903,551		$	2,517,114		$	270,312		$	973,048		$	22,221,043		$	8,657,514

Net assets:
Beginning of year	$	3,706,867		$	-		$	737,135		$	-		$	2,517,114		$	-		$	973,048		$	-		$	8,657,514		$	-
End of year	$	11,857,623		$	3,706,867		$	1,134,232		$	737,135		$	3,420,665		$	2,517,114		$	1,243,360		$	973,048		$	30,878,557		$	8,657,514

Units Transactions:
Beginning of year		375,235			-			75,869			-			282,084			-			100,216			-			869,203			-
Purchase		979,093			259,583			81,105			58,964			212,394			230,600			82,972			120,717			1,516,358			678,583
Transferred between Sub-Accounts and Fixed Accumulation Account		(110,007	)		116,903			28,683			17,265			47,276			52,404			26,702			(20,122	)		1,134,906			195,609
Withdrawn, surrendered and annuitized		(56,599	)		(1,251	)		(10,528	)		(360	)		(31,671	)		(920	)		(13,636	)		(379	)		(201,524	)		(4,989	)
End of year		1,187,722			375,235			175,129			75,869			510,083			282,084			196,254			100,216			3,318,943			869,203

(b) For the period August 27, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 24 -

Statements of Changes in Net Assets - continued

	MFK Sub-Account						MFL Sub-Account						MIS Sub-Account						MIT Sub-Account						MMS Sub-Account
	Year Ended December 31, 2002			Period Ended December 31, 2001 (b)			Year Ended December 31, 2002			Period Ended December 31, 2001 (b)			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001
Operations:
Net investment income (loss)	$	423,716		$	(18,843	)	$	(21,426	)	$	(5,326	)	$	(555,450	)	$	(716,071	)	$	(128,479	)	$	(257,569	)	$	(7,749	)	$	153,045
Net realized gains (losses)		107,010			(6,469	)		(119,219	)		66			(14,895,496	)		1,147,135			(5,784,582	)		1,179,654			-			-
Net unrealized gains (losses)		1,116,001			(27,168	)		(991,481	)		64,437			(74,811	)		(16,356,886	)		(2,634,105	)		(7,752,834	)		-			-
Increase (Decrease) in net assets from operations	$	1,646,727		$	(52,480	)	$	(1,132,126	)	$	59,177		$	(15,525,757	)	$	(15,925,822	)	$	(8,547,166	)	$	(6,830,749	)	$	(7,749	)	$	153,045

Participant transactions:
Accumulation activity:
Purchase payments received	$	14,328,383		$	5,969,595		$	2,018,002		$	2,106,638		$	350,556		$	16,258,754		$	253,626		$	11,339,763		$	15,386		$	88,695
Net transfers between Sub-Accounts and Fixed Account		16,565,121			463,629			1,536,876			516,627			(5,357,720	)		9,257,938			(4,626,213	)		7,086,373			874,704			3,134,629
Withdrawals, surrenders, annuitizations and contract charges		(1,652,087	)		(29,148	)		(169,868	)		(10,972	)		(3,724,173	)		(3,358,184	)		(2,773,352	)		(3,019,378	)		(2,041,892	)		(2,564,050	)
Net accumulation activity	$	29,241,417		$	6,404,076		$	3,385,010		$	2,612,293		$	(8,731,337	)	$	22,158,508		$	(7,145,939	)	$	15,406,758		$	(1,151,802	)	$	659,274

Annuitization activity:
Annuitizations	$	-		$	-		$	-		$	-		$	10,842		$	20,212		$	13,059		$	144,567		$	-		$	-
Annuity payments and contract charges		-			-			-			-			(9,048	)		(11,320	)		(17,465	)		(7,971	)		-			-
Annuity transfers		-			-			-			-			-			-			-			-			-			-
Net transfers between Sub-Accounts		-			-			-			-			-			-			-			-			-			-
Adjustments to annuity reserve		-			-			-			-			(7,493	)		(2,458	)		1,469			(13,408	)		-			-
Net annuitization activity	$	-		$	-		$	-		$	-		$	(5,699	)	$	6,434		$	(2,937	)	$	123,188		$	-		$	-
Increase (Decrease) in net assets from participant transactions	$	29,241,417		$	6,404,076		$	3,385,010		$	2,612,293		$	(8,737,036	)	$	22,164,942		$	(7,148,876	)	$	15,529,946		$	(1,151,802	)	$	659,274

Increase (Decrease) in net assets	$	30,888,144		$	6,351,596		$	2,252,884		$	2,671,470		$	(24,262,793	)	$	6,239,120		$	(15,696,042	)	$	8,699,197		$	(1,159,551	)	$	812,319

Net assets:
Beginning of year	$	6,351,596		$	-		$	2,671,470		$	-		$	55,294,423		$	49,055,303		$	40,259,945		$	31,560,748		$	6,809,800		$	5,997,481
End of year	$	37,239,740		$	6,351,596		$	4,924,354		$	2,671,470		$	31,031,630		$	55,294,423		$	24,563,903		$	40,259,945		$	5,650,249		$	6,809,800

Units Transactions:
Beginning of year		628,219			-			276,474			-			7,310,990			4,353,315			4,731,430			3,029,817			598,302			539,256
Purchase		1,385,370			586,538			224,427			223,182			57,114			1,971,338			34,783			1,223,623			1,155			7,836
Transferred between Sub-Accounts and Fixed Accumulation Account		1,572,349			44,662			179,252			54,438			(974,795	)		1,384,290			(666,709	)		819,669			76,838			278,289
Withdrawn, surrendered and annuitized		(169,178	)		(2,981	)		(23,284	)		(1,146	)		(580,571	)		(397,953	)		(381,246	)		(341,679	)		(179,419	)		(227,079	)
End of year		3,416,760			628,219			656,869			276,474			5,812,738			7,310,990			3,718,258			4,731,430			496,876			598,302

(b) For the period August 27, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 25 -

Statements of Changes in Net Assets - continued

	NWD Sub-Account						TRS Sub-Account						UTS Sub-Account						OP1 Sub-Account						OP2 Sub-Account
	Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001
Operations:
Net investment income (loss)	$	(414,290	)	$	(499,252	)	$	844,809		$	523,834		$	767,293		$	1,172,733		$	(31,748	)	$	(99,572	)	$	(168,930	)	$	(176,981	)
Net realized gains (losses)		(4,769,173	)		(2,164,990	)		(1,024,094	)		1,487,503			(13,644,842	)		2,164,163			(589,647	)		1,772,904			176,173			982,735
Net unrealized gains (losses)		(5,804,169	)		654,243			(3,649,825	)		(2,126,950	)		1,853,233			(18,785,134	)		(1,543,412	)		(2,871,870	)		(1,354,195	)		(132,087	)
Increase (Decrease) in net assets from Operations	$	(10,987,632	)	$	(2,009,999	)	$	(3,829,110	)	$	(115,613	)	$	(11,024,316	)	$	(15,448,238	)	$	(2,164,807	)	$	(1,198,538	)	$	(1,346,952	)	$	673,667

Participant transactions:
Accumulation activity:
Purchase payments received	$	308,192		$	8,088,240		$	365,706		$	15,789,522		$	182,556		$	7,856,326		$	83,524		$	693,189		$	79,529		$	169,985
Net transfers between Sub-Accounts and Fixed Account		10,463,018			3,231,188			7,669,107			18,657,170			(9,158,881	)		7,777,265			(2,393,850	)		(11,404,523	)		(2,882,285	)		(420,440	)
Withdrawals, surrenders, annuitizations and contract charges		(2,234,190	)		(2,245,337	)		(3,603,915	)		(2,332,203	)		(3,428,247	)		(4,312,036	)		(1,065,673	)		(1,456,966	)		(1,789,253	)		(1,045,612	)
Net accumulation activity	$	8,537,020		$	9,074,091		$	4,430,898		$	32,114,489		$	(12,404,572	)	$	11,321,555		$	(3,375,999	)	$	(12,168,300	)	$	(4,592,009	)	$	(1,296,067	)

Annuitization activity:
Annuitizations	$	-		$	-		$	-		$	72,025		$	-		$	247,825		$	-		$	23,586		$	-		$	-
Annuity payments and contract charges		(3,890	)		(1,806	)		(12,550	)		(13,810	)		(42,968	)		(67,499	)		(7,121	)		(7,267	)		(9,120	)		(6,755	)
Annuity transfers		-			-			-			-			-			-			-			-			-			-
Net transfers between Sub-Accounts		-			-			-			-			-			-			-			-			-			-
Adjustments to annuity reserve		(5	)		(121	)		3,542			(6,160	)		(1,222	)		(1,966	)		(521	)		(22	)		(746	)		(645	)
Net annuitization activity	$	(3,895	)	$	(1,927	)	$	(9,008	)	$	52,055		$	(44,190	)	$	178,360		$	(7,642	)	$	16,297		$	(9,866	)	$	(7,400	)
Increase (Decrease) in net assets from participant transactions	$	8,533,125		$	9,072,164		$	4,421,890		$	32,166,544		$	(12,448,762	)	$	11,499,915		$	(3,383,641	)	$	(12,152,003	)	$	(4,601,875	)	$	(1,303,467	)

Increase (Decrease) in net assets	$	(2,454,507	)	$	7,062,165		$	592,780		$	32,050,931		$	(23,473,078	)	$	(3,948,323	)	$	(5,548,448	)	$	(13,350,541	)	$	(5,948,827	)	$	(629,800	)

Net assets:
Beginning of year	$	34,145,689		$	27,083,524		$	47,271,929		$	15,220,998		$	46,649,921		$	50,598,244		$	11,224,190		$	24,574,731		$	14,564,433		$	15,194,233
End of year	$	31,691,182		$	34,145,689		$	47,864,709		$	47,271,929		$	23,176,843		$	46,649,921		$	5,675,742		$	11,224,190		$	8,615,606		$	14,564,433

Units Transactions:
Beginning of year		3,148,941			2,025,239			4,188,905			1,317,651			5,070,993			3,782,883			1,054,691			2,121,287			900,726			988,307
Purchase		38,186			844,944			32,991			1,401,794			25,089			773,084			8,445			60,305			4,826			10,956
Transferred between Sub-Accounts and Fixed Accumulation Account		1,617,766			473,696			679,031			1,681,148			(1,279,697	)		906,901			(260,358	)		(997,657	)		(202,844	)		27,189
Withdrawn, surrendered and annuitized		(259,424	)		(194,938	)		(335,877	)		(211,688	)		(450,907	)		(391,875	)		(114,785	)		(129,244	)		(123,249	)		(71,348	)
End of year		4,545,469			3,148,941			4,565,050			4,188,905			3,365,478			5,070,993			687,993			1,054,691			579,459			900,726

See notes to financial statements

- 26 -

Futurity, Futurity II, Futurity Focus, Futurity Accolade, Futurity Focus II, Futurity III, Futurity Select Four

Futurity Select Four Plus, Futurity Select Seven, Futurity Select Freedom and Futurity Select Incentive Sub-Accounts
Included in Sun Life of Canada (U.S.) Variable Account F

Statements of Changes in Net Assets - continued

	OP3 Sub-Account						OP4 Sub-Account						PHY Sub-Account			PMB Sub-Account			PRR Sub-Account			PTR Sub-Account				RX1 Sub-Account
	Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001			Period End December 31, 2002 (d)			Period End December 31, 2002 (d)			Period End December 31, 2002 (d)			Period Ended December 31, 2002 (d)			Year Ended December 31, 2002				Period Ended December 31, 2001 (a)
Operations:
Net investment income (loss)	$	(83,373	)	$	(33,365	)	$	20,492		$	35,517		$	443,985		$	339,421		$	3,707		$	117,698		$		8,241		$	3,952
Net realized gains (losses)		510,679			1,582,394			(215,549	)		(59,812	)		20,814			78,162			2,325			192,519				(229,567	)		(163	)
Net unrealized gains (losses)		(1,968,895	)		(1,007,212	)		(342,834	)		(227,621	)		1,869,376			2,819,791			39,115			343,769				(57,323	)		7,255
Increase (Decrease) in net assets from Operations	$	(1,541,589	)	$	541,817		$	(537,891	)	$	(251,916	)	$	2,334,175		$	3,237,374		$	45,147		$	653,986		$		(278,649	)	$	11,044

Participant transactions:
Accumulation activity:
Purchase payments received	$	61,221		$	398,621		$	39,064		$	151,907		$	1,114,255		$	990,682		$	229,896		$	2,161,967		$		180,419		$	78,536
Net transfers between Sub-Accounts and Fixed Account		(972,102	)		(3,187,530	)		(473,426	)		91,906			27,027,265			27,656,822			1,394,352			40,168,532				915,223			117,164
Withdrawals, surrenders, annuitizations and contract charges		(1,351,347	)		(585,858	)		(514,177	)		(460,560	)		(536,730	)		(562,820	)		(9,287	)		(363,298	)			(86,231	)		(6	)
Net accumulation activity	$	(2,262,228	)	$	(3,374,767	)	$	(948,539	)	$	(216,747	)	$	27,604,790		$	28,084,684		$	1,614,961		$	41,967,201		$		1,009,411		$	195,694

Annuitization activity:
Annuitizations	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$		-		$	-
Annuity payments and contract charges		(6,110	)		(3,295	)		-			-			-			-			-			-				-			-
Annuity transfers		-			-			-			-			-			-			-			-				-			-
Net transfers between Sub-Accounts		-			-			-			-			-			-			-			-				-			-
Adjustments to annuity reserve		(644	)		10			-			-			-			-			173			114				-			-
Net annuitization activity	$	(6,754	)	$	(3,285	)	$	-		$	-		$	-		$	-		$	173		$	114		$		-		$	-
Increase (Decrease) in net assets from participant transactions	$	(2,268,982	)	$	(3,378,052	)	$	(948,539	)	$	(216,747	)	$	27,604,790		$	28,084,684		$	1,615,134		$	41,967,315		$		1,009,411		$	195,694

Increase (Decrease) in net assets	$	(3,810,571	)	$	(2,836,235	)	$	(1,486,430	)	$	(468,663	)	$	29,938,965		$	31,322,058		$	1,660,281		$	42,621,301		$		730,762		$	206,738

Net assets:
Beginning of year	$	7,470,840		$	10,307,075		$	3,346,490		$	3,815,153		$	-		$	-		$	-		$	-		$		206,738		$	-
End of year	$	3,660,269		$	7,470,840		$	1,860,060		$	3,346,490		$	29,938,965		$	31,322,058		$	1,660,281		$	42,621,301		$		937,500		$	206,738

Units Transactions:
Beginning of year		536,606			762,532			304,247			324,989			-			-			-			-				25,047			-
Purchase		3,911			28,449			3,691			13,706			106,485			90,672			23,469			215,170				29,216			9,952
Transferred between Sub-Accounts and Fixed Accumulation Account		(94,309	)		-208,954			(49,185	)		6,519			2,709,968			2,655,373			139,104			3,992,394				138,927			15,096
Withdrawn, surrendered and annuitized		(115,939	)		(45,421	)		(52,656	)		(40,967	)		(51,800	)		(51,180	)		(945	)		(36,348	)			(14,883	)		(1	)
End of year		330,269			536,606			206,097			304,247			2,764,653			2,694,865			161,628			4,171,216				178,307			25,047

(a) For the period May 1, 2001 (commencement of operations) through December 31, 2001.

(d) For the period September 30, 2002 (commencement of operations) through December 31, 2002.

