PROSPECTUS

MAY 1, 2009

SUN LIFE FINANCIAL MASTERS® ACCESS

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 interest options. The variable options are Sub-Accounts in the Variable Account, each of which invests in shares of one of the following funds (the “Funds”):

Large-Cap Equity Funds	International/Global Small/Mid-Cap Equity Funds
AllianceBernstein Wealth Appreciation Strategy	First Eagle Overseas Variable Fund3
Portfolio, Class B4	Emerging Markets Equity Funds
Columbia Marsico 21st Century Fund, Variable Series -	Lazard Retirement Emerging Markets Equity Portfolio,
B Class	Service Class
Columbia Marsico Growth Fund, Variable Series - B Class	MFS® Emerging Markets Equity Portfolio - S Class
Fidelity® Variable Insurance Products Fund Contrafund®	Specialty Sector Equity Funds
Portfolio Service Class 26	MFS® Utilities Portfolio - S Class
Huntington VA Dividend Capture Fund2	Specialty Sector Commodity Funds
Huntington VA Growth Fund2	Huntington VA Real Strategies Fund2
Huntington VA Income Equity Fund2	PIMCO CommodityRealReturnTM Strategy
Huntington VA Macro 100 Fund2	Portfolio - Admin. Class5
Lord Abbett Series Fund All Value Portfolio - Class VC	Real Estate Equity Funds
MFS® Core Equity Portfolio - S Class	Sun Capital Global Real Estate Fund - S Class
MFS® Value Portfolio - S Class	Asset Allocation Funds
Mutual Shares Securities Fund - Class 2	AllianceBernstein Balanced Wealth Strategy
Oppenheimer Capital Appreciation Fund/VA -	Portfolio, Class B4
Service Shares	BlackRock Global Allocation V.I. Fund - Class III
SCSM Davis Venture Value Fund - S Class	Fidelity® Variable Insurance Products Balanced
SCSM WMC Large Cap Growth Fund - S Class	Portfolio Service Class 26
SCSM Lord Abbett Growth & Income Fund - S Class	Franklin Income Securities Fund - Class 2
SCSM Oppenheimer Large Cap Core Fund - S Class	Huntington VA Balanced Fund2
Van Kampen Life Investment Trust Comstock Portfolio -	MFS® Total Return Portfolio - S Class
Class II8	Oppenheimer Balanced Fund/VA - Service Shares
Mid-Cap Equity Funds	SCSM Ibbotson Balanced Fund - S Class1
Fidelity® Variable Insurance Products Fund Mid Cap	SCSM Ibbotson Growth Fund- S Class1
Portfolio Service Class 26	SCSM Ibbotson Moderate Fund - S Class1
Huntington VA Mid Corp America Fund2	Universal Institutional Funds Inc.- Equity and
Huntington VA New Economy Fund2	Income Portfolio - Class II7
Lord Abbett Series Fund Growth Opportunities	Target Date Funds
Portfolio - Class VC	Fidelity® Variable Insurance Products Fund Freedom
SCSM WMC Blue Chip Mid Cap Fund - S Class	2015 Portfolio - Service Class 21, 6
SCSM Goldman Sachs Mid Cap Value Fund - S Class	Fidelity® Variable Insurance Products Fund Freedom
Universal Institutional Funds Inc. - Mid Cap Growth	2020 Portfolio - Service Class 21, 6
Portfolio - Class II7	Money Market Funds
Universal Institutional Funds Inc. - U.S. Mid Cap	Sun Capital Money Market Fund® - S Class
Value Portfolio - Class II7	Short-Term Bond Funds
Small-Cap Equity Funds	SCSM Goldman Sachs Short Duration Fund - S Class
Franklin Small Cap Value Securities Fund - Class 2	Intermediate-Term Bond Funds
Huntington VA Situs Fund2	Huntington VA Mortgage Securities Fund2
SCSM AIM Small Cap Growth Fund - S Class	MFS® Bond Portfolio - S Class
SCSM Dreman Small Cap Value Fund - S Class	MFS® Government Securities Portfolio - S Class
SCSM Oppenheimer Main Street Small Cap Fund - S Class	SCSM PIMCO Total Return Fund - S Class
International/Global Equity Funds	Sun Capital Investment Grade Bond Fund® - S Class
AllianceBernstein International Growth Portfolio, Class B4	Inflation Protected Bond Funds
SCSM AllianceBernstein International Value Fund - S Class	SCSM BlackRock Inflation Protected Bond Fund - S Class
Columbia Marsico International Opportunities Fund,	Multi-Sector Bond Funds
Variable Series - B Class	Franklin Strategic Income Securities Fund - Class 2
Huntington VA International Equity Fund2	High Yield Bond Funds
Huntington VA Rotating Markets Fund2	SCSM PIMCO High Yield Fund - S Class
MFS® International Growth Portfolio - S Class	Emerging Markets Bond Fund
MFS® International Value Portfolio - S Class	PIMCO Emerging Markets Bond Portfolio -
MFS® Research International Portfolio - S Class	Admin. Class5
Oppenheimer Global Securities Fund/VA - Service Shares
Templeton Growth Securities Fund - Class 2

1	These are Fund of Funds options and expenses of the Fund include the Fund level expenses of the underlying Funds as well. The Fund may be more expensive than Funds that do not invest in other Funds.
2	Only available if you purchase your Contract through a Huntington Bank representative. The Huntington Funds do not have different share classes.
3	First Eagle Overseas Variable Fund does not have different share classes.
4	In marketing materials and other documents, the AllianceBernstein funds may be referred to as follows: AllianceBernstein VPS Wealth Appreciation Strategy Portfolio; AllianceBernstein VPS Wealth Strategy Portfolio; and AllianceBernstein VPS International Growth Portfolio.
5	In marketing materials and other documents, the PIMCO portfolios may be referred to as follows: PIMCO VIT CommodityRealReturnTM Strategy Portfolio and PIMCO VIT Emerging Markets Bond Portfolio.
6	In marketing materials and other documents, the Fidelity funds may be referred to as follows: Fidelity® VIP Contrafund Portfolio; Fidelity® VIP Mid Cap Portfolio; Fidelity® VIP Balanced Portfolio; Fidelity® VIP Freedom 2015 Portfolio; and Fidelity® VIP Freedom 2020 Portfolio.
7	In marketing materials and other documents, the Universal Institutional Funds may be referred to as follows: Van Kampen's UIF Mid Cap Growth Portfolio; Van Kampen's UIF U.S. Mid Cap Value Portfolio; and Van Kampen's UIF Equity & Income Portfolio.
8	In marketing materials and other documents, Van Kampen Life Insurance Trust Comstock Portfolio may be referred to as Van Kampen LIT Comstock Portfolio.

AllianceBernstein L.P. advises the AllianceBernstein Variable Product Series Fund Inc. Portfolios. Arnhold and S. Bleichroeder Advisers, LLC advises the First Eagle Overseas Variable Fund. Columbia Management Advisors, LLC, advises the Columbia Funds (with Marsico Capital Management, LLC, sub-advising the Columbia Marsico Funds). BlackRock Advisors, LLC advises BlackRock Global Allocation V.I. (with BlackRock Investment Management, LLC and BlackRock Asset Management U.K. Limited serving as sub-advisers). Fidelity® Management & Research Company advises Fidelity VIP Portfolios; Fidelity VIP Contrafund Portfolio and Fidelity VIP Mid Cap Portfolio (sub-advised by FMR Co. Inc., Fidelity Research & Analysis Company, Fidelity Management & Research (U.K.) Inc., Fidelity International Investment Advisors, Fidelity International Investment Advisors (U.K.) Limited, and Fidelity Investments Japan Limited); and Fidelity VIP Balanced Portfolio (sub-advised by Fidelity Investments Money Management, Inc., FMR Co. Inc., Fidelity Research & Analysis Company, Fidelity Management & Research (U.K.) Inc., Fidelity International Investment Advisors, Fidelity International Investment Advisors (U.K.) Limited, and Fidelity Investments Japan Limited). Franklin® Advisers, Inc. advises Franklin Income Securities Fund and Franklin Strategic Income Securities Fund. Franklin® Advisory Services, LLC advises the Franklin Small Cap Value Securities Fund. Franklin® Mutual Advisers, LLC advises Mutual Shares Securities Fund. Huntington Asset Advisors, Inc., advises the Huntington VA Funds: Huntington VA Macro 100 Fund (sub-advised by Laffer Investments Inc.) Lazard Asset Management LLC advises the Lazard Retirement Portfolio. Lord, Abbett & Co. LLC advises the Lord Abbett Series Fund Portfolios. Massachusetts Financial Services Company, our affiliate,advises the MFS® Portfolios. Morgan Stanley Investment Management Inc. advises the Universal Institutional Funds. Pacific Investment Management Company LLC advises the PIMCO Variable Insurance Trust Portfolios. OppenheimerFunds, Inc. advises the Oppenheimer Funds. Strategic Advisers® advises the Fidelity VIP Freedom Portfolios (sub-advised by FMR Co. Inc.). Sun Capital Advisers LLC, our affiliate, advises the Sun Capital Funds; SCSM BlackRock Inflation Protected Bond Fund (sub-advised by BlackRock Financial Management, Inc.), SCSM Davis Venture Value Fund (sub-advised by Davis Selected Advisers, L.P.); SCSM Oppenheimer Main Street Small Cap Fund and SCSM Oppenheimer Large Cap Core Fund (sub-advised by OppenheimerFunds, Inc.;) SCSM Lord Abbett Growth & Income Fund (sub-advised by Lord, Abbett & Co. LLC); SCSM Goldman Sachs Mid Cap Value Fund and SCSM Goldman Sachs Short Duration Fund (sub-advised by Goldman Sachs Asset Management, L.P.); SCSM Ibbotson Balanced Fund, SCSM Ibbotson Growth Fund, and SCSM Ibbotson Moderate Growth Fund (sub-advised by Ibbotson Associates, Inc.); SCSM PIMCO High Yield Fund and SCSM PIMCO Total Return Fund (sub-advised by Pacific Investment Management Company LLC); SCSM WMC Blue Chip Mid Cap Fund and SC WMC Large Cap Growth Fund (sub-advised by Wellington Management Company, LLP); SCSM AIM Small Cap Growth Fund (sub-advised by Invesco Aim Advisors, Inc.), SCSM Dreman Small Cap Value Fund (sub-advised by Dreman Value Management, L.L.C.); and the SCSM AllianceBernstein International Value Fund (sub-advised by AllianceBernstein L.P.). Templeton® Global Advisors Limited advises Templeton Growth Securities Fund (sub-advised by Templeton Asset Management Limited). Van Kampen Asset Management advises the Van Kampen Life Investment Trust Portfolio.

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

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

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

We have filed a Statement of Additional Information dated May 1, 2009 (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 83 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, you can inspect and copy all of our filings at the SEC's public reference facilities at: 100 F Street, N.E., Washington, D.C. 20549-0102, telephone (202) 551-8090. The SEC will provide copies by mail for a fee. The SEC also 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:  SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.), P.O. Box 9133, Wellesley Hills, Massachusetts 02481

TABLE OF CONTENTS

SPECIAL TERMS [INSERT PAGE NUMBER]

PRODUCT HIGHLIGHTS [INSERT PAGE NUMBER]

FEES AND EXPENSES [INSERT PAGE NUMBER]

EXAMPLE [INSERT PAGE NUMBER]

CONDENSED FINANCIAL INFORMATION [INSERT PAGE NUMBER]

THE ANNUITY CONTRACT [INSERT PAGE NUMBER]

COMMUNICATING TO US ABOUT YOUR CONTRACT [INSERT PAGE NUMBER]

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) [INSERT PAGE NUMBER]

THE VARIABLE ACCOUNT [INSERT PAGE NUMBER]

VARIABLE ACCOUNT OPTIONS: THE FUNDS [INSERT PAGE NUMBER]

THE FIXED ACCOUNT [INSERT PAGE NUMBER]

THE FIXED ACCOUNT OPTIONS: THE GUARANTEE PERIODS [INSERT PAGE NUMBER]

THE ACCUMULATION PHASE [INSERT PAGE NUMBER]

Issuing Your Contract [INSERT PAGE NUMBER]

Amount and Frequency of Purchase Payments [INSERT PAGE NUMBER]

Allocation of Net Purchase Payments [INSERT PAGE NUMBER]

Your Account [INSERT PAGE NUMBER]

Your Account Value [INSERT PAGE NUMBER]

Variable Account Value [INSERT PAGE NUMBER]

Fixed Account Value [INSERT PAGE NUMBER]

Transfer Privilege [INSERT PAGE NUMBER]

Waivers; Reduced Charges; Special Guaranteed Interest Rates [INSERT PAGE NUMBER]

Other Programs [INSERT PAGE NUMBER]

WITHDRAWALS AND MARKET VALUE ADJUSTMENT [INSERT PAGE NUMBER]

Cash Withdrawals [INSERT PAGE NUMBER]

Market Value Adjustment [INSERT PAGE NUMBER]

CONTRACT CHARGES [INSERT PAGE NUMBER]

Account Fee [INSERT PAGE NUMBER]

Administrative Expense Charge and Distribution Fee [INSERT PAGE NUMBER]

Mortality and Expense Risk Charge [INSERT PAGE NUMBER]

Charges for Optional Benefits [INSERT PAGE NUMBER]

Premium Taxes [INSERT PAGE NUMBER]

Fund Expenses [INSERT PAGE NUMBER]

Modification in the Case of Group Contracts [INSERT PAGE NUMBER]

OPTIONAL LIVING BENEFIT: RETIREMENT INCOME ESCALATORSM II [INSERT PAGE NUMBER]

Determining Your Withdrawal Benefit Base [INSERT PAGE NUMBER]

Determining Your Annual Withdrawal Amount [INSERT PAGE NUMBER]

How RIE II Works [INSERT PAGE NUMBER]

Withdrawals Under RIE II [INSERT PAGE NUMBER]

Cost of RIE II [INSERT PAGE NUMBER]

Step-Up Under RIE II [INSERT PAGE NUMBER]

Joint-Life Coverage [INSERT PAGE NUMBER]

Cancellation of RIE II [INSERT PAGE NUMBER]

Death of Participant Under RIE II with Single-Life Coverage [INSERT PAGE NUMBER]

Death of Participant Under RIE II with Joint-Life Coverage [INSERT PAGE NUMBER]

Annuitization Under RIE II [INSERT PAGE NUMBER]

Certain Tax Considerations [INSERT PAGE NUMBER]

OPTIONAL LIVING BENEFIT: Income ON Demand® II Escalator [INSERT PAGE NUMBER]

Determining Your Income Benefit Base [INSERT PAGE NUMBER]

Determining Your Annual Income Amount [INSERT PAGE NUMBER]

Determining Your Stored Income Balance [INSERT PAGE NUMBER]

How IOD II Escalator Works [INSERT PAGE NUMBER]

Withdrawals Under IOD II Escalator [INSERT PAGE NUMBER]

Cost of IOD II Escalator [INSERT PAGE NUMBER]

Step-Up Under IOD II Escalator [INSERT PAGE NUMBER]

Joint-Life Coverage [INSERT PAGE NUMBER]

Cancellation of IOD II Escalator [INSERT PAGE NUMBER]

Death of Participant Under IOD II Escalator with Single-Life Coverage [INSERT PAGE NUMBER]

Death of Participant Under IOD II Escalator with Joint-Life Coverage [INSERT PAGE NUMBER]

Annuitization Under IOD II Escalator [INSERT PAGE NUMBER]

Certain Tax Considerations [INSERT PAGE NUMBER]

OPTIONAL LIVING BENEFIT: RETIREMENT ASSET PROTECTORSM [INSERT PAGE NUMBER]

Cost of Retirement Asset Protector [INSERT PAGE NUMBER]

How Retirement Asset Protector Works [INSERT PAGE NUMBER]

Withdrawals Under Retirement Asset Protector [INSERT PAGE NUMBER]

Step-Up Under Retirement Asset Protector [INSERT PAGE NUMBER]

Renewal of Retirement Asset Protector [INSERT PAGE NUMBER]

Cancellation of Retirement Asset Protector [INSERT PAGE NUMBER]

Death of Participant Under Retirement Asset Protector [INSERT PAGE NUMBER]

Certain Tax Considerations [INSERT PAGE NUMBER]

DESIGNATED FUNDS [INSERT PAGE NUMBER]

BUILD YOUR PORTFOLIO [INSERT PAGE NUMBER]

TAX ISSUES UNDER OPTIONAL LIVING BENEFITS [INSERT PAGE NUMBER]

Tax Issues Under Retirement Income Escalator II [INSERT PAGE NUMBER]

Tax Issues Under Income ON Demand II Escalator [INSERT PAGE NUMBER]

Tax Issues Under Retirement Asset Protector [INSERT PAGE NUMBER]

DEATH BENEFIT [INSERT PAGE NUMBER]

Amount of Death Benefit [INSERT PAGE NUMBER]

The Basic Death Benefit [INSERT PAGE NUMBER]

Optional Death Benefit Riders [INSERT PAGE NUMBER]

Spousal Continuance [INSERT PAGE NUMBER]

Calculating the Death Benefit [INSERT PAGE NUMBER]

Method of Paying Death Benefit [INSERT PAGE NUMBER]

Non-Qualified Contracts [INSERT PAGE NUMBER]

Selection and Change of Beneficiary [INSERT PAGE NUMBER]

Payment of Death Benefit [INSERT PAGE NUMBER]

THE INCOME PHASE - ANNUITY PROVISIONS [INSERT PAGE NUMBER]

Selection of Annuitant(s) [INSERT PAGE NUMBER]

Selection of the Annuity Commencement Date [INSERT PAGE NUMBER]

Annuity Options [INSERT PAGE NUMBER]

Selection of Annuity Option [INSERT PAGE NUMBER]

Amount of Annuity Payments [INSERT PAGE NUMBER]

Exchange of Variable Annuity Units [INSERT PAGE NUMBER]

Account Fee [INSERT PAGE NUMBER]

Annuity Payment Rates [INSERT PAGE NUMBER]

Annuity Options as Method of Payment for Death Benefit [INSERT PAGE NUMBER]

OTHER CONTRACT PROVISIONS [INSERT PAGE NUMBER]

Exercise of Contract Rights [INSERT PAGE NUMBER]

Change of Ownership [INSERT PAGE NUMBER]

Voting of Fund Shares [INSERT PAGE NUMBER]

Reports to Owners [INSERT PAGE NUMBER]

Substitution of Securities [INSERT PAGE NUMBER]

Change in Operation of Variable Account [INSERT PAGE NUMBER]

Splitting Units [INSERT PAGE NUMBER]

Modification [INSERT PAGE NUMBER]

Discontinuance of New Participants [INSERT PAGE NUMBER]

Reservation of Rights [INSERT PAGE NUMBER]

Right to Return [INSERT PAGE NUMBER]

TAX CONSIDERATIONS [INSERT PAGE NUMBER]

U.S. Federal Income Tax Considerations [INSERT PAGE NUMBER]

Puerto Rico Tax Considerations [INSERT PAGE NUMBER]

ADMINISTRATION OF THE CONTRACT [INSERT PAGE NUMBER]

DISTRIBUTION OF THE CONTRACT [INSERT PAGE NUMBER]

AVAILABLE INFORMATION [INSERT PAGE NUMBER]

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE [INSERT PAGE NUMBER]

STATE REGULATION [INSERT PAGE NUMBER]

LEGAL PROCEEDINGS [INSERT PAGE NUMBER]

FINANCIAL STATEMENTS [INSERT PAGE NUMBER]

TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION [INSERT PAGE NUMBER]

APPENDIX A - GLOSSARY [INSERT PAGE NUMBER]

APPENDIX B - MARKET VALUE ADJUSTMENT [INSERT PAGE NUMBER]

APPENDIX C - OPTIONAL DEATH BENEFIT EXAMPLES [INSERT PAGE NUMBER]

APPENDIX D - PREVIOUSLY AVAILABLE INVESTMENT OPTIONS [INSERT PAGE NUMBER]

APPENDIX E - SECURED RETURNS FOR LIFE PLUSSM [INSERT PAGE NUMBER]

APPENDIX F - RETIREMENT INCOME ESCALATORSM [INSERT PAGE NUMBER]

APPENDIX G - Income ON Demand® [INSERT PAGE NUMBER]

APPENDIX H - Income On Demand® II [INSERT PAGE NUMBER]

APPENDIX I - Income ON Demand® II Plus [INSERT PAGE NUMBER]

APPENDIX J - Build Your Portfolio [INSERT PAGE NUMBER]

APPENDIX K - CONDENSED FINANCIAL INFORMATION [INSERT PAGE NUMBER]

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

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

The Accumulation Phase

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

Variable Account Options:  The Funds

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

The Fixed Account Options:  The Guarantee Periods

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

Fees and Expenses

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

If your Account Value is less than $100,000 on your Account Anniversary, we deduct a $50 Annual Account Fee. We will waive the Account Fee if your Contract was fully invested in the Fixed Account during the entire Account Year.

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

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

If you elect an optional death benefit rider, we will deduct, during the Accumulation Phase, an additional charge from the assets of the Variable Account ranging from an annual rate of 0.20% to 0.40% of the average daily value of your Contract depending upon which optional death benefit rider you elected.

If you elect an optional living benefit, we will assess a periodic charge at a rate that differs among the optional living benefits. Currently, however, the annual amount of the charge in no case exceeds 1.15% of the highest Account Value (or other benefit base for the optional living benefit in question) during the year.

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.

Optional Living Benefits

At issue, you may choose to participate in one of three optional living benefits available under your Contract. Each option provides the living benefits guarantee in a different way:

● Retirement Income Escalator II offers a guaranteed withdrawal benefit with an opportunity for a bonus to be added to your benefit base if you defer taking withdrawals during a specified time period under your Contract.

● Income ON Demand II Escalator offers an income storage benefit that provides guaranteed lifetime withdrawals, and allows you to accumulate the guaranteed lifetime benefits, rather than requiring you to take the annual payments or lose them. It also allows the opportunity to increase your annual payments at later ages.

● Retirement Asset Protector Rider offers a stand-alone guaranteed minimum accumulation benefit (“GMAB”).

The optional living benefits are available only if you are age 85 or younger on the Open Date. If you purchase an optional living benefit, your investment choices are limited to the Designated Funds. Your optional living benefit terminates if you annuitize or if you transfer any portion of your Account Value to an investment option other than one of the Designated Funds. In addition, a change of ownership may also terminate your living benefit. Under all of the optional living benefits, you may make Purchase Payments only during your first Account Year. Withdrawals taken in excess of prescribed amounts may adversely affect benefits under all of the riders except Retirement Asset Protector.  In addition, withdrawals taken prior to prescribed dates may adversely affect benefits under all of the riders except Retirement Asset Protector. All of the optional living benefits allow you to “step-up” your guaranteed amount on an annual basis, if eligible.  Not all of the optional living benefits are available in all states.

In addition to the currently available optional living benefits listed above, five other optional living benefits were previously available. Although these optional living benefits are no longer being issued, they are still in force under many Contracts that are already outstanding. Each of these optional living benefits are discussed in a separate Appendix at the end of this prospectus:

Appendix E - Secured Returns for Life Plus

Appendix F - Retirement Income Escalator

Appendix G - Income ON Demand

Appendix H - Income ON Demand II

Appendix I - Income ON Demand II Plus

The Income Phase:  Annuity Provisions

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

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

Death Benefit

If you die before the Contract reaches the Income Phase, the Beneficiary will receive a death benefit.  The amount of the death benefit depends upon your age on the Open Date and whether you choose the basic death benefit or, for a fee, you enhance the death benefit by electing an optional death benefit rider that is available in your state.  If you are 85 or younger on your Open Date, the basic death benefit pays the greatest of your Account Value, your total Purchase Payments (adjusted for withdrawals), or your cash Surrender Value, all calculated as of your Death Benefit Date. If you are 86 or older on your Open Date, the basic death benefit is the Surrender Value. You must make your election before the date on which your Contract becomes effective. The riders are only available if you are younger than 80 on the Open Date. Any optional death benefit rider election may not be changed after your Contract is issued.

Withdrawals 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 (or later, if allowed by your state), 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 in good order. (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 your Contract is a Non-Qualified Contract, it is possible that the election of an optional living benefit rider might increase the taxable portion of any withdrawal you make from the Contract. If you are younger than 59½ when you take money out, you may be charged a 10% federal tax penalty.

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

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

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

P. O. Box 9133

Wellesley Hills, Massachusetts  02481

Toll Free (800) 752-7215

FEES AND EXPENSES

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

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

Contract Owner Transaction Expenses

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

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

Annual Account Fee $ 502

Variable Account Annual Expenses

(as a percentage of net Variable Account assets)3

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

Charges for Optional Death Benefit Features

Death Benefits Available5	Fee as a % of Account Value
Maximum Anniversary Account Value	0.20%
5% Premium Roll-Up	0.20%
Earnings Enhancement Benefit Premier	0.25%
Earnings Enhancement Benefit Premier with MAV	0.40%
Earnings Enhancement Benefit Premier with 5% Roll-Up	0.40%
Earnings Enhancement Benefit Premier Plus	0.40%

Maximum Annual Charge for an Optional Death Benefit Rider     (as a percentage of Account Value):   0.40% 

Charges for Optional Living Benefit Features

Living Benefits Currently Available6	Maximum Annual Fee7
Retirement Income Escalator II Living Benefit     (as a percentage of the highest Withdrawal Benefit Base8 during the Account Year):	1.15%
Income ON Demand II Escalator Living Benefit     (as a percentage of the highest Fee Base9 during the Account Year):	1.15%
Retirement Asset Protector Living Benefit     (as a percentage of the highest Retirement Asset Protector Benefit Base10 during the Account Year):	0.75%

Previously Available Living Benefits11	Maximum Annual Fee
Secured Returns for Life Plus Living Benefit     (as a percentage of the highest Account Value during the Account Year):	0.50%7
Retirement Income Escalator Living Benefit     (as a percentage of the highest Withdrawal Benefit Base8 during the Account Year):	0.95%7
Income ON Demand Living Benefit     (as a percentage of the highest Income Benefit Base12 during the Account Year):	0.85%7
Income ON Demand II Living Benefit     (as a percentage of the highest Fee Base9 during the Account Year):	0.85%7
Income ON Demand II Plus Living Benefit     (as a percentage of the highest Fee Base9 during the Account Year):	1.15%7

Maximum Annual Charge for an Optional Living Benefit     (as a percentage of highest Account Value or other fee base during the Account Year):   1.15%  

Total Variable Account Annual Expenses (1.70%) plus Maximum Charges for an Optional Death     Benefit (0.40%) and an Optional Living Benefit (1.15%):   3.25%13,14

The table below 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 reimbursement15		0.72%	3.68%

1	The premium tax rate and base vary by your state of residence and the type of Certificate you own. Currently, we deduct premium taxes from Certificate Value upon full surrender (including a surrender for the death benefit) or annuitization. (See “Contract Charges -- Premium Taxes.”)
2	The Annual Account Fee is waived if 100% of your Account Value has been allocated to the Fixed Account during the entire Account Year or if your Account Value is $100,000 or more on your Account Anniversary.(See “Account Fee.”)
3	All of the Variable Account Annual Expenses, except for the charges for optional living benefits, are assessed as a percentage of average daily net Variable Account assets. The charge for each optional living benefit is assessed on a quarterly basis.
4	For Contracts purchased prior to March 5, 2007, the rate of this charge is 1.55% if you were age 76 or older on the Contract's Open Date. In that case, the rate for “Total Variable Account Annual Expenses (without optional benefits)” would be 1.90%.
5	The optional death benefit riders are defined under “Death Benefit.” These riders are available only if you are younger than age 80 on the Open Date. The charge varies depending upon the rider selected as shown under “Charges for Optional Benefit Riders.”
6	You may only elect one optional living benefit. Each optional living benefit, including the charges therefore is described in detail under a separate heading bearing its name. As discussed under those headings, if, after you acquire one of these riders, you elect to increase or renew certain benefits under the rider, we have the right to increase the rate of the charge to what we are then charging on newly issued riders of the same type or to a rate based on then-current market conditions.
7	The charges shown are assessed and deducted quarterly based upon the applicable fee base, taken on the last day of each Account Quarter. Your actual charges may be less than the maximum stated above. See “Cost of RIE II,” “Cost of IOD II Escalator ,” “Cost of Retirement Asset Protector,” “APPENDIX E - SECURED RETURNS FOR LIFE PLUS,” “APPENDIX F - RETIREMENT INCOME ESCALATOR,” “APPENDIX G - Income ON Demand,” “APPENDIX H - Income ON Demand II,” and “APPENDIX I - Income ON Demand II Plus.” For Contracts purchased prior to February 17, 2009, the Maximum Annual Fees for Retirement Income Escalator II, Income ON Demand II Escalator, and Retirement Asset Protector were initially set at 1.00%, 1.00%, and .35%, respectively. Those fees will not change on those earlier Contracts, unless the Owner consents in writing to the higher fees as described under “Step-up Under RIE II,” “Step-up Under IOD II Escalator,” and “Step-up Under Retirement Asset Protector.”
8	The Withdrawal Benefit Base initially is equal to your initial Purchase Payment, and it thereafter is subject to certain adjustments. See “OPTIONAL LIVING BENEFIT: RETIREMENT INCOME ESCALATOR II.”
9	The Fee Base initially is equal to your initial Purchase Payment, and it thereafter is subject to certain adjustments. See “OPTIONAL LIVING BENEFIT: Income ON Demand II Escalator,” “APPENDIX H - Income ON Demand II,” and “APPENDIX I - Income ON Demand II Plus.”
10	The Retirement Asset Protector Benefit Base initially is equal to your initial Purchase Payment, and it thereafter is subject to certain adjustments. See “OPTIONAL LIVING BENEFIT: RETIREMENT ASSET PROTECTOR.”
11	Although these optional living benefits are no longer being issued, these previously available living benefits are still in force under many outstanding Contracts. For more information on these previously issued optional living benefits, including how the fees are calculated, please see “APPENDIX E - SECURED RETURNS FOR LIFE PLUS,” “APPENDIX F - RETIREMENT INCOME ESCALATOR,” “APPENDIX G - Income ON Demand Benefit,” APPENDIX H - Income ON Demand II,” and APPENDIX I - Income ON Demand II Plus.” If you elect to increase certain benefits under the Secured Returns for Life Plus, Retirement Income Escalator, Income ON Demand, Income ON Demand II or Income ON Demand II Plus living benefits, we have the right to increase the rate of the charge based on then-current market conditions. (See “Step-Up” sections in Appendix E, Appendix F, Appendix G, Appendix H and Appendix I.) Under these outstanding Contracts, you were permitted to select only one optional living benefit.
12	The Income Benefit Base initially is equal to your initial Purchase Payment, and it thereafter is subject to certain adjustments.
13	This amount assumes that the EEB Premier with MAV or EEB Premier with 5% Roll-Up (0.40%) was selected and that either the Retirement Income Escalator II or Income ON Demand II Escalator Optional Living Benefit with joint-life coverage (1.15%) was also selected (in addition to the 1.35% Mortality and Expense Risk Charge, the 0.15% Administrative Expense Charge, and the 0.20% Distribution Fee).  It also assumes t that the living benefit’s initial fee base is equal to the Account Value.  If the fee base changes, the charge for your optional living benefit and your Total Variable Account Annual Expenses would be higher or lower.
14	This chart shows your Total Variable Account Expensesbeforeyou annuitize your Contract.  As stated in “Amount of Annuity Payments,” after you annuitize your Contract, your insurance charges will be at an annual rate of 1.70% of average daily net Variable Account assets. This means that, after you annuitize, we will not deduct the Mortality and Expense Risks Charges; nor will we deduct the charges for any optional living or death benefit features.  Instead, the 1.70% insurance charge compensates us for ongoing administrative expenses. It includes the Administrative Expenses Charge and the Distribution Fee.
15	The expenses shown, which include any acquired fund fees and expenses, are for the year ended December 31, 2008, 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 some Funds are reduced by contractual fee reduction and expense reimbursement arrangements that will remain in effect at least through April 30, 2010. Other Funds have voluntary fee reduction and/or expense reimbursement arrangements that may be terminated at any time. If all such contractual or voluntary arrangements are taken into account, the minimum and maximum Total Annual Fund Operating Expenses for all Funds were 0.72% and 1.86%, respectively. However, if only the contractual arrangements (but not the voluntary arrangements) were taken into account, these percentages would still have been 0.72% and 1.86%. Expenses are based on estimates for any fund reporting operating results for less than 10 months for the current fiscal year. Each fee reduction and/or expense reimbursement arrangement is described in the relevant Fund's prospectus.

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

EXAMPLE

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

The Example assumes that you invest $10,000 in the Contract for the time periods indicated and that your Contract combines the features producing the highest maximum charges, including an optional death benefit (EEB Premier with MAV or EEB Premier with 5% Roll-Up) and the most expensive optional living benefit (Retirement Income Escalator II or Income ON Demand II Escalator each with joint-life coverage). If these optional benefits were not elected or fewer options were elected, the expense figures shown below would be lower. The Example also assumes that your investment has a 5% return each year and assumes the maximum fees and expenses of any of the Funds. For purposes of converting the Annual Account Fee to a percentage, the Example assumes an average Contract size of $50,000. In addition, this Example assumes no transfers were made and no premium taxes were deducted.  If these arrangements were considered, the expenses shown would be higher. This Example also does not take into consideration any fee waiver or expense reimbursement arrangement of the Funds. If these arrangements were taken into consideration, the expenses shown would be lower.

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

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

1 year	3 years	5 years	10 years
$696	$2,046	$3,341	$6,356

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

1 year	3 years	5 years	10 years
$696	$2,046	$3,341	$6,356

(3) If you do not surrender your Contract:

1 year	3 years	5 years	10 years
$696	$2,046	$3,341	$6,356

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

CONDENSED FINANCIAL INFORMATION

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

THE ANNUITY CONTRACT

Sun Life Assurance Company of Canada (U.S.) 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 Participant 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 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. However, if you purchase your Contract in connection with a tax-qualified plan, your purchase should be made for reasons other than tax-deferral.  Tax-qualified plans provide tax-deferral without the need for purchasing an annuity contract.

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

You choose these benefits on a variable or fixed basis or a combination of both. When you choose Variable Account investment options or a Variable Annuity option, your Account Value will change in response to changes in the return available from the different types of investments you select under your Contract. With these variable options, you assume all investment risk under your 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 less than that permitted by law.

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

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

COMMUNICATING TO US ABOUT YOUR CONTRACT

All materials sent to us, including Purchase Payments, must be sent to our Annuity Mailing Address as set forth at the beginning 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 all financial transactions, including Purchase Payments, withdrawal requests and transfer instructions, to be received on the next Business Day if we receive them (1) on a day that is not a Business Day or (2) after 4:00 p.m., Eastern Time. In some cases, receipt of requests for financial transactions by the broker-dealer of record will be deemed to be constructive receipt by us.

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

SUN LIFE 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, Puerto Rico, and the U.S. Virgin Islands, 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 ultimately controlled by Sun Life Financial Inc. (“Sun Life Financial”). Sun Life Financial, a corporation organized in Canada, is a reporting company under the Securities Exchange Act of 1934 with common shares listed on the Toronto, New York, and Philippine stock exchanges.

THE VARIABLE ACCOUNT

We established the Variable Account as a separate account on July 13, 1989, pursuant to a resolution of our Board of Directors. The Variable Account funds the Contract and various other variable annuity contracts that we offer. 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 and other variable annuity contracts that provide benefits that vary in accordance with the investment performance of the Variable Account. Although the assets maintained in the Variable Account will not be charged with any liabilities arising out of any other business we conduct, all obligations arising under a Contract, including the promise to make annuity payments, are general corporate obligations of the Company.

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

VARIABLE ACCOUNT OPTIONS: THE FUNDS

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

More comprehensive information about the Funds, including a discussion of their management, investment objectives, expenses, and potential risks, is found in the current prospectuses for the Funds (the “Fund Prospectuses”). The Fund Prospectuses should be read in conjunction with this Prospectus before you invest. A copy of each Fund Prospectus, as well as a Statement of Additional Information for each Fund, may be obtained without charge from the Company by calling (800) 752-7215 or by writing to Sun Life Assurance Company of Canada (U.S.), P.O. Box 9133, Wellesley Hills, Massachusetts 02481.

The Funds may also be available to registered separate accounts offering variable annuity and variable life products of other affiliated and unaffiliated insurance companies, as well as to the Variable Account and other separate accounts of the Company. Although we do not anticipate any disadvantages to this, there is a possibility that a material conflict may arise between the interests of the Variable Account and one or more of the other separate accounts participating in the Funds. A conflict may occur due to a change in law affecting the operations of variable life and variable annuity separate accounts, differences in the voting instructions of the 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.

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.”

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

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

We may from time to time at our discretion offer special interest rates 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 option, 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 if the Covered Person dies before the Annuity Commencement Date.

Issuing Your Contract

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

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

Amount and Frequency of Purchase Payments

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

If you are participating in an optional living benefit, you may make Purchase Payments only during your first Account Year.

Allocation of Net Purchase Payments

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

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

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

Your Account

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

Your Account Value

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

Variable Account Value

     Variable Accumulation Units

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

     Variable Accumulation Unit Value

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

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

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

     Crediting and Canceling Variable Accumulation Units

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

Fixed Account Value

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

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

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

     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. 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 an application of a Market Value Adjustment upon annuitization or withdrawals. We reserve the right to limit each new allocation to a Guarantee Period to at least $1,000.

     Renewals

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

l	written notice from you electing a different Guarantee Period from among those we then offer, or
l	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 to the Renewal 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 transfer your Guarantee Amount into the Money Market Sub-Account.

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

     Early Withdrawals

If you withdraw, transfer, or annuitize an allocation from a Guarantee Period more than 30 days prior to the Renewal Date, we will apply a Market Value Adjustment to the transaction. This could result in an increase or a 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. See “Withdrawals and Market Value Adjustment.”

Transfer Privilege

     Permitted Transfers

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

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

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

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

There is usually no charge imposed on transfers; however, we reserve the right to impose a transfer charge of $15 for each transfer. Transfers out of a Guarantee Period more than 30 days before the Renewal Date or any time after the Renewal 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 telephone. If the request is received before the earlier of (a) 4:00 p.m. Eastern Time on a Business Day, or (b) the close of the New York Stock Exchange on days that the Stock Exchange closes before 4:00 p.m., the transfer will be effective that day The telephone transfer privilege is available automatically during regular business hours before 4:00 p.m. Eastern Time, and does not require your written election. We will require personal identifying information to process a request for a transfer made by telephone. We will not be liable for following instructions communicated by telephone that we reasonably believe are genuine.

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

     Short-Term Trading

The Contracts are not designed for short-term trading.  If you wish to employ such strategies, do not purchase a Contract. Transfer limits and other restrictions, described below, are subject to our ability to monitor transfer activity.  Some Participants and their third party intermediaries engaging in short-term trading may employ a variety of strategies to avoid detection.  Despite our efforts to prevent short-term trading, there is no assurance that we will be able to identify such Participants or intermediaries or curtail their trading.  A failure to detect and curtail short-term trading could result in adverse consequences to the Participants. Short-term trading can increase costs for all Participants as a result of excessive portfolio transaction fees.  In addition, short-term trading can adversely affect a Fund's performance.  If large amounts of money are suddenly transferred out of a Fund, the Fund's investment adviser cannot effectively invest in accordance with the Fund's investment objectives and policies.

The Company has policies and procedures to discourage frequent transfers of contract value.  As described under “Transfer Privilege,” such policies include limiting the number and timing of certain transfers, subject to exceptions described in that section and exceptions designed to protect the interests of individual Participants.  The Company also reserves the right to charge a fee for transfers.

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

If we determine that a third party acting on your behalf is engaging (alone or in combination with transfers effected by you directly) in a pattern of short-term trading, we may refuse to process certain transfers requested by such a third party.  We impose additional administrative restrictions on third parties that engage in transfers of Contract Values on behalf of multiple Participants at one time. Specifically, we limit the form of such large group transfers to fax or mail delivery only, require the third party to provide us with advance notice of any possible large group transfer so that we can have additional staff ready to process the request, and require that the amount transferred out of a Sub-Account for each Participant be equal to 100% of that Participant's value in the Sub-Account.

We will provide you written notification of any restrictions imposed.

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

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

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

     Funds' Shareholder Trading Policies

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

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

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

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

Waivers; Reduced Charges; Special Guaranteed Interest Rates

We may reduce or waive the mortality and expense risk charges, the administrative service fee, the distribution fee, or the annual Account Fee, credit additional amounts, grant special Guaranteed Interest Rates in certain situations, or offer other options or benefits. These situations may include sales of Contracts (1) where selling and/or maintenance costs associated with the Contracts are reduced, such as the sale of several Contracts to the same 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.

Other Programs

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

     Dollar-Cost Averaging

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

No Market Value Adjustment (either positive or negative) will apply to amounts automatically transferred from the Fixed Account under the dollar-cost averaging program. However, if you discontinue or alter the program prior to completion, amounts remaining in the Fixed Account will be transferred to the Money Market Sub-Account, unless you instruct us otherwise, and the Market Value Adjustment will be applied. Any allocation of a new Purchase Payment to the program will be treated as commencing a new dollar-cost averaging program and may be subject to the $1,000 minimum investment limit.

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

     Asset Allocation

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

One asset allocation program consists of one or more asset allocation models that we may make available from time to time.  You may participate in no more than one such model at a time.  Each such asset allocation model represents a combination of Sub-Accounts with a different level of risk. Any asset allocation models, as well as the terms and conditions of this asset allocation program, are fully described in a separate brochure. We may add or delete such models in the future.

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

Another asset allocation program that we offer involves your investment in a “Fund of Funds” structure, which permits you to invest in Funds that focus on the differing asset classes.  Three Variable Sub-Accounts, SC Ibbotson Moderate Sub-Account, SC Ibbotson Balanced Sub-Account, and SC Ibbotson Growth Sub-Account, invest in three differing Fund of Funds investment options.  The Fund of Funds differ in their allocations to asset classes that reflect differing risk characteristics of the Funds in which they invest, ranging from moderate conservative to moderate aggressive. This means the adviser of each Fund of Funds seeks to achieve its objective by investing in a portfolio of Funds which in turn invest in a variety of U.S. and foreign equity, fixed income and money market securities. The expenses of a Fund of Funds may be higher than a regular fund because of this two-tier structure. The investment objectives of the SC Ibbotson Moderate Fund, SC Ibbotson Balanced Fund, and SC Ibbotson Growth Fund are described in each Fund’s prospectus.  Please contact your financial advisor for additional detail regarding asset allocation and these three Variable Sub-Accounts.

     Systematic Withdrawal and Interest Out Programs

You may select our Systematic Withdrawal Program or our Interest Out Program. Under the Systematic Withdrawal Program, you determine the amount and frequency of regular withdrawals you would like to receive from your Fixed Account Value and/or Variable Account Value and we will process them automatically. Under the Interest Out Program, we automatically pay you, or reinvest, interest credited for all Guarantee Periods you have chosen. The withdrawals under these programs may be subject to a Market Value Adjustment. They may also be included as income and subject to a 10% federal tax penalty. You should consult a qualified tax professional before choosing these options. We reserve the right to limit the election of either of these programs to Contracts with a minimum Account Value of $20,000. Limits on your systematic withdrawal may apply if you purchased an optional living benefit rider.

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

     Portfolio Rebalancing Program

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

No transfers to or from any Guarantee Period are permitted while this program is in effect.

     Secured Future Program

Under the Secured Future Program, we divide your Purchase Payments between the Fixed Account and the Variable Account. For the Fixed Account portion, you choose a Guarantee Period from among those we offer. We then allocate to that Guarantee Period the portion of your Purchase Payment necessary so that, at the end of the Guarantee Period, your Fixed Account allocation, including interest, will equal the entire amount of your original Purchase Payment, less the amount of any Contract charges that have been deducted from the Fixed Account. The remainder of the original Purchase Payment will be invested in the Sub-Accounts of your choice. At the end of the Guarantee Period, you will be guaranteed the amount of your original Purchase Payment (assuming no withdrawals or transfers), plus you will have the benefit, if any, of the investment performance of the Sub-Accounts you have chosen.

     Travel Assistance Program

This program may provide some or all of the following services, provided by a third party we designate, when the person covered is 100 miles or more away from home:

l	Referral to an English-speaking doctor or hospital for medical consultation and evaluation
l	Hospital admission guarantee, assuming the covered person has applicable health coverage
l	Emergency evacuation, if necessary
l	Critical care monitoring of attending doctor/hospital
l	Medically supervised repatriation, if the person covered requires assistance returning home after hospitalization
l	Assistance in filling prescriptions, if required
l	Receipt and transmission of necessary emergency messages
l	Telephone counseling and referrals if the person covered experiences emotional trauma
l	Transportation to join a covered person who was traveling alone and will be hospitalized more than seven days
l	Transportation home for minor children left unattended by the covered person’s illness or injury
l	Legal and interpreter referrals
l	Return of mortal remains

The “person covered” is:

l	The Owner as identified in the Contract, if the Contract is owned by one or more individuals; or
l	The Annuitant as identified in the Contract, if the Contract is owned by a non-natural entity.

There is no charge for this program, and you are automatically enrolled in the program if your Contract is eligible for the program and you do not instruct us otherwise. Your Contract is eligible for the program if its Open Date is on or after October 20, 2008, and the program has been approved in your state and by the firm through whom you purchased your Contract. The program will terminate when your Contract terminates, you change ownership of your Contract, or you instruct us to cancel your participation in the program.

Ask your sales representative for the brochure that provides additional detail about the Travel Assistance Program.

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, other than a Systematic 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.

We do not deduct any sales charge from your Purchase Payments when they are made, nor do we impose a withdrawal charge (known as a “contingent deferred sales charge”) on amounts you withdraw.

However, all withdrawals from your Fixed Account Value may be subject to a Market Value Adjustment (see “Market Value Adjustment”). 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 your Account Value at the end of the Valuation Period during which we receive your withdrawal request; we deduct the Account Fee, if applicable, 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, except as may be otherwise provided under the terms of any optional living benefit rider that you have elected.

     Partial Withdrawals

Unless you specify otherwise, when you request a partial withdrawal, we will pay you the amount specified in your request adjusted by any applicable charges and/or MVA and then reduce the value of your Account by the gross amount of the withdrawal.

You may specify the amount you want withdrawn from each Sub-Account and/or Guarantee Amount to which your Account is allocated. If you do not so specify, we will deduct the total amount you request pro rata, based on your Account Value at the end of the Valuation Period during which we receive your request. If you have elected “Build Your Portfolio,” withdrawals out of your portfolio model will be taken pro-rata from each of your selected Funds.

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

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

     Time of Payment

We will pay you the applicable amount of any full or partial withdrawal within 7 days after we receive your withdrawal request in good order, 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:

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

Market Value Adjustment

If permitted under the laws of your state, 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. However, we will not apply the Market Value Adjustment to automatic transfers to a Sub-Account from a Guarantee Period as part of our dollar-cost averaging program.

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. However, we do not apply the adjustment to the amount of interest credited during your current Account Year. Any withdrawal from a Guarantee Amount is attributed first to such interest.

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	)	N/12	-  1
	1 + J + b

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;
N	is the number of complete months remaining in your Guarantee Period; and
b	is a factor that currently is 0%, but that in the future we may increase to up to 0.25%. Any increase would be applicable only to Participants who purchase their Contracts after the date of that increase. The “b” factor is the amount that will be used to cover market volatility (i.e., credit risk), basis risk, and/or liquidity costs.

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

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

CONTRACT CHARGES

Account Fee

During the Accumulation Phase of your Contract, we will deduct from your Account an annual Account Fee of $50 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. 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 the Account Fee if:

l	your Account Value has been allocated only to the Fixed Account during the applicable Account Year; or
l	your Account Value is $100,000 or more 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 and Distribution Fee

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

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

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

Mortality and Expense Risk Charge

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

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

Charges for Optional Benefits

You may only elect one of the currently available optional living benefits. If you elect an optional living benefit, we will deduct a charge from your Account Value on the last valuation day of each Account Quarter during the Accumulation Phase. The maximum amount of the charge depends upon the benefit you elect as shown in the following chart. (The chart shows the charges for the forms of optional living benefits that are currently being offered. For more information about these charges, as well as the charges for forms of optional living benefits that are no longer being offered but remain in force under currently outstanding Contracts, please see “FEES AND EXPENSES.”)

Living Benefit Currently Available	Maximum Charge per Account Year
Retirement Income Escalator II	1.15% of the highest Withdrawal Benefit Base during the Account Year1
Income ON Demand II Escalator	1.15% of highest Fee Base during Account Year2
Retirement Asset Protector	0.75% of highest Retirement Asset Protector Benefit Base during Account Year3
1 The Withdrawal Benefit Base is initially equal to your initial Purchase Payment, and thereafter is subject to certain adjustments. 2 The Fee Base is initially equal to your initial Purchase Payment, and thereafter is subject to certain adjustments. 3 The Retirement Asset Protector Benefit Base is initially equal to your initial Purchase Payment, and thereafter is subject to certain adjustments.

If you elect an optional death benefit rider, we will deduct, during the Accumulation Phase, a charge based on your average daily Variable Account Value depending upon which of the optional death benefit rider(s) you elect. The effective annual percentage rates of these charges are set out below.

Rider(s) You Elect*	% of Variable Account Value
Maximum Anniversary Account Value	0.20%
5% Premium Roll-Up	0.20%
Earnings Enhancement Benefit Premier	0.25%
Earnings Enhancement Benefit Premier with MAV	0.40%
Earnings Enhancement Benefit Premier with 5% Roll-Up	0.40%
Earnings Enhancement Benefit Premier Plus	0.40%

                                             * As defined under “Optional Death Benefits.”

Premium Taxes

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.

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

Fund Expenses

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

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 Participants. However, such modification will apply only with respect to Participant Accounts established after the effective date of the modification.

OPTIONAL LIVING BENEFIT: RETIREMENT INCOME ESCALATORSM II

If you purchased your Contract prior to February 17, 2009, and elected to participate in Retirement Income Escalator II (“RIE II”), your Lifetime Withdrawal Percentage (defined below) will be different from the Lifetime Withdrawal Percentage available on Contracts currently being issued. (See “Determining Your Annual Withdrawal Amount,” “Step-up Under RIE II,” and “Joint-Life Coverage.”) In addition, unless you “step-up” as described under “Step-up Under RIE II,” the fee charged for your RIE II will be lower than the fee charged on Contracts purchased on or after February 17, 2009. (See “Cost of RIE II.”)

On or before the Issue Date, you may elect to participate in RIE II. RIE II provides an annual income guarantee for life.  Your income amount will not decrease, provided that your withdrawals do not exceed the guaranteed amount in any year.  In general, the longer you wait for your first withdrawal under RIE II, the larger the guaranteed Annual Withdrawal Amount. To describe how RIE II works, we use the following definitions:

Annual Withdrawal Amount:	The total guaranteed amount available for withdrawal each Account Year during your life, provided that you comply with certain conditions.  The Annual Withdrawal Amount is equal to your current Withdrawal Benefit Base multiplied by your Lifetime Withdrawal Percentage. (You should be aware that certain actions you take could significantly reduce the amount of your Annual Withdrawal Amount.)
Designated Funds:	The limited investment options you can choose if you are participating in a living benefit.
Early Withdrawal:	Any withdrawal taken prior to your RIE II Coverage Date.
Excess Withdrawal:	Any withdrawal taken after your RIE II Coverage Date that exceeds your Annual Withdrawal Amount (or your Required Minimum Distribution Amount, if greater).
Lifetime Withdrawal Percentage:	The percentage used to calculate your Annual Withdrawal Amount.
RIE II Bonus Base:	The amount on which bonuses are calculated.  The RIE II Bonus Base is equal to the sum of your Purchase Payments, increased by any “step-ups” (described below) and reduced proportionately by any withdrawal taken prior to your RIE II Coverage Date or any Excess Withdrawals (see “Excess Withdrawals” under “Withdrawals Under RIE II”).
RIE II Bonus Period:	A ten-year period commencing on the Issue Date and ending on your tenth Account Anniversary. If you “step up” RIE II (described below) during the RIE II Bonus Period, the RIE II Bonus Period is extended to ten years from the date of the step-up.
RIE II Coverage Date:	Your Issue Date if you are at least age 59 at issue; otherwise, the first Account Anniversary after you attain age 59.
Withdrawal Benefit Base:	The amount used to calculate (1) your Annual Withdrawal Amount and (2) your cost for RIE II.
You and Your:	The terms “you” and “your” refer to the oldest living Participant or the surviving spouse of the oldest Participant, as described under “Death of Participant Under RIE II with Single-Life Coverage” and “Death of Participant Under RIE II with Joint-Life Coverage.” In the case of a non-natural Participant, these terms refer to the oldest living annuitant.

RIE II may not be appropriate for all investors. Before purchasing RIE II, you should carefully consider the following:

RIE II may beappropriate for you if you are an investor who:
●	wants an opportunity for annual income to increase as you grow older.
●	wants a guaranteed stream of income for life without annuitizing, beginning on or after your RIE II Coverage Date.
●	wants the option of joint-life coverage.
●	can defer withdrawals during your early Account Years to increase your benefit in later years.
RIE II may be inappropriate for you if you are an investor who:
●	anticipates the need for Excess Withdrawals or Early Withdrawals.
●	wants to invest in funds other than a Designated Fund.
RIE II is inappropriate if you are an investor who:
●	is actively invested in contributory plans, because RIE II prohibits any Purchase Payments after the first Account Anniversary.

You may combine RIE II with any optional death benefit rider other than the EEB Premier Plus rider. Upon annuitization, RIE II and any elected optional death benefit rider automatically terminate.

You may elect to participate in RIE II, provided that:

l	the rider is available for sale both in the state where the Contract is sold and in the state where you reside;
l	neither the oldest Participant nor the oldest Annuitant has attained age 86 on or before the date we receive your application (in the case of a non-natural Participant, the oldest Annuitant has not attained age 86 on or before that date);
l	you limit the allocation of your Purchase Payments and Account Value to the Designated Funds that we make available with RIE II;
l	you do not elect the EEB Premier Plus Optional Death Benefit rider; and
l	you do not elect any other optional living benefit rider available under your Contract.

RIE II allows you to withdraw a guaranteed amount of money each year, beginning on your RIE II Coverage Date, until the death of any Participant if single-life coverage is elected (or until the death of both the Participant and the Participant's spouse if joint-life coverage is elected). Your right to take withdrawals under RIE II continues regardless of the investment performance of the Designated Funds, provided that you comply with certain requirements. After your RIE II Coverage Date, the amount you can withdraw, in any one year, can be up to 7% of your Withdrawal Benefit Base, depending upon your age (or the younger spouse's age in case of joint-life coverage) on the date of your first withdrawal.

In addition, if you make no withdrawals in an Account Year during your RIE II Bonus Period, we will increase your Withdrawal Benefit Base by an amount equal to 7% of your RIE II Bonus Base.  The RIE II Bonus Period is a 10-year period commencing on your Issue Date.  The period will be extended for an additional 10 years commencing on each step-up of the Withdrawal Benefit Base (see “Step-Up Under RIE II”), provided that the step-up occurs during the RIE II Bonus Period.

If you are participating in RIE II, you may not make Purchase Payments after the first year following your Issue Date.  After the first Account Anniversary, any Purchase Payments submitted by a Participant while participating in RIE II will be returned to the Participant, unless the Participant instructs us to terminate participation in RIE II.

To participate in RIE II, all of your Account Value must be invested in one or more of the Designated Funds at all times during the term of RIE II. (The “term” of RIE II is for life, unless your Withdrawal Benefit Base is reduced to zero or RIE II is terminated or cancelled as described under “Cancellation of RIE II,” “Depleting Your Account Value,” and “Annuitization Under RIE II.”) The only Funds, dollar-cost averaging program options, and asset allocation models that currently qualify as Designated Funds are listed in the section entitled “Designated Funds.”

Under RIE II, you have the option of choosing between single-life coverage and joint-life coverage. These options are described in greater detail under “Joint-Life Coverage,” “Death of Participant Under RIE II with Single-Life Coverage,” and “Death of Participant Under RIE II with Joint-Life Coverage.”

Determining Your Withdrawal Benefit Base

On the Issue Date, we set your Withdrawal Benefit Base equal to your initial Purchase Payment. Thereafter, your Withdrawal Benefit Base is:

l	increased by any applicable bonuses;
l	increased by any step-ups as described under “Step-Up Under RIE II”;
l	increased by any subsequent Purchase Payments you make during the first year following the Issue Date.
l	decreased following any Early Withdrawals you take as described under “Early Withdrawals”; and
l	decreased following any Excess Withdrawals you take as described under “Excess Withdrawals”.

Determining Your Annual Withdrawal Amount

Your Annual Withdrawal Amount is first determined when you make your first withdrawal after your RIE II Coverage Date and then on each subsequent Account Anniversary. Your Annual Withdrawal Amount is equal to your Withdrawal Benefit Base multiplied by your Lifetime Withdrawal Percentage.  The Lifetime Withdrawal Percentage depends upon your age at the time you make your first withdrawal after your RIE II Coverage Date as shown in the tables below. If you purchased your Contract on or after February 17, 2009, your Lifetime Withdrawal Percentage is determined as follows:

Your Age on the Date of the First Withdrawal After Your RIE II Coverage Date*	Lifetime Withdrawal Percentage
59-64	4%
65 - 74	5%
75 - 79	6%
80 or older	7%

                                  *If you elected joint-life coverage, the age ranges are based upon the age of the younger spouse

                                    as described under “Joint-Life Coverage.”

If you purchased your Contract prior to February 17, 2009, your Lifetime Withdrawal Percentage is determined, as follows:

Your Age on the Date of the First Withdrawal After Your RIE II Coverage Date*	Lifetime Withdrawal Percentage
59 - 69	5%
70 - 79	6%
80 or older	7%

                                  *If you elected joint-life coverage, the age ranges are based upon the age of the younger spouse

                                    as described under “Joint-Life Coverage.”

Your Lifetime Withdrawal Percentage will only increase if your age at the time of step-up coincides with a higher percentage as shown in the table above.  (See “Step-Up Under RIE II.”).  An increase in the Lifetime Withdrawal Percentage will increase your Annual Withdrawal Amount.

Your Annual Withdrawal Amount equals your Withdrawal Benefit Base multiplied by your Lifetime Withdrawal Percentage. If your Withdrawal Benefit Base changes after your Annual Withdrawal Amount is determined, your Annual Withdrawal Amount will also change.  The new Annual Withdrawal Amount will be effective on the next Account Anniversary and, at that time, will reflect any increases caused by a step-up or a bonus that took place during the prior Account Year and any decreases caused by Excess Withdrawals (described below) that were taken during the prior Account Year. The new Annual Withdrawal Amount will be in effect for all subsequent Account Years, unless and until there is a further change in your Withdrawal Benefit Base.

How RIE II Works

Each Account Year, beginning on your RIE II Coverage Date, you can take withdrawals totaling up to the amount of your Annual Withdrawal Amount, subject to the terms and conditions discussed below.  Even if your Account Value is reduced to zero, as long as your Withdrawal Benefit Base is greater than zero, you can withdraw up to your Annual Withdrawal Amount every year of your life unless you choose to cancel RIE II.

If you defer taking any withdrawals in an Account Year during the RIE II Bonus Period, your Withdrawal Benefit Base will be increased by an amount equal to 7% of your RIE II Bonus Base. However, if this amount is less than the amount you will receive under a step-up, the Withdrawal Benefit Base will instead be increased by the step-up amount. If you do take a withdrawal, you are still eligible for step-up. (See “Step-Up under RIE II.”) In this way, if you defer taking withdrawals during your early Account Years, you will be able to take larger withdrawals in later Account Years. Your Annual Withdrawal Amount is not, however, cumulative:  any unused portion of your Annual Withdrawal Amount in any Account Year cannot be applied to a future year.

Note that the timing and amount of your withdrawals may significantly decrease your total benefits under RIE II, as described further under “Withdrawals Under RIE II.”  Note also that investing in any Fund, other than a Designated Fund, will cancel RIE II, as described under “Cancellation of RIE II.”

Here is an example of how RIE II works. This example assumes that your Contract was purchased on or after February 17, 2009.

Assume that you are age 65 when your Contract is issued with an initial Purchase Payment of $100,000 and that you elected to participate in RIE II with single-life coverage. (If you selected joint-life coverage the numbers shown in the example could be different.)  Your Withdrawal Benefit Base and your RIE II Bonus Base are each set equal to your initial Purchase Payment on your Issue Date.  Because you reached age 59 prior to your Issue Date, your RIE II Coverage Date is your Issue Date.  You can begin at any time to withdraw up to your Annual Withdrawal Amount each Account Year without reducing your Withdrawal Benefit Base.  During the RIE II Bonus Period, your Withdrawal Benefit Base will increase by 7% of your RIE II Bonus Base each Account Year in which you do not take a withdrawal.  (For convenience, assume that the investment performance on your underlying investments remains neutral throughout the life of your Contract, except for Account Year 2.)
Assume that, because of good investment performance of the Designated Funds during Account Year 2, your Account Value has grown to $125,000 on your second Account Anniversary.  Your Contract is, therefore, eligible for an automatic step-up of its Withdrawal Benefit Base and RIE II Bonus Base.  Assume that we have not increased the percentage used to calculate the RIE II Fee on newly issued Contracts; therefore we will step up your Withdrawal Benefit Base and your RIE II Bonus Base to $125,000.  Your new Annual Withdrawal Amount will be 5% of your new Withdrawal Benefit Base, or $6,250.  Going forward, your new RIE II Bonus Base will be $125,000, unless increased by another step-up or reduced by an Excess Withdrawal, and your RIE II Bonus Period will now end on your 12th Account Anniversary (i.e., ten years after the step-up). All values shown are as of the beginning of the Account Year.
Account Year	Account Value	Withdrawal Benefit Base	RIE II Bonus Base	Annual Withdrawal Amount	Withdrawals
1	$100,000	$100,000	$100,000	$5,000	$0
2	$100,000	$107,000	$100,000	$5,350	$0
3	$125,000	$125,000	$125,000	$6,250	$0
Assume you take your first withdrawal when you are age 71 in Account Year 7.  Using the above chart, we set your Lifetime Withdrawal Percentage at 5%.  Your Annual Withdrawal Amount will be equal to 5% of your Withdrawal Benefit Base. You can begin withdrawing up to $8,000 each Account Year without reducing your Withdrawal Benefit Base, as shown in the following table:
4	$125,000	$133,750	$125,000	$6,688	$0
5	$125,000	$142,500	$125,000	$7,125	$0
6	$125,000	$151,250	$125,000	$7,563	$0
7	$125,000	$160,000	$125,000	$8,000	$8,000
8	$117,000	$160,000	$125,000	$8,000	$8,000
Assume in Account Year 9, you defer taking a withdrawal.  Your Withdrawal Benefit Base will increase by $8,750 which is 7% of your RIE II Bonus Base ($125,000). Your new Annual Withdrawal Amount will be set equal to $8,438, which is 5% of your new Withdrawal Benefit Base ($168,750), as shown below:
9	$109,000	$160,000	$125,000	$8,000	$0
10	$109,000	$168,750	$125,000	$8,438	$8,438
Assume that in Account Year 14, you again decide to defer taking a withdrawal.  Your Withdrawal Benefit Base will not be increased because you are no longer in the RIE II Bonus Period, as your RIE II Bonus Period ends 10 years after the previous step-up.
11	$100,563	$168,750	$125,000	$8,438	$8,438
12	$92,125	$168,750	$125,000	$8,438	$8,438
13	$83,688	$168,750	$125,000	$8,438	$8,438
14	$75,250	$168,750	$125,000	$8,438	$0
15	$75,250	$168,750	$125,000	$8,438	$8,438

There is no way to know for certain whether forgoing income in one or more years will increase or decrease the total income paid to the Participant over the life of the annuity.  Generally speaking, not taking income in a year will increase the Annual Withdrawal Amount during the RIE II Bonus Period due to the bonus and the potential for step-ups.  In this way, if you defer taking withdrawals during your early Account Years, you will be able to take larger withdrawals in later Account Years. Your Annual Withdrawal Amount is not, however, cumulative:  any unused portion of your Annual Withdrawal Amount in any Account Year cannot be applied to a future year.

The total lifetime payments to the Participant could be more or less depending upon investment performance over the life of the Contract and the age to which the Participant lives.  Better investment performance and a longer life span generally make it advantageous to forgo the Annual Withdrawal Amount in a limited number of years.

Withdrawals Under RIE II

     Withdrawals After the RIE II Coverage Date

Starting on your RIE II Coverage Date and continuing to your Annuity Commencement Date, you may take withdrawals totaling up to your Annual Withdrawal Amount each Account Year without reducing your Withdrawal Benefit Base.  These withdrawals will reduce your Account Value by the amount of the withdrawal, but will not change your Withdrawal Benefit Base.

The previous example shows withdrawals taken after your RIE II Coverage Date.  Because they do not exceed your Annual Withdrawal Amount (or your Required Minimum Distribution amount, if higher), the withdrawals do not reduce your Withdrawal Benefit Base or your Annual Withdrawal Amount.

If a withdrawal exceeds your Annual Withdrawal Amount, then the withdrawal would be considered an Excess Withdrawal.

     Excess Withdrawals

If you take an Excess Withdrawal, your RIE II Bonus Base and your Withdrawal Benefit Base will be reduced according to the following formulae:

Your new RIE II Bonus Base =	BB x	(	AV - WD	)
			AV - AWA

Your new Withdrawal Benefit Base =	WBB x	(	AV - WD	)
			AV - AWA

Where:
	BB =	Your RIE II Bonus Base immediately prior to the Excess Withdrawal.
	WBB =	Your Withdrawal Benefit Base immediately prior to the Excess Withdrawal.
	WD =	The amount of the Excess Withdrawal.
	AV =	Your Account Value immediately prior to the Excess Withdrawal.
	AWA =	Your Annual Withdrawal Amount minus any prior partial withdrawals taken during the current Account Year.

Using the facts of the above example, assume that in Account Year 7, you take two withdrawals: a $4,000 withdrawal followed by a $6,000 withdrawal.  Your first withdrawal reduces your Account Value to $121,000 but does not affect your RIE II Bonus Base or Withdrawal Benefit Base because it is not in excess of your Annual Withdrawal Amount. Your second withdrawal (when combined with the first) is in excess of your $8,000 Annual Withdrawal Amount.  After your second withdrawal, your RIE II Bonus Base and your Withdrawal Benefit Base will be reduced as follows:
	Your new RIE II Bonus Base	=	$125,000	x	$121,000 – $6,000
					$121,000 – ($8,000 – $4,000)
		=	$125,000	x	$115,000
					$117,000
		=	$125,000	x	0.98291
		=	$122,863
	Your new Withdrawal Benefit Base	=	$160,000	x	$121,000 – $6,000
					$121,000 – ($8,000 – $4,000)
		=	$160,000	x	$115,000
					$117,000
		=	$160,000	x	0.98291
		=	$157,265
Beginning on your Account Anniversary and going forward, your new Annual Withdrawal Amount will be reduced to 5% of your new Withdrawal Benefit Base, or $7,863.

You should be aware that, if your Account Value is less than the Withdrawal Benefit Base at the time an Excess Withdrawal is taken (as in the above example), then your Withdrawal Benefit Base and your RIE II Bonus Base will be reduced by an amount equal to or more than the excess amount withdrawn.  Thus, Excess Withdrawals taken in a down market could severely reduce your benefits under RIE II.

     Early Withdrawals

All withdrawals taken before your RIE II Coverage Date will be considered Early Withdrawals and your RIE II Bonus Base and your Withdrawal Benefit Base will be reduced using the following formulae:

Your new RIE II Bonus Base	=	BB x	(	AV –  WD	)
				AV

Your new Withdrawal Benefit Base	=	WBB x	(	AV –  WD	)
				AV

Where:
	BB  =	Your RIE II Bonus Base immediately prior to the Early Withdrawal.
	WBB  =	Your Withdrawal Benefit Base immediately prior to the Early Withdrawal.
	WD  =	The amount of the Early Withdrawal.
	AV  =	Your Account Value immediately prior to the Early Withdrawal.

Assume that you are age 45 when your Contract is issued with an initial Purchase Payment of $100,000 and that you elected to participate in RIE II with single-life coverage. (If you selected joint-life coverage, the numbers shown in the example could be different.)  Your Withdrawal Benefit Base and your RIE II Bonus Base are each set equal to your initial Purchase Payment on your Issue Date.  Your Withdrawal Benefit Base will increase by 7% of your RIE II Bonus Base each year in which you do not take a withdrawal.  Your RIE II Coverage Date will not occur until your 15th Account Anniversary (the first Account Anniversary after you reach age 59).  Any withdrawals you take prior to that time will be Early Withdrawals.
Assume that because of good investment performance of the Designated Funds during Account Year 2, your Account Value has grown to $125,000 on your second Account Anniversary. Your Contract is therefore eligible for an automatic step-up of its Withdrawal Benefit Base and RIE II Bonus Base. Assume that we have not increased the percentage used to calculate the RIE II Fee on newly issued Contracts; therefore we will step-up your Withdrawal Benefit Base and your RIE II Bonus Base to $125,000.
Assume that, in your Account Year 7, you withdraw $10,000.  Because you are age 51 (and younger than age 59), this is an Early Withdrawal.
Account Year		Account Value	Withdrawal Benefit Base	RIE II Bonus Base			Annual Withdrawal Amount			Withdrawals
1		$100,000	$100,000	$100,000			$0			$0
2		$100,000	$107,000	$100,000			$0			$0
3		$125,000	$125,000	$125,000			$0			$0
4		$125,000	$133,750	$125,000			$0			$0
5		$125,000	$142,500	$125,000			$0			$0
6		$125,000	$151,250	$125,000			$0			$0
7		$125,000	$160,000	$125,000			$0			$10,000
At this point, your RIE II Bonus Base and your Withdrawal Benefit Base will be recalculated as follows:
	Your new RIE II Bonus Base				=	$125,000		x	$125,000 – $10,000
									$125,000
					=	$125,000		x	$115,000
									$125,000
					=	$125,000		x	0.92000
					=	$115,000
	Your new Withdrawal Benefit Base				=	$160,000		x	$125,000 – $10,000
									$125,000
					=	$160,000		x	$115,000
									$125,000
					=	$160,000		x	0.92000
					=	$147,200
Your Annual Withdrawal Amount will still be $0 because you have not reached your RIE II Coverage Date.

You should be aware that Early Withdrawals could severely reduce (or even exhaust) your benefits under RIE II.

In addition to reducing your benefits under RIE II, any withdrawal before you reach age 59½ could have adverse tax consequences. You should consult a qualified tax professional for more information.

     Depleting Your Account Value

If your Account Value is reduced to zero as a result of an Excess Withdrawal or an Early Withdrawal, your Withdrawal Benefit Base and the RIE II Bonus Base will each also be reduced to zero. Therefore, your Contract, including your benefits under RIE II, will end.

If, on the other hand, your Account Value is reduced to zero through any combination of poor investment performance of the Designated Funds, Contract charges, and withdrawals other than Excess Withdrawals or Early Withdrawals, your Withdrawal Benefit Base will not be reduced. Your Contract will end, but your right to receive an annual withdrawal amount will continue.  That is to say, regardless of your age on the day the Account Value is reduced to zero, you will be entitled to receive your Annual Withdrawal Amount each year for as long as you live.

Cost of RIE II

If you elect RIE II, we will deduct a quarterly fee from your Account Value (“RIE II Fee”). The RIE II Fee will be taken as a specific deduction from your Account Value on the last valuation day of each Account Quarter. The RIE II Fee will be a percentage of your Withdrawal Benefit Base.  This percentage will equal 0.2375% of your Withdrawal Benefit Base on the last day of the Account Quarter if you elected single-life coverage (0.2875% for joint-life coverage).  The maximum RIE II Fee you can pay in any one Account Year is equal to 0.95% of the highest Withdrawal Benefit Base at any point in that Account Year if you elected single-life coverage (1.15% for joint-life coverage). We reserve the right to increase the percentage rate used to calculate the RIE II Fee on newly issued Contracts.

If you purchased your Contract prior to February 17, 2009, your cost for RIE II was initially, on an annual basis, 0.80% of the highest Withdrawal Benefit Base for single-life coverage (1.00% for joint-life coverage). Your cost for RIE II will not increase unless:

l	you decide to step-up your Withdrawal Benefit Base, as described under “Step-Up Under RIE II,” and
l	you consent in writing, at the time of step-up, to accept an increase in your RIE II Fee to 0.95% for single-life coverage (1.15% for joint-life coverage).

If you do not consent to the higher fee, the step-up will not be implemented and all subsequent step-ups will be suspended unless and until we receive your written consent to the higher fee.

Your RIE II Fee will not change during an Account Year, unless you take one of the following specific actions:

l	If you make an additional Purchase Payment during your first Account Year, you will increase your Withdrawal Benefit Base and thus your RIE II Fee.
l	If you make a withdrawal before your RIE II Coverage Date or a withdrawal in excess of your Annual Withdrawal Amount, you will decrease your Withdrawal Benefit Base and thus your RIE II Fee.

However, on each Account Anniversary, we determine whether favorable investment performance of the Designated Funds may cause the Withdrawal Benefit Base to increase as described under “Step-Up Under RIE II.”  If your Withdrawal Benefit Base increases because of favorable investment performance, your RIE II fee will also increase because it is recalculated on each Account Anniversary based upon your highest Withdrawal Benefit Base during that Account Year.

We will continue to deduct the RIE II Fee until you annuitize your Contract, your Account Value reduces to zero, or your RIE II is terminated or cancelled as described under “Cancellation of RIE II”.

We reserve the right to make special offers from time to time.  Specifically, we reserve the right to waive the RIE II Fee for a limited period on newly issued Contracts. The same waiver would apply to all Contracts issued while we are making the special offer.

Step-Up Under RIE II

Regardless of your age on the Issue Date, on each Account Anniversary prior to your Annuity Commencement Date, we will automatically step-up your Withdrawal Benefit Base and your RIE II Bonus Base, provided that you satisfy certain requirements. First, you must meet eligibility requirements:

l	Your Account Value must equal no more than $5,000,000. (For purposes of determining the $5,000,000 limit, we reserve the right, in our sole discretion, to aggregate your Account Value with the account values of all other variable annuity contracts you own issued by Sun Life Assurance Company of Canada (U.S.) or its affiliates.)
l	Your highest quarter-end Account Value (adjusted for subsequent Purchase Payments and withdrawals) during the most recent Account Year (“Highest Quarterly Value”) must be greater than your current Withdrawal Benefit Base (adjusted for any applicable 7% bonus increases).

Second, if you satisfy the eligibility requirements, we then consider whether market conditions have caused us to increase the percentage rate used to calculate the RIE II Fee on newly issued Contracts. If we are no longer issuing Contracts with RIE II, then the percentage rate we use to calculate your RIE II Fee will be set based upon current market conditions at that time.

l

If we have not had to increase the percentage rate as described above, the percentage rate we use to calculate your RIE II Fee will remain unchanged and we will automatically step-up your Withdrawal Benefit Base and your RIE II Bonus Base

l

If we have had to increase the percentage rate as described above, we offer you the opportunity to step-up at the higher percentage rate. In this case, your written consent is required to accept the higher percentage rate used to calculate your RIE II Fee and step-up your Withdrawal Benefit Base and RIE II Bonus Base.  If you do not consent to the step-up and higher percentage, the step-up will not be implemented and all subsequent step-ups of your Withdrawal Benefit Base and RIE II Bonus Base will also be suspended. You may thereafter submit an election form to us, however, in order to consent to the then-applicable percentage rate and thus reactivate subsequent automatic step-ups.

At the time of step-up, we will increase your Withdrawal Benefit Base and RIE II Bonus Base to an amount equal to the Highest Quarterly Value, if such amount exceeds your current Withdrawal Benefit Base (adjusted for any applicable 7% bonus increases). If the step-up occurs during the RIE II Bonus Period, your RIE II Bonus Period will renew for another 10-year period commencing at the time of step-up.

If your Lifetime Withdrawal Percentage has already been determined and your age at the time of step-up coincides with a higher percentage as shown in the table below, your Lifetime Withdrawal Percentage will increase. After the step-up, your Annual Withdrawal Amount will be your Lifetime Withdrawal Percentage multiplied by your new Withdrawal Benefit Base. If you purchased your Contract on or after February 17, 2009, your Lifetime Withdrawal Percentage is determined, based upon your age at time of step-up, as follows:

Your Age at Step-up*	Lifetime Withdrawal Percentage
59 - 64	4%
65 - 74	5%
75 - 79	6%
80 or older	7%

                                  *If you elected joint-life coverage, the age ranges are based upon the age of the younger spouse

                                    as described under “Joint-Life Coverage.”

If you purchased your Contract prior to February 17, 2009, your Lifetime Withdrawal Percentage is determined, based upon your age at time of step-up, as follows:

Your Age at Step-Up*	Lifetime Withdrawal Percentage
59 - 69	5%
70 - 79	6%
80 or older	7%

                                  *If you elected joint-life coverage, the age ranges are based upon the age of the younger spouse

                                    as described under “Joint-Life Coverage.”

Here are examples of how step-up works under a few different circumstances.  In each of the four examples, Account Values shown are as of the last day of each Account Quarter.  Adjustments are made on the day a Purchase Payment or withdrawal is made. All four examples assume that the Contract was purchased on or after February 17, 2009.

Assume that you are 65 years old when you purchase a Contract with an initial Purchase Payment of $100,000, and that you elect to participate in RIE II with single-life coverage. (If you selected joint-life coverage, the numbers shown in the example could be different.) Your Withdrawal Benefit Base and your RIE II Bonus Base are each equal to your initial Purchase Payment. Your Annual Withdrawal Amount is $5,000 (5% of your Withdrawal Benefit Base).
The Account Values on each of your four Account Quarters are $113,000, $108,000, $90,000, and $103,000, respectively.  No additional Purchase Payments are made and no withdrawals are taken, so no adjustments to these values are necessary.  The highest adjusted quarterly value is $113,000.  Your new Withdrawal Benefit Base is set to equal to $113,000 since that amount exceeds your previous Withdrawal Benefit Base increased by 7% of your RIE II Bonus Base ($100,000 + $7,000).
Time	Account Value	Adjustment for subsequent Purchase Payments and withdrawals	Account Value (after subsequent adjustments)	Withdrawal Benefit Base
Issue	$100,000	n/a	n/a	$100,000
End of First Quarter	$113,000	n/a	$113,000	$100,000
End of Second Quarter	$108,000	n/a	$108,000	$100,000
End of Third Quarter	$90,000	n/a	$90,000	$100,000
End of Fourth Quarter (before step-up)	$103,000	n/a	$103,000	$100,000
Highest Quarterly Value (after adjustments)			$113,000
Step-up comparison	Is $113,000 greater than $100,000 + $7,000?  Yes, so step-up.
On the Account Anniversary (after step-up)
New Withdrawal Benefit Base =	$113,000	Highest Quarterly Value (after adjustments)
New Annual Withdrawal Amount =	$5,650	$113,000 x 5%
New RIE II Bonus Base =	$113,000
Please note:  The end of the fourth Account Quarter and the Account Anniversary are the same day.  We only make the distinction to separate values before and after step-up.

If you make an additional Purchase Payment during your first Account Year, your Account Value, your Withdrawal Benefit Base, and your RIE II Bonus Base are each immediately increased by the amount of the additional Purchase Payment.

Here is an example of how an additional Purchase Payment of $50,000 made in the first Account Quarter would affect your step-up:

Time	Account Value	Adjustment for subsequent Purchase Payments and withdrawals	Account Value (after subsequent adjustments)	Withdrawal Benefit Base
Issue	$100,000	n/a	n/a	$100,000
End of First Quarter	$113,000	$50,000	$163,000	$100,000
$50,000 Purchase Payment	$163,000	n/a	n/a	$150,000
End of Second Quarter	$158,000	n/a	$158,000	$150,000
End of Third Quarter	$140,000	n/a	$140,000	$150,000
End of Fourth Quarter (before step-up)	$153,000	n/a	$153,000	$150,000
Highest Quarterly Value (after adjustments)			$163,000
Step-up comparison	Is $163,000 greater than $150,000 + $10,500?  Yes, so step-up.
On the Account Anniversary (after step-up)
New Withdrawal Benefit Base =	$163,000	Highest Quarterly Value (after adjustments)
New Annual Withdrawal Amount =	$8,150	$163,000 x 5%
New RIE II Bonus Base =	$163,000
Please note:  Since the additional Purchase Payment occurred after the first Account Quarter, the first Account Quarter value was adjusted.

Here is an example of how a $4,000 withdrawal taken in the second Account Quarter would affect your step-up:

Time	Account Value	Adjustment for subsequent Purchase Payments and withdrawals	Account Value (after subsequent adjustments)	Withdrawal Benefit Base
Issue	$100,000	n/a	n/a	$100,000
End of First Quarter	$113,000	-  $4,000	$109,000	$100,000
$4,000 withdrawal	$109,000	n/a	n/a	$100,000
End of Second Quarter	$104,000	n/a	$104,000	$100,000
End of Third Quarter	$86,000	n/a	$86,000	$100,000
End of Fourth Quarter (before step-up)	$99,000	n/a	$99,000	$100,000
Highest Quarterly Value (after adjustments)			$109,000
Step-up comparison	Is $109,000 greater than $100,000 + $0 (no bonus since withdrawal taken)? Yes, so step-up.
On the Account Anniversary (after step-up)
New Withdrawal Benefit Base =	$109,000	Highest Quarterly Value (after adjustments)
New Annual Withdrawal Amount =	$5,450	$109,000 x 5%
New RIE II Bonus Base =	$109,000
Please note:  Since the withdrawal occurred after the first Account Quarter, the first Account Quarter value was adjusted.

Assume instead you take a $40,000 withdrawal in the second Account Quarter at a point when the Account Value equaled $99,000 immediately before the withdrawal.  Since this withdrawal exceeds your Annual Withdrawal Amount, it is considered an Excess Withdrawal.  The Excess Withdrawal reduces your Withdrawal Benefit Base and your RIE II Bonus Base as described under “Excess Withdrawals.”  All previous quarter-end Account Values are first reduced by the Annual Withdrawal Amount less any prior withdrawals taken in that Account Year and then adjusted in the same proportion that the Withdrawal Benefit Base was adjusted after the Excess Withdrawal. (See the two-step calculation shown in the box below the following example.)

Time	Account Value	Adjustment for subsequent Purchase Payments and withdrawals	Account Value (after subsequent adjustments)	Withdrawal Benefit Base
Issue	$100,000	n/a	n/a	$100,000
End of First Quarter	$113,000	-  $45,213	$67,787	$100,000
$40,000 withdrawal	$59,000	n/a	n/a	$62,766
End of Second Quarter	$68,000	n/a	$68,000	$62,766
End of Third Quarter	$50,000	n/a	$50,000	$62,766
End of Fourth Quarter (before step-up)	$63,000	n/a	$63,000	$62,766
Highest Quarterly Value (after adjustments)			$68,000
Step-up comparison	Is $68,000 greater than $62,766 + $0 (no bonus since withdrawal taken)? Yes, so step-up.
On the Account Anniversary (after step-up)
New Withdrawal Benefit Base =	$68,000	Highest Quarterly Value (after adjustments)
New Annual Withdrawal Amount =	$3,400	$68,000 x 5%
New RIE II Bonus Base =	$68,000

(1)	Reduce the end of First Quarter Account Value by the Annual Withdrawal Amount less any prior withdrawals taken in that Account Year	=	$113,000	–	$5,000		= $108,000
(2)	Adjust the Account Value for the first Account Quarter	=	$108,000 x	(	$99,000 – $40,000	)	= $67,787
					$99,000 – $5,000
	The total adjustment	=	$113,000	–	$67,787		= $45,213

All of the above examples assume that you are age 65 at issue, so your Lifetime Withdrawal Percentage is 5%. Assume instead you are age 74 at issue and have attained age 75 on your first Account Anniversary.  Follow the first example where no withdrawals were taken and no additional Purchase Payments were made.  When your Withdrawal Benefit Base steps-up to $113,000, your new Lifetime Withdrawal Percentage is 6% since you had attained age 75 by your first Account Anniversary.  Your Annual Withdrawal Amount is now $6,780.

Joint-Life Coverage

On the Issue Date, you have the option of electing RIE II with single-life coverage or, for a higher RIE II Fee, with joint-life coverage. Once you make the election, you cannot switch between joint-life and single-life coverage, regardless of any change in life events. Joint-life coverage is not available if you are unmarried on the Issue Date.

Joint-life coverage can be elected on an individually-owned Contract or on a co-owned Contract. On an individually-owned Contract, joint-life coverage is available only if your spouse is the sole primary beneficiary on the Issue Date and remains the sole primary beneficiary while RIE II is in effect.  On a co-owned Contract, joint-life coverage is available only if you and your spouse are the only co-owners on the Issue Date and remain so while RIE II is in effect. Whereas single-life coverage provides annual withdrawals under RIE II only until any Participant dies, joint-life coverage provides annual withdrawals under RIE II for as long as either you or your spouse is alive.  (Note, however, upon the death of a spouse, the Contract, including RIE II, ends.  To take annual withdrawals under RIE II’s joint-life feature after the death of a spouse, the surviving spouse must first elect to continue the Contract through the “Spousal Continuance” provision.)  See also “Death of Participant Under RIE II with Joint-Life Coverage.”

If you have elected joint-life coverage, the RIE II Coverage Date will be your Issue Date if the younger spouse is at least age 59 on the Issue Date, and will be the first Account Anniversary after the younger spouse attains (or would have attained) age 59 if the younger spouse is less than age 59 on the Issue Date. (For purposes of joint-life coverage, the younger spouse refers to the person who was the younger spouse on the Issue Date, even if that person has died or is no longer married to the person who was his or her spouse on the Issue Date.)  Thus, Early Withdrawals will be determined based upon this definition of your RIE II Coverage Date.  Your Lifetime Withdrawal Percentage will be determined based on the age that the youngerspouse is (or would have been) on the date of the first withdrawal under the Contract after the RIE II Coverage Date, as shown in the tables below. If you purchased your Contract on or after February 17, 2009, your Lifetime Withdrawal Percentage is determined, as follows:

Age of Younger Spouse on Date of the First Withdrawal After Your RIE II Coverage Date	Lifetime Withdrawal Percentage
59 - 64	4%
65 - 74	5%
75 - 79	6%
80 or older	7%

If you purchased your Contract prior to February 17, 2009, your Lifetime Withdrawal Percentage is determined, as follows:

Age Younger Spouse on Date of First Withdrawal After Your RIE II Coverage Date	Lifetime Withdrawal Percentage
59 - 69	5%
70 - 79	6%
80 or older	7%

Your Annual Withdrawal Amount equals your Withdrawal Benefit Base multiplied by your Lifetime Withdrawal Percentage. Once your Annual Withdrawal Amount is calculated, the Lifetime Withdrawal Percentage will not change except if a step-up occurs as described under “Step-Up Under RIE II.” The Lifetime Withdrawal Percentage will then be reset, if higher, to the percentage for then attained age of the younger spouse.

The two spouses on the Issue Date are the only two people covered under the joint-life feature.  If a Participant remarries, the new spouse is not covered under the joint-life feature.  Therefore, if the spouse on the Issue Date is no longer your spouse, RIE II benefits continue for your life and, when you die, annual withdrawals are no longer available.  Note that, when you elect joint-life coverage, you also elect the higher joint-life fee.  That fee will not change as long as RIE II is in effect, regardless of any change in life events.

If one spouse is significantly younger than the other spouse, you should carefully consider whether joint-life coverage is an appropriate choice in light of the possibility of a longer waiting period before withdrawals under RIE II can be made and in light of the higher fee for joint-life coverage.

Joint-life coverage may not be available on all Contracts.

Cancellation of RIE II

Should you decide that RIE II is no longer appropriate for you, you may cancel RIE II at any time.  Upon cancellation, all benefits and charges under RIE II shall cease. Once cancelled, RIE II cannot be reinstated.

Although transfers among the Designated Funds are permitted as described under “Transfer Privilege,” RIE II will be cancelled automatically:

● if any Purchase Payment is allocated to an investment option other than a Designated Fund; or

● if any portion of Account Value maintained in a Designated Fund is transferred into an investment option other than a Designated Fund.

RIE II will also be cancelled for any of the following:

● upon a termination of the Contract;

● upon annuitization*; or

● your Withdrawal Benefit Base is reduced to zero as a result of Early or Excess Withdrawals.

*Note that the maximum Annuity Commencement Date permitted under this Contract is the first day of the month following the Annuitant’s 95th birthday.  See “Selection of Annuity Commencement Date” under “THE INCOME PHASE – ANNUITY PROVISIONS.”

A change of ownership of the Contract may also cancel your benefits under RIE II.

Death of Participant Under RIE II with Single-Life Coverage

If you selected single-life coverage, RIE II terminates on the death of any Participant and the Beneficiary may elect to exercise any of the available options under the Death Benefit provisions of the Contract. If your surviving spouse is the sole primary Beneficiary and elects to continue the Contract, your spouse has the additional option of electing to participate in a new RIE II rider on the original Contract (assuming that your surviving spouse meets certain eligibility requirements).  If the surviving spouse makes such election:

● the new Account Value and the new Withdrawal Benefit Base will both be set equal to the Death Benefit amount;

● the new percentage rate used to calculate the RIE II Fee will be set by us based on market conditions at the time and may be higher than the current percentage rate used to calculate the RIE II Fee;

● the new Withdrawal Benefit Base and the new RIE II Bonus Base will each be equal to the Account Value after any Death Benefit has been credited;

● the new Lifetime Withdrawal Percentage will be based on the age of the surviving spouse; and

● a new RIE II Bonus Period begins.

Death of Participant Under RIE II with Joint-Life Coverage

If the surviving spouse on the Death Benefit Date was not the spouse of a Participant on the original Contract’s Issue Date, then this section does not apply, even if joint-life coverage was elected.  In such case, if a Participant dies while participating in RIE II, the provisions of the section titled “Death of Participant Under RIE II with Single-Life Coverage” will apply.

If you purchased joint-life coverage and one of the Participants dies, RIE II will continue, provided that the surviving spouse, as the sole primary beneficiary, continues the Contract.  In such case:

● the new Account Value will be equal to the Death Benefit;

● the RIE II Fee for the joint-life coverage option will continue for the surviving spouse as it was immediately prior to the death of the Participant;

● the Withdrawal Benefit Base and the RIE II Bonus Base will remain unchanged until the next Account Anniversary when a step-up could apply due to an increase in Account Value (see “Step-Up Under RIE II”);

● if withdrawals under RIE II have not yet begun, the Lifetime Withdrawal Percentage will be based on the age the younger spouse attains (or would have attained) on the date of the first withdrawal after the RIE II Coverage Date;

● if withdrawals under RIE II have already begun, the Lifetime Withdrawal Percentage will not change; and

● the RIE II Bonus Period will continue unchanged from the original contract.

At the death of the surviving spouse, the Contract, including RIE II, will terminate.

If you purchased joint-life coverage and the deceased Participant's surviving spouse does not continue the Contract, your Beneficiary may elect any available option under the Death Benefit provisions of the Contract.

Annuitization Under RIE II

Under the terms of RIE II, if your Account Value is greater than zero on your maximum Annuity Commencement Date, you may elect to:

(1)	surrender your Contract and receive your Cash Surrender Value,
(2)	annuitize your Account Value under one of the then currently available Annuity Options, or
(3)	annuitize your remaining Account Value as a single-life annuity (or a joint-life annuity, if joint-life coverage was elected at issue and is still eligible) with an annualized annuity payment of not less than your then current Annual Withdrawal Amount.

If you make no election, we will default your choice to option 3.

If your Account Value has been reduced to zero (other than as a result of an Early Withdrawal or an Excess Withdrawal), and your Withdrawal Benefit Base is greater than zero on or before your maximum Annuity Commencement Date, you will receive your full Annual Withdrawal Amount until you die. For a more complete discussion of this, see “Depleting Your Account Value.”

Certain Tax Considerations

Certain tax considerations may be important to you in connection with a living benefit, such as RIE II. For a discussion of some of these considerations, please refer to “TAX ISSUES UNDER OPTIONAL LIVING BENEFITS” and “TAX CONSIDERATIONS - Impact of Optional Death Benefit and Optional Living Benefit Riders.”

OPTIONAL LIVING BENEFIT: Income ON Demand® II Escalator

If you purchased your Contract prior to February 17, 2009, and elected to participate in Income ON Demand II Escalator (“IOD II Escalator”), your Lifetime Income Percentage (defined below) will be different from the Lifetime Income Percentage available on Contracts currently being issued. (See “Determining Your Annual Income Amount,” “Step-up Under IOD II Escalator,” and “Joint-Life Coverage.”) In addition, unless you “step-up” as described under “Step-up Under IOD II Escalator,” the fee charged for your IOD II Escalator will be lower than the fee charged on Contracts purchased on or after February 17, 2009. (See “Cost of IOD II Escalator.”)

On or before the Issue Date, you may elect to participate in IOD II Escalator. To describe how IOD II Escalator works, we use the following definitions:

Annual Income Amount:	The amount added to your Stored Income Balance on each Account Anniversary during your Stored Income Period. It is equal to your Income Benefit Base multiplied by your Lifetime Income Percentage.
Designated Funds:	The limited investment options you can choose if you are participating in a living benefit.
Early Withdrawal:	Any withdrawal taken prior to your First Withdrawal Date.
Excess Withdrawal:	Any withdrawal taken after your First Withdrawal Date that exceeds your Stored Income Balance (or your Required Minimum Distribution Amount, if greater).
Fee Base:	The amount used to calculate your cost for IOD II Escalator.
First Withdrawal Date:	Your Issue Date if you are at least age 59 at issue, otherwise the first Account Anniversary after you attain age 59.
Income Benefit Base:	The amount used to calculate your Annual Income Amount for IOD II Escalator.
Lifetime Income Percentage:	The percentage used to calculate your Annual Income Amount.
Stored Income Balance:	The amount you may withdraw at any time after your First Withdrawal Date without reducing your benefits under IOD II Escalator.
Stored Income Period:	A period beginning on your Issue Date if you are at least age 50 at issue, otherwise the first Account Anniversary following your 50th birthday, ending on your Annuity Commencement Date.
You and Your:	The terms “you” and “your” refer to the oldest living Participant or the surviving spouse of the oldest Participant, as described under the sections entitled “Death of Participant Under IOD II Escalator with Single-Life Coverage” and “Death of Participant Under IOD II Escalator with Joint-Life Coverage.” In the case of a non-natural Participant, these terms refer to the oldest living annuitant.

IOD II Escalator may not be appropriate for all investors. Before purchasing IOD II Escalator, you should carefully consider the following:

IOD II Escalator may beappropriate if you are an investor who:
●	wants a stream of income for life beginning after the First Withdrawal Date.
●	wants an opportunity for the annual income to increase as you grow older.
●	wants the flexibility to store income for later years, rather than taking a specified percentage every year.
●	wants the option of joint-life coverage.
●	wants to start accruing benefits by storing income as early as age 50 and can wait until the First Withdrawal Date to begin receiving that income.
IOD II Escalator may be inappropriate if you are an investor who:
●	anticipates the need for Excess Withdrawals or Early Withdrawals.
●	wants to invest in funds other than a Designated Fund.
●	is significantly younger than 50 on the Issue Date, because IOD II Escalator does not begin to accrue lifetime benefits until you are age 50.
IOD II Escalator is inappropriate if you are an investor who:
●	is actively invested in contributory plans, because IOD II Escalator prohibits any Purchase Payments after the first Account Anniversary.