See notes to financial statements

- 27 -

Futurity, Futurity II, Futurity Focus, Futurity Accolade, Futurity Focus II, Futurity III, Futurity Select Four

Futurity Select Four Plus, Futurity Select Seven, Futurity Select Freedom and Futurity Select Incentive Sub-Accounts
Included in Sun Life of Canada (U.S.) Variable Account F

Statements of Changes in Net Assets - continued

	RX2 Sub-Account						SB1 Sub-Account						SB2 Sub-Account						SB3 Sub-Account						SB4 Sub-Account
	Year Ended December 31, 2002			Period Ended December 31, 2001 (a)			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001
Operations:
Net investment income (loss)	$	(19,012	)	$	(7,370	)	$	(8,009	)	$	(4,504	)	$	(1,398	)	$	(5,892	)	$	116,540		$	76,331		$	(4,403	)	$	23,091
Net realized gains (losses)		(758,725	)		(412	)		(23,728	)		46,501	)		(7,978	)		20,704			58,790			38,621			(97,970	)		(13,305	)
Net unrealized gains (losses)		(76,313	)		(53,260	)		(213,024	)		(54,002	)		(128,733	)		(80,106	)		73,445			125,821			(186,231	)		(117,453	)
Increase (Decrease) in net assets from Operations	$	(854,050	)	$	(61,042	)	$	(244,761	)	$	(12,005	)	$	(138,109	)	$	(65,294	)	$	248,775		$	240,773		$	(288,604	)	$	(107,667	)

Participant transactions:
Accumulation activity:
Purchase payments received	$	568,349		$	447,331		$	334		$	10,653		$	1,082		$	8,159		$	605		$	3,341		$	2,302		$	2,337
Net transfers between Sub-Accounts and Fixed Account		(254,462	)		1,276,774			(11,007	)		416,947			(17,492	)		29,508			40,295			(902,803	)		(217,239	)		(61,382	)
Withdrawals, surrenders, annuitizations and contract charges		(200,536	)		(16,695	)		(70,550	)		(30,244	)		(6,139	)		(48,575	)		(595,288	)		(477,261	)		(755,935	)		(479,033	)
Net accumulation activity	$	113,351		$	1,707,410		$	(81,223	)	$	397,356		$	(22,549	)	$	(10,908	)	$	(554,388	)	$	(1,376,723	)	$	(970,872	)	$	(538,078	)

Annuitization activity:
Annuitizations	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-
Annuity payments and contract charges		-			-			-			-			-			-			(1,462	)		(1,441	)		(881	)		(946	)
Annuity transfers		-			-			-			-			-			-			-			-			-			-
Net transfers between Sub-Accounts					-			-			-			-			-			-			-			-			-
Adjustments to annuity reserve		-			-			-			-			-			-			(1,000	)		7			(21	)		(34	)
Net annuitization activity	$	-		$	-		$	-		$	-		$	-		$	-		$	(2,462	)	$	(1,434	)	$	(902	)	$	(980	)
Increase (Decrease) in net assets from participant transactions	$	113,351		$	1,707,410		$	(81,223	)	$	397,356		$	(22,549	)	$	(10,908	)	$	(556,850	)	$	(1,378,157	)	$	(971,774	)	$	(539,058	)

Increase (Decrease) in net assets	$	(740,699	)	$	1,646,368		$	(325,984	)	$	385,351		$	(160,658	)	$	(76,202	)	$	(308,075	)	$	(1,137,384	)	$	(1,260,378	)	$	(646,725	)

Net assets:
Beginning of year	$	1,646,368		$	-		$	895,117		$	509,766		$	566,123		$	642,325		$	3,651,666		$	4,789,050		$	3,979,916		$	4,626,641
End of year	$	905,669		$	1,646,368		$	569,133		$	895,117		$	405,465		$	566,123		$	3,343,591		$	3,651,666		$	2,719,538		$	3,979,916

Units Transactions:
Beginning of year		207,526			-			58,507			33,486			46,806			50,200			312,493			432,976			377,628			429,550
Purchase		85,382			56,191			231			678			94			645			64			295			244			218
Transferred between Sub-Accounts and Fixed Accumulation Account		(72,002	)		153,634			(2,736	)		26,299			(2,136	)		87			3,690			(78,922	)		(20,649	)		(6,244	)
Withdrawn, surrendered and annuitized		(35,984	)		(2,299	)		(5,680	)		(1,956	)		(591	)		(4,126	)		(49,897	)		(41,856	)		(76,549	)		(45,896	)
End of year		184,922			207,526			50,322			58,507			44,173			46,806			266,350			312,493			280,674			377,628

(a) For the period May 1, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 28 -

Statements of Changes in Net Assets - continued

	SC1 Sub-Account						SC2 Sub-Account						SC3 Sub-Account						SC4 Sub-Account						SC5 Sub-Account
	Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001
Operations:
Net investment income (loss)	$	(424,605	)	$	1,356,449		$	3,967,217		$	2,265,478		$	1,347,699		$	651,479		$	(93,524	)	$	(242,136	)	$	(771,996	)	$	(689,460	)
Net realized gains (losses)		-			(13	)		(809,059	)		445,817			3,049,161			1,403,818			(609,706	)		(4,651,055	)		(2,548,887	)		(2,489,237	)
Net unrealized gains (losses)		-			13			235,580			(375,204	)		(3,894,500	)		(206,079	)		(1,869,457	)		1,933,975			(5,853,641	)		2,259,571
Increase (Decrease) in net assets from operations	$	(424,605	)	$	1,356,449		$	3,393,738		$	2,336,091		$	502,360		$	1,849,218		$	(2,572,687	)	$	(2,959,216	)	$	(9,174,524	)	$	(919,126	)

Participant transactions:
Accumulation activity:
Purchase payments received	$	56,085,331		$	61,183,777		$	21,071,457		$	17,462,938		$	6,468,652		$	5,513,151		$	1,073,241		$	7,344,960		$	6,656,346		$	16,298,751
Net transfers between Sub-Accounts and Fixed Account		31,322,047			30,836,941			(32,198,932	)		34,391,448			19,934,315			1,821,563			(327,848	)		(6,246,177	)		6,230,667			6,860,730
Withdrawals, surrenders, annuitizations and contract charges		(59,266,468	)		(16,485,142	)		(8,111,148	)		(3,488,884	)		(2,901,371	)		(1,589,971	)		(558,590	)		(1,268,037	)		(3,825,368	)		(3,481,265	)
Net accumulation activity	$	28,140,910		$	75,535,576		$	(19,238,623	)	$	48,365,502		$	23,501,596		$	5,744,743		$	186,803		$	(169,254	)	$	(9,061,645	)	$	19,678,216

Annuitization activity:
Annuitizations	$	149,023		$	308,296		$	34,356		$	-		$	13,612		$	22,482		$	-		$	-		$	-		$	82,828
Annuity payments and contract charges		(76,969	)		(112,515	)		(75,113	)		(80,351	)		(9,781	)		(2,066	)		(4,442	)		(1,379	)		(9,916	)		(16,303	)
Annuity transfers		-			-			-			-			-			-			-			-			-			-
Net transfers between Sub-Accounts		-			-			-			-			-			-			-			-			-			-
Adjustments to annuity reserve		(5,210	)		(1,613	)		(4,441	)		(5,005	)		2,133			(2,628	)		83			(59	)		4,314			(11,598	)
Net annuitization activity	$	66,844		$	194,168		$	(45,198	)	$	(85,356	)	$	5,964		$	17,788		$	(4,359	)	$	(1,438	)	$	(5,602	)	$	54,927
Increase (Decrease) in net assets from participant transactions	$	28,207,754		$	75,729,744		$	(19,283,821	)	$	48,280,146		$	23,507,560		$	5,762,531		$	182,444		$	(170,692	)	$	9,056,043		$	19,733,143

Increase (Decrease) in net assets	$	27,783,149		$	77,086,193		$	(15,890,083	)	$	50,616,237		$	24,009,920		$	7,611,749		$	(2,390,243	)	$	(3,129,908	)	$	(118,481	)	$	18,814,017

Net assets:
Beginning of year	$	115,305,491		$	38,219,298		$	79,912,659		$	29,296,422		$	18,358,466		$	10,746,717		$	8,230,145		$	11,360,053		$	51,486,712		$	32,672,695
End of year	$	143,088,640		$	115,305,491		$	64,022,576		$	79,912,659		$	42,368,386		$	18,358,466		$	5,839,902		$	8,230,145		$	51,368,231		$	51,486,712

Units Transactions:
Beginning of year		10,787,454			3,603,840			7,089,173			2,715,389			1,408,479			867,981			994,748			1,061,619			4,473,960			2,345,719
Purchase		5,477,772			5,836,764			1,906,113			1,586,735			491,134			456,635			174,607			912,922			688,992			1,558,017
Transferred between Sub-Accounts and Fixed Accumulation Account		3,011,665			2,892,131			(2,770,342	)		3,101,944			1,556,195			208,648			(61,772	)		(816,527	)		762,009			875,049
Withdrawn, surrendered and annuitized		(5,751,068	)		(1,545,281	)		(730,088	)		(314,895	)		(214,300	)		(124,785	)		(83,770	)		(163,266	)		(379,828	)		(304,825	)
End of year		13,525,823			10,787,454			5,494,856			7,089,173			3,241,508			1,408,479			1,023,813			994,748			5,545,133			4,473,960

See notes to financial statements

- 29 -

Statements of Changes in Net Assets - continued

	SC6 Sub-Account						SC7 Sub-Account						SC8 Sub-Account						SC9 Sub-Account						SCA Sub-Account
	Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001
Operations:
Net investment income (loss)	$	(35,512	)	$	(34,511	)	$	(471,576	)	$	(259,405	)	$	(95,703	)	$	(66,800	)	$	(21,688	)	$	(11,647	)	$	(181,413	)	$	(190,930	)
Net realized gains (losses)		(337,695	)		(232,687	)		(1,400,119	)		(2,895,803	)		(873,219	)		(31,130	)		(668,923	)		120,827			(331,103	)		229,706
Net unrealized gains (losses)		(821,988	)		116,734			(4,816,324	)		(122,141	)		(848,167	)		(233,360	)		(759,086	)		(321,910	)		(804,491	)		743,593
Increase (Decrease) in net assets from operations	$	(1,195,195	)	$	(150,464	)	$	(6,688,019	)	$	(3,277,349	)	$	(1,817,089	)	$	(331,290	)	$	(1,449,697	)	$	(212,730	)	$	(1,317,007	)	$	782,369

Participant transactions:
Accumulation activity:
Purchase payments received	$	643,150		$	947,858		$	5,946,970		$	19,758,608		$	988,647		$	3,362,647		$	515,521		$	1,959,323		$	1,754,687		$	7,620,406
Net transfers between Sub-Accounts and Fixed Account		745,564			545,371			2,439,064			6,911,496			(287,889	)		2,705,134			197,281			2,855,193			1,115,688			(420,900	)
Withdrawals, surrenders, annuitizations and contract charges		(177,913	)		(234,813	)		(2,079,264	)		(2,055,972	)		(788,894	)		(223,556	)		(404,678	)		(402,238	)		(1,243,236	)		(1,280,293	)
Net accumulation activity	$	1,210,801		$	1,258,416		$	6,306,770		$	24,614,132		$	(88,136	)	$	5,844,225		$	308,124		$	4,412,278		$	1,627,139		$	5,919,213

Annuitization activity:
Annuitizations	$	-		$	27,210		$	-		$	97,366		$	183		$	26,975		$	-		$	21,702		$	-		$	44,452
Annuity payments and contract charges		(1,864	)		(2,050	)		(9,448	)		(3,054	)		(952	)		(253	)		(516	)		(202	)		(2,382	)		(417	)
Annuity transfers		-			-			-			-			-			-			-			-			-			-
Net transfers between Sub-Accounts		-			-			-			-			-			-			-			-			-			-
Adjustments to annuity reserve		2,983			(3,189	)		(50,768	)		58,969			2,535			(3,055	)		2,337			(2,341	)		5,785			(5,190	)
Net annuitization activity	$	1,119		$	21,971		$	(60,216	)	$	153,281		$	1,766		$	23,667		$	1,821		$	19,159		$	3,403		$	38,845
Increase (Decrease) in net assets from participant transactions	$	1,211,920		$	1,280,387		$	6,246,554		$	24,767,413		$	(86,370	)	$	5,867,892		$	309,945		$	4,431,437		$	1,630,542		$	5,958,058

Increase (Decrease) in net assets	$	16,725		$	1,129,923		$	(441,465	)	$	21,490,064		$	(1,903,459	)	$	5,536,602		$	(1,139,752	)	$	4,218,707		$	313,535		$	6,740,427

Net assets:
Beginning of year	$	3,569,703		$	2,439,780		$	32,120,228		$	10,630,164		$	7,997,588		$	2,460,986		$	4,530,621		$	311,914		$	12,795,381		$	6,054,954
End of year	$	3,586,428		$	3,569,703		$	31,678,763		$	32,120,228		$	6,094,129		$	7,997,588		$	3,390,869		$	4,530,621		$	13,108,916		$	12,795,381

Units Transactions:
Beginning of year		399,721			237,057			3,692,440			1,085,376			771,222			218,554			426,871			27,744			1,179,279			589,160
Purchase		78,622			108,275			731,909			2,229,741			103,920			323,301			53,474			178,433			172,603			756,443
Transferred between Sub-Accounts and Fixed Accumulation Account		105,028			80,935			251,816			623,164			(49,263	)		251,685			17,539			259,156			100,922			(37,081	)
Withdrawn, surrendered and annuitized		(25,432	)		(26,546	)		(266,943	)		(245,841	)		(91,153	)		(22,318	)		(47,903	)		(38,462	)		(128,907	)		(129,243	)
End of year		557,939			399,721			4,409,222			3,692,440			734,726			771,222			449,981			426,871			1,323,897			1,179,279

See notes to financial statements

- 30 -

Statements of Changes in Net Assets - continued

	SCB Sub-Account						SCC Sub-Account						SCD Sub-Account						SCE Sub-Account						SCF Sub-Account
	Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Year Ended December 31, 2001			Year Ended December 31, 2002			Period Ended December 31, 2001 (a)			Year Ended December 31, 2002			Period Ended December 31, 2001 (a)			Year Ended December 31, 2002			Period Ended December 31, 2001 (a)
Operations:
Net investment income (loss)	$	(377,029	)	$	(115,074	)	$	(13,276	)	$	(3,396	)	$	(23,421	)	$	(11,067	)	$	(5,508	)	$	(1,541	)	$	(76,723	)	$	(23,452	)
Net realized gains (losses)		(431,400	)		416,769			(240,791	)		(578	)		(1,201,719	)		9,741			(281,006	)		(26,684	)		(1,545,825	)		(10,597	)
Net unrealized gains (losses)		(4,910,400	)		827,803			(424,250	)		(107,592	)		107,959			(107,959	)		17,448			(17,453	)		(32,833	)		32,831
Increase (Decrease) in net assets from operations	$	(5,718,829	)	$	1,129,498		$	(678,317	)	$	(111,566	)	$	(1,117,181	)	$	(109,285	)	$	(269,066	)	$	(45,678	)	$	(1,655,381	)	$	(1,218	)

Participant transactions:
Accumulation activity:
Purchase payments received	$	7,286,870		$	4,993,677		$	443,489		$	1,417,667		$	513,895		$	955,770		$	138,623		$	314,690		$	1,270,918		$	1,779,346
Net transfers between Sub-Accounts and Fixed Account		24,156,331			10,693,853			519,219			1,090,809			(1,336,034	)		1,162,747			(277,503	)		155,266			(3,733,354	)		2,651,231
Withdrawals, surrenders, annuitizations and contract charges		(2,238,424	)		(1,031,713	)		(179,186	)		(63,551	)		(41,582	)		(28,330	)		(11,521	)		(4,811	)		(245,506	)		(66,036	)
Net accumulation activity	$	29,204,777		$	14,655,817		$	783,522		$	2,444,925		$	(863,721	)	$	2,090,187		$	(150,401	)	$	465,145		$	(2,707,942	)	$	4,364,541

Annuitization activity:
Annuitizations	$	6,757		$	22,252		$	-		$	21,897		$	-		$	-		$	-		$	-		$	-		$	-
Annuity payments and contract charges		(3,057	)		(207	)		(147	)		(202	)		-			-			-			-			-			-
Annuity transfers		-			-			-			-			-			-			-			-			-			-
Net transfers between Sub-Accounts		-			-			-			-			-			-			-			-			-			-
Adjustments to annuity reserve		3,150			(2,613	)		2,332			(2,332	)		-			-			-			-			-			-
Net annuitization activity	$	6,850		$	19,432		$	2,185		$	19,363		$	-		$	-		$	-		$	-		$	-		$	-
Increase (Decrease) in net assets from participant transactions	$	29,211,627		$	14,675,249		$	785,707		$	2,464,288		$	(863,721	)	$	2,090,187		$	(150,401	)	$	465,145		$	(2,707,942	)	$	4,364,541

Increase (Decrease) in net assets	$	23,492,798		$	15,804,747		$	107,390		$	2,352,722		$	(1,980,902	)	$	1,980,902		$	(419,467	)	$	419,467		$	(4,363,323	)	$	4,363,323

Net assets:
Beginning of year	$	19,339,906		$	3,535,159		$	2,472,871		$	120,149		$	1,980,902		$	-		$	419,467		$	-		$	4,363,323		$	-
End of year	$	42,832,704		$	19,339,906		$	2,580,261		$	2,472,871		$	-		$	1,980,902		$	-		$	419,467		$	-		$	4,363,323

Units Transactions:
Beginning of year		1,560,208			292,014			237,971			10,689			279,791			-			76,141			-			430,414			-
Purchase		622,579			420,567			45,211			129,684			79,839			130,168			31,995			52,245			137,679			177,368
Transferred between Sub-Accounts and Fixed Accumulation Account		2,499,310			938,148			60,078			103,756			(350,776	)		153,710			(104,774	)		24,731			(538,768	)		260,105
Withdrawn, surrendered and annuitized		(212,885	)		(90,521	)		(18,928	)		(6,158	)		(8,854	)		(4,087	)		(3,362	)		(835	)		(29,325	)		(7,059	)
End of year		4,469,212			1,560,208			324,332			237,971			-			279,791			-			76,141			-			430,414

(a) For the period May 1, 2001 (commencement of operations) through December 31, 2001.