You may combine IOD II Escalator with any optional death benefit rider other than the EEB Premier Plus rider.  Upon annuitization, IOD II Escalator and any elected optional death benefit rider automatically terminate.

You may elect to participate in IOD II Escalator, provided that:

l	the rider is available for sale both in the state where the Contract is sold, and in the state where you reside;
l	neither the oldest Participant nor the oldest Annuitant has attained age 86 on or before the date we receive your application (in the case of a non-natural Participant, the oldest Annuitant has not attained age 86 on or before that date);
l	you limit the allocation of your Purchase Payments and Account Value to the Designated Funds that we make available with IOD II Escalator;
l	you do not elect the EEB Premier Plus Optional Death Benefit rider; and
l	you do not elect any other optional living benefit rider available under your Contract.

IOD II Escalator allows you to withdraw a guaranteed amount each year, beginning after your First Withdrawal Date, until the death of any Participant if single-life coverage is elected (or until the death of both the Participant and the Participant's spouse if joint-life coverage is elected), regardless of the investment performance of the Designated Funds, provided that you comply with certain requirements. The guaranteed annual amount you can withdraw, in any one year, can be up to 7% of your Income Benefit Base depending upon your age. Any amount that you do not withdraw in a given year will remain in the Stored Income Balance and can be used later.

If you are participating in IOD II Escalator, you may not make Purchase Payments after the first year following your Issue Date. After the first Account Anniversary, any Purchase Payments submitted by a Participant while participating in IOD II Escalator will be returned to the Participant, unless the Participant instructs us to terminate participation in IOD II Escalator.

To participate in IOD II Escalator, all of your Account Value must be invested only in Designated Funds at all times during the term of IOD II Escalator. (The term of IOD II Escalator is for life, unless your Income Benefit Base is reduced to zero or your benefits under IOD II Escalator are terminated or cancelled as described under “Cancellation of IOD II Escalator,” “Depleting Your Account Value,” and “Annuitization Under IOD II Escalator.”) The only Funds, dollar-cost averaging program options, and asset allocation models that currently qualify as Designated Funds are listed in the section entitled “Designated Funds.”

You also have the option of choosing between single-life coverage and joint-life coverage. These options are described in greater detail under “Joint-Life Coverage” and the sections entitled “Death of Participant Under IOD II Escalator with Single-Life Coverage” and “Death of Participant Under IOD II Escalator with Joint-Life Coverage.”

Determining Your Income Benefit Base

On the Issue Date, we set your Income Benefit Base equal to your initial Purchase Payment. Thereafter, your Income Benefit Base is:

l	increased on each Account Anniversary by any step-ups as described under “Step-Up Under IOD II Escalator”;
l	increased to the extent that you exercise your one-time option to use any amount of your Stored Income Balance to increase your Income Benefit Base, as described under “How IOD II Escalator Works”;
l	increased by any subsequent Purchase Payments you make during the first year following the Issue Date;
l	decreased following any Early Withdrawals you take, as described under “Early Withdrawals”; and
l	decreased following any Excess Withdrawals you take, as described under “Excess Withdrawals”.

Determining Your Annual Income Amount

Your Annual Income Amount is first determined at the beginning of your Stored Income Period and then on each subsequent Account Anniversary. Your Annual Income Amount is equal to your Income Benefit Base multiplied by your Lifetime Income Percentage. The Lifetime Income Percentage depends upon your age at the beginning of your Stored Income Period as shown in the tables below. If you purchased your Contract on or after February 17, 2009, your Lifetime Income Percentage is determined, as follows:

Your Age at the Beginning of Your Stored Income Period*	Lifetime Income Percentage
50 - 64	4%
65 - 74	5%
75 - 79	6%
80 or older	7%

                                  *If you elected joint-life coverage, the age ranges are based upon the age of the younger spouse

                                    as described under “Joint-Life Coverage.”

If you purchased your Contract prior to February 17, 2009, your Lifetime Income Percentage is determined, as follows:

Your Age at the Beginning of Your Stored Income Period*	Lifetime Income Percentage
50 - 69	5%
70 - 79	6%
80 or older	7%

                                  *If you elected joint-life coverage, the age ranges are based upon the age of the younger spouse

                                    as described under “Joint-Life Coverage.”

Your Lifetime Income Percentage will only increase if your age at the time of step-up coincides with a higher percentage as shown in the table above.  (See “Step-Up Under IOD II Escalator.”).  An increase in the Lifetime Income Percentage will increase your Annual Income Amount.

Your Annual Income Amount will also change with any change to your Income Benefit Base as described under “Determining Your Income Benefit Base”.

Determining Your Stored Income Balance

At the beginning of the Stored Income Period, your Stored Income Balance will equal your Annual Income Amount (your Lifetime Income Percentage multiplied by your Income Benefit Base on that Date). Thereafter, your Stored Income Balance is:

l	increased by your Lifetime Income Percentage multiplied by any subsequent Purchase Payments you make during the first year following the Issue Date;
l	increased on each Account Anniversary by your Annual Income Amount determined on that Anniversary;
l	decreased by the amount of any withdrawals you take, on or after your First Withdrawal Date, up to the amount of your Stored Income Balance;
l	decreased to $0 if you take an Excess Withdrawal;
l	decreased in proportion to the change in your Account Value if you take an Early Withdrawal; and
l	decreased by the amount you use in exercising your one-time option to increase your Income Benefit Base (described under “How IOD II Escalator Works”).

How IOD II Escalator Works

Under the terms of IOD II Escalator, you can take withdrawals up to the amount of your Stored Income Balance beginning on your First Withdrawal Date, subject to the terms and conditions discussed below. You can use all or a portion of your Stored Income Balance to effect a one-time increase of your Income Benefit Base prior to your Annuity Commencement Date. IOD II Escalator also provides the opportunity to increase your Annual Income Amount if your Lifetime Income Percentage increases as you grow older. (Your Lifetime Income Percentage will only increase if you step-up after you reach certain specified ages.) If your Account Value is reduced to zero, and your Income Benefit Base is greater than zero, you will receive an amount equal to your Annual Income Amount every year of your life unless you choose to cancel IOD II Escalator.

Withdrawals from your Stored Income Balance can be taken at any time beginning on your First Withdrawal Date and prior to your Annuity Commencement Date without affecting your Income Benefit Base. If, beginning on your First Withdrawal Date, you make a withdrawal that does not exceed your Stored Income Balance, your Stored Income Balance will be decreased by the amount withdrawn.

You also have the option to use all or a portion of your Stored Income Balance to increase your Income Benefit Base. This option allows you to increase your future Annual Income Amount. While your Contract is in force, you may exercise this option only once and you must do so prior to your Annuity Commencement Date.  If you choose to use any portion of your Stored Income Balance to increase your Income Benefit Base:

● your Stored Income Balance will be decreased by the amount used;

● the amount of your Stored Income Balance used will be added to your Income Benefit Base; and

● your new Annual Income Amount on your next Account Anniversary will equal your Lifetime Income Percentage multiplied by your new Income Benefit Base.

Here is an example of how IOD II Escalator works. These examples assume that your Contract was purchased on or after February 17, 2009.

Assume that you are age 65 when your Contract is issued with an initial Purchase Payment of $100,000. Assume you elected to participate in IOD II Escalator with single-life coverage and investment performance of the Designated Funds is neutral over the years. (If you selected joint-life coverage, the numbers shown in the example could be different.) Your Income Benefit Base is equal to your initial Purchase Payment on your Issue Date. Your Lifetime Income Percentage is 5%. Your Annual Income Amount is $5,000 (5% of your Income Benefit Base). Therefore, $5,000 will be added each year to your Stored Income Balance.  Values shown are as of the beginning of the Account Year.
Year	Account Value	Income Benefit Base	Annual Income Amount	Withdrawal	Stored Income Balance
1	$100,000	$100,000	$5,000	$0	$5,000
2	$100,000	$100,000	$5,000	$0	$10,000
3	$100,000	$100,000	$5,000	$0	$15,000
4	$100,000	$100,000	$5,000	$0	$20,000

During your fifth Account Year, you use the full amount of your Stored Income Balance ($25,000) to increase your Income Benefit Base. On your next Account Anniversary, your Income Benefit Base will be increased to $125,000 and your Annual Income Amount will be $6,250 (your Lifetime Income Percentage multiplied by your Income Benefit Base). Therefore $6,250 will be added each year to your Stored Income Balance unless your Annual Income Amount changes.
Year	Account Value	Income Benefit Base	Annual Income Amount	Withdrawal	Stored Income Balance
5	$100,000	$100,000	$5,000	$0	$25,000
6	$100,000	$125,000	$6,250	$0	$6,250
7	$100,000	$125,000	$6,250	$0	$12,500
8	$100,000	$125,000	$6,250	$0	$18,750
Each year thereafter, the Annual Income Amount will be added to the Stored Income Balance in the same manner.

Assume instead that, during your fifth Account Year, you take a withdrawal of $25,000, thereby reducing your Stored Income Balance to $0. On your next Account Anniversary, your Income Benefit Base will remain at $100,000 and your Annual Income Amount remains at $5,000 (your Lifetime Income Percentage multiplied by your Income Benefit Base). Therefore $5,000 will be added each year to your Stored Income Balance unless your Annual Income Amount changes.
Year	Account Value	Income Benefit Base	Annual Income Amount	Withdrawal	Stored Income Balance
5	$100,000	$100,000	$5,000	$25,000	$0
6	$75,000	$100,000	$5,000	$0	$5,000
7	$75,000	$100,000	$5,000	$0	$10,000
8	$75,000	$100,000	$5,000	$0	$15,000
Each year thereafter, the Annual Income Amount will be added to the Stored Income Balance in the same manner.

Early Withdrawals and Excess Withdrawals may significantly decrease your benefits under IOD II Escalator, as described further under “Withdrawals Under IOD II Escalator.” Even if your Stored Income Period has begun, withdrawals prior to your First Withdrawal Date are considered Early Withdrawals. Investing in any Fund, other than a Designated Fund, will cancel IOD II Escalator as described under “Cancellation of IOD II Escalator.”

Withdrawals Under IOD II Escalator

     Withdrawals After Your First Withdrawal Date

Starting on your First Withdrawal Date and continuing to your Annuity Commencement Date you may take annual withdrawals up to your Stored Income Balance without affecting your benefits under IOD II Escalator. These withdrawals will reduce your Stored Income Balance by the full amount of the withdrawal, but will not change your Income Benefit Base. This is shown in the previous example.

     Excess Withdrawals

If you take an Excess Withdrawal, your Income Benefit Base will be reduced according to the following formula:

Your new Income Benefit Base =	IBB x	(	AV – WD	)
			AV – SB

Where:
	IBB =	Your Income Benefit Base immediately prior to the Excess Withdrawal.
	WD =	The amount of the Excess Withdrawal.
	SB  =	Your Stored Income Balance (or your Required Minimum Distribution Amount, if greater) immediately prior to the Excess Withdrawal.
	AV  =	Your Account Value immediately prior to the Excess Withdrawal.

Your Annual Income Amount will be recalculated based on the reduced Income Benefit Base. Here is an example of an Excess Withdrawal:

Using the same facts as the previous example, assume that in your fifth Account Year you take a withdrawal of $50,000, exceeding your Stored Income Balance. Assume that due to poor investment performance during the fifth Account Year your Account Value was $90,000 immediately prior to the withdrawal.  Your Income Benefit Base will be reduced to $61,538 as shown below.
Year	Account Value	Income Benefit Base	Annual Income Amount	Withdrawal	Stored Income Balance
5	$100,000	$100,000	$5,000	$50,000	$0
6	$50,000	$61,538	$3,077	$0	$3,077
7	$50,000	$61,538	$3,077	$0	$6,154
8	$50,000	$61,538	$3,077	$0	$9,231
Each year thereafter, the Annual Income Amount will be added to the Stored Income Balance in the same manner.

Your new Income Benefit Base	=	$100,000 x	(	$90,000 – $50,000	)	= $61,538
				$90,000 – $25,000

Excess Withdrawals taken in a down market could severely reduce your benefits under IOD II Escalator.

    Early Withdrawals

All withdrawals taken before your First Withdrawal Date will be considered Early Withdrawals and the Income Benefit Base and the Stored Income Balance will be reduced using the following formulae:

Your new Income Benefit Base =	IBB x	(	AV - WD	)
			AV

Your new Stored Income Balance =	SB x	(	AV - WD	)
			AV

Where:
	IBB =	Your Income Benefit Base immediately prior to the Early Withdrawal.
	SB  =	Your Stored Income Balance immediately prior to the Early Withdrawal.
	WD =	The amount of the Early Withdrawal.
	AV  =	Your Account Value immediately prior to the Early Withdrawal.

Your future Annual Income Amount will be recalculated based on the reduced Income Benefit Base. Early Withdrawals could severely reduce your benefits under IOD II Escalator.

In addition to reducing your benefits under IOD II Escalator, any withdrawal before your First Withdrawal Date could have adverse tax consequences. You should consult a qualified tax professional for more information.

     Depleting Your Account Value

If your Account Value is reduced to zeroas a result ofan Early Withdrawal or an Excess Withdrawal (as described above), your Stored Income Balance and your Income Benefit Base will both be reduced to zero. Therefore, your Contract, as well as your benefits under IOD II Escalator, will end.

If your Account Value is reduced to zero through any combination of poor investment performance of the Designated Funds, Contract charges, and withdrawals other than Excess Withdrawals or Early Withdrawals, your Income Benefit Base will not be reduced. Your Contract will end. You will be entitled to receive annual payments equal to your Lifetime Income Percentage multiplied by your Income Benefit Base. Prior to determining your annual payments, you may increase your Income Benefit Base by any remaining Stored Income Balance as described below. These payments will continue for as long as you live. If you elected joint-life coverage, the payments will continue as long as either you or your spouse are alive as described under “Death of Participant Under IOD II Escalator with Joint-Life Coverage.” If you have any remaining Stored Income Balance on the day your Account Value is reduced to zero, you will be notified that, before you begin to receive your “annual lifetime payments,” you must deplete your Stored Income Balance by:

(a)	withdrawing your remaining Stored Income Balance;
(b)	applying the remaining amount of your Stored Income Balance to increase your Income Benefit Base (and thus the amount of your “annual lifetime payments”); or
(c)	using a combination of (a) and (b).

Because the Contract has ended, the amount of these annual lifetime payments will not change. You should be aware, however, that they could be subject to certain tax consequences. You should consult a qualified tax professional for more information.

Cost of IOD II Escalator

If you elect IOD II Escalator, we will deduct a quarterly fee from your Account Value (“IOD II Escalator Fee”). The IOD II Escalator Fee will be taken as a specific deduction from your Account Value on the last valuation day of each Account Quarter and will equal 0.2375 % of your Fee Base on that day, if you elected single-life coverage (0.2875% for joint-life coverage). On an annual basis, the IOD II Escalator Fee is equal to 0.95% of your Fee Base if you elected single-life coverage (1.15% for joint-life coverage). We reserve the right to increase the percentage rate used to calculate the IOD II Escalator Fee on newly issued Contracts.

If you purchased your Contract prior to February 17, 2009, your cost for IOD II Escalator was initially, on an annual basis, 0.80% of the highest Fee Base for single-life coverage (1.00% for joint-life coverage). Your cost for IOD II Escalator will not increase unless:

l	you decide to step-up your Income Benefit Base, as described under “Step-Up Under IOD II Escalator,” and
l	you consent in writing, at the time of step-up, to accept an increase in your IOD II Escalator Fee to 0.95% for single-life coverage (1.15% for joint-life coverage).

If you do not consent to the higher fee, the step-up will not be implemented and all subsequent step-ups will be suspended unless and until we receive your written consent to the higher fee.

During the first Account Year, your Fee Base is equal to your Income Benefit Base.  On each Account Anniversary, the Fee Base is recalculated.  Your new Fee Base will be reset to equal your Income Benefit Base plus your Stored Income Balance (if any) less your Annual Income Amount (if any) for that year if this recalculated amount is higher than your current Fee Base. In the event that the recalculated amount is not greater than your current Fee Base, we will continue to calculate your IOD II Escalator Fee based upon your current Fee Base until, at least, your next Account Anniversary.  Note that, although your IOD II Escalator Fee may increase, it will never decrease.

For the most part, we calculate your Fee Base only on your Account Anniversary. However, we will recalculate your Fee Base between Account Anniversaries, if you take an Early Withdrawal or Excess Withdrawal or make additional Purchase Payments during your first Account Year.

If you take an Excess Withdrawal during your Stored Income Period, your Fee Base will be decreased by the following formula:

Your new Fee Base =	Fee Base  x	(	AV - WD	)
			AV - SB

If you take an Early Withdrawal, your Fee Base will be decreased by the following formula:

Your new Fee Base =	Fee Base  x	(	AV - WD	)
			AV

Where:
	Fee Base =	Your Fee Base immediately prior to the Early/Excess Withdrawal.
	WD =	The amount of the Early/Excess Withdrawal.
	SB =	Your Stored Income Balance (if any) immediately prior to the Excess Withdrawal.
	AV =	Your Account Value immediately prior to the Early/Excess Withdrawal.

Any additional Purchase Payment you make during your first Account Year will increase your Income Benefit Base as described under “Determining Your Income Benefit Base.” Therefore, your Fee Base will increase by any additional Purchase Payments made.

Here is an example of how we calculate your Fee Base. The following examples assume that you purchased your Contract on or after February 17, 2009.

Assume that you are age 65 when your Contract is issued with an initial Purchase Payment of $100,000.  Assume you elected to participate in IOD II Escalator with single-life coverage and investment performance of the Designated Funds is neutral over the years. (If you selected joint-life coverage, the numbers shown in the example could be different.) Your Income Benefit Base is equal to your initial Purchase Payment on your Issue Date.  Your Lifetime Income Percentage is 5%.  Your Annual Income Amount is $5,000 (5% of your Income Benefit Base). Values are shown as of the beginning of the Account Year.
During the Stored Income Period, the Fee Base is reset at the beginning of the Contract Year to equal your Income Benefit Base plus your Stored Income Balance less your Annual Income Amount, if that amount is greater than the previous Fee Base.  For example, in Contract Year 4, the Fee Base is set equal to the Income Benefit Base ($100,000) plus the Stored Income Balance ($20,000) less your Annual Income Amount ($5,000) if that amount ($115,000) is greater than the previous Fee Base ($110,000).
Year	Income Benefit       Base	Annual Income      Amount	Stored                      Income Balance			Fee Base
			Beginning of year	Withdrawal   Amount	End of year
1	$100,000	$5,000	$5,000	$0	$5,000	$100,000
2	$100,000	$5,000	$10,000	$0	$10,000	$105,000
3	$100,000	$5,000	$15,000	$0	$15,000	$110,000
4	$100,000	$5,000	$20,000	$0	$20,000	$115,000
Assume, instead, that in your fourth Account Year you take a $20,000 withdrawal.  At the beginning of your fifth Account Year, your Income Benefit Base ($100,000) plus your Stored Income Balance ($5,000) less your Annual Income Amount ($5,000) is less than the current Fee Base ($115,000), so there is no change to the Fee Base, as shown below.
Year	Income Benefit       Base	Annual Income      Amount	Stored                      Income Balance			Fee Base
			Beginning of year	Withdrawal   Amount	End of year
4	$100,000	$5,000	$20,000	$20,000	$0	$115,000
5	$100,000	$5,000	$5,000	$0	$5,000	$115,000
6	$100,000	$5,000	$10,000	$0	$10,000	$115,000
7	$100,000	$5,000	$15,000	$0	$15,000	$115,000
8	$100,000	$5,000	$20,000	$0	$20,000	$115,000
9	$100,000	$5,000	$25,000	$0	$25,000	$120,000
On each Account Anniversary thereafter, your Fee Base is recalculated and reset if necessary.

Your IOD II Escalator Fee will not change during an Account Year, unless you take one of two specific actions:

l	If you make an additional Purchase Payment during your first Account Year, you will increase your Fee Base and thus your IOD II Escalator Fee.
l	If you make an Early Withdrawal or an Excess Withdrawal, you will decrease your Fee Base and thus your IOD II Escalator Fee.

In addition, on your Account Anniversary, the IOD II Escalator Fee may also change, if we increase the percentage used to calculate the IOD II Escalator Fee as described under “Step-Up Under IOD II Escalator.”

The investment performance of the Designated Funds will not affect your IOD II Escalator Fee during an Account Year. However, as stated under “Step-Up Under IOD II Escalator,” favorable investment performance may cause the Income Benefit Base to increase on an Account Anniversary, and thus increase your IOD II Escalator Fee.

We will continue to deduct the IOD II Escalator Fee until you annuitize your Contract, your Account Value reduces to zero, or your benefits under IOD II Escalator are cancelled as described under “Cancellation of IOD II Escalator “.

Step-Up Under IOD II Escalator

Regardless of your age on the Issue Date, on each Account Anniversary prior to your Annuity Commencement Date, we will automatically step-up your Income Benefit Base, provided that you satisfy certain requirements. First, you must meet eligibility requirements:

l

Your Account Value less your Stored Income Balance must equal no more than $5,000,000. (For purposes of determining the $5,000,000 limit, we reserve the right, in our sole discretion, to aggregate your Account Value with the account values of all other variable annuity contracts you own issued by Sun Life Assurance Company of Canada (U.S.) or its affiliates.)

l

Your highest quarter-end Account Value (adjusted for subsequent purchase payments and withdrawals) during the most recent Account Year (“Highest Quarterly Value”) minus your Stored Income Balance must be greater than your current Income Benefit Base. (If you have not yet reached your Stored Income Period and therefore do not yet have a Stored Income Balance, your highest quarter-end Account Value must only be greater than your current Income Benefit Base.)

Second, if you satisfy the eligibility requirements, we then consider whether market conditions have caused us to increase the percentage rate used to calculate the IOD II Escalator Fee on newly issued Contracts. If we are no longer issuing Contracts with IOD II Escalator, then the percentage rate we use to calculate your IOD II Escalator Fee will be set based upon current market conditions at that time.

l

If we have not had to increase the percentage rate as described above, the percentage rate we use to calculate your IOD II Escalator Fee will remain unchanged and we will automatically step-up your Income Benefit Base.

l

If we have had to increase the percentage rate as described above, we offer you the opportunity to step-up at the higher percentage rate. In this case, your written consent is required to accept the higher percentage rate used to calculate your IOD II Escalator Fee and step-up your Income Benefit Base.  If you do not consent to the step-up and higher percentage, the step-up will not be implemented and all subsequent step-ups of your Income Benefit Base will also be suspended. You may thereafter submit an election form to us, however, in order to consent to the then-applicable percentage rate and thus reactivate subsequent automatic step-ups.

At the time of step-up, we will increase your Income Benefit Base to an amount equal to the highest adjusted quarterly Account Value less your Stored Income Balance, if any, provided that such amount exceeds your current Income Benefit Base.

Your Lifetime Income Percentage will increase if your age at the time of step-up coincides with a higher percentage as shown below. After the step-up, your Annual Income Amount will be your Lifetime Income Percentage multiplied by your new Income Benefit Base. If you purchased your Contract on or after February 17, 2009, your Lifetime Income Percentage is determined, based upon your age at time of step-up, as follows:

Your Age at Step-up*	Lifetime Income Percentage
50 - 64	4%
65 - 74	5%
75 - 79	6%
80 or older	7%

                                  *If you elected joint-life coverage, the age ranges are based upon the age of the younger spouse

                                    as described under “Joint-Life Coverage.”

If you purchased your Contract prior to February 17, 2009, your Lifetime Income Percentage is determined, based upon your age at time of step-up, as follows:

Your Age at Step-up*	Lifetime Income Percentage
50 - 69	5%
70 - 79	6%
80 or older	7%

                                  *If you elected joint-life coverage, the age ranges are based upon the age of the younger spouse

                                    as described under “Joint-Life Coverage.”

Here are examples of how step-up works under a few different circumstances. All four examples assume that the Contract was purchased on or after February 17, 2009.

Assume that you are 65 years old when you purchase a Contract with an initial Purchase Payment of $100,000, and that you elect to participate in IOD II Escalator with single-life coverage. (If you selected joint-life coverage, the numbers shown in the example could be different.) Your Income Benefit Base is equal to your initial Purchase Payment. Your Annual Income Amount is $5,000 (5% of your Income Benefit Base). Your initial Stored Income Balance is $5,000.
In each of the four examples, Account Values shown are as of the last day of each Account Quarter.  Adjustments are made on the day a Purchase Payment or withdrawal is made.
The Account Values on each of your four Account Quarters are $113,000, $108,000, $90,000, and $103,000, respectively.  No additional Purchase Payments are made and no withdrawals are taken, so no adjustments to these values are necessary.  Your Stored Income Balance at the end of the fourth Account Quarter is $5,000.  The highest adjusted quarterly value is $113,000.  Your new Income Benefit Base is set to equal $108,000 ($113,000 - $5,000) since that amount exceeds your previous Income Benefit Base.
Time	Account Value	Adjustment for subsequent Purchase Payments and withdrawals	Account Value (after subsequent adjustments)	Income Benefit Base
Issue	$100,000	n/a	n/a	$100,000
End of First Quarter	$113,000	n/a	$113,000	$100,000
End of Second Quarter	$108,000	n/a	$108,000	$100,000
End of Third Quarter	$90,000	n/a	$90,000	$100,000
End of Fourth Quarter (before step-up)	$103,000	n/a	$103,000	$100,000
Highest Quarterly Value (after adjustments)			$113,000
Stored Income Balance at end of fourth quarter		$5,000
Step-up comparison	Is ($113,000 - $5,000) greater than $100,000?  Yes, so step-up.
On the Account Anniversary (after step-up)
New Income Benefit Base =	$108,000	Highest Quarterly Value (after adjustments) less the Stored Income Balance.
New Annual Income Amount =	$5,400	$108,000 x 5%
New Stored Income Balance =	$10,400	Stored Income Balance at the end of the fourth Account Quarter plus the new Annual Income Amount.
Please note:  The end of the fourth Account Quarter and the Account Anniversary are the same day.  We only make the distinction to separate values before and after step-up.

If you make an additional Purchase Payment during your first Account Year, your Account Value and your Income Benefit Base are each immediately increased by the amount of the additional Purchase Payment.  Your Stored Income Balance is increased by 5% of the additional Purchase Payment.

Here is an example of how an additional Purchase Payment of $50,000 made in the second Account Quarter would affect your step-up:

Time	Account Value	Adjustment for subsequent Purchase Payments and withdrawals	Account Value (after subsequent adjustments)	Income Benefit Base
Issue	$100,000	n/a	n/a	$100,000
End of First Quarter	$113,000	$50,000	$163,000	$100,000
$50,000 Purchase Payment	$163,000	n/a	n/a	$150,000
End of Second Quarter	$158,000	n/a	$158,000	$150,000
End of Third Quarter	$140,000	n/a	$140,000	$150,000
End of Fourth Quarter (before step-up)	$153,000	n/a	$153,000	$150,000
Highest Quarterly Value (after adjustments)			$163,000
Stored Income Balance at end of fourth quarter		$7,500 (initial $5,000 plus 5% x $50,000)
Step-up comparison	Is ($163,000 - $7,500) greater than $150,000?  Yes, so step-up.
On the Account Anniversary (after step-up)
New Income Benefit Base =	$155,500	Highest Quarterly Value (after adjustments) less the Stored Income Balance.
New Annual Income Amount =	$7,775	$155,500 x 5%
New Stored Income Balance =	$15,275	Stored Income Balance at the end of the fourth Account Quarter plus the new Annual Income Amount.
Please note:  Since the additional Purchase Payment occurred after the first Account Quarter, the first Account Quarter value was adjusted.

Here is an example of how a $4,000 withdrawal taken in the second Account Quarter would affect your step-up:

Time	Account Value	Adjustment for subsequent Purchase Payments and withdrawals	Account Value (after subsequent adjustments)	Income Benefit Base
Issue	$100,000	n/a	n/a	$100,000
End of First Quarter	$113,000	-  $4,000	$109,000	$100,000
$4,000 withdrawal	$109,000	n/a	n/a	$100,000
End of Second Quarter	$104,000	n/a	$104,000	$100,000
End of Third Quarter	$86,000	n/a	$86,000	$100,000
End of Fourth Quarter (before step-up)	$99,000	n/a	$99,000	$100,000
Highest Quarterly Value (after adjustments)			$109,000
Stored Income Balance at end of fourth quarter		$1,000 (initial $5,000 less $4,000 withdrawal)
Step-up comparison	Is ($109,000 - $1,000) greater than $100,000?  Yes, so step-up.
On the Account Anniversary (after step-up)
New Income Benefit Base =	$108,000	Highest Quarterly Value (after adjustments) less the Stored Income Balance.
New Annual Income Amount =	$5,400	$108,000 x 5%
New Stored Income Balance =	$6,400	Stored Income Balance at the end of the fourth Account Quarter plus the new Annual Income Amount.
Please note:  Since the withdrawal occurred after the first Account Quarter, the first Account Quarter value was adjusted.

Assume instead you take a $40,000 withdrawal in the second Account Quarter at a point when the Account Value equaled $99,000 immediately before the withdrawal.  Since this withdrawal exceeds your Stored Income Balance, it is considered an Excess Withdrawal.  The Excess Withdrawal reduces your Income Benefit Base as described under “Excess Withdrawals.”  All previous quarter-end Account Values are first reduced by the amount of the Stored Income Balance and then adjusted in the same proportion that the Income Benefit Base was adjusted after the Excess Withdrawal. (See the two-step calculation shown in the box below the following example.)

Time	Account Value	Adjustment for subsequent Purchase Payments and withdrawals	Account Value (after subsequent adjustments)	Income Benefit Base
Issue	$100,000	n/a	n/a	$100,000
End of First Quarter	$113,000	-  $45,213	$67,787	$100,000
$40,000 withdrawal	$59,000	n/a	n/a	$62,766
End of Second Quarter	$68,000	n/a	$68,000	$62,766
End of Third Quarter	$50,000	n/a	$50,000	$62,766
End of Fourth Quarter (before step-up)	$63,000	n/a	$63,000	$62,766
Highest Quarterly Value (after adjustments)			$68,000
Stored Income Balance at end of fourth quarter		$0
Step-up comparison	Is ($68,000 - $0) greater than $62,766?  Yes, so step-up.
On the Account Anniversary (after step-up)
New Income Benefit Base =	$68,000	Highest Quarterly Value (after adjustments) less the Stored Income Balance.
New Annual Income Amount =	$3,400	$68,000 x 5%
New Stored Income Balance =	$3,400	Stored Income Balance at the end of the fourth Account Quarter plus the new Annual Income Amount.

(1)	Reduce the end of First Quarter Account Value by the Stored Income Balance	=	$113,000	–	$5,000		= $108,000
(2)	Adjust Account Value for the first Account Quarter	=	$108,000 x	(	$99,000 – $40,000	)	= $67,787
					$99,000 – $5,000
	The total adjustment	=	$113,000	–	$67,787		= $45,213

All of the above examples assume that you are age 65 at issue, so your Lifetime Income Percentage is set to 5%.  Assume instead you are age 74 at issue and have attained age 75 on your first Account Anniversary.  Follow the first example where no withdrawals were taken and no additional Purchase Payments were made.  When your Income Benefit Base steps-up to $108,000, your new Lifetime Income Percentage is 6% since you are now age 75.  Your Annual Income Amount is now $6,480, and your Stored Income Balance becomes $11,480.

Joint-Life Coverage

On the Issue Date, you have the option of electing IOD II Escalator with single-life coverage or, for a higher IOD II Escalator Fee, with joint-life coverage. Once you make the election, you cannot switch between joint-life and single-life coverage, regardless of any change in life events.  Joint-life coverage is not available if you are unmarried on the Issue Date.

Joint-life coverage can be elected on an individually-owned Contract or on a co-owned Contract.  On an individually-owned Contract, joint-life coverage is available only if your spouse is the sole primary Beneficiary on the Issue Date and remains the sole primary Beneficiary while IOD II Escalator is in effect. On a co-owned Contract, joint-life coverage is available only if you and your spouse are the only co-owners on the Issue Date and remain so while IOD II Escalator is in effect. Whereas single-life coverage provides an Annual Income Amount only until any Participant dies, joint-life coverage provides an Annual Income Amount for as long as either you or your spouse is alive. Note that, for joint-life coverage to continue after the death of any Participant, the surviving spouse must elect to continue the contract through the “Spousal Continuance” provision.  See also “Death of Participant Under IOD II Escalator with Joint-Life Coverage”.

If you have elected joint-life coverage, the Stored Income Period will be your Issue Date if the younger spouse is at least age 50. Otherwise it will be the first Account Anniversary after the younger spouse attains (or would have attained) age 50 if the younger spouse is less than age 50 on the Issue Date.  (For purposes of joint-life coverage, the younger spouse refers to the person who was the younger spouse on the Issue Date, even if that person has died or is no longer married to the person who was his or her spouse on the Issue Date.)  The First Withdrawal Date will be your Issue Date if the younger spouse is at least age 59. Otherwise it will be the first Account Anniversary after the younger spouse attains (or would have attained) age 59. The Lifetime Income Percentage will be based on the age of the younger spouse, as shown in the tables below.  If you purchased your Contract on or after February 17, 2009, your Lifetime Income Percentage is determined, as follows:

Age of Younger Spouse at Step-up	Lifetime Income Percentage
50 - 64	4%
65 - 74	5%
75 - 79	6%
80 or older	7%

If you purchased your Contract prior to February 17, 2009, your Lifetime Income Percentage is determined, as follows:

Age Younger Spouse at Step-up	Lifetime Income Percentage
50 - 69	5%
70 - 79	6%
80 or older	7%

The Lifetime Income Percentage may increase, in the future, if the age of the younger spouse at time of step-up coincides with a higher percentage as shown in the above table.

The two spouses on the Issue Date are the only two people covered under the joint-life feature.  If a Participant remarries, the new spouse is not covered under the joint-life feature.  Therefore, if the spouse on the Issue Date is no longer your spouse, your benefits under IOD II Escalator continue for your life and, when you die, annual withdrawals are no longer available.  Note that, when you elect joint-life coverage, you also elect the higher joint-life fee. The percentage rate of the fee will not be reduced regardless of any change in life events.

If one spouse is significantly younger than the other spouse, you should carefully consider whether joint-life coverage is an appropriate choice in light of the possibly long waiting period before the benefit begins to accumulate income and in light of the higher fee for joint-life coverage.

Joint-life coverage may not be available on all Contracts.

Cancellation of IOD II Escalator

Should you decide that IOD II Escalator is no longer appropriate for you, you may cancel IOD II Escalator at any time. Upon cancellation, all benefits and charges under IOD II Escalator shall cease. Once cancelled, IOD II Escalator cannot be reinstated.

Although transfers among the Designated Funds are permitted as described under “Transfer Privilege,” IOD II Escalator will be cancelled automatically:

● if any Purchase Payment is allocated to an investment option other than a Designated Fund; or

● if any portion of Account Value maintained in a Designated Fund is transferred into an investment option other than a Designated Fund.

IOD II Escalator will also be cancelled for any of the following:

● upon a termination of the Contract;

● upon annuitization*; or

● your Income Benefit Base is reduced to zero as a result of Early or Excess Withdrawals.

*Note that the maximum Annuity Commencement Date permitted under this Contract is the first day of the month following the Annuitant’s 95th birthday.  See “Selection of Annuity Commencement Date” under “THE INCOME PHASE – ANNUITY PROVISIONS.”

A change in ownership may also cancel your benefits under IOD II Escalator.

Death of Participant Under IOD II Escalator with Single-Life Coverage

If you elected single-life coverage, IOD II Escalator terminates on the death of any Participant and the Beneficiary may elect to exercise any of the available options under the Death Benefit provisions of the Contract. Alternately, the Beneficiary may elect to receive the Stored Income Balance. If your surviving spouse is the sole primary Beneficiary and elects to continue the Contract, your spouse has the additional option of electing to participate in a new IOD II Escalator rider on the original Contract (assuming your surviving spouse meets certain eligibility requirements). If your surviving spouse makes such election, all of the following occur:

● the new Account Value will be the greater of the Stored Income Balance on the original Contract or the Death Benefit;

● the new percentage rate used to calculate the IOD II Escalator Fee will be set by us based on market conditions at the time and may be higher than the current percentage rate used to calculate the IOD II Escalator Fee;

● the new Income Benefit Base will be equal to the Account Value after any Death Benefit has been credited;

● the new Lifetime Income Percentage will be based on the age of the surviving spouse; and

● the new Stored Income Balance will be reset to zero.

Death of Participant Under IOD II Escalator with Joint-Life Coverage

If the surviving spouse on the Death Benefit Date was not the spouse of a Participant on the original Contract’s Issue Date, then this section does not apply, even if joint-life coverage was elected.  In such case, if a Participant dies while participating in IOD II Escalator, the provisions of the section titled “Death of Participant Under IOD II Escalator with Single-Life Coverage” will apply.

If you purchased joint-life coverage and one of the Participants dies, IOD II Escalator will continue, provided that the surviving spouse, as the sole primary beneficiary, continues the Contract. In such case:

● the new Account Value will be equal to the Death Benefit;

● the Stored Income Balance will remain unchanged;

● the Income Benefit Base will remain unchanged until the next Account Anniversary when a step-up could apply due to an increase in the Account Value (see “Step-Up Under IOD II Escalator “);

● if the Stored Income Period has not yet begun, the Lifetime Income Percentage will be determined when the Stored Income Period begins (i.e., on the first Account Anniversary following the date the younger spouse attains (or would have attained) age 50);

● if the Stored Income Period  has already begun, the Lifetime Income Percentage will not change;

● on each Account Anniversary, the Annual Income Amount will be equal to the Income Benefit Base multiplied by the Lifetime Income Percentage; and

● the percentage rate of the IOD II Escalator Fee for the joint-life coverage option will continue for the surviving spouse as it was immediately prior to the death of the Participant.

At the death of the surviving spouse, the Contract, including IOD II Escalator, terminates.

If you purchased joint-life coverage and the deceased Participant's surviving spouse does not continue the Contract, your Beneficiary may elect any available option under the Death Benefit provisions of the Contract.

Annuitization Under IOD II Escalator

Under the terms of IOD II Escalator, if your Account Value is greater than zero on your maximum Annuity Commencement Date, you may elect to:

(1)	surrender your Contract and receive your Cash Surrender Value (or your Stored Income Balance, if greater);
(2)	annuitize your Account Value under one of the Annuity Options available on that date; or
(3)	(a) receive any remaining Stored Income Balance in a single sum and (b) annuitize your remaining Account Value as a single-life annuity (or a joint-life annuity, if joint-life coverage was elected at issue and you are still eligible to receive it) with an annualized annuity payment of not less than the Lifetime Income Percentage multiplied by your then current Income Benefit Base.

If you make no election, we will default your choice to option 3.

If your Account Value has been reduced to zero (other than as a result of an Early Withdrawal or an Excess Withdrawal), and your Income Benefit Base is greater than zero on or before your maximum Annuity Commencement Date, you will receive your full Annual Income Amount each year until you die. For a more complete discussion of this, see “Depleting Your Account Value.”

Certain Tax Considerations

Certain tax considerations may be important to you in connection with a living benefit, such as IOD II Escalator. For a discussion of some of these considerations, please refer to “TAX ISSUES UNDER OPTIONAL LIVING BENEFITS” and “TAX CONSIDERATIONS - Impact of Optional Death Benefit and Optional Living Benefit Riders.”

OPTIONAL LIVING BENEFIT: RETIREMENT ASSET PROTECTORSM

If you purchased your Contract prior to February 17, 2009, and elected to participate in Retirement Asset Protector, the fee charged for your living benefit will be lower than the fee charged on Contracts purchased on or after February 17, 2009. (See “Cost of Retirement Asset Protector.”) Your fee will not increase unless you elect to “step-up” as described under “Step-Up Under Retirement Asset Protector,” and you consent in writing to accept the higher fee.

On or before the Issue Date, you may elect to participate in Retirement Asset Protector. To describe how Retirement Asset Protector works, we use the following definitions:

Retirement Asset Protector Benefit Base:	An amount equal to the sum of all Purchase Payments made during the first year following your Issue Date, decreased by any partial withdrawals taken and increased by any step-ups as described under “Step-Up Under Retirement Asset Protector.”
Designated Funds:	The limited investment options you can choose if you are participating in a living benefit.
GMAB Maturity Date:	The date when Retirement Asset Protector matures. If you are younger than 85 on the Issue Date, your GMAB Maturity Date is the later of your 10th Account Anniversary or 10 years from the date of your most recent step-up. (See “Step-Up Under Retirement Asset Protector.”) If you are 85 on the Issue Date, your GMAB Maturity Date is your maximum Annuity Commencement Date.
You and Your:	Under Retirement Asset Protector, the terms “you” and “your” refer to the oldest Participant or the surviving spouse of the oldest Participant as described under “Death of Participant Under Retirement Asset Protector.” In the case of a non-natural Participant, these terms refer to the oldest annuitant.

Retirement Asset Protector is designed for long-term investors. It provides them with the security of knowing that their investments will be protected during down markets or, if that guarantee is not needed, that their Retirement Asset Protector Fees will be refunded. Retirement Asset Protector guarantees a return of the greater of:

l	the excess of your Retirement Asset Protector Benefit Base over your Account Value or
l	your total fees paid for Retirement Asset Protector (“Retirement Asset Protector Fees”),

regardless of the investment performance of the Designated Funds, provided that you have reached the GMAB Maturity Date.

Retirement Asset Protector may be appropriate for investors who:
●	want to protect their principal and who can afford to wait at least 10 years before withdrawing from their investment.
●	want a refund of their fees if the guarantee is not needed.
Retirement Asset Protector may be inappropriate for investors who:
●	want lifetime income guarantees.
●	want to invest in funds other than a Designated Fund.
Retirement Asset Protector is inappropriate if you are an investor who:
●	is actively invested in contributory plans, because Retirement Asset Protector prohibits any Purchase Payments after the first Account Anniversary.

You may elect to participate in Retirement Asset Protector, if:

l	Retirement Asset Protector is available for sale both in the state where the Contract is sold, and in the state where the Participant resides;
l	neither the oldest Participant nor the oldest Annuitant has attained age 86 on or before the date we receive your application in good order (in the case of a non-natural Participant, the oldest Annuitant has not reached age 86 on or before that date);
l	you limit the allocation of your Purchase Payments and Account Value to the investment options, known as Designated Funds, that we make available with Retirement Asset Protector;
l	you do not elect the EEB Premier Plus Optional Death Benefit Rider; and
l	you do not elect any other optional living benefit available under your Contract.

If you are participating in Retirement Asset Protector, you may not make Purchase Payments after the first year following your Issue Date.

To participate in Retirement Asset Protector, all of your Account Value must be invested in a Designated Fund at all times during the term of the GMAB Maturity Date.  The only Funds, dollar-cost averaging program options, and asset allocation models that currently qualify as Designated Funds are listed in the section entitled “Designated Funds.”

Cost of Retirement Asset Protector

If you elect Retirement Asset Protector, we will deduct a quarterly fee from your Account Value (“Retirement Asset Protector Fee”). The Retirement Asset Protector Fee will be taken as a specific deduction from your Account Value on the last valuation day of each Account Quarter. The Fee will be a percentage of your Retirement Asset Protector Benefit Base. This percentage rate will equal 0.1875% of your Retirement Asset Protector Benefit Base on the last day of the Account Quarter. The maximum Retirement Asset Protector Fee you can pay in any one Account Year is equal to 0.75% of the highest Retirement Asset Protector Benefit Base at any point in that Account Year.

If you purchased your Contract prior to February 17, 2009, your cost for Retirement Asset Protector was initially, on an annual basis, 0.35% of your Retirement Asset Protector Benefit Base. The cost of your benefit will not increase unless, at time of step-up, you consent in writing to accept this higher fee of 0.75%. If you do not consent to the higher fee, the step-up will not be implemented and all subsequent step-ups will be suspended unless and until we receive your written consent to the higher fee.

Your Retirement Asset Protector Fee will not change, unless you take one of these specific actions:

l	If you made an additional Purchase Payment during your first Account Year, you will increase your Retirement Asset Protector Benefit Base and thus your Retirement Asset Protector Fee.
l	If you make a partial withdrawal, you will decrease your Retirement Asset Protector Benefit Base and thus your Retirement Asset Protector Fee.
l	If you elect to “step-up” your Retirement Asset Protector Benefit Base, your Retirement Asset Protector Fee will increase.

The investment performance of the Designated Funds will not affect your Retirement Asset Protector Fee unless you elect a step-up of your Retirement Asset Protector Benefit Base.

We will continue to deduct the Retirement Asset Protector Fee until:

l	you annuitize your Contract;
l	Retirement Asset Protector matures on the GMAB Maturity Date;
l	your Retirement Asset Protector benefit is cancelled as described under “Cancellation of Retirement Asset Protector;” or
l	your Account Value is reduced to zero.

How Retirement Asset Protector Works

On the GMAB Maturity Date, we will credit your Account Value with an amount equal to the greater of:

(a)	any excess of your Retirement Asset Protector Benefit Base over your Account Value after adjusting for any Contract charges; and
(b)	the total amount of Retirement Asset Protector Fees paid between the Issue Date and the GMAB Maturity Date.

We determine the value of (b) in two steps:

(1)	As described above under “Cost of Retirement Asset Protector,” each quarter between the Issue Date and the GMAB Maturity Date we calculate the Retirement Asset Protector Fee by multiplying your Retirement Asset Protector Benefit Base on the last valuation day of that quarter by 0.1875%.
(2)	We then sum each quarterly amount calculated in (1) to determine the total amount of Retirement Asset Protector Fees paid.

In the situation where you do not make additional Purchase Payments or partial withdrawals and you do not “step-up,” you can expect the total fees paid to equal 7.50% of your initial Purchase Payment. In other words, because Retirement Asset Protector matures in 10 years, we multiply 0.1875% times 40 quarters (four quarters per year for 10 years) to obtain the percentage (7.50%) needed to determine the total amount of the fees to be paid. If you make additional Purchase Payments, you “step-up,” or the percentage rate used to calculate the Retirement Asset Protector Fee is changed at the time of “step-up,” the total amount of fees will be higher.

The greater of the two amounts will be allocated to the Designated Fund in which you are invested at that time. Here is an example of how we calculate benefits under Retirement Asset Protector:

l	Assume that you purchased a Contract on January 2, 2009 with an initial Purchase Payment of $100,000 and you selected Retirement Asset Protector. Your Retirement Asset Protector Benefit Base equals your Purchase Payment amount of $100,000.
l	Assume you make an additional Purchase Payment of $50,000 on February 2, 2009, thus increasing your Retirement Asset Protector Benefit Base to $150,000.
l	Assume you make no withdrawals or additional Purchase Payments prior to the GMAB Maturity Date on January 2, 2019.
l	Assume that, because of poor investment performance, your Account Value on January 2, 2019 is $135,000. The excess of your Retirement Asset Protector Benefit Base over your Account Value is $15,000 ($150,000 - $135,000). The total amount of Retirement Asset Protector Fees paid is equal to the sum of the value of the Retirement Asset Protector Benefit Bases on the last day of each Account Quarter since the Inception Date ($150,000 x 40) times one quarter of the annual Retirement Asset Protector Fee (0.75% ÷ 4). In this case, the total amount of rider fees paid is $11,250. Therefore, we will credit $15,000 to your Account Value.
l	Assume instead that, because of better investment performance, your Account Value on January 2, 2019, is $155,000. Because your Account Value is greater than your Retirement Asset Protector Benefit Base, your Account Value will be credited with the total amount of Retirement Asset Protector Fees paid. In this case, the amount will be $11,250.

Withdrawals Under Retirement Asset Protector

All withdrawals you take, including any Required Minimum Distribution Amounts, will reduce the dollar value of the Retirement Asset Protector Benefit Base proportionally to the amount withdrawn. For example, after a partial withdrawal, the new Retirement Asset Protector Benefit Base will equal:

Retirement Asset Protector Benefit Base immediately before partial withdrawal X Account Value immediately after partial withdrawal Account Value immediately before partial withdrawal

You should be aware that, if you take a withdrawal when your Account Value is less than your Retirement Asset Protector Benefit Base, the withdrawal may reduce the value of your Benefit Base by an amount greater than the amount of the withdrawal. Thus, withdrawals taken in a down market could severely reduce your benefits under Retirement Asset Protector. Here is an example of how we handle withdrawals under Retirement Asset Protector:

l	Assume that you purchased a Contract on January 2, 2009 with an initial Purchase Payment of $100,000 and you selected Retirement Asset Protector. Your Retirement Asset Protector Benefit Base equals your Purchase Payment amount of $100,000.
l	Assume that, on March 10, 2011, your Account Value is $80,000. Assume further that you take a withdrawal of $10,000 on that date, thus reducing your Account Value to $70,000. Your Retirement Asset Protector Benefit Base is reduced proportionally to the amount withdrawn. Therefore your new Retirement Asset Protector Benefit Base is $100,000 x ($70,000 ÷ $80,000), or $87,500.
l	Assume you make no additional withdrawals prior to the GMAB Maturity Date on January 2, 2019.
l	Assume that, because of investment performance, your Account Value on January 2, 2019 is $80,000. The excess of your Retirement Asset Protector Benefit Base over your Account Value is $7,500 ($87,500 - $80,000). The total amount of Retirement Asset Protector Fees paid is equal to the sum of the value of your Retirement Asset Protector Benefit Bases on the last day of each Account Quarter since the Issue Date [($100,000 x 8) + ($87,500 x 32)] times one quarter of your annual Retirement Asset Protector Fee (0.75% ÷ 4). In this case, the total amount of rider fees paid is $6,750. Therefore, we will credit $7,500 to your Account Value.

Step-Up Under Retirement Asset Protector

On or after your first Account Anniversary, you may electto increase your Retirement Asset Protector Benefit Base to your then current Account Value. The step-up election may be made on anyday on or after your first Account Anniversary. (We reserve the right, in our sole discretion, to require step-up elections to occur only on Account Anniversaries.)

If you are participating in Retirement Asset Protector, on the day we receive your step-up election notice in good order (the “Step-Up Date”), we will increase your Retirement Asset Protector Benefit Base to an amount equal to your Account Value if eligible. If you elect to step-up, at least one full year from the Step-Up Date must pass before you can elect another step-up. You can only elect to step-up if:

l	your current Account Value is greater than the current Retirement Asset Protector Benefit Base, and
l	your Account Value is $5,000,000 or less on your Step-Up Date.

For purposes of determining the $5,000,000 limit, we reserve the right, in our sole discretion, to aggregate your Account Value with the account values of all other variable annuity contracts you own that have been issued by Sun Life Assurance Company of Canada (U.S.) or its affiliates.

Under Retirement Asset Protector, your Step-Up Date must be at least 10 years prior to your maximum Annuity Commencement Date. If you have selected an Annuity Commencement Date that is prior to the maximum Annuity Commencement Date but is less than 10 years after your Step-Up Date, then we will automatically extend your Annuity Commencement Date to equal your GMAB Maturity Date.

Without a step-up, your benefit under Retirement Asset Protector will “mature” on your 10th Account Anniversary. If you elect to step-up your Retirement Asset Protector Benefit Base, your benefit under Retirement Asset Protector will mature 10 years from the most recent Step-Up Date. In either case, on the day your Retirement Asset Protector benefit matures (the “GMAB Maturity Date”), we will credit the greater of:

l	any excess of your Retirement Asset Protector Benefit Base over your Account Value, or
l	the total amount of fees you paid for Retirement Asset Protector.

l	Assume that you purchased a Contract on January 2, 2009 with an initial Purchase Payment of $100,000 and you selected Retirement Asset Protector. Assume further that your Retirement Asset Protector Fees remain constant until the GMAB Maturity Date. Your Retirement Asset Protector Benefit Base equals your Purchase Payment amount of $100,000.
l	Assume that, on January 2, 2010, your Account Value is $118,000. Because your Account Value is greater than your Retirement Asset Protector Benefit Base, you elect to step-up to a new ten-year period with a new Retirement Asset Protector Benefit Base of $118,000. Your new GMAB Maturity Date will be January 2, 2020.
l	Assume you make no withdrawals prior to the GMAB Maturity Date on January 2, 2020.
l	Assume that your Account Value on January 2, 2020 is $108,000. The excess of your Retirement Asset Protector Benefit Base over your Account Value is $10,000 ($118,000 - $108,000). The total amount of Retirement Asset Protector Fees paid is equal to the sum of the value of your Retirement Asset Protector Benefit Bases on the last day of each Account Quarter since the Issue Date [($100,000 x 4) + ($118,000 x 40)] times one quarter of your annual Retirement Asset Protector Fee (0.75% ÷ 4). In this case, the total amount of rider fees paid is $9,600. Therefore, we will credit $10,000 to your Account Value.

We reserve the right to discontinue offering the step-up provision of Retirement Asset Protector if we determine that, based upon market conditions at the time of the step-up, we can no longer offer Retirement Asset Protector to new Contracts at the current percentage rate used to calculate the Retirement Asset Protector Fee as set forth under “Cost of Retirement Asset Protector.” In that case, we will send notification that the step-up provision under your Contract has been discontinued unless you elect to begin a new step-up provision at the higher percentage rate. Your written consent is required to accept the higher percentage rate and continue to step-up.

Renewal of Retirement Asset Protector

If you elect to participate in Retirement Asset Protector and you remain in the benefit until it matures, you may elect to renew your participation in Retirement Asset Protector, provided that we are still offering the benefit to new Participants. Upon renewal, the annual charge for participation in Retirement Asset Protector will be extended under the terms and conditions applicable to new Participants at that time. We reserve the right, in our sole discretion, to stop offering Retirement Asset Protector to new Participants, in which case renewals will no longer be available.

Cancellation of Retirement Asset Protector

You may cancel Retirement Asset Protector at any time. Upon cancellation, all benefits and charges under the benefit shall cease.  Once cancelled, Retirement Asset Protector cannot be reinstated.

Although transfers among the Designated Funds are permitted as described under “Transfer Privilege,” Retirement Asset Protector will be cancelled automatically:

● if any Purchase Payment is allocated to an investment option other than a Designated Fund; or

● if any portion of Account Value maintained in a Designated Fund is transferred into any investment option other than a Designated Fund.

A change of ownership of the Contract may also cancel the Benefit.

Death of Participant Under Retirement Asset Protector

If the Participant dies while participating in Retirement Asset Protector, all benefits and charges under the benefit will automatically terminate when we receive Due Proof of Death, unless the surviving spouse is the sole Beneficiary and elects to continue the Contract. The surviving spouse has two options under the Contract (assuming that the rider is available to new Participants at the time of such election and the surviving spouse meets certain eligibility requirements).

(1)

The spouse can automatically continue Retirement Asset Protector even though the Account Value may have been enhanced under the provisions of the death benefit. (See “Spousal Continuance” under “DEATH BENEFIT.”)  The GMAB Maturity Date does not change.

(2)

The surviving spouse can elect to participate in a new Retirement Asset Protector benefit on the original Contract.  The Retirement Asset Protector Fee may be higher than your current fee. The Retirement Asset Protector Fee will be set by us based upon market conditions at the time of election. The Retirement Asset Protector Benefit Base will be equal to the Account Value after the death benefit has been credited. The new GMAB Maturity Date will be 10 years after Retirement Asset Protector has been re-elected.

Certain Tax Considerations

Certain tax considerations may be important to you in connection with a living benefit, such as Retirement Asset Protector. For a discussion of some of these considerations, please refer to “TAX ISSUES UNDER OPTIONAL LIVING BENEFITS” and “TAX CONSIDERATIONS - Impact of Optional Death Benefit and Optional Living Benefit Riders.”

DESIGNATED FUNDS

To participate in an optional living benefit, all of your Account Value must be invested only in Designated Funds at all times during the term of your optional living benefit.

The only Funds, dollar-cost averaging program options, and asset allocation models that currently qualify as Designated Funds are as follows:

Asset Allocation Models	Funds (continued)
90/10 Masters Model1	Fidelity® Variable Insurance Products Fund Freedom 2015 Portfolio -
80/20 Masters Model	Service Class 2
Build Your Portfolio	Fidelity® Variable Insurance Products Fund Freedom 2020 Portfolio -
	Service Class 2
Dollar-Cost Averaging Program Options	Fidelity® Variable Insurance Products Balanced Portfolio -
6-Month DCA Guarantee Option	Service Class 2
12-Month DCA Guarantee Option	MFS® Total Return Portfolio - S Class
	Oppenheimer Balanced Fund/VA - Service Shares
Funds	AllianceBernstein Balanced Wealth Strategy Fund - Class B
SC Ibbotson Growth Fund - S Class	Universal Institutional Funds Inc. - Equity and Income
SC Ibbotson Balanced Fund - S Class	Portfolio - Class II
SC Ibbotson Moderate Fund - S Class	BlackRock Global Allocation V.I. - Class 3

1 Not available to Contracts purchased on or after February 17, 2009.

One of the asset allocation models that qualifies as a Designated Fund is the portfolio model that applies to our “build your portfolio” program. That portfolio model and the “build your portfolio” program are described in “BUILD YOUR PORTFOLIO” and in “APPENDIX J -- BUILD YOUR PORTFOLIO.”

If you elected to participate in Income ON Demand II (“IOD II”), Income ON Demand II Escalator (“IOD II Escalator”), Income ON Demand II Plus (“IOD II PLUS”) or Retirement Income Escalator II (“RIE II”), and are invested in more than one Designated Fund, we will automatically transfer assets among your Designated Funds to maintain the percentage allocation you selected.  We will make these transfers on a quarterly basis.

If you purchased Secured Returns for Life Plus, Income ON Demand (“IOD”), Retirement Income Escalator (“RIE”), or Retirement Asset Protector, and you are invested in more than one Designated Fund, we will not automatically transfer your assets among your Designated Funds to maintain the percentage allocation you selected, unless you have instructed us to do so.

We reserve the right to declare that a particular Fund no longer qualifies as a Designated Fund.  If you are invested in a Designated Fund at the time we declare the Fund to no longer be a Designated Fund, your Account Value can remain in that Fund without canceling your participation in a living benefit. However, any transfers or future Purchase Payments may only be allocated to a Fund that is declared by us to be a Designated Fund at the time of the transaction.  If you are invested in a Fund that has been declared by us to no longer be a Designated Fund, you must first transfer your Account Value from that Fund into one or more of the current Designated Fund(s) if you want to make subsequent Purchase Payments or any additional transfers. (Note that this restriction does not apply to automatic portfolio rebalancing.) We also reserve the right to close Funds only to new Contracts. We will, however, revise the prospectus to give notice to prospective investors of the closing of any Fund.  If a Designated Fund is closed only to new Contracts, any current Account Value may remain in that Fund and future transfers and Purchase Payments to that Fund are permissible, as long as the Fund is still declared by us to be a Designated Fund.

Note that, on IOD, IOD II, IOD II Plus, IOD II Escalator, RIE, and RIE II, we have reserved the right toallow step-ups only if your Account Value is invested in a Fund that has been declared by us to be a Designated Fund.  In such case, if you are invested in a Fund that has been declared by us to no longer be a Designated Fund, youmay have to transfer into a current Designated Fund before a step-up can occur. If you decide not to transfer into a current Designated Fund and forgo step-up, thenyour living benefit rider will continue with all of the benefits except forstep-up.

BUILD YOUR PORTFOLIO

Among the choices of Designated Funds is a selection of funds (“portfolio model”) that you design yourself using certain broad guidelines that we provide. To “build your portfolio,” you pick funds from the asset classes available at that time. Altogether you must choose at least three funds but no more than 18 funds for your portfolio model. The amount you may invest in each asset class is determined by a percentage range that we provide for each asset class. The sum of the percentages you invest in the asset classes altogether must total 100%. A chart showing the Funds available in each asset class and the percentage range assigned to each asset class is included in Appendix J.

You may transfer funds within the asset classes as long as your allocations remain within the percentage ranges we have established, and you adhere to the transfer provisions of your Contract. (See “Transfer Privilege,” Short-Term Trading,” and “Funds' Shareholder Trading Policies.”) Withdrawals out of your portfolio model will be taken pro-rata from each of your selected Funds. Any additional Purchase Payments will be allocated proportionally to your current Fund selection. At any time you can change your Fund selection by providing new allocation instructions. (Under the terms of the living benefit riders, however, there are certain limits on the times when you can make additional Purchase Payments.) Your new instructions will change your existing allocations accordingly. Your portfolio will be rebalanced quarterly to maintain your percentage allocations in line with the performance of the Funds over the prior quarter.

If at any time, a fund is closed to new business, no new payments or transfers into the fund will be permitted. However, portfolio rebalancing of the fund will continue. To make a payment into your portfolio model after a fund within the model has been closed, you must redesign your portfolio model without the closed fund. Your entire Account Value will then be reallocated to your new portfolio model.

TAX ISSUES UNDER OPTIONAL LIVING BENEFITS

If your Contract is a Non-Qualified Contract, it is possible that the election of an optional living benefit might increase the taxable portion of any withdrawal you make from the Contract.

If your Contract is a Qualified Contract, the retirement plan governing that Qualified Contract may be subject to certain Required Minimum Distribution (“RMD”) provisions imposed by the Internal Revenue Code (the “Code”) and IRS regulations (collectively, the “Federal Tax Laws”). These RMD provisions require that a yearly amount be distributed from the retirement plan beginning generally in the calendar year in which you attain age 70½. Your failure to withdraw your yearly RMD amount from your retirement plan could result in adverse tax treatment. Because for certain retirement plans we do not know what assets are held by the plan, we assume for all plans that the Qualified Contract is the only asset and we determine a yearly RMD amount for only this Contract (“Yearly RMD Amount”).

Please refer to “Tax Considerations - Impact of Optional Death Benefit and Optional Living Benefit Riders” for more information regarding these and other tax issues that you should consider before electing to participate in an optional living benefit.

Tax Issues Under Retirement Income Escalator II

When you elect to participate in RIE II, we will inform you that you may withdraw annual amounts up to your Yearly RMD Amount without reducing your guaranteed withdrawal benefit. To assist you in complying with the RMD requirements, each year, we will notify you in early January of your calculated Yearly RMD Amount and inform you that you may withdraw annual amounts up to your Yearly RMD Amount without reducing your guaranteed withdrawal benefit.

In the event that your Yearly RMD Amount attributable to your Contract is greater than the maximum withdrawal amount permitted each year under RIE II, we are currently waiving withdrawal provisions as follows. If you withdraw all or a portion of your Qualified Contract's Yearly RMD Amount from the Contract while participating in RIE II, we reduce your Account Value dollar for dollar by the amount of the withdrawal. In addition, for that year only, your Annual Withdrawal Amount under RIE II will be reduced, dollar for dollar, by the amount of the withdrawal. We will not, however, penalize you if the current Federal Tax Laws require you to withdraw from your Contract an amount greater than your Annual Withdrawal Amount. In other words, we will not reduce your Annual Withdrawal Amount for future years (or your Withdrawal Benefit Base or Bonus Base), if a Yearly RMD Amount exceeds your Annual Withdrawal Amount, provided that:

● you withdraw your Qualified Contract's first Yearly RMD Amount in the calendar year you attain age 70½ rather than postponing the withdrawal of that Amount until the first quarter of the next calendar year, and

● you do not make any withdrawal from your Qualified Contract that would result in you receiving, in any Account Year, more than one calendar year's Yearly RMD Amount.

Currently, any withdrawal in excess of the Annual Withdrawal Amount that is taken to satisfy the Yearly RMD Amounts will not be treated as an Excess Withdrawal, and will not reduce the Withdrawal Benefit Base. However, if there is any material change to the current Code or IRS Rules governing the timing or determination of required minimum distribution amounts, then the Company reserves the right to treat any withdrawal greater than the Annual Withdrawal Amount as an Excess Withdrawal which may significantly reduce the Withdrawal Benefit Base.

Tax Issues Under Income ON Demand II Escalator

When you elect to participate in IOD II Escalator, you may withdraw annual amounts up to the Yearly RMD Amount without affecting your benefit, subject to the conditions stated below. In the event that your Yearly RMD Amount attributable to your Contract is greater than your Stored Income Balance, we are currently waiving the withdrawal provisions under IOD II Escalator, as follows. If you withdraw all or a portion of your Qualified Contract's Yearly RMD Amount from the Contract while participating in IOD II Escalator, we reduce your Account Value and your Stored Income Balance, dollar for dollar, by the amount of the withdrawal to a value not less than zero. We will not, however, penalize you if the current Federal Tax Laws require you to withdraw from your Contract an amount greater than your Stored Income Balance. In other words, if a Yearly RMD Amount exceeds your Stored Income Balance, we will reduce your Stored Income Balance, but we will not reduce your Income Benefit Base, provided that:

● you withdraw your Qualified Contract's first Yearly RMD Amount in the calendar year you attain age 70½ rather than postponing the withdrawal of that Amount until the first quarter of the next calendar year, and

● you do not make any withdrawal from your Qualified Contract that would result in you receiving, in any Account Year, more than one calendar year's Yearly RMD Amount.

Currently, any withdrawal in excess of the Annual Income Amount or Stored Income Balance that is taken to satisfy the Yearly RMD Amounts will not be treated as an Excess Withdrawal, and will not reduce the Income Benefit Base. However, if there is any material change to the current Code or IRS Rules governing the timing or determination of required minimum distribution amounts, then the Company reserves the right to treat any withdrawal greater than the Annual Income Amount or Stored Income Balance as an Excess Withdrawal which may significantly reduce the Income Benefit Base.

Tax Issues Under Retirement Asset Protector

If you withdraw all or a portion of your retirement plan's Yearly RMD Amount from the your Qualified Contract while participating in Retirement Asset Protector, we reduce your Account Value by the amount of the withdrawal and your Retirement Asset Protector Benefit Base proportionally (see “Withdrawals Under Retirement Asset Protector “).

DEATH BENEFIT

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

Amount of Death Benefit

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

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

The Basic Death Benefit

In general, if you were 85 or younger on your Open Date, 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 Adjusted Purchase Payments (Purchase Payments x (Account Value after withdrawal ÷ Account Value before withdrawal)) as of the Death Benefit Date. See “Calculating the Death Benefit.” Because of the way that Adjusted Purchase Payments are computed, a withdrawal may cause the basic death benefit to decrease by more than the amount of the withdrawal.

If you were 86 or older on your Open 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.

Optional Death Benefit Riders

Subject to availability in your state, you may enhance the “basic death benefit” by electing one of the following optional death benefit riders. You must make your election on or before the Issue Date. You will pay a charge for the optional death benefit rider you elect. (For a description of these charges, see “Charges for Optional Benefit Riders.”) The riders are available only if you are younger than 80 on the Open Date. The optional death benefit election may not be changed after the Contract's Issue Date. The death benefit under all optional death benefit riders will be adjusted for all partial withdrawals as described in this Prospectus under the heading “Calculating the Death Benefit.” For examples of how the death benefit is calculated under the optional death benefit riders, see Appendix C.

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

     Maximum Anniversary Account Value (“MAV”) Rider

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

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

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

     5% Premium Roll-Up (“5% Roll-Up”) Rider

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

l	the amount payable under the basic death benefit above, or
l	the sum of your total Purchase Payments plus interest accruals, adjusted for partial withdrawals.

Under this rider, interest accrues at a rate of 5% per year on Purchase Payments and transfers to the Variable Account while they remain in the Variable Account. The 5% interest accruals will continue until the earlier of:

l	the first day of the month following your 80th birthday, or
l	the day the death benefit amount under this rider equals twice the sum of your Adjusted Purchase Payments.

     Earnings Enhancement Benefit Premier (“EEB Premier”) Rider

If you elect this EEB Premier Rider, your death benefit will be the amount payable under the basic death benefit, PLUS the “EEB Premier amount.” Calculated as of the Death Benefit Date, the “EEB Premier amount” is determined as follows:

l

If you are 69 or younger on your Open Date, the “EEB Premier amount” will be 45% of the difference between your Account Value and your Adjusted Purchase Payments, up to a cap. The cap is 100% of (a) the Adjusted Purchase Payments made prior to your death minus (b) any Purchase Payments made within the twelve months prior to your death but not within your first Account Year.

l

If you are between the ages of 70 and 79 on your Open Date, the “EEB Premier amount” will be 25% of the difference between your Account Value and your Adjusted Purchase Payments, up to a cap. The cap is 40% of (a) the Adjusted Purchase Payments made prior to your death minus (b) any Purchase Payments made in the twelve months prior to your death but not within your first Account Year. In addition, on the Account Anniversary following your 85th birthday, the “EEB Premier amount” will be locked in. Partial withdrawals, whether before or after your 85th birthday, will proportionally reduce the “EEB Premier amount.”

     Earnings Enhancement Benefit Premier with MAV (“EEB Premier with MAV”) Rider

If you elect this EEB Premier with MAV Rider, your death benefit will be the amount payable under the MAV Rider PLUS the “EEB Premier amount.” Calculated as of your Death Benefit Date, the “EEB Premier amount” is as follows:

l

If you are 69 or younger on your Open Date, the “EEB Premier amount” will be 45% of the difference between your Account Value and your Adjusted Purchase Payments, up to a cap. The cap is 100% of (a) the Adjusted Purchase Payments made prior to your death minus (b) any Purchase Payments made in the twelve months prior to your death but not within your first Account Year.

l

If you are between the ages of 70 and 79 on your Open Date, the “EEB Premier amount” will be 25% of the difference between your Account Value and your Adjusted Purchase Payments, up to a cap. The cap is 40% of (a) the Adjusted Purchase Payments made prior to your death minus (b) any Purchase Payments made in the twelve months prior to your death but not within your first Account Year. In addition, on the Account Anniversary following your 85th birthday, the “EEB Premier amount” will be locked in. Partial withdrawals, whether before or after your 85th birthday, will proportionally reduce the “EEB Premier amount.”

     Earnings Enhancement Benefit Premier with 5% Roll-Up (“EEB Premier with 5% Roll-Up”) Rider

If you elect this EEB Premier with 5% Roll-Up Rider, your death benefit will be the amount payable under the 5% Roll-Up Rider PLUS the “EEB Premier amount.” Calculated as of your Death Benefit Date, the “EEB Premier amount” is determined as follows:

l

If you are 69 or younger on your Open Date, the “EEB Premier amount” will be 45% of the difference between your Account Value and your Adjusted Purchase Payments, up to a cap. The cap is 100% of (a) the Adjusted Purchase Payments made prior to your death minus (b) any Purchase Payments made in the twelve months prior to your death but not within your first Account Year.

l

If you are between the ages of 70 and 79 on your Open Date, the “EEB Premier amount” will be 25% of the difference between your Account Value and your Adjusted Purchase Payments, up to a cap. The cap is 40% of (a) the Adjusted Purchase Payments made prior to your death minus (b) any Purchase Payments made in the twelve months prior to your death but not within your first Account Year. In addition, on the Account Anniversary following your 85th birthday, the “EEB Premier amount” will be locked in. Partial withdrawals, whether before or after your 85th birthday, will proportionally reduce the “EEB Premier amount.”

     Earnings Enhancement Benefit Premier Plus (“EEB Premier Plus”) Rider

If you elect this EEB Premier Plus Rider, your death benefit will be the amount payable under the basic death benefit, PLUS the “EEB Premier Plus amount.”  Calculated as of the Death Benefit Date, the “EEB Premier Plus amount” is determined as follows:

l

If you are 69 or younger on your Open Date, the “EEB Premier Plus amount” will be 75% of the difference between your Account Value and your Adjusted Purchase Payments, up to a cap. The cap is 150% of (a) the Adjusted Purchase Payments made prior to your death minus (b) any Purchase Payments made within the 12 months prior to your death but not within your first Account Year.

l

If you are between the ages of 70 and 79 on your Open Date, the “EEB Premier Plus amount” will be 35% of the difference between your Account Value and your Adjusted Purchase Payments, up to a cap. The cap is 60% of (a) the Adjusted Purchase Payments made prior to your death minus (b) any Purchase Payments made in the twelve months prior to your death but not within your first Account Year. In addition, on the Account Anniversary following your 85th birthday, the “EEB Premier Plus amount” will be locked in. Partial withdrawals, whether before or after your 85th birthday, will proportionally reduce the “EEB Premier Plus amount.”

Spousal Continuance

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

Calculating the Death Benefit

In calculating the death benefit amount payable under option (3) of the “Basic Death Benefit” or any of the optional death benefit riders, any partial withdrawals will reduce the death benefit amount to an amount equal to the death benefit amount immediately before the withdrawal multiplied by the ratio of the Account Value immediately after the withdrawal to the Account Value immediately before the withdrawal. Because of the way these adjustments are computed, a withdrawal may cause the basic death benefit to decrease by more than the amount of the withdrawal.

If the death benefit is the amount payable under options (2) or (3) of the “Basic Death Benefit” or under any of the optional death benefit riders, your Account Value may be increased by the excess, if any, of that amount over option (1) of the “Basic Death Benefit.” Any such increase will be allocated to the Sub-Accounts in proportion to your Account Value in those Sub-Accounts on the Death Benefit Date. Such increase will be made only if the Beneficiary elects to annuitize, elects to defer annuitization, or elects to continue the Contract. Also, any portion of this new Account Value attributed to the Fixed Account will be transferred to the Money Market Sub-Account (without the application of a Market Value Adjustment). If a surviving spouse, as the named Beneficiary, elects to continue the Contract after the Covered Person's death, the surviving spouse may transfer any such Fixed Account portion back 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 “The Income Phase -- Annuity Provisions.”

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

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

Non-Qualified Contracts

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

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

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

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

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

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

Selection and Change of Beneficiary

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

Payment of Death Benefit

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

THE INCOME PHASE - ANNUITY PROVISIONS

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

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

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

Selection of Annuitant(s)

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

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

l	The earliest possible Annuity Commencement Date is the first Account Anniversary.
l	The latest possible Annuity Commencement Date is the first day of the month following the Annuitant's 95th birthday (“maximum Annuity Commencement Date”). If there is a Co-Annuitant, the Annuity Commencement Date applies to the younger of the Annuitant and Co-Annuitant.
l	The Annuity Commencement Date must always be the first day of a calendar month.

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

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

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

Annuity Options

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

      Annuity Option A - Life Annuity

We provide monthly payments during the lifetime of the Annuitant. Annuity payments stop when the Annuitant dies. There is no provision for continuation of any payments to a Beneficiary. Note that if the Annuitant dies prior to the end of the first month after the Annuity Commencement Date, only one annuity payment will be made.

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

Selection of Annuity Option

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

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

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

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

Amount of Annuity Payments

     Adjusted Account Value

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

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

     Variable Annuity Payments

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

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

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

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

     Fixed Annuity Payments

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

     Minimum Payments

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

Exchange of Variable Annuity Units

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

To make an exchange, the Annuitant sends us, at our Annuity 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 in one Sub-Account for those in another, the Annuitant should carefully review the relevant Fund prospectuses for the investment objectives and risk disclosure of the Funds in which the Sub-Accounts invest.

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

Account Fee

During the Income Phase, we deduct the annual Account Fee of $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 Contracts contain Annuity Payment Rates for each Annuity Option described in this Prospectus. The rates show, for each $1,000 applied, the dollar amount of: (a) the first monthly Variable Annuity payment based on the assumed interest rate specified in the applicable Contract (3% per year, compounded annually); and (b) the monthly Fixed Annuity payment, when this payment is based on the minimum guaranteed interest rate specified in the Contract. 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 elected and the adjusted age of the Annuitant. The Contracts also describe the method of determining the adjusted age of the Annuitant. The mortality table used in determining the Annuity Payment Rates for Annuity Options A, B and C is the Annuity 2000 Table.

Annuity Options as Method of Payment for Death Benefit

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

OTHER CONTRACT PROVISIONS

Exercise of Contract Rights

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

Change of Ownership

Ownership of a Qualified Contract may not be transferred except to: (1) the Annuitant; (2) a trustee or successor trustee of a pension or profit sharing trust which is qualified under Section 401 of the Internal Revenue Code; (3) the employer of the Annuitant, provided that the Qualified Contract after transfer is maintained under the terms of a retirement plan qualified under Section 403(a) of the Internal Revenue Code for the benefit of the Annuitant; (4) the trustee or custodian of an individual retirement account plan qualified under Section 408 of the Internal Revenue Code for the benefit of the 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 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, in good order. 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.

Change of ownership will not change the Covered Person named when the Contract is issued. This means that all death benefits will continue to be based on the Covered Person and not the Participant. The amount payable on the death of the new Participant will be the Surrender Value.

Voting of Fund Shares

We will vote Fund shares held by the Sub-Accounts at meetings of shareholders of the Funds or in connection with similar solicitations, according to the voting instructions received from persons having the right to give voting instructions. During the Accumulation Phase, you will have the right to give voting instructions, 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. Because of this method of proportional voting, a small number of Contract Owners may determine the outcome of a shareholder vote.

Owners of Qualified Contracts issued on a group basis may be subject to other voting provisions of the particular plan and under 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 to persons who may have such rights under plans, other than rights afforded under the Investment Company Act of 1940, or any duty to inquire as to the instructions received by Owners, Participants or others, or the authority of any such persons, to instruct the voting of Fund shares. Except as the Variable Account or the Company has actual knowledge to the contrary, the instructions given by Owners 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.

Reports to Owners

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

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

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

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

Substitution of Securities

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

Change in Operation of Variable Account

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

Splitting Units

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

Modification

Upon notice to the 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: (1) 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; (2) 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; (3) 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”); (4) provides additional Variable Account and/or fixed accumulation options; or (5) 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 Account Fee, 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.

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 or Sub-Accounts; (2) add or delete Funds, sub-series thereof or other investment companies and corresponding Sub-Accounts; (3) add or remove Guarantee Periods available at any time for election by 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, or longer if allowed by your state, after it was delivered to you. State law may also allow you to return the Contract to your sales representative. When we receive the returned Contract, it will be cancelled and we will refund to you your Account Value. If applicable state law requires, we will return the full amount of any Purchase Payment(s) we received.

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

     Deductibility of Purchase Payments

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

     Pre-Distribution Taxation of Contracts

Generally, an increase in the value of a Contract will not give rise to a current income 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. If you withdraw your entire Account Value under a Non-Qualified Contract before the Annuity Commencement Date (a “full surrender”), the taxable portion will equal the amount you receive less the “investment in the contract” (i.e., the total Purchase Payments (excluding amounts that were deductible by, or excluded from the gross income of, the Owner of a Contract), less any Purchase Payments that were amounts previously received which were not includable in income).

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

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

Death benefits paid upon the death of a Participant are not life insurance benefits and will generally be includable 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 Participant's or annuitant's death, i.e., the investment in the contract must still be determined by reference to the Participant's investment in the Contract. Special mandatory distribution rules also apply after the death of the Participant when the beneficiary is not the surviving spouse of the Participant.  

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

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

     Distributions and Withdrawals from Qualified Contracts

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

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

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

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

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

     Withholding

In the case of an eligible rollover distribution (as defined above) from a Qualified Contract (other than from an IRA), we (or the plan administrator) must withhold and remit to the U.S. Government 20% of the distribution, unless the 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 surviving spouse Beneficiary may elect a direct rollover. In the case of a distribution from (i) a Non-Qualified Contract, (ii) an IRA, or (iii) a Qualified Contract where the distribution is not an eligible rollover distribution, we will withhold and remit to the U.S. Government a part of the taxable portion of each distribution unless, prior to the distribution, the 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 the mutual fund series underlying non-qualified 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 IRS has stated that satisfaction of the diversification requirements described above by itself does not prevent a Participant from being treated as the owner of separate account assets under an “owner control” test.  If a Participant is treated as the owner of separate account assets for tax purposes, the Participant would be subject to taxation on the income and gains from the separate account assets. In published revenue rulings through 1982 and then again in 2003, the IRS has stated that a variable contract Participant will be considered the owner of separate account assets if the owner possesses incidents of ownership in those assets, such as the ability to exercise control over the investment of the assets.  In Revenue Ruling 2003-91, the IRS considered certain variable annuity and variable life insurance contracts and concluded that the owners of the variable contracts would not be considered the owners of the contracts' underlying assets for federal income tax purposes.

Revenue Ruling 2003-91 states that the determination of whether the owner of a variable contract possesses sufficient incidents of ownership over the assets underlying the variable contract so as to be deemed the owner of those assets for federal income tax purposes will depend on all the facts and circumstances. We do not believe that the differences between the Contract and the contracts described in Revenue Ruling 2003-91 should prevent the holding in Revenue Ruling 2003-91 from applying.  Nevertheless, you should consult with a qualified tax professional on the potential impact of the investor control rules of the IRS as they relate to the investment decisions and activities you may undertake with respect to the Contract.  In addition, the IRS and/or the Treasury Department may issue new rulings, interpretations or regulations on this subject in the future.  Accordingly, we therefore reserve the right to modify the Contracts as necessary to attempt to prevent you from being considered the owner, for tax purposes, of the underlying assets.  We also reserve the right to notify you if we determine that it is no longer practicable to maintain the Contract in a manner that was designed to prevent you from being considered the owner of the assets of the Separate Account.  You bear the risk that you may be treated as the owner of Separate Account assets and taxed accordingly.

     Tax Treatment of the Company and the Variable Account

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

     Qualified Retirement Plans

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

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

     Pension and Profit-Sharing Plans

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

     Tax-Sheltered Annuities

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

Effective October 1, 2008, we stopped issuing any new TSAs, including Texas Optional Retirement Program annuities.  After December 31, 2008, we no longer accepted any additional Purchase Payments to any previously issued TSAs.

The Internal Revenue Service’s (“IRS”) comprehensive TSA regulations became effective January 1, 2009, and these regulations, subsequent IRS guidance, and/or the terms of an employer’s TSA plan impose new restrictions on TSAs, including restrictions on (1) the availability of hardship distributions and loans, (2) TSA exchanges within the same employer’s TSA plan, and (3) TSA transfers to another employer’s TSA plan.  You should consult with a qualified tax professional about how the regulations affect you and your TSA.

If TSAs 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 you attain age 59½, have a severance from employment with the employer, die or become 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. Financial hardship withdrawals (as well as certain other premature withdrawals) are fully taxable and will be subject to a 10% federal income tax penalty, in addition to any applicable Contract withdrawal charge. Under certain circumstances the 10% federal income tax penalty will not apply if the withdrawal is for medical expenses. A financial hardship withdrawal may not be repaid once it is taken.

The IRS’s TSA regulations provide that TSA financial hardship withdrawals will be subject to the IRS rules applicable to hardship distributions from 401(k) plans.  Specifically, if you have not terminated your employment or reached age 59½, you may be able to withdraw a limited amount of monies if you have an immediate and heavy financial need and the withdrawal amount is necessary to satisfy such financial need.  An immediate and heavy financial need may arise only from:

l	deductible medical expenses incurred by you, your spouse, or your dependents;
l	payments of tuition and related educational fees for the next 12 months of post-secondary education for you, your spouse, or your dependents;
l	costs related to the purchase of your principal residence (not including mortgage payments);
l	payment necessary to prevent eviction from your principal residence or foreclosure of the mortgage on your principal residence;
l	payments for burial or funeral expenses for your parent, spouse, children, or dependents; or
l	expenses for the repair of damage to your principal residence that would qualify for the federal income tax casualty deduction.

You will be required to represent in writing to us (1) that your specified immediate and heavy financial need cannot reasonably be relieved through insurance or otherwise, by liquidation of your assets, by ending any contributions you are making under your TSA plan, by other distributions and nontaxable loans under any of your qualified plans, or by borrowing from commercial sources and (2) that your requested withdrawal amount complies with applicable law, including the federal tax law limit.  And, unless your TSA was issued prior to September 25, 2007 and the only payments you made to such TSA were TSA funds you transferred directly to us from another TSA carrier (a “90-24 Transfer TSA”), your TSA employer also may need to agree in writing to your hardship request.

If your TSA contains a provision that permits loans, you may request a loan but you will be required to represent in writing to us that your requested loan amount complies with applicable law, including the federal tax law limit.  And, unless your TSA is a 90-24 Transfer TSA, your TSA employer also may need to agree in writing to your loan request.

TSAs, like IRAs, are subject to required minimum distributions under the Code.  TSAs 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 TSA plan, you may be entitled to transfer or exchange all or a portion of your TSA to one or more alternative funding options within the same or different TSA plan. You should consult the documents governing your TSA plan and your plan administrator for information as to such investment alternatives. If you wish to transfer/exchange your TSA, you will be able to do so only if the issuer of the new TSA certifies to us that the transfer/exchange is permissible under the TSA regulations and the applicable TSA plan.  Your TSA employer also may need to agree in writing to your transfer/exchange request.

     Individual Retirement Arrangements

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

     Roth Individual Retirement Arrangements

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

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

     Impact of Optional Death Benefit and Optional Living Benefit Riders

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

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

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

If you are subject to the RMD requirements while you are enrolled in the AB Plan under any optional living benefit rider, any RMD amount that you take from the Contract will reduce the amount of the benefit under the AB Plan. This reduction could significantly reduce the value of the optional living benefit to you.

If you are subject to the RMD requirements while you are enrolled in the WB Plan under any optional living benefit rider, and any RMD amount that you take from the Contract ever exceeds the maximum amount that you may withdraw under the terms of the WB Plan, the additional withdrawal amount will reduce the amount of the benefit available under the WB Plan. This reduction could significantly reduce the value of the optional living benefit to you.

Participants in 403(b) plans who are under age 59½, are subject to withdrawal restrictions under the Internal Revenue Code that may prevent them from being able to make any withdrawals under the WB Plan while they remain under age 59½.

Prior to electing to participate in (or, if applicable, prior to renewing your participation in) any optional living benefit rider, you should consult with a qualified tax professional as to the possible effect of RMD distributions on the benefits that might otherwise be available under any optional living benefit.

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

Non-Qualified Contracts.  We are required to make a determination as to the taxability of any withdrawal you make in order to be able to annually report to the IRS and you information about your withdrawal.  Under the Internal Revenue Code, any withdrawal from a Non-Qualified Contract is taxable to the extent the annuity's cash value exceeds the investment in the contract.  There is no definition of “cash value” in the Code and, for tax reporting purposes, we are currently treating it as the Account Value of the Contract.  However, there can be no assurance that the IRS will agree that this is the correct cash value.  The IRS could, for example, determine that the cash value is the Account Value plus an additional amount representing the value of an optional rider.  If this were to occur, election of an optional rider could cause any withdrawal, including a withdrawal under the withdrawal benefit of any optional living benefit rider, to have a higher proportion of the withdrawal derived from taxable investment earnings.  Prior to electing to participate in an optional rider (or, if applicable, prior to renewing your participation in any optional living benefit), you should consult with a qualified tax professional as to the meaning of “cash value.”

Puerto Rico Tax Considerations

The Contract offered by this Prospectus is considered a non-qualified 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. We currently offer the Contract in Puerto Rico in connection with Individual Retirement Arrangements that qualify under the U.S. Internal Revenue Code but do not qualify under the Puerto Rico 1994 Code. See the applicable text of this Prospectus under the heading “Federal Tax Status” dealing with such Arrangements and their RMD requirements. We may make Contracts available for use with other retirement plans that similarly qualify under the U.S. Internal Revenue Code but do not qualify under the Puerto Rico 1994 Code.

As a result of IRS Revenue Ruling 2004-75, as amplified by Revenue Ruling 2004-97, we will treat Contract distributions and withdrawals occurring on or after January 1, 2005 as U.S. source income that is subject to U.S. income tax withholding and reporting.  Under “TAX CONSIDERATIONS,” see “Pre-Distribution Taxation of Contracts,” “Distributions and Withdrawals from Non-Qualified Contracts,” “Withholding” and “Non-Qualified Contracts.” You should consult a qualified tax professional for advice regarding the effect of Revenue Ruling 2004-75 on your U.S. and Puerto Rico income tax situation.

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

ADMINISTRATION OF THE CONTRACT

We perform certain administrative functions relating to the Contract, 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 Contract; 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 CONTRACT

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

The Company (or its affiliate, for purposes of this section only, collectively, “the Company”), pays the Selling Broker-Dealers compensation for the promotion and sale of the Contract.   The Selling Agents who solicit sales of the Contract typically receive a portion of the compensation paid by the Company to the Selling Broker-Dealers in the form of commissions or other compensation, depending on the agreement between the Selling Broker-Dealer and their Selling Agent.  This compensation is not paid directly by the Participant or the separate account.  The Company intends to recoup this compensation through fees and charges imposed under the Contract, and from profits on payments received by the Company for providing administrative, marketing, and other support and services to the Funds.

The amount and timing of commissions the Company may pay to Selling Broker-Dealers may vary depending on the selling agreement but is not expected to be more than 2.00% of Purchase Payments, and 1.00% annually of the Participant's Account Value. The Company may pay or allow other promotional incentives or payments in the form of cash or other compensation to the extent permitted by FINRA rules and other applicable laws and regulations, and this compensation may be significant in amount.

The Company also pays compensation to wholesaling broker-dealers or other firms or intermediaries, including payments to affiliates of the Company, in return for wholesaling services such as providing marketing and sales support, product training and administrative services to the Selling Agents of the Selling Broker-Dealers.  This compensation may be significant in amount and may be based on a percentage of Purchase Payments and/or a percentage of Contract Value and/or may be a fixed dollar amount.

In addition to the compensation described above, the Company may make additional cash payments, in certain circumstances referred to as “override” compensation, or reimbursements to Selling Broker-Dealers in recognition of their marketing and distribution, transaction processing and/or administrative services support.  These payments are not offered to all Selling Broker-Dealers, and the terms of any particular agreement governing the payments may vary among Selling Broker-Dealers depending on, among other things, the level and type of marketing and distribution support provided. Marketing and distribution support services may include, among other services, placement of the Company's products on the Selling Broker-Dealers' preferred or recommended list, access to the Selling Broker-Dealers' registered representatives for purposes of promoting sales of the Company's products, assistance in training and education of the Selling Agents, and opportunities for the Company to participate in sales conferences and educational seminars.  The payments or reimbursements may be calculated as a percentage of the particular Selling Broker-Dealer's actual or expected aggregate sales of our variable contracts (including the Contract) or assets held within those contracts and/or may be a fixed dollar amount. Broker-dealers receiving these additional payments may pass on some or all of the payments to the Selling Agent. The prospect of receiving, or the receipt of additional compensation as described above may provide Selling Broker-Dealers with an incentive to favor sales of the Contracts over other variable annuity contracts (or other investments) with respect to which the Selling Broker-Dealer does not receive additional compensation, or lower levels of additional compensation. You should take such payment arrangements into account when considering and evaluating any recommendation relating to the Contracts.

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

As discussed in the preceding paragraphs, the Selling Broker-Dealer may receive numerous forms of payments that, directly or indirectly, provide incentives to, and otherwise facilitate and encourage the offer and sale of the Contracts by Selling Broker-Dealers and their registered representatives. Such payments may be greater or less in connection with the Contracts than in connection with other products offered and sold by the Company or by others. Accordingly, the payments described above may create a potential conflict of interest, as they may influence your Selling Broker-Dealer or registered representative to present a Contract to you instead of (or more favorably than) another product or products that might be preferable to you.

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

Commissions may be waived or reduced in connection with certain transactions described in this Prospectus under the heading “Waivers; Reduced Charges; Special Guaranteed Interest Rates.” During 2006, 2007, and 2008, approximately $620,746, $951,947, and $772,651, respectively, in commissions were paid to but not retained by Clarendon in connection with the distribution of the Contracts.

AVAILABLE INFORMATION

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

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

You can inspect and copy this information and our registration statements at the SEC's public reference facilities at the following locations: Washington, D.C. -- 100 F Street, N.E., Washington, D.C. 20549-0102, telephone (202) 551-8090; 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, 2008 filed with the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is incorporated herein by reference. All documents or reports we file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the date of this prospectus and prior to the termination of the offering, shall be deemed incorporated by reference into the prospectus.

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

STATE REGULATION

The Company is subject to the laws of the State of 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 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.

FINANCIAL STATEMENTS

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

The financial statements of the Variable Account for the year ended December 31, 2008 are also included in the SAI.

TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION

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

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 Contracts

Designation and Change of Beneficiary

Custodian

Independent Registered Public Accounting Firm

Financial Strength and Credit Ratings

Financial Statements

This Prospectus sets forth information about the Contract and the Variable Account that a prospective purchaser should know before investing. Additional information about the Contract and the Variable Account has been filed with the Securities and Exchange Commission in a Statement of Additional Information dated May 1, 2009 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 (800) 752-7215.

To:	Sun Life Assurance Company of Canada (U.S.)
	P.O. Box 9133
	Wellesley Hills, Massachusetts 02481
	Please send me a Statement of Additional Information for
	Sun Life Financial Masters Access Variable and Fixed Annuity
	Sun Life of Canada (U.S.) Variable Account F.

Name:
Address:
City:	State:	Zip Code:
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 QUARTER: A three-month period, with the first Account Quarter beginning on your Issue Date.

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

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

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

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

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

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

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

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

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

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

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

COMPANY (“WE, “ “US,” “SUN LIFE (U.S.)”): Sun Life Assurance Company of Canada (U.S.).

CONTRACT: Any Individual Contract, Group Contract, or Certificate issued under a Group Contract.

COVERED PERSON: The person(s) identified as such in the Contract whose death will trigger the death benefit provisions of the Contract. The Participant/Owner is the Covered Person unless there is a non-natural Owner, such as a trust, in which case the Annuitant is the Covered Person.

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

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

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 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.

ISSUE DATE: The date the Contract becomes effective which is the date we apply your initial Net Purchase Payment to your Account and issue your Contract. This is called the “Date of Coverage” in the Contract.

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.

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

*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. If there are two Participants, the death benefit is paid upon the death of either Participant.

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 Participant, or on the Annuity Commencement Date.

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

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

RENEWAL DATE: The last day of a Guarantee Period.

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

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

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

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.

YOU and YOUR: The terms “you” and “your” refer to “Owner,” “Participant,” and/or “Covered Person” as those terms are identified in the Contract.

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

APPENDIX B -

MARKET VALUE ADJUSTMENT

Fixed Account - Examples of the Market Value Adjustment (“MVA”)

The MVA Factor is:

(	1 + I	)	N/12	-  1
	1 + J + b

These examples assume the following:

(1)	The Guarantee Amount was allocated to a 5-year Guarantee Period with a Guaranteed Interest Rate of 6% or .06.
(2)	The date of surrender is 2 years from the Expiration Date (N = 24).
(3)	The value of the Guarantee Amount on the date of surrender is $11,910.16.
(4)	The interest earned in the current Account Year is $674.16.
(5)	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 8% or .08 and the b factor is zero.

The MVA factor =	(	1 + I			)		N/12	-  1
		1 + J + b
=	(	1 + .06			)		24/12	-  1
		1 + .08
=	(	.981	)	2		-  1
=		.963 - 1
=		-.037

The value of the Guarantee Amount less interest credited to the Guarantee Amount in the current Account Year is multiplied by the MVA factor to determine the MVA:

($11,910.16 - $674.16) x (-.037) = -$415.73.