See notes to financial statements

- 31 -

Statements of Changes in Net Assets - continued

	SCG Sub-Account						SCH Sub-Account						SCI Sub-Account						SCJ Sub-Account						SCK Sub-Account				SCL Sub-Account					SCM Sub-Account
	Year Ended December 31, 2002			Period Ended December 31, 2001 (a)			Year Ended December 31, 2002			Period Ended December 31, 2001 (a)			Period Ended December 31, 2002			Period Ended December 31, 2001 (a)				Period Ended December 31, 2002 (c)				Period Ended December 31, 2002 (c)						Year Ended December 31, 2002(c)					Period Ended December 31, 2002 (e)
Operations:
Net investment income (loss)	$	(26,217	)	$	(5,864	)	$	(44,281	)	$	(208	)	$	(42,025	)	$	(12,157	)			$	(30,078	)			$	(16,793	)			$	(9,088	)			$	(228	)
Net realized gains (losses)		(306,876	)		(304,826	)		(93,940	)		(4,309	)		(566,365	)		(30,173	)				(445,030	)				(347,530	)				(116,851	)				(981	)
Net unrealized gains (losses)		(13,899	)		13,895			(409,925	)		57,560			(518,621	)		(119,683	)				(419,656	)				(246,575	)				(2,739	)				4,217
Increase (Decrease) in net assets from operations	$	(346,992	)	$	(296,795	)	$	(548,146	)	$	53,043		$	(1,127,011	)	$	(162,013	)			$	(894,764	)			$	(610,898	)			$	(128,678	)			$	3,008

Participant transactions:
Accumulation activity:
Purchase payments received	$	384,177		$	405,199		$	1,132,838		$	782,239		$	1,275,853		$	937,098				$	1,388,049				$	1,467,945				$	427,351				$	12,447
Net transfers between Sub-Accounts and Fixed Account		(734,471	)		715,816			3,037,414			690,792			385,892			1,716,568					5,374,277					3,720,135					1,934,020					121,138
Withdrawals, surrenders, annuitizations and contract charges		(75,829	)		(50,950	)		(294,783	)		(9,444	)		(145,566	)		(62,355	)				(186,344	)				(153,106	)				(71,480	)				(350	)
Net accumulation activity	$	(426,123	)	$	1,070,065		$	3,875,469		$	1,463,587		$	1,516,179		$	2,591,311				$	6,575,982				$	5,034,974				$	2,289,891				$	133,235

Annuitization activity:
Annuitizations	$	-		$	-		$	192		$	-		$	-		$	-				$	-				$	-				$	-				$	-
Annuity payments and contract charges		(155	)		-			(2,251	)		-			(134	)		-					-					-					-					-
Annuity transfers		-			-			-			-			-			-					-					-					-					-
Net transfers between Sub-Accounts		-			-			-			-			-			-					-					-					-					-
Adjustments to annuity reserve		-			-			808			-			-			-					-					-					-					-
Net annuitization activity	$	(155	)	$	-		$	(1,251	)	$	-		$	(134	)	$	-				$	-				$	-				$	-				$	-
Increase (Decrease) in net assets from participant transactions	$	(426,278	)	$	1,070,065		$	3,874,218		$	1,463,587		$	1,516,045		$	2,591,311				$	6,575,982				$	5,034,974				$	2,289,891				$	133,235

Increase (Decrease) in net assets	$	(773,270	)	$	773,270		$	3,326,072		$	1,516,630		$	389,034		$	2,429,298				$	5,681,218				$	4,424,076				$	2,161,213				$	136,243

Net assets:
Beginning of year	$	773,270		$	-		$	1,516,630		$	-		$	2,429,298		$	-				$	-				$	-				$	-				$	-
End of year	$	-		$	773,270		$	4,842,702		$	1,516,630		$	2,818,332		$	2,429,298				$	5,681,218				$	4,424,076				$	2,161,213				$	136,243

Units Transactions:
Beginning of year		90,980			-			154,774			-			280,389			-					-					-					-					-
Purchase		43,592			47,928			117,198			82,615			162,212			109,046					136,250					141,807					40,533					1,425
Transferred between Sub-Accounts and Fixed Accumulation Account		(125,362	)		49,305			311,262			73,169			39,934			178,557					647,050					445,240					251,227					16,854
Withdrawn, surrendered and annuitized		(9,210	)		(6,253	)		(32,398	)		(1,010	)		(21,475	)		(7,214	)				(22,745	)				(18,656	)				(9,701	)				(48	)
End of year		-			90,980			550,836			154,774			461,060			280,389					760,555					568,391					282,059					18,231

(a) For the period May 1, 2001 (commencement of operations) through December 31, 2001.

(e) For the period April 29, 2002 (commencement of operations) through December 31, 2002.

See notes to financial statements

- 32 -

Futurity, Futurity II, Futurity Focus, Futurity Accolade, Futurity Focus II, Futurity III, Futurity

Select Four, Futurity Select Four Plus, Futurity Select Seven, Futurity Select Freedom and Futurity

Select Incentive Sub-Accounts Included in Sun Life of Canada (U.S.) Variable Account F

Notes to Financial Statements

(1) Organization

Sun Life of Canada (U.S.) Variable Account F (the ''Variable Account'') is a separate account of Sun Life of Assurance Company of Canada (U.S.), (the ''Sponsor''), and was established on July 13, 1989 as a funding vehicle for the variable portion of Futurity contracts, Futurity II contracts, Futurity Focus contracts, Futurity Accolade contracts, Futurity Focus II contracts, Futurity III contracts and Futurity Select Four contracts, Futurity Select Four Plus contracts, Futurity Select Seven contracts, Futurity Select Freedom contracts and Futurity Select Incentive contracts (collectively, the ''Contracts'') and certain other group and individual 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 Delaware 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 Act of 1940. With respect to the Futurity contracts, the Funds are: AIM Variable Insurance Fund, Inc., the Alger American Fund, Credit Suisse Institutional Fund, Inc., Goldman Sachs Variable Insurance Trust, J.P. Morgan Series Trust II, Lord Abbett Series Fund, Inc., MFS/Sun Life Series Trust, OCC Accumulation Trust and Salomon Brothers Variable Series Funds, Inc. With respects to the Futurity II contracts, the Funds are: AIM Variable Insurance Fund, Inc., Arnhold and S. Bleichroader Advisers, Inc., the Alger American Fund, Alliance Variable Products Series Fund, Inc., Credit Suisse Institutional Fund, Inc., Fidelity Variable Insurance Products Funds, First Eagle Variable Fund, Goldman Sachs Variable Insurance Trust, INVESCO Variable Investment Funds, Inc., J.P. Morgan Series Trust II, Lord Abbett Series Fund, Inc., MFS/Sun Life Series Trust, OCC Accumulation Trust, PIMCO Variable Insurance Trust, Rydex Variable Trust, Sun Capital Advisers Trust and the Templeton Securities Fund. With respect to the Futurity Focus contracts, the Funds are: AIM Variable Insurance Fund, Inc., the Alger American Fund, Credit Suisse Institutional Fund, Inc., Goldman Sachs Variable Insurance Trust, J.P. Morgan Series Trust II, Lord Abbett Series Fund, Inc., MFS/ Sun Life Series Trust, OCC Accumulation Trust, PIMCO Variable Insurance Trust, Sun Capital Advisers Trust and the Franklin Templeton Variable Insurance Products Trust. With respect to the Futurity Accolade contracts, the Funds are: AIM Variable Insurance Fund, Inc., the Alger American Fund, Alliance Variable Products Series Fund, Inc., Fidelity Variable Insurance Products Funds, First Eagle Variable Fund, Goldman Sachs Variable Insurance Trust, INVESCO Variable Investment Funds, Inc. J.P. Morgan Series Trust II, Lord Abbett Series Fund, Inc., MFS/Sun Life Series Trust, OCC Accumulation Trust, PIMCO Variable Insurance Trust, Rydex Variable Trust, Sun Capital Advisers Trust and the Franklin Templeton Variable Insurance Products Trust. With respects to the Futurity Focus II contracts, Futurity III contracts and Futurity Select Four contracts, the Funds are: AIM Variable Insurance Fund, Inc., the Alger American Fund, Alliance Variable Products Series Fund, Inc., Fidelity Variable Insurance Products Funds, First Eagle Variable Fund, Goldman Sachs Variable Insurance Trust, INVESCO Variable Investment Funds, Inc. J.P. Morgan Series Trust II, Lord Abbett Series Fund, Inc., MFS/Sun Life Series Trust, PIMCO Variable Insurance Trust, Rydex Variable Trust, Sun Capital Advisers Trust and the Franklin Templeton Variable Insurance Products Trust. With respects to the Futurity Select Four Plus contracts, Futurity Select Seven contracts, Futurity Select Freedom contracts and Futurity Select Incentive contracts, the Funds are: AIM Variable Insurance Fund, Inc., Alliance Variable Products Series Fund, Inc., Fidelity Variable Insurance Products Funds, First Eagle Variable Fund, Goldman Sachs Variable Insurance Trust, INVESCO Variable Investment Funds, Inc., Lord Abbett Series Fund, Inc., MFS/Sun Life Series Trust, PIMCO Variable Insurance Trust, Rydex Variable Trust, Sun Capital Advisers Trust and the Franklin Templeton Variable Insurance Products Trust.

- 33 -

Notes to Financial Statements - continued

(2) Significant Accounting Policies
General

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 participants are recorded in the new Sub-Account upon receipt of the redemption proceeds.

Federal Income Tax Status

(3) Contract Charges and Related Party Transactions

A mortality and expense risk charge based on the value of the Sub-Accounts included in the Variable Account is deducted from the Variable Account at the end of each valuation period for the mortality and expense risks assumed by the Sponsor. The 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		Level 6
Futurity contracts	1.25%		-		-		-		-		-
Futurity II contracts	1.25%	-		-		-		-		-
Futurity Focus contracts	1.00%	-		-		-		-		-
Futurity Accolade contracts	1.30%	1.45%		1.55%		1.70%		-		-
Futurity Focus II contracts	1.00%	1.15%		1.25%		1.40%		1.50%		1.65%
Futurity III contracts	0.85%	1.00%		1.10%		1.15%		1.25%		1.40%
Futurity Select Four contracts	0.95%	1.10%		1.20%		1.35%		1.45%		1.60%
Futurity Select Four Plus contracts	1.30%	1.50%		1.55%		1.70%		1.75%		1.90%
Futurity Select Seven contracts	1.05%	1.25%		1.30%		1.45%		1.50%		1.65%
Futurity Select Freedom contracts	1.35%	1.55%		1.60%		1.75%		1.80%		1.95%
Futurity Select Incentive contracts	1.40%	1.60%		1.65%		1.80%		1.85%		2.00%

- 34 -

Notes to Financial Statements - continued

(3) Contract Charges and Related Party Transactions - continued

Each year on the account anniversary, an account administration fee (''Account Fee'') equal to the lesser of $30 in the case of Futurity contracts, $35 in the case of Futurity II contracts, Futurity Accolade contracts and Futurity III contracts and $50 in the case of Futurity Focus contracts, Futurity Focus II contracts, Futurity Select Four contracts, Futurity Select Four Plus contracts, Futurity Select Seven contracts, Futurity Select Freedom contracts and Futurity Select Incentive contracts or 2% of the participant's account value in Account Years one through five (thereafter, the Account Fee may be changed annually, but it may not exceed the lesser of $50 or 2% of the participant's account value) is deducted from the participant's account to reimburse the Sponsor for certain administrative expenses. After the annuity commencement date, the Account Fee will be deducted pro rata from each variable annuity payment made during the year. As reimbursement for administrative expenses attributable to contracts which exceed the revenues received from the Account Fees, the Sponsor makes a deduction from the Variable Account at the end of each valuation period at an effective annual rate of 0.15% of the net assets attributable to such Contracts.

For assuming the risk that withdrawal charges may be insufficient to compensate it for the costs of distributing the contracts, the Sponsor makes a deduction from the Variable Account at the end of each valuation period at an effective annual rate of 0.15% of the net assets attributable to Futurity Select Seven and Futurity Select Incentive and an effective annual rate of 0.20% of the net assets attributable to Futurity Select Four Plus and Futurity Select Freedom contracts.

Massachusetts Financial Services Company is the investment adviser to the MFS/Sun Life Series Trust. Sun Capital Advisers Inc. 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 1.82% and .65% to 1.25% of the Fund's net assets, respectively.

The Sponsor does not deduct a sales charge from purchase payments. However, a withdrawal charge (contingent deferred sales charge) of up to 6% of certain amounts withdrawn when applicable, may be deducted to cover certain expenses relating to the sale of Futurity Select Four and Futurity II contracts; 7% for Futurity III contracts and 8% for Futurity, Futurity Focus, Futurity Accolade, Futurity Select Four Plus, Futurity Select Seven and Futurity Select Incentive contracts, including commissions paid to sales personnel, the costs of preparation of sales literature, and other promotional costs and acquisition expenses.

For the year ended December 31, 2002, the Sponsor received the following amount related to the above mentioned contract and surrender charges. These charges are reflected in the Withdrawals, surrenders and annuitizations line of the Statement of Changes in Net Assets.

	Contract Charges		Surrender Charges
AIM Variable Insurance Fund, Inc.
V.I. Capital Appreciation Fund	$	19,838	$	18,331
V.I. Growth Fund		25,513		22,517
V.I. Growth and Income Fund		22,553		49,127
V.I. International Equity Fund		18,557		24,784
V.I. Value Fund		1,640		2,590
V.I. International Growth Fund Series 2		-		780
Arnhold and S. Bleichroader Advisers, Inc.
First Eagle SoGen Overseas Variable Fund		1,640		13,128
The Alger American Fund
Growth Portfolio		28,354		63,570
Income and Growth Portfolio		18,662		57,273
Small Capitalization Portfolio		7,118		11,322
Alliance Variable Products Series Fund, Inc.
Premier Growth Fund		1,778		2,852
Technology Fund		754		2,586
Growth and Income Fund		5,967		10,823
Worldwide Privatization Fund		225		258
Quasar Fund		196		26
Credit Suisse Institutional
Emerging Markets Portfolio		831		3,185
International Equity Portfolio		668		1,713

- 35 -

Notes to Financial Statements - continued

(3) Contract Charges and Related Party Transactions - continued

Credit Suisse Institutional - continued	Contract Charges		Surrender Charges
Global Post-Venture Capital Portfolio		316		1,103
Small Company Growth Portfolio		1,154		3,278
Fidelity Variable Insurance Products Funds
VIP Contrafund		1,836		9,834
VIP Overseas Fund		4,557		15,347
VIP Growth Fund		8,978		38,396
Franklin Templeton Variable Insurance Products Trust
Foreign Securities Fund Class 2		33		2
Goldman Sachs Variable Insurance Trust
VIT CORE Large Cap Growth Fund		2,541		5,723
VIT CORE Small Cap Equity Fund		2,234		8,622
VIT CORE US Equity Fund		6,682		21,163
VIT Growth and Income Fund		2,607		24,251
VIT International Equity Fund		4,289		15,389
VIT Internet Tollkeeper Fund		-		17
VIT Capital Growth Fund		387		885
INVESCO Variable Investment Funds, Inc.
Dynamics Fund		506		1,557
Small Company Growth Fund		522		627
J.P. Morgan Series Trust II
International Opportunities Portfolio		3,411		6,934
Small Company Portfolio		2,828		7,646
U.S. Disciplined Equity Portfolio		7,019		20,649
Lord Abbett Series Fund, Inc.
Growth and Income Portfolio		35,758		174,525
International Portfolio		223		2,141
Mid Cap Value		14,142		39,046
MFS/Sun Life Series Trust
Capital Appreciation Series		10,269		42,351
Capital Appreciation S Class		293		407
Emerging Growth Series		26,516		113,380
Emerging Growth S Class		407		540
Government Securities Series		15,163		165,051
Government Securities S Class		3,548		41,446
High Yield Series		14,817		87,751
High Yield S Class		1,219		5,339
Massachusetts Investors Growth Stock Series		19,581		77,582
Massachusetts Investors Growth Stock S Class		1,591		3,852
Massachusetts Investors Trust Series		13,110		56,998
Massachusetts Investors Trust S Class		1,240		2,191
Money Market		2,209		36,919
New Discovery Series		13,504		46,598
New Discovery S Class		1,630		4,970
Total Return Series		15,290		66,723
Total Return S Class		3,507		20,411
Utilities Series		15,723		67,800
Utilities S Class		804		2,536
OCC Accumulation Trust
Equity Portfolio		3,642		22,614
Managed Portfolio		882		35,741
Mid Cap Portfolio		4,072		15,360
Small Cap Portfolio		2,397		15,877

- 36 -

Notes to Financial Statements - continued

(3) Contract Charges and Related Party Transactions - continued

	Contract Charges		Surrender Charges
PIMCO Variable Insurance Trust
High Yield Portfolio		1,480		2,227
Emerging Markets Bond Portfolio		1,421		7,506
Real Return Portfolio		32		2
Total Return Portfolio		1,240		371
Rydex Variable Trust
Nova Fund		251		1,080
OTC Fund		338		3,919
Salomon Brothers Variable Series Funds, Inc.
Capital Fund		337		1,003
Investors Fund		114		-
Strategic Bond Fund		840		13,422
Total Return Fund		1,243		15,295
Sun Capital Advisers Trust
Sun Capital Money Market Fund		25,125		735,975
Sun Capital Investment Grade Bond Fund		16,363		133,974
Sun Capital Real Estate Fund		12,978		78,496
SC Select Equity Fund		3,021		7,087
SC Blue Chip Mid Cap Fund		20,134		98,374
SC Investors Foundation Fund		1,324		2,193
SC Davis Venture Value Fund		9,300		38,680
SC Davis Financial Fund		2,570		14,704
SC Value Equity Fund		1,757		9,974
SC Value Mid Cap Fund		4,781		31,054
SC Value Small Cap Fund		12,115		43,926
SC Value Managed Fund		624		3,457
SC INVESCO Technology Fund		616		197
SC INVESCO Telecommunications Fund		135		375
SC INVESCO Health Sciences Fund		1,785		1,831
SC INVESCO Energy Fund		603		40
SC Neuberger Berman Mid Cap Value Fund		956		3,957
SC Neuberger Berman Mid Cap Growth Fund		772		1,888
SC Alger Growth Fund		846		1,771
SC Alger Income & Growth Fund		540		2,672
SC Alger Small Capitalization Fund		360		2,237
Sun Capital All Cap Fund		0		0

(4) Annuity Reserves

Annuity reserves are calculated using the 1983 Individual Annuitant Mortality Table and an assumed interest rate of 3% per year for Futurity, Futurity II, Futurity Focus and Futurity Accolade products and the 2000 Individual Annuitant Mortality Table and an assumed interest rate of 3% per year for Futurity Focus II, Futurity III, Futurity Select Four, Futurity Select Four Plus, Futurity Select Seven, Futurity Select Freedom and Futurity Select Incentive products. Required adjustments to the reserves are accomplished by transfers to or from the Sponsor.

- 37 -

Notes to Financial Statements - continued

(5) Investment Purchases and Sales

The following table shows the aggregate cost of shares purchased and proceeds from the sales of shares for each Sub-account for the year ended December 31, 2002:

	Purchases		Sales
AIM Variable Insurance Fund, Inc.
V.I. Growth Fund Series 2	$	76,960	$	302
V.I. Core Equity Fund Series 2		107,313		408
V.I. Capital Appreciation Fund		6,820,929		14,511,060
V.I. Growth Fund		25,808,797		13,802,971
V.I. Growth and Income Fund		4,629,634		15,674,256
V.I. International Equity Fund		126,119,683		144,905,872
V.I. Value Fund		4,954,556		1,568,548
V.I. Capital Appreciation Fund Series 2		122,423		441
V.I. International Growth Fund Series 2		355,688		271,995
V.I. Premier Equity Fund Series 2		48,627		27,823
Arnhold and S. Bleichroader Advisers, Inc.
First Eagle SoGen Overseas Variable Fund		42,440,282		1,883,529
The Alger American Fund
Growth Portfolio		5,581,602		19,949,801
Income and Growth Portfolio		4,382,988		14,958,055
Small Capitalization Portfolio		1,068,715		3,371,813
Alliance Variable Products Series Fund, Inc.
Growth and Income Fund		26,865,493		7,268,836
Premier Growth Fund		5,498,027		2,097,735
Quasar Fund		1,288,689		2,184,249
Technology Fund		1,511,969		507,275
Worldwide Privatization Fund		5,112,941		2,898,349
Credit Suisse Institutional
Emerging Markets Portfolio		187,000		388,456
Global Post-Venture Capital Portfolio		21,165		151,786
International Equity Portfolio		90,303		319,709
Small Company Growth Portfolio		748,573		1,824,831
Fidelity Variable Insurance Products Funds
VIP Contrafund		12,491,565		2,400,286
VIP Growth Fund		34,716,587		20,752,839
VIP Overseas Fund		61,799,805		70,217,117
Franklin Templteton Variable Insurance Products Trust
Growth Securities Fund Class 2		25,365		287
Foreign Securities Fund Class 2		592,140		6,688
Goldman Sachs Variable Insurance Trust
VIT Capital Growth Fund		1,946,497		361,502
VIT CORE Large Cap Growth Fund		2,080,527		21,568,380
VIT CORE Small Cap Equity Fund		1,362,181		3,096,752
VIT CORE US Equity Fund		3,748,449		5,529,624
VIT Growth and Income Fund		700,320		2,178,377
VIT International Equity Fund		886,479		2,765,957
VIT Internet Tollkeeper Fund		121,887		384,931
INVESCO Variable Investment Funds, Inc.
Dynamics Fund		2,485,631		974,904
Small Company Growth Fund		1,543,437		564,293
J.P. Morgan Series Trust II
International Opportunities Portfolio		341,725		2,061,450
Small Company Portfolio		632,469		1,552,912
U.S. Disciplined Equity Portfolio		2,065,940		5,473,008
Lord Abbett Series Fund, Inc.
Growth and Income Portfolio		58,609,284		40,781,763
Mid Cap Value		35,646,697		10,230,334
International Portfolio		1,551,770		690,130

-38-

Notes to Financial Statements - continued

(5) Investment Purchases and Sales - continued

Purchases

Sales

MFS/Sun Life Series Trust

Capital Appreciation S Class

6,448,042

5,586,079

Capital Appreciation Series

1,324,738

7,026,405

Emerging Growth S Class

1,465,673

668,315

Emerging Growth Series

5,438,524

17,276,962

Government Securities S Class

38,162,644

8,497,511

Government Securities Series

43,838,501

24,443,952

High Yield S Class

26,427,377

17,102,533

High Yield Series

16,083,584

29,376,126

Massachusetts Investors Growth Stock S Class

7,872,598

1,439,506

Massachusetts Investors Growth Stock Series

6,095,806

15,380,800

Massachusetts Investors Trust S Class

4,157,650

794,066

Massachusetts Investors Trust Series

3,154,177

10,433,000

Money Market Series

5,955,755

7,115,306

New Discovery S Class

18,207,922

1,041,310

New Discovery Series

17,831,634

9,712,793

Total Return S Class

30,263,386

5,167,256

Total Return Series

22,074,985

15,202,399

Utilities S Class

3,679,179

1,623,170

Utilities Series

3,349,179

15,029,426

OCC Accumulation Trust

Equity Portfolio

311,322

3,651,991

Managed Portfolio

133,282

1,061,329

Mid Cap Portfolio

1,422,008

5,937,095

Small Cap Portfolio

3,043,311

4,318,204

PIMCO Variable Insurance Trust

High Yield Portfolio

28,815,120

766,345

Emerging Markets Bond Portfolio

29,753,384

1,329,279

Real Return Portfolio

1,662,858

41,738

Total Return Portfolio

42,839,159

560,519

Rydex Variable Trust

Nova Fund

2,896,088

1,878,436

OTC Fund

2,090,187

1,995,848

Salomon Brothers Variable Series Funds, Inc.

Capital Fund

275,150

364,382

Investors Fund

36,066

60,013

Strategic Bond Fund

1,547,733

1,987,042

Total Return Fund

411,297

1,387,453

Sun Capital Advisers Trust

Sun Capital Money Market Fund

322,135,175

294,346,816

Sun Capital Investment Grade Bond Fund

77,277,722

92,589,889

Sun Capital Real Estate Fund

36,633,836

9,492,598

SC Select Equity Fund

2,511,967

2,423,130

SC Blue Chip Mid Cap Fund

21,689,308

13,409,576

SC Investors Foundation Fund

1,996,774

823,349

SC Davis Venture Value Fund

12,610,536

6,784,790

SC Davis Financial Fund

4,039,172

4,223,780

SC Value Equity Fund

2,356,224

2,070,304

SC Value Mid Cap Fund

9,181,305

7,737,961

SC Value Small Cap Fund

39,403,545

9,952,153

SC Value Managed Fund

2,046,508

1,276,409

SC INVESCO Technology Fund

1,247,854

2,134,996

SC INVESCO Telecommunications Fund

325,997

481,906

SC INVESCO Health Sciences Fund

4,539,055

7,323,720

SC INVESCO Energy Fund

3,647,007

4,099,502

SC Neuberger Berman Mid Cap Value Fund

5,461,865

1,632,736

SC Neuberger Berman Mid Cap Growth Fund

3,226,600

1,752,580

SC Alger Growth Fund

10,041,401

3,495,497

SC Alger Income & Growth Fund

7,692,282

2,674,101

SC Alger Small Capitalization Fund

3,273,238

992,435

Sun Capital All Cap Fund

142,424

9,417

- 39 -

Select Incentive Sub-Accounts Included in Sun Life of Canada (U.S.) Variable Account F

Notes to Financial Statements - continued

(6) Financial Highlights

The summary of unit values and units outstanding for variable annuity contracts and the expense ratios, excluding expenses of the underlying funds, the investment income ratio and total return for the year ended December 31, 2002, follows.

At December 31

For year ended December 31

Unit Fair Value

Net

Investment

Expense Ratio

Total Return

Units

lowest to highest

Assets

Income Ratio*

lowest to highest**

lowest to highest***

AG2
	December 31, 2002	9,933	$ 7.0343	to	$ 10.5140	$	72,925		- %			1.35%		to		2.15%		(29.66)%		to		5.14
AG3
	December 31, 2002 (c)	11,314	8.1995	to	10.4956		103,888		0.91			1.35		to		2.05		(18.00)		to		4.96
AI1
	December 31, 2002	4,517,822	4.2491	to	7.9843		26,516,524		-			1.00		to		1.85		(25.76)		to		(25.22)
	December 31, 2001	5,563,655	6.1966	to	11.5712		44,487,725		-			1.15		to		1.85		(24.71)		to		(24.16)
AI2
	December 31, 2002	8,105,745	3.0701	to	5.8045		34,096,185		-			1.00		to		1.85		(32.50)		to		(31.66)
	December 31, 2001	5,978,099	5.1794	to	9.7277		37,503,852		0.20			1.00		to		1.85		(35.12)		to		(34.55)
AI3
	December 31, 2002	5,737,435	4.9221	to	7.9835		36,108,743		0.29			1.00		to		1.85		(17.15)		to		(16.43)
	December 31, 2001	7,175,804	6.3069	to	10.4760		55,463,593		0.05			1.00		to		1.85		(24.27)		to		(23.61)
AI4
	December 31, 2002	4,224,313	4.8618	to	7.6535		25,474,957		0.36			1.00		to		1.85		(17.24)		to		(16.52)
	December 31, 2001	7,454,026	6.5504	to	10.2443		54,183,196		0.35			1.00		to		1.85		(24.96)		to		(24.30)
AI5
	December 31, 2002	824,629	6.0388	to	6.111		5,011,133		0.40			1.15		to		1.85		(31.55)		to		(31.06)
	December 31, 2001 (a)	407,446	7.9492	to	8.9475		3,603,548		0.29			1.15		to		1.85		(11.78)		to		(11.35)
AI7
	December 31, 2002 (c)	14,094	7.4505	to	10.5504		117,551		-			1.1		to		1.90		(25.49)		to		5.50
AI8
	December 31, 2002 (c)	4,093	8.1645	to	9.6921		34,395		0.31			1.35		to		2.15		(18.36)		to		(3.08)
AI9
	December 31, 2002 (c)	2,289	7.0926	to	10.423		18,018		1.52			1.35		to		2.05		(29.07)		to		4.23
SGI
	December 31, 2002 (d)	3,996,990	10.8885	to	11.1493		44,526,797		1.47			1.00		to		2.25		8.88		to		11.49
AL1
	December 31, 2002	8,205,394	4.407	to	8.0565		45,485,920		0.04			1.00		to		1.85		(34.20)		to		(33.66)
	December 31, 2001	10,169,607	7.0163	to	12.8134		87,365,194		0.24			1.00		to		1.85		(13.46)		to		(12.70)
AL2
	December 31, 2002	4,500,052	5.0475	to	9.2993		30,858,383		0.67			1.00		to		1.85		(32.38)		to		(31.79)
	December 31, 2001	5,785,259	7.8053	to	14.2870		59,309,865		0.38			1.00		to		1.85		(15.92)		to		(15.18)
AL3
	December 31, 2002	1,566,452	3.4879	to	5.8292		7,351,571		-			1.00		to		1.85		(28.52)		to		(27.06)
	December 31, 2001	1,962,751	5.2129	to	8.8215		12,963,425		0.06			1.15		to		1.85		(30.83)		to		(30.32)
AN1
	December 31, 2002	1,052,237	5.7871	to	10.3646		6,201,326		-			1.15		to		2.25		(32.12)		to		3.65
	December 31, 2001 (a)	601,780	7.653	to	8.7181		5,144,499		-			1.15		to		1.85		(14.74)		to		(14.33)
AN2
	December 31, 2002	304,747	4.5958	to	10.525		1,440,238		-			1.15		to		2.05		(42.89)		to		5.25
	December 31, 2001 (a)	157,358	6.9178	to	8.2622		1,269,256		-			1.15		to		1.85		(19.53)		to		(19.15)
AN3
	December 31, 2002	3,865,669	7.0422	to	10.5259		27,536,338		0.58			1.00		to		2.05		(28.86)		to		5.26
	December 31, 2001 (a)	1,689,129	8.4391	to	9.3829		15,672,268		0.05			1.15		to		1.85		(7.70)		to		(7.26)
AN4
	December 31, 2002	287,342	8.0044	to	10.2672		2,363,754		2.18			1.15		to		2.05		(10.75)		to		2.67
	December 31, 2001 (a)	37,676	6.7392	to	9.2621		321,781		0.01			1.15		to		1.85		(14.82)		to		(14.41)
AN5
	December 31, 2002	75,132	6.251	to	10.4054			483,853		-	1.15		to		1.85		(33.32)		to		4.05
	December 31, 2001 (a)	207,369	7.363	to	9.3784			1,950,541		-	1.15		to		1.85		(6.25)		to		(5.80)
CS1
	December 31, 2002	107,756	6.9038	to	9.839			975,201		0.18	1.00		to		1.40		(12.80)		to		(12.57)
	December 31, 2001	124,190	8.3385	to	11.8873			1,308,142		-	1.15		to		1.85		(10.92)		to		(10.68)
CS2
	December 31, 2002	76,619	6.0714	to	6.9377			508,636		-	1.00		to		1.40		(21.03)		to		(20.82)
	December 31, 2001	104,918	8.3953	to	9.5960			883,610		-	1.15		to		1.85		(29.64)		to		(29.45)
CS3
	December 31, 2002	43,870	5.4371	to	6.6239			280,672		-	1.00		to		1.40		(35.08)		to		(34.91)
	December 31, 2001	58,715	9.3337	to	11.3746			576,848		-	1.15		to		1.40		(23.27)		to		(23.16)
CS4
	December 31, 2002	139,231	6.4522	to	8.0857			1,045,016		-	1.00		to		1.40		(34.62)		to		(34.45)
	December 31, 2001	252,504	9.7884	to	12.2702			2,952,097		-	1.15		to		1.85		(17.19)		to		(16.97)
FL1
	December 31, 2002	1,422,859	8.3687	to	10.3067			12,043,799		0.37	1.15		to		2.25		(13.61)		to		3.07
	December 31, 2001 (a)	301,559	8.2113	to	9.5741			2,851,982		-	1.15		to		1.85		(5.68)		to		(5.23)