-$415.73 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 - $674.16) x (-.037) = -$49.06. -$49.06 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 5% or .05 and the b factor is zero.

The MVA factor =	(	1 + I			)		N/12	-  1
		1 + J + b
=	(	1 + .06			)		24/12	-  1
		1 + .05
=	(	1.010	)	2		-  1
=		1.019 - 1
=		.019

The value of the Guarantee Amount less interested credit to the Guarantee Amount in the current Account Year is multiplied by the MVA factor to determine the MVA:

($11,910.16 - $674.16) x .019 = $213.48.

$213.48 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 - $674.16) x .019 = $25.19.

$25.19 represents the MVA that would be added to the value of the partial withdrawal amount.

APPENDIX C -

OPTIONAL DEATH BENEFIT EXAMPLES

CALCULATION OF 5% PREMIUM ROLL-UP OPTIONAL DEATH BENEFIT

Example 1:

Assume a Purchase Payment of $60,000 is made on the Issue Date, and an additional Purchase Payment of $40,000 is made one year later.  Assume that all of the money is invested in the Sub-Accounts.  No withdrawals are made.  The Owner dies in the eighth Account Year.  The Account Value on the Death Benefit Date is $135,000, and the value of the Purchase Payments accumulated at 5% until the Death Benefit Date is $140,000.  The calculation of the death benefit to be paid is as follows:

The Death Benefit Amount will be the greatest of:
Account Value	=	$135,000
Cash Surrender Value	=	$135,000
Total of Adjusted Purchase Payments	=	$100,000
5% Premium Roll-Up Value *	=	$140,000
The Death Benefit Amount would therefore	=	$140,000

* The 5% Premium Roll-Up Value is capped at 2 times the Adjusted Purchase Payments. Therefore, the cap = 2 x $100,000 = $200,000.

Example 2:

Assume a Purchase Payment of $60,000 is made on the Issue Date, and an additional Purchase Payment of $40,000 is made one year later.  Assume that all of the money is invested in the Sub-Accounts and that the Account Value is $150,000 just prior to a $30,000 withdrawal.  The Account Value on the Death Benefit Date is $90,000.  The calculation of the death benefit to be paid is as follows:

The Death Benefit Amount will be the greatest of:
Account Value	=	$  90,000
Cash Surrender Value*	=	$  89,950
Total of Adjusted Purchase Payments**	=	$  80,000
5% Premium Roll-Up Value***	=	$112,000
The Death Benefit Amount would therefore	=	$112,000

*Cash Surrender Value is the amount we would pay you if you surrendered your entire Account Value. For a description of how Cash Surrender Value is calculated, see “Full Withdrawals” under the subheading “Cash Withdrawals.”

* Adjusted Purchase Payments can be calculated as follows: Purchase Payments x (Account Value after withdrawal ÷ Account Value before withdrawal) = $100,000 x ($120,000 ÷ $150,000) = $80,000

** The 5% Premium Roll-Up Value is capped at 2 times the Adjusted Purchase Payments. Therefore, the cap = 2 x $80,000 = $160,000.

CALCULATION OF EEB PREMIER OPTIONAL DEATH BENEFIT

Example 1:

Assume a Purchase Payment of $60,000 is made on the Issue Date, and an additional Purchase Payment of $40,000 is made one year later. Assume that all of the money is invested into the Sub-Accounts, no withdrawals are made and the Account Value on the Death Benefit Date is $135,000. In addition, this Contract was issued prior to the owner's 70th birthday. Assume death occurs in Account Year 7. The calculation of the Death Benefit to be paid is as follows:

The Death Benefit Amount will be the greatest of:
Account Value	=	$135,000
Cash Surrender Value	=	$135,000
Total of Adjusted Purchase Payments	=	$100,000
The Death Benefit Amount would therefore	=	$135,000

-- PLUS --

The EEB amount, calculated as follows:
Account Value minus Adjusted Purchase Payments	=	$ 35,000
45% of the above amount	=	$ 15,750
Cap of 100% of Adjusted Purchase Payments	=	$100,000
The lesser of the above two amounts = the EEB Premier amount	=	$ 15,750

The total Death Benefit would be the amount paid on the basic death benefit plus the EEB Premier amount = $135,000 + $15,750 = $150,750.

Example 2:

Assume a Purchase Payment of $60,000 is made on the Issue Date, and an additional Purchase Payment of $40,000 is made one year later. Assume that all of the money is invested into the Sub-Accounts and that the Account Value is $135,000 just prior to a $20,000 withdrawal. The Account Value on the Death Benefit Date is $115,000. In addition, this Contract was issued prior to the owner's 70th birthday and death occurs in year 9.

The Death Benefit Amount will be the greatest of:
Account Value	=	$115,000
Cash Surrender Value*	=	$115,000
Total of Adjusted Purchase Payments**	=	$ 85,185
The Death Benefit Amount would therefore	=	$115,000

-- PLUS --

The EEB amount, calculated as follows:
Account Value minus Adjusted Purchase Payments	=	$ 29,815
45% of the above amount	=	$ 13,417
Cap of 100% of Adjusted Purchase Payments	=	$ 85,185
The lesser of the above two amounts = the EEB Premier
Amount	=	$ 13,417

The total Death Benefit would be the amount paid on the basic death benefit plus the EEB Premier amount = $115,000 + $13,417 = $128,417.

*Cash Surrender Value is the amount we would pay you if you surrendered your entire Account Value. For a description of how Cash Surrender Value is calculated, see “Full Withdrawals” under the subheading “Cash Withdrawals.”

** Adjusted Purchase Payments can be calculated as follows: Payments x (Account Value after withdrawal ÷Account Value before withdrawal) = $100,000 x ($115,000 ÷ $135,000) = $85,185

CALCULATION OF EEB PREMIER PLUS OPTIONAL DEATH BENEFIT

Assume a Purchase Payment of $60,000 is made on the Issue Date, and an additional Purchase Payment of $40,000 is made one year later. Assume that all of the money is invested into the Sub-Accounts, no withdrawals are made and the Account Value on the Death Benefit Date is $135,000. In addition, this Contract was issued prior to the owner's 70th birthday. Assume death occurs in Account Year 7. The calculation of the Death Benefit to be paid is as follows:

The Death Benefit Amount will be the greatest of:
Account Value	=	$135,000
Cash Surrender Value*	=	$135,000
Total of Adjusted Purchase Payments	=	$100,000
The Death Benefit Amount would therefore	=	$135,000

--PLUS --

The EEB Premier Plus amount, calculated as follows:
Account Value minus Adjusted Purchase Payments	=	$ 35,000
75% of the above amount	=	$ 26,250
Cap of 150% of Adjusted Purchase Payments	=	$150,000
The lesser of the above two amounts = the EEB Premier Plus
with 5% Roll-up amount	=	$ 26,250

The total Death Benefit would be the amount paid on the basic death benefit plus the EEB Premier Plus amount = $135,000 + $26,250 = $161,250.

*Cash Surrender Value is the amount we would pay you if you surrendered your entire Account Value. For a description of how Cash Surrender Value is calculated, see “Full Withdrawals” under the subheading “Cash Withdrawals.”

CALCULATION OF EEB PREMIER WITH MAV OPTIONAL DEATH BENEFIT

Assume a Purchase Payment of $60,000 is made on the Issue Date, and an additional Purchase Payment of $40,000 is made one year later. Assume that all of the money is invested into the Sub-Accounts, no withdrawals are made and the Account Value on the Death Benefit Date is $135,000. The Maximum Anniversary Value on the Death Benefit Date is $140,000. Assume death occurs in Account Year 7. In addition, this Contract was issued prior to the owner's 70th birthday. The calculation of the Death Benefit to be paid is as follows:

The Death Benefit Amount will be the greatest of:
Account Value	=	$135,000
Cash Surrender Value*	=	$135,000
Total of Adjusted Purchase Payments	=	$100,000
Maximum Anniversary Value	=	$140,000
The Death Benefit Amount would therefore	=	$140,000

--PLUS--

The EEB Premier amount, calculated as follows:
Account Value before EEB minus Adjusted Purchase Payments	=	$ 35,000
45% of the above amount	=	$ 15,750
Cap of 100% of Adjusted Purchase Payments	=	$100,000
The lesser of the above two amounts = the EEB Premier amount	=	$ 15,750

The total Death Benefit would be the amount paid on the Maximum Anniversary Rider plus the EEB Premier amount = $140,000 + $15,750 = $155,750.

*Cash Surrender Value is the amount we would pay you if you surrendered your entire Account Value. For a description of how Cash Surrender Value is calculated, see “Full Withdrawals” under the subheading “Cash Withdrawals.”

CALCULATION OF EEB PREMIER WITH 5% ROLL-UP OPTIONAL DEATH BENEFIT

Assume a Purchase Payment of $60,000 is made on the Issue Date, and an additional Purchase Payment of $40,000 is made one year later. Assume that all of the money is invested into the Sub-Accounts, no withdrawals are made and the Account Value on the Death Benefit Date is $135,000. The value of the Purchase Payments accumulated at 5% until the Death Benefit Date is $140,000. In addition, this Contract was issued prior to the owner's 70th birthday. Assume death occurs in Account Year 8. The calculation of the Death Benefit to be paid is as follows:

The Death Benefit Amount will be the greatest of:
Account Value	=	$135,000
Cash Surrender Value*	=	$135,000
Total of Adjusted Purchase Payments	=	$100,000
5% Premium Roll-up Value	=	$140,000
The Death Benefit Amount would therefore	=	$140,000

--PLUS--

The EEB Premier amount, calculated as follows:
Account Value minus Adjusted Purchase Payments	=	$ 35,000
45% of the above amount	=	$ 15,750
Cap of 100% of Adjusted Purchase  Payments	=	$100,000
The lesser of the above two amounts = the EEB Premier amount	=	$ 15,750

The total Death Benefit would be the amount paid on the 5% Roll-Up Rider plus the EEB Premier amount = $140,000 + $15,750 = $155,750.

*Cash Surrender Value is the amount we would pay you if you surrendered your entire Account Value. For a description of how Cash Surrender Value is calculated, see “Full Withdrawals” under the subheading “Cash Withdrawals.”

APPENDIX D -

PREVIOUSLY AVAILABLE INVESTMENT OPTIONS

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

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

Large-Cap Equity Funds	Real Estate Equity Funds
MFS® Capital Appreciation Portfolio – S Class	Sun Capital Global Real Estate Fund – Initial Class
MFS® Strategic Value Portfolio – S Class*	Multi- Sector Bond Funds
International/Global Equity Funds	MFS® Strategic Income Portfolio – S Class
MFS® Global Growth Portfolio – S Class
Mid-Cap Equity Funds
MFS® Mid Cap Growth Portfolio – S Class
MFS® Mid Cap Value Portfolio – S Class

*On June 22, 2009, the MFS Strategic Value Portfolio will be closed to new Purchase Payments. However, any automatic programs previously authorized by a Contract Owner, such as dollar-cost averaging, portfolio rebalancing, and asset allocation, into the MFS Strategic Value Portfolio will continue until June 29, 2009 when it is expected that the MFS Strategic Value Portfolio will merge with the MFS Value Portfolio.

Massachusetts Financial Services Company advises the MFS® Funds.  Sun Capital Advisers LLC advises the Sun Capital Funds.

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

Large-Cap Equity Funds	Small-Cap Equity Funds
MFS® Growth Portfolio - S Class	MFS® New Discovery Portfolio - S Class
MFS® Massachusetts Investors Growth Stock Portfolio -	Oppenheimer Main Street Small Cap Fund/VA
S Class	- Service Shares
MFS® Blended Research Core Equity Portfolio
MFS® Global Research Portfolio - S Class

Massachusetts Financial Services Company advises the MFS® Funds. OppenheimerFunds, Inc. advises the Oppenheimer Funds. Sun Capital Advisers LLC advises the Sun Capital Funds.

If you purchased your Contract before March 10, 2008, you may make subsequent Purchase Payments and transfers into the following investment options that were available for investment prior to that date:

Asset Allocation Funds	High Yield Bond Funds
PIMCO All Asset Portfolio - Admin. Class	MFS® High Yield Portfolio - S Class
International/Global Equity Funds	Money Market Funds
Templeton Foreign Securities Fund - Class 2	MFS® Money Market Portfolio - S Class
Emerging Markets Equity Funds
Templeton Developing Markets Securities Fund -
Class 2

Massachusetts Financial Services Company, our affiliate,advises the MFS® Funds.  Pacific Investment Management Company LLC advises the PIMCO Variable Insurance Trust Portfolios. Templeton® Asset Management Ltd. advises the Templeton Developing Markets Securities Fund. Templeton® Investment Counsel, LLC advises Templeton Foreign Securities Fund and Templeton Growth Securities Fund.

If you purchased your Contract before October 20, 2008, you may make subsequent Purchase Payments and transfers into the following investment options that were available for investment prior to that date:

Large-Cap Equity Funds	Target Date Funds
Oppenheimer Main Street Fund®/VA - Service Shares	Fidelity® Variable Insurance Products Fund Freedom
International/Global Equity Funds	2010 Portfolio - Service Class 2*
AllianceBernstein International Value Portfolio,	Intermediate-Term Bond Funds
Class B	PIMCO Total Return Portfolio - Admin. Class
	Inflation-Protected Bond Funds
	PIMCO Real Return Portfolio - Admin. Class

* This is a Fund of Funds option and expenses of the Fund include the Fund level expenses of the underlying Funds as well. The Fund may be more expensive than Funds that do not invest in other Funds.

AllianceBernstein L.P. advises the AllianceBernstein Variable Products Series Fund Inc. Portfolio. Pacific Investment Management Company LLC advises the PIMCO Variable Insurance Trust Portfolios. OppenheimerFunds, Inc. advises the Oppenheimer Fund. Strategic Advisers®, Inc. advises the Fidelity Variable Insurance Products Fund Freedom Portfolio.

If you purchased your Contract before February 17, 2009, you may make subsequent Purchase Payments and transfers into the following investment option that was available for investment prior to that date:

Asset Allocation Funds

Franklin Templeton VIP Founding Funds Allocation

Fund, Class 2**

** This is a Fund of Funds option and expenses of the Fund include the Fund level expenses of the underlying Funds as well. The Fund may be more expensive than Funds that do not invest in other Funds.

Franklin Templeton Services, LLC administers the Franklin Templeton Founding Funds Allocation Fund (with the following advising the underlying portfolios of the fund: Franklin Advisers, Inc. advising the Franklin Income Securities Fund, Franklin Mutual Advisers LLC advising Mutual Shares Securities Fund and Templeton Global Advisers Limited advising Templeton Growth Securities Fund).

APPENDIX E -

SECURED RETURNS FOR LIFE PLUSSM

The optional living benefit rider known as Secured Returns for Life Plus (“Secured Returns for Life Plus” or a “Benefit”) was available for Contracts issued after April 11, 2006, and prior to February 17, 2009. The following information applies to your Contract if you elected to participate in Secured Returns for Life Plus. Secured Returns for Life Plus is no longer available for sale on new Contracts. Since we are no longer offering Secured Returns for Life Plus to new Owners, renewals are no longer available.

Secured Returns for Life Plus provides a guarantee of a return of your initial Purchase Payment (adjusted for subsequent Purchase Payments and withdrawals), during the accumulation period regardless of the investment performance of the Designated Funds, provided that you comply with certain requirements. The amount guaranteed can be greater than or less than your Account Value. The guaranteed amount can be paid out under a Guaranteed Minimum Accumulation Benefit (“AB”) Plan, which provides for a return of your guaranteed amount on the AB Plan Maturity Date, or a Guaranteed Minimum Withdrawal Benefit (“WB”) Plan, which provides for a return of your guaranteed amount through periodic withdrawals or, if you meet certain conditions, payments for life. (You should note that the Benefit does not, in all cases, guarantee payments “for Life.” Certain actions you take may reduce, or even exhaust, your Benefit.)

In addition, Secured Returns for Life Plus includes a bonus feature (called the “Plus 5 Program”) that may increase the guaranteed amount under the WB Plan provided no withdrawals are taken during an Account Year. These bonuses will not increase your guaranteed amount under the AB Plan. We will, however, keep track of any bonuses while you are in the AB Plan and apply them to the WB Plan, if and when you transfer into the WB Plan. The bonuses under the Plus 5 Program are discussed further in this Appendix under “Plus 5 Program.”

We use the following definitions to describe how Secured Returns for Life Plus works:

AB Plan Maturity Date:	The date when the AB Plan matures. If you are younger than 85 on the Issue Date, your AB Plan Maturity Date is the later of your 10th Account Anniversary or 10 years from the date of your last step-up. (See “Step-Up.”) If you are 85 on the Issue Date, your AB Plan Maturity Date is your maximum Annuity Commencement Date.
Designated Funds:	The limited investment options you can choose if you are participating in a living benefit.
Plus 5 Period:	The period of time equal in length to the first 10 Account Years; or, if less than 10 years, the period of time up to the Account Year in which the oldest Participant attains age 80.
Bonus Base:	An amount that is equal to the initial Purchase Payment on the date the Contract is issued, and later is adjusted for any subsequent Purchase Payments, step-ups, and partial withdrawals made during the Plus 5 Period.
Guaranteed Living Benefit Amount (the “GLB amount”):	The minimum amount guaranteed under the Contract while you are participating in the AB Plan. The GLB amount is initially equal to your initial Purchase Payment, which is adjusted for any subsequent Purchase Payments, step-ups, and partial withdrawals. The GLB amount is also used to set the RGLB amount on the date you elect the WB Plan.
Remaining Guaranteed Living Benefit Amount (the “RGLB amount”):	The minimum amount guaranteed if you elected the WB Plan. The RGLB amount equals the GLB amount plus any accrued bonus amount on the date you choose to participate in the WB Plan. This amount will be adjusted for subsequent Purchase Payments, step-ups, bonus amounts, and partial withdrawals.
Guaranteed Living Benefit Base (the “GLB Base”):	A value equal to the RGLB amount on the date you elect to participate in the WB Plan. The GLB Base is adjusted later for any subsequent Purchase Payments, step-ups, bonus amounts, and partial withdrawals. The GLB Base is used to establish the Maximum WB Amount.
Lifetime Income Base:	A value equal to the RGLB amount on the WB Plan election date, if you are age 60 or older on said date. A value equal to the RGLB amount on the Account Anniversary on or immediately following your 59th birthday, if you are less than age 60 on the WB Plan election date. The Lifetime Income Base is adjusted later for any subsequent Purchase Payments, step-ups, bonus amounts, and partial withdrawals. The Lifetime Income Base is used to establish the Maximum WB for Life Amount.
Maximum WB Amount:	The maximum guaranteed amount available for annual withdrawal until your RGLB amount has been reduced to zero. The annual Maximum WB Amount is equal to 5% of the GLB Base.
Maximum WB For Life Amount:	The maximum guaranteed amount available for annual withdrawal during your lifetime. The Maximum WB for Life Amount is equal to 4% or 5% of the current Lifetime Income Base depending upon the age of the Participant on the date of the first withdrawal under the WB Plan or most recent Step-Up Date. If your Contract is co-owned, the age of the oldest Participant will be used to determine the Maximum WB for Life Amount. (You should be aware that the Maximum WB for Life Amount is not a guaranteed amount. Certain actions you take could reduce the value of your Maximum WB for Life Amount to zero.)
You and Your:	Under this optional living benefit, the terms “you” and “your” refer to the oldest Participant or the surviving spouse of the oldest Participant as described under “Death of Participant Under the AB Plan” and “Death of Participant Under the WB Plan.” In the case of a non-natural Participant, these terms refer to the oldest annuitant.

We also use the following acronyms when discussing the features of Secured Returns for Life Plus:

WB Plan	Guaranteed Minimum Withdrawal Benefit Plan
AB Plan	Guaranteed Minimum Accumulation Benefit Plan
GLB Amount	Guaranteed Living Benefit Amount
RGLB Amount	Remaining Guaranteed Living Benefit Amount
Maximum WB Amount	Maximum Guaranteed Minimum Withdrawal Benefit Amount
Maximum WB for Life Amount	Maximum Guaranteed Minimum Withdrawal Benefit for Life Amount

To participate in Secured Returns for Life Plus, all of your Account Value must be invested in a Designated Fund at all times during the term of the plan: a 10-year period under the AB Plan or, if you elected the WB Plan, until the RGLB amount is reduced to zero and the Lifetime Income Base is zero. The only Funds, dollar-cost averaging program options, and asset allocation models that currently qualify as Designated Funds are listed in the section entitled “Designated Funds” in the prospectus to which this Appendix is attached.

When you elected to participate in Secured Returns for Life Plus, you are automatically enrolled in the AB Plan. At any time, you may elect instead to receive your benefits under the WB Plan, provided that you make the election prior to the earliest of the date your AB Plan matures, the Contract's maximum Annuity Commencement Date (the first day of the month following the youngest Annuitant's 95th birthday), and the date you annuitize. Once you elect to participate in the WB Plan, you may not change your election to the AB Plan. If you do not specifically elect the WB Plan, you will be deemed to have elected to remain in the AB Plan.

Guaranteed Minimum Accumulation Benefit (“AB”) Plan

Under its terms, the AB Plan matures on the AB Plan Maturity Date. On that date, we will credit your Account Value with any excess of your GLB amount over your Account Value after adjusting for any Contract charges or credits. Any such amount will be allocated to the Designated Fund in which you are invested at that time.

Your GLB amount and your Bonus Base are equal to the sum of 100% of your initial Purchase Payment plus a specified percentage of any subsequent Purchase Payments, adjusted in amount for step-ups (described in this Appendix under “Step -Up”) and partial withdrawals. If you make one or more subsequent Purchase Payments during the 10-year period, the period will not restart. Rather, the percentage of guaranteed return for each subsequent Purchase Payment after the second Account Anniversary will be reduced depending upon the Account Year in which it was made, as follows:

Account Year in which Purchase Payment was made	Percentage added to the GLB amount and to the Bonus Base
1-2	100%
3-5	85%
6-8	70%
9-10	60%

Note that the timing and amount of subsequent Purchase Payments and withdrawals may significantly affect the total Secured Returns for Life Plus Benefit. In particular, Purchase Payments made after the second Account Year may significantly reduce the value of this Benefit to you.

If your Account Value is greater than your GLB amount on the AB Plan Maturity Date, we will credit your Account Value with an amount equal to the charges you paid for Secured Returns for Life Plus. (See “Refund of Secured Returns for Life Plus Charges Under the AB Plan” in this Appendix) For examples of how we calculate benefits under the AB Plan, see Examples 1 and 2 in this Appendix.

Guaranteed Minimum Withdrawal Benefit (“WB”) Plan

Under the terms of the WB Plan, you are guaranteed a return of your RGLB amount even if your Account Value becomes zero. Each Account Year during which the WB Plan is in effect, you can withdraw up to your Maximum WB Amount until your RGLB amount has been depleted. Once the RGLB amount is reduced to zero, your GLB Base is permanently set to zero as well. However, if you exceed your Maximum WB Amount in any one Account Year, your RGLB and future guaranteed withdrawals will be reduced in the manner described in this Appendix under “Withdrawals Under Secured Returns for Life Plus.”

The WB Plan also guarantees that, if you have chosen the WB Plan and if you are age 60 or older, you can withdraw up to your Maximum WB for Life Amount every Account Year that you are alive, even if your Account Value has been depleted. If you are younger than age 60, you may withdraw up to your Maximum WB for Life Amount every Account Year after your first Account Anniversary following your 59th birthday. If you exceed your Maximum WB for Life Amount in any one Account Year, the amount of your subsequent guaranteed lifetime withdrawals will be reduced in the manner discussed in this Appendix under “Withdrawals Under Secured Returns for Life Plus.”

Your Guaranteed Living Benefit Base is also set equal to the RGLB amount on the date you elect to participate in the Guaranteed Minimum Withdrawal Benefit Plan. Your Maximum WB Amount is a set dollar amount equal to 5% of your GLB Base. On the day you elect to participate in the WB Plan, we set your RGLB amount to equal your GLB amount as described above under “Guaranteed Minimum Accumulation Benefit (“AB”) Plan” plus any accrued bonuses. This value is used to determine your Maximum WB for Life Amount as discussed further below.

To calculate your Maximum WB for Life Amount, we must first determine your Lifetime Income Base. The Lifetime Income Base is an amount equal to the RGLB amount on:

l	the date you elected to participate in the WB Plan if you are age 60 or older on that date, or
l	your first Account Anniversary after your 59th birthday, if you are 59 or younger on the date you elect to participate in the WB Plan.

The Maximum WB for Life Amount will then be calculated, based upon your age on the date of the first withdrawal under the WB Plan, as follows:

Your Age on Date of First Withdrawal under WB Plan	Maximum WB for Life Amount
65 or older	5% of the Lifetime Income Base
64 or younger	4% of the Lifetime Income Base

You are not required to make any withdrawals after you have elected the WB Plan; however, each time you make a withdrawal, we determine whether the withdrawal has exceeded the Maximum WB Amount, the Maximum WB for Life Amount, or both. If you have exceeded the Maximum WB Amount or the Maximum WB for Life Amount, we determine the new maximum amount(s) for future withdrawals. In any one Account Year, withdrawals in excess of your Maximum WB Amount or your Maximum WB for Life Amount may reduce or eliminate your future guaranteed withdrawals, possibly reducing the guaranteed minimum withdrawal benefit to an amount less than the sum of your Purchase Payments. (See “Withdrawals Under Secured Returns for Life Plus” in this Appendix.)

Provided your RGLB amount and Account Value have not been reduced to zero, any Purchase Payment made after you have elected the WB Plan, and before your fourth Account Anniversary, will increase your RGLB amount, your GLB Base, your Bonus Base, and your Lifetime Income Base each by 100% of such Purchase Payment. Therefore, your Maximum WB Amount will equal 5% of your new GLB Base. Your Maximum WB for Life Amount will equal 4% or 5% of your new Lifetime Income Base, depending upon your age on the date of your first withdrawal under the WB Plan as shown in the above chart or your most recent “Step-Up Date,” described in this Appendix under “Step-Up.” Under the WB Plan, after your fourth Account Anniversary, you may not make any additional Purchase Payments unless your Benefit under the rider has been cancelled, terminated, or revoked. After the fourth Account Anniversary, any Purchase Payments submitted by a Participant while participating in the WB Plan will be treated as “Not in Good Order” and returned to the Participant, unless the Participant instructs us to terminate his participation in the rider.

For examples of how we calculate benefits under the WB Plan, see Examples 5 and 6 in this Appendix.

     Plus 5 Program

The Plus 5 Program gives you the opportunity to increase your Secured Returns for Life Plus Benefit if you defer taking withdrawals. That is to say, if you have selected the Benefit and you do not take any withdrawals in the early Account Years, you will be able to take larger withdrawals in the later Account Years. Under Secured Returns for Life Plus, the Plus 5 Program is automatically available to you during your first 10 Account Years (the “Plus 5 Period”). However, if you are 70 or older on the Issue Date, the Plus 5 Period ends on your 80th birthday. Under the Plus 5 Program, if you do not take any withdrawals during any one or more Account Years, we will automatically calculate a bonus based upon your initial Purchase Payment (the “Bonus Base”) and adjusted for additional Purchase Payments, step-ups, and partial withdrawals. Although we calculate the amount of your bonus each year regardless of whether you are participating in the AB Plan or the WB Plan, you can benefit from any bonus amount only if you choose to participate in the WB Plan, as follows:

	l	Assume you are participating in the AB Plan. Under this Plan, you only have the potential for increasing the amount of your withdrawals in later Account Years. For each year you do not take a withdrawal during the Plus 5 Period, we will calculate a bonus equal to 5% of your Bonus Base and add it to an existing accrued bonus amount. The bonuses you earn will accumulate but will not increase your Account Value, your GLB amount, or any guarantee payments you receive under the AB Plan. If you choose to switch to the WB Plan, that potential for larger withdrawals will be realized. When you switch to the WB Plan, we will set your RGLB amount to equal your GLB amount plus any bonuses accumulated under your Contract while you were participating in the AB Plan.
	l	Assume you are participating in the WB Plan. Under this Plan, the potential for larger withdrawals will be realized. Each year you do not take a withdrawal during the Plus 5 Period, we will not only calculate a bonus equal to 5% of your Bonus Base, but we will add that bonus to your RGLB amount on your Account Anniversary (prior to calculating your new GLB Base or Lifetime Income Base).  In this way, your withdrawals under the WB Plan will be larger in the later years than they would have been without the Plus 5 Program. Each time we add a bonus to the RGLB amount, we will also recalculate your GLB Base and Lifetime Income Base as described below.
		After the addition of any bonus, your new GLB Base will be the greater of:
l			your GLB Base prior to the addition of the amount of any bonus, and
l			your RGLB amount after the addition of any applicable bonus.
		If your age is within our age limitations, we will calculate a new Lifetime Income Base. Your new Lifetime Income Base will be equal to the greater of:
l			your Lifetime Income Base prior to the addition of the bonus amount, and
l			the lesser of:
l				your RGLB amount after the addition of the bonus amount, and
l				your previous Lifetime Income Base plus the addition of any bonus amount.

While you are participating in the AB Plan during the Plus 5 Period, any bonuses that apply to your Contract will only accumulate and will not increase your GLB amount or any guarantee payments you receive under the AB Plan. However, for each Account Year that you do not take a withdrawal during the Plus 5 Period, the bonus will be calculated and added to the existing accrued bonus amount. Before taking a withdrawal during the Plus 5 Period, you should carefully consider the negative effect this will have on your Plus 5 bonuses.

When and if you elect to participate in the WB Plan, your RGLB amount is set equal to your GLB amount plus any bonuses accumulated under your Contract while you were participating in the AB Plan. Your accrued bonus amount will then be set at zero. Any future bonus amounts, if applicable, while you are participating in the WB Plan, will be added each year, as described above.

Bonuses under the Plus 5 Program do not increase your Account Value; you can benefit from any such bonus only if you choose the WB Plan.

Cost of Secured Returns for Life Plus

Unlike other Contract charges, the charge for Secured Returns for Life Plus will not be calculated as a percentage of average daily net assets as described under “Variable Accumulation Unit Value” in the prospectus to which this Appendix is attached. Instead, the charge for the Benefit will be made as a specific deduction from the Account Value, taken on the last valuation day of the Account Quarter. The charge per year for Secured Returns for Life Plus is currently equal to 0.50% of your Account Value. The quarterly charge will be determined by multiplying the Account Value at the end of the Account Quarter by 0.125%. (See Example 18 in this Appendix.) The specific amount of the quarterly charge will be reflected on your quarterly account statement. The maximum charge you can pay for Secured Returns for Life Plus in any one Account Year is equal to 0.50% of the highest Account Value at any point in that Account Year.

We will continue to deduct this charge until:

l	you annuitize or
l	under the provisions of Secured Returns for Life Plus:
l		your Benefit matures;
l		your Benefit is revoked (see “Revocation of Secured Returns for Life Plus” in this Appendix); or
l		your RGLB amount and your Lifetime Income Base are both reduced to zero under the WB Plan.

Cancellation of the Benefit (caused by a transfer out of the Designated Fund, a Purchase Payment allocation to a non-Designated Fund, or an assignment) will not terminate the charge, until the 7th Account Anniversary. (See “Cancellation of Secured Returns for Life Plus” in this Appendix.)

Withdrawals Under Secured Returns for Life Plus

Any withdrawals you take under Secured Returns for Life Plus may reduce the value of your Benefit under the rider. Such withdrawals affect your Benefit differently depending upon whether you are participating in the AB Plan or the WB Plan. In either case, however, a withdrawal may reduce the value of the Benefit by an amount greater than the amount of the withdrawal.

Assume you are participating in the AB Plan. Any withdrawals you make will reduce the dollar value of your Benefit under this rider proportionally to the amount withdrawn. For example, after a partial withdrawal, the new GLB amount will equal

old GLB amount X Account Value immediately after partial withdrawal Account Value immediately before partial withdrawal

Therefore, on your AB Maturity Date, instead of crediting your Account Value with the full amount of your Benefit, we will reduce the amount we credit proportionally to the amount withdrawn.

You should be aware that, if your Account Value is less than the amount of your Benefit at the time a withdrawal is taken, your GLB amount will be reduced by an amount equal to or more than the amount withdrawn.  Thus, withdrawals taken in a down market could severely reduce your benefits under Secured Returns for Life Plus.

We will also proportionally reduce your Bonus Base and any accrued bonuses using a similar calculation. (See Example 3 in this Appendix.) However, as discussed in detail under “Plus 5 Program,” even though the Bonus Base and accrued bonuses are calculated while you are in the AB Plan, you can benefit from any bonus amount only if you choose to participate in the WB Plan.

Assume you are participating in the WB Plan and you want to receive the full amount of your guaranteed benefit over a period of years. To maximize your guaranteed benefit, you may withdraw no more than a specified amount each year. In other words, each year, you may withdraw no more than your Maximum WB Amount. Your guaranteed benefit amount (the RGLB amount) will be reduced by the amount of the withdrawal, but your Maximum WB Amount will remain unchanged.  In other words, you will be able to take the same maximum amount each year until your guaranteed benefit amount is completely withdrawn.

If, however, in any one Account Year, you withdraw more than the current Maximum WB Amount, the dollar value of your guaranteed benefits will be reduced and the amount of each future annual guaranteed withdrawal will be less. You should be aware that, if you withdraw more than your Maximum WB Amount at time when your Account Value is less than the amount of your Benefit, your RGLB amount will be reduced by an amount equal to or more than the excess amount withdrawn.  Thus, withdrawals taken in a down market could severely reduce your benefits under Secured Returns for Life Plus.

Here is how we calculate the benefit reduction. Your new RGLB amount will be the lesser of:

l	your previous RGLB amount, reduced by the amount of the withdrawal, and
l	your Account Value after the withdrawal.

Yournew GLB Base will be the lesser of:

l	your previous GLB Base reduced by the amount of the withdrawal in excess of the Maximum WB Amount, and
l	your Account Value after the withdrawal.

Your new Bonus Base will be the lesser of:

l	your previous Bonus Base reduced by the amount of the withdrawal in excess of the Maximum WB Amount, and
l	your Account Value after the withdrawal.

Your new Maximum WB Amount will be 5% of your new reduced GLB Base. Going forward, this will be the maximum amount that you can withdraw annually without further reducing your Benefit.

The Maximum WB Amount is not cumulative. If you withdraw less than the Maximum WB Amount in any one Account Year, you cannot add that unused portion to withdrawals made in future years to increase the Maximum WB Amount.

Assume you are participating in the WB Plan and you want to receive a guaranteed annual amount for the rest of your life. To maximize your guaranteed benefit, you may withdraw no more than a specified amount each year.  Under this scenario, you may withdraw no more than your Maximum WB for Life Amount. Your guaranteed benefit amount (the RGLB amount) will be reduced by the amount of such withdrawals, but your Maximum WB for Life Amount will remain unchanged. In other words, you will be able to take the same maximum amount each year as long as you are alive, subject to the other terms and conditions described herein.

If, however, in any one Account Year, you withdraw more than the current Maximum WB for Life Amount, the dollar value of your guaranteed benefits will be reduced and the amount of each future annual guaranteed withdrawal will be less. Here is how we calculate the benefit reduction. Your new Lifetime Income Base will be the lesser of:

l	your previous Lifetime Income Base reduced by the amount of the withdrawal in excess of the Maximum WB for Life Amount, and
l	the Account Value after the withdrawal.

Your new Maximum WB for Life Amount will be determined based upon your age on the date of the first withdrawal under the WB Plan (or your age on the most recent “Step-Up Date,” if later) as follows:

Your Age on the later of Date of First Withdrawal under WB Plan or Most Recent Step-Up Date	New Maximum WB for Life Amount
65 or older	5% of the new Lifetime Income Base
64 or younger	4% of the new Lifetime Income Base

The Maximum WB for Life Amount is not cumulative. That is to say, the unused portion in any Account Year cannot be applied in future years to increase the Maximum WB for Life Amount.

In general when participating in the WB Plan, you should keep the following in mind:

l		A withdrawal in excess of the Maximum WB Amount or the Maximum WB for Life Amount might reduce or eliminate your Secured Returns for Life Plus Benefits.
l		If your Account Value drops to zero and, in the same year, you withdraw more than your Maximum WB Amount or your Maximum WB for Life Amount, your benefits under Secured Returns for Life Plus will terminate.
l		If your Account Value drops to zero but you did not, in the same year, withdraw more than your Maximum WB Amount or your Maximum WB for Life Amount, your benefits under Secured Returns for Life Plus will continue. However, no subsequent Purchase Payment will be accepted, no death benefit or annuity benefits will be payable, and all benefits under your Contract, except the right to continue annual withdrawals under this rider, will terminate. You will have two choices:
(1)			You could choose to receive the Maximum WB for Life Amount, if any, until you die. In that case, after your death, your beneficiary receives the Maximum WB Amount until the RGLB amount, if any, is reduced to zero; or
(2)			You (or your beneficiary if you have died) could choose to receive the Maximum WB Amount until the RGLB amount, if any, is reduced to zero.
	If you do not make a choice, we will default you to option 1.

For examples showing how withdrawals affect your benefits under the WB Plan, see Examples 5 through 7 and Examples 11 and 12 in this Appendix.

Annuitization Under the WB Plan

Under the WB Plan, if your Account Value is greater than zero on the maximum Annuity Commencement Date, you may annuitize your Contract rather than receiving periodic payments under the WB plan. If no prior election to annuitize is on file with the Company, on the maximum Annuity Commencement Date you may elect to:

l	annuitize the Contract as described under “THE INCOME PHASE - ANNUITY PROVISIONS” in the prospectus to which this Appendix is attached;
l	surrender your Contract;
l	receive the Maximum WB Amount each year until the RGLB amount is reduced to zero; or
l	receive the Maximum WB for Life Amount each year until a Participant dies and, thereafter, allow the beneficiary to receive the Maximum WB Amount until the RGLB amount, if any, is reduced to zero.

Regardless of whether you elect to annuitize, surrender or receive payments under the WB plan, all other Contract benefits, including the death benefit, will terminate on the Annuity Commencement Date. If you fail to make an election, we may automatically annuitize your Contract and provide a life annuity with 120 monthly payments certain. Note that the maximum Annuity Commencement Date permitted under this Contract is the first day of the month following the Annuitant’s 95th birthday.  See “Selection of Annuity Commencement Date” under “THE INCOME PHASE – ANNUITY PROVISIONS” in the prospectus to which this Appendix is attached.

Cancellation of Secured Returns for Life Plus

Transfers among the Designated Funds are permitted as described in the prospectus to which this Appendix is attached under “Transfer Privilege.” If, however, you transfer some or all of your Account Value out of the Designated Funds, the Secured Returns for Life Plus benefits will be automatically cancelled. Likewise, if you allocate one or more subsequent Purchase Payments to an investment option other than one of the Designated Funds, the Secured Returns for Life Plus benefits will be cancelled.

A change of ownership of the Contract may also cancel Secured Returns for Life Plus.

Once Secured Returns for Life Plus has been cancelled, it cannot be reinstated. After cancellation of the benefits, you will continue to pay the annual charge for Secured Returns for Life Plus until your 7th Account Anniversary.

Revocation of Secured Returns for Life Plus

Anytime after your 7th Account Anniversary, you may revoke Secured Returns for Life Plus. Once revoked, Secured Returns for Life Plus may not be reinstated. After Secured Returns for Life Plus has been revoked, all benefits and charges will end.

Step-Up

On or after your first Account Anniversary, you may elect to increase your guaranteed amount to your then current Account Value. Currently, this step-up election may be made on any day after your first Account Anniversary. (We reserve the right to require step-up elections to occur only within 30 days following the first or any subsequent Account Anniversary.)

If you are participating in the AB Plan, on the day we receive your step-up election notice in good order (the “Step-Up Date”), we will increase your GLB amount and Bonus Base to an amount equal to your Account Value on the Step-Up Date, if eligible. If you elect to step-up, at least one full year from the Step-Up Date must pass before you can elect another step-up. You can only elect to step-up if:

l	your current Account Value is greater than the current GLB amount, and
l	your Account Value is $5,000,000 or less on your Step-Up Date.

If you are participating in the WB Plan on the Step-Up Date, we will step up your GLB Base, your Bonus Base, your RGLB amount, and your Lifetime Income Base to an amount equal to your Account Value on the Step-Up Date, if eligible. If you elect to step-up, at least one full year from the Step-Up Date must pass before you can elect another step-up.  You can only elect to step-up if:

l	your current Account Value is greater than the current GLB Base and greater than the current Lifetime Income Base, and
l	your Account Value is $5,000,000 or less on your Step-Up Date.

For purposes of determining the above $5,000,000 limits, we reserve the right to aggregate your Account Value with the account values of all other Sun Life variable annuity contracts you own.

If you are in the AB Plan, your Step-Up Date must be at least 10 years prior to your maximum Annuity Commencement Date. If you have selected an Annuity Commencement Date that is prior to the maximum Annuity Commencement Date but is less than 10 years after your Step-Up Date, we will automatically extend your Annuity Commencement Date to equal your AB Plan Maturity Date.

Without a step-up, your benefits under the AB Plan will “mature” on the 10th Account Anniversary (the date we credit your Account with any excess of your GLB amount over your Account Value or refund your Secured Returns for Life Plus charge, i.e. the “AB Plan Maturity Date”). If you elect to step-up your GLB amount, the term of your benefits under the AB Plan will change. After you make a step-up election, your benefits under the AB Plan will mature 10 years from the Step-Up Date, unless you elect the WB Plan any time before the AB Plan matures. (See Example 4 in this Appendix.) Accrued bonus amounts after step-up under the AB Plan will be equal to the greater of:

l	the accrued bonus amount before step-up less the difference between the GLB amount after and before step-up, and
l	zero.

Thus, a step-up while the AB Plan is in effect will cause a reduction in the amount of any accrued bonuses.

Following your step-up election, the rider fee will be changed to an amount equal to the Secured Returns for Life Plus fee charged on newly issued Contracts at that time. This fee may be higher than your current fee as set forth in this Appendix under “Cost of Secured Returns for Life Plus.” If we are no longer issuing new Contracts with the Secured Returns for Life Plus Rider, then the rider fee after the step-up will be set by us, based upon current market conditions at the time of the step-up. Significant changes in stock market prices, interest rate fluctuations, and competitive industry trends are among the market conditions we consider in whether to change the fee.

If you have been receiving benefits under the WB Plan, a step-up will change your Maximum WB Amount and your Maximum WB for Life Amount. Your Step-Up Date must be a date prior to your maximum Annuity Commencement Date. After the step-up, your Maximum WB Amount will be 5% of the new GLB Base, and your Maximum WB for Life Amount will be 4% or 5% of your new Lifetime Income Base depending upon your age. If you are 65 or older on the Step-Up Date and your Maximum WB for Life Amount has been equal to 4% of your GLB Base, your Maximum WB for Life Amount will be increased to 5% of your GLB Base. Note that, if you step-up in a particular Account Year, any withdrawals previously made in that Account Year are applied against your new Maximum WB Amount and your new Maximum WB for Life Amount. (See Example 8 in this Appendix.)

If your Benefit is under the AB Plan, at the time of step-up, you can still change to the WB Plan at a later date, subject to the applicable age restrictions described in this Appendix under “Guaranteed Minimum Withdrawal Benefit ('WB') Plan”. (See Example 16 in this Appendix.)

Subsequent Purchase Payments After a Step-Up

Under the WB Plan, any subsequent Purchase Payment will increase, by the full amount of the payment, the RGLB amount, the GLB Base, the Bonus Base, and the Lifetime Income Base, if applicable. After your fourth Account Anniversary, if you are participating in the WB Plan, subsequent Purchase Payments are not allowed.

Under the AB Plan, after your step-up election, any subsequent Purchase Payment will increase the GLB amount and the Bonus Base under your AB Plan by a specified percentage of the subsequent Purchase Payment. The percentage guaranteed depends upon the “Step-Up Year” in which the Payment was made. (A “Step-Up Year” is the 365-day period (366, if a leap year) commencing on your Step-Up Date.) The example below illustrates how we determine the percentage guaranteed after a subsequent Purchase Payment:

	Assume you purchased a Contract on July 1, 2010, and elected to step-up your Contract on October 1, 2015. Under the AB Plan that you have elected, your Benefit matures on October 1, 2025. For any subsequent Purchase Payments you make into this Contract, your GLB amount and your Bonus Base would increase by the following percentages of such Purchase Payments:
Step-Up Year		Payments Made Between	Percentage Added to the GLB amount and the Bonus Base
1		10/02/15 – 10/01/16	100%
2		10/02/16 – 10/01/17	100%
3		10/02/17 – 10/01/18	85%
4		10/02/18 – 10/01/19	85%
5		10/02/19 – 10/01/20	85%
6		10/02/20 – 10/01/21	70%
7		10/02/21 – 10/01/22	70%
8		10/02/22 – 10/01/23	70%
9		10/02/23 – 10/01/24	60%
10		10/02/24 – 10/01/25	60%

Thus, only 70% of a subsequent Purchase Payment made on October 2, 2020 would be guaranteed, whereas 85% of a subsequent Purchase Payment made on October 1, 2020 would be guaranteed. It may be to your disadvantage to make any such Purchase Payments that increase the GLB amount by less that 100% of the payment.

Refund of Secured Returns for Life Plus Charges Under the AB Plan

If your Contract remains in the AB Plan until the AB Plan Maturity Date, and the Account Value is greater than or equal to the GLB amount, then we will refund the charges you have paid for Secured Returns for Life Plus (“Refund Amount”) by crediting the Refund Amount to your Account Value. The Refund Amount will be allocated to the Designated Fund in which you are invested on such AB Plan Maturity Date. No refund of the Secured Returns for Life Plus charges will be made if you change from the AB Plan to the WB Plan.

Death of Participant Under the AB Plan

If any Participant dies while participating in the AB Plan, all benefits and charges under Secured Returns for Life Plus will automatically terminate when we receive Due Proof of Death, unless the surviving spouse is the sole Beneficiary and elects to continue the Contract. In that case, the surviving spouse has three options under the Contract.

(1)	The spouse can automatically continue in the AB Plan even though the Account Value may have been enhanced under the provisions of the death benefit. (See “Spousal Continuance” under “DEATH BENEFIT” in the prospectus to which this Appendix is attached.) The charges under Secured Returns for Life Plus will be assessed against the enhanced Account Value. The GLB amount, however, will not be reset.
(2)	The surviving spouse can elect to switch to the WB Plan; however, such election must be made prior to the earliest of annuitization, the maximum Annuity Commencement Date, and the scheduled AB Plan Maturity Date. The same WB Plan benefits will apply, except the surviving spouse will not be entitled to receive lifetime withdrawal benefits under the original optional living benefit rider.
(3)	The surviving spouse can elect to participate in a new Secured Returns for Life Plus rider on the original Contract (assuming that the rider is available to new Participants at the time of election and the surviving spouse meets certain eligibility requirements) and, thus, be eligible to receive lifetime withdrawal benefits. If the surviving spouse makes such election: (a) the rider charge will be equal to the rider charge on newly issued Contracts; (b) the GLB amount and the Bonus Base will be equal to the Account Value after the death benefit has been credited; and (c) the spouse will be enrolled in the AB Plan. If the spouse elects to switch to the WB Plan, the GLB Base and the RGLB amount will be the GLB amount on the date the spouse elected to participate in the WB Plan. The Lifetime Income Base will be the RGLB amount on:
l		the date the surviving spouse elected to participate in the WB Plan, if the spouse is age 60 or older on that date, or
l		the Account Anniversary after the surviving spouse reaches age 59, if the spouse is 59 or younger on the date of the WB Plan election.

If the Contract is not continued by the surviving spouse following a Participant’s death while participating in the AB Plan, the Beneficiary may elect any available option under the Death Benefit provisions of the Contract.

Death of Participant Under the WB Plan

If any Participant dies while participating in the WB Plan, the Beneficiary may elect to exercise any of the available options under the Death Benefit provisions of the Contract or, alternatively, to receive the Maximum WB Amount on an annual basis until the RGLB amount has been reduced to zero. If the surviving spouse is the sole Beneficiary and elects to continue the Contract, the spouse has two additional options under the Contract:

(1)

The surviving spouse can automatically continue to participate in the WB Plan, but lifetime withdrawal benefits will not be available to the spouse. All other benefits under the WB Plan will continue, for the surviving spouse, even though the Account Value may have been enhanced under the provisions of the death benefit. (See “Spousal Continuance” under “DEATH BENEFIT” in the prospectus to which this Appendix is attached.) The charges under Secured Returns for Life Plus will be assessed against the enhanced Account Value. The RGLB amount, however, will not be reset.

(2)

The surviving spouse can elect to participate in a new Secured Returns for Life Plus benefit on the original contract (subject to the terms and conditions described above under “Death of Participant Under the AB Plan”) and, thus, be eligible to receive lifetime withdrawal benefits.

Certain Tax Considerations

Certain tax considerations may be important to you in connection with a living benefit, such as Secured Returns for Life Plus. When you elect to participate in the WB Plan, we will inform you that you may withdraw annual amounts up to your Yearly RMD Amount without reducing your guaranteed withdrawal benefit. To assist you in complying with the RMD requirements, each year, we will notify you in early January of your calculated Yearly RMD Amount and inform you that you may withdraw annual amounts up to your Yearly RMD Amount without reducing your guaranteed withdrawal benefit.

In the event that your Yearly RMD Amount attributable to your Contract is greater than the maximum withdrawal amount permitted each year under the WB Plan, we are currently waiving withdrawal provisions under Secured Returns for Life Plus as follows. If you withdraw all or a portion of your Qualified Contract's Yearly RMD Amount from the Contract while participating in the WB Plan, we reduce your Account Value and your RGLB amount, dollar for dollar, by the amount of the withdrawal. We will not, however, penalize you if the current Federal Tax Laws require you to withdraw from your Contract an amount greater than either your Maximum WB Amount, or your Maximum WB for Life Amount. In other words, we will not reduce your GLB Base, Lifetime Income Base, or Bonus Base, if a Yearly RMD Amount exceeds either your Maximum WB Amount or your Maximum WB for Life Amount, provided that:

● you withdraw your Qualified Contract's first Yearly RMD Amount in the calendar year you attain age 70½ rather than postponing the withdrawal of that Amount until the first quarter of the next calendar year, and

● you do not make any withdrawal from your Qualified Contract that would result in you receiving, in any Account Year, more than one calendar year's Yearly RMD Amount.

If there is any change to the current Code or IRS rules governing the timing or determination of RMD amounts (including, but not limited to, amendments to the current IRS regulations or the issuance of IRS guidance), then we reserve the right to reduce the GLB Base, Lifetime Income Base, Bonus Base, or all of these amounts, per the terms of the rider regarding Excess Withdrawals, when a Yearly RMD Amount withdrawn from your Contract exceeds either your Maximum WB Amount or your Maximum WB for Life Amount. Notice will be given to Contract Owners before we exercise this right.

If you withdraw all or a portion of your Qualified Contract's Yearly RMD Amount from the Contract while participating in the AB Plan, we reduce your Account Value by the amount of the withdrawal and your GLB amount, Bonus Base and any accrued bonus amounts proportionally (see “Withdrawals Under Secured Returns for Life Plus” in this Appendix).

For a further discussion of some of these considerations, please refer to “TAX CONSIDERATIONS - Impact of Optional Death Benefit and Optional Living Benefit Riders” in the prospectus to which this Appendix is attached.

ALL OF THE FOLLOWING EXAMPLES ARE BASED UPON THE ASSUMPTION THAT YOU ELECTED SECURED RETURNS FOR LIFE PLUS ON JANUARY 1, 2009 WITH AN INITIAL PURCHASE PAYMENT OF $100,000. YOUR INITIAL GLB AMOUNT EQUALS YOUR PURCHASE PAYMENT AMOUNT OF $100,000.

EXAMPLE 1: Calculation of Benefits under AB Plan.

l	Assume that you are age 65 at issue. Assume that you elect the AB plan. Your GLB amount at issue and your Bonus Base at issue are both equal to $100,000 (your Purchase Payment amount). Assume that you take no withdrawals in your first Account Year. Therefore, on January 1, 2010, your accrued bonus amount is $5,000, which equals 5% of the Bonus Base. Since no withdrawals have been taken, your GLB amount and your Bonus Base both remain at $100,000.
l	Assume that you take no withdrawals in your second Account Year. Therefore, on January 1, 2011, your accrued bonus amount is $10,000, which equals $5,000 (5% of the Bonus Base) plus your previous accrued bonus amount of $5,000. Since no withdrawals have been taken, your GLB amount and your Bonus Base both remain at $100,000.
l	Assume that you take no withdrawals in your third Account Year. Therefore, on January 1, 2012, your accrued bonus amount is $15,000, which equals $5,000 (5% of the Bonus Base) plus your previous accrued bonus amount of $10,000. Since no withdrawals have been taken, your GLB amount and your Bonus Base both remain at $100,000.
l	Assume that you remain in the AB plan until it “matures” on January 1, 2019. Assume that you have taken no withdrawals since your contract was issued. Your accrued bonus amount is $50,000 ($5,000 per year for ten years). Since your rider has “matured” in the AB plan, the accrued bonus amount becomes $0. Assume that your Account Value on January 1, 2019 is $88,000. Since your Account Value is less than your GLB amount by $12,000, an amount equal to $12,000 will be deposited into your Contract ($100,000 - $88,000).

EXAMPLE 2: Calculation of Benefits under AB Plan with Subsequent Purchase Payments; Refund Applies.

l	Assume that you are age 65 at issue. Assume that you elect the AB plan. Your GLB amount at issue and your Bonus Base at issue are both equal to $100,000 (your Purchase Payment amount). Assume that you take no withdrawals in your first Account Year. Therefore, on January 1, 2010, your accrued bonus amount is $5,000, which equals 5% of the Bonus Base. Since no withdrawals have been taken, your GLB amount and your Bonus Base both remain at $100,000.
l	Assume that you take no withdrawals in your second Account Year. Therefore, on January 1, 2011, your accrued bonus amount is $10,000, which equals $5,000 (5% of the Bonus Base) plus your previous accrued bonus amount of $5,000. Since no withdrawals have been taken, your GLB amount and your Bonus Base both remain at $100,000.
l	Assume that on May 20, 2011, you make a Purchase Payment of $80,000. Since you are in your third Account Year, your GLB amount is increased by 85% of this Purchase Payment. Therefore, your new GLB amount is $168,000 (old GLB amount of $100,000 plus 85% of $80,000). Your new Bonus Base is also $168,000 (old Bonus Base of $100,000 plus 85% of $80,000). Your accrued bonus amount remains at $10,000.
l	Assume that you take no withdrawals in your third Account Year. Therefore, on January 1, 2012, your accrued bonus amount is $18,400, which equals $8,400 (5% of the Bonus Base) plus your previous accrued bonus amount of $10,000. Since no withdrawals have been taken, your GLB amount and your Bonus Base both remain at $168,000.
l	Assume that you remain in the AB Plan until it “matures” on January 1, 2019. Assume that you have taken no withdrawals since your contract was issued. Your accrued bonus amount is $77,200 ($5,000 per year for two years plus $8,400 per year for eight years). Since your rider “matured” in the AB Plan, the accrued bonus amount becomes $0. Assume that your Account Value on January 1, 2019 is $200,000. Assume that the total rider charges you paid were $8,375.
l	Because your Account Value is greater than your GLB amount ($200,000 vs. $168,000), your Contract will be credited with an amount equal to the rider charges you have paid ($8,375), increasing your Account Value to $208,375.

EXAMPLE 3: Withdrawals under AB Plan.

l	Assume that you are age 65 at issue. Assume that you elect the AB plan. Your GLB amount at issue and your Bonus Base at issue are both equal to $100,000 (your Purchase Payment amount). Assume that you take no withdrawals in your first Account Year. Therefore, on January 1, 2010, your accrued bonus amount is $5,000, which equals 5% of the Bonus Base. Since no withdrawals have been taken, your GLB amount and your Bonus Base both remain at $100,000.
l	Assume that you take no withdrawals in your second Account Year. Therefore, on January 1, 2011, your accrued bonus amount is $10,000, which equals $5,000 (5% of the Bonus Base) plus your previous accrued bonus amount of $5,000. Since no withdrawals have been taken, your GLB amount and your Bonus Base both remain at $100,000.
l	Assume that on March 10, 2011 (in your third Account Year), your Account Value is $80,000. Also assume that you take a withdrawal of $10,000 on this date. Therefore, your ending Account Value on March 10, 2011 is $70,000. Your GLB amount, Bonus Base, and accrued bonus amount are reduced proportionally to the amount withdrawn. Therefore, your new GLB amount is $100,000 x ($70,000 ÷ $80,000) = $87,500. Your new Bonus Base is $100,000 x ($70,000 ÷ $80,000) = $87,500. Your new accrued bonus amount is $10,000 x ($70,000 ÷ $80,000) = $8,750.
l	Assume that you take no more withdrawals in your third Account Year. Therefore, on January 1, 2012, your GLB amount remains at $87,500, and your Bonus Base also remains at $87,500. Since you made a withdrawal in your third Account Year, you do not accrue a bonus amount in that Account Year. Therefore, your accrued bonus amount remains at $8,750.
l	Assume that you take no withdrawals in your fourth Account Year. Therefore, on January 1, 2013, your accrued bonus amount is $13,125, which equals $4,375 (5% of the Bonus Base) plus your previous accrued bonus amount of $8,750. Since no withdrawals were been taken, your GLB amount and your Bonus Base both remain at $87,500.
l	Assume that you remain in the AB plan until it “matures” on January 1, 2019. Assume that you take no more withdrawals from your contract. Your accrued bonus amount is $39,375 ($8,750 total for the first two years plus $4,375 per year for seven years). Since your rider has “matured” in the AB plan, the accrued bonus amount becomes $0. Assume that your Account Value on January 1, 2019 is $80,000. Since your Account Value is less than your GLB amount by $7,500, an amount equal to $7,500 will be deposited into your Contract ($87,500 - $80,000).

EXAMPLE 4: Step-up elected under AB Plan.

l	Assume that you are age 65 at issue. Assume that you elect the AB plan. Your GLB amount at issue and your Bonus Base at issue are both equal to $100,000 (your Purchase Payment amount). Assume that you take no withdrawals in your first Account Year. Therefore, on January 1, 2010, your accrued bonus amount is $5,000, which equals 5% of the Bonus Base. Since no withdrawals have been taken, your GLB amount and your Bonus Base both remain at $100,000.
l	Assume that you take no withdrawals in your second Account Year. Therefore, on January 1, 2011, your accrued bonus amount is $10,000, which equals $5,000 (5% of the Bonus Base) plus your previous accrued bonus amount of $5,000. Since no withdrawals have been taken, your GLB amount and your Bonus Base both remain at $100,000.
l	Assume that you take no withdrawals in your third Account Year. Therefore, on January 1, 2012, your accrued bonus amount is $15,000, which equals $5,000 (5% of the Bonus Base) plus your previous accrued bonus amount of $10,000. Since no withdrawals have been taken, your GLB amount and your Bonus Base both remain at $100,000.
l	Assume that on January 1, 2012 your Account Value is $118,000. Since you have passed your first Account Anniversary and have not stepped-up within the past year, and since your Account Value is greater than your GLB amount, you may elect to step up to a new ten year period, with a new GLB amount of $118,000. Assume that you do elect to step up. Your GLB amount is now equal to $118,000. Also, your Bonus Base is now equal to $118,000. Your AB plan “maturity date” is now January 1, 2022. Since your new GLB amount of $118,000 is greater than the sum of your old GLB amount of $100,000 plus your old accrued bonus amount of $15,000, your new accrued bonus amount is set equal to $0.
l	Assume that you take no withdrawals in your fourth Account Year. Therefore, on January 1, 2013, your accrued bonus amount is $5,900, which equals $5,900 (5% of the Bonus Base) plus your previous accrued bonus amount of $0. Since no withdrawals have been taken, your GLB amount and your Bonus Base both remain at $118,000.
l	Assume that you remain in the AB plan until it “matures” on January 1, 2022. Assume that you have taken no withdrawals since your contract was issued. Your accrued bonus amount is $41,300 ($5,900 per year for seven years). Since your rider has “matured” in the AB plan, the accrued bonus amount becomes $0. Assume that your Account Value on January 1, 2022 is $112,000. Since your Account Value is less than your GLB amount by $6,000, an amount equal to $6,000 will be deposited into your Contract ($118,000 - $112,000).

EXAMPLE 5: Calculation of Benefits under WB Plan; Early Withdrawals.

l	Assume you are age 56 at issue. Also assume that you elect the WB plan on January 1, 2009, and that you choose to systematically withdraw the Maximum WB Amount annually.
l	On January 1, 2009:
l		Your GLB Base is $100,000 [the value of your RGLB amount on the day you elect to participate in the WB Plan].
l		Your Maximum WB Amount is $5,000 [5% of your GLB Base].
l		Your Lifetime Income Base is zero because you have not passed your first Account Anniversary after your 59th birthday
l		Your Maximum WB for Life Amount is zero [4% of your Lifetime Income Base].
l		Your Bonus Base is $100,000 [the amount of your initial Purchase Payment]. Since you are taking withdrawals each Account Year, you do not receive any bonus credits.
l	On December 31, 2009, after your first systematic withdrawal of $5,000, your Maximum WB Amount:
l		Your Account Value is reduced by the amount of the withdrawal [$5,000].
l		Your RGLB amount, reduced by the amount of the withdrawal, is $95,000 [$100,000-$5,000].
l		Your GLB Base is still $100,000 because you did not withdraw more than your Maximum WB Amount.
l		Your Lifetime Income Base is zero because you have not passed your first Account Anniversary after your 59th birthday.
l		Your Bonus Base is still $100,000 because you did not withdraw more than your Maximum WB Amount.
l	Assume you take only systematic withdrawals of $5,000 for a total of 3 years. Assume you make no subsequent Purchase Payments. On December 1, 2011, you celebrate your 59th birthday. On January 1, 2012:
l		Your Account Value has been reduced by the amount of the total withdrawals [$15,000].
l		Your RGLB amount, reduced by the amount of the total withdrawal, is $85,000 [$100,000-($5,000 x 3)].
l		Your GLB Base is still $100,000 because you did not withdraw more than your Maximum WB Amount in any Account Year.
l		Your Lifetime Income Base is set at $85,000 [an amount equal to the RGLB amount on your first Account Anniversary after your 59th birthday].
l		Your Maximum WB for Life Amount is $3,400 [4% of your Lifetime Income Base because you are less than 65 years old].
l		Your Bonus Base is still $100,000 because you did not withdraw more than your Maximum WB Amount.
l	Assume you elect to take only annual systematic withdraws of no more than your Maximum WB for Life Amount [$3,400] for an additional 20 years. Assume you make no subsequent Purchase Payments, and that your Account Value reduces to zero. On December 31, 2031:
l		Your Account Value equals zero.
l		Your RGLB amount, reduced by the amount of the total withdrawals, is $17,000 [85,000 – ($3,400 x 20)]
l		Your GLB Base is still $100,000 because you did not withdraw more than the Maximum WB Amount in any Account Year.
l		Your Lifetime Income Base is still $85,000 because you did not withdraw more than the Maximum WB for Life Amount in any Account Year.
l		Your Bonus Base is $0 because bonus credits may only be given in the first ten Account Years.
	Even though your rights under the annuity Contract terminated when the Account Value became zero, we will continue to make payments to you. At this point, however, you must choose between:
(1)			withdrawing the Maximum WB for Life Amount each year until you die or
(2)			withdrawing your Maximum WB Amount each year until your RGLB amount is reduced to zero.
l	Assume you elect to take annual payments of your Maximum WB for Life Amount. Therefore you will continue to receive $3,400 per year as long as you are alive. If you die before your RGLB amount is reduced to $0, your beneficiary will receive $5,000 per year (your Maximum WB Amount) until your RGLB amount is reduced to zero.

EXAMPLE 6: Calculation of Benefits under WB Plan with Subsequent Purchase Payments; Lifetime Withdrawals.

l	Assume you are age 60 at issue. Also assume that you elect the WB plan on January 1, 2009, and that you choose to systematically withdraw the Maximum WB for Life Amount annually.
l	On January 1, 2009:
l		Your GLB Base is $100,000 [the value of your RGLB amount on the day you elect to participate in the WB Plan].
l		Your Maximum WB Amount is $5,000 [5% of your GLB Base].
l		Your Lifetime Income Base is $100,000 [the value of your RGLB amount on the day you elect to participate in the WB Plan].
l		Your Maximum WB for Life Amount is $4,000 [4% of your Lifetime Income Base because you are age 60].
l		Your Bonus Base is $100,000 [the amount of your initial Purchase Payment]. Since you are taking withdrawals each Account Year, you do not receive any bonus credits.
l	On December 31, 2009, after your first systematic withdrawal of $4,000:
l		Your Account Value is reduced by the amount of the withdrawal [$4,000].
l		Your RGLB amount, reduced by the amount of the withdrawal, is $96,000 [$100,000-$4,000].
l		Your GLB Base is still $100,000 because you did not withdraw more than your Maximum WB Amount.
l		Your Lifetime Income Base is $100,000 because you did not withdraw more than your Maximum WB for Life Amount.
l		Your Bonus Base is still $100,000 because you did not withdraw more than your Maximum WB Amount.
l	Assume you take only annual systematic withdrawals of $4,000 for a total of 4 years. Assume you make a subsequent Purchase Payment of $50,000, in your 4th Account Year. Assume also that, immediately before the subsequent Purchase Payment, your Account Value was $80,000. On December 31, 2012:
l		Your RGLB amount, reduced by the amount of the total withdrawals and increased by the subsequent Purchase Payment, is $134,000 [$100,000 - ($4,000 x 4) + $50,000].
l		Your GLB Base, increased by the subsequent Purchase Payment, is $150,000.
l		Your Maximum WB Amount is $7,500 [5% of your new GLB Base]
l		Your Lifetime Income Base, increased by the subsequent Purchase Payment, is $150,000.
l		Your Maximum WB for Life Amount is $6,000 [4% of your new Lifetime Income Base]
l		Your Bonus Base, increased by the subsequent Purchase Payment, is $150,000.
	You may increase your annual systematic withdrawals to $6,000 without any effect on your future lifetime benefits.
l	Assume you elect to take only annual systematic withdraws of no more than your Maximum WB for Life Amount [$6,000] for an additional 20 years. Assume you make no subsequent Purchase Payments, and that your Account Value reduces to zero. On December 31, 2032:
l		Your Account Value equals zero.
l		Your RGLB amount, reduced by the amount of the total withdrawals is $14,000 [$134,000 – ($6,000 x 20)].
l		Your GLB Base is still $150,000 because you did not withdraw more than your Maximum WB Amount.
l		Your Lifetime Income Base is $150,000 because you did not withdraw more than your Maximum WB for Life Amount in any Account Year.
l		Your Bonus Base is $0 because bonus credits may only be given in the first ten Account Years.
	Even though your rights under the annuity Contract terminated when the Account Value became zero, we will continue to make payments to you. At this point, however, you must choose between:
(1)			withdrawing the Maximum WB for Life Amount each year until you die or
(2)			withdrawing your Maximum WB Amount each year until your RGLB amount is reduced to zero.
l	Assume you elect to take annual payments of your Maximum WB for Life Amount of $6,000. Therefore, you will continue to receive $6,000 per year as long as you are alive. If you die before your RGLB amount is reduced to $0, your beneficiary will receive $7,500 per year (your Maximum WB Amount) until your RGLB amount is reduced to zero.

EXAMPLE 7: Withdrawals under WB Plan Exceeding Maximum WB Amount.

l	Assume you are age 63 at issue. Also assume that you elect the WB plan on January 1, 2009. Assume that your Designated Fund had poor investment performance, losing 2% a year over the course of the Contract. On January 1, 2009:
l		Your GLB Base is $100,000 [the value of your RGLB amount on the day you elect to participate in the WB Plan].
l		Your Maximum WB Amount is $5,000 [5% of your GLB Base].
l		Your Lifetime Income Base is $100,000 [the value of your RGLB amount on the day you elect to participate in the WB Plan].
l		Your Maximum WB for Life Amount is $4,000 [4% of your Lifetime Income Base because you are age 63].
l		Your Bonus Base is $100,000 [the amount of your initial Purchase Payment]. Since you are taking withdrawals each Account Year, you do not receive any bonus credits.
l	On December 31, 2009, after you take a withdrawal of $6,000, your Account Value is $92,000:
l		Your RGLB amount is reduced to $92,000 [the lesser of (1) your current RGLB amount minus the withdrawal [$100,000-$6,000] and (2) your new Account Value [$92,000]].
l		Your GLB Base is reduced to $92,000 [the lesser of (1) your current GLB Base minus the excess withdrawal [$100,000 - ($6,000 - $5,000)] and (2) your new Account Value [$92,000]].
l		Your Maximum WB Amount is now $4,600 [5% of your GLB Base].
l		Your Lifetime Income Base is reduced to $92,000 [the lesser of (1) your current Lifetime Income Base minus the excess withdrawal [$100,000 - ($6,000 - $4,000)] and (2) your new Account Value [$92,000]].
l		Your Maximum WB for Life Amount is $3,680 [4% of your new Lifetime Income Base].
l		Your Bonus Base is reduced to $92,000 [the lesser of (1) your current Bonus Base minus the excess withdrawal [$100,000 - ($6,000 - $5,000)] and (2) your new Account Value [$92,000]].
l	Assume you make no subsequent Purchase Payments, but you take annual systematic withdrawals of $6,000 for a total of 13 years. Due to the of poor investment performance of your Designated Fund, your Account Value is now $7,609. Because you have taken withdrawals in excess of your Maximum WB Amount, your RGLB amount is also now $7,609. Because you have taken withdrawals in excess of your Maximum WB Amount, your GLB Base is also now $7,609. Your Maximum WB Amount is 5% of $7,609, or $380. Because you have taken withdrawals in excess of your Maximum WB for Life Amount, your Lifetime Income Base is also now $7,609. Your Maximum WB for Life Amount is 4% of $7,609, or $304. Your Bonus Base is $0 because bonus credits may only be given in the first ten Account Years.
l	Assume your fund earns -2% in Account Year 14, and that you take another $6,000 withdrawal. On December 31, 2022:
l		Your Account Value is $1,457.
l		Your RGLB amount is $1,457 [the lesser of (1) your current RGLB amount minus the withdrawal amount ($7,609 - $6,000) and (2) your new Account Value ($1,457)].
l		Your GLB Base is $1,457 [the lesser of (1) your current GLB Base minus the excess withdrawal [$7,609 – ($6,000 - $380)] and (2) your new Account Value [$1,457]].
l		Your Maximum WB Amount equals $73 [5% of your new GLB Base].
l		Your Lifetime Income Base is $1,457 [the lesser of (1) your current Lifetime Income Base minus the excess withdrawal [$7,609 - ($6,000 - $304)] and (2) your new Account Value [$1,457]].
l		Your Maximum WB for Life Amount equals $58 [4% of your new Lifetime Income Base].
	Because your GLB Base is greater than zero, you may take annual withdrawals up to the Maximum WB Amount until your RGLB amount becomes zero. Because your Lifetime Income Base is greater than zero, you may take annual withdrawals up to the Maximum WB for Life Amount until you die or annuitize. Any withdrawal you take that is greater than your Maximum WB Amount will reduce your GLB Base (and hence, give you a new, reduced Maximum WB Amount). Any withdrawal you take that is greater than your Maximum WB for Life Amount will reduce your Lifetime Income Base (and hence, give you a new, reduced Maximum WB for Life Amount).
	If your Account Value is reduced to zero by a withdrawal that does not exceed your Maximum WB for Life Amount, you must choose between:
(1)			withdrawing the Maximum WB for Life Amount each year until you die or
(2)			withdrawing your Maximum WB Amount each year until your RGLB amount is reduced to zero.
	If your Account Value is reduced to zero by a withdrawal that exceeds your Maximum WB for Life Amount but does not exceed your Maximum WB Amount, your Lifetime Income Base will become zero, but we will continue to pay your then current Maximum WB Amount each year until your RGLB is reduced to zero.
	If your Account Value is reduced to zero by a withdrawal that exceeds both your Maximum WB for Life Amount and your Maximum WB Amount, your Lifetime Income Base, your RGLB amount, and your GLB Base will all be reduced to zero, your Maximum WB for Life Amount and your Maximum WB Amount will both become zero, and no more benefits will be paid.

EXAMPLE 8: Step-up elected under WB Plan.

l	Assume you are age 65 at issue. Also assume that you elect the WB plan on January 1, 2009, and that you choose to systematically withdraw the Maximum WB Amount annually. Assume that your Designated Fund had good investment performance, gaining 6% a year over the course of the Contract. On January 1, 2009:
l		Your GLB Base is $100,000 [the value of your RGLB amount on the day you elect to participate in the WB Plan].
l		Your Maximum WB Amount is $5,000 [5% of your GLB Base].
l		Your Lifetime Income Base is $100,000 [the value of your RGLB amount on the day you elect to participate in the WB Plan].
l		Your Maximum WB for Life Amount is $5,000 [5% of your Lifetime Income Base because you are age 65].
l		Your Bonus Base is $100,000 [the amount of your initial Purchase Payment]. Since you are taking withdrawals each Account Year, you do not receive any bonus credits.
l	On December 31, 2009, after you take your first systematic withdrawal of $5,000, your Account Value is $101,000:
l		Your RGLB amount, reduced by the amount of the withdrawal, is $95,000 [$100,000-$5,000].
l		Your GLB Base is still $100,000 because you withdrew no more than your Maximum WB Amount.
l		Your Maximum WB Amount is $5,000 [5% of your GLB Base].
l		Your Lifetime Income Base is $100,000 because you withdrew no more than your Maximum WB for Life Amount.
l		Your Maximum WB for Life Amount is $5,000 [5% of your Lifetime Income Base].
l		Your Bonus Base is still $100,000 because you did not withdraw more than your Maximum WB Amount.
l	Assume you make no subsequent Purchase Payments, but you take systematic withdrawals of $5,000 for a total of 3 years. On December 31, 2011:
l		Your Account Value is $103,184.
l		Your RGLB amount is $85,000 [$100,000 - ($5,000 x 3)].
l		Your GLB Base is still $100,000 because you withdrew no more than your Maximum WB Amount.
l		Your Maximum WB Amount is $5,000 [5% of your GLB Base].
l		Your Lifetime Income Base is still $100,000 because you withdrew no more than your Maximum WB for Life Amount.
l		Your Maximum WB for Life Amount is $5,000 [5% of your Lifetime Income Base].
l		Your Bonus Base is still $100,000 because you withdrew no more than your Maximum WB Amount.
	Because your Account Value is greater than your RGLB amount, your GLB Base, and your Lifetime Income Base, you may step-up your RGLB amount, your GLB Base, your Bonus Base, and your Lifetime Income Base each to an amount equal to your current Account Value. Assume you elect to step-up. On January 1, 2012*:
l		Your Account Value is $103,184.
l		Your RGLB amount is $103,184.
l		Your GLB Base is $103,184.
l		Your Maximum WB Amount is $5,159 [5% of your new GLB Base].
l		Your Lifetime Income Base is $103,184.
l		Your Maximum WB for Life Amount is $5,159 [5% of your new Lifetime Income Base].
l		Your Bonus Base is $103,184.
*	Note: Assume instead that you elected to step-up sometime in 2012 after your withdrawal of $5,000 was taken and that your Account Value at the time of the step-up was $103,184. Your new Maximum WB Amount and new Maximum WB for Life amount of $5,159 would apply so that you could withdraw an additional $159 during the remainder of 2012 without exceeding your maximum amounts.

EXAMPLE 9: WB election at issue; withdrawals not taken immediately.

l	Assume that you are age 65 at issue. Also assume that you elect the WB plan at issue. Your RGLB amount, your GLB Base, your Lifetime Income Base (LIB), and your Bonus Base all equal $100,000. Your Maximum WB Amount equals 5% of your GLB Base, or $5,000. Your Maximum WB for Life Amount equals 5% of your Lifetime Income Base, or $5,000.
l	Assume that you take no withdrawals in your first Account Year. Therefore, on January 1, 2010, the RGLB amount will be increased by $5,000, which equals 5% of the Bonus Base. Your new RGLB amount is now $105,000. Your GLB Base will now become the greater of:
(i)		your old GLB Base of $100,000, and
(ii)		your new RGLB amount of $105,000.
	Therefore, your GLB Base is now $105,000, and your new Maximum WB Amount is 5% of $105,000, or $5,250.
	Your LIB will now become the greater of:
(i)		your old LIB of $100,000, and
(ii)		the lesser of:
(a)			your new RGLB amount of $105,000, and
(b)			your old LIB of $100,000 plus the bonus amount of $5,000.
	Therefore, your LIB is now $105,000, and your new Maximum WB for Life Amount is 5% of $105,000, or $5,250. Your Bonus Base remains at $100,000.
l	Assume that you take no withdrawals in your second Account Year. Therefore, on January 1, 2011, the RGLB amount will be increased by $5,000, which equals 5% of the Bonus Base. Your new RGLB amount is now $110,000. Your GLB Base will now become the greater of:
(i)		your old GLB Base of $105,000, and
(ii)		your new RGLB amount of $110,000.
	Therefore, your GLB Base is now $110,000, and your new Maximum WB Amount is 5% of $110,000, or $5,500.
	Your LIB will now become the greater of:
(i)		your old LIB of $105,000, and
(ii)		the lesser of:
(a)			your new RGLB amount of $110,000, and
(b)			your old LIB of $105,000 plus the bonus amount of $5,000.
	Therefore, your LIB is now $110,000, and your new Maximum WB for Life Amount is 5% of $110,000, or $5,500. Your Bonus Base remains at $100,000.
l	Assume that you take a withdrawal equal to your Maximum WB for Life Amount of $5,500 in your third Account Year. Your RGLB amount will be reduced by the amount of the withdrawal, so that it will equal $110,000 - $5,500, or $104,500. Your GLB Base will remain at $110,000, so your Maximum WB Amount will remain at 5% of $110,000, or $5,500. Your LIB will also remain at $110,000, so your Maximum WB for Life Amount will remain at 5% of $110,000, or $5,500.
l	Assume that you remain alive and that you continue to make withdrawals of $5,500 until the RGLB amount runs out in year 2030. Because the RGLB amount is now $0, the GLB Base also becomes $0. Your LIB is still $110,000. Therefore, you can continue to receive $5,500 per year as long as you are alive. Also, if there is a remaining Account Value, the Contract continues.

EXAMPLE 10: WB election at issue; subsequent Purchase Payments made; withdrawals not taken immediately.

l	Assume that you are age 65 at issue. Also assume that you elect the WB plan at issue. Your RGLB amount, your GLB Base, your Lifetime Income Base (LIB), and your Bonus Base all equal $100,000. Your Maximum WB Amount equals 5% of your GLB Base, or $5,000. Your Maximum WB for Life Amount equals 5% of your Lifetime Income Base, or $5,000.
l	Assume that you take no withdrawals in your first Account Year. Therefore, on January 1, 2010, the RGLB amount will be increased by $5,000, which equals 5% of the Bonus Base. Your new RGLB amount is now $105,000. Your GLB Base will now become the greater of:
(i)		your old GLB Base of $100,000, and
(ii)		your new RGLB amount of $105,000.
	Therefore, your GLB Base is now $105,000, and your new Maximum WB Amount is 5% of $105,000, or $5,250.
	Your LIB will now become the greater of:
(i)		your old LIB of $100,000, and
(ii)		the lesser of:
(a)			your new RGLB amount of $105,000, and
(b)			your old LIB of $100,000 plus the bonus amount of $5,000.
	Therefore, your LIB is now $105,000, and your new Maximum WB for Life Amount is 5% of $105,000, or $5,250. Your Bonus Base remains at $100,000.
l	Assume that you make a Purchase Payment of $60,000 in your second Account Year. Your RGLB amount, GLB Base, LIB, and Bonus Base are all increased by the amount of the Purchase Payment. Therefore, your RGLB amount, GLB Base, and LIB are all now equal to $105,000 plus $60,000 = $165,000. Your Bonus Base is now equal to $100,000 plus $60,000 = $160,000.
l	Assume that you take no withdrawals in your second Account Year. Therefore, on January 1, 2011, the RGLB amount will be increased by $8,000, which equals 5% of the Bonus Base. Your new RGLB amount is now $173,000. Your GLB Base will now become the greater of:
(i)		your old GLB Base of $165,000, and
(ii)		your new RGLB amount of $173,000.
	Therefore, your GLB Base is now $173,000, and your new Maximum WB Amount is 5% of $173,000, or $8,650.
	Your LIB will now become the greater of:
(i)		your old LIB of $165,000, and
(ii)		the lesser of:
(a)			your new RGLB amount of $173,000, and
(b)			your old LIB of $165,000 plus the bonus amount of $8,000.
	Therefore, your LIB is now $173,000, and your new Maximum WB for Life Amount is 5% of $173,000, or $8,650. Your Bonus Base remains at $160,000.
l	Assume that you take a withdrawal equal to your Maximum WB for Life Amount of $8,650 in your third Account Year. Your RGLB amount will be reduced by the amount of the withdrawal, so that it will equal $173,000 - $8,650, or $164,350. Your GLB Base will remain at $173,000, so your Maximum WB Amount will remain at 5% of $173,000, or $8,650. Your LIB will also remain at $173,000, so your Maximum WB for Life Amount will remain at 5% of $173,000, or $8,650. Your Bonus Base will remain at $160,000.
l	Assume that you remain alive and that you continue to make withdrawals of $8,650 until the RGLB amount runs out in year 2030. Because the RGLB amount is now $0, the GLB Base also becomes $0. Your Bonus Base is $0 because bonus credits may only be given in the first ten Account Years. Your LIB is still $173,000. Therefore, you can continue to receive $8,650 per year as long as you are alive. Also, if there is a remaining Account Value, the Contract continues.

EXAMPLE 11: WB election at issue; withdrawals taken.

l	Assume that you are age 65 at issue. Also assume that you elect the WB plan at issue. Your RGLB amount, your GLB Base, your Lifetime Income Base (LIB), and your Bonus Base all equal $100,000. Your Maximum WB Amount equals 5% of your GLB Base, or $5,000. Your Maximum WB for Life Amount equals 5% of your Lifetime Income Base, or $5,000.
l	Assume that you take no withdrawals in your first Account Year. Therefore, on January 1, 2010, the RGLB amount will be increased by $5,000, which equals 5% of the Bonus Base. Your new RGLB amount is now $105,000. Your GLB Base will now become the greater of:
(i)		your old GLB Base of $100,000, and
(ii)		your new RGLB amount of $105,000
	Therefore, your GLB Base is now $105,000, and your new Maximum WB Amount is 5% of $105,000, or $5,250.
	Your LIB will now become the greater of:
(i)		your old LIB of $100,000, and
(ii)		the lesser of:
(a)			your new RGLB amount of $105,000, and
(b)			your old LIB of $100,000 plus the bonus amount of $5,000.
	Therefore, your LIB is now $105,000, and your new Maximum WB for Life Amount is 5% of $105,000, or $5,250. Your Bonus Base remains at $100,000.
l	Assume that you take a withdrawal equal to your Maximum WB for Life Amount of $5,250 in your second Account Year. Your RGLB amount will be reduced by the amount of the withdrawal, so that it will equal $105,000 - $5,250, or $99,750. Your GLB Base will remain at $105,000, so your Maximum WB Amount will remain at 5% of $105,000, or $5,250. Your LIB will also remain at $105,000, so your Maximum WB for Life Amount will remain at 5% of $105,000, or $5,250. Since your withdrawal did not exceed your Maximum WB Amount, your Bonus Base will remain at $100,000.
l	Assume that you take no withdrawals in your third Account Year. Therefore, on January 1, 2012, the RGLB amount will be increased by $5,000, which equals 5% of the Bonus Base. Your new RGLB amount is now $104,750. Your GLB Base will now become the greater of:
(i)		your old GLB Base of $105,000, and
(ii)		your new RGLB amount of $104,750.
	Therefore, your GLB Base remains at $105,000, and your Maximum WB Amount remains at 5% of $105,000, or $5,250.
	Your LIB will now become the greater of:
(i)		your old LIB of $105,000, and
(ii)		the lesser of:
(a)			your new RGLB amount of $104,750, and
(b)			your old LIB of $105,000 plus the bonus amount of $5,000.
	Therefore, your LIB remains at $105,000, and your Maximum WB for Life Amount remains at 5% of $105,000, or $5,250.
	Your Bonus Base remains at $100,000.
l	Assume that you take no withdrawals in your fourth Account Year. Therefore, on January 1, 2013, the RGLB amount will be increased by $5,000, which equals 5% of the Bonus Base. Your new RGLB amount is now $109,750. Your GLB Base will now become the greater of:
(i)		your old GLB Base of $105,000, and
(ii)		your new RGLB amount of $109,750.
	Therefore, your GLB Base is now $109,750, and your new Maximum WB Amount is 5% of $109,750, or $5,487.
	Your LIB will now become the greater of:
(i)		your old LIB of $105,000, and
(ii)		the lesser of:
(a)			your new RGLB amount of $109,750, and
(b)			your old LIB of $105,000 plus the bonus amount of $5,000.
	Therefore, your LIB is now $109,750, and your new Maximum WB for Life Amount is 5% of $109,750, or $5,487. Your Bonus Base remains at $100,000.
l	Assume that you take a withdrawal equal to your Maximum WB for Life Amount of $5,487 in 2013. Also assume that you remain alive and continue to take annual withdrawals of $5,487 until the RGLB amount runs out in year 2032. Because the RGLB amount is now $0, the GLB Base also becomes $0. Your Bonus Base is $0 because bonus credits may only be given in the first ten Account Years. Your LIB is still $109,750. Therefore, you can continue to receive $5,487 per year as long as you are alive. Also, if there is a remaining Account Value, the Contract continues.

EXAMPLE 12: WB election at issue; Excess Withdrawal taken.

l	Assume that you are age 65 at issue. Also assume that you elect the WB plan at issue. Your RGLB amount, your GLB Base, your Lifetime Income Base (LIB), and your Bonus Base all equal $100,000. Your Maximum WB Amount equals 5% of your GLB Base, or $5,000. Your Maximum WB for Life Amount equals 5% of your Lifetime Income Base, or $5,000.
l	Assume that you take no withdrawals in your first Account Year. Therefore, on January 1, 2010, the RGLB amount will be increased by $5,000, which equals 5% of the Bonus Base. Your new RGLB amount is now $105,000. Your GLB Base will now become the greater of:
(i)		your old GLB Base of $100,000, and
(ii)		your new RGLB amount of $105,000.
	Therefore, your GLB Base is now $105,000, and your new Maximum WB Amount is 5% of $105,000, or $5,250.
	Your LIB will now become the greater of:
(i)		your old LIB of $100,000, and
(ii)		the lesser of:
(a)			your new RGLB amount of $105,000, and
(b)			your old LIB of $100,000 plus the bonus amount of $5,000.
	Therefore, your LIB is now $105,000, and your new Maximum WB for Life Amount is 5% of $105,000, or $5,250. Your Bonus Base remains at $100,000.
l	Assume that you take a withdrawal of $6,000 in your second Account Year. This withdrawal exceeds both your Maximum WB Amount and your Maximum WB for Life Amount of $5,250. Assume that your Account Value equals $90,000 after you make this withdrawal. Your RGLB amount will be reduced to the lesser of:
(i)		your old RGLB amount of $105,000 minus the $6,000 withdrawal, and
(ii)		your Account Value of $90,000.
	Therefore, your new RGLB amount is $90,000.
	Your GLB Base will be reduced to the lesser of:
(i)		your old GLB Base of $105,000 minus the $750 excess withdrawal, and
(ii)		your Account Value of $90,000.
	Therefore, your new GLB Base is $90,000. Your new Maximum WB Amount is 5% of $90,000, or $4,500.
	Your Bonus Base will be reduced to the lesser of:
(i)		your old Bonus Base of $100,000 minus the $750 excess withdrawal, and
(ii)		your Account Value of $90,000.
	Therefore, your new Bonus Base is $90,000.
	Your LIB will be reduced to the lesser of:
(i)		your old LIB of $105,000 minus the $750 excess withdrawal, and
(ii)		your Account Value of $90,000.
	Therefore, your new LIB is $90,000. Your new Maximum WB for Life Amount is 5% of $90,000, or $4,500.
l	Assume that you take no withdrawals in your third Account Year. Therefore, on January 1, 2012, the RGLB amount will be increased by $4,500, which equals 5% of the Bonus Base. Your new RGLB amount is now $94,500. Your GLB Base will now become the greater of:
(i)		your old GLB Base of $90,000, and
(ii)		your new RGLB amount of $94,500.
	Therefore, your GLB Base is now $94,500, and your new Maximum WB Amount is 5% of $94,500, or $4,725.
	Your LIB will now become the greater of:
(i)		your old LIB of $90,000, and
(ii)		the lesser of:
(a)			your new RGLB amount of $94,500, and
(b)			your old LIB of $90,000 plus the bonus amount of $4,500.
	Therefore, your LIB is now $94,500, and your new Maximum WB for Life Amount is 5% of $94,500, or $4,725. Your Bonus Base remains at $90,000.
l	Assume that you take no withdrawals in your fourth Account Year. Therefore, on January 1, 2013, the RGLB amount will be increased by $4,500, which equals 5% of the Bonus Base. Your new RGLB amount is now $99,000. Your GLB Base will now become the greater of:
(i)		your old GLB Base of $94,500, and
(ii)		your new RGLB amount of $99,000.
	Therefore, your GLB Base is now $99,000, and your new Maximum WB Amount is 5% of $99,000, or $4,950.
	Your LIB will now become the greater of:
(i)		your old LIB of $94,500, and
(ii)		the lesser of:
(a)			your new RGLB amount of $99,000, and
(b)			your old LIB of $94,500 plus the bonus amount of $4,500.
	Therefore, your LIB is now $99,000, and your new Maximum WB for Life Amount is 5% of $99,000, or $4,950. Your Bonus Base remains at $90,000.
l	Assume that you take a withdrawal equal to your Maximum WB for Life Amount of $4,950 in 2013. Also assume that you remain alive and continue to take annual withdrawals of $4,950 until the RGLB amount runs out in year 2032. Because the RGLB amount is now $0, the GLB Base also becomes $0. Your Bonus Base is $0 because bonus credits may only be given in the first ten Account Years. Your LIB is still $99,000. Therefore, you can continue to receive $4,950 per year as long as you are alive. Also, if there is a remaining Account Value, the Contract continues.

EXAMPLE 13: WB election at issue; withdrawals not taken immediately; Step-up elected.

l	Assume that you are age 65 at issue. Also assume that you elect the WB plan at issue. Your RGLB amount, your GLB Base, your Lifetime Income Base (LIB), and your Bonus Base all equal $100,000. Your Maximum WB Amount equals 5% of your GLB Base, or $5,000. Your Maximum WB for Life Amount equals 5% of your Lifetime Income Base, or $5,000.
l	Assume that you take no withdrawals in your first Account Year. Therefore, on January 1, 2010, the RGLB amount will be increased by $5,000, which equals 5% of the Bonus Base. Your new RGLB amount is now $105,000. Your GLB Base will now become the greater of:
(i)		your old GLB Base of $100,000, and
(ii)		your new RGLB amount of $105,000.
	Therefore, your GLB Base is now $105,000, and your new Maximum WB Amount is 5% of $105,000, or $5,250.
	Your LIB will now become the greater of:
(i)		your old LIB of $100,000, and
(ii)		the lesser of:
(a)			your new RGLB amount of $105,000, and
(b)			your old LIB of $100,000 plus the bonus amount of $5,000.
	Therefore, your LIB is now $105,000, and your new Maximum WB for Life Amount is 5% of $105,000, or $5,250. Your Bonus Base remains at $100,000.
l	Assume that you take no withdrawals in your second Account Year. Therefore, on January 1, 2011, the RGLB amount will be increased by $5,000, which equals 5% of the Bonus Base. Your new RGLB amount is now $110,000. Your GLB Base will now become the greater of:
(i)		your old GLB Base of $105,000, and
(ii)		your new RGLB amount of $110,000.
	Therefore, your GLB Base is now $110,000, and your new Maximum WB Amount is 5% of $110,000, or $5,500.
	Your LIB will now become the greater of:
(i)		your old LIB of $105,000, and
(ii)		the lesser of:
(a)			your new RGLB amount of $110,000, and
(b)			your old LIB of $105,000 plus the bonus amount of $5,000.
	Therefore, your LIB is now $110,000, and your new Maximum WB for Life Amount is 5% of $110,000, or $5,500. Your Bonus Base remains at $100,000.
l	Assume that you take no withdrawals in your third Account Year. Therefore, on January 1, 2012, the RGLB amount will be increased by $5,000, which equals 5% of the Bonus Base. Your new RGLB amount is now $115,000. Your GLB Base will now become the greater of:
(i)		your old GLB Base of $110,000, and
(ii)		your new RGLB amount of $115,000.
	Therefore, your GLB Base is now $115,000, and your new Maximum WB Amount is 5% of $115,000, or $5,750.
	Your LIB will now become the greater of:
(i)		your old LIB of $115,000, and
(ii)		the lesser of:
(a)			your new RGLB amount of $115,000, and
(b)			your old LIB of $110,000 plus the bonus amount of $5,000.
	Therefore, your LIB is now $115,000, and your new Maximum WB for Life Amount is 5% of $115,000, or $5,750. Your Bonus Base remains at $100,000.
l	Assume that on January 2, 2012 your Account Value is $118,000. Since you have have passed your first Account Anniversary and have not stepped-up within the past year, and since your Account Value is greater than both the GLB Base and the LIB, you may step up your WB plan guarantees. Assume that you do elect to step up. Your RGLB amount, your GLB Base, your LIB and your Bonus Base are all now equal to $118,000. Your new Maximum WB Amount is 5% of $118,000, or $5,900. Your new Maximum WB for Life Amount is 5% of $118,000, or $5,900.
l	Assume that you take no withdrawals in your fourth Account Year. Therefore, on January 1, 2013, the RGLB amount will be increased by $5,900, which equals 5% of the Bonus Base. Your new RGLB amount is now $123,900. Your GLB Base will now become the greater of:
(i)		your old GLB Base of $118,000, and
(ii)		your new RGLB amount of $123,900.
	Therefore, your GLB Base is now $123,900, and your new Maximum WB Amount is 5% of $123,900, or $6,195.
	Your LIB will now become the greater of:
(i)		your old LIB of $118,000, and
(ii)		the lesser of:
(a)			your new RGLB amount of $123,900, and
(b)			your old LIB of $118,000 plus the bonus amount of $5,900.
	Therefore, your LIB is now $123,900, and your new Maximum WB for Life Amount is 5% of $123,900, or $6,195. Your Bonus Base remains at $118,000.
l	Assume that you take a withdrawal equal to your Maximum WB for Life Amount of $6,195 in your fifth Account Year. Your RGLB amount will be reduced by the amount of the withdrawal, so that it will equal $123,900 - $6,195, or $117,705. Your GLB Base will remain at $123,900, so your Maximum WB Amount will remain at 5% of $123,900, or $6,195. Your LIB will also remain at $123,900, so your Maximum WB for Life Amount will remain at 5% of $123,900, or $6,195. Your Bonus Base remains at $118,000.
l	Assume that you remain alive and that you continue to make withdrawals of $6,195 until the RGLB amount runs out in year 2032. Because the RGLB amount is now $0, the GLB Base also becomes $0. Your Bonus Base is $0 because bonus credits may only be given in the first ten Account Years. Your LIB is still $123,900. Therefore, you can continue to receive $6,195 per year as long as you are alive. Also, if there is a remaining Account Value, the Contract continues.

EXAMPLE 14: Switch from AB to WB; No withdrawals under the AB Plan.

l	Assume that you are age 65 at issue. Assume that you elect the AB plan. Your GLB amount at issue and your Bonus Base at issue are both equal to $100,000 (your Purchase Payment amount). Assume that you take no withdrawals in your first Account Year. Therefore, on January 1, 2010, your accrued bonus amount is $5,000, which equals 5% of the Bonus Base. Since no withdrawals have been taken, your GLB amount and your Bonus Base both remain at $100,000.
l	Assume that you take no withdrawals in your second Account Year. Therefore, on January 1, 2011, your accrued bonus amount is $10,000, which equals $5,000 (5% of the Bonus Base) plus your previous accrued bonus amount of $5,000. Since no withdrawals have been taken, your GLB amount and your Bonus Base both remain at $100,000.
l	Assume that you take no withdrawals in your third Account Year. Therefore, on January 1, 2012, your accrued bonus amount is $15,000, which equals $5,000 (5% of the Bonus Base) plus your previous accrued bonus amount of $10,000. Since no withdrawals have been taken, your GLB amount and your Bonus Base both remain at $100,000.
l	Assume that while you are in your fourth Account Year, you switch to the WB plan. Assume that you have not taken any withdrawals yet. Your RGLB amount is now equal to your old GLB amount of $100,000 plus your accrued bonus amount of $15,000, for a total of $115,000. Your GLB Base and your LIB are both set equal to the RGLB amount at the time of conversion to the WB plan. Therefore, both the GLB Base and the LIB are equal to $115,000. Your Maximum WB Amount equals 5% of your GLB Base, or $5,750. Your Maximum WB for Life Amount equals 5% of your LIB, or $5,750. Your Bonus Base remains at $100,000. Since you have switched to the WB plan, your accrued bonus amount becomes $0.
l	Assume that you take no withdrawals in your fourth Account Year. Therefore, on January 1, 2013, the RGLB amount will be increased by $5,000, which equals 5% of the Bonus Base. Your new RGLB amount is now $120,000. Your GLB Base will now become the greater of:
(i)		your old GLB Base of $115,000, and
(ii)		your new RGLB amount of $120,000.
	Therefore, your GLB Base is now $120,000, and your new Maximum WB Amount is 5% of $120,000, or $6,000.
	Your LIB will now become the greater of:
(i)		your old LIB of $115,000, and
(ii)		the lesser of:
(a)			your new RGLB amount of $120,000, and
(b)			your old LIB of $115,000 plus the bonus amount of $5,000.
	Therefore, your LIB is now $120,000, and your new Maximum WB for Life Amount is 5% of $120,000, or $6,000. Your Bonus Base remains at $100,000.
l	Assume that you take a withdrawal equal to your Maximum WB for Life Amount of $6,000 in your fifth Account Year. Your RGLB amount will be reduced by the amount of the withdrawal, so that it will equal $120,000 - $6,000, or $114,000. Your GLB Base will remain at $120,000, so your Maximum WB Amount will remain at 5% of $120,000, or $6,000. Your LIB will also remain at $120,000, so your Maximum WB for Life Amount will remain at 5% of $120,000, or $6,000. Your Bonus Base remains at $100,000.
l	Assume that you remain alive and that you continue to make withdrawals of $6,000 until the RGLB amount runs out in year 2032. Because the RGLB amount is now $0, the GLB Base also becomes $0. Your Bonus Base is $0 because bonus credits may only be given in the first ten Account Years. Your LIB is still $120,000. Therefore, you can continue to receive $6,000 per year as long as you are alive. Also, if there is a remaining Account Value, the Contract continues.

EXAMPLE 15: Switch from AB to WB; withdrawals under the AB Plan.

l	Assume that you are age 65 at issue. Assume that you elect the AB plan. Your GLB amount at issue and your Bonus Base at issue are both equal to $100,000 (your Purchase Payment amount). Assume that you take no withdrawals in your first Account Year. Therefore, on January 1, 2010, your accrued bonus amount is $5,000, which equals 5% of the Bonus Base. Since no withdrawals have been taken, your GLB amount and your Bonus Base both remain at $100,000.
l	Assume that you take no withdrawals in your second Account Year. Therefore, on January 1, 2011, your accrued bonus amount is $10,000, which equals $5,000 (5% of the Bonus Base) plus your previous accrued bonus amount of $5,000. Since no withdrawals have been taken, your GLB amount and your Bonus Base both remain at $100,000.
l	Assume that on March 10, 2011 (in your third Account Year), your Account Value is $80,000. Also assume that you take a withdrawal of $10,000 on this date. Therefore, your ending Account Value on March 10, 2011 is $70,000. Your GLB amount, Bonus Base, and accrued bonus amount are reduced proportionally to the amount withdrawn. Therefore, your new GLB amount is $100,000 x ($70,000 ÷ $80,000) = $87,500. Your new Bonus Base is $100,000 x ($70,000 ÷ $80,000) = $87,500. Your new accrued bonus amount is $10,000 x ($70,000 ÷ $80,000) = $8,750
l	Assume that while you are in your fourth Account Year, you switch to the WB plan. Your RGLB amount is now equal to your old GLB amount of $87,500 plus your accrued bonus amount of $8,750, for a total of $96,250. Your GLB Base and your LIB are both set equal to the RGLB amount at the time of conversion to the WB plan. Therefore, both the GLB Base and the LIB are equal to $96,250. Your Maximum WB Amount equals 5% of your GLB Base, or $4,812. Your Maximum WB for Life Amount equals 5% of your LIB, or $4,812. Your Bonus Base remains at $87,500. Since you have switched to the WB plan, your accrued bonus amount becomes $0.
l	Assume that you take no withdrawals in your fourth Account Year. Therefore, on January 1, 2013, the RGLB amount will be increased by $4,375, which equals 5% of the Bonus Base. Your new RGLB amount is now $100,625. Your GLB Base will now become the greater of:
(i)		your old GLB Base of $96,250, and
(ii)		your new RGLB amount of $100,625.
	Therefore, your GLB Base is now $100,625, and your new Maximum WB Amount is 5% of $100,625, or $5,031.
	Your LIB will now become the greater of:
(i)		your old LIB of $96,250, and
(ii)		the lesser of:
(a)			your new RGLB amount of $100,625, and
(b)			your old LIB of $96,250 plus the bonus amount of $4,375.
	Therefore, your LIB is now $100,625, and your new Maximum WB for Life Amount is 5% of $100,625, or $5,031. Your Bonus Base remains at $87,500.
l	Assume that you take a withdrawal equal to your Maximum WB for Life Amount of $5,031 in your fifth Account Year. Your RGLB amount will be reduced by the amount of the withdrawal, so that it will equal $100,625 - $5,031, or $95,594. Your GLB Base will remain at $100,625, so your Maximum WB Amount will remain at 5% of $100,625, or $5,031. Your LIB will also remain at $100,625, so your Maximum WB for Life Amount will remain at 5% of $100,625, or $5,031. Your Bonus Base remains at $87,500.
l	Assume that you remain alive and that you continue to make withdrawals of $5,031 until the RGLB amount runs out in year 2032. Because the RGLB amount is now $0, the GLB Base also becomes $0. Your Bonus Base is $0 because bonus credits may only be given in the first ten Account Years. Your LIB is still $100,625. Therefore, you can continue to receive $5,031 per year as long as you are alive. Also, if there is a remaining Account Value, the Contract continues.

EXAMPLE 16: Switch from AB to WB; Step-up while in AB Plan.

l	Assume that you are age 65 at issue. Assume that you elect the AB plan. Your GLB amount at issue and your Bonus Base at issue are both equal to $100,000 (your Purchase Payment amount). Assume that you take no withdrawals in your first Account Year. Therefore, on January 1, 2010, your accrued bonus amount is $5,000, which equals 5% of the Bonus Base. Since no withdrawals have been taken, your GLB amount and your Bonus Base both remain at $100,000.
l	Assume that you take no withdrawals in your second Account Year. Therefore, on January 1, 2011, your accrued bonus amount is $10,000, which equals $5,000 (5% of the Bonus Base) plus your previous accrued bonus amount of $5,000. Since no withdrawals have been taken, your GLB amount and your Bonus Base both remain at $100,000.
l	Assume that you take no withdrawals in your third Account Year. Therefore, on January 1, 2012, your accrued bonus amount is $15,000, which equals $5,000 (5% of the Bonus Base) plus your previous accrued bonus amount of $10,000. Since no withdrawals have been taken, your GLB amount and your Bonus Base both remain at $100,000.
l	Assume that on January 2, 2012 your Account Value is $118,000. Since you have passed your first Account Anniversary and have not stepped-up within the past year, and since your Account Value is greater than your GLB amount, you may elect to step up to a new ten year period, with a new GLB amount of $118,000. Assume that you do elect to step up. Your GLB amount is now equal to $118,000. Also, your Bonus Base is now equal to $118,000. Your AB plan “maturity date” is now January 2, 2022. Since your new GLB amount of $118,000 is greater than the sum of your old GLB amount of $100,000 plus your old accrued bonus amount of $15,000, your new accrued bonus amount is set equal to $0.
l	Assume that you take no withdrawals in your fourth Account Year. Therefore, on January 1, 2013, your accrued bonus amount is $5,900, which equals $5,900 (5% of the Bonus Base) plus your previous accrued bonus amount of $0. Since no withdrawals have been taken, your GLB amount and your Bonus Base both remain at $118,000.
l	Assume that while you are in your fifth Account Year, you switch to the WB plan. Assume that you have not taken any withdrawals yet. Your RGLB amount is now equal to your old GLB amount of $118,000 plus your accrued bonus amount of $5,900, for a total of $123,900. Your GLB Base and your LIB are both set equal to the RGLB amount at the time of conversion to the WB plan. Therefore, both the GLB Base and the LIB are equal to $123,900. Your Maximum WB Amount equals 5% of your GLB Base, or $6,195. Your Maximum WB for Life Amount equals 5% of your LIB, or $6,195. Your Bonus Base remains at $118,000. Since you have switched to the WB plan, your accrued bonus amount becomes $0.
l	Assume that you take no withdrawals in your fifth Account Year. Therefore, on January 1, 2014, the RGLB amount will be increased by $5,900, which equals 5% of the Bonus Base. Your new RGLB amount is now $129,800. Your GLB Base will now become the greater of:
(i)		your old GLB Base of $123,900, and
(ii)		your new RGLB amount of $129,800.
	Therefore, your GLB Base is now $129,800, and your new Maximum WB Amount is 5% of $129,800, or $6,490.
	Your LIB will now become the greater of:
(i)		your old LIB of $123,900, and
(ii)		the lesser of:
(a)			your new RGLB amount of $129,800, and
(b)			your old LIB of $123,900 plus the bonus amount of $5,900.
	Therefore, your LIB is now $129,800, and your new Maximum WB for Life Amount is 5% of $129,800, or $6,490. Your Bonus Base remains at $118,000.
l	Assume that you take a withdrawal equal to your Maximum WB for Life Amount of $6,490 in your sixth Account Year. Your RGLB amount will be reduced by the amount of the withdrawal, so that it will equal $129,800 - $6,490, or $123,310. Your GLB Base will remain at $129,800, so your Maximum WB Amount will remain at 5% of $129,800, or $6,490. Your LIB will also remain at $129,800, so your Maximum WB for Life Amount will remain at 5% of $129,800, or $6,490. Your Bonus Base remains at $118,000.
l	Assume that you remain alive and that you continue to make withdrawals of $6,490 until the RGLB amount runs out in year 2033. Because the RGLB amount is now $0, the GLB Base also becomes $0. Your Bonus Base is $0 because bonus credits may only be given in the first ten Account Years. Your LIB is still $129,800. Therefore, you can continue to receive $6,490 per year as long as you are alive. We will continue to charge the rider fee for as long as you are eligible to receive benefits under the WB Plan. The Owner can annuitize as long as there is a remaining Account Value, but if Account Value drops to zero, the Contract terminates.

EXAMPLE 17: Switch from AB to WB; Step-up while in AB Plan.

l	Assume that you are age 65 at issue. Assume that you elect the AB plan. Your GLB amount at issue and your Bonus Base at issue are both equal to $100,000 (your Purchase Payment amount). Assume that you take no withdrawals in your first Account Year. Therefore, on January 1, 2010, your accrued bonus amount is $5,000, which equals 5% of the Bonus Base. Since no withdrawals have been taken, your GLB amount and your Bonus Base both remain at $100,000.
l	Assume that you take no withdrawals in your second Account Year. Therefore, on January 1, 2011, your accrued bonus amount is $10,000, which equals $5,000 (5% of the Bonus Base) plus your previous accrued bonus amount of $5,000. Since no withdrawals have been taken, your GLB amount and your Bonus Base both remain at $100,000.
l	Assume that you take no withdrawals in your third Account Year. Therefore, on January 1, 2012, your accrued bonus amount is $15,000, which equals $5,000 (5% of the Bonus Base) plus your previous accrued bonus amount of $10,000. Since no withdrawals have been taken, your GLB amount and your Bonus Base both remain at $100,000.
l	Assume that on January 2, 2012 your Account Value is $112,000. Since you have passed your first Account Anniversary and have not stepped-up within the past year, and since your Account Value is greater than your GLB amount, you may elect to step up to a new ten year period, with a new GLB amount of $112,000. Assume that you do elect to step up. Your GLB amount is now equal to $112,000. Also, your Bonus Base is now equal to $112,000. Your AB plan “maturity date” is now January 2, 2022. Since your new GLB amount of $112,000 is less than the sum of your old GLB amount of $100,000 plus your old accrued bonus amount of $15,000, your new accrued bonus amount is set equal to the sum of your old GLB amount of $100,000 plus your old accrued bonus amount of $15,000, less your new GLB amount of $112,000. Therefore, your new accrued bonus amount is $3,000.
l	Assume that you take no withdrawals in your fourth Account Year. Therefore, on January 1, 2013, your accrued bonus amount is $8,600, which equals $5,600 (5% of the Bonus Base) plus your previous accrued bonus amount of $3,000. Since no withdrawals have been taken, your GLB amount and your Bonus Base both remain at $112,000.
l	Assume that while you are in your fifth Account Year, you switch to the WB plan. Assume that you have not taken any withdrawals yet. Your RGLB amount is now equal to your old GLB amount of $112,000 plus your accrued bonus amount of $8,600, for a total of $120,600. Your GLB Base and your LIB are both set equal to the RGLB amount at the time of conversion to the WB plan. Therefore, both the GLB Base and the LIB are equal to $120,600. Your Maximum WB Amount equals 5% of your GLB Base, or $6,030. Your Maximum WB for Life Amount equals 5% of your LIB, or $6,030. Your Bonus Base remains at $112,000. Since you have switched to the WB plan, your accrued bonus amount becomes $0.
l	Assume that you take no withdrawals in your fifth Account Year. Therefore, on January 1, 2014, the RGLB amount will be increased by $5,600, which equals 5% of the Bonus Base. Your new RGLB amount is now $126,200. Your GLB Base will now become the greater of:
(i)			your old GLB Base of $120,600, and
(ii)			your new RGLB amount of $126,200.
	Therefore, your GLB Base is now $126,200, and your new Maximum WB Amount is 5% of $126,200, or $6,310.
	Your LIB will now become the greater of:
(i)		your old LIB of $120,600, and
(ii)		the lesser of:
(a)				your new RGLB amount of $126,200, and
(b)				your old LIB of $120,600 plus the bonus amount of $5,600.
	Therefore, your LIB is now $126,200, and your new Maximum WB for Life Amount is 5% of $126,200, or $6,310. Your Bonus Base remains at $112,000.
l	Assume that you take a withdrawal equal to your Maximum WB for Life Amount of $6,310 in your sixth Account Year. Your RGLB amount will be reduced by the amount of the withdrawal, so that it will equal $126,200 - $6,310, or $119,890. Your GLB Base will remain at $126,200, so your Maximum WB Amount will remain at 5% of $126,200, or $6,310. Your LIB will also remain at $126,200, so your Maximum WB for Life Amount will remain at 5% of $126,200, or $6,310. Your Bonus Base remains at $112,000.
l	Assume that you remain alive and that you continue to make withdrawals of $6,310 until the RGLB amount runs out in year 2033. Because the RGLB amount is now $0, the GLB Base also becomes $0. Your Bonus Base is $0 because bonus credits may only be given in the first ten Account Years. Your LIB is still $126,200. Therefore, you can continue to receive $6,310 per year as long as you are alive. We will continue to charge the rider fee for as long as you are eligible to receive benefits under the WB Plan. The Owner can annuitize as long as there is a remaining Account Value, but if the Account Value drops to zero, the Contract terminates.

EXAMPLE 18: Calculation of Explicit Rider Charges.

l	Assume that you did not elect the WB plan at any time. Assume that your Account Value increases at an annual rate of 5% per year throughout the next ten years. Also assume that you do not elect to step-up at any time.
l	On March 31, 2009, your Account Value before the charge for Secured Returns for Life Plus is taken is $101,196.79. The charge deducted on March 31, 2009 is $126.50 ($101,196.79 x .00125). Therefore, your ending Account Value on March 31, 2009 is $101,070.29 ($101,196.79 - $126.50).
l	On June 30, 2009, your Account Value before the charge for Secured Returns for Life Plus is taken is $102,307.23. The fee deducted on June 30, 2009 is $127.88 ($102,307.23 x .00125). Therefore, your ending Account Value on June 30, 2009 is $102,179.35 ($102,307.23 - $127.88).
l	On September 30, 2009, your Account Value before the charge for Secured Returns for Life Plus is taken is $103,443.69. The fee deducted on September 30, 2009 is $129.30 ($103,443.69 x .00125). Therefore, your ending Account Value on September 30, 2009 is $103,314.39 ($103,443.69 - $129.30).
l	This pattern continues until the maturity date for your Benefit of January 1, 2019. On that date, your Account will be credited with a payment. If your current Account Value is less than your current GLB amount, then your Account will be credited with the difference between these two amounts. If your current Account Value is greater than your current GLB amount, then your Account will be credited with the sum of all of Secured Returns for Life Plus charges that have been made. Note that if Secured Returns for Life Plus was revoked or cancelled before the maturity date for your Benefit of January 1, 2019, then no Secured Returns for Life Plus credit will be made to your Account.

EXAMPLE 19: One Year Step-up elected under AB Plan.

l	Assume that you are age 65 at issue. Assume that you elect the AB plan. Your Guaranteed Living Benefit amount (“GLB amount”) at issue and your Bonus Base at issue are both equal to $100,000 (your Purchase Payment amount). Assume that you take no withdrawals in your first Account Year. Therefore, on January 1, 2010, your accrued bonus amount is $5,000, which equals 5% of the Bonus Base. Since no withdrawals have been taken, your GLB amount and your Bonus Base both remain at $100,000.
l	Assume that on January 1, 2010 your Account Value is $118,000. Since your Account Value is greater than your GLB amount, you may elect to step up to a new ten year period, with a new GLB amount of $118,000. Assume that you do elect to step up. Your GLB amount is now equal to $118,000. Also, your Bonus Base is now equal to $118,000. Your AB plan Maturity Date is now January 1, 2020. Since your new GLB amount of $118,000 is greater than the sum of your old GLB amount of $100,000 plus your old accrued bonus amount of $5,000, your new accrued bonus amount is set equal to $0.
l	Assume that you remain in the AB plan until it “matures” on January 1, 2020. Assume that you have taken no withdrawals since your Contract was issued. Your accrued bonus amount is $53,100 ($5,900 per year for nine years). Since your rider has “matured” in the AB plan, the accrued bonus amount becomes $0. Assume that your Account Value on January 1, 2020 is $112,000. Since your Account Value is less than your GLB amount by $6,000, an amount equal to $6,000 will be deposited into your Contract ($118,000 - $112,000).

APPENDIX F -

RETIREMENT INCOME ESCALATORSM

The optional living benefit rider known as Retirement Income Escalator (“RIE”) was available for issued after May 5, 2008 prior to October 20, 2008 and certain contracts issued after October 20, 2008. The following information applies to your Contract if you elected to participate in RIE. RIE is no longer available for sale on new Contracts.

RIE provides an annual income guarantee for life.  Your income amount will not decrease, provided that your withdrawals do not exceed the guaranteed amount in any year.  In general, the longer you wait for your first withdrawal under RIE, the larger the guaranteed annual income amount.  To describe how RIE works, we use the following definitions:

RIE Coverage Date:	Your Issue Date if you are at least age 59½ at issue; otherwise, the first Account Anniversary after you attain age 59½.
Annual Withdrawal Amount:	The total guaranteed amount available for withdrawal each Account Year during your life, provided that you comply with certain conditions.  The Annual Withdrawal Amount is equal to your current Withdrawal Benefit Base multiplied by your Lifetime Withdrawal Percentage. (You should be aware that certain actions you take could significantly reduce the amount of your Annual Withdrawal Amount.)
Designated Funds:	The limited investment options you can choose if you are participating in a living benefit.
Lifetime Withdrawal Percentage:	The percentage used to calculate your Annual Withdrawal Amount. The percentage will be 5%, 6%, or 7% depending upon your age on your first withdrawal under the Contract after your RIE Coverage Date. Once determined, the percentage is set for the life of your RIE.
Withdrawal Benefit Base:	The amount used to calculate (1) your Annual Withdrawal Amount and (2) your cost for RIE.
RIE Bonus Period:	A ten-year period commencing on the Issue Date and ending on your tenth Account Anniversary. If you “step up” your RIE (described below) during the RIE Bonus Period, the RIE Bonus Period is extended to ten years from the date of the step-up.
Bonus Base:	The amount on which bonuses are calculated.  The Bonus Base is equal to the sum of your Purchase Payments, increased by any “step-ups” (described below) and reduced proportionately by any withdrawal taken prior to your RIE Coverage Date or any excess withdrawals (see “Excess Withdrawals” under “Withdrawals Under RIE”).
You and Your:	The terms “you” and “your” refer to the oldest Participant or the surviving spouse of the oldest Participant, as described under “Death of Participant Under RIE with Single-Life Coverage.” In the case of a non-natural Participant, these terms refer to the oldest annuitant.

Upon annuitization, RIE and any elected optional death benefit rider automatically terminate.

RIE allows you to withdraw a guaranteed amount of money each year, beginning on your RIE Coverage Date, until the death of any Participant if single-life coverage is elected (or until the death of both the Participant and the Participant's spouse if joint-life coverage is elected). Your right to take withdrawals under RIE continues regardless of the investment performance of a Designated Fund, provided that you comply with certain requirements. The amount you can withdraw, in any one year, is 5%, 6% or 7% of your Withdrawal Benefit Base, depending upon your age on the date of your first withdrawal after your RIE Coverage Date.

In addition, if you make no withdrawals in an Account Year during your RIE Bonus Period, we will increase your Withdrawal Benefit Base by an amount equal to 7% of your Bonus Base.  The RIE Bonus Period is a 10-year period commencing on your Issue Date.  The period will be extended for an additional 10 years commencing on each step-up of the Withdrawal Benefit Base (see  “Step-Up Under RIE” in this Appendix), provided that the step up occurs prior to the conclusion of the current 10-year period.

If you are participating in RIE, you may not make Purchase Payments after the first year following your Issue Date.  After the first Account Anniversary, any Purchase Payments submitted by a Participant while participating in RIE will be treated as “Not in Good Order” and returned to the Participant, unless the Participant instructs us to terminate his participation in RIE.

To participate in RIE, all of your Account Value must be invested in a Designated Fund at all times during the term of RIE. (The “term” of RIE is for life, unless your Withdrawal Benefit Base is reduced to zero or your RIE is terminated or cancelled as described in this Appendix under “Cancellation of RIE,” “Depleting Your Account Value,” and “Annuitization Under RIE.”) See “Designated Funds” in the prospectus to which this Appendix is attached.

Under RIE, you have the option of choosing between single-life coverage and joint-life coverage. These options are described in greater detail under “Joint-Life Coverage,” “Death of Participant Under RIE with Single-Life Coverage,” and “Death of Participant Under RIE with Joint-Life Coverage” in this Appendix.

Determining Your Withdrawal Benefit Base

On the Issue Date, we set your Withdrawal Benefit Base equal to your initial Purchase Payment. Thereafter, your Withdrawal Benefit Base is:

l	decreased following any withdrawals you take prior to your RIE Coverage Date;
l	decreased following any withdrawals you take after your RIE Coverage Date, if such withdrawal is in excess of the Annual Withdrawal Amount at the time of the withdrawal;
l	increased by any applicable bonuses;
l	increased by any step-ups as described under “Step-Up Under RIE”; and
l	increased by any subsequent Purchase Payments you make during the first year following the Issue Date.

Determining Your Annual Withdrawal Amount

Your Annual Withdrawal Amount is calculated when you make your first withdrawal after your RIE Coverage Date.  It is a set percentage of your Withdrawal Benefit Base.  This percentage, known as the Lifetime Withdrawal Percentage, is determined based upon your age at that time, as follows:

Your Age on the Date of the First Withdrawal After Your RIE Coverage Date*	Lifetime Withdrawal Percentage
59½ - 69	5%
70 - 79	6%
80 - or older	7%

                                  *If you elected joint-life coverage, the age ranges are based upon the age of the younger spouse

                                    as described under “Joint-Life Coverage” in this Appendix.

Once set, your Lifetime Withdrawal Percentage will remain the same for the life of your RIE.  Your Annual Withdrawal Amount equals your Withdrawal Benefit Base multiplied by your Lifetime Withdrawal Percentage.  Therefore, if your Withdrawal Benefit Base changes after your Annual Withdrawal Amount is determined, your Annual Withdrawal Amount will also change.  The new Annual Withdrawal Amount will be effective on the next Account Anniversary and, at that time, will reflect any increases caused by a step-up or a bonus that took place during the prior Account Year and any decreases caused by excess withdrawals (described below) that were taken during the prior Account Year. The new Annual Withdrawal Amount will be in effect for all subsequent Account Years, unless and until there is a further change in your Withdrawal Benefit Base.

How RIE Works

Each Account Year, beginning on your RIE Coverage Date, you can take withdrawals totaling up to the amount of your Annual Withdrawal Amount, subject to the terms and conditions discussed below.  Even if your Account Value is reduced to zero, as long as your Withdrawal Benefit Base is greater than zero, you can withdraw up to your Annual Withdrawal Amount every year of your life unless you choose to cancel RIE.

If you defer taking any withdrawals in an Account Year during the RIE Bonus Period, your Withdrawal Benefit Base will be increased by an amount equal to 7% of your Bonus Base, thereby increasing your Annual Withdrawal Amount.  In this way, if you defer taking withdrawals during your early Account Years, you will be able to take larger withdrawals in later Account Years. Your Annual Withdrawal Amount is not, however, cumulative:  any unused portion of your Annual Withdrawal Amount in any Account Year cannot be applied to a future year.

Note that the timing and amount of your withdrawals may significantly decrease your total RIE, as described further in this Appendix under “Withdrawals Under RIE.”  Note also that investing in any Fund, other than a Designated Fund, will cancel RIE, as described in this Appendix under “Cancellation of RIE.”

Here is an example of how RIE works:

Assume that you are age 60 when your Contract is issued with an initial Purchase Payment of $100,000 and that you elected to participate in RIE with single-life coverage. (If you selected joint-life coverage the numbers shown in the example could be different.)  Your Withdrawal Benefit Base and your Bonus Base are each set equal to your initial Purchase Payment on your Issue Date.  Because you reached age 59½ prior to your Issue Date, your RIE Coverage Date is your Issue Date.  You can begin at any time to withdraw up to your Annual Withdrawal Amount each Account Year without reducing your Withdrawal Benefit Base.  During the RIE Bonus Period, your Withdrawal Benefit Base will increase by 7% of your Bonus Base each Account Year in which you do not take a withdrawal.  (For convenience, assume that the investment performance on your underlying investments remains neutral throughout the life of your Contract, except for Account Year 2.)
Assume that, because of good investment performance of the Designated Funds during Account Year 2, your Account Value has grown to $125,000 by the beginning of Account Year 3.  Your Contract is, therefore, eligible for an automatic step-up of its Withdrawal Benefit Base and Bonus Base.  Assume that we have not increased the percentage used to calculate the RIE Fee on newly issued Contracts; therefore we will step up your Withdrawal Benefit Base and your Bonus Base to $125,000.  Your new Annual Withdrawal Amount will be 5% of your new Withdrawal Benefit Base, or $6,250.  Going forward, your new Bonus Base will be $125,000, unless increased by another step-up or reduced by an excess withdrawal, and your RIE Bonus Period will now end on your 12th Account Anniversary (i.e., ten years after the step-up).
Account Year	Account Value	Withdrawal Benefit Base	Bonus Base	Annual Withdrawal Amount	Withdrawals
1	$100,000	$100,000	$100,000	$5,000	0
2	$100,000	$107,000	$100,000	$5,350	0
3	$125,000	$125,000	$125,000	$6,250	0
Assume you take your first withdrawal when you are age 66 in Account Year 7.  Using the above chart, we set your Lifetime Withdrawal Percentage at 5%.  Your Annual Withdrawal Amount will be equal to 5% of your Withdrawal Benefit Base. You can begin withdrawing up to $8,000 each Account Year without reducing your Withdrawal Benefit Base, as shown in the following table:
4	$125,000	$133,750	$125,000	$6,688	0
5	$125,000	$142,500	$125,000	$7,125	0
6	$125,000	$151,250	$125,000	$7,563	0
7	$125,000	$160,000	$125,000	$8,000	$8,000
8	$117,000	$160,000	$125,000	$8,000	$8,000
Assume in Account Year 9, you decide to defer taking a withdrawal.  Your Withdrawal Benefit Base will increase by 7% of your Bonus Base. Your new Annual Withdrawal Amount will be set equal to 5% of your new Withdrawal Benefit Base, as shown below:
9	$109,000	$160,000	$125,000	$8,000	$0
10	$109,000	$168,750	$125,000	$8,438	$8,438
Assume that in Account Year 14, you again decide to defer taking a withdrawal.  Your Withdrawal Benefit Base will not be increased because you are no longer in the Bonus Period, as your RIE Bonus Period ends 10 years after the previous step-up.
11	$100,563	$168,750	$125,000	$8,438	$8,438
12	$92,125	$168,750	$125,000	$8,438	$8,438
13	$83,688	$168,750	$125,000	$8,438	$8,438
14	$75,250	$168,750	$125,000	$8,438	$0
15	$75,250	$168,750	$125,000	$8,438	$8,438

There is no way to know for certain whether forgoing income in one or more years will increase or decrease the total income paid to the Participant over the life of the annuity.  Generally speaking, not taking income in a year will increase the Annual Withdrawal Amount due to the bonus and the potential for step-ups.  Therefore, not taking income in one or more years will mean that the Participant will take income in fewer years, but will be entitled to more income in those years.

The total lifetime payments to the Participant could be more or less depending upon investment performance over the life of the Contract and the age to which the Participant lives.  Better investment performance and a longer life span generally make it advantageous to forgo the Annual Withdrawal Amount in a limited number of years.

In general the Company’s risk is greater when the Participant takes the Annual Withdrawal Amount each year beginning on the RIE Coverage Date.

Withdrawals Under RIE

     Withdrawals After the RIE Coverage Date

Starting on your RIE Coverage Date, you may take withdrawals totaling up to your Annual Withdrawal Amount each Account Year without reducing your Withdrawal Benefit Base.  These withdrawals will reduce your Account Value by the amount of the withdrawal, but will not change your Withdrawal Benefit Base.

Above is an example of withdrawals taken after your RIE Coverage Date.  Because they do not exceed your Annual Withdrawal Amount, the withdrawals do not reduce your Withdrawal Benefit Base or your Annual Withdrawal Amount.

     Excess Withdrawals

If you take a withdrawal that exceeds your Annual Withdrawal Amount (or your Required Minimum Distribution Amount, if higher), your Withdrawal Benefit Base and your Bonus Base will be reduced proportionately by the excess amount of the withdrawal.  In other words, after an “excess withdrawal,” your Bonus Base and your Withdrawal Benefit Base will be reduced according to the following formulae:

Your new Bonus Base	=	A x	(	C	)
				D - E

Your new Withdrawal	=	B x	(	C	)
Benefit Base				D - E

Where:
	A   =	Your Bonus Base immediately prior to the excess withdrawal.
	B  =	Your Withdrawal Benefit Base immediately prior to the excess withdrawal.
	C   =	Your Account Value immediately after the excess withdrawal.
	D   =	Your Account Value immediately prior to the excess withdrawal.
	E   =	Your Annual Withdrawal Amount minus any prior partial withdrawals taken during the current Account Year.

Using the facts of the above example, assume that in Account Year 7, you take two withdrawals: a $4,000 withdrawal followed by a $6,000 withdrawal.  Your first withdrawal reduces your Account Value to $121,000 but does not affect your Bonus Base or Withdrawal Benefit Base because it is not in excess of your Annual Withdrawal Amount. Your second withdrawal (when combined with the first) is in excess of your $8,000 Annual Withdrawal Amount.  After your second withdrawal, your Bonus Base and your Withdrawal Benefit Base will be reduced as follows:
	Your new Bonus Base	=	125,000	x	121,000 – 6,000
					121,000 – (8,000 – 4,000)
		=	125,000	x	115,000
					117,000
		=	125,000	x	0.98291
		=	122,863
	Your new Withdrawal
	Benefit Base	=	160,000	x	121,000 – 6,000
					121,000 – (8,000 – 4,000)
		=	160,000	x	115,000
					117,000
		=	160,000	x	0.98291
		=	157,265
Going forward, your new Annual Withdrawal Amount will be reduced to 5% of your new Withdrawal Benefit Base or $7,863.

You should be aware that, if your Account Value is less than the Withdrawal Benefit Base at the time an excess withdrawal is taken (as in the above example), then your Withdrawal Benefit Base and your Bonus Benefit Base will be reduced by an amount equal to or more than the excess amount withdrawn.  Thus, excess withdrawals taken in a down market could severely reduce your RIE.

     Withdrawals Prior to the RIE Coverage Date (Early Withdrawals)

All withdrawals taken prior to your RIE Coverage Date will be treated as “early withdrawals” and your Bonus Base and your Withdrawal Benefit Base will be reduced proportionately to the amount of the withdrawal.  In other words, your Bonus Base and your Withdrawal Benefit Base will be reduced by the following formulae:

Your new Bonus Base	=	W x	(	Y	)
				Z

Your new Withdrawal	=	X x	(	Y	)
Benefit Base				Z

Where:
	W  =	Your Bonus Base immediately prior to the early withdrawal.
	X   =	Your Withdrawal Benefit Base immediately prior to the early withdrawal.
	Y  =	Your Account Value immediately after the early withdrawal.
	Z   =	Your Account Value immediately prior to the early withdrawal.

Assume that you are age 45 when your Contract is issued with an initial Purchase Payment of $100,000 and that you elected to participate in RIE with single-life coverage. (If you selected joint-life coverage the number shown in the example could be different.)  Your Withdrawal Benefit Base and your Bonus Base are each set equal to your initial Purchase Payment on your Issue Date.  Your Withdrawal Benefit Base will increase by 7% of your Bonus Base each year in which you do not take a withdrawal.  Your RIE Coverage Date will not occur until your 15th Account Anniversary (the first Account Anniversary after you reach age 59½).  Any withdrawals you take prior to that time will be “early withdrawals.” Assume that because of good investment performance of the Designated Fund during Account Year 2, your Account Value has grown to $125,000 by the beginning of Account Year 3. Your Contract is therefore eligible for an automatic step-up of its Withdrawal Benefit Base and Bonus Base. Assume that we have not increase the percentage used to calculate the RIE Fee on newly issued Contracts; therefore we will step-up your Withdrawal Benefit Base and your Bonus Base to $125,000. Assume that, in your Account Year 7, you withdraw $10,000.  Because you are age 51 (and younger than age 59½), this is an early withdrawal.
Account Year		Account Value	Withdrawal Benefit Base			Bonus Base			Annual Withdrawal Amount	Withdrawals
1		$100,000	$100,000			$100,000			$0	0
2		$100,000	$107,000			$100,000			$0	0
3		$125,000	$125,000			$125,000			$0	0
4		$125,000	$133,750			$125,000			$0	0
5		$125,000	$142,500			$125,000			$0	0
6		$125,000	$151,250			$125,000			$0	0
7		$125,000	$160,000			$125,000			$0	$10,000
At this point, your Bonus Base and your Withdrawal Benefit Base will be recalculated as follows:
	Your new Bonus Base			=	125,000		x	125,000 – 10,000
								125,000
				=	125,000		x	115,000
								125,000
				=	125,000		x	0.92000
				=	115,000
	Your new Withdrawal
	Benefit Base			=	160,000		x	125,000 –10,000
								125,000
				=	160,000		x	115,000
								125,000 –10,000
				=	160,000		x	0.92000
				=	147,200
Your Annual Withdrawal Amount will still be $0 because your have not reached your RIE Coverage Date.

You should be aware that early withdrawals could severely reduce (or even exhaust) your RIE.

In addition to reducing your RIE, any withdrawal before you reach age 59½ could have adverse tax consequences. You should consult a qualified tax professional for more information.

     Depleting Your Account Value

If your Account Value is reduced to zero as a result of an “excess withdrawal” or an “early withdrawal” (as described above), your Withdrawal Benefit Base will also be reduced to zero. Therefore, your Contract, as well as your RIE, will end.

If, on the other hand, your Account Value is reduced to zero through any combination of poor investment performance of the Designated Funds, Contract charges, and withdrawals other than excess or early withdrawals, your Withdrawal Benefit Base will not be reduced. Your Contract will therefore end, but your RIE will continue.  That is to say, regardless of your age on the day the Account Value is reduced to zero, you will be entitled to receive your Annual Withdrawal Amount each year for as long as you live.

Cost of RIE

If you elected RIE, we deduct a quarterly fee from your Account Value (“RIE Fee”). The RIE Fee will be taken as a specific deduction from your Account Value on the last valuation day of each Account Quarter. The RIE Fee will be a percentage of your Withdrawal Benefit Base.  This percentage will equal 0.1875% of your Withdrawal Benefit Base on the last day of the Account Quarter, if you elected single-life coverage (0.2375% for joint-life coverage).  The maximum RIE Fee you can pay in any one Account Year is equal to 0.75% of the highest Withdrawal Benefit Base at any point in that Account Year, if you elected single-life coverage (0.95% for joint-life coverage).

Your RIE Fee will not change during an Account Year, unless you take one of the following specific actions:

l	If you make an additional Purchase Payment during your first Account Year, you will increase your Withdrawal Benefit Base and thus your RIE Fee.
l	If you make a withdrawal before your RIE Coverage Date or a withdrawal in excess of your Annual Withdrawal Amount, you will decrease your Withdrawal Benefit Base and thus your RIE Fee.

The investment performance of the Designated Funds will not affect your RIE Fee during an Account Year.  However, as explained in this Appendix under “Step-Up Under RIE,” favorable investment performance may cause the Withdrawal Benefit Base to increase on an Account Anniversary.  That would also increase your RIE Fee.

We will continue to deduct the RIE Fee until you annuitize your Contract, your Account Value reduces to zero, or your RIE is terminated or cancelled as described under “Cancellation of RIE” in this Appendix.

We reserve the right to make special offers from time to time.  Specifically, we reserve the right to waive the RIE Fee for a limited period on newly issued Contracts. The same waiver would apply to all Contracts issued while we are making the special offer.

Step-Up Under RIE

Regardless of your age on the Issue Date, on each Account Anniversary prior to your maximum Annuity Commencement Date, we will automatically step-up your Withdrawal Benefit Base and your Bonus Base each to equal your Account Value, provided that certain requirements are satisfied.  First, you must meet certain eligibility requirements:

l	Your Account Value must equal no more than $5,000,000. (For purposes of determining the $5,000,000 limit, we reserve the right, in our sole discretion, to aggregate your Account Value with the account values of all other variable annuity contracts you own issued by Sun Life Assurance Company of Canada (U.S.) or its affiliates.)
l	Your Account Value must be greater than your current Withdrawal Benefit Base, adjusted for any 7% bonus increases.

Note that we have reserved the right to add another requirement for eligibility. We have reserved the right toonly allow step-ups if your money is invested in a Fund that is a Designated Fund for newly issued contracts. (See “Designated Funds” in the prospectus to which this Appendix is attached)

If you satisfy the eligibility requirements, then we consider whether market conditions have caused us to increase the percentage used to calculate the RIE Fee on newly issued Contracts.  If we are no longer issuing Contracts with the RIE rider then the percentage we use to calculate your RIE Fee will be set based upon current market conditions at that time. Significant changes in stock market prices, interest rate fluctuations, and competitive industry trends are among the market conditions we consider in whether to change the fee.

l

If we have not had to increase the percentage as described above, the percentage we use to calculate your RIE will remain unchanged and we will automatically step-up your Withdrawal Benefit Base.

l

If we have had to increase the percentage as described above, we offer you the opportunity to step-up at the higher percentage.  In this case, your prior written consent is required to accept the higher percentage used to calculate your RIE Fee and step-up your Withdrawal Benefit Base.  If you do not consent to the step-up and higher percentage, the step-up will not be implemented and all subsequent step-ups under your RIE will also be suspended.  You may thereafter submit an election form to us, however, to consent to the higher percentage and reactivate subsequent automatic step-ups.

After a step-up, your Annual Withdrawal Amount will be equal to your new Withdrawal Benefit Base multiplied by your Lifetime Withdrawal Percentage.  Here is an example of how we calculate a step-up under RIE:

Assume that you are age 60 when your Contract is issued with an initial Purchase Payment of $100,000 and that you elected to participate in RIE with single-life coverage. (If you selected joint-life coverage the numbers shown in the example could be different.)  Assume that, because of good investment performance of the Designated Funds during Account Year 2, your Account Value has grown to $125,000 by the beginning of Account Year 3.  Your Contract is, therefore, eligible for an automatic step-up of its Withdrawal Benefit Base and Bonus Base.  Assume that we have not increased the percentage used to calculate the RIE Fee on newly issued Contracts; therefore we will step up your Withdrawal Benefit Base and your Bonus Base to $125,000.  Your new Annual Withdrawal Amount will be 5% of your new Withdrawal Benefit Base, or $6,250.
Account Year	Account Value	Withdrawal Benefit Base	Bonus Base	Annual Withdrawal Amount	Withdrawals
1	$100,000	$100,000	$100,000	$5,000	0
2	$100,000	$107,000	$100,000	$5,350	0
3	$125,000	$125,000	$125,000	$6,250	0
4	$125,000	$133,750	$125,000	$6,688	0
5	$125,000	$142,500	$125,000	$7,125	0
6	$125,000	$151,250	$125,000	$7,563	0
7	$125,000	$160,000	$125,000	$8,000	0
Going forward, your new Bonus Base will be $125,000, unless increased by another step-up or reduced by an excess withdrawal, and your RIE Bonus Period will now end on your 12th Account Anniversary (i.e., ten years after the step-up).

Joint-Life Coverage

On the Issue Date, you had the option of electing RIE with single-life coverage or, for a higher RIE Fee, with joint-life coverage. Once you make the election, you cannot switch between joint-life and single-life coverage, regardless of any change in life events. Joint-life coverage is not available if you are unmarried on the Issue Date.

Joint-life coverage can be elected on an individually-owned Contract or on a co-owned Contract. On an individually-owned Contract, joint-life coverage is available only if your spouse is the sole beneficiary on the Issue Date and remains the sole beneficiary while RIE is in effect.  On a co-owned Contract, joint-life coverage is available only if you and your spouse are the only co-owners on the Issue Date and remain so while RIE is in effect. Whereas single-life coverage provides annual withdrawals under RIE only until any Participant dies, joint-life coverage provides annual withdrawals under RIE for as long as either you or your spouse is alive.  (Note, however, upon the death of a spouse, the Contract, (including RIE) ends.  To take annual withdrawals under RIE’s joint-life feature after the death of a spouse, the surviving spouse must first elect to continue the Contract through the “Spousal Continuance” provision.)  See also “Death of Participant Under RIE with Joint-Life Coverage” in this Appendix.

If you elected joint-life coverage, the RIE Coverage Date will be your Issue Date if the younger spouse is at least age 59½ on the Issue Date, and will be the first Account Anniversary after the younger spouse attains (or would have attained) age 59½ if the younger spouse is less than age 59½ on the Issue Date. (For purposes of joint-life coverage, the younger spouse refers to the person who was the younger spouse on the Issue Date, even if that person has died or is no longer married to the person who was his or her spouse on the Issue Date.)  Thus, “early withdrawals” will be determined based upon this definition of your RIE Coverage Date.  Your Lifetime Withdrawal Percentage will be determined based on the age that the youngerspouse is (or would have been) on the date of the first withdrawal under the Contract after the RIE Coverage Date, as follows:

Age of Younger Spouse on Date of the First Withdrawal After Your RIE Coverage Date	Lifetime Withdrawal Percentage
59½ - 69	5%
70 - 79	6%
80 - or older	7%

Once set, your Lifetime Withdrawal Percentage will remain the same for the life of your RIE.  Your Annual Withdrawal Amount equals your Withdrawal Benefit Base multiplied by your Lifetime Withdrawal Percentage.

The two spouses on the Issue Date are the only two people covered under the joint-life feature.  If a Participant remarries, the new spouse is not covered under the joint-life feature.  Therefore, if the spouse on the Issue Date is no longer your spouse, RIE benefits continue for your life and, when you die, annual withdrawals are no longer available.  Note that, when you elect joint-life coverage, you also elect the higher joint-life fee.  That fee will not change as long as RIE is in effect, regardless of any change in life events.

If one spouse is significantly younger than the other spouse, you should carefully consider whether joint-life coverage is an appropriate choice in light of the possibility of a longer waiting period before withdrawals under RIE can be made and in light of the higher fee for joint-life coverage.

Joint-life coverage may not be available on all Contracts.

Cancellation of RIE

Should you decide that RIE is no longer appropriate for you, you may cancel RIE at any time.  Upon cancellation, all benefits and charges under RIE shall cease. Once cancelled, RIE cannot be reinstated.

Although transfers among the Designated Funds are permitted as described under “Transfer Privilege,” RIE will be cancelled automatically:

● if any Purchase Payment is allocated to an investment option other than a Designated Fund; or

● if any portion of Account Value maintained in a Designated Fund is transferred into an investment option other than a Designated Fund.

A change of ownership of the Contract may also cancel your RIE.

Death of Participant Under RIE with Single-Life Coverage

If you selected single-life coverage, RIE terminates on the death of any Participant and the Beneficiary may elect to exercise any of the available options under the Death Benefit provisions of the Contract. If your surviving spouse is the sole Beneficiary and elects to continue the Contract, your spouse has the additional option of electing to participate in a new RIE rider on the original Contract (assuming that at the time of election RIE is available to new Participants and your surviving spouse meets certain eligibility requirements).  If the surviving spouse makes such election:

● the new Account Value and the new Withdrawal Benefit Base will both be set equal to the Death Benefit amount; and

● the new RIE Fee will be set by us based on market conditions at the time and may be higher than the current RIE Fee.

Death of Participant Under RIE with Joint-Life Coverage

If the surviving spouse on the Death Benefit Date was not the spouse of a Participant on the original Contract’s Issue Date, then this section does not apply, even if joint-life coverage was elected.  In such case, if a Participant dies while participating in RIE, the provisions of the section in this Appendix titled “Death of Participant Under RIE with Single-Life Coverage” will apply.

If you purchased joint-life coverage and one of the Participants dies, RIE will continue, provided that the surviving spouse, as the sole beneficiary, continues the Contract.  In such case:

● the new Account Value will be equal to the Death Benefit;

● the RIE Fee for the joint-life coverage option will continue for the surviving spouse as it was immediately prior to the death of the Participant;

● the Withdrawal Benefit Base will remain unchanged until the next Account Anniversary when a step-up could apply due to an increase in Account Value (see “Step-Up Under RIE” in this Appendix);

● if withdrawals under RIE have not yet begun, the Lifetime Withdrawal Percentage will be based on the age the younger spouse attains (or would have attained) on the date of the first withdrawal after the RIE Coverage Date;

● if withdrawals under RIE have already begun, the Lifetime Withdrawal Percentage will not change; and

● the RIE Bonus Period will continue unchanged from the original contract.

At the death of the surviving spouse, the Contract, including RIE, will terminate.

If you purchased joint-life coverage and the deceased Participant's surviving spouse does not continue the Contract, your Beneficiary may elect any available option under the Death Benefit provisions of the Contract.

Annuitization Under RIE

Under the terms of RIE, if your Account Value is greater than zero on your maximum Annuity Commencement Date, you may elect to:

(1)	surrender your Contract and receive your Cash Surrender Value,
(2)	annuitize your Account Value under one of the then currently available Annuity Options, or
(3)	annuitize your remaining Account Value as a single-life annuity (or a joint-life annuity, if joint-life coverage was elected at issue and is still eligible) with an annualized annuity payment of not less than your then current Annual Withdrawal Amount.

If you make no election, we will default your choice to option 3.

If your Account Value has been reduced to zero (other than as a result of an “early withdrawal” or an “excess withdrawal”), and your Withdrawal Benefit Base is greater than zero on or before your maximum Annuity Commencement Date, you will receive your full Annual Withdrawal Amount until you die. For a more complete discussion of this, see “Depleting Your Account Value” in this Appendix.

Certain Tax Considerations

Certain tax considerations may be important to you in connection with a living benefit, such as RIE. When you elect to participate in the Retirement Income Escalator Benefit, we will inform you that you may withdraw annual amounts up to your Yearly RMD Amount without reducing your guaranteed withdrawal benefit. To assist you in complying with the RMD requirements, each year, we will notify you in early January of your calculated Yearly RMD Amount and inform you that you may withdraw annual amounts up to your Yearly RMD Amount without reducing your guaranteed withdrawal benefit.

In the event that your Yearly RMD Amount attributable to your Contract is greater than the maximum withdrawal amount permitted each year under the RIE Benefit, we are currently waiving withdrawal provisions as follows. If you withdraw all or a portion of your Qualified Contract's Yearly RMD Amount from the Contract while participating in the RIE Benefit, we reduce your Account Value  dollar for dollar by the amount of the withdrawal. In addition, for that year only, your Annual Withdrawal Amount under the RIE Benefit will be reduced, dollar for dollar, by the amount of the withdrawal. We will not, however, penalize you if the current Federal Tax Laws require you to withdraw from your Contract an amount greater than your Annual Withdrawal Amount. In other words, we will not reduce your Annual Withdrawal Amount for future years (or your Withdrawal Benefit Base or Bonus Base), if a Yearly RMD Amount exceeds your Annual Withdrawal Amount, provided that:

● you withdraw your Qualified Contract's first Yearly RMD Amount in the calendar year you attain age 70½ rather than postponing the withdrawal of that Amount until the first quarter of the next calendar year, and

● you do not make any withdrawal from your Qualified Contract that would result in you receiving, in any Account Year, more than one calendar year's Yearly RMD Amount.

If there is any change to the current Code or IRS rules governing the timing or determination of RMD amounts (including, but not limited to, amendments to the current IRS regulations or the issuance of IRS guidance), then we reserve the right to reduce the Annual Withdrawal Amount, Withdrawal Benefit Base or Bonus Base per the terms of the rider regarding excess withdrawals, when a Yearly RMD Amount withdrawn from your Contract exceeds your Annual Withdrawal Amount. (See “Withdrawals under RIE.”) Notice will be given to Contract Owners before we exercise this right.

For further discussion of some of these considerations, please refer to “TAX CONSIDERATIONS - Impact of Optional Death Benefit and Optional Living Benefit Riders” in the Prospectus to which this Appendix is attached.

APPENDIX G -

Income ON Demand®

The optional living benefit rider known as Income ON Demand (“Income ON Demand” or “Benefit”) was available for Contracts issued after May 5, 2008 and prior to October 20, 2008 and certain contracts issued after October 20, 2008. The following information applies to your Contract if you elected to participate in Income ON Demand. Income ON Demand is no longer available for sale on new Contracts.

To describe how Income ON Demand works, we use the following definitions:

Income ON Demand Coverage Date:	Your Issue Date if you are at least age 55 at issue, otherwise the first Account Anniversary following your 55th birthday.
Annual Income Amount:	The amount added to your Stored Income Balance on each Account Anniversary beginning on the Income ON Demand Coverage Date; it is equal to 5% of your Income Benefit Base on the date of crediting.
Designated Funds:	The limited investment options you can choose if you are participating in a living benefit.
Stored Income Balance:	The amount you may withdraw at any time after age 59½ without reducing the Benefit.
Income Benefit Base:	The amount used to calculate your Annual Income Amount and your cost for Income ON Demand.
You and Your:	The terms “you” and “your” refer to the oldest Participant or the surviving spouse of the oldest Participant, as described under the sections entitled “Death of Participant Under Income ON Demand with Single-Life Coverage” and “Death of Participant Under Income ON Demand with Joint-Life Coverage.” In the case of a non-natural Participant, these terms refer to the oldest annuitant.

Upon annuitization, Income ON Demand and any elected optional death benefit rider automatically terminate.

Income ON Demand allows you to withdraw a guaranteed amount each year, beginning at age 59½, until the death of any Participant if single-life coverage is elected (or until the death of both the Participant and the Participant's spouse if joint-life coverage is elected), regardless of the investment performance of the Designated Funds, provided that you comply with certain requirements. The amount you can withdraw, in any one year, is based on 5% of your Income Benefit Base. Any amount that you do not withdraw in a given year will be stored in the Stored Income Balance and can be used for later withdrawals. The amount you can withdraw each year can be increased or decreased as described below under “Determining Your Stored Income Balance.”

In addition, if you make no withdrawals during the first 10 Account Years, regardless of your age on the Issue Date, we will credit to your Account Value an amount equal to the excess, if any, of your total Purchase Payments over your then Account Value. If you are participating in Income ON Demand, you may not make Purchase Payments after the first year following your Issue Date. After the first Account Anniversary, any Purchase Payments submitted by a Participant while participating in Income ON Demand will be treated as “Not in Good Order” and returned to the Participant, unless the Participant instructs us to terminate his participation in the rider.

You also have the option of choosing between single-life coverage and joint-life coverage. These options are described in greater detail in this Appendix under “Joint-Life Coverage” and the sections entitled “Death of Participant Under Income ON Demand with Single-Life Coverage” and “Death of Participant Under Income ON Demand with Joint-Life Coverage.”

To participate in Income ON Demand, all of your Account Value must be invested in a Designated Fund at all times during the term of Income ON Demand. (The term of Income ON Demand is for life, unless your Income Benefit Base is reduced to zero or Income ON Demand is terminated or cancelled as described in this Appendix under “Cancellation of Income ON Demand,” “Depleting Your Account Value,” and “Annuitization Under Income ON Demand.”) See “Designated Funds” in the prospectus to which this Appendix is attached.

Determining Your Income Benefit Base

On the Issue Date, we set your Income Benefit Base equal to your initial Purchase Payment. Thereafter, your Income Benefit Base is:

l	decreased following any withdrawals you take prior to becoming age 59½;
l	decreased following any withdrawals you take after becoming age 59½, if such withdrawal is in excess of the Stored Income Balance at the time of the withdrawal;
l	increased by any step-ups as described under “Step-Up Under Income ON Demand” in this Appendix;
l	increased to the extent you exercise your one-time option to use any amount of your Stored Income Balance to increase your Income Benefit Base, as described in this Appendix under “How Income ON Demand Works”; and
l	increased by any subsequent Purchase Payments you make during the first year following the Issue Date.

Determining Your Stored Income Balance

On the Income ON Demand Coverage Date, your Stored Income Balance will equal your Annual Income Amount (i.e., 5% of your Income Benefit Base on that Date). After the initial Stored Income Balance has been set, your Stored Income Balance:

l	increases by 5% of any subsequent Purchase Payments you make during the first year following the Issue Date,
l	increases on each Account Anniversary by the amount of your Annual Income Amount determined on that Anniversary,
l	decreases by the amount of any withdrawals you take, and
l	decreases by the amount you use in exercising your “one-time” option to increase your Income Benefit Base (described below under “How Income ON Demand Works”).

How Income ON Demand Works

Under the terms of Income ON Demand, you can take withdrawals up to the amount of your Stored Income Balance at any time, subject to the terms and conditions discussed below. If your Account Value is reduced to zero, as long as your Income Benefit Base is greater than zero, you will receive an amount equal to your Annual Income Amount every year of your life unless you choose to cancel the Rider. Although your Stored Income Balance will begin accumulating on the Income ON Demand Coverage Date, you may not begin withdrawing your Stored Income Balance until you are (or, for joint-life coverage, the younger spouse is) at least age 59½ without reducing your Income Benefit Base. You can continue to withdraw your Stored Income Balance until your Annuity Commencement Date.

Note that the timing and amount of your withdrawals may significantly decrease your total Income ON Demand Benefit, as described further in this Appendix under “Withdrawals Under Income ON Demand” and “Tenth-Year Credit.” Note also that investing in any Fund, other than a Designated Fund, will cancel Income ON Demand as described under “Cancellation of Income ON Demand” in this Appendix.

Your Stored Income Balance can be used in two ways. You can withdraw all or a portion of your Stored Income Balance through partial withdrawals, or you can use all or a portion of your Stored Income Balance to effect a “one-time” increase of your Income Benefit Base.

Withdrawals from your Stored Income Balance can be taken at any time after age 59½ without affecting your Income Benefit Base. If, at any time after age 59½ and prior to your Annuity Commencement Date, you make a withdrawal that does not exceed your Stored Income Balance your Stored Income Balance will be decreased by the amount withdrawn.

You also have the option to use all or a portion of your Stored Income Balance to increase your Income Benefit Base. This option allows you to increase your future Annual Income Amount. This option may be exercised only once and must occur prior to your Annuity Commencement Date and prior to the later of your tenth Account Anniversary and the Account Anniversary following your 65th birthday. If you choose to use any portion of your Stored Income Balance to increase your Income Benefit Base:

● your Stored Income Balance will be decreased by the amount used;

● the amount of Stored Income Balance used will be added to your Income Benefit Base; and

● your Annual Income Amount will be reset on your next Account Anniversary to equal 5% of the then Income Benefit Base.

After you exercise this “one-time” option, your new Annual Income Amount will be added to your Stored Income Balance on each Account Anniversary, unless and until there is another occurrence (as noted in this section) that changes your Annual Income Amount.

Here is an example of how Income ON Demand works.

Assume that you are age 60 when your Contract is issued with an initial Purchase Payment of $100,000. Assume you elected to participate in Income ON Demand. Your Income Benefit Base is equal to your initial Purchase Payment on your Issue Date. Your Annual Income Amount is $5,000 (5% of your Income Benefit Base). Therefore, $5,000 will be added each year to your Stored Income Balance.
Year	Annual Income Amount		Stored Income Balance
	(Amount Added to Stored Income Balance)		(Cumulative Balance if No Withdrawals Taken)
1	$5,000	®	$5,000
2	$5,000	®	$10,000
3	$5,000	®	$15,000
4	$5,000	®	$20,000
5	$5,000	®	$25,000
6	$5,000	®	$30,000
7	$5,000	®	$35,000
8	$5,000	®	$40,000
9	$5,000	®	$45,000
10	$5,000	®	$50,000

Assume that, immediately prior to your tenth Account Anniversary, you decide to use the full amount of your Stored Income Balance ($50,000) to increase your Income Benefit Base. Your Income Benefit Base will be increased to $150,000. Your Annual Income Amount will be $7,500 (5% of your Income Benefit Base). Therefore $7,500 will be added each year to your Stored Income Balance.
Year	Annual Income Amount		Stored Income Balance
	(Amount Added to Stored Income Balance)		(Cumulative Balance if No Withdrawals Taken)
11	$7,500	®	$7,500
12	$7,500	®	$15,000
13	$7,500	®	$22,500
14	$7,500	®	$30,000
15	$7,500	®	$37,500

Assume instead that you decide to take a lump sum withdrawal of $50,000, thus depleting your Stored Income Balance. Your Income Benefit Base will remain at $100,000. Your Annual Income Amount remains at $5,000 (5% of your Income Benefit Base). Therefore $5,000 will be added each year to your Stored Income Balance.
Year	Annual Income Amount		Stored Income Balance
	(Amount Added to Stored Income Balance)		(Cumulative Balance if No Additional Withdrawals)
11	$5,000	®	$5,000
12	$5,000	®	$10,000
13	$5,000	®	$15,000
14	$5,000	®	$20,000
15	$5,000	®	$25,000

Withdrawals Under Income ON Demand

     Withdrawals After Age 59½

Starting at age 59½, you may take annual withdrawals up to your Stored Income Balance without affecting your benefits under Income ON Demand. These withdrawals will reduce your Stored Income Balance by the full amount of the withdrawal, but will not change your Income Benefit Base.

Here is an example of a partial withdrawal that does not exceed your Stored Income Balance.

Using the facts of the first example, assume that, immediately prior to your tenth Account Anniversary, you decide to take a lump sum withdrawal of $30,000 from the $50,000 in your Stored Income Balance, thus reducing your Stored Income Balance to $20,000. Your Income Benefit Base will remain at $100,000. Your Annual Income Amount will remain at $5,000 (5% of your Income Benefit Base). Therefore $5,000 will be added each year to your Stored Income Balance.
Year	Annual Income Amount		Stored Income Balance
	(Amount Added to Stored Income Balance)		(Cumulative Balance if No Additional Withdrawals)
11	$5,000	®	$25,000
12	$5,000	®	$30,000
13	$5,000	®	$35,000
14	$5,000	®	$40,000
15	$5,000	®	$45,000

     Excess Withdrawals

If you take a withdrawal that exceeds your Stored Income Balance (or your Required Minimum Distribution Amount, if higher), your Income Benefit Base will be reset to equal the lesser of:

● the Income Benefit Base prior to the withdrawal reduced by the amount of the withdrawal in excess of the Stored Income Balance (or your yearly Required Minimum Distribution Amount, if higher), and

● the Account Value after the withdrawal.

Your Annual Income Amount will be recalculated based on the reduced Income Benefit Base. Here is an example of a withdrawal that exceeds your Stored Income Balance, thus reducing future Annual Income Amounts even if the market has performed well.

Using the facts of the first example, assume that, immediately prior to your tenth Account Anniversary, you decide to take a lump sum payment of $60,000 thus exceeding your Stored Income Balance of $50,000. Assume also that your Account Value immediately prior to the withdrawal is $120,000. Your Income Benefit Base will be reset to the lesser of (a) your old Income Benefit Base reduced by the excess of your withdrawal over the Stored Income Balance [$100,000 – ($60,000 - $50,000) = $90,000)] or (b) your new Account Value after the withdrawal ($120,000 - $60,000 = $60,000) or $60,000. Your new Annual Income Amount will be $3,000 (5% of your Income Benefit Base). Therefore $3,000 will be added each year to your Stored Income Balance.
Year	Annual Income Amount		Stored Income Balance
	(Amount Added to Stored Income Balance)		(Cumulative Balance if No Additional Withdrawals)
11	$3,000	®	$3,000
12	$3,000	®	$6,000
13	$3,000	®	$9,000
14	$3,000	®	$12,000
15	$3,000	®	$15,000

Excess withdrawals taken in a down market could even more severely reduce your benefits under Income ON Demand. Here is an example of an excess withdrawal taken after the investment performance of the Designated Funds has reduced your Account Value:

Using the facts of the preceding example, assume that your Account Value immediately prior to the withdrawal is $80,000. Your Income Benefit Base will be reset to equal the lesser of (a) your previous Income Benefit Base reduced by the excess of your withdrawal over the Stored Income Balance [$100,000 – ($60,000 - $50,000) = $90,000)] and (b) your Account Value immediately after the withdrawal ($80,000 - $60,000 = $20,000) or $20,000. Your new Annual Income Amount will be $1,000 (5% of your Income Benefit Base). Therefore, only $1,000 will be added each year to your Stored Income Balance.
Year	Annual Income Amount		Stored Income Balance
	(Amount Added to Stored Income Balance)		(Cumulative Balance if No Additional Withdrawals)
11	$1,000	®	$1,000
12	$1,000	®	$2,000
13	$1,000	®	$3,000
14	$1,000	®	$4,000
15	$1,000	®	$5,000

     Withdrawals Prior to Age 59½ (Early Withdrawals)

All withdrawals taken before age 59½ will be considered “early withdrawals” and the Income Benefit Base will be reset to equal the lesser of:

● the Income Benefit Base prior to the withdrawal reduced by the amount of the withdrawal in excess of the Stored Income Balance (or your yearly Required Minimum Distribution Amount, if higher), and

● the Account Value after the withdrawal.

Your Annual Income Amount will be recalculated based on the reduced Income Benefit Base.

Early withdrawals could severely reduce (or even exhaust) your benefits under Income ON Demand. Here is an example of an early withdrawal taken after the investment performance of the Designated Funds has reduced your Account Value.

Assume that you are age 50 when your Contract is issued with an initial Purchase Payment of $100,000 and that you elected to participate in Income ON Demand. Your Income Benefit Base is set equal to your initial Purchase Payment on your Issue Date ($100,000), but benefits under Income ON Demand do not begin to accrue until the first Account Anniversary after your 55th birthday (your Income ON Demand Coverage Date). Assume also that poor investment performance of your underlying funds has reduced your Account Value to $85,000 by the end of your second Account Year. At that time, you decide to withdraw $5,000, further reducing your Account Value to $80,000. Your Income Benefit Base will be reset to $80,000 which is the lesser of (1) your previous Income Benefit Base reduced by the amount of the withdrawal in excess of the Stored Income Balance ($100,000 - $5,000 = $95,000) and (2) your Account Value immediately after the withdrawal ($85,000 - $5,000 = $80,000). Assuming you take no additional withdrawals prior to your Income ON Demand Coverage Date, your Annual Income Amount will be $4,000 (5% of your Income Benefit Base.)
Year	Income Benefit Base	Annual Income Amount		Stored Income Balance
	(beginning of Account Year)	(Amount Added to Stored Income Balance)		(Cumulative Balance if No Withdrawals Taken)
1	$100,000	$0	®	$0
2	$100,000	$0	®	$0
3	$80,000	$0	®	$0
4	$80,000	$0	®	$0
5	$80,000	$0	®	$0
6	$80,000	$4,000	®	$4,000
7	$80,000	$4,000	®	$8,000
8	$80,000	$4,000	®	$12,000
9	$80,000	$4,000	®	$16,000
10	$80,000	$4,000	®	$20,000

In addition to reducing your benefits under Income ON Demand, any withdrawal before age 59½ could have adverse tax consequences. You should consult a qualified tax professional for more information.

     Depleting Your Account Value

If your Account Value is reduced to zero as a result of an “excess withdrawal” or an “early withdrawal” (as described above), your Stored Income Balance and your Income Benefit Base will both be reduced to zero. Therefore, your Contract, as well as Income ON Demand, will end.

If, on the other hand, your Account Value is reduced to zero through any combination of poor investment performance of the Designated Funds, Contract charges, and withdrawals other than excess or early withdrawals, your Income Benefit Base will not be reduced. Your Contract will therefore end, but Income ON Demand will continue.  That is to say, regardless of your age on the day the Account Value is reduced to zero, you will be entitled to receive annual payments. These payments will be equal to 5% of the amount of your Income Benefit Base, as determined on that day and increased (if you choose) by any remaining Stored Income Balance as described below. These payments will begin on the first Account Anniversary after your Account Value goes to zero and continue for as long as you live. If you elected joint-life coverage, the payments will continue until the death of both you and your spouse as described in this Appendix under “Death of Participant Under Income ON Demand with Joint-Life Coverage.” If you have any remaining Stored Income Balance on the day your Account Value is reduced to zero, you will be notified that, before you begin to receive your “annual lifetime payments,” you must deplete your Stored Income Balance by:

(a)	taking a lump sum withdrawal of your remaining Stored Income Balance,
(b)	using the remaining amount of your Stored Income Balance to increase your Income Benefit Base (and thus the amount of your “annual lifetime payments”), if you have not already exercised this one-time option as described in this Appendix under “How Income ON Demand Works,” or
(c)	using a combination of (a) and (b).

You should be aware, however, that a lump sum withdrawal could be subject to certain tax consequences. You should consult a qualified tax professional for more information.

Cost of Income ON Demand

If you elected Income ON Demand, we will deduct a quarterly fee from your Account Value (“Income ON Demand Fee”). The Income ON Demand Fee will be taken as a specific deduction from your Account Value on the last valuation day of each Account Quarter. The Fee will be a percentage of your Income Benefit Base. This percentage rate will equal 0.1625% of your Income Benefit Base on the last day of the Account Quarter, if you elected single-life coverage (0.2125% for joint-life coverage). The maximum Income ON Demand Fee you can pay in any one Account Year is equal to 0.65% of the highest Income ON Demand Benefit Base at any point in that Account Year, if you elected single-life coverage (0.85% for joint-life coverage).

Your Income ON Demand Fee will not change during an Account Year, unless you take one of three specific actions:

l	If you make an additional Purchase Payment during your first Account Year, you will increase your Income Benefit Base and thus your Income ON Demand Fee.
l	If you take advantage of the one-time option to use all or a portion of your Stored Income Balance to increase your Income Benefit Base and thus your Income ON Demand Fee.
l	If you make a withdrawal prior to age 59½ or a withdrawal in excess of your Stored Income Balance, you will decrease your Income Benefit Base and thus your Income ON Demand Fee.

The investment performance of the Designated Funds will not affect your Income ON Demand Fee during an Account Year. However, as stated in this Appendix under “Step-Up Under Income ON Demand,” favorable investment performance may cause the Income Benefit Base to increase on an Account Anniversary. That would also increase your Income ON Demand Fee.

We will continue to deduct the Income ON Demand Fee until you annuitize your Contract, your Account Value reduces to zero, or your Income ON Demand Benefit is cancelled as described under “Cancellation of Income ON Demand” in this Appendix.

Tenth-Year Credit

If you make no withdrawals during your first ten Account Years, on your tenth Account Anniversary, we will credit your Account Value with an amount equal to the excess, if any, of your total Purchase Payments over your then Account Value. Your Income Benefit Base will not change. This tenth-year credit will be allocated to the Designated Fund in which you are invested at the time.

Step-Up Under Income ON Demand

Regardless of your age on the Issue Date, on each Account Anniversary prior to your maximum Annuity Commencement Date, we will automatically step-up your Income Benefit Base, provided that you satisfy certain requirements. First, you must meet eligibility requirements:

l	Your Account Value less your Stored Income Balance must equal no more than $5,000,000. (For purposes of determining the $5,000,000 limit, we reserve the right, in our sole discretion, to aggregate your Account Value with the account values of all other variable annuity contracts you own issued by Sun Life Assurance Company of Canada (U.S.) or its affiliates.)
l	Your Account Value less your Stored Income Balance must be greater than your current Income Benefit Base. (If you have not yet reached your Income ON Demand Coverage Date and therefore do not yet have a Stored Income Balance, your Account Value must only be greater than your current Income Benefit Base.)

If you satisfy the eligibility requirements, we then consider whether market conditions have caused us to increase the percentage rate used to calculate the Income ON Demand Fee on newly issued Contracts. If we are no longer issuing Contracts with the Income ON Demand rider then the percentage rate we use to calculate your Income ON Demand Fee will be set based upon current market conditions at that time. Significant changes in stock market prices, interest rate fluctuations, and competitive industry trends are among the market conditions we consider in whether to change the fee.

l

If we have not had to increase the percentage rate as described above, the percentage rate we use to calculate your Income ON Demand Fee will remain unchanged and we will automatically step-up your Income Benefit Base.

l

If we have had to increase the percentage rate as described above, we offer you the opportunity to step-up at the higher percentage rate. In this case, your written consent is required to accept the higher percentage rate used to calculate your Income ON Demand Fee and step-up Income ON Demand.  If you do not consent to the step-up and higher percentage, the step-up will not be implemented and all subsequent step-ups under Income ON Demand will also be suspended. You may thereafter submit an election form to us, however, in order to consent to the then-applicable percentage rate and thus reactivate subsequent automatic step-ups.

At the time of step-up, the step-up will increase your Income Benefit Base to an amount equal to your Account Value less your Stored Income Balance. After the step-up, your Annual Income Amount will be 5% of your new Income Benefit Base.

Joint-Life Coverage

On the Issue Date, you had the option of electing Income ON Demand with single-life coverage or, for a higher Income ON Demand Fee, with joint-life coverage. Once you make the election, you cannot switch between joint-life and single-life coverage, regardless of any change in life events.  Joint-life coverage is not available if you are unmarried on the Issue Date.

Joint-life coverage can be elected on an individually-owned Contract or on a co-owned Contract.  On an individually-owned Contract, joint-life coverage is available only if your spouse is the sole beneficiary on the Issue Date and remains the sole beneficiary while Income ON Demand is in effect. On a co-owned Contract, joint-life coverage is available only if you and your spouse are the only co-owners on the Issue Date and remain so while Income ON Demand is in effect. Whereas single-life coverage provides an Annual Income Amount only until any Participant dies, joint-life coverage provides an Annual Income Amount for as long as either you or your spouse is alive. Note that, for joint-life coverage to continue after the death of any Participant, the surviving spouse must elect to continue the contract through the “Spousal Continuance” provision.  See also “Death of Participant Under Income ON Demand with Joint-Life Coverage” in this Appendix.

If you have elected joint-life coverage, the Income On Demand Coverage Date will be your Issue Date if the younger spouse is at least age 55 on the Issue Date, and will be the first Account Anniversary after the younger spouse attains (or would have attained) age 55 if the younger spouse is less than age 55 on the Issue Date.  (For purposes of joint-life coverage, the younger spouse refers to the person who was the younger spouse on the Issue date, even if that person has died or is no longer married to the person who was his or her spouse on the Issue Date.)  On the Income On Demand Coverage Date, your Annual Income Amount will be calculated and begin accumulating. If withdrawals of the Stored Income Balance are taken before the date the younger spouse attains (or would have attained) age 59½, the withdrawal will be considered an “early withdrawal,” and the Income Benefit Base will be reduced.

The two spouses on the Issue Date are the only two people covered under the joint-life feature.  If a Participant remarries, the new spouse is not covered under the joint-life feature.  Therefore, if the spouse on the Issue Date is no longer your spouse, the Income ON Demand benefits continue for your life and, when you die, annual withdrawals are no longer available.  Note that, when you elect joint-life coverage, you also elect the higher joint-life fee. That fee will not change as long as Income ON Demand is in effect, regardless of any change in life events.

If one spouse is significantly younger than the other spouse, you should carefully consider whether joint-life coverage is an appropriate choice in light of the possibly long waiting period before the benefit begins to store income and in light of the higher fee for joint-life coverage.

Joint-life coverage may not be available on all Contracts.

Cancellation of Income ON Demand

Should you decide that Income ON Demand is no longer appropriate for you, you may cancel it at any time. Upon cancellation, all benefits and charges under Income ON Demand shall cease. Once cancelled, the Rider cannot be reinstated.

Although transfers among the Designated Funds are permitted as described under “Transfer Privilege,” Income ON Demand will be cancelled automatically:

● if any Purchase Payment is allocated to an investment option other than a Designated Fund; or

● if any portion of Account Value maintained in a Designated Fund is transferred into an investment option other than a Designated Fund.

A change of ownership of the Contract may also cancel Income ON Demand.

Death of Participant Under Income ON Demand with Single-Life Coverage

If you selected single-life coverage, Income ON Demand terminates on the death of any Participant and the Beneficiary may elect to exercise any of the available options under the Death Benefit provisions of the Contract. Alternately, the Beneficiary may elect to receive the Stored Income Balance. If your surviving spouse is the sole Beneficiary and elects to continue the Contract, your spouse has the additional option of electing to participate in a new Income ON Demand Rider on the original Contract (assuming that, at the time of such election, Income ON Demand is available to new Participants and your surviving spouse meets certain eligibility requirements). If the surviving spouse makes such election:

● the new Account Value will be the greater of the Stored Income Balance on the original Contract or the Death Benefit;

● the new Income ON Demand Fee will be set by us based on market conditions at the time and may be higher than the current Income ON Demand Fee;

● the new Income Benefit Base will be equal to the Account Value after any Death Benefit has been credited; and

● the new Stored Income Balance will be reset to zero.

Death of Participant Under Income ON Demand with Joint-Life Coverage

If the surviving spouse on the Death Benefit Date was not the spouse of a Participant on the original Contract’s Issue Date, then this section does not apply, even if joint-life coverage was elected.  In such case, if a Participant dies while participating in Income ON Demand, the provisions of the section in this Appendix titled “Death of Participant Under Income ON Demand with Single-Life Coverage” will apply.

If you purchased joint-life coverage and one of the Participants dies, Income ON Demand will continue, provided that the surviving spouse, as the sole beneficiary, continues the Contract. In such case:

● the new Account Value will be equal to the Death Benefit;

● the Stored Income Balance will remain unchanged;

● the Income Benefit Base will remain unchanged until the next Account Anniversary when a step-up could apply due to an increase in Account Value (see “Step-Up Under Income ON Demand” in this Appendix);

● on each Account Anniversary, the Annual Income Amount will be equal to the Income Benefit Base multiplied by 5%; and

● the Income ON Demand fee for the joint-life coverage option will continue for the surviving spouse as it was immediately prior to the death of the Participant.

At the death of the surviving spouse, the Contract, including Income ON Demand, terminates.

If you purchased joint life coverage and the deceased Participant's surviving spouse does not continue the Contract, your Beneficiary may elect any available option under the Death Benefit provisions of the Contract.

Annuitization Under Income ON Demand

Under the terms of Income ON Demand, if your Account Value is greater than zero on your maximum Annuity Commencement Date, you may elect to:

(1)	surrender your Contract and receive your Cash Surrender Value (or your Stored Income Balance, if greater),
(2)	annuitize your Account Value under one of the then currently available Annuity Options, or
(3)	(a) receive any remaining Stored Income Balance in a single sum and (b) annuitize your remaining Account Value as a single-life annuity (or a joint-life annuity, if joint-life coverage was elected at issue and you are still eligible to receive it) with an annualized annuity payment of not less than 5% of your then current Income Benefit Base.

If you make no election, we will default your choice to option 3.

If your Account Value has been reduced to zero (other than as a result of an “early withdrawal” or an “excess withdrawal”), and your Income Benefit Base is greater than zero on or before your maximum Annuity Commencement Date, you will receive your full Annual Income Amount each year until you die. For a more complete discussion of this, see “Depleting Your Account Value” in this Appendix.

Certain Tax Considerations

Certain tax considerations may be important to you in connection with a living benefit, such as Income ON Demand.

When you elect to participate in Income ON Demand, you may withdraw annual amounts up to the Yearly RMD Amount without affecting your benefits under Income ON Demand, subject to the conditions stated below. In the event that your Yearly RMD Amount attributable to your Contract is greater than your Stored Income Balance, we are currently waiving the withdrawal provisions under Income ON Demand as follows. If you withdraw all or a portion of your Qualified Contract's Yearly RMD Amount from the Contract while participating in Income ON Demand, we reduce your Account Value and your Stored Income Balance, dollar for dollar, by the amount of the withdrawal to a value not less than zero. We will not, however, penalize you if the current Federal Tax Laws require you to withdraw from your Contract an amount greater than your Stored Income Balance. In other words, if a Yearly RMD Amount exceeds your Stored Income Balance, we will reduce your Stored Income Balance, but we will not reduce your Income Benefit Base, provided that:

● you withdraw your Qualified Contract's first Yearly RMD Amount in the calendar year you attain age 70½ rather than postponing the withdrawal of that Amount until the first quarter of the next calendar year, and

● you do not make any withdrawal from your Qualified Contract that would result in you receiving, in any Account Year, more than one calendar year's Yearly RMD Amount.

If there is any change to the current Code or IRS rules governing the timing or determination of RMD Amounts (including, but not limited to, amendments to the current IRS regulations or the issuance of IRS guidance), we reserve the right, in our sole discretion, to reduce your Stored Income Balance and your Income Benefit Base, or both of these amounts, per the terms of the Income ON Demand Rider regarding excess withdrawals (see “Withdrawals Under Income ON Demand”), when a Yearly RMD Amount withdrawn from your Contract exceeds your Stored Income Balance. Notice will be given to Contract Owners before we exercise this right.

For further discussion of some of these considerations, please refer to “TAX CONSIDERATIONS - Impact of Optional Death Benefit and Optional Living Benefit Riders” in the Prospectus to which this Appendix is attached.

APPENDIX H -

Income On Demand® II

The optional living benefit rider known as Income ON Demand II (“IOD II”) was available for Contracts issued after October 20, 2008 and prior to February 17, 2009. The following information applies to your Contract if you elected to participate in IOD II. IOD II is no longer available for sale on new Contracts.

To describe how IOD II works, we use the following definitions:

Annual Income Amount:	The amount added to your Stored Income Balance on each Account Anniversary during your Stored Income Period. It is equal to 5% of your Income Benefit Base on the date of crediting.
Designated Funds:	The limited investment options you can choose if you are participating in a living benefit.
Early Withdrawal:	Any withdrawal taken prior to your First Withdrawal Date.
Excess Withdrawal:	Any withdrawal taken after your First Withdrawal Date that exceeds your Stored Income Balance (or your Required Minimum Distribution Amount, if greater).
Fee Base:	The amount used to calculate your cost for IOD II.
First Withdrawal Date:	Your Issue Date if you are at least age 59 at issue, otherwise the first Account Anniversary after you attain age 59.
Income Benefit Base:	The amount used to calculate your Annual Income Amount for IOD II.
Stored Income Balance:	The amount you may withdraw at any time after your First Withdrawal Date without reducing your benefits under IOD II.
Stored Income Period:	A period beginning on your Issue Date if you are at least age 50 at issue, otherwise the first Account Anniversary following your 50th birthday, ending on your Annuity Commencement Date.
You and Your:	The terms “you” and “your” refer to the oldest living Participant or the surviving spouse of the oldest Participant, as described under the sections entitled “Death of Participant Under IOD II with Single-Life Coverage” and “Death of Participant Under IOD II with Joint-Life Coverage.” In the case of a non-natural Participant, these terms refer to the oldest living annuitant.

Upon annuitization, IOD II and any elected optional death benefit rider automatically terminate.

IOD II allows you to withdraw a guaranteed amount each year, beginning after your First Withdrawal Date, until the death of any Participant if single-life coverage is elected (or until the death of both the Participant and the Participant's spouse if joint-life coverage is elected), regardless of the investment performance of the Designated Funds, provided that you comply with certain requirements. The amount you can withdraw, in any one year, is based on 5% of your Income Benefit Base. Any amount that you do not withdraw in a given Account Year will remain in the Stored Income Balance and can be used later.

If you are participating in IOD II, you may not make Purchase Payments after the first year following your Issue Date. After the first Account Anniversary, any Purchase Payments submitted by a Participant while participating in IOD II will be returned to the Participant, unless the Participant instructs us to terminate participation in IOD II.

To participate in IOD II, all of your Account Value must be invested only in Designated Funds at all times during the term of IOD II. (The term of IOD II is for life, unless your Income Benefit Base is reduced to zero or your benefits under IOD II are terminated or cancelled as described in this Appendix under “Cancellation of IOD II,” “Depleting Your Account Value,” and “Annuitization Under IOD II.”) The only Funds, dollar-cost averaging program options, and asset allocation models that currently qualify as Designated Funds are shown in the section entitled “Designated Funds” in the prospectus to which this Appendix is attached.

You also have the option of choosing between single-life coverage and joint-life coverage. These options are described in greater detail in this Appendix under “Joint-Life Coverage” and the sections entitled “Death of Participant Under IOD II with Single-Life Coverage” and “Death of Participant Under IOD II with Joint-Life Coverage.”

Determining Your Income Benefit Base

On the Issue Date, we set your Income Benefit Base equal to your initial Purchase Payment. Thereafter, your Income Benefit Base is:

l	increased on each Account Anniversary by any step-ups as described under “Step-Up Under IOD II” in this Appendix;
l	increased to the extent that you exercise your one-time option to use any amount of your Stored Income Balance to increase your Income Benefit Base, as described under “How IOD II Works” in this Appendix;
l	increased by any subsequent Purchase Payments you make during the first year following the Issue Date;
l	decreased following any Early Withdrawals you take, as described under “Early Withdrawals” in this Appendix; and
l	decreased following any Excess Withdrawals you take, as described under “Excess Withdrawals” in this Appendix.

Determining Your Stored Income Balance

At the beginning of the Stored Income Period, your Stored Income Balance will equal your Annual Income Amount (i.e., 5% of your Income Benefit Base on that Date). Thereafter, your Stored Income Balance is:

l	increased by 5% of any subsequent Purchase Payments you make during the first year following the Issue Date;
l	increased on each Account Anniversary by your Annual Income Amount determined on that Anniversary;
l	decreased by the amount of any withdrawals you take, on or after your First Withdrawal Date, up to the amount of your Stored Income Balance;
l	decreased to $0 if you take an Excess Withdrawal;
l	decreased in proportion to the change in your Account Value if you take an Early Withdrawal; and
l	decreased by the amount you use in exercising your one-time option to increase your Income Benefit Base (described under “How IOD II Works”).

How IOD II Works

Under the terms of IOD II, you can take withdrawals up to the amount of your Stored Income Balance beginning on your First Withdrawal Date, subject to the terms and conditions discussed below. You can use all or a portion of your Stored Income Balance to effect a one-time increase of your Income Benefit Base prior to your Annuity Commencement Date. If your Account Value is reduced to zero, and your Income Benefit Base is greater than zero, you will receive an amount equal to your Annual Income Amount every year of your life unless you choose to cancel IOD II.

Withdrawals from your Stored Income Balance can be taken at any time beginning on your First Withdrawal Date and prior to your Annuity Commencement Date without affecting your Income Benefit Base. If, beginning on your First Withdrawal Date, you make a withdrawal that does not exceed your Stored Income Balance, your Stored Income Balance will be decreased by the amount withdrawn.

You also have the option to use all or a portion of your Stored Income Balance to increase your Income Benefit Base. This option allows you to increase your future Annual Income Amount. While your Contract is in force, you may exercise this option only once and you must do so prior to your Annuity Commencement Date.  If you choose to use any portion of your Stored Income Balance to increase your Income Benefit Base:

● your Stored Income Balance will be decreased by the amount used;

● the amount of your Stored Income Balance used will be added to your Income Benefit Base; and

● your new Annual Income Amount on your next Account Anniversary will equal 5% of your new Income Benefit Base.

Here is an example of how IOD II works:

Assume that you are age 60 when your Contract is issued with an initial Purchase Payment of $100,000. Assume you elect to participate in IOD II with single-life coverage and investment performance of the Designated Funds is neutral over the years. (If you selected joint-life coverage, the numbers shown in the example could be different.) Your Income Benefit Base is equal to your initial Purchase Payment on your Issue Date. Your Annual Income Amount is $5,000 (5% of your Income Benefit Base). Therefore, $5,000 will be added each year to your Stored Income Balance.  Values shown are as of the beginning of the Account Year.
Year	Account Value	Income Benefit Base	Annual Income Amount	Withdrawal	Stored Income Balance
1	$100,000	$100,000	$5,000	$0	$5,000
2	$100,000	$100,000	$5,000	$0	$10,000
3	$100,000	$100,000	$5,000	$0	$15,000
4	$100,000	$100,000	$5,000	$0	$20,000

During your fifth Account Year, you use the full amount of your Stored Income Balance ($25,000) to increase your Income Benefit Base. On your next Account Anniversary, your Income Benefit Base will be increased to $125,000 and your Annual Income Amount will be $6,250 (5% of your Income Benefit Base). Therefore $6,250 will be added each year to your Stored Income Balance unless your Annual Income Amount changes.
Year	Account Value	Income Benefit Base	Annual Income Amount	Withdrawal	Stored Income Balance
5	$100,000	$100,000	$5,000	$0	$25,000
6	$100,000	$125,000	$6,250	$0	$6,250
7	$100,000	$125,000	$6,250	$0	$12,500
8	$100,000	$125,000	$6,250	$0	$18,750
Each year thereafter, the Annual Income Amount will be added to the Stored Income Balance in the same manner.

Assume instead that, during your fifth Account Year, you take a withdrawal of $25,000, thereby reducing your Stored Income Balance to $0. On your next Account Anniversary your Income Benefit Base will remain at $100,000 and your Annual Income Amount remains at $5,000 (5% of your Income Benefit Base). Therefore $5,000 will be added each year to your Stored Income Balance unless your Annual Income Amount changes.
Year	Account Value	Income Benefit Base	Annual Income Amount	Withdrawal	Stored Income Balance
5	$100,000	$100,000	$5,000	$25,000	$0
6	$75,000	$100,000	$5,000	$0	$5,000
7	$75,000	$100,000	$5,000	$0	$10,000
8	$75,000	$100,000	$5,000	$0	$15,000
Each year thereafter, the Annual Income Amount will be added to the Stored Income Balance in the same manner.

Early Withdrawals and Excess Withdrawals may significantly decrease your benefits under IOD II, as described further in this Appendix under “Withdrawals Under IOD II.” Even if your Stored Income Period has begun, withdrawals prior to your First Withdrawal Date are considered Early Withdrawals. Investing in any Fund, other than a Designated Fund, will cancel IOD II as described under “Cancellation of IOD II” in this Appendix.

Withdrawals Under IOD II

     Withdrawals After Your First Withdrawal Date

Starting on your First Withdrawal Date and continuing to your Annuity Commencement Date you may take annual withdrawals up to your Stored Income Balance without affecting your benefits under IOD II. These withdrawals will reduce your Stored Income Balance by the full amount of the withdrawal, but will not change your Income Benefit Base. This is shown in the example above.

     Excess Withdrawals

If you take an Excess Withdrawal, your Income Benefit Base will be reduced according to the following formula:

Your new Income Benefit Base =	IBB x	(	AV – WD	)
			AV – SB

Where:
	IBB =	Your Income Benefit Base immediately prior to the Excess Withdrawal.
	WD =	The amount of the Excess Withdrawal.
	SB  =	Your Stored Income Balance (or your Required Minimum Distribution Amount, if greater) immediately prior to the Excess Withdrawal.
	AV  =	Your Account Value immediately prior to the Excess Withdrawal.

Your Annual Income Amount will be recalculated based on the reduced Income Benefit Base. Here is an example of an Excess Withdrawal.

Using the same facts as the previous example, assume that in your fifth Account Year you take a withdrawal of $50,000, exceeding your Stored Income Balance. Assume that, due to poor investment performance during the fifth Account Year, your Account Value was $90,000 immediately prior to the withdrawal.  Your Income Benefit Base will be reduced to $61,538 as shown below.
Year	Account Value	Income Benefit Base	Annual Income Amount	Withdrawal	Stored Income Balance
5	$100,000	$100,000	$5,000	$50,000	$0
6	$40,000	$61,538	$3,077	$0	$3,077
7	$40,000	$61,538	$3,077	$0	$6,154
8	$40,000	$61,538	$3,077	$0	$9,231
Each year thereafter, the Annual Income Amount will be added to the Stored Income Balance in the same manner.

Your new Income Benefit Base	=	$100,000 x	(	$90,000 – $50,000	)	= $61,538
				$90,000 – $25,000

Excess Withdrawals taken in a down market could severely reduce your benefits under IOD II.

    Early Withdrawals

All withdrawals taken before your First Withdrawal Date will be considered Early Withdrawals and the Income Benefit Base and the Stored Income Balance will be reduced using the following formulae:

Your new Income Benefit Base =	IBB x	(	AV - WD	)
			AV

Your new Stored Income Balance =	SB x	(	AV - WD	)
			AV

Where:
	IBB =	Your Income Benefit Base immediately prior to the Early Withdrawal.
	SB  =	Your Stored Income Balance immediately prior to the Early Withdrawal.
	WD =	The amount of the Early Withdrawal.
	AV  =	Your Account Value immediately prior to the Early Withdrawal.

Your future Annual Income Amount will be recalculated based on the reduced Income Benefit Base.

Early Withdrawals could severely reduce your benefits under IOD II.

In addition to reducing your benefits under IOD II, any withdrawal before age 59½ could have adverse tax consequences. You should consult a qualified tax professional for more information.

     Depleting Your Account Value

If your Account Value is reduced to zeroas a result ofan Early Withdrawal or an Excess Withdrawal (as described above), your Stored Income Balance and your Income Benefit Base will both be reduced to zero. Therefore, your Contract, as well as your benefits under IOD II will end.

If your Account Value is reduced to zero through any combination of poor investment performance of the Designated Funds, Contract charges, and withdrawals other than Excess Withdrawals or Early Withdrawals, your Income Benefit Base will not be reduced. Your Contract will end. You will be entitled to receive annual payments equal to 5% of the amount of your Income Benefit Base. Prior to determining your annual payments, you may increase your Income Benefit Base by any remaining Stored Income Balance as described below. These payments will continue for as long as you live. If you elected joint-life coverage, the payments will continue as long as either you or your spouse are alive as described in this Appendix under “Death of Participant Under IOD II with Joint-Life Coverage.” If you have any remaining Stored Income Balance on the day your Account Value is reduced to zero, you will be notified that, before you begin to receive your “annual lifetime payments,” you must deplete your Stored Income Balance by:

(a)	withdrawing your remaining Stored Income Balance;
(b)	applying the remaining amount of your Stored Income Balance to increase your Income Benefit Base (and thus the amount of your “annual lifetime payments”); or
(c)	using a combination of (a) and (b).

Because the Contract has ended, the amount of these annual lifetime payments will not change. You should be aware, however, that they could be subject to certain tax consequences. You should consult a qualified tax professional for more information.

Cost of IOD II

If you elected IOD II, we will deduct a quarterly fee from your Account Value (“IOD II Fee”). The IOD II Fee will be taken as a specific deduction from your Account Value on the last valuation day of each Account Quarter and will equal 0.1625 % of your Fee Base on that day, if you elected single-life coverage (0.2125% for joint-life coverage). On an annual basis, the IOD II Fee is equal to 0.65% of your Fee Base if you elected single-life coverage (0.85% for joint-life coverage). We reserve the right to increase the percentage rate used to calculate the IOD II Fee on newly issued Contracts.

During the first Account Year, your Fee Base is equal to your Income Benefit Base.  On each Account Anniversary, the Fee Base is recalculated.  Your new Fee Base will be reset to equal your Income Benefit Base plus your Stored Income Balance (if any) less your Annual Income Amount for that year if this recalculated amount is higher than your current Fee Base. In the event that the recalculated amount is not greater than your current Fee Base, we will continue to calculate your IOD II Fee based upon your current Fee Base until, at least, your next Account Anniversary.  Note that, although your IOD II Fee may increase, it will never decrease.