- 40 -

Notes to Financial Statements - continued

(6) Financial Highlights - continued

At December 31

For year ended December 31

Unit Fair Value

Net

Investment

Expense Ratio

Total Return

Units

lowest to highest

Assets

Income Ratio*

Lowest to highest**

lowest to highest***

FL2
	December 31, 2002	923,348	6.2595	to	9.8147	5,872,825	0.73	1.15	to	2.25	(22.98)	to	(1.85)
	December 31, 2001 (a)	2,991,637	7.4421	to	8.5233	24,051,764	-	1.15	to	1.85	(19.82)	to	(19.44)
FL3
	December 31, 2002	5,065,258	5.9183	to	10.4634	30,420,886	0.12	1.15	to	2.25	(32.04)	to	4.63
	December 31, 2001 (a)	3,773,079	7.7787	to	8.8778	32,730,723	-	1.15	to	1.85	(13.49)	to	(13.08)
FTG
	December 31, 2002 (d)	2,357	10.0133	to	10.5995	24,668	-	1.00	to	2.30	0.13	to	5.99
FTI
	December 31, 2002 (d)	54,719	10.4408	to	10.4595	572,025	-	1.00	to	2.30	4.41	to	4.59
GS1
	December 31, 2002	-				-	-	1.00	to	1.85
	December 31, 2001	2,906,746	5.5990	to	9.3984	21,570,379	0.03	1.15	to	1.85	(22.24)	to	(21.67)
GS2
	December 31, 2002	505,836	7.9514	to	11.0207	4,909,310	0.23	1.00	to	1.85	(17.12)	to	(15.93)
	December 31, 2001	668,766	9.0737	to	12.4635	7,691,027	0.31	1.15	to	1.85	2.58	to	3.33
GS3
	December 31, 2002	1,993,373	5.7633	to	10.6802	14,150,917	0.55	1.00	to	2.05	(23.34)	to	6.80
	December 31, 2001	2,154,860	7.7804	to	11.1917	20,333,064	0.44	1.15	to	1.85	(13.58)	to	(12.95)
GS4
	December 31, 2002	703,658	7.0501	to	8.2167	5,375,072	1.34	1.00	to	1.85	(12.98)	to	(12.35)
	December 31, 2001	887,554	8.2218	to	9.6366	7,760,248	0.45	1.15	to	1.85	(11.03)	to	(10.37)
GS5
	December 31, 2002	1,048,203	5.2595	to	7.2798	6,737,841	0.98	1.00	to	1.85	(19.85)	to	(19.27)
	December 31, 2001	1,311,340	7.2538	to	9.9775	10,458,720	1.45	1.15	to	1.85	(23.71)	to	(23.15)
GS6
	December 31, 2002	-				-	-	1.15	to	1.85
	December 31, 2001 (a)	46,526	6.545	to	7.6518	335,126	-	1.15	to	1.85	(28.17)	to	(27.82)
GS7
	December 31, 2002	294,424	6.5275	to	10.6221	1,951,108	0.27	1.15	to	2.05	(26.45)	to	6.22
	December 31, 2001 (a)	90,647	8.5073	to	9.0546	798,856	0.23	1.15	to	1.85	(12.08)	to	(11.69)
IV1
	December 31, 2002	393,726	5.3748	to	10.9025	2,135,358	-	1.15	to	2.05	(34.08)	to	9.02
	December 31, 2001 (a)	170,065	7.2534	to	8.3429	1,371,474	-	1.15	to	1.85	(19.59)	to	(19.20)
IV2
	December 31, 2002	227,469	5.9564	to	10.6445	1,374,325	-	1.15	to	2.05	(32.39)	to	6.45
	December 31, 2001 (a)	105,665	7.4813	to	8.7461	933,440	-	1.15	to	1.85	(11.90)	to	(11.48)
JP1
	December 31, 2002	1,646,234	5.4944	to	7.1758	11,099,926	0.05	1.00	to	1.85	(26.02)	to	(25.48)
	December 31, 2001	2,063,692	7.7128	to	10.1168	18,832,702	0.48	1.15	to	1.85	(13.55)	to	(12.92)
JP2
	December 31, 2002	691,691	5.4639	to	7.5437	4,472,500	0.49	1.00	to	1.85	(19.82)	to	(19.24)
	December 31, 2001	915,732	7.2397	to	10.0974	7,427,975	0.95	1.15	to	1.85	(20.65)	to	(20.07)
JP3
	December 31, 2002	565,247	5.93	to	9.4647	4,418,747	0.21	1.00	to	1.85	(23.10)	to	(22.54)
	December 31, 2001	664,931	7.6661	to	12.2520	6,757,718	0.04	1.15	to	1.85	(9.74)	to	(9.08)
LA1
	December 31, 2002	12,899,028	7.773	to	10.7219	116,450,425	0.51	1.00	to	2.25	(22.27)	to	7.22
	December 31, 2001 (a)	11,399,173	9.8977	to	12.8855	130,365,761	0.85	1.00	to	1.85	(8.45)	to	(7.66)
LA2
	December 31, 2002	4,868,436	8.3835	to	10.6794	44,797,324	0.69	1.00	to	2.25	(16.17)	to	6.79
	December 31, 2001 (a)	2,281,117	8.9499	to	9.9510	23,695,759	0.84	1.15	to	1.85	3.44	to	3.90
LA3
	December 31, 2002	158,181	6.341	to	8.2983	1,021,388	1.23	1.00	to	1.85	(19.23)	to	(17.02)
	December 31, 2001	42,292	7.0106	to	8.9279	332,937	0.29	1.15	to	1.85	(21.47)	to	(21.12)
CAS
	December 31, 2002	2,385,864	3.7729	to	6.3834	12,330,965	0.18	1.00	to	1.85	(33.64)	to	(33.06)
	December 31, 2001	3,296,185	6.1469	to	10.5012	25,983,854	0.36	1.00	to	1.85	(26.71)	to	(26.07)
EGS
	December 31, 2002	4,741,685	3.215	to	7.0556	23,694,820	-	1.00	to	1.85	(35.40)	to	(34.92)
	December 31, 2001	6,733,222	5.6007	to	12.2101	52,492,438	-	1.15	to	1.85	(35.80)	to	(35.33)
GSS
	December 31, 2002	6,101,434	11.8031	to	12.9882	75,660,507	4.17	1.00	to	1.85	7.77	to	8.70
	December 31, 2001	4,640,049	10.7500	to	11.6010	53,198,300	5.16	1.10	to	1.85	5.45	to	6.37
HYS
	December 31, 2002	2,506,679	9.2399	to	9.9067	24,127,067	11.38	1.00	to	1.85	0.85	to	1.53
	December 31, 2001	4,366,787	9.3145	to	9.8965	41,407,521	8.60	1.15	to	1.85	(0.14)	to	0.59
M1A
	December 31, 2002	2,563,610	6.6708	to	10.2978	17,299,280	-	1.00	to	2.25	(34.89)	to	2.98
	December 31, 2001 (b)	234,663	8.0788	to	9.9670	2,417,131	-	1.15	to	1.85	2.86	to	3.12

- 41 -

Notes to Financial Statements - continued

(6) Financial Highlights - continued

At December 31

For year ended December 31

Unit Fair Value

Net

Investment

Expense Ratio

Total Return

Units

lowest to highest

Assets

Income Ratio*

Lowest to highest**

lowest to highest***

M1B
	December 31, 2002	1,096,685	6.8823	to	10.2544	7,605,453		0.12		1.00		to		2.05			(30.61)		to		2.54
	December 31, 2001 (b)	352,547	8.0479	to	9.8053	3,443,901		-		1.15		to		1.85			(2.45)		to		(2.21)
MFC
	December 31, 2002	1,187,722	9.9081	to	10.6129	11,857,623		9.95		1.15		to		2.25			(0.24)		to		6.13
	December 31, 2001 (b)	375,235	8.4040	to	9.8255	3,706,867		-		1.15		to		1.85			(1.34)		to		(1.09)
MFD
	December 31, 2002	175,129	6.4212	to	7.0533	1,134,232		0.16		1.15		to		2.05			(35.57)		to		(29.47)
	December 31, 2001 (b)	75,869	7.6216	to	9.8565	737,135		-		1.15		to		1.85			(2.96)		to		(2.75)
MFE
	December 31, 2002	510,083	6.6338	to	11.0756	3,420,665		4.08		1.15		to		2.25			(33.11)		to		10.76
	December 31, 2001 (b)	282,084	7.5521	to	9.2085	2,517,114		-		1.15		to		1.85			(10.89)		to		(10.67)
MFF
	December 31, 2002	196,254	6.2456	to	10.4752	1,243,360		-		1.15		to		2.15			(37.03)		to		4.75
	December 31, 2001 (b)	100,216	7.8897	to	9.2854	973,048		-		1.15		to		1.85			(3.06)		to		(2.83)
MFJ
	December 31, 2002	3,318,943	8.9888	to	10.5296	30,878,557		2.83		1.00		to		2.10			(10.11)		to		5.30
	December 31, 2001 (b)	869,203	8.1437	to	9.7889	8,657,514		-		1.15		to		1.85			(0.53)		to		(0.29)
MFK
	December 31, 2002	3,416,760	10.2177	to	10.9818		37,239,740		3.48		1.00		to		2.25	2.18		to		8.42
	December 31, 2001 (b)	628,219	8.4902	to	10.2440		6,351,596		-		1.15		to		1.85	0.99		to		1.24
MFL
	December 31, 2002	656,869	7.4454	to	10.4542		4,924,354		0.97		1.15		to		2.05	(23.48)		to		4.54
	December 31, 2001 (b)	276,474	7.8888	to	9.6608		2,671,470		-		1.15		to		1.85	(3.49)		to		(3.26)
MIS
	December 31, 2002	5,812,738	4.4535	to	6.3607		31,031,630		0.15		1.00		to		1.85	(29.39)		to		(28.78)
	December 31, 2001	7,310,990	6.8988	to	9.7996		55,294,423		0.11		1.10		to		1.85	(26.29)		to		(25.65)
MIT
	December 31, 2002	3,718,258	6.1229	to	7.2574		24,563,903		1.07		1.00		to		1.85	(22.69)		to		(22.12)
	December 31, 2001	4,731,430	8.3767	to	9.9278		40,259,945		0.77		1.15		to		1.85	(17.30)		to		(16.70)
MMS
	December 31, 2002	496,876	11.3710				5,650,249		1.27				1.40			(0.12)
	December 31, 2001	598,302	11.2904				6,809,800		3.44				1.25			2.34
NWD
	December 31, 2002	4,545,469	5.2153	to	9.6919		31,691,182		-		1.00		to		1.85	(34.69)		to		(34.13)
	December 31, 2001	3,148,941	7.8672	to	14.4709		34,145,689		-		1.00		to		1.85	(6.88)		to		(6.07)
TRS
	December 31, 2002	4,565,050	9.4901	to	11.0783		47,864,709		3.16		1.00		to		1.85	(7.46)		to		(6.66)
	December 31, 2001	4,188,905	10.2072	to	11.8762		47,271,929		3.01		1.1		to		1.85	(1.36)		to		(0.50)
UTS
	December 31, 2002	3,365,478	5.3699	to	8.0597		23,176,843		3.80		1.00		to		1.85	(25.26)		to		(24.72)
	December 31, 2001	5,070,993	8.4643	to	12.6248		46,649,921		3.77		1.15		to		1.85	(25.72)		to		(25.18)
OP1
	December 31, 2002	687,993	7.8992	to	8.2355		5,675,742		1.01		1.00		to		1.85	(22.87)		to		(22.31)
	December 31, 2001	1,054,691	10.7412	to	11.2525		11,224,190		0.93		1.15		to		1.85	(13.15)		to		(8.08)
OP2
	December 31, 2002	579,459	13.9078	to	15.2044		8,615,606		-		1.00		to		1.85	(8.85)		to		(8.19)
	December 31, 2001	900,726	14.3036	to	15.6418		14,564,433		0.21		1.15		to		1.85	4.58		to		5.34
OP3
	December 31, 2002	330,269	9.383	to	12.6653		3,660,269		0.08		1.00		to		1.85	(23.09)		to		(22.53)
	December 31, 2001	536,606	11.3704	to	15.2911		7,470,840		1.07		1.15		to		1.85	6.32		to		7.09
OP4
	December 31, 2002	206,097	8.6487	to	9.0659		1,860,060		2.18		1.00		to		1.85	(18.42)		to		(17.83)
	December 31, 2001	304,247	10.9367	to	11.5107		3,346,490		2.37		1.15		to		1.85	(6.44)		to		(6.00)
PHY
	December 31, 2002 (d)	2,764,653	10.8107	to	10.9945		29,938,965		10.40		1.00		to		2.30	8.11		to		9.95
PMB
	December 31, 2002 (d)	2,694,865	11.2045	to	11.6365		31,322,058		7.96		1.00		to		2.30	12.04		to		16.37
PRR
	December 31, 2002 (d)	161,628	10.0645	to	10.0894		1,660,281		3.29		1.00		to		2.30	0.64		to		0.89
PTR
	December 31, 2002 (d)	4,171,216	10.1935	to	10.4195		42,621,301		4.28		1.00		to		2.30	1.93		to		4.20
RX1
	December 31, 2002	178,307	5.1947	to	6.3585		937,500		3.43		1.15		to		2.05	(36.92)		to		(36.42)
	December 31, 2001 (a)	25,047	7.5481	to	9.1202		206,738		3.83		1.40		to		1.85	(17.65)		to		(17.34)
RX2
	December 31, 2002	184,922	4.7490	to	11.2833		905,669		-		1.15		to		1.90	(41.43)		to		12.83
	December 31, 2001 (a)	207,526	6.4472	to	8.2307		1,646,368		-		1.40		to		1.85	(20.84)		to		(20.49)