For the most part, we calculate your Fee Base only on your Account Anniversary. However, we will recalculate your Fee Base between Account Anniversaries, if you take an Early Withdrawal or Excess Withdrawal or make additional Purchase Payments during your first Account Year.

If you take an Excess Withdrawal during your Stored Income Period, your Fee Base will be decreased by the following formula:

Your new Fee Base =	Fee Base  x	(	AV - WD	)
			AV - SB

If you take an Early Withdrawal, your Fee Base will be decreased by the following formula:

Your new Fee Base =	Fee Base  x	(	AV - WD	)
			AV

Where:
	Fee Base =	Your Fee Base immediately prior to the Early/Excess Withdrawal.
	WD =	The amount of the Early/Excess Withdrawal.
	SB =	Your Stored Income Balance (if any) immediately prior to the Excess Withdrawal.
	AV =	Your Account Value immediately prior to the Early/Excess Withdrawal.

Any additional Purchase Payment you make during your first Account Year will increase your Income Benefit Base as described in this Appendix under “Determining Your Income Benefit Base.” Therefore, your Fee Base will increase by any additional Purchase Payments made.

Here is an example of how we calculate your Fee Base:

Assume that you are age 60 when your Contract is issued with an initial Purchase Payment of $100,000.  Assume you elected to participate in IOD II with single-life coverage and investment performance of the Designated Funds is neutral over the years. (If you selected joint-life coverage, the numbers shown in the example could be different.) Your Income Benefit Base is equal to your initial Purchase Payment on your Issue Date.  At issue, your Annual Income Amount is $5,000 (5% of your Income Benefit Base). Values are shown as of the beginning of the Account Year.
During the Stored Income Period, the Fee Base is reset at the beginning of the Contract Year to equal your Income Benefit Base plus your Stored Income Balance less your Annual Income Amount, if that amount is greater than the previous Fee Base.  For example, in Contract Year 4, the Fee Base is set equal to the Income Benefit Base ($100,000) plus the Stored Income Balance ($20,000) less your Annual Income Amount ($5,000) if that amount ($115,000) is greater than the previous Fee Base ($110,000).
Year	Income Benefit       Base	Annual Income      Amount	Stored                      Income Balance			Fee Base
			Beginning of year	Withdrawal   Amount	End of year
1	$100,000	$5,000	$5,000	$0	$5,000	$100,000
2	$100,000	$5,000	$10,000	$0	$10,000	$105,000
3	$100,000	$5,000	$15,000	$0	$15,000	$110,000
4	$100,000	$5,000	$20,000	$0	$20,000	$115,000
Assume, instead, that in your fourth Account Year you take a $20,000 withdrawal.  At the beginning of your fifth Account Year, your Income Benefit Base ($100,000) plus your Stored Income Balance ($5,000) less your Annual Income Amount ($5,000) is less than the current Fee Base ($115,000), so there is no change to the Fee Base, as shown below.
Year	Income Benefit       Base	Annual Income      Amount	Stored                      Income Balance			Fee Base
			Beginning of year	Withdrawal   Amount	End of year
4	$100,000	$5,000	$20,000	$20,000	$0	$115,000
5	$100,000	$5,000	$5,000	$0	$5,000	$115,000
6	$100,000	$5,000	$10,000	$0	$10,000	$115,000
7	$100,000	$5,000	$15,000	$0	$15,000	$115,000
8	$100,000	$5,000	$20,000	$0	$20,000	$115,000
9	$100,000	$5,000	$25,000	$0	$25,000	$120,000
On each Account Anniversary thereafter, your Fee Base is recalculated and reset if necessary.

Your IOD II Fee will not change during an Account Year, unless you take one of two specific actions:

l	If you make an additional Purchase Payment during your first Account Year, you will increase your Fee Base and thus your IOD II Fee.
l	If you make an Early Withdrawal or an Excess Withdrawal, you will decrease your Fee Base and thus your IOD II Fee.

In addition, on your Account Anniversary, the IOD II Fee may also change if we increase the percentage used to calculate the IOD II Fee as described below under “Step-Up Under IOD II.”

The investment performance of the Designated Funds will not affect your IOD II Fee during an Account Year. However, as stated below under “Step-Up Under IOD II,” favorable investment performance may cause the Income Benefit Base to increase on an Account Anniversary, and thus increase your IOD II Fee.

We will continue to deduct the IOD II Fee until you annuitize your Contract, your Account Value reduces to zero, or your benefits under IOD II are cancelled as described under “Cancellation of IOD II” in this Appendix.

Step-Up Under IOD II

Regardless of your age on the Issue Date, on each Account Anniversary prior to your Annuity Commencement Date, we will automatically step-up your Income Benefit Base, provided that you satisfy certain requirements. First, you must meet eligibility requirements:

l

Your Account Value less your Stored Income Balance must equal no more than $5,000,000. (For purposes of determining the $5,000,000 limit, we reserve the right, in our sole discretion, to aggregate your Account Value with the account values of all other variable annuity contracts you own issued by Sun Life Assurance Company of Canada (U.S.) or its affiliates.)

l

Your highest quarter-end Account Value (adjusted for subsequent purchase payments and withdrawals) during the most recent Account Year (“Highest Quarterly Value”) minus your Stored Income Balance must be greater than your current Income Benefit Base. (If you have not yet reached your Stored Income Period and therefore do not yet have a Stored Income Balance, your highest quarter-end Account Value must only be greater than your current Income Benefit Base.)

Second, if you satisfy the eligibility requirements, we then consider whether market conditions have caused us to increase the percentage rate used to calculate the IOD II Fee on newly issued Contracts. If we are no longer issuing Contracts with IOD II, then the percentage rate we use to calculate your IOD II Fee will be set based upon current market conditions at that time. Significant changes in stock market prices, interest rate fluctuations, and competitive industry trends are among the market conditions we consider in whether to change the fee.

l

If we have not had to increase the percentage rate as described above, the percentage rate we use to calculate your IOD II Fee will remain unchanged and we will automatically step-up your Income Benefit Base.

l

If we have had to increase the percentage rate as described above, we offer you the opportunity to step-up at the higher percentage rate. In this case, your written consent is required to accept the higher percentage rate used to calculate your IOD II Fee and step-up your Income Benefit Base.  If you do not consent to the step-up and higher percentage, the step-up will not be implemented and all subsequent step-ups of your Income Benefit Base will also be suspended. You may thereafter submit an election form to us, however, in order to consent to the then-applicable percentage rate and thus reactivate subsequent automatic step-ups.

At the time of step-up, we will increase your Income Benefit Base to an amount equal to the highest adjusted quarterly Account Value less your Stored Income Balance, if such amount exceeds your current Income Benefit Base. After the step-up, your Annual Income Amount will be 5% of your new Income Benefit Base.

Here are examples of how step-up works under a few different circumstances:

Assume that you are 60 years old when you purchase a Contract with an initial Purchase Payment of $100,000, and that you elect to participate in IOD II with single-life coverage. (If you selected joint-life coverage, the numbers shown in the example could be different.) Your Income Benefit Base is equal to your initial Purchase Payment. Your Annual Income Amount is $5,000 (5% of your Income Benefit Base). Your initial Stored Income Balance is $5,000.
In each of the four examples, Account Values shown are as of the last day of each Account Quarter.  Adjustments are made on the day a Purchase Payment or withdrawal is made.
The Account Values on each of your four Account Quarters are $113,000, $108,000, $90,000, and $103,000, respectively.  No additional Purchase Payments are made and no withdrawals are taken, so no adjustments to these values are necessary.  Your Stored Income Balance at the end of the fourth Account Quarter is $5,000.  The highest adjusted quarterly value is $113,000.  Your new Income Benefit Base is set to equal $108,000 ($113,000 - $5,000) since that amount exceeds your previous Income Benefit Base.
Time	Account Value	Adjustment for subsequent Purchase Payments and withdrawals	Account Value (after subsequent adjustments)	Income Benefit Base
Issue	$100,000	n/a	n/a	$100,000
End of First Quarter	$113,000	n/a	$113,000	$100,000
End of Second Quarter	$108,000	n/a	$108,000	$100,000
End of Third Quarter	$90,000	n/a	$90,000	$100,000
End of Fourth Quarter (before step-up)	$103,000	n/a	$103,000	$100,000
Highest Quarterly Value (after adjustments)			$113,000
Stored Income Balance at end of fourth quarter		$5,000
Step-up comparison	Is ($113,000 - $5,000) greater than $100,000?  Yes, so step-up.
On the Account Anniversary (after step-up):
New Income Benefit Base =	$108,000	Highest Quarterly Value (after adjustments) less the Stored Income Balance.
New Annual Income Amount =	$5,400	$108,000 x 5%
New Stored Income Balance =	$10,400	Stored Income Balance at the end of the fourth Account Quarter plus the new Annual Income Amount.
Please note:  The end of the fourth Account Quarter and the Account Anniversary are the same day.  We only make the distinction to separate values before and after step-up.

If you make an additional Purchase Payment during your first Account Year, your Account Value and your Income Benefit Base are each immediately increased by the amount of the additional Purchase Payment.  Your Stored Income Balance is increased by 5% of the additional Purchase Payment.

Here is an example of how an additional Purchase Payment of $50,000 made in the second Account Quarter would affect your step-up:

Time	Account Value	Adjustment for subsequent Purchase Payments and withdrawals	Account Value (after subsequent adjustments)	Income Benefit Base
Issue	$100,000	n/a	n/a	$100,000
End of First Quarter	$113,000	$50,000	$163,000	$100,000
$50,000 Purchase Payment	$163,000	n/a	n/a	$150,000
End of Second Quarter	$158,000	n/a	$158,000	$150,000
End of Third Quarter	$140,000	n/a	$140,000	$150,000
End of Fourth Quarter (before step-up)	$153,000	n/a	$153,000	$150,000
Highest Quarterly Value (after adjustments)			$163,000
Stored Income Balance at end of fourth quarter		$7,500 (initial $5,000 plus 5% x $50,000)
Step-up comparison	Is ($163,000 - $7,500) greater than $150,000?  Yes, so step-up.
On the Account Anniversary (after step-up):
New Income Benefit Base =	$155,500	Highest Quarterly Value (after adjustments) less the Stored Income Balance.
New Annual Income Amount =	$7,775	$155,500 x 5%
New Stored Income Balance =	$15,275	Stored Income Balance at the end of the fourth Account Quarter plus the new Annual Income Amount.
Please note:  Since the additional Purchase Payment occurred after the first Account Quarter, the first Account Quarter value was adjusted.

Here is an example of how a $4,000 withdrawal taken in the second Account Quarter would affect your step-up:

Time	Account Value	Adjustment for subsequent Purchase Payments and withdrawals	Account Value (after subsequent adjustments)	Income Benefit Base
Issue	$100,000	n/a	n/a	$100,000
End of First Quarter	$113,000	-  $4,000	$109,000	$100,000
$4,000 withdrawal	$109,000	n/a	n/a	$100,000
End of Second Quarter	$104,000	n/a	$104,000	$100,000
End of Third Quarter	$86,000	n/a	$86,000	$100,000
End of Fourth Quarter (before step-up)	$99,000	n/a	$99,000	$100,000
Highest Quarterly Value (after adjustments)			$109,000
Stored Income Balance at end of fourth quarter		$1,000 (initial $5,000 less $4,000 withdrawal)
Step-up comparison	Is ($109,000 - $1,000) greater than $100,000?  Yes, so step-up.
On the Account Anniversary (after step-up):
New Income Benefit Base =	$108,000	Highest Quarterly Value (after adjustments) less the Stored Income Balance.
New Annual Income Amount =	$5,400	$108,000 x 5%
New Stored Income Balance =	$6,400	Stored Income Balance at the end of the fourth Account Quarter plus the new Annual Income Amount.
Please note:  Since the withdrawal occurred after the first Account Quarter, the first Account Quarter value was adjusted.

Assume instead you take a $40,000 withdrawal in the second Account Quarter at a point when the Account Value equaled $99,000 immediately before the withdrawal.  Since this withdrawal exceeds your Stored Income Balance, it is considered an Excess Withdrawal.  The Excess Withdrawal reduces your Income Benefit Base as described in this Appendix under “Excess Withdrawals.”  All previous quarter-end Account Values are first reduced by the amount of the Stored Income Balance and then adjusted in the same proportion that the Income Benefit Base was adjusted after the Excess Withdrawal. (See the two-step calculation shown in the box below the following example.)

Time	Account Value	Adjustment for subsequent Purchase Payments and withdrawals	Account Value (after subsequent adjustments)	Income Benefit Base
Issue	$100,000	n/a	n/a	$100,000
End of First Quarter	$113,000	-  $45,213	$67,787	$100,000
$40,000 withdrawal	$59,000	n/a	n/a	$62,766
End of Second Quarter	$68,000	n/a	$68,000	$62,766
End of Third Quarter	$50,000	n/a	$50,000	$62,766
End of Fourth Quarter (before step-up)	$63,000	n/a	$63,000	$62,766
Highest Quarterly Value (after adjustments)			$68,000
Stored Income Balance at end of fourth quarter		$0
Step-up comparison	Is ($68,000 - $0) greater than $62,766?  Yes, so step-up.
On the Account Anniversary (after step-up)
New Income Benefit Base =	$68,000	Highest Quarterly Value (after adjustments) less the Stored Income Balance.
New Annual Income Amount =	$3,400	$68,000 x 5%
New Stored Income Balance =	$3,400	Stored Income Balance at the end of the fourth Account Quarter plus the new Annual Income Amount.

(1)	Reduce the end of First Quarter Account Value by the Stored Income Balance	=	$113,000	–	$5,000		= $108,000
(2)	Adjust Account Value for the first Account Quarter	=	$108,000 x	(	$99,000 – $40,000	)	= $67,787
					$99,000 – $5,000
	The total adjustment	=	$113,000	–	$67,787		= $45,213

Joint-Life Coverage

On the Issue Date, you have the option of electing IOD II with single-life coverage or, for a higher IOD II Fee, with joint-life coverage. Once you make the election, you cannot switch between joint-life and single-life coverage, regardless of any change in life events.  Joint-life coverage is not available if you are unmarried on the Issue Date.

Joint-life coverage can be elected on an individually-owned Contract or on a co-owned Contract.  On an individually-owned Contract, joint-life coverage is available only if your spouse is the sole primary beneficiary on the Issue Date and remains the sole primary beneficiary while IOD II is in effect. On a co-owned Contract, joint-life coverage is available only if you and your spouse are the only co-owners on the Issue Date and remain so while IOD II is in effect. Whereas single-life coverage provides an Annual Income Amount only until any Participant dies, joint-life coverage provides an Annual Income Amount for as long as either you or your spouse is alive. Note that, for joint-life coverage to continue after the death of any Participant, the surviving spouse must elect to continue the contract through the “Spousal Continuance” provision.  See also “Death of Participant Under IOD II with Joint-Life Coverage” in this Appendix.

If you have elected joint-life coverage, the Stored Income Period will begin on your Issue Date if the younger spouse is at least age 50 on the Issue Date. Otherwise it will begin on the first Account Anniversary after the younger spouse attains (or would have attained) age 50.  (For purposes of joint-life coverage, the younger spouse refers to the person who was the younger spouse on the Issue Date, even if that person has died or is no longer married to the person who was his or her spouse on the Issue Date.)  The First Withdrawal Date will be your Issue Date if the younger spouse is at least age 59 at issue. Otherwise it will be the first Account Anniversary after the younger spouse attains (or would have attained) age 59.

The two spouses on the Issue Date are the only two people covered under the joint-life feature.  If a Participant remarries, the new spouse is not covered under the joint-life feature.  Therefore, if the spouse on the Issue Date is no longer your spouse, your benefits under IOD II continue for your life and, when you die, annual withdrawals are no longer available.  Note that, when you elect joint-life coverage, you also elect the higher joint-life fee. The percentage rate of the fee will not be reduced regardless of any change in life events.

If one spouse is significantly younger than the other spouse, you should carefully consider whether joint-life coverage is an appropriate choice in light of the possibly long waiting period before the benefit begins to store income and in light of the higher fee for joint-life coverage.

Joint-life coverage may not be available on all Contracts.

Cancellation of IOD II

Should you decide that IOD II is no longer appropriate for you, you may cancel IOD II at any time. Upon cancellation, all benefits and charges under IOD II shall cease. Once cancelled, IOD II cannot be reinstated.

Although transfers among the Designated Funds are permitted as described under “Transfer Privilege,” IOD II will be cancelled automatically:

● if any Purchase Payment is allocated to an investment option other than a Designated Fund; or

● if any portion of Account Value maintained in a Designated Fund is transferred into an investment option other than a Designated Fund.

IOD II will also be cancelled for any of the following:

● upon a termination of the Contract;

● upon annuitization*; or

● your Income Benefit Base is reduced to zero as a result of Early or Excess Withdrawals.

*Note that the maximum Annuity Commencement Date permitted under this Contract is the first day of the month following the Annuitant’s 95th birthday.  See “Selection of Annuity Commencement Date” under “THE INCOME PHASE – ANNUITY PROVISIONS” in the prospectus to which this Appendix is attached.

A change in ownership may also cancel your benefits under IOD II.

Death of Participant Under IOD II with Single-Life Coverage

If you elected single-life coverage, IOD II terminates on the death of any Participant and the Beneficiary may elect to exercise any of the available options under the Death Benefit provisions of the Contract. Alternately, the Beneficiary may elect to receive the Stored Income Balance. If your surviving spouse is the sole primary Beneficiary and elects to continue the Contract, your spouse has the additional option of electing to participate in a new IOD II Rider on the original Contract (assuming your surviving spouse meets certain eligibility requirements). If your surviving spouse makes such election, all of the following occur:

● the new Account Value will be the greater of the Stored Income Balance on the original Contract or the Death Benefit;

● the new percentage rate used to calculate the IOD II Fee will be set by us based on market conditions at the time and may be higher than the current percentage rate used to calculate the IOD II Fee;

● the new Income Benefit Base will be equal to the Account Value after any Death Benefit has been credited; and

● the new Stored Income Balance will be reset to zero.

Death of Participant Under IOD II with Joint-Life Coverage

If the surviving spouse on the Death Benefit Date was not the spouse of a Participant on the original Contract’s Issue Date, then this section does not apply, even if joint-life coverage was elected.  In such case, if a Participant dies while participating in IOD II, the provisions of the section titled “Death of Participant Under IOD II with Single-Life Coverage” will apply.

If you purchased joint-life coverage and one of the Participants dies, IOD II will continue, provided that the surviving spouse, as the sole primary beneficiary, continues the Contract. In such case:

● the new Account Value will be equal to the Death Benefit;

● the Stored Income Balance will remain unchanged;

● the Income Benefit Base will remain unchanged until the next Account Anniversary when a step-up could apply due to an increase in the Account Value (see “Step-Up Under IOD II”);

● on each Account Anniversary, the Annual Income Amount will be equal to the Income Benefit Base multiplied by 5%; and

● the percentage rate of the IOD II Fee for the joint-life coverage option will continue for the surviving spouse as it was immediately prior to the death of the Participant.

At the death of the surviving spouse, the Contract, including IOD II, terminates.

If you purchased joint-life coverage and the deceased Participant's surviving spouse does not continue the Contract, your Beneficiary may elect any available option under the Death Benefit provisions of the Contract.

Annuitization Under IOD II

Under the terms of IOD II, if your Account Value is greater than zero on your maximum Annuity Commencement Date, you may elect to:

(1)	surrender your Contract and receive your Cash Surrender Value (or your Stored Income Balance, if greater);
(2)	annuitize your Account Value under one of the Annuity Options available on that date; or
(3)	(a) receive any remaining Stored Income Balance in a single sum and (b) annuitize your remaining Account Value as a single-life annuity (or a joint-life annuity, if joint-life coverage was elected at issue and you are still eligible to receive it) with an annualized annuity payment of not less than 5% of your then current Income Benefit Base.

If you make no election, we will default your choice to option 3.

If your Account Value has been reduced to zero (other than as a result of an Early Withdrawal or an Excess Withdrawal), and your Income Benefit Base is greater than zero on or before your maximum Annuity Commencement Date, you will receive your full Annual Income Amount each year until you die. For a more complete discussion of this, see “Depleting Your Account Value” in this Appendix.

Certain Tax Considerations

Certain tax considerations may be important to you in connection with a living benefit, such as IOD II. When you elect to participate in IOD II, you may withdraw annual amounts up to the Yearly RMD Amount without affecting your benefit, subject to the conditions stated below. In the event that your Yearly RMD Amount attributable to your Contract is greater than your Stored Income Balance, we are currently waiving the withdrawal provisions under IOD II as follows. If you withdraw all or a portion of your Qualified Contract's Yearly RMD Amount from the Contract while participating in IOD II, we reduce your Account Value and your Stored Income Balance, dollar for dollar, by the amount of the withdrawal to a value not less than zero. We will not, however, penalize you if the current Federal Tax Laws require you to withdraw from your Contract an amount greater than your Stored Income Balance. In other words, if a Yearly RMD Amount exceeds your Stored Income Balance, we will reduce your Stored Income Balance, but we will not reduce your Income Benefit Base, provided that:

● you withdraw your Qualified Contract's first Yearly RMD Amount in the calendar year you attain age 70½ rather than postponing the withdrawal of that Amount until the first quarter of the next calendar year, and

● you do not make any withdrawal from your Qualified Contract that would result in you receiving, in any Account Year, more than one calendar year's Yearly RMD Amount.

Currently, any withdrawal in excess of the Annual Income Amount or Stored Income Balance that is taken to satisfy the Yearly RMD Amounts will not be treated as an Excess Withdrawal, and will not reduce the Income Benefit Base. However, if there is any material change to the current Code or IRS Rules governing the timing or determination of required minimum distribution amounts, then the Company reserves the right to treat any withdrawal greater than the Annual Income Amount or Stored Income Balance as an Excess Withdrawal which may significantly reduce the Income Benefit Base.

For a further discussion of some of these considerations, please refer to “TAX CONSIDERATIONS - Impact of Optional Death Benefit and Optional Living Benefit Riders” in the prospectus to which this Appendix is attached.

APPENDIX I -

Income ON Demand® II Plus

The optional living benefit rider known as Income ON Demand II Plus (“IOD II Plus”) was available for Contracts issued after October 20, 2008 and prior to February 17, 2009. The following information applies to your Contract if you elected to participate in IOD II Plus. IOD II Plus is no longer available for sale on new Contracts.

IOD II Plus provides an annual income guarantee for life. In early years, you can increase your guarantee if you defer withdrawals. In later years, you can store the annual guarantee amounts not withdrawn. To describe how IOD II Plus works, we use the following definitions:

Annual Income Amount:	An amount equal to your current Income Benefit Base multiplied by 5%, calculated on each Account Anniversary.
Designated Funds:	The limited investment options you can choose if you are participating in a living benefit.
Early Withdrawal:	Any withdrawal taken prior to your First Withdrawal Date.
Excess Withdrawal:	Any withdrawal taken after your First Withdrawal Date that (a) when added to all prior withdrawals taken in that Account Year, exceeds the Annual Income Amount (or your Required Minimum Distribution Amount, if greater) while in the IOD II Plus Bonus Period or (b) exceeds your Stored Income Balance (or your Required Minimum Distribution Amount, if greater) while in the Stored Income Period.
Fee Base:	The amount used to calculate your cost for IOD II Plus.
First Withdrawal Date:	Your Issue Date if you are at least age 59 at issue, otherwise the first Account Anniversary after you attain age 59.
Income Benefit Base:	The amount used to calculate your Annual Income Amount for IOD II Plus.
IOD II Plus Bonus Base:	The amount on which bonuses are calculated.  The IOD II Plus Bonus Base is equal to the sum of your Purchase Payments, increased by any “step-ups” (described below) and reduced for any Early Withdrawals or any Excess Withdrawals.
IOD II Plus Bonus Period:	A ten-year period commencing on the Issue Date. If you “step-up” IOD II Plus,(described below) during the IOD II Plus Bonus Period, the IOD II Plus Bonus Period is extended to ten years from the date of the step-up.
Stored Income Balance:	The amount you may withdraw at any time during your Stored Income Period and after your First Withdrawal Date without reducing your benefits under IOD II Plus.
Stored Income Period:	A period beginning on the latest of your first Account Anniversary,  the end of your IOD II Plus Bonus Period, or the first Account Anniversary following your 50th birthday, and ending on your Annuity Commencement Date.
You and Your:	The terms “you” and “your” refer to the oldest living Participant or the surviving spouse of the oldest Participant, as described under the sections entitled “Death of Participant Under IOD II Plus with Single-Life Coverage” and “Death of Participant Under IOD II Plus with Joint-Life Coverage.” In the case of a non-natural Participant, these terms refer to the oldest living annuitant.

Upon annuitization, IOD II Plus and any elected optional death benefit rider automatically terminate.

IOD II Plus allows you to withdraw a guaranteed amount each year, beginning after your First Withdrawal Date, until the death of any Participant if single-life coverage is elected (or until the death of both the Participant and the Participant's spouse if joint-life coverage is elected), regardless of the investment performance of the Designated Funds, provided that you comply with certain requirements. The amount you can withdraw, in any one year, is based on 5% of your Income Benefit Base. If you make no withdrawals (including Required Minimum Distribution Amounts) in an Account Year during your IOD II Plus Bonus Period, we will increase your Income Benefit Base by an amount equal to 7% of your IOD II Plus Bonus Base.

You may choose to end the current Bonus Period at anytime as long as you are at least age 50.  The Stored Income Period will begin on the first Account Anniversary following your election. You can elect to end the Bonus Period by notifying us by written request, mailed to our Annuity Mailing Address, which is set forth at the beginning of this Prospectus.

After your IOD II Plus Bonus Period ends and your Stored Income Period begins, we will not increase your Income Benefit Base by an amount equal to 7% of your IOD II Plus Bonus Base.  Instead, your Annual Income Amount will be added each year to your Stored Income Balance.

If you are participating in IOD II Plus, you may not make Purchase Payments after the first year following your Issue Date. After the first Account Anniversary, any Purchase Payments submitted by a Participant while participating in IOD II Plus will be returned to the Participant, unless the Participant instructs us to terminate participation in IOD II Plus.

To participate in IOD II Plus, all of your Account Value must be invested only in Designated Funds at all times during the term of IOD II Plus. (The term of IOD II Plus is for life, unless your Income Benefit Base is reduced to zero or your benefits under IOD II Plus are terminated or cancelled as described in this Appendix under “Cancellation of IOD II Plus,” “Depleting Your Account Value,” and “Annuitization Under IOD II Plus.”) The only Funds, dollar-cost averaging program options, and asset allocation models that currently qualify as Designated Funds are as shown in the section entitled “Designated Funds” in the prospectus to which this Appendix is attached.

You also have the option of choosing between single-life coverage and joint-life coverage. These options are described in greater detail in this Appendix under “Joint-Life Coverage” and the sections entitled “Death of Participant Under IOD II Plus with Single-Life Coverage” and “Death of Participant Under IOD II Plus with Joint-Life Coverage.”

Determining Your Income Benefit Base

On the Issue Date, we set your Income Benefit Base equal to your initial Purchase Payment. Thereafter, your Income Benefit Base is:

l	increased on each Account Anniversary by any applicable bonus amount during the IOD II Plus Bonus Period;
l	increased on each Account Anniversary by any step-ups as described under “Step-Up Under IOD II Plus” in this Appendix;
l	increased to the extent that you exercise your one-time option to use any amount of your Stored Income Balance to increase your Income Benefit Base, as described under “How IOD II Plus Works” in this Appendix;
l	increased by any subsequent Purchase Payments you make during the first year following the Issue Date;
l	decreased following any Early Withdrawals you take, as described under “Early Withdrawals” in this Appendix; and
l	decreased following any Excess Withdrawals you take, as described under “Excess Withdrawals” in this Appendix.

Determining Your Stored Income Balance

At the beginning of the Stored Income Period, your Stored Income Balance will equal your Annual Income Amount (i.e., 5% of your Income Benefit Base on that Date). Thereafter, your Stored Income Balance is:

l	increased on each Account Anniversary by your Annual Income Amount determined on that Anniversary;
l	decreased by the amount of any withdrawals you take, on or after your First Withdrawal Date, up to the amount of your Stored Income Balance;
l	decreased to $0 if you take an Excess Withdrawal;
l	decreased in proportion to the change in your Account Value if you take an Early Withdrawal; and
l	decreased by the amount you use in exercising your one-time option to increase your Income Benefit Base (described below under “How IOD II Plus Works”).

How IOD II Plus Works

     During the IOD II Plus Bonus Period

During the IOD II Plus Bonus Period, in each year that you do not take a withdrawal, your Income Benefit Base will be increased by an amount equal to 7% of your IOD II Plus Bonus Base. However, if this amount is less than the amount you will receive under a step-up, the Income Benefit Base will instead be increased by the step-up amount. If you do take a withdrawal, you are still eligible for step-up. (See “Step-Up under IOD II Plus” in this Appendix.) In this way, if you defer taking withdrawals during your early Account Years, you will be able to take larger withdrawals in later Account Years. Your Annual Income Amount, during this period, is not cumulative. Any unused portion of your Annual Income Amount in any Account Year, during the IOD II Plus Bonus Period cannot be applied to a future year.

During each Account Year, beginning on your First Withdrawal Date, you can take withdrawals totaling up to the amount of your Annual Income Amount, subject to the terms and conditions discussed below.  Even if your Account Value is reduced to zero, as long as your Income Benefit Base is greater than zero, you will receive an amount equal to your Annual Income Amount every year of your life unless you choose to cancel IOD II Plus.

     During the Stored Income Period

During the Stored Income Period on each Account Anniversary, your Annual Income Amount is added to your Stored Income Balance. You can take withdrawals up to the amount of your Stored Income Balance beginning on your First Withdrawal Date, subject to the terms and conditions discussed below. You can use all or a portion of your Stored Income Balance to effect a one-time increase of your Income Benefit Base prior to your Annuity Commencement Date. If your Account Value is reduced to zero, and your Income Benefit Base is greater than zero, you will receive an amount equal to your Annual Income Amount every year of your life unless you choose to cancel IOD II Plus.

Withdrawals from your Stored Income Balance can be taken at any time beginning on your First Withdrawal Date and prior to your Annuity Commencement Date without affecting your Income Benefit Base. If, beginning on your First Withdrawal Date, you make a withdrawal that does not exceed your Stored Income Balance, your Stored Income Balance will be decreased by the amount withdrawn.

You also have the option to use all or a portion of your Stored Income Balance to increase your Income Benefit Base. This option allows you to increase your future Annual Income Amount. While your Contract is in force, you may exercise this option only once and you must do so prior to your Annuity Commencement Date.  If you choose to use any portion of your Stored Income Balance to increase your Income Benefit Base:

● your Stored Income Balance will be decreased by the amount used;

● the amount of your Stored Income Balance used will be added to your Income Benefit Base; and

● your new Annual Income Amount on your next Account Anniversary will equal 5% of your new Income Benefit Base.

Here is an example of how IOD II Plus works:

Assume that you are age 60 when your Contract is issued with an initial Purchase Payment of $100,000. Assume you elect to participate in IOD II Plus with single-life coverage and investment performance of the Designated Funds is neutral over the years. (If you selected joint-life coverage, the numbers shown in the example could be different.) Your Income Benefit Base is equal to your initial Purchase Payment on your Issue Date. You decide to remain in the IOD II Plus Bonus Period for two years.  The IOD II Plus Bonus Base is $100,000 for year one and year two. The bonus amount is 7% of the IOD II Plus Bonus Base. You wait until your third Account Year before you begin your Stored Income Period. At issue, your Annual Income Amount is $5,000 (5% of your Income Benefit Base). Values are shown as of the beginning of the Account Year, except for the bonus which occurs at the end of the Account Year.
Year	Account Value	Income Benefit Base	Annual Income Amount	Bonus Amount	Stored Income Balance
1	$100,000	$100,000	$5,000	$7,000	$0
2	$100,000	$107,000	$5,350	$7,000	$0
3	$100,000	$114,000	$5,700	n/a	$5,700
4	$100,000	$114,000	$5,700	n/a	$11,400

During your fifth Account Year, you use the full amount of your Stored Income Balance ($17,100) to increase your Income Benefit Base thereby reducing your Stored Income balance to $0. On your next Account Anniversary, your Income Benefit Base of $114,000 will be increased to $131,100 and your Annual Income Amount will be $6,555 (5% of your Income Benefit Base). Therefore $6,555 will be added each year to your Stored Income Balance unless your Annual Income Amount changes.
Year	Account Value	Income Benefit Base	Annual Income Amount	Bonus Amount	Stored Income Balance
5	$100,000	$114,000	$5,700	n/a	$17,100
6	$100,000	$131,100	$6,555	n/a	$6,555
7	$100,000	$131,100	$6,555	n/a	$13,110
8	$100,000	$131,100	$6,555	n/a	$19,665
Each year thereafter, the Annual Income Amount will be added to the Stored Income Balance in the same manner.

Assume instead that, during your fifth Account Year, you take a withdrawal of $17,100, thereby reducing your Stored Income Balance to $0. On your next Account Anniversary, your Income Benefit Base will remain at $114,000 and your Annual Income Amount remains at $5,700 (5% of your Income Benefit Base). Therefore $5,700 will be added each year to your Stored Income Balance unless your Annual Income Amount changes.
Year	Account Value	Income Benefit Base	Annual Income Amount	Withdrawal	Stored Income Balance
5	$100,000	$114,000	$5,700	$17,100	$0
6	$82,900	$114,000	$5,700	$0	$5,700
7	$82,900	$114,000	$5,700	$0	$11,400
8	$82,900	$114,000	$5,700	$0	$17,100
Each year thereafter, the Annual Income Amount will be added to the Stored Income Balance in the same manner.

Early Withdrawals and Excess Withdrawals may significantly decrease your benefits under IOD II Plus, as described further under “Withdrawals Under IOD II Plus.” Even if your Stored Income Period has begun, withdrawals prior to you First Withdrawal Date are considered Early Withdrawals. Investing in any Fund, other than a Designated Fund, will cancel IOD II Plus as described under “Cancellation of IOD II Plus” in this Appendix.

Withdrawals Under IOD II Plus

     Withdrawals After Your First Withdrawal Date

Your First Withdrawal Date may occur during either your IOD II Plus Bonus Period or your Stored Income Period. If your First Withdrawal Date occurs during the IOD II Plus Bonus Period, you may take withdrawals up to your Annual Income Amount each year without affecting your benefits under IOD II Plus. Each withdrawal will reduce your Annual Income Amount for that year by the full amount of that withdrawal. You will not be eligible for a 7% bonus during any Account Year in which you have taken a withdrawal. If your First Withdrawal Date occurs during your Stored Income Period, withdrawals, up to the amount of your Stored Income Balance, will reduce your Stored Income Balance by the full amount of the withdrawal, but will not change your Income Benefit Base. This is shown in the example above.

     Excess Withdrawals

An Excess Withdrawal can occur during the IOD II Plus Bonus Period or the Stored Income Period.  During the IOD II Plus Bonus Period, if you take an Excess Withdrawal, both your Income Benefit Base and your IOD II Plus Bonus Base will be reduced according to the following formulae:

Your new Income Benefit Base =	IBB x	(	AV – WD	)
			AV – AIA

Your new IOD II Plus Bonus Base =	BB x	(	AV – WD	)
			AV – AIA

Where:
	IBB  =	Your Income Benefit Base immediately prior to the Excess Withdrawal.
	BB  =	Your IOD II Plus Bonus Base immediately prior to the Excess Withdrawal.
	WD =	The amount of the Excess Withdrawal.
	AIA =	Your remaining Annual Income Amount immediately prior to the Excess Withdrawal minus any prior partial withdrawals taken during the current Account Year.
	AV  =	Your Account Value immediately prior to the Excess Withdrawal.

During the Stored Income Period, if you take an Excess Withdrawal, your Stored Income Balance will be reduced to zero.  In addition, your Income Benefit Base will be reduced according to the following formula:

Your new Income Benefit Base =	IBB x	(	AV – WD	)
			AV – SB

Where:
	IBB =	Your Income Benefit Base immediately prior to the Excess Withdrawal.
	WD =	The amount of the Excess Withdrawal.
	SB  =	Your Stored Income Balance immediately prior to the Excess Withdrawal (or your Required Minimum Distribution Amount, if greater).
	AV  =	Your Account Value immediately prior to the Excess Withdrawal.

Your Annual Income Amount will be recalculated on your next Account Anniversary based on the reduced Income Benefit Base. Here is an example of an Excess Withdrawal.

Using the same facts as the previous example, assume that in your fifth Account Year you take a withdrawal of $50,000, exceeding your Stored Income Balance. Assume that due to poor investment performance during the fifth Account Year, your Account Value was $90,000 immediately prior to the withdrawal.  Your Income Benefit Base will be reduced to $62,551 as shown below and your new Annual Income Amount will be 5% of your new Income Benefit base ($3,128). The Annual Withdrawal Amount of $3,128 will be added to your Stored Income Balance.
Year	Account Value	Income Benefit Base	Annual Income Amount	Withdrawal	Stored Income Balance
5	$100,000	$114,000	$5,700	$50,000	$0
6	$50,000	$62,551	$3,128	$0	$3,128
7	$50,000	$62,551	$3,128	$0	$6,2561
8	$50,000	$62,551	$3,128	$0	$9,384
Each year thereafter, the Annual Income Amount will be added to the Stored Income Balance in the same manner.

Your new Income Benefit Base	=	$114,000 x	(	$90,000 – $50,000	)	= $62,551
				$90,000 – $17,100

Excess Withdrawals taken in a down market could severely reduce your benefits under IOD II Plus.

    Early Withdrawals

An Early Withdrawal can occur during the IOD II Plus Bonus Period or the Stored Income Period. Any withdrawals taken before the First Withdrawal Date are Early Withdrawals. If an Early Withdrawal occurs during your IOD II Plus Bonus Period, your Annual Income Amount will be reduced by the full amount of the withdrawal.  In addition, your IOD II Plus Bonus Base will be reduced according to the following formula:

Your new IOD II Plus Bonus Base =	BB x	(	AV - WD	)
			AV

If the Early Withdrawal occurs during the Stored Income Period, your Stored Income Balance will be reduced using the following formula:

Your new Stored Income Balance =	SB x	(	AV - WD	)
			AV

In either the IOD II Plus Bonus Period or Stored Income Period, your new Income Benefit Base will equal:

Your new Income Benefit Base =	IBB x	(	AV - WD	)
			AV

Where:
	IBB  =	Your Income Benefit Base immediately prior to the Early Withdrawal.
	BB  =	Your IOD II Plus Bonus Base immediately prior to the Early Withdrawal.
	SB  =	Your Stored Income Balance immediately prior to the Early Withdrawal.
	WD =	The amount of the Early Withdrawal.
	AV  =	Your Account Value immediately prior to the Early Withdrawal.

Your future Annual Income Amount will be recalculated based on the reduced Income Benefit Base. Early Withdrawals could severely reduce your benefits under IOD II Plus.

In addition to reducing your benefits under IOD II Plus, any withdrawal before your First Withdrawal Date could have adverse tax consequences. You should consult a qualified tax professional for more information.

     Depleting Your Account Value

If your Account Value is reduced to zeroas a result ofanEarly Withdrawal or an Excess Withdrawal (as described above), your Stored Income Balance (if any), your IOD II Plus Bonus Base (if any), and your Income Benefit Base will all be reduced to zero. Therefore, your Contract, as well as your benefits under IOD II Plus, will end.

If your Account Value is reduced to zero through any combination of poor investment performance of the Designated Funds, Contract charges, and withdrawals other than Excess Withdrawals or Early Withdrawals, your Income Benefit Base will not be reduced. Your Contract will end, but you will be entitled to receive annual payments as follows.

If you were in the IOD II Plus Bonus Period on the day the Account Value was reduced to zero, regardless of your age, you will be entitled to receive annual amounts equal to 5% of your Income Benefit Base each year for as long as you live.

If you were in the Stored Income Period on the day the Account Value was reduced to zero, you will be entitled to receive annual amounts equal to 5% of your Income Benefit Base. Prior to determining your annual payments, you may increase your Income Benefit Base by any remaining Stored Income Balance as described below. These payments will continue for as long as you live. If you elected joint-life coverage, the payments will continue as long as either you or your spouse are alive as described in this Appendix under “Death of Participant Under IOD II Plus with Joint-Life Coverage.”  If you have any remaining Stored Income Balance on the day your Account Value is reduced to zero, you will be notified that, before you begin to receive your “annual lifetime payments,” you must deplete your Stored Income Balance by:

(a)	withdrawing your remaining Stored Income Balance;
(b)	applying the remaining amount of your Stored Income Balance to increase your Income Benefit Base (and thus the amount of your “annual lifetime payments”); or
(c)	using a combination of (a) and (b).

Because the Contract has ended, the amount of these annual lifetime payments will not change. You should be aware, however, that they could be subject to certain tax consequences. You should consult a qualified tax professional for more information.

Cost of IOD II Plus

If you elected IOD II Plus, we will deduct a quarterly fee from your Account Value (“IOD II Plus Fee”). The IOD II Plus Fee will be taken as a specific deduction from your Account Value on the last valuation day of each Account Quarter and will equal 0.2375 % of your Fee Base on that day, if you elected single-life coverage (0.2875% for joint-life coverage). On an annual basis, the IOD II Plus Fee is equal to 0.95% of your Fee Base if you elected single-life coverage (1.15% for joint-life coverage). We reserve the right to increase the percentage rate used to calculate the IOD II Plus Fee on newly issued Contracts.

During the first Account Year, your Fee Base is equal to your Income Benefit Base.  On each Account Anniversary, the Fee Base is recalculated.  During the IOD II Plus Bonus Period, your new Fee Base will be reset to equal your Income Benefit Base, if your Income Benefit Base is higher than your current Fee Base.  During the Stored Income Period, your new Fee Base will be reset to equal your Income Benefit Base plus your Stored Income Balance (if any) less your Annual Income Amount for that year if this recalculated amount is higher than your current Fee Base. In the event that the recalculated amount is not greater than your current Fee Base, we will continue to calculate your IOD II Plus Fee based upon your current Fee Base until, at least, your next Account Anniversary.  Note that, although your IOD II Plus Fee may increase, it will never decrease.

For the most part, we calculate your Fee Base only on your Account Anniversary. However, we will recalculate your Fee Base between Account Anniversaries, if you take an Early Withdrawal or Excess Withdrawal or make additional Purchase Payments during your first Account Year.

If you take an Excess Withdrawal during your IOD II Plus Bonus Period, your Fee Base will be decreased by the following formula:

Your new Fee Base =	Fee Base  x	(	AV - WD	)
			AV - AIA

If you take an Excess Withdrawal during your Stored Income Period, your IOD II Plus Fee Base will be decreased by the following formula:

Your new Fee Base =	Fee Base  x	(	AV - WD	)
			AV - SB

If you take an Early Withdrawal, your IOD II Plus Fee Base will be decreased by the following formula:

Your new Fee Base =	Fee Base  x	(	AV - WD	)
			AV

Where:
	Fee Base =	Your IOD II Plus Fee Base immediately prior to the Early/Excess Withdrawal.
	WD =	The amount of the Early/Excess Withdrawal.
	SB =	Your Stored Income Balance (if any) immediately prior to the Excess Withdrawal.
	AIA =	Your Annual Income Amount immediately prior to the Excess Withdrawal minus any prior partial withdrawals taken during the current Account Year.
	AV =	Your Account Value immediately prior to the Early/Excess Withdrawal.

Any additional Purchase Payment you make during your first Account Year will increase your Income Benefit Base as described under “Determining Your Income Benefit Base.” Therefore, your Fee Base will increase by any additional Purchase Payments made.

Here is an example of how we calculate your Fee Base:

Assume that you are age 60 when your Contract is issued with an initial Purchase Payment of $100,000.  Assume you elected to participate in IOD II Plus with single-life coverage and investment performance of the Designated Funds is neutral over the years. (If you selected joint-life coverage, the numbers shown in the example could be different.) Your Income Benefit Base is equal to your initial Purchase Payment ($100,000) on your Issue Date. Your IOD II Plus Bonus Base is equal to your initial Purchase Payment ($100,000).  At issue, your Annual Income Amount is $5,000 (5% of your Income Benefit Base). You wait until your third Account Year before you elect to begin your Stored Income Period. During the IOD II Plus Bonus Period, in years that withdrawals are not taken, your Income Benefit Base increases by 7% of your IOD II Plus Bonus Base (assuming no step-up). Values are shown as of the beginning of the Account Year. At the beginning of your Stored Income Period, Year 3, your Annual Income Amount has increased to $5,700.
During the IOD II Plus Bonus Period (Account Years 1and 2), the Fee Base is set equal to your Income Benefit Base.  During the Stored Income Period, the Fee Base is reset at the beginning of the Account Year to equal your Income Benefit Base plus your Stored Income Balance less your Annual Income Amount, if that amount is greater than the previous Fee Base.  For example, in Account Year 4, the Fee Base is set equal to the Income Benefit Base ($114,000) plus the Stored Income Balance ($11,400) less your Annual Income Amount ($5,700) if that amount ($119,700) is greater than the previous Fee Base ($114,000).
Year	Income Benefit       Base	Annual Income      Amount	Stored                      Income Balance			Fee Base
			Beginning of year	Withdrawal   Amount	End of year
1	$100,000	$5,000	$0	$0	$0	$100,000
2	$107,000	$5,350	$0	$0	$0	$107,000
3	$114,000	$5,700	$5,700	$0	$5,700	$114,000
4	$114,000	$5,700	$11,400	$0	$11,400	$119,700
Assume, instead, that in your fourth Account Year you take a $11,400 withdrawal.  At the beginning of your fifth Account Year, your Income Benefit Base ($114,000) plus your Stored Income Balance ($0) less your Annual Income Amount ($5,700) is less than the current Fee Base ($119,700), so there is no change to the Fee Base as shown below. In Account Year 7, the Fee Base is reset. Your Income Benefit Base ($114,000) plus your Stored Income Balance ($17,100) less your Annual income Amount ($5,700), results in an amount of $125,400, an amount that is greater than the previous Fee Base ($119,700).
Year	Income Benefit       Base	Annual Income      Amount	Stored                      Income Balance			Fee Base
			Beginning of year	Withdrawal   Amount	End of year
4	$114,000	$5,700	$11,400	$11,400	$0	$119,700
5	$114,000	$5,700	$5,700	$0	$5,700	$119,700
6	$114,000	$5,700	$11,400	$0	$11,400	$119,700
7	$114,000	$5,700	$17,100	$0	$17,100	$125,400
On each Account Anniversary thereafter, your Fee Base is recalculated and reset if necessary.

Your IOD II Plus Fee will not change during an Account Year, unless you take one of two specific actions:

l	If you make an additional Purchase Payment during your first Account Year, you will increase your Fee Base and thus your IOD II Plus Fee.
l	If you make an Early Withdrawal or an Excess Withdrawal, you will decrease your Fee Base and thus your IOD II Plus Fee.

In addition, on your Account Anniversary, the IOD II Plus Fee may also change, if we increase the percentage used to calculate the IOD II Plus Fee as described below under “Step-Up Under IOD II Plus.”

The investment performance of the Designated Funds will not affect your IOD II Plus Fee during an Account Year. However, as stated below under “Step-Up Under IOD II Plus,” favorable investment performance may cause the Income Benefit Base to increase on an Account Anniversary, and thus increase your IOD II Plus Fee.

We will continue to deduct the IOD II Plus Fee until you annuitize your Contract, your Account Value reduces to zero, or your benefits under IOD II Plus are cancelled as described under “Cancellation of IOD II Plus” in this Appendix.

Step-Up Under IOD II Plus

You can step-up your Income Benefit Base and IOD II Plus Bonus Base each Account Anniversary prior to your Annuity Commencement Date, provided that you satisfy certain requirements. First, you must meet eligibility requirements:

l	Your Account Value less your Stored Income Balance (if any) must equal no more than $5,000,000. (For purposes of determining the $5,000,000 limit, we reserve the right, in our sole discretion, to aggregate your Account Value with the account values of all other variable annuity contracts you own issued by Sun Life Assurance Company of Canada (U.S.) or its affiliates.)
l	If your Contract is in the Stored Income Period, your highest quarter-end Account Value (adjusted for subsequent purchase payments and withdrawals) during the most recent Account Year (“Highest Quarterly Value”) minus your Stored Income Balance must be greater than your current Income Benefit Base.
l	If your Contract has not started the Stored Income Period, your Highest Quarterly Value during the most recent Account Year must be greater than your current Income Benefit Base (adjusted for any applicable bonus if the Contract is in the IOD II Plus Bonus Period).

Second, if you satisfy the eligibility requirements, we then consider whether market conditions have caused us to increase the percentage rate used to calculate the IOD II Plus Fee on newly issued Contracts. If we are no longer issuing Contracts with IOD II Plus, then the percentage rate we use to calculate your IOD II Plus Fee will be set based upon current market conditions at that time. Significant changes in stock market prices, interest rate fluctuations, and competitive industry trends are among the market conditions we consider in whether to change the fee.

l

If we have not had to increase the percentage rate as described above, the percentage rate we use to calculate your IOD II Plus Fee will remain unchanged and we will automatically step up your Income Benefit Base and your IOD II Plus Bonus Base (if applicable).

l

If we have had to increase the percentage rate as described above, we offer you the opportunity to step-up at the higher percentage rate. In this case, your written consent is required to accept the higher percentage rate used to calculate your IOD II Plus Fee and step-up your Income Benefit Base.  If you do not consent to the step-up and higher percentage, the step-up will not be implemented and all subsequent step-ups of your Income Benefit Base will also be suspended. You may thereafter submit an election form to us, however, in order to consent to the then-applicable percentage rate and thus reactivate subsequent automatic step-ups.

At the time of step-up prior to the Stored Income Period, we will increase your Income Benefit Base and your IOD II Plus Bonus Base each to an amount equal to the highest adjusted quarterly Account Value, if such amount exceeds your current Income Benefit Base (adjusted for any applicable bonus if the Contract is in the IOD II Plus Bonus Period). If the step-up occurred during the IOD II Plus Bonus Period, your IOD II Plus Bonus Period will be renewed for another 10-year period.

At the time of step-up during the Stored Income Period, we will increase your Income Benefit Base to an amount equal to the highest adjusted quarterly Account Value less your Stored Income Balance, if such amount exceeds your current Income Benefit Base. After the step-up, your Annual Income Amount will be 5% of your new Income Benefit Base.

Below are examples of how step-up works under a few different circumstances.

Assume that you are 60 years old when you purchase a Contract with an initial Purchase Payment of $100,000, and that you elect to participate in IOD II Plus with single-life coverage. (If you selected joint-life coverage, the numbers shown in the example could be different.) Your Income Benefit Base and your IOD II Plus Bonus Base are equal to your initial Purchase Payment. Your Annual Income Amount is $5,000 (5% of your Income Benefit Base).  The example assumes you are in the IOD II Plus Bonus Period.
In each of the five examples, Account Values shown are as of the last day of each Account Quarter.  Adjustments are made on the day a Purchase Payment or withdrawal is made.
The Account Values on each of your four Account Quarters are $113,000, $108,000, $90,000, and $103,000, respectively.  No additional Purchase Payments are made and no withdrawals are taken, so no adjustments to these values are necessary.  The highest adjusted quarterly value is $113,000. Both your new Income Benefit Base and IOD II Plus Bonus Base are set to equal $113,000 since that amount exceeds your previous Income Benefit Base increased by 7% of your IOD II Plus Bonus Base ($100,000 + $7,000).
Time	Account Value	Adjustment for subsequent Purchase Payments and withdrawals	Account Value (after subsequent adjustments)	Income Benefit Base
Issue	$100,000	n/a	n/a	$100,000
End of First Quarter	$113,000	n/a	$113,000	$100,000
End of Second Quarter	$108,000	n/a	$108,000	$100,000
End of Third Quarter	$90,000	n/a	$90,000	$100,000
End of Fourth Quarter (before step-up)	$103,000	n/a	$103,000	$100,000
Highest Quarterly Value (after adjustments)			$113,000
Stored Income Balance at end of fourth quarter		n/a (since you are in the IOD II Plus Bonus Period)
Step-up comparison	Is $113,000 greater than $100,000 + $7,000?  Yes, so step-up.
On the Account Anniversary (after step-up)
New Income Benefit Base =	$113,000	Highest Quarterly Value (after adjustments).
New Annual Income Amount =	$5,650	$113,000 x 5%
New Stored Income Balance =	n/a	(since you are in the IOD II Plus Bonus Period)
New IOD II Plus Bonus Base =	$113,000
Please note:  The end of the fourth Account Quarter and the Account Anniversary are the same day.  We only make the distinction to separate values before and after step-up.

If you make an additional Purchase Payment during your first Account Year, your Account Value, your Income Benefit Base, and your IOD II Plus Bonus Base are each immediately increased by the amount of the additional Purchase Payment.

Here is an example of how an additional Purchase Payment of $50,000 made in the second Account Quarter would affect your step-up and assumes that you are in the IOD II Plus Bonus Period:

Time	Account Value	Adjustment for subsequent Purchase Payments and withdrawals	Account Value (after subsequent adjustments)	Income Benefit Base
Issue	$100,000	n/a	n/a	$100,000
End of First Quarter	$113,000	$50,000	$163,000	$100,000
$50,000 Purchase Payment	$163,000	n/a	n/a	$150,000
End of Second Quarter	$158,000	n/a	$158,000	$150,000
End of Third Quarter	$140,000	n/a	$140,000	$150,000
End of Fourth Quarter (before step-up)	$153,000	n/a	$153,000	$150,000
Highest Quarterly Value (after adjustments)			$163,000
Stored Income Balance at end of fourth quarter		n/a (since you are in the IOD II Plus Bonus Period)
Step-up comparison	Is $163,000 greater than $150,000 + $10,500?  Yes, so step-up.
On the Account Anniversary (after step-up)
New Income Benefit Base =	$163,500	Highest Quarterly Value (after adjustments).
New Annual Income Amount =	$8,150	$163,500 x 5%
New Stored Income Balance =	n/a	(since you are in the IOD II Plus Bonus Period)
New IOD II Plus Bonus Base =	$163,000
Please note:  Since the additional Purchase Payment occurred after the first Account Quarter, the first Account Quarter value was adjusted.

Here is an example of how a $4,000 withdrawal taken in the second Account Quarter would affect your step-up and assumes you are in the IOD II Plus Bonus Period:

Time	Account Value	Adjustment for subsequent Purchase Payments and withdrawals	Account Value (after subsequent adjustments)	Income Benefit Base
Issue	$100,000	n/a	n/a	$100,000
End of First Quarter	$113,000	$4,000	$109,000	$100,000
$4,000 withdrawal	$109,000	n/a	n/a	$100,000
End of Second Quarter	$104,000	n/a	$104,000	$100,000
End of Third Quarter	$86,000	n/a	$86,000	$100,000
End of Fourth Quarter (before step-up)	$99,000	n/a	$99,000	$100,000
Highest Quarterly Value (after adjustments)			$109,000
Stored Income Balance at end of fourth quarter		n/a (since you are in the IOD II Plus Bonus Period)
Step-up comparison	Is $109,000 greater than $100,000 + $0 (no bonus since withdrawal taken? Yes, so step-up.
On the Account Anniversary (after step-up)
New Income Benefit Base =	$109,000	Highest Quarterly Value (after adjustments).
New Annual Income Amount =	$5,450	$109,000 x 5%
New Stored Income Balance =	n/a	(since you are in the IOD II Plus Bonus Period)
New IOD II Plus Bonus Base =	$109,000
Please note:  Since the withdrawal occurred after the first Account Quarter, the first Account Quarter value was adjusted.

Assume instead you take a $40,000 withdrawal in the second Account Quarter at a point when the Account Value equaled $99,000 immediately before the withdrawal.  Since this withdrawal exceeds your Annual Income Amount, it is considered an Excess Withdrawal.  The Excess Withdrawal reduces your Income Benefit Base and your IOD II Plus Bonus Base as described under “Excess Withdrawals” in this Appendix.  All previous quarterly Account Values are first reduced by the amount of the Annual Income Amount less any prior withdrawals taken in that Account Year and then adjusted in the same proportion that the Income Benefit Base was adjusted after the Excess Withdrawal. (See the two-step calculation shown in the box below the following example.) The example assumes you are in the IOD II Plus Bonus Period.

Time	Account Value	Adjustment for subsequent Purchase Payments and withdrawals	Account Value (after subsequent adjustments)	Income Benefit Base
Issue	$100,000	n/a	n/a	$100,000
End of First Quarter	$113,000	$45,213	$67,787	$100,000
$40,000 withdrawal	$59,000	n/a	n/a	$62,766
End of Second Quarter	$68,000	n/a	$68,000	$62,766
End of Third Quarter	$50,000	n/a	$50,000	$62,766
End of Fourth Quarter (before step-up)	$63,000	n/a	$63,000	$62,766
Highest Quarterly Value (after adjustments)			$68,000
Stored Income Balance at end of fourth quarter		n/a (since you are in the IOD II Plus Bonus Period)
Step-up comparison	Is $68,000 greater than $62,766 + $0 (no bonus since withdrawal taken)? Yes, so step-up.
On the Account Anniversary (after step-up)
New Income Benefit Base =	$68,000	Highest Quarterly Value (after adjustments).
New Annual Income Amount =	$3,400	$68,000 x 5%
New Stored Income Balance =	n/a	(since you are in the IOD II Plus Bonus Period)
New IOD II Plus Bonus Base =	$68,000

(1)	Reduce the end of First Quarter Account Value by the Annual Income Amount less any prior withdrawals taken in that Account Year	=	$113,000	–	$5,000		= $108,000
(2)	Adjust the Account Value for the first Account Quarter	=	$108,000 x	(	$99,000 – $40,000	)	= $67,787
					$99,000 – $5,000
	The total adjustment	=	$113,000	–	$67,787		= $45,213

Using the facts of the above example where no withdrawals or additional premiums have taken place, assume that for Account Year 2 you have elected to begin the Stored Income Period. As stated in the above example the Income Benefit Base is $113,000 beginning of Account Year 2. Your Annual Income Amount is $5,650 (5% of your Income Benefit Base).  Because you have elected to begin the Stored Income Period, your Stored Income Balance is initially equal to your Annual Income Amount ($5,650).
The Account Values on each of your four Account Quarters for Account Year 2 are $105,000, $111,000, $116,000, and $120,000, respectively.  No additional Purchase Payments are made and no withdrawals are taken, so no adjustments to these values are necessary.  The highest adjusted quarterly value is $120,000.  Your new Income Benefit Base is set to equal $114,350 ($120,000 - $5,650) since that amount exceeds your previous Income Benefit Base.
Time	Account Value	Adjustment for subsequent Purchase Payments and withdrawals	Account Value (after subsequent adjustments)	Income Benefit Base
End of First Quarter	$105,000	n/a	$105,000	$113,000
End of Second Quarter	$111,000	n/a	$111,000	$113,000
End of Third Quarter	$116,000	n/a	$116,000	$113,000
End of Fourth Quarter (before step-up)	$120,000	n/a	$120,000	$113,000
Highest Quarterly Value (after adjustments)			$120,000
Stored Income Balance at  end of fourth quarter		$5,650
Step-up comparison	Is ($120,000 - $5,650) greater than $113,000?  Yes, so step-up.
On the Contract Anniversary (after step-up)
New Income Benefit Base =	$114,350	Highest Quarterly Value (after adjustments) less the Stored Income Balance.
New Annual Income Amount =	$5,718	$114,350 x 5%
New Stored Income Balance =	$11,367
New IOD II Plus Bonus Base =	n/a	No longer applicable for the Stored Income Period
Please note:  The end of the fourth Account Quarter and the Contract Anniversary are the same day.  We only make the distinction to separate values before and after step-up.

Joint-Life Coverage

On the Issue Date, you have the option of electing IOD II Plus with single-life coverage or, for a higher IOD II Plus Fee, with joint-life coverage. Once you make the election, you cannot switch between joint-life and single-life coverage, regardless of any change in life events.  Joint-life coverage is not available if you are unmarried on the Issue Date.

Joint-life coverage can be elected on an individually-owned Contract or on a co-owned Contract.  On an individually-owned Contract, joint-life coverage is available only if your spouse is the sole primary beneficiary on the Issue Date and remains the sole primary beneficiary while IOD II Plus is in effect. On a co-owned Contract, joint-life coverage is available only if you and your spouse are the only co-owners on the Issue Date and remain so while IOD II Plus is in effect. Whereas single-life coverage provides an Annual Income Amount only until any Participant dies, joint-life coverage provides an Annual Income Amount for as long as either you or your spouse is alive. Note that, for joint-life coverage to continue after the death of any Participant, the surviving spouse must elect to continue the contract through the “Spousal Continuance” provision.  See also “Death of Participant Under IOD II Plus with Joint-Life Coverage” in this Appendix.

If you have elected joint-life coverage, the IOD II Plus Bonus Period and the Stored Income Period are determined based on the age of the younger spouse if the younger spouse attains (or would have attained) age 50.  (For purposes of joint-life coverage, the younger spouse refers to the person who was the younger spouse on the Issue Date, even if that person has died or is no longer married to the person who was his or her spouse on the Issue Date.)  On the first day of the Stored Income Period, your Annual Income Amount will be added to your Stored Income Balance. The First Withdrawal Date will be your Issue Date if the younger spouse is at least age 59 at issue. Otherwise it will be the first Account Anniversary after the younger spouse attains (or would have attained) age 59.

The two spouses on the Issue Date are the only two people covered under the joint-life feature.  If a Participant remarries, the new spouse is not covered under the joint-life feature.  Therefore, if the spouse on the Issue Date is no longer your spouse, your benefits under IOD II Plus continue for your life and, when you die, annual withdrawals are no longer available.  Note that, when you elect joint-life coverage, you also elect the higher joint-life fee. The percentage rate of the fee will not be reduced regardless of any change in life events.

If one spouse is significantly younger than the other spouse, you should carefully consider whether joint-life coverage is an appropriate choice in light of the possibly long waiting period before the benefit begins to store income and in light of the higher fee for joint-life coverage.

Joint-life coverage may not be available on all Contracts.

Cancellation of IOD II Plus

Should you decide that IOD II Plus is no longer appropriate for you, you may cancel IOD II Plus at any time. Upon cancellation, all benefits and charges under IOD II Plus shall cease. Once cancelled, IOD II Plus cannot be reinstated.

Although transfers among the Designated Funds are permitted as described under “Transfer Privilege,” IOD II Plus will be cancelled automatically:

● if any Purchase Payment is allocated to an investment option other than a Designated Fund; or

● if any portion of Account Value maintained in a Designated Fund is transferred into an investment option other than a Designated Fund.

IOD II Plus will also be cancelled for any of the following:

● upon a termination of the Contract;

● upon annuitization*; or

● your Income Benefit Base is reduced to zero as a result of Early or Excess Withdrawals.

*Note that the maximum Annuity Commencement Date permitted under this Contract is the first day of the month following the Annuitant’s 95th birthday.  See “Selection of Annuity Commencement Date” under “THE INCOME PHASE – ANNUITY PROVISIONS” in the prospectus to which this Appendix is attached.

A change in ownership may also cancel your benefits under IOD II Plus.

Death of Participant Under IOD II Plus with Single-Life Coverage

If you elected single-life coverage, IOD II Plus terminates on the death of any Participant and the Beneficiary may elect to exercise any of the available options under the Death Benefit provisions of the Contract. Alternately, the Beneficiary may elect to receive the Stored Income Balance, if any. If your surviving spouse is the sole primary Beneficiary and elects to continue the Contract, your spouse has the additional option of electing to participate in a new IOD II Plus Rider on the original Contract (assuming your surviving spouse meets certain eligibility requirements). If your surviving spouse makes such election, all of the following occur:

● the new Account Value will be the greater of the Stored Income Balance, if any, on the original Contract or the Death Benefit;

● the new percentage rate used to calculate the IOD II Plus Fee will be set by us based on market conditions at the time and may be higher than the current percentage rate used to calculate the IOD II Plus Fee;

● the new Income Benefit Base and your new IOD II Plus Bonus Base will each be equal to the Account Value after any Death Benefit has been credited; and

● the new IOD II Plus Bonus Period begins.

Death of Participant Under IOD II Plus with Joint-Life Coverage

If the surviving spouse on the Death Benefit Date was not the spouse of a Participant on the original Contract’s Issue Date, then this section does not apply, even if joint-life coverage was elected.  In such case, if a Participant dies while participating in IOD II Plus, the provisions of the section titled “Death of Participant Under IOD II Plus with Single-Life Coverage” will apply.

If you purchased joint-life coverage and one of the Participants dies, IOD II Plus will continue, provided that the surviving spouse, as the sole primary beneficiary, continues the Contract. In such case:

● the new Account Value will be equal to the Death Benefit;

● the Stored Income Balance, if any, will remain unchanged;

● the Income Benefit Base and the IOD II Plus Bonus Base will remain unchanged until the next Account Anniversary when a step-up could apply due to an increase in the Account Value (see “Step-Up Under IOD II Plus” in this Appendix);

● on each Account Anniversary, the Annual Income Amount will be equal to the Income Benefit Base multiplied by 5%; and

● the percentage rate of the IOD II Plus Fee for the joint-life coverage option will continue for the surviving spouse as it was immediately prior to the death of the Participant.

At the death of the surviving spouse, the Contract, including IOD II Plus, terminates.

If you purchased joint-life coverage and the deceased Participant's surviving spouse does not continue the Contract, your Beneficiary may elect any available option under the Death Benefit provisions of the Contract.

Annuitization Under IOD II Plus

Under the terms of IOD II Plus, if your Account Value is greater than zero on your maximum Annuity Commencement Date, you may elect to:

(1)	surrender your Contract and receive the greater of your Cash Surrender Value or your Stored Income Balance, if any;
(2)	annuitize your Account Value under one of the Annuity Options available on that date; or
(3)	(a) receive the remaining Stored Income Balance, if any, in a single sum and (b) annuitize your remaining Account Value as a single-life annuity (or a joint-life annuity, if joint-life coverage was elected at issue and you are still eligible to receive it) with an annualized annuity payment of not less than 5% of your then current Income Benefit Base.

If you make no election, we will default your choice to option 3.

If your Account Value has been reduced to zero (other than as a result of an Early Withdrawal or an Excess Withdrawal), and your Income Benefit Base is greater than zero on or before your maximum Annuity Commencement Date, you will receive your full Annual Income Amount each year until you die. For a more complete discussion of this, see “Depleting Your Account Value.”

Certain Tax Considerations

Certain tax considerations may be important to you in connection with a living benefit, such as IOD II Plus. When you elect to participate in IOD II Plus, you may withdraw annual amounts up to the Yearly RMD Amount without affecting your benefit, subject to the conditions stated below. In the event that your Yearly RMD Amount attributable to your Contract is greater than your Stored Income Balance, we are currently waiving the withdrawal provisions under IOD II Plus as follows. If you withdraw all or a portion of your Qualified Contract's Yearly RMD Amount from the Contract while participating in IOD II Plus, we reduce your Account Value and your Stored Income Balance, dollar for dollar, by the amount of the withdrawal to a value not less than zero. We will not, however, penalize you if the current Federal Tax Laws require you to withdraw from your Contract an amount greater than your Stored Income Balance. In other words, if a Yearly RMD Amount exceeds your Stored Income Balance, we will reduce your Stored Income Balance, but we will not reduce your Income Benefit Base, provided that:

● you withdraw your Qualified Contract's first Yearly RMD Amount in the calendar year you attain age 70½ rather than postponing the withdrawal of that Amount until the first quarter of the next calendar year, and

● you do not make any withdrawal from your Qualified Contract that would result in you receiving, in any Account Year, more than one calendar year's Yearly RMD Amount.

Currently, any withdrawal in excess of the Annual Income Amount or Stored Income Balance that is taken to satisfy the Yearly RMD Amounts will not be treated as an Excess Withdrawal, and will not reduce the Income Benefit Base. However, if there is any material change to the current Code or IRS Rules governing the timing or determination of required minimum distribution amounts, then the Company reserves the right to treat any withdrawal greater than the Annual Income Amount or Stored Income Balance as an Excess Withdrawal which may significantly reduce the Income Benefit Base.

For a further discussion of some of these considerations, please refer to “TAX CONSIDERATIONS - Impact of Optional Death Benefit and Optional Living Benefit Riders” in the prospectus to which this Appendix is attached.

APPENDIX J -

Build Your Portfolio

This Appendix sets forth the Funds and percentage limits that constitute the “build your portfolio” program. This program is more fully described under “BUILD YOUR PORTFOLIO” in the Prospectus. Briefly, if you comply with this program, the portfolio you build will satisfy the Designated Funds requirement under certain optional living benefit riders. For Contracts purchased prior to February 17, 2009, the allocation percentage limits available at issue continue to be applicable: Fixed Income Funds - 25% to 80%; Asset Allocation Funds - 0% to 75%; Core Equity Funds - 0% to 75%; Growth Equity Funds - 0% to 30%; and Specialty Funds - 0% to 10%. If you do not comply with the allocation percentage limits in effect under your Contract, your selection of the Build Your Portfolio model will not qualify as a Designated Fund and your participation in the living benefit will be cancelled.

Fixed Income Funds	Asset Allocation Funds	Core Equity Funds	Growth Equity Funds	Specialty Funds
30% to 80%	0% to 70%	0% to 70%	0% to 30%	0% to 10%
PIMCO Total Return Portfolio2	AllianceBernstein Balanced Wealth Strategy Portfolio	Lord Abbett Series Fund All Value Portfolio	Franklin Small Cap Value Securities Fund	Franklin Strategic Income Securities Fund
Sun Capital Investment Grade Bond Fund®	Fidelity® Variable Insurance Products Balanced Portfolio	MFS® Value Portfolio	SCSM Oppenheimer Main Street Small Cap Fund	PIMCO Emerging Markets Bond Portfolio
MFS® Government Securities Portfolio	Franklin Income Securities Fund	Van Kampen Life Investment Trust Comstock Portfolio	Oppenheimer Capital Appreciation Fund/VA	Sun Capital Global Real Estate Fund
MFS® Bond Portfolio	Franklin Templeton Founding Funds Allocation Fund3	Mutual Shares Securities Fund	Lord Abbett Series Fund Growth Opportunities Portfolio	PIMCO CommodityRealReturnTM Strategy Portfolio
PIMCO Real Return Portfolio2	MFS® Total Return Portfolio	MFS® Utilities Portfolio	MFS® International Value Portfolio	MFS® Emerging Markets Equity Portfolio
Huntington VA Mortgage Securities Fund1	Oppenheimer Balanced Fund/VA	MFS® Core Equity Portfolio	MFS® Research International Portfolio	SCSM PIMCO High Yield Fund
Sun Capital Money Market Fund®	Universal Institutional Funds Inc. - Equity and Income Portfolio	SCSM Davis Venture Value Fund	Templeton Growth Securities Fund	Lazard Retirement Emerging Markets Equity Portfolio
SCSM Goldman Sachs Short Duration Fund	Fidelity® Variable Insurance Products Fund Freedom 2010 Portfolio2	Oppenheimer Main St. Fund®/VA2	First Eagle Overseas Variable Fund	Huntington VA Rotating Markets Fund1
SCSM PIMCO Total Return Fund	Fidelity® Variable Insurance Products Fund Freedom 2015 Portfolio	Huntington VA Dividend Capture Fund1	Oppenheimer Global Securities Fund/VA	Huntington VA Real Strategies Fund1
SCSM BlackRock Inflation Protected Bond Fund	Fidelity® Variable Insurance Products Fund Freedom 2020 Portfolio	Huntington VA Income Equity Fund1	Columbia Marsico International Opportunities Fund, Variable Series
	SCSM Ibbotson Moderate Fund	SCSM Lord Abbett Growth & Income Fund	Fidelity® Variable Insurance Products Fund Mid Cap Portfolio
	SCSM Ibbotson Balanced Fund	SCSM Goldman Sachs Mid Cap Value Fund	MFS® International Growth Portfolio
	SCSM Ibbotson Growth Fund	AllianceBernstein Wealth Appreciation Strategy Portfolio	SCSM WMC Large Cap Growth Fund
	BlackRock Global Allocation V.I. Fund	SCSM Oppenheimer Large Cap Core Fund	Huntington VA Growth Fund1
	Huntington VA Balanced Fund1		Huntington VA Marco 100 Fund1
			Huntington VA Mid Corp America Fund1
			Huntington VA New Economy Fund1
			Huntington VA International Equity Fund1
			Huntington VA Situs Fund1
			SCSM WMC Blue Chip Mid Cap Fund
			Universal Institutional Funds Inc. - Mid Cap Growth Portfolio
			Universal Institutional Funds Inc. - Mid Cap Value Portfolio
			AllianceBernstein International Growth Portfolio
			AllianceBernstein  International Value Portfolio2

Fixed Income Funds	Asset Allocation Funds	Core Equity Funds	Growth Equity Funds	Specialty Funds
30% to 80%	0% to 70%	0% to 70%	0% to 30%	0% to 10%
			Fidelity® Variable Insurance Products Fund Contrafund® Portfolio
			SCSM AllianceBernstein International Value Fund
			SCSM Dremen Small Cap Value Fund
			SCSM AIM Small Cap Growth Fund