- 42 -

Notes to Financial Statements - continued

(6) Financial Highlights - continued

At December 31

For year ended December 31

Unit Fair Value

Net

Investment

Expense Ratio

Total Return

Units

lowest to highest

Assets

Income Ratio*

lowest to highest**

lowest to highest***

SB1
	December 31, 2002	50,322	11.3073				569,133		0.36				1.40				(25.10)
	December 31, 2001	58,507	15.3706				895,117		1.06				1.40				(0.84)
SB2
	December 31, 2002	44,173	9.1789				405,465		1.10				1.40				(24.11)
	December 31, 2001	46,806	12.4261				566,123		0.77				1.40				(5.48)
SB3
	December 31, 2002	266,350	12.4412				3,343,591		4.55				1.40						7.34
	December 31, 2001	312,493	11.3543				3,651,666		4.01				1.40						5.43
SB4
	December 31, 2002	280,674	9.6453				2,719,538		1.25				1.40				(8.15)
	December 31, 2001	377,628	10.5189				3,979,916		2.50				1.40				(2.18)
SC1
	December 31, 2002	13,525,823	9.9092	to	11.0128		143,088,640		1.11		1.00		to		2.25		(0.91)		to		0.11
	December 31, 2001	10,787,454	10.9209	to	10.6595		115,305,491		3.13		1.00		to		1.85		1.66		to		2.55
SC2
	December 31, 2002	5,494,856	10.3315	to	11.893		64,022,576		5.62		1.00		to		2.25		3.25		to		4.00
	December 31, 2001	7,089,173	10.7052	to	11.2878		79,912,659		6.01		1.15		to		1.85		5.24		to		6.01
SC3
	December 31, 2002	3,241,508	9.5184	to	15.1589		42,368,386		6.02		1.00		to		2.25		(4.82)		to		6.17
	December 31, 2001	1,408,479	11.0724	to	13.8086		18,358,466		5.46		1.15		to		1.85		10.47		to		11.27
SC4
	December 31, 2002	1,023,813	4.7131	to	10.9474		5,839,902		0.15		1.00		to		2.05		(29.21)		to		9.47
	December 31, 2001	994,748	6.7732	to	10.2515		8,230,145		0.24		1.15		to		1.85		(17.81)		to		(17.20)
SC5
	December 31, 2002	5,545,133	7.4927	to	13.0085		51,368,231		-		1.00		to		2.25		(19.65)		to		4.75
	December 31, 2001	4,473,960	8.7568	to	15.1331		51,486,712		-		1.00		to		1.85		(5.06)		to		(4.24)
SC6
	December 31, 2002	557,939	5.8981	to	7.5365		3,586,428		0.49		1.00		to		2.05		(26.23)		to		(24.63)
	December 31, 2001	399,721	8.1455	to	10.3172		3,569,703		0.36		1.15		to		1.85		(9.64)		to		(8.98)
SC7
	December 31, 2002	4,409,222	7.0467	to	10.5355		31,678,763		0.00		1.00		to		2.15		(17.84)		to		5.35
	December 31, 2001	3,692,440	8.5577	to	9.0832		32,120,228		0.53		1.00		to		1.85		(12.27)		to		(11.51)
SC8
	December 31, 2002	734,726	7.5318	to	10.6525		6,094,129		0.15		1.00		to		2.05		(19.97)		to		6.53
	December 31, 2001	771,222	9.4147	to	10.4689		7,997,588		-		1.15		to		1.85		(8.33)		to		(7.66)
SC9
	December 31, 2002	449,981	6.5312	to	10.4313		3,390,869		0.79		1.00		to		2.05		(28.84)		to		4.31
	December 31, 2001	426,871	9.3753	to	11.1956		4,530,621		0.90		1.15		to		1.85		(4.37)		to		(3.68)
SCA
	December 31, 2002	1,323,897	8.8617	to	11.2852		13,108,916		0.06		1.00		to		2.05		(11.38)		to		12.85
	December 31, 2001	1,179,279	9.7186	to	10.2926	12,795,381		0.02		1.15		to		1.85		4.85		to		5.60
SCB
	December 31, 2002	4,469,212	7.2585	to	10.2435	42,832,704		-		1.00		to		2.25		(27.42)		to		1.30
	December 31, 2001	1,560,208	10.1641	to	12.175	19,339,906		0.03		1.15		to		1.85		6.89		to		7.66
SCC
	December 31, 2002	324,332	7.0803	to	9.8556	2,580,261		0.85		1.00		to		2.05		(23.10)		to		(1.44)
	December 31, 2001	237,971	9.3713	to	10.9697	2,472,871		1.12		1.15		to		1.85		(7.81)		to		(7.15)
SCD
	December 31, 2002	-				-		-		1.15		to		1.85
	December 31, 2001 (a)	279,791	5.9838	to	8.0371	1,980,902		-		1.15		to		1.85		(85.25)		to		(29.12)
SCE
	December 31, 2002	-				-		-		1.15		to		1.85
	December 31, 2001 (a)	76,141	5.2615	to	6.6239	419,467		-		1.15		to		1.85		(45.04)		to		(44.78)
SCF
	December 31, 2002	-				-		-		1.15		to		2.05
	December 31, 2001 (a)	430,414	8.7867	to	10.1927	4,363,323		-		1.15		to		1.85		(23.95)		to		1.59
SCG
	December 31, 2002	-				-		-		1.15		to		2.25
	December 31, 2001 (a)	90,980	7.4007	to	8.7894	773,270		0.10		1.15		to		1.85		(15.25)		to		(14.84)
SCH
	December 31, 2002	550,836	8.4919	to	10.3759	4,842,702		0.16		1.15		to		2.25		(15.08)		to		3.76
	December 31, 2001 (a)	154,774	8.1066	to	9.6479	1,516,630		0.63		1.15		to		1.85		(2.28)		to		(1.81)
SCI
	December 31, 2002	461,060	5.9962	to	10.523	2,818,332		-		1.05		to		2.10		(31.29)		to		5.23
	December 31, 2001 (a)	280,389	7.5155	to	9.3302	2,429,298		-		1.15		to		1.85		(13.60)		to		(13.19)
SCJ
	December 31, 2002 (c)	760,555	7.0143	to	10.0953	5,681,218		0.14		1.00		to		2.05		(29.86)		to		0.95

- 43 -

Notes to Financial Statements - continued

(6) Financial Highlights - continued

At December 31

For year ended December 31

Unit Fair Value

Net

Investment

Expense Ratio

Total Return

Units

lowest to highest

Assets

Income Ratio*

lowest to highest**

lowest to highest***

SCK
	December 31, 2002 (c)	568,391	7.2646	to	10.1942	4,424,076	0.48	1.00	to	2.05	(27.35)	to	1.94
SCL
	December 31, 2002 (c)	282,059	7.4789	to	10.6145	2,161,213	-	1.00	to	2.05	(25.21)	to	6.15
SCM
	December 31, 2002 (e)	18,231	7.4631	to	7.4912	136,243	0.75	1.30	to	1.85	(25.37)	to	(25.09)

* Represents the dividends, excluding distributions of capital gains, receive 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.

*** 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.

(a) For the period May 1, 2001 (commencement of operations) through December 31, 2001.

(b) For the period August 27, 2001 (commencement of operations) through December 31, 2001.

(c) For the period May 1, 2002 (commencement of operations) through December 31, 2002. Investment Income Ratio and Expense Ratio have been annualized.

(d) For the period September 30, 2002 (commencement of operations) through December 31, 2002. Investment Income Ratio and Expense Ratio have been annualized.

(e) For the period April 29, 2002 (commencement of operations) through December 31, 2002. Investment Income Ratio and Expense Ratio have been annualized.

</R>

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:
<R>
		1.	Consolidated Statements of Income, Years Ended December 31, 2002, 2001 and 2000;
		2.	Consolidated Balance Sheets, December 31, 2002 and 2002,
		3.	Consolidated Statements of Comprehensive Income, Years Ended December 31, 2002, 2001 and 2000;
		4.	Consolidated Statements of Stockholder's Equity, years Ended December 31, 2002, 2002 and 2000
		5.	Consolidated Statements of Cash Flows, Years Ended December 31, 2002, 2001 and 2000;
		6.	Notes to Consolidated Financial Statements; and
		7.	Independent Auditors' Report

	C.	Financial Statements of the Registrant (Part B)

		1.	Statement of Condition, December 31, 2002;
		2.	Statement of Operations, Year Ended December 31, 2002;
		3.	Statement of Charges in Net Assets, Years Ended December 31, 2002 and December 31, 2001;
</R>		4.	Notes to Financial Statements; and
		5.	Independent Auditors' Report

(b)

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

	(1)	Resolution of Board of Directors of the Depositor dated December 3, 1985 authorizing the establishment of the Registrant (Incorporated by reference to the Registration Statement of the Registrant on Form N-4, File No. 333-37907, filed on October 14, 1997);

	(2)	Not Applicable;

	(3)(a)	Form of Marketing Services Agreement between the depositor, Sun Life of Canada (U.S.) Distributors, Inc., and Clarendon Insurance Agency, Inc. (Incorporated by reference to Pre-Effective Amendment No. 1 to the Registration Statement of the Registrant on Form N-4, File No. 333-37907, filed on January 16, 1998);

	(3)(b)(i)	Specimen Sales Operations and General Agent Agreement (Incorporated by reference to Pre-Effective Amendment No. 1 to the Registration Statement of the Registrant on Form N-4, File No. 333-37907, filed on January 16, 1998);

	(3)(b)(ii)	Specimen Broker-Dealer Supervisory and Service Agreement (Incorporated by reference to Pre-Effective Amendment No. 1 to the Registration Statement of the Registrant on Form N-4, File No. 333-37907, filed on January 16, 1998);

	(3)(b)(iii)	Specimen General Agent Agreement (Incorporated by reference to Pre-Effective Amendment No. 1 to the Registration Statement of the Registrant on Form N-4, File No. 333-37907, filed on January 16, 1998);

	(4)(a)	Form of Flexible Payment Deferred Combination Variable and Fixed Group Annuity Contract (Incorporated by reference to Post-Effective Amendment No. 2 to the Registration Statement of the Registrant on Form N-4, File No. 333-05227, filed on April 10, 1998);

	(4)(b)	Form of Certificate to be issued in connection with the Contract filed as Exhibit 4(a) (Incorporated by reference to Post-Effective Amendment No. 2 to the Registration Statement of the Registrant on Form N-4, File No. 333-05227, filed on April 10, 1998);

	(4)(c)	Form of Flexible Payment Deferred Combination Variable and Fixed Individual Annuity Contract (Incorporated by reference to Post-Effective Amendment No. 2 to the Registration Statement of the Registrant on Form N-4, File No. 333-05227, filed on April 10, 1998);

	(5)(a)	Form of Application to be used with the Certificate filed as Exhibit 4(b) and the Contract filed as Exhibit 4(c) (Incorporated by reference to Post-Effective Amendment No. 2 to the Registration Statement of the Registrant on Form N-4, File No. 333-05227, filed on April 10, 1998);

	(6)	Certificate of Incorporation and By-laws of the Depositor (Incorporated by reference to the Registration Statement of the Registrant on Form N-4, File No. 333-37907, filed on October 14, 1997);

	(7)	Not Applicable;

	(8)(a)	Form of Participation Agreement by and between The Alger American Fund, the Depositor, and Fred Alger and Company, Incorporated (Incorporated by reference to Post-Effective Amendment No. 13 to the Registration Statement of the Registrant on Form N-4, File No. 33-41628, filed April 23, 1999);

	(8)(b)(i)	Form of Participation Agreement dated February 17, 1998 by and between Goldman Sachs Variable, Insurance Trust, Goldman Sachs & Co. and the Depositor (Incorporated by reference to Post-Effective Amendment No. 13 to the Registration Statement of the Registrant on Form N-4, File No. 33-41628, filed April 23, 1999);

	(8)(b)(ii)	Form of Amendment No. 1 dated December 14, 1998 to Participation Agreement filed as Exhibit 8(b)(i) (Incorporated by reference to Post-Effective Amendment No. 13 to the Registration Statement of the Registrant on Form N-4, File No. 33-41628, filed April 23, 1999);

	(8)(b)(iii)	Form of Amendment No. 2 dated as of March 15, 1999 to Participation Agreement filed as Exhibit 8(b)(i) (Incorporated by reference to Post-Effective Amendment No. 13 to the Registration Statement of the Registrant on Form N-4, File No. 33-41628, filed April 23, 1999);

	(8)(c)	Form of Fund Participation Agreement between Depositor and J.P. Morgan Services Trust II (Incorporated by reference to Post-Effective Amendment No. 13 to the Registration Statement of the Registrant on Form N-4, File No. 33-41628, filed April 23, 1999);

	(8)(d)	Form of Participation Agreement dated February 17, 1998 by and among MFS/Sun Life Services Trust, the Depositor and Massachusetts Financial Services Company (Incorporated by reference to Post-Effective Amendment No. 13 to the Registration Statement of the Registrant on Form N-4, File No. 33-41628, filed April 23, 1999);

	(8)(e)	Form of Participation Agreement dated February 17, 1998 by and among OCC Accumulation Trust, the Depositor and OCC Distributors (Incorporated by reference to Post-Effective Amendment No. 13 to the Registration Statement of the Registrant on Form N-4, File No. 33-41628, filed April 23, 1999);

	(8)(f)	Form of Participation Agreement dated February, 1998 by and among the Depositor, Warburg Pincus Trust, Warburg Pincus Asset Management, Inc. and Counsellors Securities, Inc (Incorporated by reference to Post-Effective Amendment No. 13 to the Registration Statement of the Registrant on Form N-4, File No. 33-41628, filed April 23, 1999);

	(8)(g)	Form of Participation Agreement dated February 17, 1998 by and among the Depositor, AIM Variable Insurance Funds, Inc., AIM Distributors, Inc., and Claredon Insurance Agency, Inc. (Incorporated by reference to Post-Effective Amendment No. 1 to Registrant's Registration Statement on Form N-4, File No. 333-82957, filed February 3, 2000);

	(8)(h)	Form of Participation Agreement dated August 18, 1999 by and among the Depositor, Sun Capital Advisers Trust and Sun Capital Advisers, Inc. (Incorporated by reference to Post-Effective Amendment No. 1 to Registrant's Registration Statement on Form N-4, File No. 333-82957, filed February 3, 200`0);

	(8)(h)(i)	Form of Participation Agreement dated as of February 17, 1998 by and among the Depositor, Salomon Brothers Variable Series Funds, Inc., and Salomon Brothers Asset Management Inc. (Filed as Exhibit 8(i) to Pre- Effective Amendment No. 1 to the Registration Statement on Form N-4, File No. 333-41438 filed September 25, 2000);

	(9)	Previously filed;
<R>
	(10)(a)	Consent of Deloitte & Touche, LLP*;
</R>
	(10)(b)	Representation of Counsel pursuant to Rule 485(b)*;

	(11)	Financial Statement Schedules I and VI (Incorporated by reference to the Annual Report of Depositor on Form 10-K, filed on March 23, 2000);

	(12)	Not Applicable;

	(13)	Schedule for computation of performance quotations (Incorporated by reference to Post-Effective Amendment No. 2 to the Registration Statement of the Registrant on Form N-4, File No. 333-05227, filed on April 10, 1998);

	(14)	Not Applicable;

	(15)	Powers of Attorney (Incorporated by reference as Exhibit 15 to Post-Effective Amendment No. 3 to the Registration Statement on Form N-4, File No. 333-30844, filed on February 9, 2001);
<R>
	(16)	Organizational Chart (Incorporated by reference to Exhibit 16 to Post-Effective Amendment No. 42 to the Registration Statement of the Registrant on Form N-4, File Nos. 333-01043, 811-07543, filed on February 26, 2003.)