1 Only available if you purchased your Contract through a Huntington Bank representative.

2 Only available if you purchased your Contract before October 20, 2008.

3 Only available if you purchased your Contract before February 17, 2009.

APPENDIX K -

CONDENSED FINANCIAL INFORMATION

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

Fund	Price Level	Year	Accumulation Unit Value Beginning of Year	Accumulation Unit Value End of Year	Number of Accumulation Units End of  Year
AllianceBernstein International Growth Portfolio	01	2008	10.0000	5.6728	3,177
AllianceBernstein International Growth Portfolio	02	2008	10.0000	5.6634	0
AllianceBernstein International Growth Portfolio	03	2008	10.0000	5.6611	0
AllianceBernstein International Growth Portfolio	04	2008	10.0000	5.6540	0
AllianceBernstein International Growth Portfolio	05	2008	10.0000	5.6517	0
AllianceBernstein International Growth Portfolio	06	2008	10.0000	5.6446	0
AllianceBernstein VPS Balanced Wealth Strategy Port B Share	01	2008	10.0000	7.6615	20,308
AllianceBernstein VPS Balanced Wealth Strategy Port B Share	02	2008	10.0000	7.6488	0
AllianceBernstein VPS Balanced Wealth Strategy Port B Share	03	2008	10.0000	7.6456	0
AllianceBernstein VPS Balanced Wealth Strategy Port B Share	04	2008	10.0000	7.6361	0
AllianceBernstein VPS Balanced Wealth Strategy Port B Share	05	2008	10.0000	7.6330	0
AllianceBernstein VPS Balanced Wealth Strategy Port B Share	06	2008	10.0000	7.6235	0
AllianceBernstein VPS International Value Portfolio B Share	01	2008	10.0000	5.3687	179,379
AllianceBernstein VPS International Value Portfolio B Share	02	2008	10.0000	5.3598	74,860
AllianceBernstein VPS International Value Portfolio B Share	03	2008	10.0000	5.3576	388
AllianceBernstein VPS International Value Portfolio B Share	04	2008	10.0000	5.3509	5,477
AllianceBernstein VPS International Value Portfolio B Share	05	2008	10.0000	5.3487	0
AllianceBernstein VPS International Value Portfolio B Share	06	2008	10.0000	5.3420	0
AllianceBernstein VPS Wealth Appreciation Strat Port B Share	01	2008	10.0000	6.5739	0
AllianceBernstein VPS Wealth Appreciation Strat Port B Share	02	2008	10.0000	6.5630	0
AllianceBernstein VPS Wealth Appreciation Strat Port B Share	03	2008	10.0000	6.5603	0
AllianceBernstein VPS Wealth Appreciation Strat Port B Share	04	2008	10.0000	6.5521	20,426
AllianceBernstein VPS Wealth Appreciation Strat Port B Share	05	2008	10.0000	6.5494	0
AllianceBernstein VPS Wealth Appreciation Strat Port B Share	06	2008	10.0000	6.5412	0
BlackRock Global Allocation	01	2008	10.0000	10.0710	29,276
BlackRock Global Allocation	02	2008	10.0000	10.0669	4,348
BlackRock Global Allocation	03	2008	10.0000	10.0659	0
BlackRock Global Allocation	04	2008	10.0000	10.0629	8,040
BlackRock Global Allocation	05	2008	10.0000	10.0619	0
BlackRock Global Allocation	06	2008	10.0000	10.0588	0
Columbia Marsico 21st Century Class B	01	2008	12.1432	6.7121	145,670
Columbia Marsico 21st Century Class B	01	2007	10.0000	12.1432	64,412
Columbia Marsico 21st Century Class B	02	2008	12.1228	6.6871	51,384
Columbia Marsico 21st Century Class B	02	2007	10.0000	12.1228	18,257
Columbia Marsico 21st Century Class B	03	2008	12.1177	6.6809	293
Columbia Marsico 21st Century Class B	03	2007	10.0000	12.1177	717
Columbia Marsico 21st Century Class B	04	2008	12.1024	6.6621	44,189
Columbia Marsico 21st Century Class B	04	2007	10.0000	12.1024	30,959
Columbia Marsico 21st Century Class B	05	2008	12.0974	6.6559	0
Columbia Marsico 21st Century Class B	05	2007	10.0000	12.0974	0
Columbia Marsico 21st Century Class B	06	2008	12.0821	6.6372	0
Columbia Marsico 21st Century Class B	06	2007	10.0000	12.0821	0
Columbia Marsico Growth Class B	01	2008	11.7829	6.9962	24,432
Columbia Marsico Growth Class B	01	2007	10.0000	11.7829	15,415
Columbia Marsico Growth Class B	02	2008	11.7631	6.9702	8,068
Columbia Marsico Growth Class B	02	2007	10.0000	11.7631	1,711
Columbia Marsico Growth Class B	03	2008	11.7582	6.9637	0
Columbia Marsico Growth Class B	03	2007	10.0000	11.7582	0
Columbia Marsico Growth Class B	04	2008	11.7433	6.9442	979
Columbia Marsico Growth Class B	04	2007	10.0000	11.7433	979
Columbia Marsico Growth Class B	05	2008	11.7384	6.9377	0
Columbia Marsico Growth Class B	05	2007	10.0000	11.7384	0
Columbia Marsico Growth Class B	06	2008	11.7235	6.9182	0
Columbia Marsico Growth Class B	06	2007	10.0000	11.7235	0
Columbia Marsico International Opp fund, Variable Fund	01	2008	12.4520	6.3048	22,899
Columbia Marsico International Opp fund, Variable Fund	01	2007	10.0000	12.4520	19,308
Columbia Marsico International Opp fund, Variable Fund	02	2008	12.4311	6.2814	16,096
Columbia Marsico International Opp fund, Variable Fund	02	2007	10.0000	12.4311	4,302
Columbia Marsico International Opp fund, Variable Fund	03	2008	12.4259	6.2755	0
Columbia Marsico International Opp fund, Variable Fund	03	2007	10.0000	12.4259	0
Columbia Marsico International Opp fund, Variable Fund	04	2008	12.4102	6.2579	3,454
Columbia Marsico International Opp fund, Variable Fund	04	2007	10.0000	12.4102	423
Columbia Marsico International Opp fund, Variable Fund	05	2008	12.4050	6.2521	0
Columbia Marsico International Opp fund, Variable Fund	05	2007	10.0000	12.4050	0
Columbia Marsico International Opp fund, Variable Fund	06	2008	12.3893	6.2346	0
Columbia Marsico International Opp fund, Variable Fund	06	2007	10.0000	12.3893	1,236
Fidelity VIP Balanced Svc2	01	2008	10.7289	6.9446	193,921
Fidelity VIP Balanced Svc2	01	2007	10.0000	10.7289	79,731
Fidelity VIP Balanced Svc2	02	2008	10.7109	6.9187	2,709
Fidelity VIP Balanced Svc2	02	2007	10.0000	10.7109	214,163
Fidelity VIP Balanced Svc2	03	2008	10.7064	6.9123	0
Fidelity VIP Balanced Svc2	03	2007	10.0000	10.7064	0
Fidelity VIP Balanced Svc2	04	2008	10.6929	6.8929	3,939
Fidelity VIP Balanced Svc2	04	2007	10.0000	10.6929	1,022
Fidelity VIP Balanced Svc2	05	2008	10.6884	6.8865	0
Fidelity VIP Balanced Svc2	05	2007	10.0000	10.6884	0
Fidelity VIP Balanced Svc2	06	2008	10.6748	6.8672	0
Fidelity VIP Balanced Svc2	06	2007	10.0000	10.6748	0
Fidelity VIP Contrafund Portfolio	01	2008	10.0000	6.6565	173,984
Fidelity VIP Contrafund Portfolio	02	2008	10.0000	6.6455	41,187
Fidelity VIP Contrafund Portfolio	03	2008	10.0000	6.6427	0
Fidelity VIP Contrafund Portfolio	04	2008	10.0000	6.6344	0
Fidelity VIP Contrafund Portfolio	05	2008	10.0000	6.6317	0
Fidelity VIP Contrafund Portfolio	06	2008	10.0000	6.6234	0
Fidelity VIP Freedom 2010 Portfolio Service Class 2	01	2008	11.8386	8.7079	14,692
Fidelity VIP Freedom 2010 Portfolio Service Class 2	01	2007	11.1088	11.8386	14,693
Fidelity VIP Freedom 2010 Portfolio Service Class 2	01	2006	10.3124	11.1088	0
Fidelity VIP Freedom 2010 Portfolio Service Class 2	01	2005	10.0000	10.3124	0
Fidelity VIP Freedom 2010 Portfolio Service Class 2	02	2008	11.7865	8.6518	35,944
Fidelity VIP Freedom 2010 Portfolio Service Class 2	02	2007	11.0826	11.7865	34,896
Fidelity VIP Freedom 2010 Portfolio Service Class 2	02	2006	10.3090	11.0826	34,212
Fidelity VIP Freedom 2010 Portfolio Service Class 2	02	2005	10.0000	10.3090	0
Fidelity VIP Freedom 2010 Portfolio Service Class 2	03	2008	11.7734	8.6378	0
Fidelity VIP Freedom 2010 Portfolio Service Class 2	03	2007	11.0760	11.7734	0
Fidelity VIP Freedom 2010 Portfolio Service Class 2	03	2006	10.3081	11.0760	0
Fidelity VIP Freedom 2010 Portfolio Service Class 2	03	2005	10.0000	10.3081	0
Fidelity VIP Freedom 2010 Portfolio Service Class 2	04	2008	11.7344	8.5959	669
Fidelity VIP Freedom 2010 Portfolio Service Class 2	04	2007	11.0563	11.7344	674
Fidelity VIP Freedom 2010 Portfolio Service Class 2	04	2006	10.3055	11.0563	679
Fidelity VIP Freedom 2010 Portfolio Service Class 2	04	2005	10.0000	10.3055	0
Fidelity VIP Freedom 2010 Portfolio Service Class 2	05	2008	11.7215	8.5821	0
Fidelity VIP Freedom 2010 Portfolio Service Class 2	05	2007	11.0498	11.7215	0
Fidelity VIP Freedom 2010 Portfolio Service Class 2	05	2006	10.3046	11.0498	0
Fidelity VIP Freedom 2010 Portfolio Service Class 2	05	2005	10.0000	10.3046	0
Fidelity VIP Freedom 2010 Portfolio Service Class 2	06	2008	11.6825	8.5404	0
Fidelity VIP Freedom 2010 Portfolio Service Class 2	06	2007	11.0300	11.6825	0
Fidelity VIP Freedom 2010 Portfolio Service Class 2	06	2006	10.3020	11.0300	0
Fidelity VIP Freedom 2010 Portfolio Service Class 2	06	2005	10.0000	10.3020	0
Fidelity VIP Freedom 2015 Portfolio Service Class 2	01	2008	12.1343	8.6716	20,567
Fidelity VIP Freedom 2015 Portfolio Service Class 2	01	2007	11.3182	12.1343	12,618
Fidelity VIP Freedom 2015 Portfolio Service Class 2	01	2006	10.3876	11.3182	4,556
Fidelity VIP Freedom 2015 Portfolio Service Class 2	01	2005	10.0000	10.3876	0
Fidelity VIP Freedom 2015 Portfolio Service Class 2	02	2008	12.0809	8.6158	0
Fidelity VIP Freedom 2015 Portfolio Service Class 2	02	2007	11.2915	12.0809	0
Fidelity VIP Freedom 2015 Portfolio Service Class 2	02	2006	10.3841	11.2915	4,215
Fidelity VIP Freedom 2015 Portfolio Service Class 2	02	2005	10.0000	10.3841	0
Fidelity VIP Freedom 2015 Portfolio Service Class 2	03	2008	12.0675	8.6018	0
Fidelity VIP Freedom 2015 Portfolio Service Class 2	03	2007	11.2848	12.0675	0
Fidelity VIP Freedom 2015 Portfolio Service Class 2	03	2006	10.3832	11.2848	0
Fidelity VIP Freedom 2015 Portfolio Service Class 2	03	2005	10.0000	10.3832	0
Fidelity VIP Freedom 2015 Portfolio Service Class 2	04	2008	12.0275	8.5601	0
Fidelity VIP Freedom 2015 Portfolio Service Class 2	04	2007	11.2647	12.0275	0
Fidelity VIP Freedom 2015 Portfolio Service Class 2	04	2006	10.3806	11.2647	0
Fidelity VIP Freedom 2015 Portfolio Service Class 2	04	2005	10.0000	10.3806	0
Fidelity VIP Freedom 2015 Portfolio Service Class 2	05	2008	12.0143	8.5463	0
Fidelity VIP Freedom 2015 Portfolio Service Class 2	05	2007	11.2581	12.0143	0
Fidelity VIP Freedom 2015 Portfolio Service Class 2	05	2006	10.3798	11.2581	0
Fidelity VIP Freedom 2015 Portfolio Service Class 2	05	2005	10.0000	10.3798	0
Fidelity VIP Freedom 2015 Portfolio Service Class 2	06	2008	11.9744	8.5048	0
Fidelity VIP Freedom 2015 Portfolio Service Class 2	06	2007	11.2380	11.9744	0
Fidelity VIP Freedom 2015 Portfolio Service Class 2	06	2006	10.3771	11.2380	0
Fidelity VIP Freedom 2015 Portfolio Service Class 2	06	2005	10.0000	10.3771	0
Fidelity VIP Freedom 2020 Portfolio Service Class 2	01	2008	12.3779	8.1759	1,397
Fidelity VIP Freedom 2020 Portfolio Service Class 2	01	2007	11.4517	12.3779	2,755
Fidelity VIP Freedom 2020 Portfolio Service Class 2	01	2006	10.4285	11.4517	0
Fidelity VIP Freedom 2020 Portfolio Service Class 2	01	2005	10.0000	10.4285	0
Fidelity VIP Freedom 2020 Portfolio Service Class 2	02	2008	12.3234	8.1233	4,871
Fidelity VIP Freedom 2020 Portfolio Service Class 2	02	2007	11.4246	12.3234	5,142
Fidelity VIP Freedom 2020 Portfolio Service Class 2	02	2006	10.4250	11.4246	5,338
Fidelity VIP Freedom 2020 Portfolio Service Class 2	02	2005	10.0000	10.4250	4,912
Fidelity VIP Freedom 2020 Portfolio Service Class 2	03	2008	12.3098	8.1101	0
Fidelity VIP Freedom 2020 Portfolio Service Class 2	03	2007	11.4178	12.3098	0
Fidelity VIP Freedom 2020 Portfolio Service Class 2	03	2006	10.4241	11.4178	0
Fidelity VIP Freedom 2020 Portfolio Service Class 2	03	2005	10.0000	10.4241	0
Fidelity VIP Freedom 2020 Portfolio Service Class 2	04	2008	12.2690	8.0708	0
Fidelity VIP Freedom 2020 Portfolio Service Class 2	04	2007	11.3975	12.2690	0
Fidelity VIP Freedom 2020 Portfolio Service Class 2	04	2006	10.4215	11.3975	0
Fidelity VIP Freedom 2020 Portfolio Service Class 2	04	2005	10.0000	10.4215	0
Fidelity VIP Freedom 2020 Portfolio Service Class 2	05	2008	12.2555	8.0578	0
Fidelity VIP Freedom 2020 Portfolio Service Class 2	05	2007	11.3908	12.2555	0
Fidelity VIP Freedom 2020 Portfolio Service Class 2	05	2006	10.4206	11.3908	0
Fidelity VIP Freedom 2020 Portfolio Service Class 2	05	2005	10.0000	10.4206	0
Fidelity VIP Freedom 2020 Portfolio Service Class 2	06	2008	12.2147	8.0186	0
Fidelity VIP Freedom 2020 Portfolio Service Class 2	06	2007	11.3705	12.2147	0
Fidelity VIP Freedom 2020 Portfolio Service Class 2	06	2006	10.4180	11.3705	0
Fidelity VIP Freedom 2020 Portfolio Service Class 2	06	2005	10.0000	10.4180	0
Fidelity VIP Mid Cap Svc2	01	2008	11.6777	6.9321	159,091
Fidelity VIP Mid Cap Svc2	01	2007	10.0000	11.6777	123,754
Fidelity VIP Mid Cap Svc2	02	2008	11.6582	6.9064	13,285
Fidelity VIP Mid Cap Svc2	02	2007	10.0000	11.6582	26,293
Fidelity VIP Mid Cap Svc2	03	2008	11.6532	6.8999	0
Fidelity VIP Mid Cap Svc2	03	2007	10.0000	11.6532	0
Fidelity VIP Mid Cap Svc2	04	2008	11.6385	6.8806	63,901
Fidelity VIP Mid Cap Svc2	04	2007	10.0000	11.6385	54,210
Fidelity VIP Mid Cap Svc2	05	2008	11.6337	6.8742	0
Fidelity VIP Mid Cap Svc2	05	2007	10.0000	11.6337	0
Fidelity VIP Mid Cap Svc2	06	2008	11.6189	6.8549	0
Fidelity VIP Mid Cap Svc2	06	2007	10.0000	11.6189	0
First Eagle Overseas Variable Fund	01	2008	10.6485	8.4967	688,177
First Eagle Overseas Variable Fund	01	2007	10.0000	10.6485	629,901
First Eagle Overseas Variable Fund	02	2008	10.6307	8.4652	128,315
First Eagle Overseas Variable Fund	02	2007	10.0000	10.6307	82,622
First Eagle Overseas Variable Fund	03	2008	10.6262	8.4573	1,112
First Eagle Overseas Variable Fund	03	2007	10.0000	10.6262	0
First Eagle Overseas Variable Fund	04	2008	10.6128	8.4336	153,116
First Eagle Overseas Variable Fund	04	2007	10.0000	10.6128	13,542
First Eagle Overseas Variable Fund	05	2008	10.6083	8.4258	0
First Eagle Overseas Variable Fund	05	2007	10.0000	10.6083	0
First Eagle Overseas Variable Fund	06	2008	10.5949	8.4021	10,234
First Eagle Overseas Variable Fund	06	2007	10.0000	10.5949	0
FRANKLIN Income Securities Class 2	01	2008	10.1772	7.0369	320,431
FRANKLIN Income Securities Class 2	01	2007	10.0000	10.1772	259,374
FRANKLIN Income Securities Class 2	02	2008	10.1602	7.0107	29,763
FRANKLIN Income Securities Class 2	02	2007	10.0000	10.1602	34,429
FRANKLIN Income Securities Class 2	03	2008	10.1559	7.0042	0
FRANKLIN Income Securities Class 2	03	2007	10.0000	10.1559	861
FRANKLIN Income Securities Class 2	04	2008	10.1430	6.9846	9,212
FRANKLIN Income Securities Class 2	04	2007	10.0000	10.1430	3,138
FRANKLIN Income Securities Class 2	05	2008	10.1388	6.9781	0
FRANKLIN Income Securities Class 2	05	2007	10.0000	10.1388	0
FRANKLIN Income Securities Class 2	06	2008	10.1260	6.9585	0
FRANKLIN Income Securities Class 2	06	2007	10.0000	10.1260	0
Franklin Small Cap Value Securities Fund	01	2008	19.4832	12.8276	22,224
Franklin Small Cap Value Securities Fund	01	2007	20.3053	19.4832	26,511
Franklin Small Cap Value Securities Fund	01	2006	17.6571	20.3053	25,684
Franklin Small Cap Value Securities Fund	01	2005	16.5137	17.6571	22,297
Franklin Small Cap Value Securities Fund	01	2004	13.5761	16.5137	19,580
Franklin Small Cap Value Securities Fund	01	2003	10.4527	13.5761	3,124
Franklin Small Cap Value Securities Fund	01	2002	10.0000	10.4527	359
Franklin Small Cap Value Securities Fund	02	2008	19.2699	12.6612	35,453
Franklin Small Cap Value Securities Fund	02	2007	20.1241	19.2699	42,648
Franklin Small Cap Value Securities Fund	02	2006	17.5351	20.1241	47,948
Franklin Small Cap Value Securities Fund	02	2005	16.4330	17.5351	49,328
Franklin Small Cap Value Securities Fund	02	2004	13.5373	16.4330	29,473
Franklin Small Cap Value Securities Fund	02	2003	10.4441	13.5373	10,469
Franklin Small Cap Value Securities Fund	02	2002	10.0000	10.4441	0
Franklin Small Cap Value Securities Fund	03	2008	19.2167	12.6198	193
Franklin Small Cap Value Securities Fund	03	2007	20.0790	19.2167	3,446
Franklin Small Cap Value Securities Fund	03	2006	17.5047	20.0790	3,468
Franklin Small Cap Value Securities Fund	03	2005	16.4128	17.5047	3,089
Franklin Small Cap Value Securities Fund	03	2004	13.5276	16.4128	1,647
Franklin Small Cap Value Securities Fund	03	2003	10.4419	13.5276	137
Franklin Small Cap Value Securities Fund	03	2002	10.0000	10.4419	0
Franklin Small Cap Value Securities Fund	04	2008	19.0582	12.4963	14,381
Franklin Small Cap Value Securities Fund	04	2007	19.9440	19.0582	16,906
Franklin Small Cap Value Securities Fund	04	2006	17.4136	19.9440	26,431
Franklin Small Cap Value Securities Fund	04	2005	16.3524	17.4136	29,745
Franklin Small Cap Value Securities Fund	04	2004	13.4986	16.3524	22,232
Franklin Small Cap Value Securities Fund	04	2003	10.4354	13.4986	9,848
Franklin Small Cap Value Securities Fund	04	2002	10.0000	10.4354	1,986
Franklin Small Cap Value Securities Fund	05	2008	19.0059	12.4557	1,919
Franklin Small Cap Value Securities Fund	05	2007	19.8995	19.0059	1,920
Franklin Small Cap Value Securities Fund	05	2006	17.3835	19.8995	1,920
Franklin Small Cap Value Securities Fund	05	2005	16.3324	17.3835	2,473
Franklin Small Cap Value Securities Fund	05	2004	13.4889	16.3324	2,473
Franklin Small Cap Value Securities Fund	05	2003	10.4333	13.4889	2,534
Franklin Small Cap Value Securities Fund	05	2002	10.0000	10.4333	0
Franklin Small Cap Value Securities Fund	06	2008	18.8487	12.3336	4,483
Franklin Small Cap Value Securities Fund	06	2007	19.7654	18.8487	5,140
Franklin Small Cap Value Securities Fund	06	2006	17.2928	19.7654	5,141
Franklin Small Cap Value Securities Fund	06	2005	16.2721	17.2928	5,229
Franklin Small Cap Value Securities Fund	06	2004	13.4599	16.2721	5,231
Franklin Small Cap Value Securities Fund	06	2003	10.4268	13.4599	86
Franklin Small Cap Value Securities Fund	06	2002	10.0000	10.4268	0
FRANKLIN Strategic Income Securities Class 2	01	2008	10.3355	9.0178	93,136
FRANKLIN Strategic Income Securities Class 2	01	2007	10.0000	10.3355	100,725
FRANKLIN Strategic Income Securities Class 2	02	2008	10.3182	8.9843	19,173
FRANKLIN Strategic Income Securities Class 2	02	2007	10.0000	10.3182	14,979
FRANKLIN Strategic Income Securities Class 2	03	2008	10.3139	8.9759	0
FRANKLIN Strategic Income Securities Class 2	03	2007	10.0000	10.3139	0
FRANKLIN Strategic Income Securities Class 2	04	2008	10.3008	8.9508	0
FRANKLIN Strategic Income Securities Class 2	04	2007	10.0000	10.3008	1,448
FRANKLIN Strategic Income Securities Class 2	05	2008	10.2965	8.9425	0
FRANKLIN Strategic Income Securities Class 2	05	2007	10.0000	10.2965	0
FRANKLIN Strategic Income Securities Class 2	06	2008	10.2835	8.9174	0
FRANKLIN Strategic Income Securities Class 2	06	2007	10.0000	10.2835	0
Franklin Templeton VIP Founding Funds Allocation Fund Cls 2	01	2008	10.0000	7.0345	157,133
Franklin Templeton VIP Founding Funds Allocation Fund Cls 2	02	2008	10.0000	7.0229	0
Franklin Templeton VIP Founding Funds Allocation Fund Cls 2	03	2008	10.0000	7.0200	0
Franklin Templeton VIP Founding Funds Allocation Fund Cls 2	04	2008	10.0000	7.0112	0
Franklin Templeton VIP Founding Funds Allocation Fund Cls 2	05	2008	10.0000	7.0084	0
Franklin Templeton VIP Founding Funds Allocation Fund Cls 2	06	2008	10.0000	6.9996	0
Huntington VA Dividend Capture	01	2008	9.9934	7.0643	0
Huntington VA Dividend Capture	01	2007	10.0000	9.9934	0
Huntington VA Dividend Capture	02	2008	9.9926	7.0493	0
Huntington VA Dividend Capture	02	2007	10.0000	9.9926	0
Huntington VA Dividend Capture	03	2008	9.9924	7.0455	0
Huntington VA Dividend Capture	03	2007	10.0000	9.9924	0
Huntington VA Dividend Capture	04	2008	9.9918	7.0342	0
Huntington VA Dividend Capture	04	2007	10.0000	9.9918	0
Huntington VA Dividend Capture	05	2008	9.9916	7.0305	0
Huntington VA Dividend Capture	05	2007	10.0000	9.9916	0
Huntington VA Dividend Capture	06	2008	9.9910	7.0192	0
Huntington VA Dividend Capture	06	2007	10.0000	9.9910	0
Huntington VA Growth	01	2008	10.2482	6.2548	0
Huntington VA Growth	01	2007	10.0000	10.2482	0
Huntington VA Growth	02	2008	10.2474	6.2415	0
Huntington VA Growth	02	2007	10.0000	10.2474	0
Huntington VA Growth	03	2008	10.2472	6.2382	0
Huntington VA Growth	03	2007	10.0000	10.2472	0
Huntington VA Growth	04	2008	10.2466	6.2282	0
Huntington VA Growth	04	2007	10.0000	10.2466	0
Huntington VA Growth	05	2008	10.2464	6.2249	0
Huntington VA Growth	05	2007	10.0000	10.2464	0
Huntington VA Growth	06	2008	10.2458	6.2150	0
Huntington VA Growth	06	2007	10.0000	10.2458	0
Huntington VA Income Equity	01	2008	10.1357	6.1931	0
Huntington VA Income Equity	01	2007	10.0000	10.1357	0
Huntington VA Income Equity	02	2008	10.1349	6.1800	0
Huntington VA Income Equity	02	2007	10.0000	10.1349	0
Huntington VA Income Equity	03	2008	10.1347	6.1767	0
Huntington VA Income Equity	03	2007	10.0000	10.1347	0
Huntington VA Income Equity	04	2008	10.1341	6.1668	0
Huntington VA Income Equity	04	2007	10.0000	10.1341	0
Huntington VA Income Equity	05	2008	10.1339	6.1635	0
Huntington VA Income Equity	05	2007	10.0000	10.1339	0
Huntington VA Income Equity	06	2008	10.1333	6.1537	0
Huntington VA Income Equity	06	2007	10.0000	10.1333	0
Huntington VA International Equity	01	2008	10.2870	6.0104	0
Huntington VA International Equity	01	2007	10.0000	10.2870	0
Huntington VA International Equity	02	2008	10.2862	5.9977	0
Huntington VA International Equity	02	2007	10.0000	10.2862	0
Huntington VA International Equity	03	2008	10.2860	5.9945	0
Huntington VA International Equity	03	2007	10.0000	10.2860	0
Huntington VA International Equity	04	2008	10.2854	5.9849	0
Huntington VA International Equity	04	2007	10.0000	10.2854	0
Huntington VA International Equity	05	2008	10.2852	5.9817	0
Huntington VA International Equity	05	2007	10.0000	10.2852	0
Huntington VA International Equity	06	2008	10.2846	5.9722	0
Huntington VA International Equity	06	2007	10.0000	10.2846	0
Huntington VA Macro 100	01	2008	10.1747	6.6097	0
Huntington VA Macro 100	01	2007	10.0000	10.1747	0
Huntington VA Macro 100	02	2008	10.1739	6.5956	0
Huntington VA Macro 100	02	2007	10.0000	10.1739	0
Huntington VA Macro 100	03	2008	10.1737	6.5921	0
Huntington VA Macro 100	03	2007	10.0000	10.1737	0
Huntington VA Macro 100	04	2008	10.1731	6.5816	0
Huntington VA Macro 100	04	2007	10.0000	10.1731	0
Huntington VA Macro 100	05	2008	10.1729	6.5781	0
Huntington VA Macro 100	05	2007	10.0000	10.1729	0
Huntington VA Macro 100	06	2008	10.1723	6.5676	0
Huntington VA Macro 100	06	2007	10.0000	10.1723	0
Huntington VA Mid Corp America	01	2008	10.2298	6.1503	0
Huntington VA Mid Corp America	01	2007	10.0000	10.2298	0
Huntington VA Mid Corp America	02	2008	10.2290	6.1373	0
Huntington VA Mid Corp America	02	2007	10.0000	10.2290	0
Huntington VA Mid Corp America	03	2008	10.2288	6.1340	0
Huntington VA Mid Corp America	03	2007	10.0000	10.2288	0
Huntington VA Mid Corp America	04	2008	10.2282	6.1242	0
Huntington VA Mid Corp America	04	2007	10.0000	10.2282	0
Huntington VA Mid Corp America	05	2008	10.2280	6.1209	0
Huntington VA Mid Corp America	05	2007	10.0000	10.2280	0
Huntington VA Mid Corp America	06	2008	10.2274	6.1111	0
Huntington VA Mid Corp America	06	2007	10.0000	10.2274	0
Huntington VA Mortgage Securities	01	2008	10.0825	10.1235	0
Huntington VA Mortgage Securities	01	2007	10.0000	10.0825	0
Huntington VA Mortgage Securities	02	2008	10.0817	10.1021	0
Huntington VA Mortgage Securities	02	2007	10.0000	10.0817	0
Huntington VA Mortgage Securities	03	2008	10.0815	10.0967	0
Huntington VA Mortgage Securities	03	2007	10.0000	10.0815	0
Huntington VA Mortgage Securities	04	2008	10.0809	10.0806	0
Huntington VA Mortgage Securities	04	2007	10.0000	10.0809	0
Huntington VA Mortgage Securities	05	2008	10.0807	10.0753	0
Huntington VA Mortgage Securities	05	2007	10.0000	10.0807	0
Huntington VA Mortgage Securities	06	2008	10.0801	10.0592	0
Huntington VA Mortgage Securities	06	2007	10.0000	10.0801	0
Huntington VA New Economy	01	2008	10.3060	4.7961	0
Huntington VA New Economy	01	2007	10.0000	10.3060	0
Huntington VA New Economy	02	2008	10.3052	4.7859	0
Huntington VA New Economy	02	2007	10.0000	10.3052	0
Huntington VA New Economy	03	2008	10.3050	4.7833	0
Huntington VA New Economy	03	2007	10.0000	10.3050	0
Huntington VA New Economy	04	2008	10.3044	4.7757	0
Huntington VA New Economy	04	2007	10.0000	10.3044	0
Huntington VA New Economy	05	2008	10.3042	4.7731	0
Huntington VA New Economy	05	2007	10.0000	10.3042	0
Huntington VA New Economy	06	2008	10.3036	4.7655	0
Huntington VA New Economy	06	2007	10.0000	10.3036	0
Huntington VA Real Strategies Fund	01	2008	10.0000	4.8242	0
Huntington VA Real Strategies Fund	02	2008	10.0000	4.8177	0
Huntington VA Real Strategies Fund	03	2008	10.0000	4.8161	0
Huntington VA Real Strategies Fund	04	2008	10.0000	4.8112	0
Huntington VA Real Strategies Fund	05	2008	10.0000	4.8096	0
Huntington VA Real Strategies Fund	06	2008	10.0000	4.8047	0
Huntington VA Rotating Markets	01	2008	10.2523	5.8381	0
Huntington VA Rotating Markets	01	2007	10.0000	10.2523	0
Huntington VA Rotating Markets	02	2008	10.2515	5.8257	0
Huntington VA Rotating Markets	02	2007	10.0000	10.2515	0
Huntington VA Rotating Markets	03	2008	10.2513	5.8226	0
Huntington VA Rotating Markets	03	2007	10.0000	10.2513	0
Huntington VA Rotating Markets	04	2008	10.2507	5.8133	0
Huntington VA Rotating Markets	04	2007	10.0000	10.2507	0
Huntington VA Rotating Markets	05	2008	10.2505	5.8102	0
Huntington VA Rotating Markets	05	2007	10.0000	10.2505	0
Huntington VA Rotating Markets	06	2008	10.2499	5.8009	0
Huntington VA Rotating Markets	06	2007	10.0000	10.2499	0
Huntington VA Situs Fund	01	2008	10.2412	5.9161	0
Huntington VA Situs Fund	01	2007	10.0000	10.2412	0
Huntington VA Situs Fund	02	2008	10.2404	5.9036	0
Huntington VA Situs Fund	02	2007	10.0000	10.2404	0
Huntington VA Situs Fund	03	2008	10.2402	5.9004	0
Huntington VA Situs Fund	03	2007	10.0000	10.2402	0
Huntington VA Situs Fund	04	2008	10.2396	5.8910	0
Huntington VA Situs Fund	04	2007	10.0000	10.2396	0
Huntington VA Situs Fund	05	2008	10.2394	5.8879	0
Huntington VA Situs Fund	05	2007	10.0000	10.2394	0
Huntington VA Situs Fund	06	2008	10.2388	5.8784	0
Huntington VA Situs Fund	06	2007	10.0000	10.2388	0
Lazard Retirement Emerging Markets Portfolio Service Class	01	2008	10.0000	5.5008	62,982
Lazard Retirement Emerging Markets Portfolio Service Class	02	2008	10.0000	5.4917	10,386
Lazard Retirement Emerging Markets Portfolio Service Class	03	2008	10.0000	5.4894	87
Lazard Retirement Emerging Markets Portfolio Service Class	04	2008	10.0000	5.4826	656
Lazard Retirement Emerging Markets Portfolio Service Class	05	2008	10.0000	5.4803	0
Lazard Retirement Emerging Markets Portfolio Service Class	06	2008	10.0000	5.4735	0
Lord Abbett All Value Portfolio	01	2008	14.6878	10.2979	41,606
Lord Abbett All Value Portfolio	01	2007	14.0019	14.6878	37,879
Lord Abbett All Value Portfolio	01	2006	12.4243	14.0019	21,917
Lord Abbett All Value Portfolio	01	2005	11.8171	12.4243	21,268
Lord Abbett All Value Portfolio	01	2004	10.3896	11.8171	17,930
Lord Abbett All Value Portfolio	01	2003	10.0000	10.3896	0
Lord Abbett All Value Portfolio	02	2008	14.5667	10.1921	27,943
Lord Abbett All Value Portfolio	02	2007	13.9149	14.5667	36,802
Lord Abbett All Value Portfolio	02	2006	12.3722	13.9149	56,766
Lord Abbett All Value Portfolio	02	2005	11.7915	12.3722	73,659
Lord Abbett All Value Portfolio	02	2004	10.3883	11.7915	35,899
Lord Abbett All Value Portfolio	02	2003	10.0000	10.3883	0
Lord Abbett All Value Portfolio	03	2008	14.5365	10.1658	0
Lord Abbett All Value Portfolio	03	2007	13.8932	14.5365	597
Lord Abbett All Value Portfolio	03	2006	12.3592	13.8932	0
Lord Abbett All Value Portfolio	03	2005	11.7851	12.3592	8
Lord Abbett All Value Portfolio	03	2004	10.3880	11.7851	46
Lord Abbett All Value Portfolio	03	2003	10.0000	10.3880	0
Lord Abbett All Value Portfolio	04	2008	14.4461	10.0871	13,239
Lord Abbett All Value Portfolio	04	2007	13.8282	14.4461	15,182
Lord Abbett All Value Portfolio	04	2006	12.3202	13.8282	25,107
Lord Abbett All Value Portfolio	04	2005	11.7658	12.3202	22,871
Lord Abbett All Value Portfolio	04	2004	10.3870	11.7658	19,209
Lord Abbett All Value Portfolio	04	2003	10.0000	10.3870	0
Lord Abbett All Value Portfolio	05	2008	14.4164	10.0612	0
Lord Abbett All Value Portfolio	05	2007	13.8068	14.4164	0
Lord Abbett All Value Portfolio	05	2006	12.3073	13.8068	0
Lord Abbett All Value Portfolio	05	2005	11.7595	12.3073	0
Lord Abbett All Value Portfolio	05	2004	10.3866	11.7595	0
Lord Abbett All Value Portfolio	05	2003	10.0000	10.3866	0
Lord Abbett All Value Portfolio	06	2008	14.3266	9.9831	3,766
Lord Abbett All Value Portfolio	06	2007	13.7420	14.3266	7,093
Lord Abbett All Value Portfolio	06	2006	12.2684	13.7420	7,093
Lord Abbett All Value Portfolio	06	2005	11.7402	12.2684	7,093
Lord Abbett All Value Portfolio	06	2004	10.3856	11.7402	7,093
Lord Abbett All Value Portfolio	06	2003	10.0000	10.3856	0
Lord Abbett Series Fund Growth and Income	01	2008	18.1642	11.3512	222,637
Lord Abbett Series Fund Growth and Income	01	2007	17.8658	18.1642	214,135
Lord Abbett Series Fund Growth and Income	01	2006	15.4970	17.8658	98,164
Lord Abbett Series Fund Growth and Income	01	2005	15.2685	15.4970	99,020
Lord Abbett Series Fund Growth and Income	01	2004	13.7885	15.2685	83,826
Lord Abbett Series Fund Growth and Income	01	2003	10.7064	13.7885	29,563
Lord Abbett Series Fund Growth and Income	01	2002	10.0000	10.7064	0
Lord Abbett Series Fund Growth and Income	02	2008	17.9652	11.2039	186,757
Lord Abbett Series Fund Growth and Income	02	2007	17.7063	17.9652	241,276
Lord Abbett Series Fund Growth and Income	02	2006	15.3899	17.7063	274,200
Lord Abbett Series Fund Growth and Income	02	2005	15.1938	15.3899	254,898
Lord Abbett Series Fund Growth and Income	02	2004	13.7491	15.1938	184,296
Lord Abbett Series Fund Growth and Income	02	2003	10.6975	13.7491	86,424
Lord Abbett Series Fund Growth and Income	02	2002	10.0000	10.6975	654
Lord Abbett Series Fund Growth and Income	03	2008	17.9157	11.1672	0
Lord Abbett Series Fund Growth and Income	03	2007	17.6666	17.9157	364
Lord Abbett Series Fund Growth and Income	03	2006	15.3631	17.6666	365
Lord Abbett Series Fund Growth and Income	03	2005	15.1751	15.3631	0
Lord Abbett Series Fund Growth and Income	03	2004	13.7393	15.1751	2,967
Lord Abbett Series Fund Growth and Income	03	2003	10.6953	13.7393	39
Lord Abbett Series Fund Growth and Income	03	2002	10.0000	10.6953	0
Lord Abbett Series Fund Growth and Income	04	2008	17.7678	11.0580	89,343
Lord Abbett Series Fund Growth and Income	04	2007	17.5478	17.7678	93,662
Lord Abbett Series Fund Growth and Income	04	2006	15.2832	17.5478	54,495
Lord Abbett Series Fund Growth and Income	04	2005	15.1192	15.2832	66,434
Lord Abbett Series Fund Growth and Income	04	2004	13.7097	15.1192	45,559
Lord Abbett Series Fund Growth and Income	04	2003	10.6887	13.7097	12,668
Lord Abbett Series Fund Growth and Income	04	2002	10.0000	10.6887	3,671
Lord Abbett Series Fund Growth and Income	05	2008	17.7191	11.0221	0
Lord Abbett Series Fund Growth and Income	05	2007	17.5086	17.7191	0
Lord Abbett Series Fund Growth and Income	05	2006	15.2568	17.5086	0
Lord Abbett Series Fund Growth and Income	05	2005	15.1007	15.2568	0
Lord Abbett Series Fund Growth and Income	05	2004	13.6999	15.1007	0
Lord Abbett Series Fund Growth and Income	05	2003	10.6865	13.6999	0
Lord Abbett Series Fund Growth and Income	05	2002	10.0000	10.6865	0
Lord Abbett Series Fund Growth and Income	06	2008	17.5725	10.9140	5,046
Lord Abbett Series Fund Growth and Income	06	2007	17.3906	17.5725	4,965
Lord Abbett Series Fund Growth and Income	06	2006	15.1772	17.3906	6,097
Lord Abbett Series Fund Growth and Income	06	2005	15.0450	15.1772	5,460
Lord Abbett Series Fund Growth and Income	06	2004	13.6704	15.0450	9,191
Lord Abbett Series Fund Growth and Income	06	2003	10.6798	13.6704	3,741
Lord Abbett Series Fund Growth and Income	06	2002	10.0000	10.6798	0
Lord Abbett Series Fund Growth Opportunities	01	2008	14.5187	8.8131	22,562
Lord Abbett Series Fund Growth Opportunities	01	2007	12.1791	14.5187	13,729
Lord Abbett Series Fund Growth Opportunities	01	2006	11.4827	12.1791	15,001
Lord Abbett Series Fund Growth Opportunities	01	2005	11.1645	11.4827	17,471
Lord Abbett Series Fund Growth Opportunities	01	2004	10.2112	11.1645	9,631
Lord Abbett Series Fund Growth Opportunities	01	2003	10.0000	10.2112	0
Lord Abbett Series Fund Growth Opportunities	01	2002	10.0000	10.0000	0
Lord Abbett Series Fund Growth Opportunities	02	2008	14.3990	8.7225	40,973
Lord Abbett Series Fund Growth Opportunities	02	2007	12.1035	14.3990	51,096
Lord Abbett Series Fund Growth Opportunities	02	2006	11.4346	12.1035	61,299
Lord Abbett Series Fund Growth Opportunities	02	2005	11.1403	11.4346	54,837
Lord Abbett Series Fund Growth Opportunities	02	2004	10.2098	11.1403	31,976
Lord Abbett Series Fund Growth Opportunities	02	2003	10.0000	10.2098	0
Lord Abbett Series Fund Growth Opportunities	02	2002	10.0000	10.0000	0
Lord Abbett Series Fund Growth Opportunities	03	2008	14.3691	8.7000	0
Lord Abbett Series Fund Growth Opportunities	03	2007	12.0845	14.3691	7,099
Lord Abbett Series Fund Growth Opportunities	03	2006	11.4225	12.0845	6,171
Lord Abbett Series Fund Growth Opportunities	03	2005	11.1342	11.4225	1,767
Lord Abbett Series Fund Growth Opportunities	03	2004	10.2095	11.1342	0
Lord Abbett Series Fund Growth Opportunities	03	2003	10.0000	10.2095	0
Lord Abbett Series Fund Growth Opportunities	03	2002	10.0000	10.0000	0
Lord Abbett Series Fund Growth Opportunities	04	2008	14.2798	8.6326	18,383
Lord Abbett Series Fund Growth Opportunities	04	2007	12.0280	14.2798	33,102
Lord Abbett Series Fund Growth Opportunities	04	2006	11.3864	12.0280	31,625
Lord Abbett Series Fund Growth Opportunities	04	2005	11.1160	11.3864	14,813
Lord Abbett Series Fund Growth Opportunities	04	2004	10.2085	11.1160	7,735
Lord Abbett Series Fund Growth Opportunities	04	2003	10.0000	10.2085	0
Lord Abbett Series Fund Growth Opportunities	04	2002	10.0000	10.0000	0
Lord Abbett Series Fund Growth Opportunities	05	2008	14.2504	8.6104	0
Lord Abbett Series Fund Growth Opportunities	05	2007	12.0093	14.2504	0
Lord Abbett Series Fund Growth Opportunities	05	2006	11.3745	12.0093	0
Lord Abbett Series Fund Growth Opportunities	05	2005	11.1100	11.3745	0
Lord Abbett Series Fund Growth Opportunities	05	2004	10.2082	11.1100	0
Lord Abbett Series Fund Growth Opportunities	05	2003	10.0000	10.2082	0
Lord Abbett Series Fund Growth Opportunities	05	2002	10.0000	10.0000	0
Lord Abbett Series Fund Growth Opportunities	06	2008	14.1616	8.5436	778
Lord Abbett Series Fund Growth Opportunities	06	2007	11.9530	14.1616	764
Lord Abbett Series Fund Growth Opportunities	06	2006	11.3385	11.9530	1,515
Lord Abbett Series Fund Growth Opportunities	06	2005	11.0918	11.3385	812
Lord Abbett Series Fund Growth Opportunities	06	2004	10.2072	11.0918	817
Lord Abbett Series Fund Growth Opportunities	06	2003	10.0000	10.2072	0
Lord Abbett Series Fund Growth Opportunities	06	2002	10.0000	10.0000	0
Lord Abbett Series Fund Mid Cap Value	01	2008	18.5034	11.0296	41,354
Lord Abbett Series Fund Mid Cap Value	01	2007	18.7165	18.5034	57,400
Lord Abbett Series Fund Mid Cap Value	01	2006	16.9643	18.7165	135,244
Lord Abbett Series Fund Mid Cap Value	01	2005	15.9458	16.9643	89,289
Lord Abbett Series Fund Mid Cap Value	01	2004	13.0779	15.9458	83,487
Lord Abbett Series Fund Mid Cap Value	01	2003	10.6640	13.0779	9,479
Lord Abbett Series Fund Mid Cap Value	01	2002	10.0000	10.6640	0
Lord Abbett Series Fund Mid Cap Value	02	2008	18.3007	10.8865	54,830
Lord Abbett Series Fund Mid Cap Value	02	2007	18.5494	18.3007	69,328
Lord Abbett Series Fund Mid Cap Value	02	2006	16.8471	18.5494	88,591
Lord Abbett Series Fund Mid Cap Value	02	2005	15.8678	16.8471	90,710
Lord Abbett Series Fund Mid Cap Value	02	2004	13.0405	15.8678	77,964
Lord Abbett Series Fund Mid Cap Value	02	2003	10.6552	13.0405	19,735
Lord Abbett Series Fund Mid Cap Value	02	2002	10.0000	10.6552	0
Lord Abbett Series Fund Mid Cap Value	03	2008	18.2503	10.8509	0
Lord Abbett Series Fund Mid Cap Value	03	2007	18.5078	18.2503	2,886
Lord Abbett Series Fund Mid Cap Value	03	2006	16.8178	18.5078	2,119
Lord Abbett Series Fund Mid Cap Value	03	2005	15.8483	16.8178	2,710
Lord Abbett Series Fund Mid Cap Value	03	2004	13.0312	15.8483	3,107
Lord Abbett Series Fund Mid Cap Value	03	2003	10.6530	13.0312	267
Lord Abbett Series Fund Mid Cap Value	03	2002	10.0000	10.6530	0
Lord Abbett Series Fund Mid Cap Value	04	2008	18.0996	10.7447	20,959
Lord Abbett Series Fund Mid Cap Value	04	2007	18.3833	18.0996	98,742
Lord Abbett Series Fund Mid Cap Value	04	2006	16.7303	18.3833	101,102
Lord Abbett Series Fund Mid Cap Value	04	2005	15.7899	16.7303	105,088
Lord Abbett Series Fund Mid Cap Value	04	2004	13.0031	15.7899	58,978
Lord Abbett Series Fund Mid Cap Value	04	2003	10.6463	13.0031	26,923
Lord Abbett Series Fund Mid Cap Value	04	2002	10.0000	10.6463	9,443
Lord Abbett Series Fund Mid Cap Value	05	2008	18.0500	10.7098	1,219
Lord Abbett Series Fund Mid Cap Value	05	2007	18.3423	18.0500	1,220
Lord Abbett Series Fund Mid Cap Value	05	2006	16.7014	18.3423	4,485
Lord Abbett Series Fund Mid Cap Value	05	2005	15.7706	16.7014	5,705
Lord Abbett Series Fund Mid Cap Value	05	2004	12.9938	15.7706	5,705
Lord Abbett Series Fund Mid Cap Value	05	2003	10.6441	12.9938	7,628
Lord Abbett Series Fund Mid Cap Value	05	2002	10.0000	10.6441	0
Lord Abbett Series Fund Mid Cap Value	06	2008	17.9007	10.6048	2,397
Lord Abbett Series Fund Mid Cap Value	06	2007	18.2187	17.9007	15,759
Lord Abbett Series Fund Mid Cap Value	06	2006	16.6143	18.2187	8,434
Lord Abbett Series Fund Mid Cap Value	06	2005	15.7124	16.6143	5,576
Lord Abbett Series Fund Mid Cap Value	06	2004	12.9658	15.7124	3,636
Lord Abbett Series Fund Mid Cap Value	06	2003	10.6375	12.9658	87
Lord Abbett Series Fund Mid Cap Value	06	2002	10.0000	10.6375	0
MFS Blended Research Core Equity Portfolio S Class	01	2008	16.8243	10.7288	38,355
MFS Blended Research Core Equity Portfolio S Class	01	2007	16.1953	16.8243	47,320
MFS Blended Research Core Equity Portfolio S Class	01	2006	14.5741	16.1953	55,406
MFS Blended Research Core Equity Portfolio S Class	01	2005	13.8014	14.5741	46,620
MFS Blended Research Core Equity Portfolio S Class	01	2004	12.5656	13.8014	18,919
MFS Blended Research Core Equity Portfolio S Class	01	2003	10.4391	12.5656	22,859
MFS Blended Research Core Equity Portfolio S Class	01	2002	10.0000	10.4391	12,683
MFS Blended Research Core Equity Portfolio S Class	02	2008	16.6400	10.5895	117,410
MFS Blended Research Core Equity Portfolio S Class	02	2007	16.0507	16.6400	143,182
MFS Blended Research Core Equity Portfolio S Class	02	2006	14.4734	16.0507	160,342
MFS Blended Research Core Equity Portfolio S Class	02	2005	13.7339	14.4734	129,407
MFS Blended Research Core Equity Portfolio S Class	02	2004	12.5297	13.7339	24,113
MFS Blended Research Core Equity Portfolio S Class	02	2003	10.4305	12.5297	20,367
MFS Blended Research Core Equity Portfolio S Class	02	2002	10.0000	10.4305	600
MFS Blended Research Core Equity Portfolio S Class	03	2008	16.5941	10.5549	0
MFS Blended Research Core Equity Portfolio S Class	03	2007	16.0146	16.5941	1,730
MFS Blended Research Core Equity Portfolio S Class	03	2006	14.4482	16.0146	1,734
MFS Blended Research Core Equity Portfolio S Class	03	2005	13.7170	14.4482	1,865
MFS Blended Research Core Equity Portfolio S Class	03	2004	12.5207	13.7170	132
MFS Blended Research Core Equity Portfolio S Class	03	2003	10.4283	12.5207	132
MFS Blended Research Core Equity Portfolio S Class	03	2002	10.0000	10.4283	0
MFS Blended Research Core Equity Portfolio S Class	04	2008	16.4571	10.4516	12,801
MFS Blended Research Core Equity Portfolio S Class	04	2007	15.9069	16.4571	25,756
MFS Blended Research Core Equity Portfolio S Class	04	2006	14.3730	15.9069	33,691
MFS Blended Research Core Equity Portfolio S Class	04	2005	13.6665	14.3730	35,677
MFS Blended Research Core Equity Portfolio S Class	04	2004	12.4937	13.6665	11,814
MFS Blended Research Core Equity Portfolio S Class	04	2003	10.4218	12.4937	16,075
MFS Blended Research Core Equity Portfolio S Class	04	2002	10.0000	10.4218	7,502
MFS Blended Research Core Equity Portfolio S Class	05	2008	16.4120	10.4177	0
MFS Blended Research Core Equity Portfolio S Class	05	2007	15.8715	16.4120	0
MFS Blended Research Core Equity Portfolio S Class	05	2006	14.3482	15.8715	0
MFS Blended Research Core Equity Portfolio S Class	05	2005	13.6498	14.3482	605
MFS Blended Research Core Equity Portfolio S Class	05	2004	12.4848	13.6498	605
MFS Blended Research Core Equity Portfolio S Class	05	2003	10.4197	12.4848	605
MFS Blended Research Core Equity Portfolio S Class	05	2002	10.0000	10.4197	0
MFS Blended Research Core Equity Portfolio S Class	06	2008	16.2762	10.3156	463
MFS Blended Research Core Equity Portfolio S Class	06	2007	15.7645	16.2762	398
MFS Blended Research Core Equity Portfolio S Class	06	2006	14.2733	15.7645	518
MFS Blended Research Core Equity Portfolio S Class	06	2005	13.5994	14.2733	547
MFS Blended Research Core Equity Portfolio S Class	06	2004	12.4579	13.5994	0
MFS Blended Research Core Equity Portfolio S Class	06	2003	10.4132	12.4579	5,012
MFS Blended Research Core Equity Portfolio S Class	06	2002	10.0000	10.4132	0
MFS Bond Portfolio S Class	01	2008	12.3786	10.8577	61,552
MFS Bond Portfolio S Class	01	2007	12.1936	12.3786	29,155
MFS Bond Portfolio S Class	01	2006	11.8278	12.1936	8,695
MFS Bond Portfolio S Class	01	2005	11.8431	11.8278	12,271
MFS Bond Portfolio S Class	01	2004	11.3761	11.8431	13,109
MFS Bond Portfolio S Class	01	2003	10.5755	11.3761	12,510
MFS Bond Portfolio S Class	01	2002	10.0000	10.5755	0
MFS Bond Portfolio S Class	02	2008	12.2430	10.7168	17,692
MFS Bond Portfolio S Class	02	2007	12.0847	12.2430	10,779
MFS Bond Portfolio S Class	02	2006	11.7460	12.0847	26,226
MFS Bond Portfolio S Class	02	2005	11.7852	11.7460	28,682
MFS Bond Portfolio S Class	02	2004	11.3436	11.7852	36,294
MFS Bond Portfolio S Class	02	2003	10.5667	11.3436	31,365
MFS Bond Portfolio S Class	02	2002	10.0000	10.5667	1,352
MFS Bond Portfolio S Class	03	2008	12.2092	10.6818	3,549
MFS Bond Portfolio S Class	03	2007	12.0576	12.2092	4,835
MFS Bond Portfolio S Class	03	2006	11.7256	12.0576	6,374
MFS Bond Portfolio S Class	03	2005	11.7707	11.7256	5,501
MFS Bond Portfolio S Class	03	2004	11.3355	11.7707	6,387
MFS Bond Portfolio S Class	03	2003	10.5646	11.3355	5,400
MFS Bond Portfolio S Class	03	2002	10.0000	10.5646	0
MFS Bond Portfolio S Class	04	2008	12.1084	10.5773	10,333
MFS Bond Portfolio S Class	04	2007	11.9765	12.1084	13,000
MFS Bond Portfolio S Class	04	2006	11.6646	11.9765	14,374
MFS Bond Portfolio S Class	04	2005	11.7273	11.6646	27,920
MFS Bond Portfolio S Class	04	2004	11.3111	11.7273	30,422
MFS Bond Portfolio S Class	04	2003	10.5580	11.3111	31,497
MFS Bond Portfolio S Class	04	2002	10.0000	10.5580	4,076
MFS Bond Portfolio S Class	05	2008	12.0753	10.5430	568
MFS Bond Portfolio S Class	05	2007	11.9498	12.0753	568
MFS Bond Portfolio S Class	05	2006	11.6444	11.9498	1,300
MFS Bond Portfolio S Class	05	2005	11.7130	11.6444	1,300
MFS Bond Portfolio S Class	05	2004	11.3030	11.7130	1,300
MFS Bond Portfolio S Class	05	2003	10.5558	11.3030	5,133
MFS Bond Portfolio S Class	05	2002	10.0000	10.5558	0
MFS Bond Portfolio S Class	06	2008	11.9753	10.4396	2,835
MFS Bond Portfolio S Class	06	2007	11.8692	11.9753	3,784
MFS Bond Portfolio S Class	06	2006	11.5837	11.8692	4,712
MFS Bond Portfolio S Class	06	2005	11.6697	11.5837	6,357
MFS Bond Portfolio S Class	06	2004	11.2786	11.6697	7,217
MFS Bond Portfolio S Class	06	2003	10.5493	11.2786	7,023
MFS Bond Portfolio S Class	06	2002	10.0000	10.5493	0
MFS Capital Appreciation Portfolio S Class	01	2008	16.2881	10.0508	0
MFS Capital Appreciation Portfolio S Class	01	2007	14.9391	16.2881	0
MFS Capital Appreciation Portfolio S Class	01	2006	14.3292	14.9391	480
MFS Capital Appreciation Portfolio S Class	01	2005	14.4845	14.3292	482
MFS Capital Appreciation Portfolio S Class	01	2004	13.3013	14.4845	3,486
MFS Capital Appreciation Portfolio S Class	01	2003	10.5424	13.3013	4,482
MFS Capital Appreciation Portfolio S Class	01	2002	10.0000	10.5424	0
MFS Capital Appreciation Portfolio S Class	02	2008	16.1097	9.9204	10
MFS Capital Appreciation Portfolio S Class	02	2007	14.8058	16.1097	1,539
MFS Capital Appreciation Portfolio S Class	02	2006	14.2302	14.8058	28,777
MFS Capital Appreciation Portfolio S Class	02	2005	14.4136	14.2302	29,418
MFS Capital Appreciation Portfolio S Class	02	2004	13.2633	14.4136	31,845
MFS Capital Appreciation Portfolio S Class	02	2003	10.5337	13.2633	33,241
MFS Capital Appreciation Portfolio S Class	02	2002	10.0000	10.5337	311
MFS Capital Appreciation Portfolio S Class	03	2008	16.0652	9.8879	0
MFS Capital Appreciation Portfolio S Class	03	2007	14.7725	16.0652	0
MFS Capital Appreciation Portfolio S Class	03	2006	14.2055	14.7725	0
MFS Capital Appreciation Portfolio S Class	03	2005	14.3959	14.2055	0
MFS Capital Appreciation Portfolio S Class	03	2004	13.2538	14.3959	0
MFS Capital Appreciation Portfolio S Class	03	2003	10.5315	13.2538	0
MFS Capital Appreciation Portfolio S Class	03	2002	10.0000	10.5315	0
MFS Capital Appreciation Portfolio S Class	04	2008	15.9326	9.7912	2,548
MFS Capital Appreciation Portfolio S Class	04	2007	14.6731	15.9326	2,518
MFS Capital Appreciation Portfolio S Class	04	2006	14.1315	14.6731	6,174
MFS Capital Appreciation Portfolio S Class	04	2005	14.3429	14.1315	14,753
MFS Capital Appreciation Portfolio S Class	04	2004	13.2253	14.3429	12,897
MFS Capital Appreciation Portfolio S Class	04	2003	10.5250	13.2253	10,354
MFS Capital Appreciation Portfolio S Class	04	2002	10.0000	10.5250	520
MFS Capital Appreciation Portfolio S Class	05	2008	15.8890	9.7594	0
MFS Capital Appreciation Portfolio S Class	05	2007	14.6404	15.8890	0
MFS Capital Appreciation Portfolio S Class	05	2006	14.1071	14.6404	0
MFS Capital Appreciation Portfolio S Class	05	2005	14.3254	14.1071	0
MFS Capital Appreciation Portfolio S Class	05	2004	13.2159	14.3254	0
MFS Capital Appreciation Portfolio S Class	05	2003	10.5228	13.2159	3,243
MFS Capital Appreciation Portfolio S Class	05	2002	10.0000	10.5228	0
MFS Capital Appreciation Portfolio S Class	06	2008	15.7575	9.6637	416
MFS Capital Appreciation Portfolio S Class	06	2007	14.5417	15.7575	417
MFS Capital Appreciation Portfolio S Class	06	2006	14.0336	14.5417	417
MFS Capital Appreciation Portfolio S Class	06	2005	14.2725	14.0336	417
MFS Capital Appreciation Portfolio S Class	06	2004	13.1874	14.2725	4,137
MFS Capital Appreciation Portfolio S Class	06	2003	10.5163	13.1874	3,718
MFS Capital Appreciation Portfolio S Class	06	2002	10.0000	10.5163	0
MFS Core Equity Portfolio S Class	01	2008	10.8668	6.5376	12,391
MFS Core Equity Portfolio S Class	01	2007	10.0000	10.8668	8,701
MFS Core Equity Portfolio S Class	02	2008	10.8485	6.5133	9,508
MFS Core Equity Portfolio S Class	02	2007	10.0000	10.8485	9,275
MFS Core Equity Portfolio S Class	03	2008	10.8440	6.5072	0
MFS Core Equity Portfolio S Class	03	2007	10.0000	10.8440	0
MFS Core Equity Portfolio S Class	04	2008	10.8303	6.4890	1,752
MFS Core Equity Portfolio S Class	04	2007	10.0000	10.8303	1,753
MFS Core Equity Portfolio S Class	05	2008	10.8257	6.4830	0
MFS Core Equity Portfolio S Class	05	2007	10.0000	10.8257	0
MFS Core Equity Portfolio S Class	06	2008	10.8120	6.4648	0
MFS Core Equity Portfolio S Class	06	2007	10.0000	10.8120	0
MFS Emerging Markets Equity Portfolio S Class	01	2008	19.1053	8.4140	5,713
MFS Emerging Markets Equity Portfolio S Class	01	2007	14.3683	19.1053	20,686
MFS Emerging Markets Equity Portfolio S Class	01	2006	11.2521	14.3683	8,660
MFS Emerging Markets Equity Portfolio S Class	01	2005	10.0000	11.2521	1,568
MFS Emerging Markets Equity Portfolio S Class	02	2008	19.0212	8.3598	4,161
MFS Emerging Markets Equity Portfolio S Class	02	2007	14.3344	19.0212	5,294
MFS Emerging Markets Equity Portfolio S Class	02	2006	11.2483	14.3344	6,630
MFS Emerging Markets Equity Portfolio S Class	02	2005	10.0000	11.2483	0
MFS Emerging Markets Equity Portfolio S Class	03	2008	19.0001	8.3463	0
MFS Emerging Markets Equity Portfolio S Class	03	2007	14.3259	19.0001	0
MFS Emerging Markets Equity Portfolio S Class	03	2006	11.2474	14.3259	0
MFS Emerging Markets Equity Portfolio S Class	03	2005	10.0000	11.2474	0
MFS Emerging Markets Equity Portfolio S Class	04	2008	18.9372	8.3058	5,569
MFS Emerging Markets Equity Portfolio S Class	04	2007	14.3004	18.9372	6,542
MFS Emerging Markets Equity Portfolio S Class	04	2006	11.2445	14.3004	7,760
MFS Emerging Markets Equity Portfolio S Class	04	2005	10.0000	11.2445	0
MFS Emerging Markets Equity Portfolio S Class	05	2008	18.9164	8.2924	0
MFS Emerging Markets Equity Portfolio S Class	05	2007	14.2920	18.9164	0
MFS Emerging Markets Equity Portfolio S Class	05	2006	11.2436	14.2920	0
MFS Emerging Markets Equity Portfolio S Class	05	2005	10.0000	11.2436	0
MFS Emerging Markets Equity Portfolio S Class	06	2008	18.8535	8.2521	0
MFS Emerging Markets Equity Portfolio S Class	06	2007	14.2665	18.8535	0
MFS Emerging Markets Equity Portfolio S Class	06	2006	11.2407	14.2665	0
MFS Emerging Markets Equity Portfolio S Class	06	2005	10.0000	11.2407	0
MFS Global Growth Portfolio S Class	01	2008	21.3320	12.7761	80
MFS Global Growth Portfolio S Class	01	2007	19.1996	21.3320	1,996
MFS Global Growth Portfolio S Class	01	2006	16.6923	19.1996	2,000
MFS Global Growth Portfolio S Class	01	2005	15.4738	16.6923	2,531
MFS Global Growth Portfolio S Class	01	2004	13.6401	15.4738	2,703
MFS Global Growth Portfolio S Class	01	2003	10.2686	13.6401	1,854
MFS Global Growth Portfolio S Class	01	2002	10.0000	10.2686	47,491
MFS Global Growth Portfolio S Class	02	2008	21.0984	12.6103	4,991
MFS Global Growth Portfolio S Class	02	2007	19.0283	21.0984	5,621
MFS Global Growth Portfolio S Class	02	2006	16.5770	19.0283	5,143
MFS Global Growth Portfolio S Class	02	2005	15.3982	16.5770	5,953
MFS Global Growth Portfolio S Class	02	2004	13.6011	15.3982	18,149
MFS Global Growth Portfolio S Class	02	2003	10.2601	13.6011	17,511
MFS Global Growth Portfolio S Class	02	2002	10.0000	10.2601	678
MFS Global Growth Portfolio S Class	03	2008	21.0402	12.5691	0
MFS Global Growth Portfolio S Class	03	2007	18.9856	21.0402	0
MFS Global Growth Portfolio S Class	03	2006	16.5482	18.9856	0
MFS Global Growth Portfolio S Class	03	2005	15.3793	16.5482	0
MFS Global Growth Portfolio S Class	03	2004	13.5913	15.3793	0
MFS Global Growth Portfolio S Class	03	2003	10.2579	13.5913	0
MFS Global Growth Portfolio S Class	03	2002	10.0000	10.2579	0
MFS Global Growth Portfolio S Class	04	2008	20.8665	12.4461	1,429
MFS Global Growth Portfolio S Class	04	2007	18.8579	20.8665	4,052
MFS Global Growth Portfolio S Class	04	2006	16.4621	18.8579	6,051
MFS Global Growth Portfolio S Class	04	2005	15.3226	16.4621	5,712
MFS Global Growth Portfolio S Class	04	2004	13.5621	15.3226	5,561
MFS Global Growth Portfolio S Class	04	2003	10.2516	13.5621	5,675
MFS Global Growth Portfolio S Class	04	2002	10.0000	10.2516	0
MFS Global Growth Portfolio S Class	05	2008	20.8094	12.4057	0
MFS Global Growth Portfolio S Class	05	2007	18.8158	20.8094	0
MFS Global Growth Portfolio S Class	05	2006	16.4337	18.8158	0
MFS Global Growth Portfolio S Class	05	2005	15.3039	16.4337	0
MFS Global Growth Portfolio S Class	05	2004	13.5524	15.3039	0
MFS Global Growth Portfolio S Class	05	2003	10.2495	13.5524	0
MFS Global Growth Portfolio S Class	05	2002	10.0000	10.2495	0
MFS Global Growth Portfolio S Class	06	2008	20.6372	12.2841	0
MFS Global Growth Portfolio S Class	06	2007	18.6890	20.6372	0
MFS Global Growth Portfolio S Class	06	2006	16.3480	18.6890	0
MFS Global Growth Portfolio S Class	06	2005	15.2474	16.3480	0
MFS Global Growth Portfolio S Class	06	2004	13.5232	15.2474	0
MFS Global Growth Portfolio S Class	06	2003	10.2431	13.5232	0
MFS Global Growth Portfolio S Class	06	2002	10.0000	10.2431	0
MFS Global Research Portfolio (Service Class)	01	2008	18.5234	11.5493	9,218
MFS Global Research Portfolio (Service Class)	01	2007	16.6822	18.5234	10,315
MFS Global Research Portfolio (Service Class)	01	2006	15.3824	16.6822	11,037
MFS Global Research Portfolio (Service Class)	01	2005	14.5277	15.3824	11,226
MFS Global Research Portfolio (Service Class)	01	2004	12.7919	14.5277	9,552
MFS Global Research Portfolio (Service Class)	01	2003	10.4093	12.7919	7,237
MFS Global Research Portfolio (Service Class)	01	2002	10.0000	10.4093	0
MFS Global Research Portfolio (Service Class)	02	2008	18.3206	11.3994	8,262
MFS Global Research Portfolio (Service Class)	02	2007	16.5333	18.3206	9,301
MFS Global Research Portfolio (Service Class)	02	2006	15.2762	16.5333	11,674
MFS Global Research Portfolio (Service Class)	02	2005	14.4567	15.2762	12,489
MFS Global Research Portfolio (Service Class)	02	2004	12.7553	14.4567	10,214
MFS Global Research Portfolio (Service Class)	02	2003	10.4007	12.7553	3,475
MFS Global Research Portfolio (Service Class)	02	2002	10.0000	10.4007	0
MFS Global Research Portfolio (Service Class)	03	2008	18.2700	11.3621	0
MFS Global Research Portfolio (Service Class)	03	2007	16.4961	18.2700	0
MFS Global Research Portfolio (Service Class)	03	2006	15.2496	16.4961	0
MFS Global Research Portfolio (Service Class)	03	2005	14.4389	15.2496	265
MFS Global Research Portfolio (Service Class)	03	2004	12.7462	14.4389	265
MFS Global Research Portfolio (Service Class)	03	2003	10.3986	12.7462	266
MFS Global Research Portfolio (Service Class)	03	2002	10.0000	10.3986	0
MFS Global Research Portfolio (Service Class)	04	2008	18.1192	11.2510	5,510
MFS Global Research Portfolio (Service Class)	04	2007	16.3852	18.1192	7,051
MFS Global Research Portfolio (Service Class)	04	2006	15.1702	16.3852	9,430
MFS Global Research Portfolio (Service Class)	04	2005	14.3857	15.1702	14,227
MFS Global Research Portfolio (Service Class)	04	2004	12.7188	14.3857	9,226
MFS Global Research Portfolio (Service Class)	04	2003	10.3921	12.7188	10,236
MFS Global Research Portfolio (Service Class)	04	2002	10.0000	10.3921	0
MFS Global Research Portfolio (Service Class)	05	2008	18.0696	11.2145	4,920
MFS Global Research Portfolio (Service Class)	05	2007	16.3487	18.0696	4,921
MFS Global Research Portfolio (Service Class)	05	2006	15.1441	16.3487	1,225
MFS Global Research Portfolio (Service Class)	05	2005	14.3682	15.1441	4,638
MFS Global Research Portfolio (Service Class)	05	2004	12.7097	14.3682	4,638
MFS Global Research Portfolio (Service Class)	05	2003	10.3899	12.7097	4,724
MFS Global Research Portfolio (Service Class)	05	2002	10.0000	10.3899	0
MFS Global Research Portfolio (Service Class)	06	2008	17.9201	11.1045	0
MFS Global Research Portfolio (Service Class)	06	2007	16.2384	17.9201	0
MFS Global Research Portfolio (Service Class)	06	2006	15.0650	16.2384	0
MFS Global Research Portfolio (Service Class)	06	2005	14.3151	15.0650	0
MFS Global Research Portfolio (Service Class)	06	2004	12.6823	14.3151	0
MFS Global Research Portfolio (Service Class)	06	2003	10.3835	12.6823	0
MFS Global Research Portfolio (Service Class)	06	2002	10.0000	10.3835	0
MFS Government Securities Portfolio S Class	01	2008	11.1810	11.9021	228,341
MFS Government Securities Portfolio S Class	01	2007	10.6404	11.1810	120,809
MFS Government Securities Portfolio S Class	01	2006	10.4606	10.6404	148,687
MFS Government Securities Portfolio S Class	01	2005	10.4317	10.4606	135,590
MFS Government Securities Portfolio S Class	01	2004	10.2487	10.4317	132,118
MFS Government Securities Portfolio S Class	01	2003	10.2346	10.2487	78,432
MFS Government Securities Portfolio S Class	01	2002	10.0000	10.2346	302
MFS Government Securities Portfolio S Class	02	2008	11.0585	11.7478	226,851
MFS Government Securities Portfolio S Class	02	2007	10.5454	11.0585	322,223
MFS Government Securities Portfolio S Class	02	2006	10.3883	10.5454	375,861
MFS Government Securities Portfolio S Class	02	2005	10.3807	10.3883	260,366
MFS Government Securities Portfolio S Class	02	2004	10.2194	10.3807	231,601
MFS Government Securities Portfolio S Class	02	2003	10.2261	10.2194	127,774
MFS Government Securities Portfolio S Class	02	2002	10.0000	10.2261	5,049
MFS Government Securities Portfolio S Class	03	2008	11.0280	11.7093	0
MFS Government Securities Portfolio S Class	03	2007	10.5217	11.0280	398
MFS Government Securities Portfolio S Class	03	2006	10.3702	10.5217	400
MFS Government Securities Portfolio S Class	03	2005	10.3679	10.3702	401
MFS Government Securities Portfolio S Class	03	2004	10.2120	10.3679	5,270
MFS Government Securities Portfolio S Class	03	2003	10.2240	10.2120	5,245
MFS Government Securities Portfolio S Class	03	2002	10.0000	10.2240	0
MFS Government Securities Portfolio S Class	04	2008	10.9370	11.5949	34,450
MFS Government Securities Portfolio S Class	04	2007	10.4510	10.9370	44,751
MFS Government Securities Portfolio S Class	04	2006	10.3162	10.4510	53,332
MFS Government Securities Portfolio S Class	04	2005	10.3297	10.3162	66,004
MFS Government Securities Portfolio S Class	04	2004	10.1900	10.3297	54,662
MFS Government Securities Portfolio S Class	04	2003	10.2176	10.1900	31,602
MFS Government Securities Portfolio S Class	04	2002	10.0000	10.2176	7,801
MFS Government Securities Portfolio S Class	05	2008	10.9070	11.5572	0
MFS Government Securities Portfolio S Class	05	2007	10.4277	10.9070	0
MFS Government Securities Portfolio S Class	05	2006	10.2984	10.4277	0
MFS Government Securities Portfolio S Class	05	2005	10.3171	10.2984	0
MFS Government Securities Portfolio S Class	05	2004	10.1828	10.3171	0
MFS Government Securities Portfolio S Class	05	2003	10.2155	10.1828	0
MFS Government Securities Portfolio S Class	05	2002	10.0000	10.2155	0
MFS Government Securities Portfolio S Class	06	2008	10.8167	11.4439	1,718
MFS Government Securities Portfolio S Class	06	2007	10.3573	10.8167	2,461
MFS Government Securities Portfolio S Class	06	2006	10.2447	10.3573	2,605
MFS Government Securities Portfolio S Class	06	2005	10.2789	10.2447	4,011
MFS Government Securities Portfolio S Class	06	2004	10.1608	10.2789	6,966
MFS Government Securities Portfolio S Class	06	2003	10.2092	10.1608	10,805
MFS Government Securities Portfolio S Class	06	2002	10.0000	10.2092	1,367
MFS Growth Portfolio	01	2008	20.1825	12.3929	314
MFS Growth Portfolio	01	2007	16.9696	20.1825	132
MFS Growth Portfolio	01	2006	16.0286	16.9696	2,084
MFS Growth Portfolio	01	2005	14.9727	16.0286	2,504
MFS Growth Portfolio	01	2004	13.4842	14.9727	5,032
MFS Growth Portfolio	01	2003	10.4601	13.4842	2,371
MFS Growth Portfolio	01	2002	10.0000	10.4601	0
MFS Growth Portfolio	02	2008	19.9615	12.2321	3,204
MFS Growth Portfolio	02	2007	16.8181	19.9615	4,414
MFS Growth Portfolio	02	2006	15.9178	16.8181	5,655
MFS Growth Portfolio	02	2005	14.8995	15.9178	7,927
MFS Growth Portfolio	02	2004	13.4456	14.8995	5,499
MFS Growth Portfolio	02	2003	10.4514	13.4456	1,932
MFS Growth Portfolio	02	2002	10.0000	10.4514	596
MFS Growth Portfolio	03	2008	19.9064	12.1920	0
MFS Growth Portfolio	03	2007	16.7803	19.9064	4,145
MFS Growth Portfolio	03	2006	15.8902	16.7803	2,542
MFS Growth Portfolio	03	2005	14.8811	15.8902	1,266
MFS Growth Portfolio	03	2004	13.4360	14.8811	0
MFS Growth Portfolio	03	2003	10.4493	13.4360	0
MFS Growth Portfolio	03	2002	10.0000	10.4493	0
MFS Growth Portfolio	04	2008	19.7421	12.0728	6,825
MFS Growth Portfolio	04	2007	16.6675	19.7421	6,364
MFS Growth Portfolio	04	2006	15.8075	16.6675	6,413
MFS Growth Portfolio	04	2005	14.8263	15.8075	5,255
MFS Growth Portfolio	04	2004	13.4071	14.8263	5,158
MFS Growth Portfolio	04	2003	10.4428	13.4071	7,157
MFS Growth Portfolio	04	2002	10.0000	10.4428	0
MFS Growth Portfolio	05	2008	19.6880	12.0335	0
MFS Growth Portfolio	05	2007	16.6303	19.6880	0
MFS Growth Portfolio	05	2006	15.7802	16.6303	0
MFS Growth Portfolio	05	2005	14.8082	15.7802	1,720
MFS Growth Portfolio	05	2004	13.3975	14.8082	1,720
MFS Growth Portfolio	05	2003	10.4406	13.3975	1,788
MFS Growth Portfolio	05	2002	10.0000	10.4406	0
MFS Growth Portfolio	06	2008	19.5251	11.9156	622
MFS Growth Portfolio	06	2007	16.5182	19.5251	622
MFS Growth Portfolio	06	2006	15.6978	16.5182	622
MFS Growth Portfolio	06	2005	14.7535	15.6978	622
MFS Growth Portfolio	06	2004	13.3686	14.7535	622
MFS Growth Portfolio	06	2003	10.4341	13.3686	0
MFS Growth Portfolio	06	2002	10.0000	10.4341	0
MFS High Yield Portfolio S Class	01	2008	14.5685	10.0749	115,209
MFS High Yield Portfolio S Class	01	2007	14.5937	14.5685	115,417
MFS High Yield Portfolio S Class	01	2006	13.4905	14.5937	102,111
MFS High Yield Portfolio S Class	01	2005	13.4626	13.4905	168,466
MFS High Yield Portfolio S Class	01	2004	12.5227	13.4626	181,013
MFS High Yield Portfolio S Class	01	2003	10.5101	12.5227	274,971
MFS High Yield Portfolio S Class	01	2002	10.0000	10.5101	23,137
MFS High Yield Portfolio S Class	02	2008	14.4089	9.9442	156,664
MFS High Yield Portfolio S Class	02	2007	14.4635	14.4089	117,041
MFS High Yield Portfolio S Class	02	2006	13.3973	14.4635	194,862
MFS High Yield Portfolio S Class	02	2005	13.3968	13.3973	149,258
MFS High Yield Portfolio S Class	02	2004	12.4869	13.3968	170,125
MFS High Yield Portfolio S Class	02	2003	10.5015	12.4869	269,802
MFS High Yield Portfolio S Class	02	2002	10.0000	10.5015	16,012
MFS High Yield Portfolio S Class	03	2008	14.3692	9.9117	0
MFS High Yield Portfolio S Class	03	2007	14.4310	14.3692	609
MFS High Yield Portfolio S Class	03	2006	13.3740	14.4310	0
MFS High Yield Portfolio S Class	03	2005	13.3803	13.3740	241
MFS High Yield Portfolio S Class	03	2004	12.4780	13.3803	281
MFS High Yield Portfolio S Class	03	2003	10.4993	12.4780	263
MFS High Yield Portfolio S Class	03	2002	10.0000	10.4993	0
MFS High Yield Portfolio S Class	04	2008	14.2506	9.8148	51,115
MFS High Yield Portfolio S Class	04	2007	14.3340	14.2506	62,162
MFS High Yield Portfolio S Class	04	2006	13.3044	14.3340	45,794
MFS High Yield Portfolio S Class	04	2005	13.3310	13.3044	72,907
MFS High Yield Portfolio S Class	04	2004	12.4511	13.3310	97,254
MFS High Yield Portfolio S Class	04	2003	10.4928	12.4511	54,640
MFS High Yield Portfolio S Class	04	2002	10.0000	10.4928	17,616
MFS High Yield Portfolio S Class	05	2008	14.2115	9.7829	1,610
MFS High Yield Portfolio S Class	05	2007	14.3020	14.2115	2,279
MFS High Yield Portfolio S Class	05	2006	13.2814	14.3020	1,838
MFS High Yield Portfolio S Class	05	2005	13.3148	13.2814	2,943
MFS High Yield Portfolio S Class	05	2004	12.4422	13.3148	2,943
MFS High Yield Portfolio S Class	05	2003	10.4906	12.4422	7,762
MFS High Yield Portfolio S Class	05	2002	10.0000	10.4906	0
MFS High Yield Portfolio S Class	06	2008	14.0939	9.6870	2,212
MFS High Yield Portfolio S Class	06	2007	14.2056	14.0939	6,061
MFS High Yield Portfolio S Class	06	2006	13.2121	14.2056	6,847
MFS High Yield Portfolio S Class	06	2005	13.2656	13.2121	8,014
MFS High Yield Portfolio S Class	06	2004	12.4154	13.2656	8,643
MFS High Yield Portfolio S Class	06	2003	10.4841	12.4154	5,010
MFS High Yield Portfolio S Class	06	2002	10.0000	10.4841	0
MFS International Growth Portfolio S Class	01	2008	11.7937	6.9601	17,047
MFS International Growth Portfolio S Class	01	2007	10.0000	11.7937	11,644
MFS International Growth Portfolio S Class	02	2008	11.7739	6.9342	7,901
MFS International Growth Portfolio S Class	02	2007	10.0000	11.7739	5,790
MFS International Growth Portfolio S Class	03	2008	11.7689	6.9277	0
MFS International Growth Portfolio S Class	03	2007	10.0000	11.7689	0
MFS International Growth Portfolio S Class	04	2008	11.7541	6.9083	2,829
MFS International Growth Portfolio S Class	04	2007	10.0000	11.7541	1,672
MFS International Growth Portfolio S Class	05	2008	11.7492	6.9019	0
MFS International Growth Portfolio S Class	05	2007	10.0000	11.7492	0
MFS International Growth Portfolio S Class	06	2008	11.7343	6.8825	0
MFS International Growth Portfolio S Class	06	2007	10.0000	11.7343	0
MFS International Value Portfolio S Class	01	2008	10.8868	7.3221	194,187
MFS International Value Portfolio S Class	01	2007	10.0000	10.8868	176,287
MFS International Value Portfolio S Class	02	2008	10.8685	7.2948	20,608
MFS International Value Portfolio S Class	02	2007	10.0000	10.8685	29,554
MFS International Value Portfolio S Class	03	2008	10.8639	7.2880	0
MFS International Value Portfolio S Class	03	2007	10.0000	10.8639	0
MFS International Value Portfolio S Class	04	2008	10.8502	7.2676	82,383
MFS International Value Portfolio S Class	04	2007	10.0000	10.8502	75,890
MFS International Value Portfolio S Class	05	2008	10.8457	7.2609	0
MFS International Value Portfolio S Class	05	2007	10.0000	10.8457	0
MFS International Value Portfolio S Class	06	2008	10.8319	7.2405	0
MFS International Value Portfolio S Class	06	2007	10.0000	10.8319	0
MFS Massachusetts Investors Growth Stock Portfolio S Class	01	2008	15.7162	9.6778	27,546
MFS Massachusetts Investors Growth Stock Portfolio S Class	01	2007	14.3707	15.7162	38,434
MFS Massachusetts Investors Growth Stock Portfolio S Class	01	2006	13.6094	14.3707	34,981
MFS Massachusetts Investors Growth Stock Portfolio S Class	01	2005	13.2917	13.6094	34,190
MFS Massachusetts Investors Growth Stock Portfolio S Class	01	2004	12.3652	13.2917	42,380
MFS Massachusetts Investors Growth Stock Portfolio S Class	01	2003	10.2395	12.3652	18,285
MFS Massachusetts Investors Growth Stock Portfolio S Class	01	2002	10.0000	10.2395	318
MFS Massachusetts Investors Growth Stock Portfolio S Class	02	2008	15.5441	9.5523	31,936
MFS Massachusetts Investors Growth Stock Portfolio S Class	02	2007	14.2424	15.5441	45,345
MFS Massachusetts Investors Growth Stock Portfolio S Class	02	2006	13.5153	14.2424	41,924
MFS Massachusetts Investors Growth Stock Portfolio S Class	02	2005	13.2267	13.5153	68,884
MFS Massachusetts Investors Growth Stock Portfolio S Class	02	2004	12.3299	13.2267	38,343
MFS Massachusetts Investors Growth Stock Portfolio S Class	02	2003	10.2311	12.3299	31,581
MFS Massachusetts Investors Growth Stock Portfolio S Class	02	2002	10.0000	10.2311	0
MFS Massachusetts Investors Growth Stock Portfolio S Class	03	2008	15.5012	9.5210	4,350
MFS Massachusetts Investors Growth Stock Portfolio S Class	03	2007	14.2104	15.5012	4,002
MFS Massachusetts Investors Growth Stock Portfolio S Class	03	2006	13.4918	14.2104	5,603
MFS Massachusetts Investors Growth Stock Portfolio S Class	03	2005	13.2105	13.4918	5,274
MFS Massachusetts Investors Growth Stock Portfolio S Class	03	2004	12.3210	13.2105	6,995
MFS Massachusetts Investors Growth Stock Portfolio S Class	03	2003	10.2290	12.3210	3,438
MFS Massachusetts Investors Growth Stock Portfolio S Class	03	2002	10.0000	10.2290	0
MFS Massachusetts Investors Growth Stock Portfolio S Class	04	2008	15.3733	9.4279	10,303
MFS Massachusetts Investors Growth Stock Portfolio S Class	04	2007	14.1148	15.3733	14,735
MFS Massachusetts Investors Growth Stock Portfolio S Class	04	2006	13.4216	14.1148	15,023
MFS Massachusetts Investors Growth Stock Portfolio S Class	04	2005	13.1618	13.4216	39,021
MFS Massachusetts Investors Growth Stock Portfolio S Class	04	2004	12.2945	13.1618	36,051
MFS Massachusetts Investors Growth Stock Portfolio S Class	04	2003	10.2226	12.2945	41,203
MFS Massachusetts Investors Growth Stock Portfolio S Class	04	2002	10.0000	10.2226	1,007
MFS Massachusetts Investors Growth Stock Portfolio S Class	05	2008	15.3311	9.3973	1,842
MFS Massachusetts Investors Growth Stock Portfolio S Class	05	2007	14.0833	15.3311	1,842
MFS Massachusetts Investors Growth Stock Portfolio S Class	05	2006	13.3984	14.0833	1,842
MFS Massachusetts Investors Growth Stock Portfolio S Class	05	2005	13.1457	13.3984	3,192
MFS Massachusetts Investors Growth Stock Portfolio S Class	05	2004	12.2857	13.1457	3,192
MFS Massachusetts Investors Growth Stock Portfolio S Class	05	2003	10.2205	12.2857	9,930
MFS Massachusetts Investors Growth Stock Portfolio S Class	05	2002	10.0000	10.2205	0
MFS Massachusetts Investors Growth Stock Portfolio S Class	06	2008	15.2043	9.3051	0
MFS Massachusetts Investors Growth Stock Portfolio S Class	06	2007	13.9884	15.2043	265
MFS Massachusetts Investors Growth Stock Portfolio S Class	06	2006	13.3285	13.9884	933
MFS Massachusetts Investors Growth Stock Portfolio S Class	06	2005	13.0972	13.3285	3,257
MFS Massachusetts Investors Growth Stock Portfolio S Class	06	2004	12.2593	13.0972	3,257
MFS Massachusetts Investors Growth Stock Portfolio S Class	06	2003	10.2141	12.2593	3,258
MFS Massachusetts Investors Growth Stock Portfolio S Class	06	2002	10.0000	10.2141	0
MFS Mid Cap Growth Portfolio S Class	01	2008	17.6695	8.4347	2,513
MFS Mid Cap Growth Portfolio S Class	01	2007	16.4041	17.6695	2,707
MFS Mid Cap Growth Portfolio S Class	01	2006	16.3285	16.4041	4,686
MFS Mid Cap Growth Portfolio S Class	01	2005	16.1612	16.3285	5,132
MFS Mid Cap Growth Portfolio S Class	01	2004	14.3862	16.1612	6,139
MFS Mid Cap Growth Portfolio S Class	01	2003	10.6565	14.3862	5,933
MFS Mid Cap Growth Portfolio S Class	01	2002	10.0000	10.6565	630
MFS Mid Cap Growth Portfolio S Class	02	2008	17.4760	8.3253	13,227
MFS Mid Cap Growth Portfolio S Class	02	2007	16.2577	17.4760	12,879
MFS Mid Cap Growth Portfolio S Class	02	2006	16.2157	16.2577	19,048
MFS Mid Cap Growth Portfolio S Class	02	2005	16.0821	16.2157	20,353
MFS Mid Cap Growth Portfolio S Class	02	2004	14.3451	16.0821	24,160
MFS Mid Cap Growth Portfolio S Class	02	2003	10.6477	14.3451	20,865
MFS Mid Cap Growth Portfolio S Class	02	2002	10.0000	10.6477	292
MFS Mid Cap Growth Portfolio S Class	03	2008	17.4278	8.2980	3,005
MFS Mid Cap Growth Portfolio S Class	03	2007	16.2212	17.4278	2,128
MFS Mid Cap Growth Portfolio S Class	03	2006	16.1876	16.2212	2,081
MFS Mid Cap Growth Portfolio S Class	03	2005	16.0624	16.1876	1,714
MFS Mid Cap Growth Portfolio S Class	03	2004	14.3349	16.0624	1,675
MFS Mid Cap Growth Portfolio S Class	03	2003	10.6455	14.3349	1,415
MFS Mid Cap Growth Portfolio S Class	03	2002	10.0000	10.6455	0
MFS Mid Cap Growth Portfolio S Class	04	2008	17.2839	8.2168	5,572
MFS Mid Cap Growth Portfolio S Class	04	2007	16.1120	17.2839	5,548
MFS Mid Cap Growth Portfolio S Class	04	2006	16.1033	16.1120	7,176
MFS Mid Cap Growth Portfolio S Class	04	2005	16.0032	16.1033	6,689
MFS Mid Cap Growth Portfolio S Class	04	2004	14.3040	16.0032	7,717
MFS Mid Cap Growth Portfolio S Class	04	2003	10.6389	14.3040	7,698
MFS Mid Cap Growth Portfolio S Class	04	2002	10.0000	10.6389	3,306
MFS Mid Cap Growth Portfolio S Class	05	2008	17.2365	8.1901	0
MFS Mid Cap Growth Portfolio S Class	05	2007	16.0761	17.2365	0
MFS Mid Cap Growth Portfolio S Class	05	2006	16.0755	16.0761	0
MFS Mid Cap Growth Portfolio S Class	05	2005	15.9837	16.0755	0
MFS Mid Cap Growth Portfolio S Class	05	2004	14.2938	15.9837	0
MFS Mid Cap Growth Portfolio S Class	05	2003	10.6367	14.2938	0
MFS Mid Cap Growth Portfolio S Class	05	2002	10.0000	10.6367	0
MFS Mid Cap Growth Portfolio S Class	06	2008	17.0939	8.1098	0
MFS Mid Cap Growth Portfolio S Class	06	2007	15.9677	17.0939	0
MFS Mid Cap Growth Portfolio S Class	06	2006	15.9916	15.9677	0
MFS Mid Cap Growth Portfolio S Class	06	2005	15.9246	15.9916	0
MFS Mid Cap Growth Portfolio S Class	06	2004	14.2630	15.9246	0
MFS Mid Cap Growth Portfolio S Class	06	2003	10.6301	14.2630	0
MFS Mid Cap Growth Portfolio S Class	06	2002	10.0000	10.6301	0
MFS Mid Cap Value Portfolio S Class	01	2008	18.5269	10.5041	1,382
MFS Mid Cap Value Portfolio S Class	01	2007	18.5508	18.5269	1,342
MFS Mid Cap Value Portfolio S Class	01	2006	16.9990	18.5508	1,732
MFS Mid Cap Value Portfolio S Class	01	2005	16.1004	16.9990	2,505
MFS Mid Cap Value Portfolio S Class	01	2004	13.4533	16.1004	3,097
MFS Mid Cap Value Portfolio S Class	01	2003	10.3755	13.4533	3,152
MFS Mid Cap Value Portfolio S Class	01	2002	10.0000	10.3755	0
MFS Mid Cap Value Portfolio S Class	02	2008	18.3240	10.3678	9,956
MFS Mid Cap Value Portfolio S Class	02	2007	18.3853	18.3240	10,954
MFS Mid Cap Value Portfolio S Class	02	2006	16.8816	18.3853	14,581
MFS Mid Cap Value Portfolio S Class	02	2005	16.0216	16.8816	17,112
MFS Mid Cap Value Portfolio S Class	02	2004	13.4148	16.0216	18,128
MFS Mid Cap Value Portfolio S Class	02	2003	10.3669	13.4148	21,086
MFS Mid Cap Value Portfolio S Class	02	2002	10.0000	10.3669	0
MFS Mid Cap Value Portfolio S Class	03	2008	18.2734	10.3339	0
MFS Mid Cap Value Portfolio S Class	03	2007	18.3440	18.2734	0
MFS Mid Cap Value Portfolio S Class	03	2006	16.8522	18.3440	0
MFS Mid Cap Value Portfolio S Class	03	2005	16.0019	16.8522	0
MFS Mid Cap Value Portfolio S Class	03	2004	13.4052	16.0019	74
MFS Mid Cap Value Portfolio S Class	03	2003	10.3648	13.4052	41
MFS Mid Cap Value Portfolio S Class	03	2002	10.0000	10.3648	0
MFS Mid Cap Value Portfolio S Class	04	2008	18.1226	10.2328	0
MFS Mid Cap Value Portfolio S Class	04	2007	18.2206	18.1226	761
MFS Mid Cap Value Portfolio S Class	04	2006	16.7645	18.2206	982
MFS Mid Cap Value Portfolio S Class	04	2005	15.9430	16.7645	4,432
MFS Mid Cap Value Portfolio S Class	04	2004	13.3764	15.9430	3,011
MFS Mid Cap Value Portfolio S Class	04	2003	10.3583	13.3764	1,554
MFS Mid Cap Value Portfolio S Class	04	2002	10.0000	10.3583	0
MFS Mid Cap Value Portfolio S Class	05	2008	18.0729	10.1995	0
MFS Mid Cap Value Portfolio S Class	05	2007	18.1800	18.0729	0
MFS Mid Cap Value Portfolio S Class	05	2006	16.7356	18.1800	0
MFS Mid Cap Value Portfolio S Class	05	2005	15.9235	16.7356	0
MFS Mid Cap Value Portfolio S Class	05	2004	13.3668	15.9235	0
MFS Mid Cap Value Portfolio S Class	05	2003	10.3562	13.3668	0
MFS Mid Cap Value Portfolio S Class	05	2002	10.0000	10.3562	0
MFS Mid Cap Value Portfolio S Class	06	2008	17.9234	10.0995	414
MFS Mid Cap Value Portfolio S Class	06	2007	18.0575	17.9234	414
MFS Mid Cap Value Portfolio S Class	06	2006	16.6483	18.0575	414
MFS Mid Cap Value Portfolio S Class	06	2005	15.8647	16.6483	415
MFS Mid Cap Value Portfolio S Class	06	2004	13.3380	15.8647	415
MFS Mid Cap Value Portfolio S Class	06	2003	10.3497	13.3380	0
MFS Mid Cap Value Portfolio S Class	06	2002	10.0000	10.3497	0
MFS Money Market Portfolio S Class	01	2008	10.3258	10.3325	1,098,437
MFS Money Market Portfolio S Class	01	2007	10.0445	10.3258	1,080,423
MFS Money Market Portfolio S Class	01	2006	9.7933	10.0445	338,821
MFS Money Market Portfolio S Class	01	2005	9.7227	9.7933	219,956
MFS Money Market Portfolio S Class	01	2004	9.8348	9.7227	208,258
MFS Money Market Portfolio S Class	01	2003	9.9672	9.8348	84,153
MFS Money Market Portfolio S Class	01	2002	10.0000	9.9672	142,702
MFS Money Market Portfolio S Class	02	2008	10.2127	10.1985	728,857
MFS Money Market Portfolio S Class	02	2007	9.9548	10.2127	668,686
MFS Money Market Portfolio S Class	02	2006	9.7256	9.9548	547,851
MFS Money Market Portfolio S Class	02	2005	9.6751	9.7256	379,920
MFS Money Market Portfolio S Class	02	2004	9.8067	9.6751	248,174
MFS Money Market Portfolio S Class	02	2003	9.9589	9.8067	164,065
MFS Money Market Portfolio S Class	02	2002	10.0000	9.9589	4,601
MFS Money Market Portfolio S Class	03	2008	10.1845	10.1651	0
MFS Money Market Portfolio S Class	03	2007	9.9324	10.1845	0
MFS Money Market Portfolio S Class	03	2006	9.7087	9.9324	0
MFS Money Market Portfolio S Class	03	2005	9.6632	9.7087	0
MFS Money Market Portfolio S Class	03	2004	9.7996	9.6632	0
MFS Money Market Portfolio S Class	03	2003	9.9569	9.7996	0
MFS Money Market Portfolio S Class	03	2002	10.0000	9.9569	0
MFS Money Market Portfolio S Class	04	2008	10.1004	10.0657	43,663
MFS Money Market Portfolio S Class	04	2007	9.8656	10.1004	79,814
MFS Money Market Portfolio S Class	04	2006	9.6581	9.8656	89,244
MFS Money Market Portfolio S Class	04	2005	9.6276	9.6581	28,043
MFS Money Market Portfolio S Class	04	2004	9.7785	9.6276	9,877
MFS Money Market Portfolio S Class	04	2003	9.9507	9.7785	34,008
MFS Money Market Portfolio S Class	04	2002	10.0000	9.9507	5,818
MFS Money Market Portfolio S Class	05	2008	10.0727	10.0330	0
MFS Money Market Portfolio S Class	05	2007	9.8436	10.0727	0
MFS Money Market Portfolio S Class	05	2006	9.6415	9.8436	0
MFS Money Market Portfolio S Class	05	2005	9.6158	9.6415	0
MFS Money Market Portfolio S Class	05	2004	9.7716	9.6158	0
MFS Money Market Portfolio S Class	05	2003	9.9486	9.7716	0
MFS Money Market Portfolio S Class	05	2002	10.0000	9.9486	0
MFS Money Market Portfolio S Class	06	2008	9.9893	9.9346	418
MFS Money Market Portfolio S Class	06	2007	9.7772	9.9893	1,085
MFS Money Market Portfolio S Class	06	2006	9.5911	9.7772	1,191
MFS Money Market Portfolio S Class	06	2005	9.5803	9.5911	808
MFS Money Market Portfolio S Class	06	2004	9.7505	9.5803	653
MFS Money Market Portfolio S Class	06	2003	9.9425	9.7505	0
MFS Money Market Portfolio S Class	06	2002	10.0000	9.9425	0
MFS New Discovery Portfolio S Class	01	2008	16.5567	9.8026	17,174
MFS New Discovery Portfolio S Class	01	2007	16.4696	16.5567	22,954
MFS New Discovery Portfolio S Class	01	2006	14.8399	16.4696	27,752
MFS New Discovery Portfolio S Class	01	2005	14.3829	14.8399	24,170
MFS New Discovery Portfolio S Class	01	2004	13.6474	14.3829	14,335
MFS New Discovery Portfolio S Class	01	2003	10.2829	13.6474	6,783
MFS New Discovery Portfolio S Class	01	2002	10.0000	10.2829	377
MFS New Discovery Portfolio S Class	02	2008	16.3754	9.6754	64,423
MFS New Discovery Portfolio S Class	02	2007	16.3226	16.3754	71,372
MFS New Discovery Portfolio S Class	02	2006	14.7374	16.3226	73,400
MFS New Discovery Portfolio S Class	02	2005	14.3126	14.7374	63,637
MFS New Discovery Portfolio S Class	02	2004	13.6085	14.3126	31,491
MFS New Discovery Portfolio S Class	02	2003	10.2744	13.6085	4,144
MFS New Discovery Portfolio S Class	02	2002	10.0000	10.2744	305
MFS New Discovery Portfolio S Class	03	2008	16.3302	9.6437	0
MFS New Discovery Portfolio S Class	03	2007	16.2860	16.3302	0
MFS New Discovery Portfolio S Class	03	2006	14.7118	16.2860	0
MFS New Discovery Portfolio S Class	03	2005	14.2950	14.7118	161
MFS New Discovery Portfolio S Class	03	2004	13.5987	14.2950	764
MFS New Discovery Portfolio S Class	03	2003	10.2723	13.5987	161
MFS New Discovery Portfolio S Class	03	2002	10.0000	10.2723	0
MFS New Discovery Portfolio S Class	04	2008	16.1954	9.5493	7,710
MFS New Discovery Portfolio S Class	04	2007	16.1764	16.1954	13,526
MFS New Discovery Portfolio S Class	04	2006	14.6352	16.1764	13,811
MFS New Discovery Portfolio S Class	04	2005	14.2423	14.6352	18,321
MFS New Discovery Portfolio S Class	04	2004	13.5695	14.2423	8,813
MFS New Discovery Portfolio S Class	04	2003	10.2659	13.5695	1,342
MFS New Discovery Portfolio S Class	04	2002	10.0000	10.2659	0
MFS New Discovery Portfolio S Class	05	2008	16.1510	9.5183	0
MFS New Discovery Portfolio S Class	05	2007	16.1403	16.1510	0
MFS New Discovery Portfolio S Class	05	2006	14.6099	16.1403	0
MFS New Discovery Portfolio S Class	05	2005	14.2249	14.6099	738
MFS New Discovery Portfolio S Class	05	2004	13.5598	14.2249	738
MFS New Discovery Portfolio S Class	05	2003	10.2638	13.5598	738
MFS New Discovery Portfolio S Class	05	2002	10.0000	10.2638	0
MFS New Discovery Portfolio S Class	06	2008	16.0173	9.4250	226
MFS New Discovery Portfolio S Class	06	2007	16.0315	16.0173	557
MFS New Discovery Portfolio S Class	06	2006	14.5337	16.0315	1,439
MFS New Discovery Portfolio S Class	06	2005	14.1724	14.5337	243
MFS New Discovery Portfolio S Class	06	2004	13.5306	14.1724	232
MFS New Discovery Portfolio S Class	06	2003	10.2574	13.5306	0
MFS New Discovery Portfolio S Class	06	2002	10.0000	10.2574	0
MFS Research International Portfolio S Class	01	2008	24.9766	14.0922	43,779
MFS Research International Portfolio S Class	01	2007	22.5258	24.9766	49,478
MFS Research International Portfolio S Class	01	2006	18.0067	22.5258	43,746
MFS Research International Portfolio S Class	01	2005	15.7645	18.0067	33,687
MFS Research International Portfolio S Class	01	2004	13.2587	15.7645	33,061
MFS Research International Portfolio S Class	01	2003	10.1103	13.2587	27,518
MFS Research International Portfolio S Class	01	2002	10.0000	10.1103	49,179
MFS Research International Portfolio S Class	02	2008	24.7032	13.9093	39,034
MFS Research International Portfolio S Class	02	2007	22.3248	24.7032	47,543
MFS Research International Portfolio S Class	02	2006	17.8823	22.3248	50,892
MFS Research International Portfolio S Class	02	2005	15.6874	17.8823	45,265
MFS Research International Portfolio S Class	02	2004	13.2208	15.6874	24,730
MFS Research International Portfolio S Class	02	2003	10.1020	13.2208	11,220
MFS Research International Portfolio S Class	02	2002	10.0000	10.1020	329
MFS Research International Portfolio S Class	03	2008	24.6350	13.8638	1,932
MFS Research International Portfolio S Class	03	2007	22.2746	24.6350	8,388
MFS Research International Portfolio S Class	03	2006	17.8512	22.2746	8,748
MFS Research International Portfolio S Class	03	2005	15.6681	17.8512	7,304
MFS Research International Portfolio S Class	03	2004	13.2113	15.6681	4,546
MFS Research International Portfolio S Class	03	2003	10.0999	13.2113	2,670
MFS Research International Portfolio S Class	03	2002	10.0000	10.0999	0
MFS Research International Portfolio S Class	04	2008	24.4317	13.7282	36,246
MFS Research International Portfolio S Class	04	2007	22.1248	24.4317	36,430
MFS Research International Portfolio S Class	04	2006	17.7583	22.1248	41,447
MFS Research International Portfolio S Class	04	2005	15.6104	17.7583	40,584
MFS Research International Portfolio S Class	04	2004	13.1829	15.6104	33,639
MFS Research International Portfolio S Class	04	2003	10.0936	13.1829	18,443
MFS Research International Portfolio S Class	04	2002	10.0000	10.0936	1,968
MFS Research International Portfolio S Class	05	2008	24.3647	13.6836	2,087
MFS Research International Portfolio S Class	05	2007	22.0755	24.3647	2,087
MFS Research International Portfolio S Class	05	2006	17.7276	22.0755	2,087
MFS Research International Portfolio S Class	05	2005	15.5913	17.7276	941
MFS Research International Portfolio S Class	05	2004	13.1735	15.5913	941
MFS Research International Portfolio S Class	05	2003	10.0915	13.1735	0
MFS Research International Portfolio S Class	05	2002	10.0000	10.0915	0
MFS Research International Portfolio S Class	06	2008	24.1632	13.5495	2,758
MFS Research International Portfolio S Class	06	2007	21.9267	24.1632	3,638
MFS Research International Portfolio S Class	06	2006	17.6352	21.9267	2,758
MFS Research International Portfolio S Class	06	2005	15.5338	17.6352	0
MFS Research International Portfolio S Class	06	2004	13.1451	15.5338	0
MFS Research International Portfolio S Class	06	2003	10.0852	13.1451	0
MFS Research International Portfolio S Class	06	2002	10.0000	10.0852	0
MFS Strategic Income Portfolio S Class	01	2008	12.9746	11.0684	3,733
MFS Strategic Income Portfolio S Class	01	2007	12.7865	12.9746	4,429
MFS Strategic Income Portfolio S Class	01	2006	12.2188	12.7865	10,217
MFS Strategic Income Portfolio S Class	01	2005	12.2328	12.2188	12,424
MFS Strategic Income Portfolio S Class	01	2004	11.5413	12.2328	20,037
MFS Strategic Income Portfolio S Class	01	2003	10.4384	11.5413	37,633
MFS Strategic Income Portfolio S Class	01	2002	10.0000	10.4384	0
MFS Strategic Income Portfolio S Class	02	2008	12.8325	10.9248	1,738
MFS Strategic Income Portfolio S Class	02	2007	12.6724	12.8325	2,943
MFS Strategic Income Portfolio S Class	02	2006	12.1344	12.6724	2,114
MFS Strategic Income Portfolio S Class	02	2005	12.1730	12.1344	2,077
MFS Strategic Income Portfolio S Class	02	2004	11.5083	12.1730	31,294
MFS Strategic Income Portfolio S Class	02	2003	10.4298	11.5083	22,435
MFS Strategic Income Portfolio S Class	02	2002	10.0000	10.4298	2,939
MFS Strategic Income Portfolio S Class	03	2008	12.7971	10.8891	0
MFS Strategic Income Portfolio S Class	03	2007	12.6439	12.7971	0
MFS Strategic Income Portfolio S Class	03	2006	12.1133	12.6439	0
MFS Strategic Income Portfolio S Class	03	2005	12.1580	12.1133	0
MFS Strategic Income Portfolio S Class	03	2004	11.5001	12.1580	0
MFS Strategic Income Portfolio S Class	03	2003	10.4277	11.5001	0
MFS Strategic Income Portfolio S Class	03	2002	10.0000	10.4277	0
MFS Strategic Income Portfolio S Class	04	2008	12.6915	10.7826	1,737
MFS Strategic Income Portfolio S Class	04	2007	12.5588	12.6915	1,738
MFS Strategic Income Portfolio S Class	04	2006	12.0502	12.5588	1,898
MFS Strategic Income Portfolio S Class	04	2005	12.1132	12.0502	1,900
MFS Strategic Income Portfolio S Class	04	2004	11.4753	12.1132	2,271
MFS Strategic Income Portfolio S Class	04	2003	10.4212	11.4753	3,185
MFS Strategic Income Portfolio S Class	04	2002	10.0000	10.4212	0
MFS Strategic Income Portfolio S Class	05	2008	12.6567	10.7476	0
MFS Strategic Income Portfolio S Class	05	2007	12.5308	12.6567	0
MFS Strategic Income Portfolio S Class	05	2006	12.0294	12.5308	0
MFS Strategic Income Portfolio S Class	05	2005	12.0984	12.0294	0
MFS Strategic Income Portfolio S Class	05	2004	11.4672	12.0984	0
MFS Strategic Income Portfolio S Class	05	2003	10.4190	11.4672	0
MFS Strategic Income Portfolio S Class	05	2002	10.0000	10.4190	0
MFS Strategic Income Portfolio S Class	06	2008	12.5520	10.6422	486
MFS Strategic Income Portfolio S Class	06	2007	12.4464	12.5520	486
MFS Strategic Income Portfolio S Class	06	2006	11.9666	12.4464	487
MFS Strategic Income Portfolio S Class	06	2005	12.0538	11.9666	487
MFS Strategic Income Portfolio S Class	06	2004	11.4424	12.0538	488
MFS Strategic Income Portfolio S Class	06	2003	10.4126	11.4424	0
MFS Strategic Income Portfolio S Class	06	2002	10.0000	10.4126	0
MFS Strategic Value Portfolio S Class	01	2008	16.4304	9.2393	0
MFS Strategic Value Portfolio S Class	01	2007	17.1663	16.4304	0
MFS Strategic Value Portfolio S Class	01	2006	15.3280	17.1663	572
MFS Strategic Value Portfolio S Class	01	2005	15.7055	15.3280	574
MFS Strategic Value Portfolio S Class	01	2004	13.5669	15.7055	575
MFS Strategic Value Portfolio S Class	01	2003	10.8659	13.5669	0
MFS Strategic Value Portfolio S Class	01	2002	10.0000	10.8659	0
MFS Strategic Value Portfolio S Class	02	2008	16.2504	9.1194	5,900
MFS Strategic Value Portfolio S Class	02	2007	17.0131	16.2504	5,973
MFS Strategic Value Portfolio S Class	02	2006	15.2221	17.0131	6,473
MFS Strategic Value Portfolio S Class	02	2005	15.6286	15.2221	19,003
MFS Strategic Value Portfolio S Class	02	2004	13.5282	15.6286	20,851
MFS Strategic Value Portfolio S Class	02	2003	10.8570	13.5282	15,722
MFS Strategic Value Portfolio S Class	02	2002	10.0000	10.8570	1,242
MFS Strategic Value Portfolio S Class	03	2008	16.2056	9.0896	3,865
MFS Strategic Value Portfolio S Class	03	2007	16.9748	16.2056	3,200
MFS Strategic Value Portfolio S Class	03	2006	15.1956	16.9748	2,806
MFS Strategic Value Portfolio S Class	03	2005	15.6094	15.1956	2,559
MFS Strategic Value Portfolio S Class	03	2004	13.5185	15.6094	1,961
MFS Strategic Value Portfolio S Class	03	2003	10.8547	13.5185	1,679
MFS Strategic Value Portfolio S Class	03	2002	10.0000	10.8547	0
MFS Strategic Value Portfolio S Class	04	2008	16.0718	9.0007	2,988
MFS Strategic Value Portfolio S Class	04	2007	16.8607	16.0718	3,849
MFS Strategic Value Portfolio S Class	04	2006	15.1165	16.8607	5,151
MFS Strategic Value Portfolio S Class	04	2005	15.5519	15.1165	8,940
MFS Strategic Value Portfolio S Class	04	2004	13.4894	15.5519	12,935
MFS Strategic Value Portfolio S Class	04	2003	10.8480	13.4894	13,935
MFS Strategic Value Portfolio S Class	04	2002	10.0000	10.8480	4,142
MFS Strategic Value Portfolio S Class	05	2008	16.0278	8.9714	0
MFS Strategic Value Portfolio S Class	05	2007	16.8231	16.0278	0
MFS Strategic Value Portfolio S Class	05	2006	15.0904	16.8231	0
MFS Strategic Value Portfolio S Class	05	2005	15.5330	15.0904	627
MFS Strategic Value Portfolio S Class	05	2004	13.4798	15.5330	627
MFS Strategic Value Portfolio S Class	05	2003	10.8457	13.4798	3,605
MFS Strategic Value Portfolio S Class	05	2002	10.0000	10.8457	0
MFS Strategic Value Portfolio S Class	06	2008	15.8952	8.8834	0
MFS Strategic Value Portfolio S Class	06	2007	16.7097	15.8952	0
MFS Strategic Value Portfolio S Class	06	2006	15.0117	16.7097	0
MFS Strategic Value Portfolio S Class	06	2005	15.4756	15.0117	244
MFS Strategic Value Portfolio S Class	06	2004	13.4507	15.4756	244
MFS Strategic Value Portfolio S Class	06	2003	10.8390	13.4507	244
MFS Strategic Value Portfolio S Class	06	2002	10.0000	10.8390	0
MFS Total Return Portfolio S Class	01	2008	15.0051	11.5427	484,447
MFS Total Return Portfolio S Class	01	2007	14.6684	15.0051	469,959
MFS Total Return Portfolio S Class	01	2006	13.3335	14.6684	396,067
MFS Total Return Portfolio S Class	01	2005	13.1925	13.3335	472,908
MFS Total Return Portfolio S Class	01	2004	12.0755	13.1925	377,859
MFS Total Return Portfolio S Class	01	2003	10.5144	12.0755	118,679
MFS Total Return Portfolio S Class	01	2002	10.0000	10.5144	17,815
MFS Total Return Portfolio S Class	02	2008	14.8408	11.3930	570,684
MFS Total Return Portfolio S Class	02	2007	14.5375	14.8408	678,438
MFS Total Return Portfolio S Class	02	2006	13.2414	14.5375	785,153
MFS Total Return Portfolio S Class	02	2005	13.1280	13.2414	615,097
MFS Total Return Portfolio S Class	02	2004	12.0410	13.1280	422,263
MFS Total Return Portfolio S Class	02	2003	10.5058	12.0410	166,941
MFS Total Return Portfolio S Class	02	2002	10.0000	10.5058	3,901
MFS Total Return Portfolio S Class	03	2008	14.7999	11.3557	1,597
MFS Total Return Portfolio S Class	03	2007	14.5048	14.7999	6,772
MFS Total Return Portfolio S Class	03	2006	13.2184	14.5048	4,849
MFS Total Return Portfolio S Class	03	2005	13.1118	13.2184	2,058
MFS Total Return Portfolio S Class	03	2004	12.0323	13.1118	6,535
MFS Total Return Portfolio S Class	03	2003	10.5036	12.0323	3,437
MFS Total Return Portfolio S Class	03	2002	10.0000	10.5036	0
MFS Total Return Portfolio S Class	04	2008	14.6777	11.2446	154,707
MFS Total Return Portfolio S Class	04	2007	14.4073	14.6777	212,525
MFS Total Return Portfolio S Class	04	2006	13.1496	14.4073	206,073
MFS Total Return Portfolio S Class	04	2005	13.0635	13.1496	178,375
MFS Total Return Portfolio S Class	04	2004	12.0065	13.0635	114,522
MFS Total Return Portfolio S Class	04	2003	10.4971	12.0065	32,114
MFS Total Return Portfolio S Class	04	2002	10.0000	10.4971	7,446
MFS Total Return Portfolio S Class	05	2008	14.6375	11.2081	1,293
MFS Total Return Portfolio S Class	05	2007	14.3751	14.6375	1,293
MFS Total Return Portfolio S Class	05	2006	13.1269	14.3751	1,293
MFS Total Return Portfolio S Class	05	2005	13.0476	13.1269	1,875
MFS Total Return Portfolio S Class	05	2004	11.9979	13.0476	1,875
MFS Total Return Portfolio S Class	05	2003	10.4949	11.9979	1,926
MFS Total Return Portfolio S Class	05	2002	10.0000	10.4949	0
MFS Total Return Portfolio S Class	06	2008	14.5164	11.0983	14,456
MFS Total Return Portfolio S Class	06	2007	14.2782	14.5164	29,859
MFS Total Return Portfolio S Class	06	2006	13.0584	14.2782	18,073
MFS Total Return Portfolio S Class	06	2005	12.9994	13.0584	15,047
MFS Total Return Portfolio S Class	06	2004	11.9720	12.9994	12,429
MFS Total Return Portfolio S Class	06	2003	10.4884	11.9720	10,420
MFS Total Return Portfolio S Class	06	2002	10.0000	10.4884	561
MFS Utilities Portfolio S Class	01	2008	35.5791	21.9430	55,013
MFS Utilities Portfolio S Class	01	2007	28.2168	35.5791	46,321
MFS Utilities Portfolio S Class	01	2006	21.7512	28.2168	33,212
MFS Utilities Portfolio S Class	01	2005	18.9157	21.7512	25,453
MFS Utilities Portfolio S Class	01	2004	14.8010	18.9157	8,515
MFS Utilities Portfolio S Class	01	2003	11.0687	14.8010	3,166
MFS Utilities Portfolio S Class	01	2002	10.0000	11.0687	0
MFS Utilities Portfolio S Class	02	2008	35.1897	21.6584	17,582
MFS Utilities Portfolio S Class	02	2007	27.9651	35.1897	20,807
MFS Utilities Portfolio S Class	02	2006	21.6010	27.9651	21,374
MFS Utilities Portfolio S Class	02	2005	18.8233	21.6010	13,330
MFS Utilities Portfolio S Class	02	2004	14.7588	18.8233	8,211
MFS Utilities Portfolio S Class	02	2003	11.0596	14.7588	5,452
MFS Utilities Portfolio S Class	02	2002	10.0000	11.0596	0
MFS Utilities Portfolio S Class	03	2008	35.0927	21.5876	760
MFS Utilities Portfolio S Class	03	2007	27.9023	35.0927	1,716
MFS Utilities Portfolio S Class	03	2006	21.5635	27.9023	1,219
MFS Utilities Portfolio S Class	03	2005	18.8002	21.5635	1,026
MFS Utilities Portfolio S Class	03	2004	14.7482	18.8002	0
MFS Utilities Portfolio S Class	03	2003	11.0573	14.7482	0
MFS Utilities Portfolio S Class	03	2002	10.0000	11.0573	0
MFS Utilities Portfolio S Class	04	2008	34.8032	21.3766	33,726
MFS Utilities Portfolio S Class	04	2007	27.7148	34.8032	7,398
MFS Utilities Portfolio S Class	04	2006	21.4513	27.7148	11,111
MFS Utilities Portfolio S Class	04	2005	18.7309	21.4513	6,985
MFS Utilities Portfolio S Class	04	2004	14.7165	18.7309	1,207
MFS Utilities Portfolio S Class	04	2003	11.0505	14.7165	1,707
MFS Utilities Portfolio S Class	04	2002	10.0000	11.0505	0
MFS Utilities Portfolio S Class	05	2008	34.7078	21.3072	257
MFS Utilities Portfolio S Class	05	2007	27.6530	34.7078	560
MFS Utilities Portfolio S Class	05	2006	21.4143	27.6530	0
MFS Utilities Portfolio S Class	05	2005	18.7081	21.4143	0
MFS Utilities Portfolio S Class	05	2004	14.7060	18.7081	0
MFS Utilities Portfolio S Class	05	2003	11.0482	14.7060	0
MFS Utilities Portfolio S Class	05	2002	10.0000	11.0482	0
MFS Utilities Portfolio S Class	06	2008	34.4208	21.0984	2,088
MFS Utilities Portfolio S Class	06	2007	27.4667	34.4208	117
MFS Utilities Portfolio S Class	06	2006	21.3026	27.4667	497
MFS Utilities Portfolio S Class	06	2005	18.6390	21.3026	55
MFS Utilities Portfolio S Class	06	2004	14.6743	18.6390	0
MFS Utilities Portfolio S Class	06	2003	11.0413	14.6743	0
MFS Utilities Portfolio S Class	06	2002	10.0000	11.0413	0
MFS Value Portfolio S Class	01	2008	19.1150	12.6131	134,789
MFS Value Portfolio S Class	01	2007	18.0616	19.1150	57,395
MFS Value Portfolio S Class	01	2006	15.2271	18.0616	44,909
MFS Value Portfolio S Class	01	2005	14.5659	15.2271	51,348
MFS Value Portfolio S Class	01	2004	12.8653	14.5659	39,154
MFS Value Portfolio S Class	01	2003	10.4628	12.8653	19,225
MFS Value Portfolio S Class	01	2002	10.0000	10.4628	281
MFS Value Portfolio S Class	02	2008	18.9057	12.4495	74,924
MFS Value Portfolio S Class	02	2007	17.9004	18.9057	41,103
MFS Value Portfolio S Class	02	2006	15.1219	17.9004	59,241
MFS Value Portfolio S Class	02	2005	14.4946	15.1219	43,102
MFS Value Portfolio S Class	02	2004	12.8285	14.4946	26,787
MFS Value Portfolio S Class	02	2003	10.4542	12.8285	14,312
MFS Value Portfolio S Class	02	2002	10.0000	10.4542	259
MFS Value Portfolio S Class	03	2008	18.8535	12.4087	198
MFS Value Portfolio S Class	03	2007	17.8602	18.8535	0
MFS Value Portfolio S Class	03	2006	15.0956	17.8602	1,317
MFS Value Portfolio S Class	03	2005	14.4768	15.0956	1,520
MFS Value Portfolio S Class	03	2004	12.8193	14.4768	2,122
MFS Value Portfolio S Class	03	2003	10.4520	12.8193	1,117
MFS Value Portfolio S Class	03	2002	10.0000	10.4520	0
MFS Value Portfolio S Class	04	2008	18.6979	12.2874	43,677
MFS Value Portfolio S Class	04	2007	17.7401	18.6979	47,071
MFS Value Portfolio S Class	04	2006	15.0170	17.7401	55,404
MFS Value Portfolio S Class	04	2005	14.4235	15.0170	53,803
MFS Value Portfolio S Class	04	2004	12.7917	14.4235	50,432
MFS Value Portfolio S Class	04	2003	10.4455	12.7917	32,084
MFS Value Portfolio S Class	04	2002	10.0000	10.4455	4,334
MFS Value Portfolio S Class	05	2008	18.6467	12.2475	589
MFS Value Portfolio S Class	05	2007	17.7005	18.6467	589
MFS Value Portfolio S Class	05	2006	14.9911	17.7005	589
MFS Value Portfolio S Class	05	2005	14.4059	14.9911	0
MFS Value Portfolio S Class	05	2004	12.7826	14.4059	0
MFS Value Portfolio S Class	05	2003	10.4433	12.7826	3,611
MFS Value Portfolio S Class	05	2002	10.0000	10.4433	0
MFS Value Portfolio S Class	06	2008	18.4924	12.1274	2,241
MFS Value Portfolio S Class	06	2007	17.5812	18.4924	2,783
MFS Value Portfolio S Class	06	2006	14.9129	17.5812	3,586
MFS Value Portfolio S Class	06	2005	14.3527	14.9129	2,320
MFS Value Portfolio S Class	06	2004	12.7550	14.3527	2,241
MFS Value Portfolio S Class	06	2003	10.4368	12.7550	2,241
MFS Value Portfolio S Class	06	2002	10.0000	10.4368	0
MFS/Sun Life Capital Opportunities Series S Class	01	2008	10.0000	10.0000	0
MFS/Sun Life Capital Opportunities Series S Class	01	2007	16.4801	10.0000	0
MFS/Sun Life Capital Opportunities Series S Class	01	2006	14.7035	16.4801	1,812
MFS/Sun Life Capital Opportunities Series S Class	01	2005	14.7635	14.7035	2,045
MFS/Sun Life Capital Opportunities Series S Class	01	2004	13.3479	14.7635	2,685
MFS/Sun Life Capital Opportunities Series S Class	01	2003	10.6080	13.3479	383
MFS/Sun Life Capital Opportunities Series S Class	01	2002	10.0000	10.6080	0
MFS/Sun Life Capital Opportunities Series S Class	02	2008	10.0000	10.0000	0
MFS/Sun Life Capital Opportunities Series S Class	02	2007	16.3330	10.0000	0
MFS/Sun Life Capital Opportunities Series S Class	02	2006	14.6019	16.3330	8,269
MFS/Sun Life Capital Opportunities Series S Class	02	2005	14.6913	14.6019	6,200
MFS/Sun Life Capital Opportunities Series S Class	02	2004	13.3098	14.6913	3,977
MFS/Sun Life Capital Opportunities Series S Class	02	2003	10.5992	13.3098	3,562
MFS/Sun Life Capital Opportunities Series S Class	02	2002	10.0000	10.5992	1,267
MFS/Sun Life Capital Opportunities Series S Class	03	2008	10.0000	10.0000	0
MFS/Sun Life Capital Opportunities Series S Class	03	2007	16.2964	10.0000	0
MFS/Sun Life Capital Opportunities Series S Class	03	2006	14.5765	16.2964	0
MFS/Sun Life Capital Opportunities Series S Class	03	2005	14.6732	14.5765	0
MFS/Sun Life Capital Opportunities Series S Class	03	2004	13.3002	14.6732	0
MFS/Sun Life Capital Opportunities Series S Class	03	2003	10.5970	13.3002	0
MFS/Sun Life Capital Opportunities Series S Class	03	2002	10.0000	10.5970	0
MFS/Sun Life Capital Opportunities Series S Class	04	2008	10.0000	10.0000	0
MFS/Sun Life Capital Opportunities Series S Class	04	2007	16.1867	10.0000	0
MFS/Sun Life Capital Opportunities Series S Class	04	2006	14.5006	16.1867	1,087
MFS/Sun Life Capital Opportunities Series S Class	04	2005	14.6192	14.5006	5,466
MFS/Sun Life Capital Opportunities Series S Class	04	2004	13.2716	14.6192	3,568
MFS/Sun Life Capital Opportunities Series S Class	04	2003	10.5904	13.2716	3,568
MFS/Sun Life Capital Opportunities Series S Class	04	2002	10.0000	10.5904	2,412
MFS/Sun Life Capital Opportunities Series S Class	05	2008	10.0000	10.0000	0
MFS/Sun Life Capital Opportunities Series S Class	05	2007	16.1507	10.0000	0
MFS/Sun Life Capital Opportunities Series S Class	05	2006	14.4756	16.1507	0
MFS/Sun Life Capital Opportunities Series S Class	05	2005	14.6013	14.4756	0
MFS/Sun Life Capital Opportunities Series S Class	05	2004	13.2622	14.6013	0
MFS/Sun Life Capital Opportunities Series S Class	05	2003	10.5882	13.2622	0
MFS/Sun Life Capital Opportunities Series S Class	05	2002	10.0000	10.5882	0
MFS/Sun Life Capital Opportunities Series S Class	06	2008	10.0000	10.0000	0
MFS/Sun Life Capital Opportunities Series S Class	06	2007	16.0418	10.0000	0
MFS/Sun Life Capital Opportunities Series S Class	06	2006	14.4001	16.0418	0
MFS/Sun Life Capital Opportunities Series S Class	06	2005	14.5474	14.4001	0
MFS/Sun Life Capital Opportunities Series S Class	06	2004	13.2336	14.5474	0
MFS/Sun Life Capital Opportunities Series S Class	06	2003	10.5816	13.2336	0
MFS/Sun Life Capital Opportunities Series S Class	06	2002	10.0000	10.5816	0
MFS/Sun Life Strategic Growth Series S Class	01	2008	10.0000	10.0000	0
MFS/Sun Life Strategic Growth Series S Class	01	2007	15.1283	10.0000	0
MFS/Sun Life Strategic Growth Series S Class	01	2006	14.4674	15.1283	9,902
MFS/Sun Life Strategic Growth Series S Class	01	2005	14.5464	14.4674	13,906
MFS/Sun Life Strategic Growth Series S Class	01	2004	13.8847	14.5464	12,622
MFS/Sun Life Strategic Growth Series S Class	01	2003	11.1176	13.8847	11,395
MFS/Sun Life Strategic Growth Series S Class	01	2002	10.0000	11.1176	1,091
MFS/Sun Life Strategic Growth Series S Class	02	2008	10.0000	10.0000	0
MFS/Sun Life Strategic Growth Series S Class	02	2007	14.9933	10.0000	0
MFS/Sun Life Strategic Growth Series S Class	02	2006	14.3674	14.9933	46,108
MFS/Sun Life Strategic Growth Series S Class	02	2005	14.4752	14.3674	40,800
MFS/Sun Life Strategic Growth Series S Class	02	2004	13.8450	14.4752	34,060
MFS/Sun Life Strategic Growth Series S Class	02	2003	11.1084	13.8450	26,490
MFS/Sun Life Strategic Growth Series S Class	02	2002	10.0000	11.1084	0
MFS/Sun Life Strategic Growth Series S Class	03	2008	10.0000	10.0000	0
MFS/Sun Life Strategic Growth Series S Class	03	2007	14.9596	10.0000	0
MFS/Sun Life Strategic Growth Series S Class	03	2006	14.3425	14.9596	0
MFS/Sun Life Strategic Growth Series S Class	03	2005	14.4575	14.3425	0
MFS/Sun Life Strategic Growth Series S Class	03	2004	13.8351	14.4575	2,762
MFS/Sun Life Strategic Growth Series S Class	03	2003	11.1061	13.8351	57
MFS/Sun Life Strategic Growth Series S Class	03	2002	10.0000	11.1061	0
MFS/Sun Life Strategic Growth Series S Class	04	2008	10.0000	10.0000	0
MFS/Sun Life Strategic Growth Series S Class	04	2007	14.8590	10.0000	0
MFS/Sun Life Strategic Growth Series S Class	04	2006	14.2678	14.8590	4,960
MFS/Sun Life Strategic Growth Series S Class	04	2005	14.4042	14.2678	14,052
MFS/Sun Life Strategic Growth Series S Class	04	2004	13.8053	14.4042	17,148
MFS/Sun Life Strategic Growth Series S Class	04	2003	11.0991	13.8053	11,159
MFS/Sun Life Strategic Growth Series S Class	04	2002	10.0000	11.0991	0
MFS/Sun Life Strategic Growth Series S Class	05	2008	10.0000	10.0000	0
MFS/Sun Life Strategic Growth Series S Class	05	2007	14.8259	10.0000	0
MFS/Sun Life Strategic Growth Series S Class	05	2006	14.2432	14.8259	0
MFS/Sun Life Strategic Growth Series S Class	05	2005	14.3866	14.2432	0
MFS/Sun Life Strategic Growth Series S Class	05	2004	13.7955	14.3866	0
MFS/Sun Life Strategic Growth Series S Class	05	2003	11.0969	13.7955	0
MFS/Sun Life Strategic Growth Series S Class	05	2002	10.0000	11.0969	0
MFS/Sun Life Strategic Growth Series S Class	06	2008	10.0000	10.0000	0
MFS/Sun Life Strategic Growth Series S Class	06	2007	14.7259	10.0000	0
MFS/Sun Life Strategic Growth Series S Class	06	2006	14.1689	14.7259	0
MFS/Sun Life Strategic Growth Series S Class	06	2005	14.3335	14.1689	0
MFS/Sun Life Strategic Growth Series S Class	06	2004	13.7657	14.3335	0
MFS/Sun Life Strategic Growth Series S Class	06	2003	11.0899	13.7657	0
MFS/Sun Life Strategic Growth Series S Class	06	2002	10.0000	11.0899	0
Mutual Shares Securities Fund	01	2008	17.7539	10.9751	168,700
Mutual Shares Securities Fund	01	2007	17.4553	17.7539	127,535
Mutual Shares Securities Fund	01	2006	14.9993	17.4553	72,449
Mutual Shares Securities Fund	01	2005	13.8012	14.9993	100,866
Mutual Shares Securities Fund	01	2004	12.4658	13.8012	81,910
Mutual Shares Securities Fund	01	2003	10.1330	12.4658	8,458
Mutual Shares Securities Fund	01	2002	10.0000	10.1330	2,060
Mutual Shares Securities Fund	02	2008	17.5595	10.8327	105,458
Mutual Shares Securities Fund	02	2007	17.2995	17.5595	113,422
Mutual Shares Securities Fund	02	2006	14.8957	17.2995	157,804
Mutual Shares Securities Fund	02	2005	13.7337	14.8957	130,704
Mutual Shares Securities Fund	02	2004	12.4302	13.7337	85,179
Mutual Shares Securities Fund	02	2003	10.1246	12.4302	23,499
Mutual Shares Securities Fund	02	2002	10.0000	10.1246	0
Mutual Shares Securities Fund	03	2008	17.5111	10.7972	0
Mutual Shares Securities Fund	03	2007	17.2607	17.5111	2,698
Mutual Shares Securities Fund	03	2006	14.8698	17.2607	2,704
Mutual Shares Securities Fund	03	2005	13.7168	14.8698	2,704
Mutual Shares Securities Fund	03	2004	12.4213	13.7168	0
Mutual Shares Securities Fund	03	2003	10.1225	12.4213	0
Mutual Shares Securities Fund	03	2002	10.0000	10.1225	0
Mutual Shares Securities Fund	04	2008	17.3665	10.6916	78,969
Mutual Shares Securities Fund	04	2007	17.1446	17.3665	120,044
Mutual Shares Securities Fund	04	2006	14.7924	17.1446	126,615
Mutual Shares Securities Fund	04	2005	13.6663	14.7924	93,831
Mutual Shares Securities Fund	04	2004	12.3946	13.6663	42,750
Mutual Shares Securities Fund	04	2003	10.1162	12.3946	14,403
Mutual Shares Securities Fund	04	2002	10.0000	10.1162	1,833
Mutual Shares Securities Fund	05	2008	17.3190	10.6569	2,374
Mutual Shares Securities Fund	05	2007	17.1064	17.3190	2,375
Mutual Shares Securities Fund	05	2006	14.7668	17.1064	2,375
Mutual Shares Securities Fund	05	2005	13.6496	14.7668	2,375
Mutual Shares Securities Fund	05	2004	12.3857	13.6496	2,375
Mutual Shares Securities Fund	05	2003	10.1141	12.3857	2,418
Mutual Shares Securities Fund	05	2002	10.0000	10.1141	0
Mutual Shares Securities Fund	06	2008	17.1757	10.5524	7,669
Mutual Shares Securities Fund	06	2007	16.9910	17.1757	16,952
Mutual Shares Securities Fund	06	2006	14.6898	16.9910	9,611
Mutual Shares Securities Fund	06	2005	13.5992	14.6898	7,164
Mutual Shares Securities Fund	06	2004	12.3590	13.5992	4,769
Mutual Shares Securities Fund	06	2003	10.1078	12.3590	0
Mutual Shares Securities Fund	06	2002	10.0000	10.1078	0
Oppenheimer Balanced/VA Svc	01	2008	10.2794	5.6970	111,344
Oppenheimer Balanced/VA Svc	01	2007	10.0000	10.2794	55,510
Oppenheimer Balanced/VA Svc	02	2008	10.2621	5.6758	8,968
Oppenheimer Balanced/VA Svc	02	2007	10.0000	10.2621	10,145
Oppenheimer Balanced/VA Svc	03	2008	10.2578	5.6705	0
Oppenheimer Balanced/VA Svc	03	2007	10.0000	10.2578	0
Oppenheimer Balanced/VA Svc	04	2008	10.2448	5.6546	0
Oppenheimer Balanced/VA Svc	04	2007	10.0000	10.2448	0
Oppenheimer Balanced/VA Svc	05	2008	10.2405	5.6493	0
Oppenheimer Balanced/VA Svc	05	2007	10.0000	10.2405	0
Oppenheimer Balanced/VA Svc	06	2008	10.2276	5.6335	0
Oppenheimer Balanced/VA Svc	06	2007	10.0000	10.2276	0
Oppenheimer Capital Appreciation Fund/VA	01	2008	17.7967	9.5052	39,551
Oppenheimer Capital Appreciation Fund/VA	01	2007	15.9022	17.7967	37,482
Oppenheimer Capital Appreciation Fund/VA	01	2006	15.0225	15.9022	42,784
Oppenheimer Capital Appreciation Fund/VA	01	2005	14.5729	15.0225	34,941
Oppenheimer Capital Appreciation Fund/VA	01	2004	13.9056	14.5729	43,121
Oppenheimer Capital Appreciation Fund/VA	01	2003	10.8241	13.9056	24,378
Oppenheimer Capital Appreciation Fund/VA	01	2002	10.0000	10.8241	0
Oppenheimer Capital Appreciation Fund/VA	02	2008	17.6018	9.3819	51,801
Oppenheimer Capital Appreciation Fund/VA	02	2007	15.7603	17.6018	56,921
Oppenheimer Capital Appreciation Fund/VA	02	2006	14.9187	15.7603	118,276
Oppenheimer Capital Appreciation Fund/VA	02	2005	14.5017	14.9187	70,337
Oppenheimer Capital Appreciation Fund/VA	02	2004	13.8659	14.5017	65,098
Oppenheimer Capital Appreciation Fund/VA	02	2003	10.8152	13.8659	32,421
Oppenheimer Capital Appreciation Fund/VA	02	2002	10.0000	10.8152	619
Oppenheimer Capital Appreciation Fund/VA	03	2008	17.5533	9.3512	140
Oppenheimer Capital Appreciation Fund/VA	03	2007	15.7249	17.5533	4,810
Oppenheimer Capital Appreciation Fund/VA	03	2006	14.8928	15.7249	2,353
Oppenheimer Capital Appreciation Fund/VA	03	2005	14.4838	14.8928	2,407
Oppenheimer Capital Appreciation Fund/VA	03	2004	13.8560	14.4838	2,626
Oppenheimer Capital Appreciation Fund/VA	03	2003	10.8129	13.8560	38
Oppenheimer Capital Appreciation Fund/VA	03	2002	10.0000	10.8129	0
Oppenheimer Capital Appreciation Fund/VA	04	2008	17.4083	9.2597	24,078
Oppenheimer Capital Appreciation Fund/VA	04	2007	15.6191	17.4083	22,236
Oppenheimer Capital Appreciation Fund/VA	04	2006	14.8153	15.6191	25,744
Oppenheimer Capital Appreciation Fund/VA	04	2005	14.4305	14.8153	26,718
Oppenheimer Capital Appreciation Fund/VA	04	2004	13.8261	14.4305	20,131
Oppenheimer Capital Appreciation Fund/VA	04	2003	10.8062	13.8261	3,866
Oppenheimer Capital Appreciation Fund/VA	04	2002	10.0000	10.8062	0
Oppenheimer Capital Appreciation Fund/VA	05	2008	17.3607	9.2296	0
Oppenheimer Capital Appreciation Fund/VA	05	2007	15.5843	17.3607	0
Oppenheimer Capital Appreciation Fund/VA	05	2006	14.7897	15.5843	0
Oppenheimer Capital Appreciation Fund/VA	05	2005	14.4129	14.7897	0
Oppenheimer Capital Appreciation Fund/VA	05	2004	13.8163	14.4129	0
Oppenheimer Capital Appreciation Fund/VA	05	2003	10.8040	13.8163	0
Oppenheimer Capital Appreciation Fund/VA	05	2002	10.0000	10.8040	0
Oppenheimer Capital Appreciation Fund/VA	06	2008	17.2170	9.1391	2,287
Oppenheimer Capital Appreciation Fund/VA	06	2007	15.4793	17.2170	2,522
Oppenheimer Capital Appreciation Fund/VA	06	2006	14.7125	15.4793	3,129
Oppenheimer Capital Appreciation Fund/VA	06	2005	14.3597	14.7125	2,291
Oppenheimer Capital Appreciation Fund/VA	06	2004	13.7865	14.3597	2,293
Oppenheimer Capital Appreciation Fund/VA	06	2003	10.7973	13.7865	0
Oppenheimer Capital Appreciation Fund/VA	06	2002	10.0000	10.7973	0
Oppenheimer Global Securities Fund	01	2008	16.5332	9.6968	59,584
Oppenheimer Global Securities Fund	01	2007	15.8564	16.5332	50,255
Oppenheimer Global Securities Fund	01	2006	13.7435	15.8564	38,033
Oppenheimer Global Securities Fund	01	2005	12.2570	13.7435	24,123
Oppenheimer Global Securities Fund	01	2004	10.4893	12.2570	6,316
Oppenheimer Global Securities Fund	01	2003	10.0000	10.4893	0
Oppenheimer Global Securities Fund	02	2008	16.3969	9.5971	26,836
Oppenheimer Global Securities Fund	02	2007	15.7579	16.3969	38,986
Oppenheimer Global Securities Fund	02	2006	13.6859	15.7579	70,081
Oppenheimer Global Securities Fund	02	2005	12.2305	13.6859	44,834
Oppenheimer Global Securities Fund	02	2004	10.4879	12.2305	9,872
Oppenheimer Global Securities Fund	02	2003	10.0000	10.4879	0
Oppenheimer Global Securities Fund	03	2008	16.3629	9.5723	0
Oppenheimer Global Securities Fund	03	2007	15.7333	16.3629	534
Oppenheimer Global Securities Fund	03	2006	13.6715	15.7333	0
Oppenheimer Global Securities Fund	03	2005	12.2238	13.6715	0
Oppenheimer Global Securities Fund	03	2004	10.4876	12.2238	0
Oppenheimer Global Securities Fund	03	2003	10.0000	10.4876	0
Oppenheimer Global Securities Fund	04	2008	16.2613	9.4982	22,486
Oppenheimer Global Securities Fund	04	2007	15.6597	16.2613	34,520
Oppenheimer Global Securities Fund	04	2006	13.6283	15.6597	34,840
Oppenheimer Global Securities Fund	04	2005	12.2039	13.6283	14,686
Oppenheimer Global Securities Fund	04	2004	10.4866	12.2039	11,586
Oppenheimer Global Securities Fund	04	2003	10.0000	10.4866	0
Oppenheimer Global Securities Fund	05	2008	16.2278	9.4738	0
Oppenheimer Global Securities Fund	05	2007	15.6355	16.2278	0
Oppenheimer Global Securities Fund	05	2006	13.6141	15.6355	0
Oppenheimer Global Securities Fund	05	2005	12.1973	13.6141	0
Oppenheimer Global Securities Fund	05	2004	10.4863	12.1973	0
Oppenheimer Global Securities Fund	05	2003	10.0000	10.4863	0
Oppenheimer Global Securities Fund	06	2008	16.1267	9.4003	658
Oppenheimer Global Securities Fund	06	2007	15.5621	16.1267	1,508
Oppenheimer Global Securities Fund	06	2006	13.5710	15.5621	3,276
Oppenheimer Global Securities Fund	06	2005	12.1773	13.5710	784
Oppenheimer Global Securities Fund	06	2004	10.4853	12.1773	664
Oppenheimer Global Securities Fund	06	2003	10.0000	10.4853	0
Oppenheimer Main St. Fund/VA	01	2008	16.2265	9.7888	254,411
Oppenheimer Main St. Fund/VA	01	2007	15.8506	16.2265	190,810
Oppenheimer Main St. Fund/VA	01	2006	14.0503	15.8506	107,269
Oppenheimer Main St. Fund/VA	01	2005	13.5166	14.0503	94,763
Oppenheimer Main St. Fund/VA	01	2004	12.5987	13.5166	55,706
Oppenheimer Main St. Fund/VA	01	2003	10.1365	12.5987	10,585
Oppenheimer Main St. Fund/VA	01	2002	10.0000	10.1365	0
Oppenheimer Main St. Fund/VA	02	2008	16.0488	9.6618	290,233
Oppenheimer Main St. Fund/VA	02	2007	15.7091	16.0488	328,216
Oppenheimer Main St. Fund/VA	02	2006	13.9532	15.7091	332,959
Oppenheimer Main St. Fund/VA	02	2005	13.4505	13.9532	261,446
Oppenheimer Main St. Fund/VA	02	2004	12.5627	13.4505	124,534
Oppenheimer Main St. Fund/VA	02	2003	10.1282	12.5627	21,636
Oppenheimer Main St. Fund/VA	02	2002	10.0000	10.1282	263
Oppenheimer Main St. Fund/VA	03	2008	16.0045	9.6302	0
Oppenheimer Main St. Fund/VA	03	2007	15.6738	16.0045	0
Oppenheimer Main St. Fund/VA	03	2006	13.9290	15.6738	0
Oppenheimer Main St. Fund/VA	03	2005	13.4339	13.9290	0
Oppenheimer Main St. Fund/VA	03	2004	12.5537	13.4339	2,248
Oppenheimer Main St. Fund/VA	03	2003	10.1261	12.5537	0
Oppenheimer Main St. Fund/VA	03	2002	10.0000	10.1261	0
Oppenheimer Main St. Fund/VA	04	2008	15.8724	9.5360	95,055
Oppenheimer Main St. Fund/VA	04	2007	15.5684	15.8724	111,557
Oppenheimer Main St. Fund/VA	04	2006	13.8565	15.5684	62,086
Oppenheimer Main St. Fund/VA	04	2005	13.3845	13.8565	63,687
Oppenheimer Main St. Fund/VA	04	2004	12.5267	13.3845	17,991
Oppenheimer Main St. Fund/VA	04	2003	10.1198	12.5267	850
Oppenheimer Main St. Fund/VA	04	2002	10.0000	10.1198	0
Oppenheimer Main St. Fund/VA	05	2008	15.8289	9.5050	0
Oppenheimer Main St. Fund/VA	05	2007	15.5337	15.8289	0
Oppenheimer Main St. Fund/VA	05	2006	13.8326	15.5337	0
Oppenheimer Main St. Fund/VA	05	2005	13.3681	13.8326	0
Oppenheimer Main St. Fund/VA	05	2004	12.5178	13.3681	0
Oppenheimer Main St. Fund/VA	05	2003	10.1177	12.5178	0
Oppenheimer Main St. Fund/VA	05	2002	10.0000	10.1177	0
Oppenheimer Main St. Fund/VA	06	2008	15.6980	9.4118	1,099
Oppenheimer Main St. Fund/VA	06	2007	15.4290	15.6980	1,411
Oppenheimer Main St. Fund/VA	06	2006	13.7604	15.4290	2,870
Oppenheimer Main St. Fund/VA	06	2005	13.3188	13.7604	1,237
Oppenheimer Main St. Fund/VA	06	2004	12.4908	13.3188	1,265
Oppenheimer Main St. Fund/VA	06	2003	10.1114	12.4908	0
Oppenheimer Main St. Fund/VA	06	2002	10.0000	10.1114	0
Oppenheimer Main St. Small Cap Fund/VA	01	2008	19.7989	12.0649	7,894
Oppenheimer Main St. Small Cap Fund/VA	01	2007	20.4276	19.7989	12,991
Oppenheimer Main St. Small Cap Fund/VA	01	2006	18.1233	20.4276	18,837
Oppenheimer Main St. Small Cap Fund/VA	01	2005	16.8033	18.1233	16,837
Oppenheimer Main St. Small Cap Fund/VA	01	2004	14.3435	16.8033	20,181
Oppenheimer Main St. Small Cap Fund/VA	01	2003	10.1157	14.3435	10,139
Oppenheimer Main St. Small Cap Fund/VA	01	2002	10.0000	10.1157	0
Oppenheimer Main St. Small Cap Fund/VA	02	2008	19.5821	11.9084	15,596
Oppenheimer Main St. Small Cap Fund/VA	02	2007	20.2453	19.5821	20,645
Oppenheimer Main St. Small Cap Fund/VA	02	2006	17.9981	20.2453	43,802
Oppenheimer Main St. Small Cap Fund/VA	02	2005	16.7211	17.9981	21,898
Oppenheimer Main St. Small Cap Fund/VA	02	2004	14.3026	16.7211	16,558
Oppenheimer Main St. Small Cap Fund/VA	02	2003	10.1074	14.3026	8,366
Oppenheimer Main St. Small Cap Fund/VA	02	2002	10.0000	10.1074	506
Oppenheimer Main St. Small Cap Fund/VA	03	2008	19.5281	11.8694	0
Oppenheimer Main St. Small Cap Fund/VA	03	2007	20.1998	19.5281	0
Oppenheimer Main St. Small Cap Fund/VA	03	2006	17.9669	20.1998	0
Oppenheimer Main St. Small Cap Fund/VA	03	2005	16.7006	17.9669	4
Oppenheimer Main St. Small Cap Fund/VA	03	2004	14.2923	16.7006	1,387
Oppenheimer Main St. Small Cap Fund/VA	03	2003	10.1053	14.2923	0
Oppenheimer Main St. Small Cap Fund/VA	03	2002	10.0000	10.1053	0
Oppenheimer Main St. Small Cap Fund/VA	04	2008	19.3669	11.7533	10,185
Oppenheimer Main St. Small Cap Fund/VA	04	2007	20.0641	19.3669	11,018
Oppenheimer Main St. Small Cap Fund/VA	04	2006	17.8734	20.0641	19,282
Oppenheimer Main St. Small Cap Fund/VA	04	2005	16.6391	17.8734	30,809
Oppenheimer Main St. Small Cap Fund/VA	04	2004	14.2616	16.6391	30,297
Oppenheimer Main St. Small Cap Fund/VA	04	2003	10.0990	14.2616	18,695
Oppenheimer Main St. Small Cap Fund/VA	04	2002	10.0000	10.0990	4,603
Oppenheimer Main St. Small Cap Fund/VA	05	2008	19.3139	11.7152	2,436
Oppenheimer Main St. Small Cap Fund/VA	05	2007	20.0193	19.3139	2,437
Oppenheimer Main St. Small Cap Fund/VA	05	2006	17.8425	20.0193	2,437
Oppenheimer Main St. Small Cap Fund/VA	05	2005	16.6188	17.8425	2,437
Oppenheimer Main St. Small Cap Fund/VA	05	2004	14.2514	16.6188	2,437
Oppenheimer Main St. Small Cap Fund/VA	05	2003	10.0969	14.2514	4,156
Oppenheimer Main St. Small Cap Fund/VA	05	2002	10.0000	10.0969	0
Oppenheimer Main St. Small Cap Fund/VA	06	2008	19.1541	11.6003	0
Oppenheimer Main St. Small Cap Fund/VA	06	2007	19.8844	19.1541	1,611
Oppenheimer Main St. Small Cap Fund/VA	06	2006	17.7495	19.8844	646
Oppenheimer Main St. Small Cap Fund/VA	06	2005	16.5575	17.7495	646
Oppenheimer Main St. Small Cap Fund/VA	06	2004	14.2207	16.5575	646
Oppenheimer Main St. Small Cap Fund/VA	06	2003	10.0906	14.2207	0
Oppenheimer Main St. Small Cap Fund/VA	06	2002	10.0000	10.0906	0
PIMCO Emerging Markets Bond Portfolio	01	2008	20.1734	16.9353	16,515
PIMCO Emerging Markets Bond Portfolio	01	2007	19.3950	20.1734	18,055
PIMCO Emerging Markets Bond Portfolio	01	2006	18.0546	19.3950	16,372
PIMCO Emerging Markets Bond Portfolio	01	2005	16.5782	18.0546	15,843
PIMCO Emerging Markets Bond Portfolio	01	2004	15.0421	16.5782	3,677
PIMCO Emerging Markets Bond Portfolio	01	2003	10.0000	15.0421	0
PIMCO Emerging Markets Bond Portfolio	02	2008	19.9588	16.7209	5,297
PIMCO Emerging Markets Bond Portfolio	02	2007	19.2279	19.9588	7,520
PIMCO Emerging Markets Bond Portfolio	02	2006	17.9355	19.2279	13,398
PIMCO Emerging Markets Bond Portfolio	02	2005	16.5023	17.9355	6,638
PIMCO Emerging Markets Bond Portfolio	02	2004	15.0039	16.5023	1,167
PIMCO Emerging Markets Bond Portfolio	02	2003	10.0000	15.0039	0
PIMCO Emerging Markets Bond Portfolio	03	2008	19.9053	16.6675	0
PIMCO Emerging Markets Bond Portfolio	03	2007	19.1862	19.9053	2,332
PIMCO Emerging Markets Bond Portfolio	03	2006	17.9058	19.1862	2,348
PIMCO Emerging Markets Bond Portfolio	03	2005	16.4833	17.9058	1,904
PIMCO Emerging Markets Bond Portfolio	03	2004	14.9943	16.4833	0
PIMCO Emerging Markets Bond Portfolio	03	2003	10.0000	14.9943	0
PIMCO Emerging Markets Bond Portfolio	04	2008	19.7456	16.5085	19,482
PIMCO Emerging Markets Bond Portfolio	04	2007	19.0617	19.7456	21,615
PIMCO Emerging Markets Bond Portfolio	04	2006	17.8168	19.0617	26,745
PIMCO Emerging Markets Bond Portfolio	04	2005	16.4265	17.8168	12,930
PIMCO Emerging Markets Bond Portfolio	04	2004	14.9656	16.4265	3,954
PIMCO Emerging Markets Bond Portfolio	04	2003	10.0000	14.9656	0
PIMCO Emerging Markets Bond Portfolio	05	2008	19.6931	16.4561	0
PIMCO Emerging Markets Bond Portfolio	05	2007	19.0207	19.6931	0
PIMCO Emerging Markets Bond Portfolio	05	2006	17.7874	19.0207	0
PIMCO Emerging Markets Bond Portfolio	05	2005	16.4077	17.7874	0
PIMCO Emerging Markets Bond Portfolio	05	2004	14.9561	16.4077	0
PIMCO Emerging Markets Bond Portfolio	05	2003	10.0000	14.9561	0
PIMCO Emerging Markets Bond Portfolio	06	2008	19.5347	16.2987	0
PIMCO Emerging Markets Bond Portfolio	06	2007	18.8969	19.5347	0
PIMCO Emerging Markets Bond Portfolio	06	2006	17.6988	18.8969	0
PIMCO Emerging Markets Bond Portfolio	06	2005	16.3510	17.6988	0
PIMCO Emerging Markets Bond Portfolio	06	2004	14.9273	16.3510	0
PIMCO Emerging Markets Bond Portfolio	06	2003	10.0000	14.9273	0
PIMCO Low Duration Portfolio	01	2008	10.7321	10.5053	475,799
PIMCO Low Duration Portfolio	01	2007	10.1687	10.7321	630,854
PIMCO Low Duration Portfolio	01	2006	9.9483	10.1687	242,732
PIMCO Low Duration Portfolio	01	2005	10.0184	9.9483	258,763
PIMCO Low Duration Portfolio	01	2004	10.0070	10.0184	179,010
PIMCO Low Duration Portfolio	01	2003	10.0000	10.0070	0
PIMCO Low Duration Portfolio	02	2008	10.6436	10.3974	400,444
PIMCO Low Duration Portfolio	02	2007	10.1055	10.6436	679,126
PIMCO Low Duration Portfolio	02	2006	9.9066	10.1055	649,472
PIMCO Low Duration Portfolio	02	2005	9.9967	9.9066	439,272
PIMCO Low Duration Portfolio	02	2004	10.0057	9.9967	289,746
PIMCO Low Duration Portfolio	02	2003	10.0000	10.0057	0
PIMCO Low Duration Portfolio	03	2008	10.6216	10.3705	31
PIMCO Low Duration Portfolio	03	2007	10.0897	10.6216	4,089
PIMCO Low Duration Portfolio	03	2006	9.8962	10.0897	4,181
PIMCO Low Duration Portfolio	03	2005	9.9912	9.8962	4,273
PIMCO Low Duration Portfolio	03	2004	10.0054	9.9912	1,412
PIMCO Low Duration Portfolio	03	2003	10.0000	10.0054	0
PIMCO Low Duration Portfolio	04	2008	10.5555	10.2903	118,345
PIMCO Low Duration Portfolio	04	2007	10.0425	10.5555	195,432
PIMCO Low Duration Portfolio	04	2006	9.8649	10.0425	94,823
PIMCO Low Duration Portfolio	04	2005	9.9749	9.8649	109,806
PIMCO Low Duration Portfolio	04	2004	10.0044	9.9749	46,420
PIMCO Low Duration Portfolio	04	2003	10.0000	10.0044	0
PIMCO Low Duration Portfolio	05	2008	10.5338	10.2638	0
PIMCO Low Duration Portfolio	05	2007	10.0269	10.5338	0
PIMCO Low Duration Portfolio	05	2006	9.8546	10.0269	0
PIMCO Low Duration Portfolio	05	2005	9.9695	9.8546	0
PIMCO Low Duration Portfolio	05	2004	10.0041	9.9695	0
PIMCO Low Duration Portfolio	05	2003	10.0000	10.0041	0
PIMCO Low Duration Portfolio	06	2008	10.4682	10.1842	3,077
PIMCO Low Duration Portfolio	06	2007	9.9799	10.4682	11,444
PIMCO Low Duration Portfolio	06	2006	9.8234	9.9799	11,355
PIMCO Low Duration Portfolio	06	2005	9.9532	9.8234	9,913
PIMCO Low Duration Portfolio	06	2004	10.0031	9.9532	9,752
PIMCO Low Duration Portfolio	06	2003	10.0000	10.0031	0
PIMCO Real Return Portfolio	01	2008	13.0452	11.9183	170,618
PIMCO Real Return Portfolio	01	2007	11.9926	13.0452	72,084
PIMCO Real Return Portfolio	01	2006	12.1128	11.9926	90,822
PIMCO Real Return Portfolio	01	2005	12.0685	12.1128	127,874
PIMCO Real Return Portfolio	01	2004	11.2723	12.0685	65,798
PIMCO Real Return Portfolio	01	2003	10.5345	11.2723	22,479
PIMCO Real Return Portfolio	01	2002	10.0000	10.5345	63
PIMCO Real Return Portfolio	02	2008	12.9023	11.7637	111,180
PIMCO Real Return Portfolio	02	2007	11.8855	12.9023	107,178
PIMCO Real Return Portfolio	02	2006	12.0291	11.8855	161,217
PIMCO Real Return Portfolio	02	2005	12.0094	12.0291	150,407
PIMCO Real Return Portfolio	02	2004	11.2401	12.0094	95,540
PIMCO Real Return Portfolio	02	2003	10.5258	11.2401	69,927
PIMCO Real Return Portfolio	02	2002	10.0000	10.5258	8,541
PIMCO Real Return Portfolio	03	2008	12.8667	11.7252	1,399
PIMCO Real Return Portfolio	03	2007	11.8588	12.8667	1,101
PIMCO Real Return Portfolio	03	2006	12.0081	11.8588	1,136
PIMCO Real Return Portfolio	03	2005	11.9947	12.0081	2,419
PIMCO Real Return Portfolio	03	2004	11.2320	11.9947	6,998
PIMCO Real Return Portfolio	03	2003	10.5236	11.2320	306
PIMCO Real Return Portfolio	03	2002	10.0000	10.5236	0
PIMCO Real Return Portfolio	04	2008	12.7605	11.6105	208,624
PIMCO Real Return Portfolio	04	2007	11.7790	12.7605	194,590
PIMCO Real Return Portfolio	04	2006	11.9456	11.7790	200,820
PIMCO Real Return Portfolio	04	2005	11.9505	11.9456	187,202
PIMCO Real Return Portfolio	04	2004	11.2079	11.9505	123,730
PIMCO Real Return Portfolio	04	2003	10.5171	11.2079	40,013
PIMCO Real Return Portfolio	04	2002	10.0000	10.5171	4,358
PIMCO Real Return Portfolio	05	2008	12.7255	11.5728	47
PIMCO Real Return Portfolio	05	2007	11.7528	12.7255	48
PIMCO Real Return Portfolio	05	2006	11.9250	11.7528	2,052
PIMCO Real Return Portfolio	05	2005	11.9359	11.9250	2,678
PIMCO Real Return Portfolio	05	2004	11.1999	11.9359	3,334
PIMCO Real Return Portfolio	05	2003	10.5149	11.1999	3,998
PIMCO Real Return Portfolio	05	2002	10.0000	10.5149	0
PIMCO Real Return Portfolio	06	2008	12.6202	11.4594	23,105
PIMCO Real Return Portfolio	06	2007	11.6735	12.6202	32,927
PIMCO Real Return Portfolio	06	2006	11.8628	11.6735	17,638
PIMCO Real Return Portfolio	06	2005	11.8918	11.8628	12,148
PIMCO Real Return Portfolio	06	2004	11.1757	11.8918	11,934
PIMCO Real Return Portfolio	06	2003	10.5084	11.1757	2,281
PIMCO Real Return Portfolio	06	2002	10.0000	10.5084	0
PIMCO Total Return Portfolio	01	2008	12.1496	12.5159	539,697
PIMCO Total Return Portfolio	01	2007	11.3650	12.1496	306,882
PIMCO Total Return Portfolio	01	2006	11.1322	11.3650	126,350
PIMCO Total Return Portfolio	01	2005	11.0530	11.1322	147,843
PIMCO Total Return Portfolio	01	2004	10.7203	11.0530	109,848
PIMCO Total Return Portfolio	01	2003	10.3819	10.7203	60,384
PIMCO Total Return Portfolio	01	2002	10.0000	10.3819	1,286
PIMCO Total Return Portfolio	02	2008	12.0165	12.3536	273,654
PIMCO Total Return Portfolio	02	2007	11.2636	12.0165	265,814
PIMCO Total Return Portfolio	02	2006	11.0553	11.2636	281,141
PIMCO Total Return Portfolio	02	2005	10.9989	11.0553	269,419
PIMCO Total Return Portfolio	02	2004	10.6896	10.9989	173,903
PIMCO Total Return Portfolio	02	2003	10.3734	10.6896	112,824
PIMCO Total Return Portfolio	02	2002	10.0000	10.3734	7,458
PIMCO Total Return Portfolio	03	2008	11.9833	12.3132	1,259
PIMCO Total Return Portfolio	03	2007	11.2382	11.9833	3,862
PIMCO Total Return Portfolio	03	2006	11.0360	11.2382	3,964
PIMCO Total Return Portfolio	03	2005	10.9854	11.0360	3,451
PIMCO Total Return Portfolio	03	2004	10.6820	10.9854	7,074
PIMCO Total Return Portfolio	03	2003	10.3712	10.6820	2,442
PIMCO Total Return Portfolio	03	2002	10.0000	10.3712	0
PIMCO Total Return Portfolio	04	2008	11.8844	12.1928	81,491
PIMCO Total Return Portfolio	04	2007	11.1627	11.8844	103,375
PIMCO Total Return Portfolio	04	2006	10.9786	11.1627	78,314
PIMCO Total Return Portfolio	04	2005	10.9449	10.9786	96,638
PIMCO Total Return Portfolio	04	2004	10.6590	10.9449	93,884
PIMCO Total Return Portfolio	04	2003	10.3648	10.6590	53,676
PIMCO Total Return Portfolio	04	2002	10.0000	10.3648	15,866
PIMCO Total Return Portfolio	05	2008	11.8518	12.1532	21
PIMCO Total Return Portfolio	05	2007	11.1377	11.8518	22
PIMCO Total Return Portfolio	05	2006	10.9596	11.1377	2,118
PIMCO Total Return Portfolio	05	2005	10.9316	10.9596	1,928
PIMCO Total Return Portfolio	05	2004	10.6514	10.9316	3,882
PIMCO Total Return Portfolio	05	2003	10.3626	10.6514	11,388
PIMCO Total Return Portfolio	05	2002	10.0000	10.3626	0
PIMCO Total Return Portfolio	06	2008	11.7537	12.0340	1,470
PIMCO Total Return Portfolio	06	2007	11.0626	11.7537	4,164
PIMCO Total Return Portfolio	06	2006	10.9024	11.0626	4,922
PIMCO Total Return Portfolio	06	2005	10.8912	10.9024	5,485
PIMCO Total Return Portfolio	06	2004	10.6284	10.8912	9,356
PIMCO Total Return Portfolio	06	2003	10.3562	10.6284	4,435
PIMCO Total Return Portfolio	06	2002	10.0000	10.3562	0
PIMCO VIT All Asset Portfolio	01	2008	11.1932	9.2592	4,641
PIMCO VIT All Asset Portfolio	01	2007	10.5123	11.1932	28,490
PIMCO VIT All Asset Portfolio	01	2006	10.2176	10.5123	5,544
PIMCO VIT All Asset Portfolio	01	2005	10.0000	10.2176	0
PIMCO VIT All Asset Portfolio	02	2008	11.1439	9.1996	2,138
PIMCO VIT All Asset Portfolio	02	2007	10.4875	11.1439	22,175
PIMCO VIT All Asset Portfolio	02	2006	10.2141	10.4875	7,644
PIMCO VIT All Asset Portfolio	02	2005	10.0000	10.2141	0
PIMCO VIT All Asset Portfolio	03	2008	11.1315	9.1847	0
PIMCO VIT All Asset Portfolio	03	2007	10.4813	11.1315	0
PIMCO VIT All Asset Portfolio	03	2006	10.2133	10.4813	0
PIMCO VIT All Asset Portfolio	03	2005	10.0000	10.2133	0
PIMCO VIT All Asset Portfolio	04	2008	11.0946	9.1402	0
PIMCO VIT All Asset Portfolio	04	2007	10.4626	11.0946	0
PIMCO VIT All Asset Portfolio	04	2006	10.2107	10.4626	0
PIMCO VIT All Asset Portfolio	04	2005	10.0000	10.2107	0
PIMCO VIT All Asset Portfolio	05	2008	11.0824	9.1255	0
PIMCO VIT All Asset Portfolio	05	2007	10.4564	11.0824	0
PIMCO VIT All Asset Portfolio	05	2006	10.2099	10.4564	0
PIMCO VIT All Asset Portfolio	05	2005	10.0000	10.2099	0
PIMCO VIT All Asset Portfolio	06	2008	11.0456	9.0811	0
PIMCO VIT All Asset Portfolio	06	2007	10.4378	11.0456	0
PIMCO VIT All Asset Portfolio	06	2006	10.2073	10.4378	0
PIMCO VIT All Asset Portfolio	06	2005	10.0000	10.2073	0
PIMCO VIT Commodity RealReturn Strategy Portfolio	01	2008	11.8804	6.5638	142,876
PIMCO VIT Commodity RealReturn Strategy Portfolio	01	2007	9.8077	11.8804	23,965
PIMCO VIT Commodity RealReturn Strategy Portfolio	01	2006	10.2959	9.8077	19,284
PIMCO VIT Commodity RealReturn Strategy Portfolio	01	2005	10.0000	10.2959	0
PIMCO VIT Commodity RealReturn Strategy Portfolio	02	2008	11.8281	6.5215	31,707
PIMCO VIT Commodity RealReturn Strategy Portfolio	02	2007	9.7845	11.8281	13,337
PIMCO VIT Commodity RealReturn Strategy Portfolio	02	2006	10.2924	9.7845	20,508
PIMCO VIT Commodity RealReturn Strategy Portfolio	02	2005	10.0000	10.2924	0
PIMCO VIT Commodity RealReturn Strategy Portfolio	03	2008	11.8150	6.5110	102
PIMCO VIT Commodity RealReturn Strategy Portfolio	03	2007	9.7787	11.8150	1,917
PIMCO VIT Commodity RealReturn Strategy Portfolio	03	2006	10.2916	9.7787	1,921
PIMCO VIT Commodity RealReturn Strategy Portfolio	03	2005	10.0000	10.2916	1,921
PIMCO VIT Commodity RealReturn Strategy Portfolio	04	2008	11.7758	6.4794	2,156
PIMCO VIT Commodity RealReturn Strategy Portfolio	04	2007	9.7612	11.7758	98
PIMCO VIT Commodity RealReturn Strategy Portfolio	04	2006	10.2890	9.7612	0
PIMCO VIT Commodity RealReturn Strategy Portfolio	04	2005	10.0000	10.2890	0
PIMCO VIT Commodity RealReturn Strategy Portfolio	05	2008	11.7628	6.4690	0
PIMCO VIT Commodity RealReturn Strategy Portfolio	05	2007	9.7555	11.7628	0
PIMCO VIT Commodity RealReturn Strategy Portfolio	05	2006	10.2881	9.7555	0
PIMCO VIT Commodity RealReturn Strategy Portfolio	05	2005	10.0000	10.2881	0
PIMCO VIT Commodity RealReturn Strategy Portfolio	06	2008	11.7237	6.4375	0
PIMCO VIT Commodity RealReturn Strategy Portfolio	06	2007	9.7381	11.7237	0
PIMCO VIT Commodity RealReturn Strategy Portfolio	06	2006	10.2855	9.7381	0
PIMCO VIT Commodity RealReturn Strategy Portfolio	06	2005	10.0000	10.2855	0
SC AIM Small Cap Growth	01	2008	10.0000	9.0163	0
SC AIM Small Cap Growth	02	2008	10.0000	9.0126	641
SC AIM Small Cap Growth	03	2008	10.0000	9.0117	0
SC AIM Small Cap Growth	04	2008	10.0000	9.0090	0
SC AIM Small Cap Growth	05	2008	10.0000	9.0081	0
SC AIM Small Cap Growth	06	2008	10.0000	9.0053	0
SC AllianceBernstein International Value	01	2008	10.0000	9.2125	94
SC AllianceBernstein International Value	02	2008	10.0000	9.2087	0
SC AllianceBernstein International Value	03	2008	10.0000	9.2078	0
SC AllianceBernstein International Value	04	2008	10.0000	9.2050	0
SC AllianceBernstein International Value	05	2008	10.0000	9.2041	0
SC AllianceBernstein International Value	06	2008	10.0000	9.2013	0
SC BlackRock Inflation Protected Bond	01	2008	10.0000	10.2485	16,835
SC BlackRock Inflation Protected Bond	02	2008	10.0000	10.2444	4,783
SC BlackRock Inflation Protected Bond	03	2008	10.0000	10.2434	0
SC BlackRock Inflation Protected Bond	04	2008	10.0000	10.2403	0
SC BlackRock Inflation Protected Bond	05	2008	10.0000	10.2392	0
SC BlackRock Inflation Protected Bond	06	2008	10.0000	10.2361	0
SC Davis Venture Value S Class	01	2008	10.5668	6.4472	175,725
SC Davis Venture Value S Class	01	2007	10.0000	10.5668	41,466
SC Davis Venture Value S Class	02	2008	10.5491	6.4232	76,518
SC Davis Venture Value S Class	02	2007	10.0000	10.5491	21,446
SC Davis Venture Value S Class	03	2008	10.5446	6.4172	0
SC Davis Venture Value S Class	03	2007	10.0000	10.5446	0
SC Davis Venture Value S Class	04	2008	10.5313	6.3992	5,367
SC Davis Venture Value S Class	04	2007	10.0000	10.5313	0
SC Davis Venture Value S Class	05	2008	10.5269	6.3932	0
SC Davis Venture Value S Class	05	2007	10.0000	10.5269	0
SC Davis Venture Value S Class	06	2008	10.5136	6.3753	0
SC Davis Venture Value S Class	06	2007	10.0000	10.5136	0
SC Dreman Small Cap Value	01	2008	10.0000	9.3457	736
SC Dreman Small Cap Value	02	2008	10.0000	9.3419	620
SC Dreman Small Cap Value	03	2008	10.0000	9.3410	0
SC Dreman Small Cap Value	04	2008	10.0000	9.3381	0
SC Dreman Small Cap Value	05	2008	10.0000	9.3372	0
SC Dreman Small Cap Value	06	2008	10.0000	9.3343	0
SC Goldman Sachs Mid Cap Value Fund (I Class)	01	2008	10.0000	7.0442	0
SC Goldman Sachs Mid Cap Value Fund (I Class)	02	2008	10.0000	7.0326	0
SC Goldman Sachs Mid Cap Value Fund (I Class)	03	2008	10.0000	7.0296	0
SC Goldman Sachs Mid Cap Value Fund (I Class)	04	2008	10.0000	7.0209	0
SC Goldman Sachs Mid Cap Value Fund (I Class)	05	2008	10.0000	7.0180	0
SC Goldman Sachs Mid Cap Value Fund (I Class)	06	2008	10.0000	7.0092	0
SC Goldman Sachs Mid Cap Value Fund (S Class)	01	2008	10.0000	7.0302	28,239
SC Goldman Sachs Mid Cap Value Fund (S Class)	02	2008	10.0000	7.0186	0
SC Goldman Sachs Mid Cap Value Fund (S Class)	03	2008	10.0000	7.0157	0
SC Goldman Sachs Mid Cap Value Fund (S Class)	04	2008	10.0000	7.0069	0
SC Goldman Sachs Mid Cap Value Fund (S Class)	05	2008	10.0000	7.0040	0
SC Goldman Sachs Mid Cap Value Fund (S Class)	06	2008	10.0000	6.9953	0
SC Goldman Sachs Short Duration Fund (I Class)	01	2008	10.0000	10.1681	23,084
SC Goldman Sachs Short Duration Fund (I Class)	02	2008	10.0000	10.1513	1,787
SC Goldman Sachs Short Duration Fund (I Class)	03	2008	10.0000	10.1471	186
SC Goldman Sachs Short Duration Fund (I Class)	04	2008	10.0000	10.1345	1,591
SC Goldman Sachs Short Duration Fund (I Class)	05	2008	10.0000	10.1303	0
SC Goldman Sachs Short Duration Fund (I Class)	06	2008	10.0000	10.1177	0
SC Goldman Sachs Short Duration Fund (S Class)	01	2008	10.0000	10.1476	209,813
SC Goldman Sachs Short Duration Fund (S Class)	02	2008	10.0000	10.1308	51,000
SC Goldman Sachs Short Duration Fund (S Class)	03	2008	10.0000	10.1266	0
SC Goldman Sachs Short Duration Fund (S Class)	04	2008	10.0000	10.1140	6,707
SC Goldman Sachs Short Duration Fund (S Class)	05	2008	10.0000	10.1099	0
SC Goldman Sachs Short Duration Fund (S Class)	06	2008	10.0000	10.0973	0
SC Ibbotson Balanced	01	2008	10.0000	10.0886	99,580
SC Ibbotson Balanced	02	2008	10.0000	10.0846	19,285
SC Ibbotson Balanced	03	2008	10.0000	10.0836	0
SC Ibbotson Balanced	04	2008	10.0000	10.0805	0
SC Ibbotson Balanced	05	2008	10.0000	10.0795	0
SC Ibbotson Balanced	06	2008	10.0000	10.0764	0
SC Ibbotson Growth	01	2008	10.0000	10.2078	255,408
SC Ibbotson Growth	02	2008	10.0000	10.2037	0
SC Ibbotson Growth	03	2008	10.0000	10.2027	0
SC Ibbotson Growth	04	2008	10.0000	10.1996	0
SC Ibbotson Growth	05	2008	10.0000	10.1985	0
SC Ibbotson Growth	06	2008	10.0000	10.1955	0
SC Ibbotson Moderate	01	2008	10.0000	9.8907	96,494
SC Ibbotson Moderate	02	2008	10.0000	9.8868	14,974
SC Ibbotson Moderate	03	2008	10.0000	9.8858	0
SC Ibbotson Moderate	04	2008	10.0000	9.8828	1,829
SC Ibbotson Moderate	05	2008	10.0000	9.8818	0
SC Ibbotson Moderate	06	2008	10.0000	9.8788	1,555
SC Lord Abbett Growth & Income Fund (I Class)	01	2008	10.0000	7.2499	0
SC Lord Abbett Growth & Income Fund (I Class)	02	2008	10.0000	7.2379	326
SC Lord Abbett Growth & Income Fund (I Class)	03	2008	10.0000	7.2349	0
SC Lord Abbett Growth & Income Fund (I Class)	04	2008	10.0000	7.2259	1,728
SC Lord Abbett Growth & Income Fund (I Class)	05	2008	10.0000	7.2229	0
SC Lord Abbett Growth & Income Fund (I Class)	06	2008	10.0000	7.2139	0
SC Lord Abbett Growth & Income Fund (S Class)	01	2008	10.0000	7.2355	1,456
SC Lord Abbett Growth & Income Fund (S Class)	02	2008	10.0000	7.2235	0
SC Lord Abbett Growth & Income Fund (S Class)	03	2008	10.0000	7.2205	0
SC Lord Abbett Growth & Income Fund (S Class)	04	2008	10.0000	7.2115	0
SC Lord Abbett Growth & Income Fund (S Class)	05	2008	10.0000	7.2085	0
SC Lord Abbett Growth & Income Fund (S Class)	06	2008	10.0000	7.1995	0
SC Oppenheimer Large Cap Core Fund	01	2008	11.7834	7.2795	4,469
SC Oppenheimer Large Cap Core Fund	01	2007	12.7629	11.7834	4,140
SC Oppenheimer Large Cap Core Fund	01	2006	10.8394	12.7629	3,768
SC Oppenheimer Large Cap Core Fund	01	2005	11.1350	10.8394	191
SC Oppenheimer Large Cap Core Fund	01	2004	10.0000	11.1350	3,094
SC Oppenheimer Large Cap Core Fund	01	2003	10.0000	10.0000	0
SC Oppenheimer Large Cap Core Fund	02	2008	11.6899	7.2070	15,898
SC Oppenheimer Large Cap Core Fund	02	2007	12.6875	11.6899	18,391
SC Oppenheimer Large Cap Core Fund	02	2006	10.7973	12.6875	20,489
SC Oppenheimer Large Cap Core Fund	02	2005	11.1143	10.7973	8,616
SC Oppenheimer Large Cap Core Fund	02	2004	10.0000	11.1143	2,441
SC Oppenheimer Large Cap Core Fund	02	2003	10.0000	10.0000	0
SC Oppenheimer Large Cap Core Fund	03	2008	11.6665	7.1889	320
SC Oppenheimer Large Cap Core Fund	03	2007	12.6687	11.6665	834
SC Oppenheimer Large Cap Core Fund	03	2006	10.7868	12.6687	836
SC Oppenheimer Large Cap Core Fund	03	2005	11.1091	10.7868	322
SC Oppenheimer Large Cap Core Fund	03	2004	10.0000	11.1091	4,190
SC Oppenheimer Large Cap Core Fund	03	2003	10.0000	10.0000	0
SC Oppenheimer Large Cap Core Fund	04	2008	11.5968	7.1349	1,690
SC Oppenheimer Large Cap Core Fund	04	2007	12.6124	11.5968	5,221
SC Oppenheimer Large Cap Core Fund	04	2006	10.7552	12.6124	10,212
SC Oppenheimer Large Cap Core Fund	04	2005	11.0936	10.7552	19,786
SC Oppenheimer Large Cap Core Fund	04	2004	10.0000	11.0936	26,543
SC Oppenheimer Large Cap Core Fund	04	2003	10.0000	10.0000	0
SC Oppenheimer Large Cap Core Fund	05	2008	11.5738	7.1171	0
SC Oppenheimer Large Cap Core Fund	05	2007	12.5938	11.5738	0
SC Oppenheimer Large Cap Core Fund	05	2006	10.7448	12.5938	0
SC Oppenheimer Large Cap Core Fund	05	2005	11.0885	10.7448	0
SC Oppenheimer Large Cap Core Fund	05	2004	10.0000	11.0885	0
SC Oppenheimer Large Cap Core Fund	05	2003	10.0000	10.0000	0
SC Oppenheimer Large Cap Core Fund	06	2008	11.5044	7.0635	0
SC Oppenheimer Large Cap Core Fund	06	2007	12.5377	11.5044	6,217
SC Oppenheimer Large Cap Core Fund	06	2006	10.7133	12.5377	6,217
SC Oppenheimer Large Cap Core Fund	06	2005	11.0729	10.7133	6,217
SC Oppenheimer Large Cap Core Fund	06	2004	10.0000	11.0729	6,217
SC Oppenheimer Large Cap Core Fund	06	2003	10.0000	10.0000	0
SC Oppenheimer Main Street Small Cap S Class	01	2008	9.8081	5.9638	163,160
SC Oppenheimer Main Street Small Cap S Class	01	2007	10.0000	9.8081	79,804
SC Oppenheimer Main Street Small Cap S Class	02	2008	9.7917	5.9416	36,605
SC Oppenheimer Main Street Small Cap S Class	02	2007	10.0000	9.7917	19,469
SC Oppenheimer Main Street Small Cap S Class	03	2008	9.7875	5.9360	140
SC Oppenheimer Main Street Small Cap S Class	03	2007	10.0000	9.7875	0
SC Oppenheimer Main Street Small Cap S Class	04	2008	9.7752	5.9194	59,914
SC Oppenheimer Main Street Small Cap S Class	04	2007	10.0000	9.7752	47,875
SC Oppenheimer Main Street Small Cap S Class	05	2008	9.7711	5.9139	0
SC Oppenheimer Main Street Small Cap S Class	05	2007	10.0000	9.7711	0
SC Oppenheimer Main Street Small Cap S Class	06	2008	9.7587	5.8973	0
SC Oppenheimer Main Street Small Cap S Class	06	2007	10.0000	9.7587	0
SC PIMCO High Yield Fund (S Class)	01	2008	10.0000	8.5105	42,538
SC PIMCO High Yield Fund (S Class)	02	2008	10.0000	8.4964	6,200
SC PIMCO High Yield Fund (S Class)	03	2008	10.0000	8.4929	0
SC PIMCO High Yield Fund (S Class)	04	2008	10.0000	8.4823	115,253
SC PIMCO High Yield Fund (S Class)	05	2008	10.0000	8.4788	0
SC PIMCO High Yield Fund (S Class)	06	2008	10.0000	8.4683	0
SC PIMCO Total Return	01	2008	10.0000	10.5745	72,271
SC PIMCO Total Return	02	2008	10.0000	10.5703	14,328
SC PIMCO Total Return	03	2008	10.0000	10.5692	0
SC PIMCO Total Return	04	2008	10.0000	10.5660	62,171
SC PIMCO Total Return	05	2008	10.0000	10.5650	0
SC PIMCO Total Return	06	2008	10.0000	10.5618	0
SC WMC Blue Chip Mid Cap Fund (Service Class)	01	2008	10.0000	7.4677	49,597
SC WMC Blue Chip Mid Cap Fund (Service Class)	02	2008	10.0000	7.4554	23,872
SC WMC Blue Chip Mid Cap Fund (Service Class)	03	2008	10.0000	7.4523	154
SC WMC Blue Chip Mid Cap Fund (Service Class)	04	2008	10.0000	7.4430	1,603
SC WMC Blue Chip Mid Cap Fund (Service Class)	05	2008	10.0000	7.4399	0
SC WMC Blue Chip Mid Cap Fund (Service Class)	06	2008	10.0000	7.4306	0
SC WMC Large Cap Growth Fund (Service Class)	01	2008	10.3562	5.6698	1,787
SC WMC Large Cap Growth Fund (Service Class)	01	2007	9.8671	10.3562	1,787
SC WMC Large Cap Growth Fund (Service Class)	01	2006	10.0000	9.8671	0
SC WMC Large Cap Growth Fund (Service Class)	02	2008	10.3210	5.6390	2,305
SC WMC Large Cap Growth Fund (Service Class)	02	2007	9.8538	10.3210	3,111
SC WMC Large Cap Growth Fund (Service Class)	02	2006	10.0000	9.8538	2,305
SC WMC Large Cap Growth Fund (Service Class)	03	2008	10.3122	5.6313	0
SC WMC Large Cap Growth Fund (Service Class)	03	2007	9.8504	10.3122	0
SC WMC Large Cap Growth Fund (Service Class)	03	2006	10.0000	9.8504	0
SC WMC Large Cap Growth Fund (Service Class)	04	2008	10.2859	5.6082	0
SC WMC Large Cap Growth Fund (Service Class)	04	2007	9.8404	10.2859	1,221
SC WMC Large Cap Growth Fund (Service Class)	04	2006	10.0000	9.8404	0
SC WMC Large Cap Growth Fund (Service Class)	05	2008	10.2772	5.6006	0
SC WMC Large Cap Growth Fund (Service Class)	05	2007	9.8371	10.2772	0
SC WMC Large Cap Growth Fund (Service Class)	05	2006	10.0000	9.8371	0
SC WMC Large Cap Growth Fund (Service Class)	06	2008	10.2509	5.5777	0
SC WMC Large Cap Growth Fund (Service Class)	06	2007	9.8271	10.2509	0
SC WMC Large Cap Growth Fund (Service Class)	06	2006	10.0000	9.8271	0
Sun Capital Global Real Estate Fund	01	2008	22.1924	8.3953	110,015
Sun Capital Global Real Estate Fund	01	2007	25.9919	15.4994	83,206
Sun Capital Global Real Estate Fund	01	2006	19.0262	18.1956	56,499
Sun Capital Global Real Estate Fund	01	2005	17.6477	13.3501	57,102
Sun Capital Global Real Estate Fund	01	2004	13.4666	12.4174	41,983
Sun Capital Global Real Estate Fund	01	2003	10.0768	10.0000	14,414
Sun Capital Global Real Estate Fund	01	2002	10.0000	10.0768	0
Sun Capital Global Real Estate Fund	02	2008	21.9495	8.3116	75,393
Sun Capital Global Real Estate Fund	02	2007	25.7601	15.3764	74,294
Sun Capital Global Real Estate Fund	02	2006	18.8948	18.0883	88,370
Sun Capital Global Real Estate Fund	02	2005	17.5614	13.2983	65,931
Sun Capital Global Real Estate Fund	02	2004	13.4281	12.3943	58,030
Sun Capital Global Real Estate Fund	02	2003	10.0685	10.0000	33,166
Sun Capital Global Real Estate Fund	02	2002	10.0000	10.0685	281
Sun Capital Global Real Estate Fund	03	2008	21.8889	8.2907	60
Sun Capital Global Real Estate Fund	03	2007	25.7022	15.3457	0
Sun Capital Global Real Estate Fund	03	2006	18.8620	18.0614	0
Sun Capital Global Real Estate Fund	03	2005	17.5398	13.2853	0
Sun Capital Global Real Estate Fund	03	2004	13.4185	12.3885	33
Sun Capital Global Real Estate Fund	03	2003	10.0664	10.0000	20
Sun Capital Global Real Estate Fund	03	2002	10.0000	10.0664	0
Sun Capital Global Real Estate Fund	04	2008	21.7083	8.2284	66,120
Sun Capital Global Real Estate Fund	04	2007	25.5295	15.2540	121,955
Sun Capital Global Real Estate Fund	04	2006	18.7638	17.9812	93,981
Sun Capital Global Real Estate Fund	04	2005	17.4753	13.2465	99,163
Sun Capital Global Real Estate Fund	04	2004	13.3896	12.3712	42,805
Sun Capital Global Real Estate Fund	04	2003	10.0602	10.0000	7,699
Sun Capital Global Real Estate Fund	04	2002	10.0000	10.0602	708
Sun Capital Global Real Estate Fund	05	2008	21.6488	8.2079	0
Sun Capital Global Real Estate Fund	05	2007	25.4725	15.2238	0
Sun Capital Global Real Estate Fund	05	2006	18.7314	17.9547	0
Sun Capital Global Real Estate Fund	05	2005	17.4539	13.2337	0
Sun Capital Global Real Estate Fund	05	2004	13.3801	12.3655	0
Sun Capital Global Real Estate Fund	05	2003	10.0581	10.0000	0
Sun Capital Global Real Estate Fund	05	2002	10.0000	10.0581	0
Sun Capital Global Real Estate Fund	06	2008	21.4697	8.1461	2,748
Sun Capital Global Real Estate Fund	06	2007	25.3009	15.1326	16,075
Sun Capital Global Real Estate Fund	06	2006	18.6337	17.8748	7,400
Sun Capital Global Real Estate Fund	06	2005	17.3895	13.1949	4,985
Sun Capital Global Real Estate Fund	06	2004	13.3513	12.3482	2,277
Sun Capital Global Real Estate Fund	06	2003	10.0519	10.0000	0
Sun Capital Global Real Estate Fund	06	2002	10.0000	10.0519	0
Sun Capital Investment Grade Bond S Class	01	2008	10.8715	9.3298	96,453
Sun Capital Investment Grade Bond S Class	01	2007	10.6853	10.8715	57,301
Sun Capital Investment Grade Bond S Class	01	2006	10.3379	10.6853	12,186
Sun Capital Investment Grade Bond S Class	01	2005	10.3369	10.3379	76,423
Sun Capital Investment Grade Bond S Class	01	2004	10.0000	10.3369	6,304
Sun Capital Investment Grade Bond S Class	01	2003	10.0000	10.0000	0
Sun Capital Investment Grade Bond S Class	02	2008	10.7852	9.2368	34,503
Sun Capital Investment Grade Bond S Class	02	2007	10.6222	10.7852	45,264
Sun Capital Investment Grade Bond S Class	02	2006	10.2978	10.6222	36,412
Sun Capital Investment Grade Bond S Class	02	2005	10.3177	10.2978	41,786
Sun Capital Investment Grade Bond S Class	02	2004	10.0000	10.3177	9,756
Sun Capital Investment Grade Bond S Class	02	2003	10.0000	10.0000	0
Sun Capital Investment Grade Bond S Class	03	2008	10.7637	9.2137	0
Sun Capital Investment Grade Bond S Class	03	2007	10.6065	10.7637	0
Sun Capital Investment Grade Bond S Class	03	2006	10.2877	10.6065	0
Sun Capital Investment Grade Bond S Class	03	2005	10.3129	10.2877	0
Sun Capital Investment Grade Bond S Class	03	2004	10.0000	10.3129	0
Sun Capital Investment Grade Bond S Class	03	2003	10.0000	10.0000	0
Sun Capital Investment Grade Bond S Class	04	2008	10.6993	9.1445	10,664
Sun Capital Investment Grade Bond S Class	04	2007	10.5593	10.6993	9,509
Sun Capital Investment Grade Bond S Class	04	2006	10.2576	10.5593	9,479
Sun Capital Investment Grade Bond S Class	04	2005	10.2985	10.2576	1,158
Sun Capital Investment Grade Bond S Class	04	2004	10.0000	10.2985	0
Sun Capital Investment Grade Bond S Class	04	2003	10.0000	10.0000	0
Sun Capital Investment Grade Bond S Class	05	2008	10.6781	9.1217	0
Sun Capital Investment Grade Bond S Class	05	2007	10.5437	10.6781	0
Sun Capital Investment Grade Bond S Class	05	2006	10.2477	10.5437	0
Sun Capital Investment Grade Bond S Class	05	2005	10.2938	10.2477	0
Sun Capital Investment Grade Bond S Class	05	2004	10.0000	10.2938	0
Sun Capital Investment Grade Bond S Class	05	2003	10.0000	10.0000	0
Sun Capital Investment Grade Bond S Class	06	2008	10.6141	9.0531	0
Sun Capital Investment Grade Bond S Class	06	2007	10.4967	10.6141	0
Sun Capital Investment Grade Bond S Class	06	2006	10.2177	10.4967	0
Sun Capital Investment Grade Bond S Class	06	2005	10.2793	10.2177	0
Sun Capital Investment Grade Bond S Class	06	2004	10.0000	10.2793	0
Sun Capital Investment Grade Bond S Class	06	2003	10.0000	10.0000	0
Sun Capital Money Market S Class	01	2008	10.0000	9.9941	558,343
Sun Capital Money Market S Class	02	2008	10.0000	9.9776	53,755
Sun Capital Money Market S Class	03	2008	10.0000	9.9734	0
Sun Capital Money Market S Class	04	2008	10.0000	9.9610	14,152
Sun Capital Money Market S Class	05	2008	10.0000	9.9569	0
Sun Capital Money Market S Class	06	2008	10.0000	9.9446	54,131
Templeton Developing Markets Securities Fund, Class 2	01	2008	17.8610	8.3029	51,998
Templeton Developing Markets Securities Fund, Class 2	01	2007	14.1098	17.8610	51,055
Templeton Developing Markets Securities Fund, Class 2	01	2006	11.2055	14.1098	9,072
Templeton Developing Markets Securities Fund, Class 2	01	2005	10.0000	11.2055	0
Templeton Developing Markets Securities Fund, Class 2	02	2008	17.7824	8.2494	7,195
Templeton Developing Markets Securities Fund, Class 2	02	2007	14.0765	17.7824	11,094
Templeton Developing Markets Securities Fund, Class 2	02	2006	11.2018	14.0765	4,982
Templeton Developing Markets Securities Fund, Class 2	02	2005	10.0000	11.2018	1,791
Templeton Developing Markets Securities Fund, Class 2	03	2008	17.7627	8.2360	0
Templeton Developing Markets Securities Fund, Class 2	03	2007	14.0682	17.7627	4,664
Templeton Developing Markets Securities Fund, Class 2	03	2006	11.2009	14.0682	4,674
Templeton Developing Markets Securities Fund, Class 2	03	2005	10.0000	11.2009	3,826
Templeton Developing Markets Securities Fund, Class 2	04	2008	17.7038	8.1961	91,838
Templeton Developing Markets Securities Fund, Class 2	04	2007	14.0432	17.7038	22,434
Templeton Developing Markets Securities Fund, Class 2	04	2006	11.1980	14.0432	7,634
Templeton Developing Markets Securities Fund, Class 2	04	2005	10.0000	11.1980	0
Templeton Developing Markets Securities Fund, Class 2	05	2008	17.6843	8.1829	0
Templeton Developing Markets Securities Fund, Class 2	05	2007	14.0349	17.6843	0
Templeton Developing Markets Securities Fund, Class 2	05	2006	11.1971	14.0349	0
Templeton Developing Markets Securities Fund, Class 2	05	2005	10.0000	11.1971	0
Templeton Developing Markets Securities Fund, Class 2	06	2008	17.6256	8.1431	6,717
Templeton Developing Markets Securities Fund, Class 2	06	2007	14.0099	17.6256	1,668
Templeton Developing Markets Securities Fund, Class 2	06	2006	11.1943	14.0099	1,668
Templeton Developing Markets Securities Fund, Class 2	06	2005	10.0000	11.1943	0
Templeton Foreign Securities Fund	01	2008	21.3617	12.5188	95,229
Templeton Foreign Securities Fund	01	2007	18.8234	21.3617	124,663
Templeton Foreign Securities Fund	01	2006	15.7667	18.8234	130,499
Templeton Foreign Securities Fund	01	2005	14.5582	15.7667	139,751
Templeton Foreign Securities Fund	01	2004	12.4953	14.5582	100,504
Templeton Foreign Securities Fund	01	2003	9.6142	12.4953	42,960
Templeton Foreign Securities Fund	01	2002	10.0000	9.6142	53,262
Templeton Foreign Securities Fund	02	2008	21.1278	12.3564	207,800
Templeton Foreign Securities Fund	02	2007	18.6555	21.1278	254,740
Templeton Foreign Securities Fund	02	2006	15.6578	18.6555	302,793
Templeton Foreign Securities Fund	02	2005	14.4870	15.6578	281,734
Templeton Foreign Securities Fund	02	2004	12.4596	14.4870	146,239
Templeton Foreign Securities Fund	02	2003	9.6062	12.4596	51,810
Templeton Foreign Securities Fund	02	2002	10.0000	9.6062	0
Templeton Foreign Securities Fund	03	2008	21.0695	12.3159	294
Templeton Foreign Securities Fund	03	2007	18.6135	21.0695	2,920
Templeton Foreign Securities Fund	03	2006	15.6306	18.6135	2,955
Templeton Foreign Securities Fund	03	2005	14.4692	15.6306	1,294
Templeton Foreign Securities Fund	03	2004	12.4507	14.4692	2,543
Templeton Foreign Securities Fund	03	2003	9.6042	12.4507	270
Templeton Foreign Securities Fund	03	2002	10.0000	9.6042	0
Templeton Foreign Securities Fund	04	2008	20.8956	12.1955	36,315
Templeton Foreign Securities Fund	04	2007	18.4884	20.8956	124,000
Templeton Foreign Securities Fund	04	2006	15.5493	18.4884	114,159
Templeton Foreign Securities Fund	04	2005	14.4159	15.5493	80,483
Templeton Foreign Securities Fund	04	2004	12.4239	14.4159	40,074
Templeton Foreign Securities Fund	04	2003	9.5983	12.4239	17,600
Templeton Foreign Securities Fund	04	2002	10.0000	9.5983	1,615
Templeton Foreign Securities Fund	05	2008	20.8383	12.1559	3,636
Templeton Foreign Securities Fund	05	2007	18.4472	20.8383	3,637
Templeton Foreign Securities Fund	05	2006	15.5224	18.4472	3,637
Templeton Foreign Securities Fund	05	2005	14.3983	15.5224	4,674
Templeton Foreign Securities Fund	05	2004	12.4150	14.3983	4,674
Templeton Foreign Securities Fund	05	2003	9.5963	12.4150	3,731
Templeton Foreign Securities Fund	05	2002	10.0000	9.5963	0
Templeton Foreign Securities Fund	06	2008	20.6659	12.0367	1,720
Templeton Foreign Securities Fund	06	2007	18.3228	20.6659	12,798
Templeton Foreign Securities Fund	06	2006	15.4414	18.3228	5,611
Templeton Foreign Securities Fund	06	2005	14.3451	15.4414	2,678
Templeton Foreign Securities Fund	06	2004	12.3882	14.3451	4,241
Templeton Foreign Securities Fund	06	2003	9.5903	12.3882	1,466
Templeton Foreign Securities Fund	06	2002	10.0000	9.5903	0
Templeton Growth Securities Fund Class 2	01	2008	20.2138	11.4596	73,961
Templeton Growth Securities Fund Class 2	01	2007	20.0936	20.2138	91,180
Templeton Growth Securities Fund Class 2	01	2006	16.7805	20.0936	30,149
Templeton Growth Securities Fund Class 2	01	2005	15.6800	16.7805	19,544
Templeton Growth Securities Fund Class 2	01	2004	13.7485	15.6800	3,162
Templeton Growth Securities Fund Class 2	01	2003	10.0000	13.7485	0
Templeton Growth Securities Fund Class 2	02	2008	19.9987	11.3144	19,796
Templeton Growth Securities Fund Class 2	02	2007	19.9206	19.9987	27,608
Templeton Growth Securities Fund Class 2	02	2006	16.6698	19.9206	39,078
Templeton Growth Securities Fund Class 2	02	2005	15.6082	16.6698	35,232
Templeton Growth Securities Fund Class 2	02	2004	13.7135	15.6082	10,287
Templeton Growth Securities Fund Class 2	02	2003	10.0000	13.7135	0
Templeton Growth Securities Fund Class 2	03	2008	19.9451	11.2783	0
Templeton Growth Securities Fund Class 2	03	2007	19.8774	19.9451	0
Templeton Growth Securities Fund Class 2	03	2006	16.6421	19.8774	0
Templeton Growth Securities Fund Class 2	03	2005	15.5903	16.6421	0
Templeton Growth Securities Fund Class 2	03	2004	13.7047	15.5903	0
Templeton Growth Securities Fund Class 2	03	2003	10.0000	13.7047	0
Templeton Growth Securities Fund Class 2	04	2008	19.7851	11.1706	21,037
Templeton Growth Securities Fund Class 2	04	2007	19.7484	19.7851	20,767
Templeton Growth Securities Fund Class 2	04	2006	16.5594	19.7484	20,633
Templeton Growth Securities Fund Class 2	04	2005	15.5365	16.5594	20,829
Templeton Growth Securities Fund Class 2	04	2004	13.6785	15.5365	17,018
Templeton Growth Securities Fund Class 2	04	2003	10.0000	13.6785	0
Templeton Growth Securities Fund Class 2	05	2008	19.7325	11.1352	0
Templeton Growth Securities Fund Class 2	05	2007	19.7059	19.7325	0
Templeton Growth Securities Fund Class 2	05	2006	16.5321	19.7059	0
Templeton Growth Securities Fund Class 2	05	2005	15.5188	16.5321	0
Templeton Growth Securities Fund Class 2	05	2004	13.6698	15.5188	0
Templeton Growth Securities Fund Class 2	05	2003	10.0000	13.6698	0
Templeton Growth Securities Fund Class 2	06	2008	19.5739	11.0287	3,917
Templeton Growth Securities Fund Class 2	06	2007	19.5777	19.5739	3,917
Templeton Growth Securities Fund Class 2	06	2006	16.4498	19.5777	3,918
Templeton Growth Securities Fund Class 2	06	2005	15.4651	16.4498	3,918
Templeton Growth Securities Fund Class 2	06	2004	13.6435	15.4651	3,919
Templeton Growth Securities Fund Class 2	06	2003	10.0000	13.6435	0
Van Kampen LIT Comstock II	01	2008	9.8718	6.2293	100,686
Van Kampen LIT Comstock II	01	2007	10.0000	9.8718	82,292
Van Kampen LIT Comstock II	02	2008	9.8552	6.2061	0
Van Kampen LIT Comstock II	02	2007	10.0000	9.8552	1,362
Van Kampen LIT Comstock II	03	2008	9.8511	6.2003	0
Van Kampen LIT Comstock II	03	2007	10.0000	9.8511	0
Van Kampen LIT Comstock II	04	2008	9.8386	6.1829	0
Van Kampen LIT Comstock II	04	2007	10.0000	9.8386	0
Van Kampen LIT Comstock II	05	2008	9.8345	6.1772	0
Van Kampen LIT Comstock II	05	2007	10.0000	9.8345	0
Van Kampen LIT Comstock II	06	2008	9.8220	6.1598	0
Van Kampen LIT Comstock II	06	2007	10.0000	9.8220	0
Van Kampen UIF Equity & Income Class II	01	2008	10.0000	8.3378	31,870
Van Kampen UIF Equity & Income Class II	02	2008	10.0000	8.3240	0
Van Kampen UIF Equity & Income Class II	03	2008	10.0000	8.3206	0
Van Kampen UIF Equity & Income Class II	04	2008	10.0000	8.3102	0
Van Kampen UIF Equity & Income Class II	05	2008	10.0000	8.3068	0
Van Kampen UIF Equity & Income Class II	06	2008	10.0000	8.2964	0
Van Kampen UIF Mid Cap Growth Class II	01	2008	10.0000	6.2695	700
Van Kampen UIF Mid Cap Growth Class II	02	2008	10.0000	6.2591	0
Van Kampen UIF Mid Cap Growth Class II	03	2008	10.0000	6.2565	0
Van Kampen UIF Mid Cap Growth Class II	04	2008	10.0000	6.2487	0
Van Kampen UIF Mid Cap Growth Class II	05	2008	10.0000	6.2461	0
Van Kampen UIF Mid Cap Growth Class II	06	2008	10.0000	6.2383	0
Van Kampen UIF US Mid Cap Value Class II	01	2008	10.0000	6.5354	0
Van Kampen UIF US Mid Cap Value Class II	02	2008	10.0000	6.5246	0
Van Kampen UIF US Mid Cap Value Class II	03	2008	10.0000	6.5219	0
Van Kampen UIF US Mid Cap Value Class II	04	2008	10.0000	6.5138	1,274
Van Kampen UIF US Mid Cap Value Class II	05	2008	10.0000	6.5111	0
Van Kampen UIF US Mid Cap Value Class II	06	2008	10.0000	6.5029	0