</R>

* Filed herewith

<R>

Item 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR

Name and	Principal Positions and Officers
Business Address	With Depositor

Donald A. Stewart	Director
150 King Street West
Toronto, Ontario
Canada M5H 1J9

C. James Prieur	Chairman and Director
150 King Street West
Toronto, Ontario
Canada M5H 1J9

James A. McNulty, III	Director
12 Wild Holly Lane
Medfield, MA 02052

David D. Horn	Director
257 Lake Street
P.O. Box 24
New Vineyard, ME 04956

Paul W. Derksen	Director
150 King Street West
Toronto, Ontario
Canada M5H IJ9

S. Caesar Raboy	Director
220 Boylston Street
Boston, MA 02110

Robert C. Salipante	President & Director
One Sun Life Executive Park
Wellesley Hills, MA 02481

David K. Stevenson	Director
359 Grove Street
Needham, MA 02492

William W. Stinson	Director
1001 13th Avenue S.W.
Calgary, Alberta
Canada T2R 0L5

James C. Baillie	Director
Torys
Suite 300, Maritime Life Tower
Toronto, Ontario MSK 1N2

Claude A. Accum	Vice President and Chief Actuary
One Sun Life Executive Park
Wellesley Hills, MA 02481

James M.A. Anderson	Vice President, Investments
One Sun Life Executive Park
Wellesley Hills, MA 02481

Nancy L. Conlin	Vice President and Chief Counsel
One Sun Life Executive Park
Wellesley Hills, MA 02481

Peter F. Demuth	Vice President, Chief Strategy and Business
One Sun Life Executive Park	Development Officer
Wellesley Hills, MA 02481

Mark W. DeTora	Vice President, Individual Insurance
One Sun Life Executive Park
Wellesley Hills, MA 02481

Ellen B. King	Assistant Vice President and Senior Counsel
One Sun Life Executive Park	and Secretary
Wellesley Hills, MA 02481

Philip K. Polkinghorn	Vice President, Annuities
112 Worcester Street
Wellesley Hills, MA 02481

Davey S. Scoon	Vice President, and Chief Financial and
One Sun Life Executive Park	Administrative Officer & Treasurer
Wellesley Hills, MA 02481

James R. Smith	Vice President & Chief Information Officer
One Sun Life Executive Park
Wellesley Hills, MA 02481

Janet V. Whitehouse	Vice President, Human Resources &
One Sun Life Executive Park	Administrative Services
Wellesley Hills, MA 02481

</R>

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 Assurance Company of Canada (U.S.), a wholly-owned subsidiary of Sun Life of Canada (U.S.) Holdings, Inc., a wholly-owned subsidiary of Sun Life Assurance Company of Canada- U.S. Operation Holdings, Inc., which is in turn a wholly-owned subsidiary of Sun Life Assurance Company of Canada.

<R>

The organization chart of Sun Life Assurance Company of Canada is filed as Exhibit 16 to Post-Effective Amendment No. 42 to the Registration Statement on Form N-4, File Nos. 333-01043, 811-07543, filed February 26, 2003.

</R>

None of the companies listed in such Exhibit 16 is a subsidiary of the Registrant; therefore the only financial statements being filed are those of Sun Life Assurance Company of Canada (U.S.).

Item 27. NUMBER OF CONTRACT OWNERS:

<R>

As of April 4, 2003there were 353 qualified and 1,047 non-qualified Contracts issued by the Registrant.

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Item 28. INDEMNIFICATION

Pursuant to Section 145 of the Delaware Corporation Law, Article 8 of the By-laws of Sun Life Assurance Company of Canada (U.S.), a copy of which was filed as Exhibit 3(b) to the Registration Statement of the Depositor on Form S-1, File No. 33-29851, provides for the indemnification of directors, officers and employees of Sun Life Assurance Company of Canada (U.S.).

Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of Sun Life Assurance Company of Canada (U.S.) pursuant to the certificate of incorporation, by-laws, or otherwise, Sun Life (U.S.) has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by Sun Life (U.S.) of expenses incurred or paid by a director, officer, controlling person of Sun Life (U.S.) in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, Sun Life (U.S.) will, 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 such issue.

Item 29. PRINCIPAL UNDERWRITERS

(a) Clarendon Insurance Agency, Inc., which is a wholly-owned subsidiary of the Depositor, acts as general distributor for the Registrant, Sun Life of Canada (U.S.) Variable Accounts C, D, E, G, H, and I, Sun Life (N.Y.) Variable Accounts A, B and C, and Money Market Variable Account, High Yield Variable Account, Capital Appreciation Variable Account, Government Securities Variable Account, World Governments Variable Account, Total Return Variable Account and Managed Sectors Variable Account.

<R>

Name and Principal	Positions and Officers
Business Address*	with Underwriter

Jane Wolak	President
Davey S. Scoon	Treasurer and Director
James M.A. Anderson	Director
James A. McNulty, III	Director
George E. Maden	Secretary and Clerk
William T. Evers	Assistant Secretary and Clerk
Imants Sakson	Vice President
Norton A. Goss, II	Vice President & Chief Compliance Officer
Michael L. Gentile	Vice President
John E. Coleman	Vice President
Nancy C. Atherton	Tax Officer

* The principal business address of all directors and officers of the principal underwriter, except for Wolak, is One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481. The principal business address of Wolak is 112 Worcester Street, Wellesley Hills, MA

</R>

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 Assurance Company of Canada (U.S.), in whole or in part, at its executive office at One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481, or at the offices of Clarendon Insurance Agency, Inc., 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(e) of the Investment Company Act of 1940.

	Sun Life Assurance Company of Canada (U.S.) represents that the fees and charges deducted under the Contract, 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 the 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

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As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements of Securities Act Rule 485(b) for effectiveness of this Post-Effective Amendment to the Registration Statement and has caused this Post-Effective Amendment to the Registration Statement to be signed on its behalf, in the Town of Wellesley Hills, and Commonwealth of Massachusetts on this 24th day of April, 2003.

	SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
	(Registrant)

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

	By: /s/ ROBERT C. SALIPANTE
	Robert C. Salipante
	President & Director

Attest:	/s/ EDWARD M. SHEA
	Edward M. Shea
	Assistant Vice President and Senior Counsel

As required by the Securities Act of 1933, this Post-Effective Amendment to the Registration Statement has been signed by the following persons in the capacities with the Depositor, Sun Life Assurance Company of Canada (U.S.), and on the dates indicated.

SIGNATURE	TITLE	DATE


/s/ ROBERT C. SALIPANTE	President and Director	April 24, 2003
Robert C. Salipante	(Principal Executive Officer)


/s/ DAVEY S. SCOON	Vice President & Chief Administrative and	April 24, 2003
Davey S. Scoon	Financial Officer & Treasurer
	(Principal Financial and Accounting Officer)


/s/ EDWARD M. SHEA	Attorney-in-Fact for:	April 24, 2003
Edward M. Shea	C. James Prieur, Chairman and Director
	Donald A. Stewart , Director
	James C. Baillie, Director
	David D. Horn, Director
	James A. McNulty, III, Director
	S. Caesar Raboy, Director
	William W. Stinson, Director

</R>

EXHIBIT INDEX

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10 (a)	Consent of Auditor
</R>
10 (b)	Representation of Counsel

	Proforma
	2000

Revenues
Premiums and annuity considerations	$ 45
Net investment income	339
Net realized investment gains (losses)	(20)
Fee and other income	298

Total revenues	662

Benefits and expenses
Policyowner benefits	338
Other operating expenses	165
Amortization of deferred policy acquisition costs	124

Total benefits and expenses	627

Income (loss) from operations	35

Interest expense	95

Income (loss) before income tax expense and discontinued
Operations	(60)

Income tax expense (benefit):
Federal	(62)
State	(2)

Income tax expense (benefit)	(64)

Net income from continuing operations	4

Net loss on disposal of subsidiaries, after tax	-

Discontinued operations	-

Net income	$ 4

Principal	Maturity	Rate

$ 150,000	12/15/07	6.625%
150,000	12/15/15	7.250%
7,500	12/15/15	6.125%
7,500	12/15/07	5.750%
80,000	06/30/12	5.710%
250,000	11/06/27	8.625%
$ 645,000

	December 31, 2002
		Gross	Gross	Estimated
	Amortized	Unrealized	Unrealized	Fair
	Cost	Gains	Losses	Value
Available-for-sale fixed maturities:
Asset Backed and Mortgage Backed Securities	$ 357,446	$ 11,085	$ (1,584)	$ 366,947
Foreign Government & Agency Securities	25,303	2,062	-	27,365
States & Political Subdivisions	500	15	-	515
U.S. Treasury & Agency Securities	311,947	11,825	(256)	323,516
Corporate securities:
Basic Industry	101,266	10,283	(1,178)	110,371
Capital Goods	96,485	10,681	(289)	106,877
Communications	84,698	4,658	(3,271)	86,085
Consumer Cyclical	111,070	6,837	(3,286)	114,621
Consumer Noncyclical	111,617	14,240	(2,924)	122,933
Energy	70,451	8,566	(1,830)	77,187
Finance	337,750	17,911	(4,737)	350,924
Industrial Other	68,302	10,677	(79)	78,900
Technology	4,782	161	-	4,943
Transportation	134,799	8,140	(14,005)	128,934
Utilities	287,665	28,129	(4,076)	311,718
Total Corporate	1,408,885	120,283	(35,675)	1,493,493

Total available-for-sale fixed maturities	$ 2,104,081	$ 145,270	$ (37,515)	$ 2,211,836

Trading fixed maturities
Asset Backed and Mortgage Backed Securities	$ 87,470	$ 8,017	$ -	$ 95,487
Foreign Government & Agency Securities	4,568	1,012	-	5,580
States & Political Subdivisions	-	-	-	-
U.S. Treasury & Agency Securities	23,491	423	-	23,914
Corporate securities:
Basic Industry	59,201	6,283	(297)	65,187
Capital Goods	56,432	5,255	(1,600)	60,087
Communications	120,120	10,688	(620)	130,188
Consumer Cyclical	146,174	12,244	(207)	158,211
Consumer Noncyclical	25,106	675	(2,951)	22,830
Energy	90,471	7,428	(3,405)	94,494
Finance	351,478	27,364	(688)	378,154
Industrial Other	64,185	5,606	(119)	69,672
Technology	3,805	-	(155)	3,650
Transportation	80,555	6,481	(10,711)	76,325
Utilities	241,913	10,081	(30,948)	221,046
Total Corporate	1,239,440	92,105	(51,701)	1,279,844

Total trading fixed maturities	$ 1,354,969	$ 101,557	$ (51,701)	$ 1,404,825

Held-to-maturity fixed maturities:
Sun Life of Canada (U.S.) Holdings, Inc.,
8.526% subordinated debt, due 2027	$ 600,000	$ 16,520	$ -	$ 616,520

Total held-to-maturity fixed maturities	$ 600,000	$ 16,520	$ -	$ 616,520

	December 31, 2001
		Gross	Gross	Estimated
	Amortized	Unrealized	Unrealized	Fair
	Cost	Gains	Losses	Value
Available-for-sale fixed maturities:
Asset Backed and Mortgage Backed Securities	$ 282,151	$ 5,123	$ (2,352)	$ 284,922
Foreign Government & Agency Securities	24,105	1,344	-	25,449
States & Political Subdivisions	254	15	-	269
U.S. Treasury & Agency Securities	142,892	5,695	(951)	147,636
Corporate securities:
Basic Industry	102,983	5,935	(7,092)	101,826
Capital Goods	132,343	7,406	(90)	139,659
Communications	108,810	5,926	(517)	114,219
Consumer Cyclical	138,538	6,688	(2,080)	143,146
Consumer Noncyclical	121,149	9,243	(904)	129,488
Energy	82,913	5,029	(1,245)	86,697
Finance	378,522	11,257	(3,518)	386,261
Industrial Other	80,099	6,791	(294)	86,596
Technology	6,988	280	-	7,268
Transportation	151,613	9,663	(15,697)	145,579
Utilities	319,225	18,200	(5,752)	331,673
Total Corporate	1,623,183	86,418	(37,189)	1,672,412

Total available-for-sale fixed maturities	$ 2,072,585	$ 98,595	$ (40,492)	$ 2,130,688

Trading fixed maturities
Asset Backed and Mortgage Backed Securities	$ 84,928	$ 1,336	$ (283)	$ 85,981
Foreign Government & Agency Securities	4,513	453	-	4,966
States & Political Subdivisions	-	-	-	-
U.S. Treasury & Agency Securities	-	-	-	-
Corporate securities:
Basic Industry	46,541	1,916	(319)	48,138
Capital Goods	41,396	2,315	(70)	43,641
Communications	131,840	4,847	(3,913)	132,774
Consumer Cyclical	117,892	4,351	(1,186)	121,057
Consumer Noncyclical	21,539	1,146	(62)	22,623
Energy	76,145	2,019	(1,793)	76,371
Finance	267,355	12,355	(929)	278,781
Industrial Other	45,959	1,746	(430)	47,275
Technology	2,977	3	-	2,980
Transportation	82,740	2,974	(2,635)	83,079
Utilities	96,348	1,626	(4,150)	93,824
Total Corporate	930,732	35,298	(15,487)	950,543

Total trading fixed maturities	$ 1,020,173	37,087	(15,770)	1,041,490

Held-to-maturity fixed maturities:
Sun Life of Canada (U.S.) Holdings, Inc.,
8.526% subordinated debt, due 2027	$ 600,000	$ 19,656	$ -	$ 619,656

Total held-to-maturity fixed maturities	$ 600,000	$ 19,656	$ -	$ 619,656

		December 31,
		2002	2001

Total mortgage loans		$ 778,962	$ 915,730

Real estate:
	Held-for-sale	-	1,490
	Held for production of income	79,783	82,055
Total real estate		$ 79,783	$ 83,545

	Balance at			Balance at
	January 1,	Additions	Subtractions	December 31,
2002
Mortgage loans	$ 7,140	$ 483	$ (607)	$ 7,016

2001
Mortgage loans	$ 4,675	$ 3,095	$ (630)	$ 7,140

2003	$ 22,707
2004	27,585
2005	64,054
2006	25,711
2007	69,860
Thereafter	569,045
Total	$ 778,962

	Commercial Mortgages
	Class AA	Class A	Class BBB
Carrying amount of retained
Interests	$ 2,911	$ 1,391	$ 1,980
Fair value of retained interests	3,427	1,599	2,282
Weighted average life in years	4.99	5.04	5.76

Expected Credit Losses
Impact on fair value of .20% of adverse change	2,862	1,269	1,725
Impact on fair value of .30% of adverse change	2,861	1,267	1,616

Residual Cash flows Discount Rate
Impact on fair value of 10% of adverse change	2,811	1,248	1,768
Impact on fair value of 20% of adverse change	2,760	1,224	1,734

	Class B	Class I
Prepayment speed	0	0
Weighted average life in years	7.25	4.54
Expected credit losses	0	0
Residual cash flows discount rate	7.798	8.844
Treasury rate interpolated for average life	4.97	4.96
Spread over treasuries	2.83%	3.88%
Duration in years	5.201	3.611

	Outstanding at December 31, 2002
	Notional		Fair Value
	Principal		Asset (Liability)
	Amounts

Interest rate swaps	$	1,683,250		$ (182,204)
Currency swaps		761,424		97,398
Equity swaps		293,994		(3,171)
Equity index options		1,153,168		213,174

Total	$	3,891,836		$ 125,197

	Outstanding at December 31, 2001
	Notional Principal Amounts		Fair Value Asset (Liability)

Interest rate swaps	$	1,327,496		$ (73,495)
Currency swaps		697,557		(22,918)
Equity swaps		259,607		(34,008)
Equity index options		1,428,323		81,000

Total	$	3,712,983		$ (49,421)

		December 31, 2002		December 31, 2001
		Carrying	Estimated	Carrying	Estimated
		Amount	Fair Value	Amount	Fair Value
Financial assets:
	Cash and cash equivalents	$ 277,104	$ 277,104	$ 180,141	$ 180,141
	Fixed maturities	4,216,661	4,233,181	3,772,178	3,791,834
	Short-term investments	171,627	171,627	103,296	103,296
	Mortgages	778,962	894,608	915,730	977,857
	Derivatives	125,197	125,197	(49,421)	(49,421)
	Policy loans	39,317	39,317	42,686	42,686
	Other invested assets	60,243	60,243	66,771	66,771

Financial liabilities:
	Guaranteed investment contracts	$ 1,768,854	$ 1,681,797	$ 1,320,278	$ 1,336,594
	Contractholder deposit funds	1,507,601	1,522,820	1,603,391	1,591,474
	Fixed annuity contracts	71,517	70,977	88,400	86,031
	Interest sensitive life insurance	116,086	121,908	116,967	117,045
	Long-term debt	645,000	688,647	565,000	596,218
	Partnership Capital Securities	607,826	616,520	607,826	619,656

		2002
Change in projected benefit obligation:
Projected benefit obligation at beginning of year		$ 149,595

Service cost		8,436

Interest cost		10,673

Actuarial (gain)		(8,075)

Benefits paid		(4,925)

Plan amendments		3,946

Projected benefit obligation at end of year		$ 159,650
Change in fair value of plan assets:
Fair value of plan assets at beginning of year		$ 212,965
Other		(888)
Actual return on plan assets		(27,682)
Benefits paid		(4,925)
Transfer due to change in plan sponsor		-
Fair value of plan assets at end of year		$ 179,470
Funded status		$ 19,820
Unrecognized net actuarial loss		38,632
Unrecognized transition obligation		(19,545)
Unrecognized prior service cost		9,132
Prepaid benefit cost		$ 48,039