MAY 1, 2009

SUN LIFE FINANCIAL MASTERS® ACCESS

VARIABLE AND FIXED ANNUITY

STATEMENT OF ADDITIONAL INFORMATION

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

TABLE OF CONTENTS

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

Advertising and Sales Literature

Tax Deferred Accumulation

Calculations

     Example of Variable Accumulation Unit Value Calculation

     Example of Variable Annuity Unit Calculation

     Example of Variable Annuity Payment Calculation

Distribution of the Contract

Custodian

Independent Registered Public Accounting Firm

Financial Strength and Credit Ratings

Financial Statements

The Statement of Additional Information sets forth information which may be of interest to prospective purchasers of the Sun Life Financial Masters® Access Variable and Fixed Annuity Contracts (the "Contracts") issued by Sun Life Assurance Company of Canada (U.S.) (the "Company" or "Sun Life (U.S.)") in connection with Sun Life of Canada (U.S.) Variable Account F (the "Variable Account") which is not included in the Prospectus dated May 1, 2009.  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.

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

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

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

Sun Life Financial Inc. ("Sun Life Financial"), a reporting company under the Securities Exchange Act of 1934 with common shares listed on the Toronto, New York and Philippine stock exchanges, is the ultimate corporate parent of Sun Life (U.S.). Sun Life Financial ultimately controls Sun Life (U.S.) through the following intervening companies: Sun Life of Canada (U.S.) Holdings, Inc., Sun Life Financial (U.S.) Investments LLC, Sun Life Financial (U.S.) Holdings, Inc., Sun Life Assurance Company of Canada - U.S. Operations Holdings, Inc., and Sun Life Global Investments Inc.

ADVERTISING AND SALES LITERATURE

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

TAX-DEFERRED ACCUMULATION:

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

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

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

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

CALCULATIONS

EXAMPLE OF VARIABLE ACCUMULATION UNIT VALUE CALCULATION

Suppose the net asset value of a Fund share at the end of the current valuation period is $18.38; at the end of the immediately preceding valuation period was $18.32; the Valuation Period is one day; and no dividends or distributions caused Fund shares to go "ex-dividend" during the current Valuation Period. $18.38 ÷ $18.32 = 1.00327511. Subtracting the one day risk factor for mortality and expense risks and the administrative expense charge of .00006375 (the daily equivalent of the current maximum charge of 2.30% on an annual basis) gives a net investment factor of 1.00321136.  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 14.6113393 (14.5645672 x 1.00321136).

EXAMPLE OF VARIABLE ANNUITY UNIT CALCULATION

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

EXAMPLE OF VARIABLE ANNUITY PAYMENT CALCULATION

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

DISTRIBUTION OF THE CONTRACT

We offer the Contract on a continuous basis through the general distributor and principal underwriter of the Contracts, Clarendon Insurance Agency, Inc. ("Clarendon").  Clarendon also acts as the general distributor of certain other annuity contracts issued by the Company and its wholly-owned subsidiary, Sun Life Insurance and Annuity Company of New York, and variable life insurance contracts issued by the Company.

In addition to commissions, the Company may, from time to time, pay or allow additional promotional incentives, in the form of cash or other compensation. The Company reserves the right to offer these additional incentives only to certain broker-dealers that sell or are expected to sell during specified time periods certain minimum amounts of Contracts or Certificates or other contracts offered by the Company.  Promotional incentives may change at any time.

Commissions will not be paid to selling agents with respect to Participant Accounts established for the personal account of employees of the Company or any of its affiliates, or of persons engaged in the distribution of the Contract, or of immediate family members of such employees or persons. In addition, commissions may be waived or reduced in connection with certain transactions described in the Prospectus under the heading “Waivers; Reduced Charges; Credits; Special 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.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The consolidated financial statements of Sun Life Assurance Company of Canada (U.S.) included in this Statement of Additional Information have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein (which report, dated March 27, 2009, accompanying such financial statements expresses an unqualified opinion and includes an explanatory paragraph, referring to the Company changing its method of accounting for certain assets and liabilities to a fair value measurement approach as required by accounting guidance adopted on January 1, 2008, and changing its method of accounting for income taxes as required by accounting guidance adopted on January 1, 2007), and has been so included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.  Their office is located at 200 Berkeley Street, Boston, Massachusetts.

The financial statements of Sun Life of Canada (U.S.) Variable Account F that are included in this Statement of Additional Information have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein (which report, dated April 24, 2009, accompanying the financial statements expresses an unqualified opinion) and has been so included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

FINANCIAL STRENGTH AND CREDIT RATINGS

Financial strength and credit ratings risk is the risk of a downgrade by rating agencies of the Company’s financial strength and/or credit ratings.

Financial strength ratings represent the opinions of rating agencies regarding the financial ability of an insurance company to meet its obligations under insurance policies. In recent months, the rating agencies have placed a negative outlook on the North American life insurance industry, as a result of the deterioration of global equity and credit markets. Three independent rating agencies have lowered the Company’s financial strength ratings. On March 6, 2009, Standard & Poor’s lowered the Company’s financial strength rating from AA+ (very strong) to AA (very strong). On February 27, 2009, A.M. Best lowered the Company’s financial strength rating from A++ (superior) to A+ (superior). On February 12, 2009, Moody’s lowered the Company’s financial strength rating from Aa2 (excellent) to Aa3 (excellent).

A material downgrade in the Company’s financial strength ratings may have an adverse effect on its financial condition and results of operations through loss of sales, higher levels of surrenders and withdrawals, higher reinsurance and may potentially require the Company to reduce prices for products and services to remain competitive.

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.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholder of

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

Wellesley Hills, Massachusetts

We have audited the accompanying consolidated balance sheets of Sun Life Assurance Company of Canada (U.S.) and subsidiaries (the “Company”) as of December 31, 2008 and 2007, and the related consolidated statements of operations, comprehensive income, stockholder’s equity, and cash flows for each of the three years in the period ended December 31, 2008.  Our audits also included the financial statement schedules listed in the Index at Item 15.  These financial statements and financial statement schedules are the responsibility of the Company's management.  Our responsibility is to express an opinion on the financial statements and financial statement schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Sun Life Assurance Company of Canada (U.S.) and subsidiaries as of December 31, 2008 and 2007, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2008, 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, the Company changed its method of accounting for certain assets and liabilities to a fair value measurement approach as required by accounting guidance adopted on January 1, 2008, and changed its method of accounting for income taxes as required by accounting guidance adopted on January 1, 2007.

DELOITTE & TOUCHE LLP

Boston, Massachusetts

March 27, 2009

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

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

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)

For the years ended December 31,

		2008		2007		2006
Revenues:
Premiums and annuity considerations	$	122,733	$	110,616	$	59,192
Net investment (loss) income (1)		(1,789,835)		1,098,592		1,206,081
Net derivative (loss) income (2)		(871,544)		(193,124)		9,089
Net realized investment losses		(38,241)		(61,048)		(44,511)
Fee and other income		564,753		479,904		398,622
Subordinated notes early redemption premium		-		25,578		-
Total revenues		(2,012,134)		1,460,518		1,628,473
Benefits and expenses:
Interest credited		561,626		629,823		633,405
Interest expense		106,777		101,532		130,802
Policyowner benefits		443,517		229,485		156,970
Amortization of deferred policy acquisition costs and value of business and customer renewals acquired (3)		(1,021,026)		189,121		399,182
Goodwill impairment		701,450		-		-
Other operating expenses		289,346		283,815		231,434
Partnership capital securities early redemption payment		-		25,578		-
Total benefits and expenses		1,081,690		1,459,354		1,551,793
(Loss) income before income tax benefit		(3,093,824)		1,164		76,680
Income tax benefit:
Federal		(858,989)		(24,289)		(1,717)
State		6		431		105
Income tax benefit		(858,983)		(23,858)		(1,612)
Net (loss) income	$	(2,234,841)	$	25,022	$	78,292

(1) Net investment (loss) income includes a (decrease) increase in market value of trading fixed maturity securities of $(2,762.9) million, $(88.4) million and $15.2 million for the years ended December 31, 2008, 2007 and 2006, respectively.

(2) Net derivative loss for the year ended December 31, 2008 includes $166.1 million of income related to the Company’s adoption of Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurement,” which is further discussed in Note 5.

(3) Amortization of deferred policy acquisition costs and value of business and customer renewals acquired for the year ended December 31, 2008 includes $3.2 million of expenses related to the Company’s adoption of SFAS No. 157, which is further discussed in Note 5.

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 per share data)

ASSETS	December 31, 2008		December 31, 2007
Investments
Available-for-sale fixed maturities at fair value (amortized cost of $782,861 and $11,848,397 in 2008 and 2007, respectively)	$	674,020	$	11,503,230
Trading fixed maturities at fair value (amortized cost of $14,909,429 and $3,938,088 in 2008 and 2007, respectively)		11,762,146		3,867,011
Mortgage loans		2,083,003		2,318,341
Derivative instruments – receivable		727,103		609,261
Limited partnerships		78,289		164,464
Real estate		201,470		201,777
Policy loans		729,407		712,633
Other invested assets		211,431		568,676
Cash and cash equivalents		1,624,149		1,169,701
Total investments and cash		18,091,018		21,115,094
Accrued investment income		282,564		290,363
Deferred policy acquisition costs		2,862,401		1,603,397
Value of business and customer renewals acquired		179,825		51,806
Net deferred tax asset		856,845		15,945
Goodwill		7,299		708,829
Receivable for investments sold		7,548		3,482
Reinsurance receivable		3,076,615		2,709,249
Other assets		222,840		311,999
Separate account assets		20,531,724		24,996,603
Total assets	$	46,118,679	$	51,806,767
LIABILITIES
Contractholder deposit funds and other policy liabilities	$	17,545,721	$	18,262,569
Future contract and policy benefits		1,014,688		823,588
Payable for investments purchased		363,513		199,210
Accrued expenses and taxes		118,671		123,065
Debt payable to affiliates		1,998,000		1,945,000
Reinsurance payable to affiliate		1,650,821		1,691,884
Derivative instruments – payable		1,494,341		446,640
Other liabilities		605,945		888,061
Separate account liabilities		20,531,724		24,996,603
Total liabilities		45,323,424		49,376,620
Commitments and contingencies – Note 21
STOCKHOLDER’S EQUITY
Common stock, $1,000 par value – 10,000 shares authorized; 6,437 shares issued and outstanding in 2008 and 2007		6,437		6,437
Additional paid-in capital		2,872,242		2,146,436
Accumulated other comprehensive loss		(129,884)		(92,403)
(Accumulated deficit) Retained earnings		(1,953,540)		369,677
Total stockholder’s equity		795,255		2,430,147
Total liabilities and stockholder’s equity	$	46,118,679	$	51,806,767

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,

		2008		2007		2006
Net (loss) income	$	(2,234,841)	$	25,022	$	78,292
Other comprehensive loss:
Change in unrealized losses on available-for-sale securities, net of tax and policyholder amounts (1)		(84,234)		(119,775)		(46,229)
Change in pension and other postretirement plan adjustments, net of tax (2)		(66,998)		11,197		1,842
Reclassification adjustments of net realized investment losses into net (loss) income (3)		25,718		2,145		40,673
Other comprehensive loss		(125,514)		(106,433)		(3,714)
Comprehensive (loss) income	$	(2,360,355)	$	(81,411)	$	74,578

(1)   Net of tax benefit of $ 45.4 million, $64.7 million and $25.5 million for the years ended December 31, 2008, 2007 and 2006, respectively.