		2002

Components of net periodic benefit cost:
Service cost		$ 8,437

Interest cost		10,674

Expected return on plan assets		(18,395)

Amortization of transition obligation asset		(3,051)

Amortization of prior service cost		216

Recognized net actuarial loss (gain)		120
Net periodic benefit cost		$ (1,999)
The Company's share of net periodic benefit cost		$ 3,834

Change in benefit obligation:
Benefit obligation at beginning of year		$ 45,515

Service cost		1,195

Interest cost		2,488

Actuarial (gain)		(7,586)

Benefits paid		(2,202)

Plan Amendments		(3,429)

Benefit obligation at end of year		$ 35,981

Change in fair value of plan assets:
Fair value of plan assets at beginning of year		$ -
Employer contributions		2,202
Benefits paid		(2,202)
Fair value of plan assets at end of year		$ -

Funded Status		$ (35,981)
Unrecognized net actuarial loss		12,477
Unrecognized prior service cost		(3,138)
Accrued benefit cost		$ (26,642)

		2002

Components of net periodic benefit cost
Service cost		$ 1,195

Interest cost		2,488

Amortization of prior service cost		(241)

Recognized net actuarial loss		933
Net periodic benefit cost		$ 4,375

The Company's share of net periodic benefit cost		$ 380

		2002	2001

Balance at January 1		$ 23,615	$ 20,574
Less reinsurance recoverable		(6,078)	(5,067)
Net balance at January 1		17,537	15,507
Incurred related to:
	Current year	12,062	11,354
	Prior years	(1,946)	(786)
Total incurred		10,116	10,568
Paid losses related to:
	Current year	(6,660)	(5,446)
	Prior years	(3,320)	(3,092)
Total paid		(9,980)	(8,538)

Balance at December 31		24,294	23,615
Less reinsurance recoverable		(6,621)	(6,078)
Deconsolidation of SLNY		(17,673)	-

Net balance at December 31		$ -	$ 17,537

	Year ended December 31, 2002

	Wealth	Individual	Group
	Management	Protection	Protection	Corporate	Totals

Total Revenues	$ 584,408	$ 62,030	$ 20,181	$ 131,332	$ 797,951
Total Expenditures	696,458	61,445	15,630	88,485	862,018
Pretax Income (Loss)	(112,050)	585	4,551	42,847	(64,067)

Net Operating Income (Loss)	(71,691)	464	3,195	48,874	(19,158)

Total Assets	$ 16,659,420	$ 2,704,635	$ -	$ 641,518	$ 20,005,573


	Year ended December 31, 2001

Total Revenues	$ 500,992	$ 32,345	$ 19,407	$ 78,562	$ 631,306
Total Expenditures	530,671	28,383	15,930	101,637	676,621
Pretax Income (Loss)	(29,679)	3,962	3,477	(23,075)	(45,315)

Net Operating Income (Loss)	(11,093)	3,443	2,641	(12,873)	(17,882)

Total Assets	$20,286,398	$ 1,685,589	$ 38,105	$ 299,647	$ 22,309,739


	Year ended December 31, 2000

Total Revenues	$ 536,630	$ 44,206	$ 17,194	$ 12,403	$ 610,433
Total Expenditures	558,375	44,477	15,350	53,515	671,717
Pretax Income (Loss)	(21,745)	(271)	1,844	(41,112)	(61,284)

Net Operating Income (Loss)	(5,971)	(176)	1,199	7,442	2,494

Total Assets	$22,098,372	$ 1,242,549	$ 30,514	$ 686,233	$ 24,057,668

	COS						EGS						EM1
	Sub-Accounts						Sub-Accounts						Sub-Accounts
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Period End
	December 31,			December 31,			December 31,			December 31,			December 31,			December 31,
	2002			2001			2002			2001			2002			2001 (a)
Operations:
Net investment income (loss)	$	(4,797,605	)	$	(8,342,542	)	$	(7,486,903	)	$	(12,862,147	)	$	(7,014	)	$	(672	)
Net realized gains (losses)		(108,712,383	)		70,666,441			(171,071,995	)		155,218,178			(114,030	)		381
Net unrealized gains (losses)		(29,588,990	)		(253,104,530	)		(68,659,822	)		(613,045,438	)		(165,228	)		22,077
Increase (Decrease) in net assets from operations	$	(143,098,978	)	$	(190,780,631	)	$	(247,218,720	)	$	(470,689,407	)	$	(286,272	)	$	21,786

Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	3,474,022		$	63,680,946		$	4,533,694		$	51,612,787		$	1,264,490		$	277,227
Net transfers between Sub-Accounts and Fixed Account		(66,309,026	)		(5,451,267	)		(81,392,865	)		(27,891,645	)		761,872			80,026
Withdrawals, surrenders, annuitizations and contract charges		(39,720,495	)		(51,682,839	)		(68,678,141	)		(84,256,673	)		(80,774	)		(1,423	)
Net accumulation activity	$	(102,555,499	)	$	6,546,840		$	(145,537,312	)	$	(60,535,531	)	$	1,945,588		$	355,830

Annuitization Activity:
Annuitizations	$	-		$	227,183		$	45,741		$	478,068		$	-		$	-
Annuity payments and contract charges		(117,999	)		(215,224	)		(327,463	)		(473,538	)		-			-
Net transfers between Sub-Accounts		-			-			-			-			-			-
Adjustments to annuity reserves		1,680			(180,402	)		(3,632	)		(309,532	)		-			-
Net annuitization activity	$	(116,319	)	$	(168,443	)	$	(285,354	)	$	(305,002	)	$	-		$	-
Increase (Decrease) in net assets from contract owner transactions	$	(102,671,818	)	$	6,378,397		$	(145,822,666	)	$	(60,840,533	)	$	1,945,588		$	355,830

Increase (Decrease) in net assets	$	(245,770,796	)	$	(184,402,234	)	$	(393,041,386	)	$	(531,529,940	)	$	1,659,316		$	377,616

Net Assets:
Beginning of year	$	494,301,507		$	678,703,741		$	763,479,404		$	1,295,009,344		$	377,616		$	-
End of year	$	248,530,711		$	494,301,507		$	370,438,018		$	763,479,404		$	2,036,932		$	377,616

Units Transactions:
Beginning of year		49,296,039			43,724,458			65,948,379			61,880,135			36,622			-
Purchase		468,094			7,793,885			629,726			7,300,234			114,419			28,514
Transferred between Sub-Accounts and Fixed Accumulation Account		(8,863,967	)		1,822,678			(9,243,938	)		2,175,012			61,923			8,274
Withdrawn, Surrendered and Annuitized		(4,320,277	)		(4,044,982	)		(6,637,379	)		(5,407,002	)		(8,015	)		(166	)
End of year		36,579,889			49,296,039			50,696,788			65,948,379			204,949			36,622

		AG2 Sub- Account			AG3 Sub- Account			AI1 Sub- Account			AI2 Sub- Account			AI3 Sub- Account			AI4 Sub- Account
Income and expenses:
Dividend income	$	-		$	223		$	-		$	-		$	135,562		$	174,509
Mortality and expense risk charges		(137	)		(395	)		(456,996	)		(494,605	)		(594,176	)		(641,787	)
Distribution expense charges		(16	)		(47	)		(54,839	)		(59,353	)		(71,301	)		(77,014	)
Net investment income (loss)	$	(153	)	$	(219	)	$	(511,835	)	$	(553,958	)	$	(529,915	)	$	(544,292	)

Realized and unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	(22	)	$	(61	)	$	(14,113,204	)	$	(20,257,517	)	$	(10,251,685	)	$	(20,227,544	)
Realized gain distribution		-			-			-			-			-			-
Net realized gains (losses)	$	(22	)	$	(61	)	$	(14,113,204	)	$	(20,257,517	)	$	(10,251,685	)	$	(20,227,544	)

Net unrealized appreciation (depreciation) on investments:
End of year	$	(3,711	)	$	(2,956	)	$	(15,457,429	)	$	(18,410,491	)	$	(18,016,297	)	$	(5,981,647	)
Beginning of year		-			-			(19,289,829	)		(23,256,803	)		(19,963,976	)		(16,287,879	)
Change in unrealized appreciation (depreciation)	$	(3,711	)	$	(2,956	)	$	3,832,400		$	4,846,312		$	1,947,679		$	10,306,232

Realized and unrealized gains (losses)	$	(3,733	)	$	(3,017	)	$	(10,280,804	)	$	(15,411,205	)	$	(8,304,006	)	$	(9,921,312	)
Increase (Decrease) in net assets from operations	$	(3,886	)	$	(3,236	)	$	(10,792,639	)	$	(15,965,163	)	$	(8,833,921	)	$	(10,465,604	)


		AI5 Sub- Account			AI7 Sub- Account			AI8 Sub- Account			AI9 Sub- Account			SGI Sub- Account			AL1 Sub- Account
Income and expenses:
Dividend income	$	20,404		$	-		$	281		$	69		$	113,708		$	27,813
Mortality and expense risk charges		(69,126	)		(246	)		(1,498	)		(88	)		(125,722	)		(850,269	)
Distribution expense charges		(8,295	)		(29	)		(180	)		(11	)		(15,087	)		(102,032	)
Net investment income (loss)	$	(57,017	)	$	(275	)	$	(1,397	)	$	(30	)	$	(27,101	)	$	(924,488	)

Realzed and unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	(535,310	)	$	(23	)	$	(50,508	)	$	(1,933	)	$	94,995		$	(20,570,282	)
Realized gain distribution		-			-			-			-			625,393			-
Net realized gains (losses)	$	(535,310	)	$	(23	)	$	(50,508	)	$	(1,933	)	$	720,388		$	(20,570,282	)

Net unrealized appreciation (depreciation) on investments:
End of year	$	(1,479,989	)	$	(4,408	)	$	1,210		$	(853	)	$	3,875,048		$	(37,676,653	)
Beginning of year		(36,876	)		-			-			-			-			(30,743,804	)
Change in unrealized appreciation (depreciation)	$	(1,443,113	)	$	(4,408	)	$	1,210		$	(853	)	$	3,875,048		$	(6,932,849	)

Realized and unrealized gains (losses)	$	(1,978,423	)	$	(4,431	)	$	(49,298	)	$	(2,786	)	$	4,595,436		$	(27,503,131	)
Increase (Decrease) in net assets from operations	$	(2,035,440	)	$	(4,706	)	$	(50,695	)	$	(2,816	)	$	4,568,335		$	(28,427,619	)

P. O. Box 9133

VARIABLE ACCOUNT OPTIONS: THE FUNDS

Variable Accumulation Unit Value

Crediting and Canceling Variable Accumulation Units

Crediting Interest

Guarantee Amounts

Renewals

We will notify you in writing between 45 and 75 days before the Expiration Date for any Guarantee Amount. If you would like to change your Fixed Account option, we must receive from you prior to the Expiration Date:

o

written notice electing a different Guarantee Period from among those we then offer, or

o

written instructions to tranfer the Guarantee Amount to one or more Sub-Accounts, in accordance with the transfer privilege provisions of the Contract (see "Transfer Privilege.")

A Guarantee Amount will not renew into a Guarantee Period that will extend beyond your Maximum Annuity Commencement Date. In that case, unless you notify us otherwise, we will automatically renew your Guarantee Amount into the Money Market Sub-Account.

Early Withdrawals

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

Request for Transfers

Market Timers

Asset Allocation

Systematic Withdrawal Program

Portfolio Rebalancing Program

Full Withdrawals

Partial Withdrawals

Time of Payment

Withdrawal Restrictions for Qualified Plans

Order of Withdrawal

	SB1 Sub- Account				SB2 Sub- Account				SB3 Sub- Account						SB4 Sub- Account					SC1 Sub- Account					SC2 Sub- Account
Income and expenses:
Dividend income		$	2,812			$	5,399			$		167,528				$	41,649				$	1,410,329				$		5,371,677
Mortality and expense risk charges			(9,662	)			(6,069	)				(45,525		)			(41,118	)				(1,638,334		)				(1,253,982	)
Distribution expense charges			(1,159	)			(728	)				(5,463		)			(4,934	)				(196,600		)				(150,478	)
Net investment income (loss)		$	(8,009	)		$	(1,398	)		$		116,540				$	(4,403	)			$	(424,605		)		$		3,967,217

Realized and unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares		$	(23,728	)		$	(7,978	)		$		58,790				$	(97,970	)			$	-				$		(809,059	)
Realized gain distributions			-				-					-					-					-						-
Net realized gains (losses)		$	(23,728	)		$	(7,978	)		$		58,790				$	(97,970	)			$					$		(809,059	)

Net unrealized appreciation (depreciation) on investments:
End of year		$	(173,120	)		$	(137,143	)		$		90,148				$	(264,646	)			$	-				$		540,289
Beginning of year			39,904				(8,410	)				16,703					(78,415	)				-						304,709
Change in unrealized appreciation (depreciation)		$	(213,024	)		$	(128,733	)		$		73,445				$	(186,231	)			$	-				$		235,580

Realized and unrealized gains (losses)		$	(236,752	)		$	(136,711	)		$		132,235				$	(284,201	)			$	-				$		(573,479	)
Increase (Decrease) in net assets from operations		$	(246,761	)		$	(138,109	)		$		248,775				$	(288,604	)			$	(424,605		)		$		3,393,738


		SC3 Sub- Account				SC4 Sub- Account				SC5 Sub- Account						SC6 Sub- Account					SC7 Sub- Account					SC8 Sub- Account
Income and expenses:
Dividend income		$	1,778,116			$	10,114			$	-					$	18,799				$		1,135			$	10,936
Mortality and expense risk charges			(384,301	)			(92,534	)			(689,282		)				(48,492		)				(422,063	)			(95,213		)
Distribution expense charges			(46,116	)			(11,104	)			(82,714		)				(5,819		)				(50,648	)			(11,426		)
Net investment income (loss)		$	1,347,699			$	(93,524	)		$	(771,996		)			$	(35,512		)		$		(471,576	)		$	(95,703		)

Realized and unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares		$	761,049			$	(609,706	)		$	(2,548,887		)			$	(337,695		)		$		(1,400,119	)		$	(873,219		)
Realized gain distributions			2,288,112				-				-						-						-				-
Net realized gains (losses)		$	3,049,161			$	(609,706	)		$	(2,548,887		)			$	(337,695		)		$		(1,400,119	)		$	(873,219		)

Net unrealized appreciation (depreciation) on investments:
End of year		$	(3,536,547	)		$	(1,593,405	)		$	(5,357,898		)			$	(1,020,385		)		$		(4,792,321	)		$	(908,747		)
Beginning of year			357,953				276,052				495,743						(198,397		)				24,003				(60,580		)
Change in unrealized appreciation (depreciation)		$	(3,894,500	)		$	(1,869,457	)		$	(5,853,641		)			$	(821,988		)		$		(4,816,324	)		$	(848,167		)

Realized and unrealized gains (losses)		$	(845,339	)		$	(2,479,163	)		$	(8,402,528		)			$	(1,159,683		)		$		(6,216,443	)		$	(1,721,386		)
Increase (Decrease) in net assets from operations		$	502,360			$	(2,572,687	)		$	(9,174,524		)			$	(1,195,195		)		$		(6,688,019	)		$	(1,817,089		)

	SCL Sub- Account			SCM Sub- Account
Income and expenses:
Dividend income	$	-		$	204
Mortality and expense risk charges		(8,114	)		(386	)
Distribution expense charges		(974	)		(46	)
Net investment income (loss)	$	(9,088	)	$	(228	)

Realized and unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	(116,851	)	$	(981	)
Realized gain distributions		-			-	-
Net realized gains (losses)	$	(116,851	)	$	(981	)

Net unrealized appreciation (depreciation) on investments:
End of year	$	(2,739	)	$	4,217
Beginning of year		-			-
Change in unrealized appreciation (depreciation)	$	(2,739	)	$	4,217

Realized and unrealized gains (losses)	$	(119,590	)	$	3,236
Increase (Decrease) in net assets from operations	$	(128,678	)	$	3,008