(2)   Net of tax benefit (expense) of $36.1 million, $(6.0) million and $(0.2) million for the years ended December 31, 2008, 2007 and 2006, respectively.

(3)   Net of tax expense of $13.8 million, $1.2 million and $21.9 million for the years ended December 31, 2008, 2007 and 2006, respectively.

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,

	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		(Accumulated Deficit) Retained Earnings		Total Stockholder’s Equity
Balance at December 31, 2005	$	6,437	$	2,138,880	$	19,260	$	561,187	$	2,725,764
Adjustment to initially apply SFAS No. 158, net of tax		-		-		(1,516)		-		(1,516)
Net income		-		-				78,292		78,292
Dividends		-		-		-		(300,000)		(300,000)
Tax benefit from stock options		-		4,528		-		-		4,528
Other comprehensive loss		-		-		(3,714)		-		(3,714)
Balance at December 31, 2006		6,437		2,143,408		14,030		339,479		2,503,354
Cumulative effect of accounting changes related to the adoption of FASB Interpretation No. 48, net of tax		-		-		-		5,176		5,176
Net income		-		-		-		25,022		25,022
Tax benefit from stock options		-		3,028		-		-		3,028
Other comprehensive loss		-		-		(106,433)		-		(106,433)
Balance at December 31, 2007		6,437		2,146,436		(92,403)		369,677		2,430,147
Cumulative effect of accounting changes related to the adoption of SFAS Nos.158 and 159, net of tax		-		-		88,033		(88,376		(343)
Net loss		-		-		-		(2,234,841)		(2,234,841)
Tax benefit from stock options		-		806		-		-		806
Capital contribution from Parent		-		725,000		-		-		725,000
Other comprehensive loss		-		-		(125,514)		-		(125,514)
Balance at December 31, 2008	$	6,437	$	2,872,242	$	(129,884)	$	(1,953,540)	$	795,255

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,

		2008		2007		2006
Cash Flows From Operating Activities:
Net (loss) income	$	(2,234,841)	$	25,022	$	78,292
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization of premiums on investments		28,371		40,668		58,752
Amortization of deferred policy acquisition costs and value of business and customer renewals acquired		(1,021,026)		189,121		399,182
Depreciation and amortization		6,711		7,460		4,608
Net losses (gains) on derivatives		812,717		131,503		(11,853)
Net realized losses on available-for-sale investments		38,241		61,048		44,511
Changes in fair value of trading investments		2,762,893		88,398		(15,235)
Net realized losses (gains) on trading investments		380,969		(4,655)		(373)
Undistributed income on private equity limited partnerships		(9,796)		(23,027)		(29,120)
Interest credited to contractholder deposits		561,626		629,823		633,405
Goodwill impairment		701,450		-		-
Deferred federal income taxes		(773,143)		43,366		4,180
Changes in assets and liabilities:
Additions to deferred policy acquisition costs and value of business and customer renewals acquired		(365,686)		(379,941)		(262,895)
Accrued investment income		7,799		855		(29,711)
Net change in reinsurance receivable/payable		(260,860)		33,161		77,063
Future contract and policy benefits		191,024		66,550		(6,619)
Other, net		253,160		(134,356)		14,268
Net cash provided by operating activities		1,079,609		774,996		958,455
Cash Flows From Investing Activities:
Sales, maturities and repayments of:
Available-for-sale fixed maturities		101,757		4,252,780		5,872,190
Trading fixed maturities		1,808,498		728,633		2,172,797
Mortgage loans		294,610		355,146		248,264
Real estate		1,141		-		-
Other invested assets		692,157		667,683		184,646
Redemption of subordinated note from affiliates		-		600,000		-
Purchases of:
Available-for-sale fixed maturities		(129,474)		(2,557,841)		(4,002,244)
Trading fixed maturities		(2,175,143)		(829,469)		(4,038,950)
Mortgage loans		(58,935)		(399,566)		(780,592)
Real estate		(5,414)		(19,439)		(20,619)
Other invested assets		(122,447)		(57,864)		(489,493)
Early redemption premium		-		25,578		-
Net change in other investments		(349,964)		(361,781)		399,514
Net change in policy loans		(16,774)		(3,007)		(7,857)
Net cash provided by (used in) investing activities	$	40,012	$	2,400,853	$	(462,344)

Continued on next page

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,

		2008		2007		2006
Cash Flows From Financing Activities:
Additions to contractholder deposit funds	$	2,190,099	$	1,924,784	$	3,520,138
Withdrawals from contractholder deposit funds		(3,616,458)		(4,533,405)		(3,690,351)
Repayments of debt		(122,000)		(980,000)		-
Debt proceeds		175,000		1,000,000		200,000
Dividends paid to stockholder		-		-		(300,000)
Capital contribution from Parent		725,000		-		-
Early redemption payment		-		(25,578)		-
Other, net		(16,814)		29,971		4,528
Net cash used in financing activities		(665,173)		(2,584,228)		(265,685)
Net change in cash and cash equivalents		454,448		591,621		230,426
Cash and cash equivalents, beginning of year		1,169,701		578,080		347,654
Cash and cash equivalents, end of year	$	1,624,149	$	1,169,701	$	578,080
Supplemental Cash Flow Information
Interest paid	$	109,532	$	73,116	$	130,686
Income taxes (refunded) paid	$	(113,194)	$	(16,281)	$	22,724

Supplemental Schedule of non-cash investing and financing activities

Effective November 8, 2007, the Company’s subsidiary, Sun Life Financial (U.S.) Reinsurance Company (“Sun Life Vermont”), entered into a reinsurance agreement with Sun Life Assurance Company of Canada (“SLOC”), the Company’s affiliate, under which Sun Life Vermont assumed the risks of certain individual universal life insurance contracts issued and to be issued by SLOC.  This agreement is described more fully in Note 1 and Note 9.  As part of the transaction, the Sun Life Vermont assumed $553.7 million of contractholder deposits, future contract and policy benefits of $20.4 million, funds withheld asset of $551.8 million, and a deferred loss of $22.3 million, all of which are considered non-cash items for purposes of the Company’s consolidated statement of cash flows.

The Company did not pay any dividends to its direct parent in 2008 and 2007, respectively.  The Company declared and paid to its direct parent, Sun Life of Canada (U.S.) Holdings, Inc., cash dividends of $300.0 million in 2006.

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, 2008, 2007 and 2006

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

GENERAL

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

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

BASIS OF PRESENTATION

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

The consolidated financial statements include the accounts of the Company and its subsidiaries.  As of December 31, 2008, the Company directly or indirectly owned all of the outstanding shares or members interest of SLNY, which issues individual fixed and variable annuity contracts, group life, group disability, group dental and stop loss insurance, and individual life insurance in New York; Independence Life and Annuity Company (“INDY”), a Rhode Island life insurance company that sold variable and whole life insurance products; Sun Life Financial (U.S.) Reinsurance Company (“Sun Life Vermont”), a Vermont special purpose financial captive insurance company; Clarendon Insurance Agency, Inc., a registered broker-dealer; SLF Private Placement Investment Company I, LLC; Sun Parkaire Landing LLC; 7101 France Avenue Manager, LLC; Sun MetroNorth, LLC; and SLNY Private Placement Investment Company I, LLC.

On September 6, 2006 the Company entered into an agreement with Credit and Repackaged Securities Limited Series 2006-10 Trust (the “CARS Trust”).  Through this agreement, the Company purchased a funded note, which is referenced through a credit default swap to the credit performance of a portfolio of corporate reference entities.  The Company entered into this credit structure for yield enhancement.  As the sole beneficiary of the CARS Trust, the Company is required to consolidate this trust under the requirements of FASB Interpretation No. 46, “Consolidation of Variable Interest Entities, an interpretation of ARB No. 51 (Revised December 2003)” (“FIN 46(R)”).  As a result of the consolidation, the Company has recorded in its balance sheet a credit default swap held by the CARS Trust.   At issue, the swap had a seven year term, maturing in 2013.  Under the terms of the swap, the CARS Trust will be required to make payments to the swap counterparty upon the occurrence of a credit event, with respect to any reference entity, that is in excess of the threshold amount specified in the swap agreement.  At December 31, 2008, the CARS Trust has not had to make any payments under the terms of the swap as the sum of all credit events has not exceeded the threshold amount.  At December 31, 2008 the fair value of the credit default swap is $(42.1) million.  Under the terms of the credit derivative, the maximum future payments the CARS Trust could be required to make is $55.0 million.  In the event the trust was required to make any payments under the swap, the underlying assets held by the trust would be liquidated to fund the payment.  If the disposition of these assets is insufficient to fund the payment calculated, then under the terms of the agreement, the cash settlement amount would be capped at the amount of the proceeds from the sale of the underlying assets.  As of December 31, 2008, the fair value of the assets held as collateral by the CARS Trust was $42.3 million.

The Company had a greater than or equal to 20%, but less than 50%, interest in seven variable interest entities (“VIEs”) at December 31, 2008.  The Company is a creditor in four trusts and three limited liability companies that were used to finance commercial mortgages and franchise receivables and equipment used in utility generation.  The Company’s maximum exposure to loss related to all of these VIEs is the investments’ carrying value, which was $36.5 million and $88.4 million at December 31, 2008 and 2007, respectively.  The investments in these VIEs mature between January 2008 and October 2024.  As the Company will not absorb a majority of the VIEs’ expected losses or receive a majority of the expected returns, the Company is not required to consolidate these VIEs, in accordance with FIN 46(R).  See Note 4 for information with respect to leveraged leases.

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, 2008, 2007 and 2006

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

BASIS OF PRESENTATION (CONTINUED)

In order to determine whether the Company is, or is not, the primary beneficiary of a VIE, the Company performs an assessment of the level of each party’s participation in controlling the entity by means other than a voting interest, which includes assumptions about the sufficiency of an equity investment at risk, the essential characteristics of a controlling financial interest, and the significance of voting rights in relation to economic interests.  If the Company is exposed to the majority of the expected losses, the majority of the expected residual returns, or both, associated with a VIE then the Company is the VIE’s primary beneficiary and must consolidate the entity.

The VIEs are generally financed with equity through the establishment of a trust by a trustee.  The carrying amount of the VIEs for which the Company has significant influence have been included in trading fixed maturities on the consolidated balance sheets.

All material intercompany transactions and balances between the Company and its subsidiaries have been eliminated in consolidation.

USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  The most significant estimates are those used in determining the fair value of financial instruments, goodwill, deferred policy acquisition costs (“DAC”), value of business acquired (“VOBA”), value of customer renewals acquired (“VOCRA”), liabilities for future contract and policyholder benefits, other-than-temporary impairments of investments and valuation allowance on deferred tax assets.  Actual results could differ from those estimates.

FINANCIAL INSTRUMENTS

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

CASH AND CASH EQUIVALENTS

Cash and cash equivalents primarily include cash, commercial paper and money market investments.  All such investments have maturities of three months or less when purchased.

INVESTMENTS

The Company accounts for its investments in accordance with SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities.”  At the time of purchase, fixed maturity securities are classified as either held-to-maturity, trading or available-for-sale.  In order for a security to be classified as held-to-maturity, the Company must have positive intent and ability to hold the security to maturity.  Securities held-to-maturity are stated at cost, adjusted for amortization of premiums and accretion of discounts.  Securities which the Company has elected to measure at fair value under SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” are classified as trading securities.  Although classified as trading securities, the Company’s intent is to not sell these securities in the near term.  Trading securities are carried at aggregate fair value with changes in market value reported as a component of net investment income.  Securities that do not meet the held-to-maturity or trading criterion are classified as available-for-sale.  Included with available-for-sale fixed maturity securities are forward purchase commitments on mortgage backed securities better known as To Be Announced (“TBA”) securities.  The Company records TBA purchases on the trade date and the corresponding payable is recorded as an outstanding liability in payable for investments purchased until the settlement date of the transaction.  Available-for-sale securities, that are not considered other-than-temporarily impaired, are carried at fair value with the unrealized gains or losses reported in other comprehensive 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, 2008, 2007 and 2006

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

INVESTMENTS (continued)

The Company determines the fair value of its publicly traded fixed maturities using four primary pricing methods: third-party pricing services, independent non-binding broker quotes, pricing matrices, and pricing models.  Prices are first sought from third party pricing services; the remaining unpriced securities are priced using one of the remaining three methods.  Third-party pricing services derive the security prices through recently reported trades for identical or similar securities with adjustments for trading volumes and market observable information through the reporting date.  In the event that there are no recent market trades, pricing services and brokers may use pricing matrices and models to develop a security price based on future expected cash flows discounted at an estimated market rate using collateral performance and vintages.  The Company generally does not adjust quotes or prices obtained from brokers or pricing services.

Structured securities, such as collateralized mortgage obligations (“CMO”), commercial mortgage-backed securities (“CMBS”), and asset-backed securities (“ABS”), are priced using a matrix, fair value model or independent broker quotations.  CMBS securities, which are a subset of the Company's CMO holdings, are priced using the last sale price of the day or a broker quote, if no sales were transacted that day.  Other CMOs and ABS are priced using matrices, models or independent broker quotations.  Typical inputs used by these three pricing methods include, but are not limited to, reported trades, benchmark yields, issuer spreads, bids and/or estimated cash flows and prepayment speeds.  In addition, estimates of expected future prepayments are factors in determining the price of ABS, mortgage-backed securities (“MBS”), CMBS, and CMOs.  These estimates are based on the underlying collateral and structure of the security, as well as prepayment speeds previously experienced in the market at interest rate levels projected for the underlying collateral.  Actual prepayment experience may vary from these estimates.

For privately placed fixed maturities, fair values are estimated using matrices, which take into account credit spreads for publicly traded securities of similar credit risk, maturity, prepayment and liquidity characteristics.  A portion of privately placed fixed maturities are also priced using market prices or broker quotes.  The fair values of mortgages 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.

The Company’s ability to liquidate positions in privately placed fixed securities and mortgages could be impacted to a significant degree by the lack of an actively traded market.  Although the Company believes that its estimates reasonably reflect the fair value of those instruments, its key assumptions about risk-free interest rates, risk premiums, performance of underlying collateral (if any) and other factors may not reflect those of an active market.

The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between knowledgeable, unrelated willing parties using inputs, including estimates and assumptions, a market participant would utilize.  The Company performs a monthly analysis on the prices received from third parties to assess if the prices represent a reasonable estimate of the fair value.  The process is both quantitative and qualitative and includes back testing of recent trades, review of key assumptions such as spreads, duration, credit rating, and on-going review of third-party pricing services methodologies.  The Company performs further testing on those securities whose prices do not fall within a pre-established tolerance range.  This testing includes looking at specific market events that may affect pricing or obtaining additional information or new prices from the third-party pricing service.  Additionally, the Company makes a selection of securities from its portfolio and compares the price received from its third-party pricing services to an independent source, creates option adjusted spreads or obtains additional broker quotes to corroborate the current market price.  Historically, the Company has found no material variances between the prices received from third-party pricing sources and the results of its testing.

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 anticipates that it will be unable to recover all amounts due under the contractual obligations of the security.  Additionally, in the event that securities that are expected to be sold before the fair value of the security recovers to amortized cost, an other-than-temporary impairment charge is also taken.

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, 2008, 2007 and 2006

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

INVESTMENTS (continued)

Some structured securities, typically those rated single A or below, are subject to Emerging Issues Task Force Issue No.  99-20, “Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests That Continued to Be Held by a Transferor in Securitized Financial Assets” (“EITF 99-20”).  EITF 99-20 requires the Company to periodically update its best estimate of cash flows over the life of the security.  In the event that the present value of the estimated cash flows is less than amortized cost, an other-than-temporary impairment charge is recorded.  Estimating future cash flows is a quantitative and qualitative process that incorporates information received from third parties, along with assumptions and judgments about the future performance of the underlying collateral.

Other-than-temporary impairments are classified as either credit-related or interest-related.  The Company categorizes other-than-temporary impairments as credit-related if there are current fundamental credit concerns regarding the issuers’ ability to pay all principal and interest amounts due, according to the contractual terms of the security or if the decline in fair value of the security is driven by issuer-specific credit events.  The Company characterizes impairments as interest-related if the depression in fair value of the security was due primarily to changes in interest or general credit spread widening and for which the Company has determined it no longer has the intent or ability to hold a security until recovery to amortized cost.  Once an other-than-temporary impairment charge has been recorded, the Company continues to review the other-than-temporarily impaired securities for additional impairment.  The net realized loss from other-than-temporary impairments is recorded in the income statement as the difference between the fair value and the amortized cost of the security.

The Company incurred realized losses totaling $41.9 million and $68.1 million for the years ended December 31, 2008 and 2007, respectively, for other-than-temporary impairments on its available-for-sale fixed maturity securities.  The entire balance of $41.9 million realized losses for other-than-temporary impairments for the year ended December 31, 2008 were credit-related.  Of the $68.1 million realized losses for other-than-temporary impairments for the year ended December 31, 2007, $52.0 million was credit-related and $16.1 million was interest-related.

The Company discontinues the accrual of income on its holdings for issuers that are in default.  Investment income would have increased by $4.6 million for the year ended December 31, 2008, if these holdings were performing.  Accrued income was not materially impacted by the termination of accrual accounting on these holdings for the year ended December 31, 2007. As of December 31, 2008, the fair market value of holdings for issuers in default was $17.9 million.  As of December 31, 2007, the Company did not have any holding for issuers that were in default.

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, 2008, 2007 and 2006

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

INVESTMENTS (CONTINUED)

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

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 lower of the present value of expected future cash flows discounted at the loan's effective interest rate or on the loan's observable market price. For the year ended December 31, 2008, the Company incurred realized losses of $3.0 million for impairments on mortgage loans.  A specific valuation allowance is established if the fair value of the impaired loan is less than the recorded amount.  The Company did not incur losses for impairments on mortgage loans for the year ended December 31, 2007.  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 calculating the valuation allowance.

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

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

Investments in private equity limited partnerships are accounted for by the equity method of accounting.

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

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

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

The Company manages funds withheld assets related to certain reinsurance agreements.  These assets are primarily comprised of fixed maturity securities and mortgages and are accounted for consistent with the policies described above.  Investment income on funds withheld reinsurance portfolios is included as a component of net investment income.  See Note 7.

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, 2008, 2007 and 2006

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

DEFERRED POLICY ACQUISITION COSTS

Acquisition costs consist of commissions, underwriting and other costs that vary with and are primarily related to the production of new business.  Acquisition costs related to investment-type contracts, primarily deferred annuity, universal life and guaranteed investment contracts (“GICs”) 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 and unrealized investment gains and losses, life and variable annuity fees, surrender charges, interest credited, policyholder benefits and direct variable administrative expenses.

Estimating future gross profit is a complex process requiring considerable judgment and the forecasting of events into the future based on historical information and actuarial assumptions.  These assumptions are subject to an annual review process.  Changes in any of the assumptions that serve to increase or decrease the estimated future gross profits will cause the amortization of DAC to decrease or increase, respectively, in the current period.  During 2008 and 2007, changes in estimated future gross profits were driven by recent experience and expectations of future performance and are related mainly to changes in lapse assumptions, future growth rates of capital markets assumptions, and expense assumptions.

DAC amortization is reviewed regularly and adjusted retrospectively when the Company calculates the actual profits or losses and revises its estimate of future gross profits to be realized from investment-type contracts, including realized and unrealized gains and losses from investments.

Although recovery of DAC is not assured, the Company believes it is more likely than not that all of these costs will be recovered from future profits.  The amount of DAC considered recoverable, however, could be reduced in the near term if the future estimates of gross profits are reduced.

Prior to the Company’s adoption of SFAS No. 159 on January 1, 2008, DAC was adjusted for amounts relating to the change in unrealized investment gains and losses on available-for-sale fixed maturity securities that supported policyholder liabilities.  This adjustment, net of tax, was included with the change in net unrealized investment gains or losses that were recorded in accumulated other comprehensive loss.  Due to the adoption of SFAS No. 159, the net change in the market value of the securities supporting policyholder liabilities is recorded in the statement of operations in 2008, versus accumulated other comprehensive income in prior years. Accordingly, the effect of such market value changes on DAC is recorded in the statement of operations in 2008.

VALUE OF BUSINESS AND CUSTOMER RENEWALS ACQUIRED

VOBA represents the actuarially-determined present value of projected future gross profits from policies in force at the date of their acquisition.  This amount is amortized in proportion to the projected emergence of profits or premium income over the estimated life of the purchased block of business.

VOCRA represents the actuarially determined present value of projected future profits arising from the existing in-force business at the date of acquisition to the next policy renewal date.  This amount is amortized in proportion to the projected premium income over the period from the first renewal date to the end of the projected life of the policies.

Although recovery of VOBA and VOCRA is not assured, the Company believes it is more likely than not that all of these costs will be recovered from future profits.  The amount of VOBA and VOCRA considered recoverable, however, could be reduced in the near term if the future estimates of gross profits are reduced.

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, 2008, 2007 and 2006

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

GOODWILL

Goodwill represents the difference between the purchase price paid and the fair value of the net assets acquired in connection with the Company’s acquisition of Keyport Life Insurance Company (“Keyport”) on November 1, 2001 and the transfer of goodwill to SLNY based on a series of agreements between SLNY and Sun Life and Health Insurance Company (U.S.) (“SLHIC”), an affiliate, effective May 31, 2007.  Goodwill obtained in connection with the purchase of Keyport is allocated to the Wealth Management Segment.  Goodwill obtained through the agreement between SLHIC and SLNY is allocated to the Group Protection Segment in the Company’s subsidiary, SLNY.

In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets,” goodwill is tested for impairment on an annual basis.  The Company completed the required impairment tests of goodwill and indefinite-lived intangible assets during the second quarter of 2008 and concluded that these assets were not impaired.   Due to market declines in the fourth quarter of 2008, the Company performed additional analyses of goodwill and indefinite-lived intangible assets and concluded that the goodwill obtained in connection with the purchase of Keyport was impaired.  An estimate of the fair value of the reporting unit was calculated, based on an actuarial appraisal of the embedded value of the reporting unit.  This fair value was then allocated among the reporting unit’s tangible and intangible assets and its liabilities to determine the implied fair value of goodwill.  As a result, the Company recorded an impairment charge of $701.5 million in the fourth quarter, which represents the entire balance of goodwill obtained in connection with the purchase of Keyport.  The impairment charge is allocated to the Wealth Management Segment.

The Company also tested the goodwill maintained in the Group Protection Segment and concluded that it is not impaired at December 31, 2008.

OTHER ASSETS

Property, equipment, leasehold improvements and capitalized software costs that are included in other assets are stated at cost, less accumulated depreciation and amortization.  Depreciation and amortization are calculated using the straight-line or accelerated method over the estimated useful lives of the related assets, which generally range from 3 to 10 years.  Depreciation and amortization expenses were $1.3 million and $2.5 million for years ended December 31, 2008 and 2007, respectively.

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

Intangible assets, which are recorded in other assets, consist of state insurance licenses that are not subject to amortization, product rights that have a weighted-average useful life of 7 years, and the value of distribution, which was transferred to SLNY from SLHIC.  The value of distribution represents the present value of projected future profits arising from sales of new business by brokers with whom SLHIC had an existing distribution relationship contract.  This amount is amortized on a straight-line basis over 25 years, representing the period over which the Company expects to earn premiums from new sales stemming from the added distribution capacity.

POLICY LIABILITIES AND ACCRUALS

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

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, 2008, 2007 and 2006

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

POLICY LIABILITIES AND ACCRUALS (continued)

Policy reserves for annuity contracts include liabilities held for group pension and payout annuity payments and liabilities held for product guarantees on variable annuity products, such as guaranteed minimum death benefits.  Reserves for pension and payout annuity contracts are calculated using the best-estimate interest and decrement assumptions that were set at the time that loss recognition testing resulted in additional reserves.  The Company periodically reviews its policies for loss recognition based upon management’s best estimates.  From time to time the Company may recognize a loss on certain lines of business.  For the year ended December 31, 2007, additional reserves of $31.4 million were recorded as a reduction to income and additional reserves of $7.5 million were recorded as a component of other comprehensive loss. The Company did not record any adjustment to reserves related to loss recognition for the year ended December 31, 2008.

Reserves for guaranteed minimum death benefits and guaranteed minimum income benefits are calculated according to the methodology of American Institute of Certified Public Accountants (“AICPA”) Statement of Position  (“SOP”) 03-1, “Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts,” whereby the expected benefits provided by the guarantees are spread over the duration of the contract in proportion to the benefit assessments.

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

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

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

Contractholder deposit funds consist of policy values that accrue to the holders of universal life-type contracts and investment-related products such as deferred annuities, single premium whole life policies (“SPWL”), GICs and funding agreements.  The liabilities consist of deposits received plus interest credited, less accumulated policyholder charges, assessments, partial withdrawals and surrenders.  The liabilities are not reduced by surrender charges.

SUN LIFE 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, 2008, 2007 and 2006

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

REVENUE AND EXPENSES

Premiums for traditional individual life products are considered earned revenue when due.  Premiums related to group life, group stop loss, group dental and group disability insurance are recognized as earned revenue pro-rata over the contract period. The unexpired portion of these premiums is recorded as unearned premiums.  Revenue from universal life-type products and investment-related products includes charges for the cost of insurance (mortality), initiation and administration of the policy and surrender charges. Revenue is recognized when the charges are assessed except that any portion of an assessment that relates to services to be provided in future years is deferred and recognized over the period during which the services are provided.

Benefits and expenses related to traditional life, annuity and disability contracts, including group policies, are recognized when incurred in a manner designed to match them with related premium revenue and to spread income recognition over the expected life of the policy.  For universal life-type and investment-type contracts, expenses include interest credited to policyholders’ accounts and death benefits in excess of account values, which are recognized as incurred.

Fees from investment advisory services are recognized as revenues when the services are provided.

INCOME TAXES

The Company accounts for current and deferred income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes,” and recognizes reserves for income taxes in accordance with FASB Interpretation Number (“FIN”) 48, “Accounting for Uncertainty in Income Taxes.”

Under the applicable asset and liability method for recording deferred income taxes, deferred taxes are recognized when assets and liabilities have different values for financial statement and tax reporting purposes, using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company’s differences between the bases of assets and liabilities used for financial statement versus tax reporting primarily result from policy reserves, policy acquisition expenses and unrealized gains and losses on investments.

Also as prescribed by SFAS No. 109, the Company performs the required recoverability test in terms of its ability to realize its recorded net deferred tax assets.  In making this determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations.  Using this available evidence, the Company performs an assessment of the future recoverability of its net deferred tax assets and records a valuation allowance in instances when it is not more likely than not that the deferred tax assets will be realized.

For the years ended December 31, 2008, 2007 and 2006, the Company participated in a consolidated federal income tax return with the Parent and other affiliates. For the year ended December 31, 2008, the Company and its subsidiaries were part of the consolidated federal income tax return.  For the year ended December 31, 2007, INDY and Sun Life Vermont were included as part of the consolidated federal income tax return, but SLNY filed stand-alone federal income tax returns.  For the year ended December 31, 2006, the Company’s subsidiaries INDY and SLNY filed stand-alone federal income tax returns.

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, 2008, 2007 and 2006

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 variable benefits.  Contracts for which funds are invested in separate accounts include variable life insurance and individual and group qualified and non-qualified variable annuity contracts.  Investment income and changes in mutual fund asset values are allocated to policyholders and therefore do not affect the operating results of the Company.  Assets held in the separate accounts are carried at fair value and the investment risk of such securities is retained by the contractholder.  The Company earns separate account fees for providing administrative services and bearing the mortality risks related to these contracts.  The activity of the separate accounts is not reflected in the consolidated financial statements except for:  (1) the fees the Company receives, which are assessed periodically and recognized as revenue when assessed; and (2) the activity related to the guaranteed minimum death benefit (“GMDB”), guaranteed minimum income benefit (“GMIB”), guaranteed minimum accumulation benefit (“GMAB”) and guaranteed minimum withdrawal benefit (“GMWB”) which is reflected in the Company’s consolidated financial statements and accompanying notes.

ACCOUNTING PRONOUNCEMENTS

New and Adopted Accounting Pronouncements

In January 2009, the FASB issued FASB Staff Position (“FSP”) No. EITF 99-20-1, “Amendments to the Impairment Guidance of EITF Issue No. 99-20.”  FSP No. EITF 99-20-1 amends EITF 99-20 to achieve more consistent determination of whether an other-than-temporary impairment has occurred.  This guidance also retains and emphasizes the objective of an other-than-temporary impairment assessment and the related disclosure requirements.  FSP No. EITF 99-20-1 is effective for all interim and annual reporting periods after December 15, 2008.  The Company adopted FSP No. EITF 99-20-1 on December 31, 2008 and the adoption did not have a material impact on the Company's financial position or results of operations.

In December 2008, the FASB issued FSP No. FAS 140-4 and FIN 46(R)-8, “Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities.”  This FSP amends FASB Statement No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” to require public entities to provide additional disclosures about transfers of financial assets.  It also amends FIN 46(R) to require public enterprises to provide additional disclosures about their involvement with VIEs.  The disclosures required by FSP No. FAS 140-4 and FIN 46(R)-8 are intended to provide greater transparency to financial statement users about a transferor's continuing involvement with transferred financial assets and an enterprise's involvement with VIEs.  FSP No. FAS 140-1 and FIN 46(R)-8 is effective for all interim and annual reporting periods after December 15, 2008.  The Company adopted the FSP on December 31, 2008.  The FSP only requires additional disclosure and had no effect on the Company's consolidated financial position or results of operations. The new disclosure is included previously in Note 1.

In September 2008, the FASB issued FSP No. FAS 133-1 and FIN 45-4, “Disclosures about Credit Derivatives and Certain Guarantees: An amendment of FASB Statement No. 133 and FASB Interpretation No. 45.”  FSP No. FAS 133-1 and FIN 45-4 amends SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” to require additional disclosures by sellers of credit derivatives, including derivatives embedded in a hybrid instrument.  This FSP also amends FIN No. 45, “Guarantor’s Accounting and Disclosure Requirement for Guarantees, Including Indirect Guarantees of Indebtedness of Others” to require an additional disclosure about the current status of the payment/performance risk of a guarantee.  FSP No. FAS 133-1 and FIN 45-4 is effective for all interim and annual reporting periods after November 15, 2008.  The Company adopted the FSP on December 31, 2008.  The FSP only requires additional disclosures about credit derivatives and guarantees and had no effect on the Company's consolidated financial position or results of operations.  The new disclosure is included previously in Note 1.

In February 2007, the FASB issued SFAS No. 159 which permits entities to choose to measure many financial instruments and certain other items at fair value (the “FV option”).  The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reporting earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions.

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, 2008, 2007 and 2006

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

New and Adopted Accounting Pronouncements (continued)

SFAS No. 159 was adopted by the Company on January 1, 2008, and the FV option was elected for all available-for-sale fixed maturity securities attributable to certain life, health and annuity products.  At December 31, 2007, such available-for-sale securities had a market value of $10.7 billion and an amortized cost of $11.1 billion, and are now classified as trading securities.  The adoption of the FV option does not relieve the Company from its obligation to monitor those available-for-sale securities that were in an unrealized loss position at December 31, 2007, which the Company does through its current portfolio monitoring process.

The FV option adoption resulted in a cumulative-effect adjustment to the Company’s December 31, 2007, balance of retained earnings and accumulated other comprehensive income of $88.4 million related to the unrealized loss on investments, net of DAC, VOBA, policyholder liabilities, and tax effects.  See Note 5 for further disclosure related to the adoption of SFAS No. 159.

In September 2006, the FASB issued SFAS No. 157 which defines fair value, establishes a framework for measuring fair value under GAAP, establishes a fair value hierarchy based on the quality of inputs used to measure fair value and expands disclosures about fair value measurements.  SFAS No. 157 does not change existing guidance as to whether or not an instrument is carried at fair value.

SFAS No. 157 clarifies that fair value is an exit price, representing the amount that would be exchanged to sell an asset or transfer a liability in an orderly transaction between market participants.  The statement establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels (i.e., Level 1, 2 and 3).  Level 1 inputs are observable inputs that reflect quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date.  Level 2 inputs are observable inputs, other than quoted prices included in Level 1, for the asset or liability or prices for similar assets and liabilities.  Level 3 inputs are unobservable inputs reflecting the reporting entity’s estimates of the assumptions that market participants would use in pricing the asset or liability.  SFAS No. 157 requires that a fair value measurement technique include an adjustment for risks inherent in a particular valuation technique (such as a pricing model) and/or the risks inherent in the inputs to the model, if market participants would also include such an adjustment.  Quantitative and qualitative disclosures will focus on the inputs used to measure fair value for both recurring and non-recurring fair value measurements and the effects of the measurements in the financial statements.

The provisions of SFAS No. 157 are effective for fiscal years beginning after November 15, 2007, and are to be applied prospectively.  Effective January 1, 2008, the Company adopted SFAS No. 157 and applied the provisions of the statement prospectively to assets and liabilities measured and disclosed at fair value.

In October 2008, the FASB issued FSP No. SFAS 157-3, “Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active”.  FSP No. SFAS 157-3 clarifies the application of SFAS No. 157 in a market that is not active and provides an example to illustrate key considerations in the determination of the fair value of a financial asset when the market for that asset is not active.  FSP No. SFAS 157-3 was effective upon issuance and did not have an impact on the Company’s consolidated financial statements.

See Note 5 for further disclosure related to the adoption of SFAS No. 157.

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, 2008, 2007 and 2006

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

New and Adopted Accounting Pronouncements (continued)

In September 2006, the FASB issued SFAS No. 158, “Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans,” which amends SFAS No. 87, “Employers’ Accounting for Pensions,” and SFAS No. 106, “Employers' Accounting for Postretirement Benefits Other Than Pensions,” to require recognition of the overfunded or underfunded status of pension and other postretirement benefit plans on the balance sheet.  Under SFAS No. 158, gains and losses, prior service costs and credits, and any remaining transition amounts under SFAS No. 87 and SFAS No. 106 that have not yet been recognized through net periodic benefit cost will be recognized in accumulated other comprehensive income, net of tax effects, until they are amortized as a component of net periodic cost.  The measurement date is required to be the company's fiscal year end.  SFAS No. 158 is effective for publicly-held companies for fiscal years ending after December 15, 2006, except for the measurement date provisions, which are effective for fiscal years ending after December 15, 2008.  The Company adopted the balance sheet recognition provisions of SFAS No. 158 at December 31, 2006 and adopted the year-end measurement date provisions effective January 1, 2008.  The adoption of the year-end measurement date provisions resulted in a net of tax cumulative-effect decrease of $0.3 million to the Company’s December 31, 2007 accumulated other comprehensive income.

In June 2006, the FASB issued FIN 48, which became effective for fiscal years beginning after December 15, 2006.  FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, and provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.  The Company adopted FIN 48 on January 1, 2007, and recognized a decrease of $5.2 million in the liability for unrecognized tax benefits (“UTBs”) and related net interest, and an offsetting increase in its January 1, 2007 balance of retained earnings.  The Company elected on a prospective basis, with the adoption of FIN 48, to recognize interest and penalties accrued related to UTBs in interest expense.

In March 2006, the FASB issued SFAS No. 156, “Accounting for Servicing of Financial Assets-an amendment of FASB Statement No. 140.”  SFAS No. 156 requires all separately recognized servicing assets and liabilities to be initially measured at fair value and permits entities to choose to either subsequently measure servicing rights at fair value and report changes in fair value in earnings, or amortize servicing rights in proportion to, and over, the estimated net servicing income or loss, and assess the rights for impairment or the need for an increased obligation.  The option to subsequently measure servicing rights at fair value allows entities which utilize derivative instruments to hedge their servicing rights to account for such hedging relationships at fair value and avoid the complications of hedge accounting under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.”  SFAS No. 156 was effective for fiscal years beginning after September 15, 2006.  The adoption of this statement did not have a material impact on the Company’s financial position or results of operations.

In February 2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid Financial Instruments-an amendment of FASB Statements No. 133 and 140.”  This statement amended SFAS No. 133 and SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities-a replacement of FASB Statement No. 125,” and resolved issues addressed in SFAS No. 133 Implementation Issue No. D1, “Application of Statement 133 to Beneficial Interests in Securitized Financial Assets.”  The Company began applying SFAS No. 155 to all financial instruments acquired, issued or subject to a remeasurement event beginning January 1, 2007.  The adoption of this statement did not have a material impact on the Company’s financial position or results of operations.

In September 2005, the AICPA issued SOP 05-1, “Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts”.  SOP 05-1 provides guidance on accounting by insurance enterprises for DAC on internal replacements of insurance and investment contracts.  The adoption of SOP 05-1 on January 1, 2007 did not have a material impact on the Company’s consolidated financial position and results of operations.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2008, 2007 and 2006

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

Accounting Standards Not Yet Adopted

In December of 2008, the FASB issued FSP FAS 132(R)-1 “Employers’ Disclosures about Postretirement Benefit Plan Assets”, which amends Statement 132(R) to require more detailed disclosure about employers’ plan assets, including employers’ investment strategies, major categories of plan assets, concentrations of risk within plan assets and valuation techniques used to measure the fair value of plan assets.  This FSP is effective for fiscal years ending after December 15, 2009.

In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts – an interpretation of FASB Statement No. 60.”  The scope of SFAS No. 163 is limited to financial guarantee insurance (and reinsurance) contracts issued by enterprises that are included within the scope of SFAS No. 60, “Accounting and Reporting by Insurance Enterprises,” and that are not accounted for as derivative instruments.  SFAS No. 163 excludes from its scope insurance contracts that are similar to financial guarantee insurance, such as mortgage guaranty insurance and credit insurance on trade receivables.  SFAS No. 163 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years, except for certain disclosures about the insurance enterprise’s risk management activities.  Except for certain disclosures, earlier application is not permitted.  The Company does not have any contracts with guarantees within the scope of this standard.  The Company’s adoption of SFAS No. 163 on January 1, 2009 will have no impact on its consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of SFAS No. 133.”  This statement amends and expands disclosures about an entity’s derivative and hedging activities with the intent to provide users of financial statements with an enhanced understanding of (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under SFAS No. 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows.  SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged.  SFAS No. 161 encourages, but does not require, comparative disclosures.  The Company will adopt SFAS No. 161 on January 1, 2009.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements.”  This statement amends Accounting Research Bulletin No. 51, “Consolidated Financial Statements” (“ARB 51”). Noncontrolling interest refers to the minority interest portion of the equity of a subsidiary that is not attributable directly or indirectly to a parent. SFAS No. 160 establishes accounting and reporting standards that require for-profit entities that prepare consolidated financial statements to (a) present noncontrolling interests as a component of equity, separate from the parent’s equity, (b) separately present the amount of consolidated net income attributable to noncontrolling interests in the statement of operations, (c) consistently account for changes in a parent’s ownership interests in a subsidiary in which the parent entity has a controlling financial interest as equity transactions, (d) require an entity to measure at fair value its remaining interest in a subsidiary that is deconsolidated, and (e) require an entity to provide sufficient disclosures that identify and clearly distinguish between interests of the parent and interests of noncontrolling owners.  SFAS No. 160 applies to all for-profit entities that prepare consolidated financial statements, and affects those for-profit entities that have outstanding noncontrolling interests in one or more subsidiaries or that deconsolidate a subsidiary.  SFAS No. 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008, with earlier adoption prohibited.  The Company does not have any noncontrolling interests within the scope of this guidance; therefore, the adoption of SFAS No. 160 on January 1, 2009 will have no impact on its 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, 2008, 2007 and 2006

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

Accounting Standards Not Yet Adopted (continued)

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS No. 141(R)”). This statement replaces SFAS No. 141 and establishes the principles and requirements for how the acquirer in a business combination (a) measures and recognizes the identifiable assets acquired, liabilities assumed, and any noncontrolling interests in the acquired entity, (b) measures and recognizes positive goodwill acquired or a gain from bargain purchase (negative goodwill), and (c) determines the disclosure information that is useful to users of financial statements in evaluating the nature and financial effects of the business combination.  Some of the significant changes to the existing accounting guidance on business combinations made by SFAS No. 141(R) include the following:

• Most of the identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquired entity shall be measured at their acquisition-date fair values rather than SFAS No. 141’s requirement to allocate the cost of an acquisition to individual assets acquired and liabilities assumed based on their estimated fair values;

• Acquisition-related costs incurred by the acquirer shall be expensed in the periods in which the costs are incurred rather than included in the cost of the acquired entity;

• Goodwill shall be measured as the excess of the consideration transferred, including the fair value of any contingent consideration, plus the fair value of any noncontrolling interest in the acquired entity, over the fair values of the acquired identifiable net assets, rather than measured as the excess of the cost of the acquired entity over the estimated fair values of the acquired identifiable net assets;

• Contractual pre-acquisition contingencies are to be recognized at their acquisition date fair values and noncontractual pre-acquisition contingencies are to be recognized at their acquisition date fair values only if it is more likely than not that the contingency gives rise to an asset or liability, whereas SFAS No. 141 generally permits the deferred recognition of pre-acquisition contingencies until the recognition criteria of SFAS No. 5, “Accounting for Contingencies,” are met; and

• Contingent consideration shall be recognized at the acquisition date rather than when the contingency is resolved and consideration is issued or becomes issuable.

SFAS No. 141(R) is effective for, and shall be applied prospectively to, business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008, with earlier adoption prohibited. Assets and liabilities that arose from business combinations with acquisition dates prior to the SFAS No. 141(R) effective date shall not be adjusted upon adoption of SFAS No. 141(R) with certain exceptions for acquired deferred tax assets and acquired income tax positions. The Company will adopt SFAS No. 141(R) on January 1, 2009 and will apply this guidance to future business combinations as appropriate.

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, 2008, 2007 and 2006

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

Accounting Standards Not Yet Adopted (continued)

In June 2007, the AICPA issued SOP 07-1, “Clarification of the Scope of the Audit and Accounting Guide Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies.”  SOP 07-1 provides guidance for determining whether an entity is within the scope of the AICPA Audit and Accounting Guide Investment Companies (“the Guide”).  This statement also addresses whether the specialized industry accounting principles of the Guide should be retained by a parent company in consolidation or by an investor that has the ability to exercise significant influence over the investment company and applies the equity method of accounting to its investment in the entity.  In addition, SOP 07-1 includes certain disclosure requirements for parent companies and equity method investors in investment companies that retain investment company accounting in the parent company’s consolidated financial statements or the financial statements of an equity method investor.  SOP 07-1 is effective for fiscal years beginning on or after December 15, 2007, with earlier application encouraged; however, in November 2007, the FASB decided to (1) delay indefinitely the effective date and (2) prohibit adoption by an entity that has not early adopted SOP 07-1.  The Company did not early adopt SOP 07-1.  SOP 07-1 as currently issued is not expected to have an impact on the Company’s consolidated financial position or results of operations.

2. MERGERS, ACQUISITIONS AND DISPOSITIONS

Effective September 27, 2007, the Company dissolved Sun life of Canada (U.S.) Holdings General Partner, LLC (the “General Partner”).  The General Partner was the sole general partner in Sun Life of Canada (U.S.) Limited Partnership (the “Partnership”) and, as a result, the Partnership had been consolidated with the results of the Company.  The Partnership was organized to purchase subordinated debentures issued by the Parent and to issue partnership capital securities to an affiliated business trust, Sun Life of Canada (U.S.) Capital Trust I (the “Capital Trust”).  Effective May 6, 2007, the Parent redeemed $600 million of 8.526% subordinated debentures issued to the Partnership and paid the Partnership an early redemption premium of $25.6 million.  Also effective May 6, 2007, the Partnership redeemed $600 million of the 8.526% partnership capital securities issued to the Capital Trust and paid a premium of $25.6 million to the Capital Trust.  The redemption had no impact on the Company’s net income.  The Partnership was dissolved effective September 27, 2007.

Effective May 31, 2007, Sun Life Financial completed its acquisition of Genworth Financial, Inc.'s (“Genworth’s”) Employee Benefits Group business (“EBG”).  Also effective May 31, 2007, SLNY entered into a series of agreements with SLHIC, one of the acquired companies (formerly named Genworth Life and Health Insurance Company), through which the New York issued business of SLHIC was transferred to SLNY.  These agreements include a 100% coinsurance agreement for all existing and future new business issued in New York, a renewal rights agreement under which SLNY has exclusive rights to renew in-force business assumed under the reinsurance agreement and an administrative service agreement under which SLNY has agreed to assume direct responsibility for all sales and administration of existing and new business issued in New York (collectively, “the SLHIC to SLNY asset transfer”).  These agreements, in accordance with SFAS No. 141, “Business Combinations,” were treated as a transfer of net assets between entities under common control.  SLNY paid $40 million of total consideration to SLHIC.  SLHIC transferred assets at carrying value of approximately $72 million, including $38.9 million of goodwill and other intangibles, as well as policyholder and other liabilities of approximately $32 million to SLNY.  The Group Protection Segment of the Company reflects a significant increase in business as a result of these agreements. These agreements have allowed the Company to expand its product offerings to include group dental insurance.

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, 2008, 2007 and 2006

2. MERGERS, ACQUISITIONS AND DISPOSITIONS (CONTINUED)

As part of the SLHIC to SLNY asset transfer, SLNY received certain intangible assets totaling $31.3 million.  These include the value of distribution, the value of business, and the value of customer renewals acquired.  The value of distribution acquired of $7.5 million is subject to amortization on a straight line basis over its projected economic life of 25 years.  The value of business acquired of $7.6 million is subject to amortization based up on expected premium income over the period from acquisition to the first customer renewal, generally not more than two years.  The value of customer renewals acquired of $16.2 million is subject to amortization based upon expected premium income over the projected life of the in-force business acquired, which is 20 years.  The Company recorded amortization for these intangible assets for the periods identified as follows:

	Value of Distribution		VOBA		VOCRA
Year ended December 31, 2008	$	299	$	782	$	4,627
Year ended December 31, 2007	$	149	$	5,928	$	1,854

3. SIGNIFICANT TRANSACTIONS WITH AFFILIATES

Below is a summary of transactions with affiliates not included in these financial statements.

Reinsurance Related Transactions

As more fully described in Note 9, the Company is party to several reinsurance transactions with SLOC and other affiliates.

On October 31, 2007, the Company subscribed to $0.25 million worth of shares of, and contributed $150 million of paid-in capital to, a newly formed wholly-owned subsidiary, Sun Life Vermont.  Sun Life Vermont is a Vermont-domiciled special purpose financial captive insurance company which, effective November 8, 2007, entered into a reinsurance agreement with SLOC, the Company’s affiliate, under which the Sun Life Vermont assumed, and will assume, the risks of certain UL policies issued by SLOC prior to December 31, 2008.  This agreement is described more fully in Note 9.  A long-term financing arrangement has been established with a financial institution (the “Lender”) that will enable Sun Life Vermont to fund a portion of its obligations under the reinsurance agreement with SLOC.  Under this arrangement, Sun Life Vermont issued, in 2008 and 2007, floating rate surplus notes of $115 million and $1 billion, respectively, (the “Surplus Notes”) to a special-purpose entity, Structured Asset Repackage Company, 2007-SUNAXXX LLC (“SUNAXXX”), affiliated with the Lender.  Pursuant to an agreement between the Lender and Sun Life Assurance Company of Canada – U.S Operations Holdings, Inc. (“SLC – U.S. Ops Holdings”), SLC – U.S. Ops Holdings bears the ultimate obligation to repay the Lender and, as such, will consolidate SUNAXXX in accordance with FIN 46(R).  Sun Life Vermont has agreed to reimburse SLC – U.S. Ops Holdings for certain costs incurred in connection with the issuance of the Surplus Notes.  For the years ended December 31, 2008 and 2007, the amount of interest expense incurred by Sun Life Vermont was $46.5 million and $8.6 million, respectively.

Effective December 31, 2007, SLNY entered into a reinsurance agreement with SLOC under which SLOC will fund a portion of the statutory reserves required by New York Regulation 147, which is substantially similar to Actuarial Guideline 38 (“AXXX reserves”), as adopted by the National Association of Insurance Commissioners (“the NAIC”), attributable to certain individual universal life (“UL”) policies sold by SLNY.  Under this agreement, SLNY ceded, and SLOC assumed, on a funds withheld 90% coinsurance basis, certain in-force policies at December 31, 2007.  Future new business also will be reinsured under this agreement.

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, 2008, 2007 and 2006

3. SIGNIFICANT TRANSACTIONS WITH AFFILIATES (CONTINUED)

Capital Transactions

On September 30, 2008 and November 13, 2008, the Company received capital contributions of $300.0 and $425.0 million, respectively, from the Parent.  The $725.0 million cash contributions were recorded as additional paid-in capital and were made to ensure the Company continues to exceed certain capital requirements, as prescribed by the NAIC.  The NAIC has established regulations that provide minimum capitalization requirements based on risk-based capital formulas for life companies.  The risk-based capital formula for life companies establishes capital requirements relating to insurance, business, asset and interest rate risks, including equity, interest rate and expense recovery risks associated with variable annuities that contain death benefits or certain living benefits.

In 2006, the Company declared and paid $300.0 million in a cash dividend to the Parent. The Company did not declare or pay a dividend to the Parent in 2008 or 2007.

Debt Transactions

In 2002, the Company issued two promissory notes with a combined total of $460 million to Sun Life (Hungary) Group Financing Limited Company (“Sun Life (Hungary) LLC”).  The proceeds of the notes were used to purchase fixed rate government and corporate bonds.  On May 24, 2007, the Company redeemed one of the notes with a principal balance of $380 million and paid $388.7 million to Sun Life (Hungary) LLC, including $8.7 million in accrued interest.  On December 29,2008, the Company redeemed in part, $62.0 million of the $80 million remaining note and paid $64.3 million, including $2.3 million in accrued interest, to Sun Life (Hungary) LLC.  At December 31, 2008 and 2007, the Company had $18 million and $80.0 million, respectively, in promissory notes issued to Sun Life (Hungary) LLC.  The Company pays interest semi-annually to Sun Life (Hungary) LLC.  Related to these promissory notes, the Company incurred interest expense of $4.5 million, $13.3 million and $26.5 million for the years ended December 31, 2008, 2007 and 2006, respectively.

On July 17, 2008, the Company issued a $60 million promissory note to Sun Life (Hungary) LLC which will mature on September 27, 2011.  The Company pays interest quarterly to Sun Life (Hungary) LLC. Total interest incurred was $1.3 million for the year ended December 31, 2008. The Company used the proceeds of the note for general corporate purposes. On December 29, 2008, the Company redeemed the note and paid $60.8 million to Sun Life (Hungary) LLC, including $0.8 million in accrued interest.

At December 31, 2008 and 2007, the Company had $565 million of surplus notes issued to Sun Life Financial (U.S.) Finance, Inc.  The Company expensed $42.6 million for interest on these surplus notes for each of the years ended December 31, 2008, 2007 and 2006.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2008, 2007 and 2006

3. SIGNIFICANT TRANSACTIONS WITH AFFILIATES (CONTINUED

Debt Transactions (continued)

Effective September 27, 2007, the Company dissolved the General Partner.  The General Partner was the sole general partner in the Partnership and, as a result, the Partnership had been consolidated with the results of the Company.  The Partnership was organized to purchase subordinated debentures issued by the Parent and to issue partnership capital securities to an affiliated business trust, the Capital Trust.  The Partnership was dissolved effective September 27, 2007.

Effective May 6, 2007, the Parent redeemed $600 million of 8.526% subordinated debentures issued to the Partnership and paid the Partnership an early redemption premium of $25.6 million.  Also effective May 6, 2007, the Partnership redeemed $600 million of the 8.526% partnership capital securities issued to the Capital Trust and paid a premium of $25.6 million to the Capital Trust.  The redemption had no impact on the Company’s net income.  Related to these partnership capital securities, the Company incurred interest expense of $17.8 million and $51.2 million for the years ended December 31, 2007 and 2006, respectively.  The Company also earned interest income, through the Partnership, $17.8 million and $51.2 million for the years ended December 31, 2007 and 2006, respectively.

Institutional Investments Contracts

On September 12, 2006, the Company entered into a Terms Agreement (the “2006-B Terms Agreement”) with its affiliates Sun Life Financial Global Funding III, L.P. (the “Issuer III”), Sun Life Financial Global Funding III, U.L.C. (the “ULC III”) and Sun Life Financial Global Funding III, L.L.C. (the “LLC III”), and with Citigroup Global Markets, Inc., Deutsche Bank Securities Inc., Morgan Stanley & Co. Incorporated, Banc of America Securities LLC, Credit Suisse Securities (USA) LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, RBC Capital Markets Corporation and Wachovia Capital Markets (each, an “Initial Purchaser” and collectively, the “2006-B Initial Purchasers”), in connection with the offer and sale by the Issuer III of $750 million of Series 2006-1 Floating Rate Notes due 2013 (“2006-B Notes”).  On September 21, 2006, the Company entered into another Terms Agreement (together with the original 2006-B Terms Agreement, the “2006-B Terms Agreements”) with the same parties as the original 2006-B Terms Agreement in connection with the offer and sale by the Issuer III of a second tranche of $150 million of 2006-B Notes.  The payment obligations of the Issuer III for the full $900 million of 2006-B Notes are unconditionally guaranteed by the LLC III pursuant to a guarantee (the “2006-B Secured Guarantee”) dated as of September 19, 2006, and the obligations of the LLC III under the 2006-B Secured Guarantee are secured by two floating rate funding agreements issued by the Company to the LLC III, one for $750 million issued on September 19, 2006 and another for $150 million issued on September 29, 2006.  On April 7, 2008, the Company issued additional floating rate funding agreement totaling $5.8 million to LLC III. Total interest credited for the funding agreements was $36.5 million, $51.6 million and $14.9 million for the years ended December 31, 2008, 2007 and 2006, respectively.

The 2006-B Terms Agreements incorporate by reference the provisions of a Purchase Agreement dated as of September 5, 2006 by and among the Issuer III, the ULC III, the LLC III, the Company and all of the 2006-B Initial Purchasers.  Pursuant to these incorporated provisions, the Company has agreed, among other things, to indemnify each 2006 Initial Purchaser against certain securities law liabilities related to the offering of the 2006-B Notes.  In addition, the Company issued a $100 million floating rate demand note payable to the LLC III on September 19, 2006.  The Company expensed $4.0 million, $5.8 million and $1.7 million for interest on this demand note for the years ended December 31, 2008, 2007 and 2006, respectively.

The Company has entered into an interest rate swap agreement with the LLC III with an aggregate notional amount of $900 million that effectively converts the floating rate payment obligations under the funding agreements to fixed rate obligations.

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, 2008, 2007 and 2006

3. SIGNIFICANT TRANSACTIONS WITH AFFILIATES (CONTINUED)

Institutional Investments Contracts (continued)

On May 17, 2006, the Company entered into a Terms Agreement (the “2006-A Terms Agreement”) with its affiliates Sun Life Financial Global Funding II, L.P. (the “Issuer II”), Sun Life Financial Global Funding II, U.L.C. (the “ULC II”) and Sun Life Financial Global Funding II, L.L.C. (the “LLC II”), and with Citigroup Global Markets, Inc. (“Citigroup”), Morgan Stanley & Co. Incorporated (“Morgan Stanley”), Banc of America Securities LLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and RBC Capital Markets Corporation (collectively, with Citigroup and Morgan Stanley, the “2006-A Initial Purchasers”), in connection with the offer and sale by the Issuer II of $900 million of Series 2006-1 Floating Rate Notes due 2011 (the “2006-A Notes”).  The payment obligations of the Issuer II are unconditionally guaranteed by the LLC II pursuant to a guarantee (the “2006-A Secured Guarantee”), and the obligations of the LLC II under the 2006-A Secured Guarantee are secured by a $900 million floating rate funding agreement issued by the Company to the LLC II.  The 2006-A Terms Agreement incorporates by reference the provisions of a Purchase Agreement dated as of May 15, 2006 by and among the Issuer II, the ULC II, the LLC II, the Company and the 2006-A Initial Purchasers.  Pursuant to these incorporated provisions, the Company has agreed, among other things, to indemnify each 2006 Initial Purchaser against certain securities law liabilities related to the offering of the 2006-A Notes.  On April 7, 2008, the Company issued additional floating rate funding agreement totaling $7.5 million to LLC II. Total interest credited for the funding agreement was $35.7 million, $50.8 million and $30.7 million for the years ended December 31, 2008, 2007 and 2006, respectively.

On May 24, 2006, the Company also issued a $100 million floating rate demand note payable to the LLC II.  The Company expensed $4.0 million, $5.7 million and $3.4 million for interest on this demand note for the years ended December 31, 2008, 2007 and 2006, respectively.

The Company has entered into an interest rate swap agreement with the LLC II with an aggregate notional amount of $900 million that effectively converts the floating rate payment obligations under the funding agreement to fixed rate obligations.

On June 3, 2005 and June 29, 2005, the Company issued two floating rate funding agreements with a combined total of $900 million to Sun Life Financial Global Funding, L.L.C. (“LLC”) due 2010.  On April 7, 2008, the Company issued an additional floating rate funding agreement totaling $10 million to LLC.  Total interest credited for these funding agreements was $36.6 million, $51.6 million and $49.5 million for the years ended December 31, 2008, 2007 and 2006, respectively.  On June 10, 2005, the Company also issued a $100.0 million floating rate demand note payable to LLC.  For interest on this demand note, the Company expensed $4.0 million, $5.8 million and $5.5 million for the years ended December 31, 2008, 2007 and 2006, respectively.

The Company has entered into an interest rate swap agreement with LLC with an aggregate notional amount of $900 million that effectively converts the floating rate payment obligations under the funding agreements to fixed rate obligations.

 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, 2008, 2007 and 2006

3. SIGNIFICANT TRANSACTIONS WITH AFFILIATES (CONTINUED)

Institutional Investments Contracts (continued)

The following table lists the details of notes due to affiliates at December 31, 2008:

Payees	Type	Rate	Maturity	Principal	Interest Expense
Sun Life Financial (U.S.) Finance, Inc.	Surplus	8.625%	11/06/2027	$     250,000	$      21,563
Sun Life Financial (U.S.) Finance, Inc.	Surplus	6.150%	12/15/2027	150,000	9,225
Sun Life Financial (U.S.) Finance, Inc.	Surplus	7.250%	12/15/2015	150,000	10,875
Sun Life Financial (U.S.) Finance, Inc.	Surplus	6.125%	12/15/2015	7,500	459
Sun Life Financial (U.S.) Finance, Inc.	Surplus	6.150%	12/15/2027	7,500	461
Structured Asset Repackage Company, 2007- SUNAXXX LLC	Surplus	LIBOR + 0.89%	11/8/2037	1,115,000	46,492
Sun Life (Hungary) Group Financing Limited Company	Promissory	5.710%	06/30/2012	18,000	6
Sun Life Financial Global Funding, L.L.C.	Demand	LIBOR + 0.35%	07/6/2010	100,000	4,055
Sun Life Financial Global Funding II, L.L.C.	Demand	LIBOR + 0.26%	07/6/2011	100,000	3,963
Sun Life Financial Global Funding III, L.L.C.	Demand	LIBOR + 0.35%	10/6/2013	100,000	4,055
				$  1,998,000	$     101,154

The following table lists the details of notes due to affiliates at December 31, 2007:

Payees	Type	Rate	Maturity	Principal	Interest Expense
Sun Life Financial (U.S.) Finance, Inc.	Surplus	8.625%	11/06/2027	$     250,000	$        21,563
Sun Life Financial (U.S.) Finance, Inc.	Surplus	6.150%	12/15/2027	150,000	9,225
Sun Life Financial (U.S.) Finance, Inc.	Surplus	7.250%	12/15/2015	150,000	10,875
Sun Life Financial (U.S.) Finance, Inc.	Surplus	6.125%	12/15/2015	7,500	459
Sun Life Financial (U.S.) Finance, Inc.	Surplus	6.150%	12/15/2027	7,500	461
Structured Asset Repackage Company, 2007- SUNAXXX LLC	Surplus	LIBOR + 0.89%	11/8/2037	1,000,000	8,642
Sun Life (Hungary) Group Financing Limited Company	Promissory	5.710%	06/30/2012	80,000	4,568
Sun Life Financial Global Funding I, L.L.C.	Demand	LIBOR + 0.35%	07/6/2010	100,000	5,754
Sun Life Financial Global Funding II, L.L.C.	Demand	LIBOR + 0.26%	07/6/2011	100,000	5,663
Sun Life Financial Global Funding III, L.L.C.	Demand	LIBOR + 0.35%	10/6/2013	100,000	5,754
				$  1,945,000	$        72,964

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, 2008, 2007 and 2006

3. SIGNIFICANT TRANSACTIONS WITH AFFILIATES (CONTINUED)

Administrative service agreements, rent and other

The Company and certain of its subsidiaries have administrative 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 $9.9 million, $14.2 million and $9.4 million for the years ended December 31, 2008, 2007 and 2006, respectively.

In accordance with an administrative service agreement between the Company and SLOC, the Company provides personnel and certain services to SLOC, as requested.  Reimbursements under this agreement, which are recorded as a reduction of other operating expenses, were approximately $316.7 million, $301.0 million and $212.4 million for the years ended December 31, 2008, 2007 and 2006, respectively.

The Company has an administrative service agreement with Sun Life Information Services Canada, Inc. (“SLISC”), under which SLISC provides administrative and support services to the Company in connection with the Company’s insurance and annuity business.  Expenses under this agreement amounted to approximately $17.6 million, $16.9 million and $10.7 million for the years ended December 31, 2008, 2007 and 2006, respectively.

The Company has a service agreement with Sun Life Information Services Ireland Limited (“SLISIL”), under which SLISIL provides various insurance related and information systems services to the Company.  Expenses under this agreement amounted to approximately $24.3 million, $26.0 million and $19.6 million for the years ended December 31, 2008, 2007 and 2006, respectively

The Company has an administrative services agreement with SLC - U.S. Ops Holdings, under which the Company provides administrative and investor services with respect to certain open-end management investment companies for which an affiliate, Massachusetts Financial Services Company (“MFS”), serves as the investment adviser, and which are offered to certain of the Company’s separate accounts established in connection with the variable annuity contracts issued by the Company.  Amounts received under this agreement amounted to approximately $17.2 million, $22.3 million and $22.6 million for the years ended December 31, 2008, 2007 and 2006, respectively.

The Company has an administrative services agreement with Sun Capital Advisers LLC (“SCA”), a registered investment adviser, under which the Company provides administrative services with respect to certain open-end management investment companies for which SCA serves as the investment adviser, and which are offered to certain of the Company’s separate accounts established in connection with the variable contracts issued by the Company.  Amounts received under this agreement amounted to approximately $2.1 million, $1.9 million and $1.5 million for the years ended December 31, 2008, 2007 and 2006, respectively. The Company paid $18.6 million, $15.9 million and $14.9 million for the years ended December 31, 2008, 2007 and 2006, respectively, in investment management services fees to SCA.

Effective November 7, 2007, Independent Financial Marketing Group, Inc. (“IFMG”) was sold by the Parent and is no longer an affiliate of the Company.  For that period of time in 2007 during which it was still affiliated, the Company paid $22.6 million in commission fees to IFMG. The Company did not pay commission fees to IFMG in 2008. During the year ended December 31, 2006, the Company paid $20.1 million in commission fees to IFMG.

During the years ended December 31, 2008, 2007 and 2006, the Company paid $23.7 million, $31.3 million and $24.3 million, respectively, in distribution fees to Sun Life Financial Distributors, Inc. (“SLFD”), an affiliate.  The Company also had an agreement with SLFD and the Parent whereby the Parent provided expense reimbursements to the Company for administrative services provided by the Company to SLFD.  Related to this agreement, the Company received reimbursement of $0.6 million and $3.2 million for the years ended December 31, 2007 and 2006, respectively.  This agreement was terminated on March 2, 2007.

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, 2008, 2007 and 2006

3. SIGNIFICANT TRANSACTIONS WITH AFFILIATES (continued)

Administrative service agreements, rent and other (continued)

The Company leases office space to SLOC under lease agreements with terms expiring on December 31, 2009 and options to extend the terms for each of twelve successive five-year terms at fair market rental value, not to exceed 125% of the fixed rent for the term which is then ending.  Rent received by the Company under the leases amounted to approximately $10.6 million for each of the years ended December 31, 2008, 2007 and 2006, respectively.  Rental income is reported as a component of net investment income.

During the year ended December 31, 2008, the Company sold mortgages to SLOC with a book value of $150.2 million and a market value of $150.2 million.

During the year ended December 31, 2008, the Company sold certain limited partnership investments to SLOC with a book value and market value of $87.2 million.

The Company records a tax benefit through paid-in-capital for SLF stock options issued to employees of the Company. Related to these stock options, the Company recorded tax benefits of approximately $0.8 million, $3.0 and $4.5 million for the years ended December 31, 2008, 2007 and 2006, respectively.

In 2004, the employees of the Company became participants in a restricted share unit (“RSU”) plan with its indirect parent, SLF.  Under the RSU plan, participants are granted units that are equivalent to one common share of SLF stock and have a fair market value of a common share of SLF stock on the date of grant.  RSUs earn dividend equivalents in the form of additional RSUs at the same rate as the dividends on common shares of SLF stock.  The redemption value, upon vesting, is the fair market value of an equal number of common shares of SLF stock.  The Company incurred expenses of $5.9 million, $4.4 million and $7.3 million relating to RSUs for the years ended December 31, 2008, 2007 and 2006, respectively.

The Company has significant transactions with affiliates.  Management believes inter-company revenues and expenses are calculated on a reasonable basis; however, these amounts may not necessarily be indicative of the costs that would be incurred if the Company operated on a stand-alone basis and these transactions were with unrelated parties.

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, 2008, 2007 and 2006

4. INVESTMENTS

Fixed Maturities

The amortized cost and fair value of fixed maturities at December 31, 2008, was as follows:

		Gross	Gross
	Amortized	Unrealized	Unrealized	Fair
Available-for-sale fixed maturities:	Cost	Gains	Losses	Value
Collateralized Mortgage Obligations	$            22,504	$             94	$           (4,489)	$            18,109
Mortgage Backed Securities	40,107	1,060	(17)	41,150
Foreign Government & Agency Securities	509	-	(37)	472
U.S. Treasury & Agency Securities	61,824	13,262	(105)	74,981
Total non-corporate	124,944	14,416	(4,648)	134,712
Corporate securities:
Basic Industry	11,619	-	(3,062)	8,557
Capital Goods	29,853	317	(7,137)	23,033
Communications	111,380	1,724	(7,820)	105,284
Consumer Cyclical	62,112	1,160	(11,769)	51,503
Consumer Noncyclical	44,947	571	(1,845)	43,673
Energy	47,968	257	(8,200)	40,025
Finance	254,505	302	(67,240)	187,567
Technology	4,485	-	(624)	3,861
Transportation	6,861	4	(1,585)	5,280
Utilities	84,187	140	(13,802)	70,525
Total Corporate	657,917	4,475	(123,084)	539,308
Total available-for-sale fixed maturities	$           782,861	$       18,891	$        (127,732)	$           674,020
	Amortized	Gross	Gross	Fair
Trading fixed maturities:	Cost	Gains	Losses	Value
Asset Backed Securities	$           796,032	$      4,357	$         (294,557)	$          505,832
Collateralized Mortgage Obligations	2,627,715	8,543	(1,141,245)	1,495,013
Mortgage Backed Securities	213,175	4,579	(325)	217,429
Foreign Government & Agency Securities	110,991	1,972	(3,788)	109,175
U.S. Treasury & Agency Securities	484,910	36,528	(18,332)	503,106
Total non-corporate	4,232,823	55,979	(1,458,247)	2,830,555
Corporate securities:
Basic Industry	201,573	67	(31,623)	170,017
Capital Goods	461,583	2,477	(71,733)	392,327
Communications	1,642,250	4,730	(165,902)	1,481,078
Consumer Cyclical	1,189,335	7,776	(250,384)	946,727
Consumer Noncyclical	496,392	2,036	(25,794)	472,634
Energy	430,413	810	(40,710)	390,513
Finance	4,188,983	2,773	(976,868)	3,214,888
Industrial Other	250,656	1,390	(9,647)	242,399
Municipals	610	-	(82)	528
Technology	88,573	-	(16,016)	72,557
Transportation	246,398	5,552	(24,662)	227,288
Utilities	1,479,840	11,365	(170,570)	1,320,635
Total Corporate	10,676,606	38,976	(1,783,991)	8,931,591
Total trading fixed maturities	$         14,909,429	$      94,955	$     (3,242,238)	$     11,762,146

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, 2008, 2007 and 2006

4. INVESTMENTS (CONTINUED)

Fixed Maturities (continued)

The amortized cost and fair value of fixed maturities at December 31, 2007, was as follows:

		Gross	Gross
	Amortized	Unrealized	Unrealized	Fair
Available-for-sale fixed maturities:	Cost	Gains	Losses	Value
Asset Backed Securities	$             827,129	$      11,436	$         (71,706)	$          766,859
Collateralized Mortgage Obligations	2,594,637	22,204	(185,362)	2,431,479
Mortgage Backed Securities	447,720	2,723	(2,244)	448,199
Foreign Government & Agency Securities	74,287	2,766	-	77,053
States & Political Subdivisions	493	6	-	499
U.S. Treasury & Agency Securities	284,811	11,462	(40)	296,233
Total non-corporate	4,229,077	50,597	(259,352)	4,020,322
Corporate securities:
Basic Industry	195,959	3,146	(3,424)	195,681
Capital Goods	424,393	8,143	(7,698)	424,838
Communications	811,426	18,403	(13,190)	816,639
Consumer Cyclical	845,981	6,415	(45,142)	807,254
Consumer Noncyclical	312,647	6,708	(2,438)	316,917
Energy	314,822	5,705	(3,292)	317,235
Finance	2,944,203	19,895	(152,604)	2,811,494
Industrial Other	272,493	6,225	(7,219)	271,499
Technology	77,817	786	(821)	77,782
Transportation	241,983	8,598	(5,061)	245,520
Utilities	1,177,596	32,001	(11,548)	1,198,049
Total Corporate	7,619,320	116,025	(252,437)	7,482,908
Total available-for-sale fixed maturities	$        11,848,397	$    166,622	$       (511,789)	$     11,503,230
	Amortized	Gross	Gross	Fair
Trading fixed maturities:	Cost	Gains	Losses	Value
Asset Backed Securities	$             105,719	$           287	$           (8,255)	$            97,751
Collateralized Mortgage Obligations	276,753	2,584	(3,519)	275,818
Mortgage Backed Securities	3,304	2	(38)	3,268
Foreign Government & Agency Securities	39,589	1,182	-	40,771
U.S. Treasury & Agency Securities	94,813	713	-	95,526
Total non-corporate	520,178	4,768	(11,812)	513,134
Corporate securities:
Basic Industry	7,417	270	(40)	7,647
Capital Goods	71,894	590	(338)	72,146
Communications	683,714	10,849	(4,105)	690,458
Consumer Cyclical	248,206	1,932	(13,458)	236,680
Consumer Noncyclical	131,746	2,199	(464)	133,481
Energy	23,609	1,745	(17)	25,337
Finance	1,886,983	15,992	(83,662)	1,819,313
Industrial Other	67,322	880	(705)	67,497
Technology	1,989	-	(21)	1,968
Transportation	40,965	1,887	(501)	42,351
Utilities	254,065	4,434	(1,500)	256,999
Total Corporate	3,417,910	40,778	(104,811)	3,353,877
Total trading fixed maturities	$          3,938,088	$      45,546	$       (116,623)	$       3,867,011

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, 2008, 2007 and 2006

4. INVESTMENTS (CONTINUED)

Fixed Maturities (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 ABS and MBS because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	December 31, 2008
	Amortized Cost	Fair Value
Maturities of available-for-sale fixed securities:
Due in one year or less	$                  476	$                  439
Due after one year through five years	59,496	52,545
Due after five years through ten years	87,028	70,484
Due after ten years	573,250	491,293
Subtotal – Maturities available-for-sale	720,250	614,761
ABS, CMO and MBS securities	62,611	59,259
Total Available-for-sale	$           782,861	$            674,020
Maturities of trading fixed securities:
Due in one year or less	$           409,847	$            383,929
Due after one year through five years	5,571,645	4,812,789
Due after five years through ten years	3,098,890	2,531,157
Due after ten years	2,192,125	1,815,997
Subtotal – Maturities  of trading	11,272,507	9,543,872
ABS, CMO and MBS securities	3,636,922	2,218,274
Total Trading	$       14,909,429	$       11,762,146

Gross gains of $17.8 million, $52.8 million and $39.5 million and gross losses of $321.9 million, $52.3 million and $92.3 million were realized on the sale of fixed maturities for the years ended December 31, 2008, 2007 and 2006, respectively.

Fixed maturities with an amortized cost of approximately $12.4 million and $12.0 million at December 31, 2008 and 2007, respectively, were on deposit with federal and state governmental authorities as required by law.

As of December 31, 2008 and 2007, 94.6% and 96.0%, respectively, of the Company's fixed maturity securities were investment grade.  Investment grade securities are those that are rated “BBB” or better by nationally recognized statistical rating organizations.  During 2008, 2007 and 2006, the Company incurred realized losses totaling $41.9 million, $68.1 million and $6.3 million, respectively, for other-than-temporary impairment of value of its available-for-sale fixed maturity securities.

The Company had outstanding commitments with respect to funding of limited partnerships of approximately $18.2 million and $34.9 million at December 31, 2008 and 2007, 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, 2008, 2007 and 2006

4. INVESTMENTS (CONTINUED)

OVERVIEW OF THE COMPANY’S INVESTMENT HOLDINGS AND PORTFOLIO MONITORING PROCESSES

At December 31, 2008, the Company held $18.1 billion in invested assets and cash.  Of this balance, $12.4 billion was invested in fixed-maturity securities designated as either available-for-sale ($674.0 million) or trading ($11.8 billion).  Of the $674.0 million of available-for-sale fixed maturities, securities with a fair value of $462.2 million were in an unrealized loss position totaling $127.7 million.  At December 31, 2008, 30 % of securities in an unrealized loss position, based on fair value, were securities with fair-value-to-amortized-cost percentages of greater than or equal to 90%.  The total unrealized loss position for such securities was $6.1 million.

In the available-for-sale fixed maturity portfolio, securities with a fair value of $34.1 million, representing 0.19 % of the total invested asset balance, were comprised of below-investment-grade or not-rated securities.  Of the securities that were below-investment-grade or not-rated at December 31, 2008, securities with a fair value of $23.1 million, representing 0.13% of the total invested asset balance, were in an unrealized loss position that totaled $3.1 million.  At December 31, 2008, 73 % of these securities in an unrealized loss position, based on fair value, were securities with fair value to amortized cost percentages of greater than or equal to 90%.

The Company’s portfolio monitoring process is designed to identify securities that may be other-than-temporarily impaired.  The Company has a Credit Committee comprised of professionals from the investment and accounting functions that meets at least quarterly to review individual issues or issuers that may be of concern.  The process involves a quarterly screening of all impaired securities, with particular attention paid to identify those securities whose fair value to amortized cost percentages have been less than 80% for an extended period of time.  Additionally, the Company screens all sales transactions which generated realized losses in excess of $1.5 million and 10% of amortized cost in order to identify identical securities or issuers which the Company continues to hold.  Discrete credit events, such as a ratings downgrade, are also used to identify securities that may be other-than-temporarily impaired.  The securities identified are then evaluated based on issuer-specific facts and circumstances, such as the issuer’s ability to meet current and future interest and principal payments, an evaluation of the issuer’s financial position  and its near term recovery prospects, difficulties being experienced by an issuer’s parent or affiliate, and management’s assessment of the outlook for the issuer’s sector.  Based on this evaluation, issues or issuers are considered for inclusion on one of the Company’s following credit lists:

“Monitor List”- Management has concluded that the fair value will increase enough to recover the Company’s amortized cost but that changes in issuer-specific facts and circumstances require monitoring on a quarterly basis.

“Watch List”- Management has concluded that the fair value will increase enough to recover the Company’s amortized cost but that changes in issuer-specific facts and circumstances require continued monitoring during the quarter.  A security is moved from the Monitor List to the Watch List when changes in issuer-specific facts and circumstances increase the possibility that a security may become impaired within the next 24 months.

“Impaired List”- Management has concluded that the fair value will not increase enough to recover the Company’s amortized cost and an other-than-temporary-impairment charge is recorded to income or the security is sold and a realized loss is recorded as a charge to income.  Other-than-temporary impairments are classified as either credit-related or interest-related.  The Company categorizes other-than-temporary impairments as credit-related if there are current fundamental credit concerns regarding the issuers’ ability to pay all principal and interest amounts due, according to the contractual terms of the security.  The Company characterizes other-than-temporary impairments as interest-related if the depression in fair value of the security was due to changes in interest or general credit spread widening and the Company has determined it no longer has the intent or ability to hold a security until recovery to amortized cost.  For the year ended December 31, 2008, other-than-temporary impairments on available-for-sale fixed maturities of $41.9 million were recorded as a charge to income.  The $41.9 million realized losses for other-than-temporary impairments for the year ended December 31, 2008 were credit-related.  Of the $68.1 million realized losses for other-than-temporary impairments for the year ended December 31, 2007, $52.0 million was credit-related and $16.1 million was interest-related.  The $6.3 million realized loss for other-than-temporary impairments for the year ended December 31, 2006, was credit-related.

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, 2008, 2007 and 2006

4. INVESTMENTS (CONTINUED)

OVERVIEW OF THE COMPANY’S INVESTMENT HOLDINGS AND PORTFOLIO MONITORING PROCESSES (continued)

At each balance sheet date, management also evaluates securities in an unrealized loss position and determines if the Company has the intent and ability to hold the securities until recovery.  If events or circumstances change, such as unexpected changes in the creditworthiness of the issuer, unanticipated changes in interest rates and/or credit spreads, changes in tax laws or accounting rules, changes in statutory capital requirements, or greater than expected liquidity needs, management will reconsider whether the Company has the intent and ability to hold a security until recovery.  If subsequent to the balance sheet date and due to an unexpected change in circumstances, the Company determines that it no longer intends to hold a security until recovery, a loss is recognized in net income in the period in which the intent to hold to recovery no longer exists.

There are inherent risks and uncertainties in management’s evaluation of securities for other-than-temporary impairment.  These risks and uncertainties include factors both external and internal to the Company, such as general economic conditions, an issuer’s financial condition or near-term recovery prospects, market interest rates, unforeseen events which affect one or more issuers or industry sectors, and portfolio management parameters, including asset mix, interest rate risk, portfolio diversification, duration matching, and greater than expected liquidity needs.  All of these factors could impact management’s evaluation of securities for other-than-temporary impairment.

The Company discontinues accruing income on all of its holdings for issuers that are in default.  Investment income would have increased by $4.6 million for the year ended December 31, 2008, if these holdings were performed.  Accrued income was not materially impacted by the termination of accrual accounting on these holdings for the years ended December 31, 2007 and 2006.  As of December 31, 2008, the fair market value of holdings for issuers in default was $17.9 million.  As of December 31, 2007 and 2006, the Company did not have any holding for issuers that were in default.

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, 2008, 2007 and 2006

4. INVESTMENTS (CONTINUED)

OVERVIEW OF THE COMPANY’S INVESTMENT HOLDINGS AND PORTFOLIO MONITORING PROCESSES (continued)

Unrealized Losses

The following table shows the fair value and gross unrealized losses of the Company’s available-for-sale fixed maturity investments, which were deemed to be temporarily impaired, aggregated by investment category, industry sector and length of time that the individual securities had been in an unrealized loss position at December 31, 2008.

	Less Than Twelve Months		Twelve Months Or More		Total
Corporate Securities	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses
Basic Industry	$       5,008	$   (1,231)	$         3,549	$        (1,831)	$         8,557	$         (3,062)
Capital Goods	2,337	(55)	11,447	(7,082)	13,783	(7,137)
Communications	65,855	(7,747)	17,237	(73)	83,092	(7,820)
Consumer Cyclical	8,473	(2,139)	28,071	(9,630)	36,544	(11,769)
Consumer Noncyclical	11,799	(341)	11,329	(1,504)	23,128	(1,845)
Energy	21,290	(4,496)	16,469	(3,704)	37,759	(8,200)
Finance	39,132	(11,130)	122,697	(56,110)	161,829	(67,240)
Industrial Other	-	-	-	-	-	-
Technology	3,861	(624)	-	-	3,861	(624)
Transportation	435	(29)	4,709	(1,556)	5,143	(1,585)
Utilities	55,467	(9,638)	10,787	(4,164)	66,254	(13,802)
Total Corporate	213,657	(37,430)	226,295	(85,654)	439,952	(123,084)
Non-Corporate
Asset Backed Securities	-	-	-	-	-	-
Collateralized Mortgage Obligations	2,967	(1,162)	12,739	(3,327)	15,706	(4,489)
Mortgage Backed Securities	1,054	(7)	3,137	(10)	4,191	(17)
U.S. Treasury & Agency Securities	1,855	(105)	-	-	1,855	(105)
Foreign Government & Agency Securities	473	(37)	-	-	472	(37)
Total Non-Corporate	6,349	(1,311)	15,876	(3,337)	22,224	(4,648)
Grand Total	$    220,006	$   (38,741)	$     242,171	$       (88,991)	$     462,176	$     (127,732)

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, 2008, 2007 and 2006

4. INVESTMENTS (CONTINUED)

OVERVIEW OF THE COMPANY’S INVESTMENT HOLDINGS AND PORTFOLIO MONITORING PROCESSES (continued)

Unrealized Losses (continued)

The following table provides the fair value and gross unrealized losses of the Company’s available-for-sale fixed maturities investments, which were deemed to be temporarily impaired, aggregated by investment category, industry sector and length of time that individual securities have been in an unrealized loss position, at December 31, 2007:

	Less Than Twelve Months		Twelve Months Or More		Total
Corporate Securities	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses
Basic Industry	$       86,180	$     (1,459)	$         23,229	$       (1,965)	$     109,409	$      (3,424)
Capital Goods	179,854	(5,651)	36,728	(2,047)	216,582	(7,698)
Communications	213,084	(5,172)	165,027	(8,018)	378,111	(13,190)
Consumer Cyclical	349,363	(26,136)	185,094	(19,006)	534,457	(45,142)
Consumer Noncyclical	90,795	(1,114)	22,910	(1,324)	113,705	(2,438)
Energy	100,815	(1,682)	44,034	(1,610)	144,849	(3,292)
Finance	1,539,054	(106,524)	515,945	(46,080)	2,054,999	(152,604)
Industrial Other	50,543	(7,059)	12,981	(160)	63,524	(7,219)
Technology	41,379	(100)	13,278	(721)	54,657	(821)
Transportation	102,549	(2,883)	41,601	(2,178)	144,150	(5,061)
Utilities	225,892	(4,894)	235,342	(6,654)	461,234	(11,548)
Total Corporate	2,979,508	(162,674)	1,296,169	(89,763)	4,275,677	(252,437)
Non-Corporate
Asset Backed Securities	232,353	(29,887)	267,080	(41,819)	499,433	(71,706)
Collateralized Mortgage Obligations	1,027,142	(95,499)	934,327	(89,863)	1,961,469	(185,362)
Mortgage Backed Securities	25,960	(64)	190,905	(2,180)	216,865	(2,244)
U.S. Treasury & Agency Securities	6,517	(40)	-	-	6,517	(40)
Total Non-Corporate	1,291,972	(125,490)	1,392,312	(133,862)	2,684,284	(259,352)
Grand Total	$  4,271,480	$ (288,164)	$    2,688,481	$   (223,625)	$  6,959,961	$   (511,789)

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, 2008, 2007 and 2006

4. INVESTMENTS (CONTINUED)

OVERVIEW OF THE COMPANY’S INVESTMENT HOLDINGS AND PORTFOLIO MONITORING PROCESSES (continued)

Unrealized Losses (continued)

The following table provides the number of securities of the Company’s available-for-sale fixed maturities investments with gross unrealized losses, which were deemed to be temporarily impaired, at December 31, 2008 (not in thousands):

	Number of Securities Less Than Twelve Months	Number of Securities Twelve Months Or More	Total Number of Securities
Corporate Securities
Basic Industry	6	2	8
Capital Goods	1	6	7
Communications	36	8	44
Consumer Cyclical	7	20	27
Consumer Noncyclical	7	4	11
Energy	12	6	18
Finance	41	73	114
Industrial Other	-	-	-
Technology	4	-	4
Transportation	1	4	5
Utilities	28	10	38
Total Corporate	143	133	276
Non-Corporate
Asset Backed Securities	-	-	-
Collateralized Mortgage Obligations	8	10	18
Foreign Government & Agency Securities	1	-	1
Mortgage Backed Securities	2	6	8
U.S. Treasury & Agency Securities	2	-	2
Total Non-Corporate	13	16	29
Grand Total	156	149	305

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, 2008, 2007 and 2006

4. INVESTMENTS (CONTINUED)

OVERVIEW OF THE COMPANY’S INVESTMENT HOLDINGS AND PORTFOLIO MONITORING PROCESSES (continued)

Unrealized Losses (continued)

The following table provides the number of securities of the Company’s available-for-sale fixed maturities investments with gross unrealized losses, which were deemed to be temporarily impaired, at December 31, 2007 (not in thousands):

	Number of Securities Less Than Twelve Months	Number of Securities Twelve Months Or More	Total Number of Securities
Corporate Securities
Basic Industry	23	7	30
Capital Goods	41	15	56
Communications	63	55	118
Consumer Cyclical	93	54	147
Consumer Noncyclical	28	9	37
Energy	24	21	45
Finance	426	178	604
Industrial Other	14	3	17
Technology	7	2	9
Transportation	44	21	65
Utilities	69	66	135
Total Corporate	832	431	1,263
Non-Corporate
Asset Backed Securities	79	115	194
Collateralized Mortgage Obligations	383	351	734
Mortgage Backed Securities	14	202	216
U.S. Treasury & Agency Securities	2	-	2
Total Non-Corporate	478	668	1,146
Grand Total	1,310	1,099	2,409

The Company’s available-for-sale fixed maturity gross unrealized loss position decreased $384.1 million as of December 31, 2008, as compared to December 31, 2007.  The change in unrealized losses was primarily due to the adoption of SFAS No. 159, under which the Company elected the FV option for all fixed maturity securities attributable to certain life, health and annuity products, which had previously been designated as available-for-sale.  At December 31, 2007, such available-for-sale securities had a market value of $10.7 billion and an amortized cost of $11.1 billion.

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, 2008, 2007 and 2006

4. INVESTMENTS (CONTINUED)

OVERVIEW OF THE COMPANY’S INVESTMENT HOLDINGS AND PORTFOLIO MONITORING PROCESSES (continued)

Unrealized Losses (continued)

The sectors in the Company’s portfolio that recognized the largest unrealized losses at December 31, 2008 were financial services, consumer cyclical, and utilities.  As of December 31, 2008, there were 114 securities accounting for unrealized losses of $67.2 million in the Finance sector.   Of these unrealized losses, 99.3% were related to investment grade issues (rated AAA through BBB).

As of December 31, 2008, there were 38 securities accounting for unrealized losses of $13.8 million in the Utility sector.   Of these unrealized losses, 99.03% were related to investment-grade issues (rated AAA through BBB). As of December 31, 2008, there were 27 securities accounting for unrealized losses of $11.8 million in the Consumer Cyclical sector.   Of these unrealized losses, 95.54% were related to investment-grade issues (rated AAA through BBB). All securities held at December 31, 2008 were subject to the Company’s portfolio monitoring process.

The Company has exposure to sub-prime and Alt-A residential mortgage-backed securities.  Sub-prime mortgage lending is the origination of residential mortgage loans to customers with weak credit profiles.  Alt-A mortgage lending is the origination of residential mortgage loans to customers who have credit ratings above sub-prime, but do not conform to government sponsored standards.  The combination of these two categories of securities is considered below prime.  The Company is not an originator of residential mortgages.  The slowing U.S. housing market and relaxed underwriting standards of some originators of below-prime loans have recently led to higher delinquency and loss rates especially within the 2006 and 2007 vintage years.  Ninety-two percent of these below-prime investments, based upon fair value, held by the Company were either issued before 2006 or have an AAA rating.  At December 31, 2008, the Company had exposure to residential sub-prime and Alt-a mortgages of $165.5 million and $116.9 million, respectively, representing approximately 1.6% of the Company's total invested assets.

Because securities issued by the same issuer with different CUSIP numbers typically have different investment characteristics, such as secured or unsecured, shorter or longer maturities, or different interest rates, management’s analyses of unrealized and realized losses are performed at the CUSIP number level.  The Company also considers the credit condition of issuers at the entity level and considers various issues affecting an issuer collectively as facts and circumstances warrant.

Realized Losses

During the year ended December 31, 2008, the Company did not record any realized losses related to the sale of available-for-sale securities that were in an unrealized loss position.  During the year ended December 31, 2007, the Company recorded $47.3 million realized losses related to the sale of available-for-sale fixed maturity securities that were in an unrealized loss position.

MORTGAGE LOANS AND REAL ESTATE

The Company invests in commercial first mortgage loans and real estate throughout the United States.  Investments are diversified by property type and geographic area.  Mortgage loans are collateralized by the related properties and generally are no more than 75% of the property’s value at the time that the original loan is made.

 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, 2008, 2007 and 2006

4. INVESTMENTS (CONTINUED)

MORTGAGE LOANS AND REAL ESTATE (continued)

The carrying value of mortgage loans and real estate investments, net of applicable reserves and accumulated depreciation, was as follows:

	December 31,
	2008	2007
Total mortgage loans	$       2,083,003	$     2,318,341
Real estate:
Held for production of income	201,470	201,777
Total real estate	$        201,470	$   201,777
Total mortgage loans and real estate	$       2,284,473	$     2,520,118

Accumulated depreciation on real estate was $36.7 million and $31.8 million at December 31, 2008 and 2007, respectively.

The Company monitors the condition of the mortgage loans in its portfolio.  In those cases where mortgages have been restructured, appropriate allowances for losses have been made.  The Company has recognized impairment on mortgage loans totaling $3.0 million and $3.3 million at December 31, 2008 and 2007, respectively.

Activity for the investment valuation allowances was as follows:

	Balance at			Balance at
	January 1,	Additions	Subtractions	December 31,
2008
Mortgage loans	$           3,288	$         3,000	$      (3,288)	$  3,000
2007
Mortgage loans	$           3,928	$ -	$        (640)	$           3,288

Mortgage loans and real estate investments comprise the following property types and geographic regions at December 31:

	2008	2007
Property Type:
Office building	$        763,405	$       820,803
Residential	198	369
Retail	923,592	1,067,483
Industrial/warehouse	262,436	306,769
Apartment	106,362	109,919
Other	231,480	218,063
Valuation allowances	(3,000)	(3,288)
Total	$   2,284,473	$    2,520,118

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, 2008, 2007 and 2006

4. INVESTMENTS (CONTINUED)

MORTGAGE LOANS AND REAL ESTATE (continued)

	2008	2007
Geographic region:
Alabama	$           9,049	$           9,387
Alaska	5,873	6,000
Arizona	4,349	449
Arkansas	55,987	59,024
California	124,004	132,829
Colorado	36,521	39,276
Connecticut	12,599	13,133
Delaware	7,029	7,188
Florida	229,681	269,254
Georgia	62,418	68,371
Idaho	3,832	3,885
Illinois	49,635	47,521
Indiana	32,082	32,584
Iowa	1,469	325
Kansas	7,620	7,853
Kentucky	28,038	29,396
Louisiana	36,426	38,470
Maine	1,090	13,425
Maryland	52,202	72,659
Massachusetts	120,059	139,203
Michigan	19,789	20,649
Minnesota	41,013	41,909
Mississippi	3,836	3,959
Missouri	61,293	64,624
Montana	3,112	30,843
Nebraska	12,937	13,457
Nevada	6,665	5,987
New Hampshire	649	762
New Jersey	35,964	37,952
New Mexico	13,310	13,787
New York	328,439	345,887
North Carolina	37,620	39,453
North Dakota	1,678	1,920
Ohio	145,192	148,743
Oklahoma	8,180	8,811
Oregon	31,261	33,852
Pennsylvania	118,744	132,665
South Carolina	32,318	33,334
South Dakota	921	949
Tennessee	37,845	39,405
Texas	340,082	348,817
Utah	24,363	27,088
Virginia	12,926	14,070
Washington	56,547	76,767
West Virginia	4,576	4,730
Wisconsin	3,942	17,785
All other	24,308	24,969
Valuation allowances	(3,000)	(3,288)
Total	$     2,284,473	$     2,520,118

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, 2008, 2007 and 2006

4. INVESTMENTS (CONTINUED)

MORTGAGE LOANS AND REAL ESTATE (continued)

At December 31, 2008, scheduled mortgage loan maturities were as follows:

2009	$             33,474
2010	34,454
2011	124,344
2012	75,628
2013	129,595
Thereafter	1,685,508
Total	$        2,083,003

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

The Company has made funding commitments of mortgage loans on real estate and other loans into the future. The outstanding funding commitments for these mortgages amount to $2.0 million and $17.8 million at December 31, 2008 and 2007, 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, 2008, 2007 and 2006

4. INVESTMENTS (CONTINUED)

SECURITIES LENDING

The Company participates in a securities lending program to generate additional income, whereby certain fixed maturity securities are loaned for a specified period of time from the Company’s portfolio to qualifying third parties, via a lending agent.  Borrowers of these securities provide collateral of 102% of the market value of the loaned securities.  The Company generally accepts cash as the only form of collateral.  Under the terms of the securities lending program, the lending agent indemnifies the Company against borrower defaults.

As of December 31, 2008 and 2007, the fair value of the loaned securities was approximately $175.0 million and $536.4 million, respectively, and was included in fixed maturities, available-for-sale, and cash and cash equivalents in the Company’s consolidated balance sheets.  The Company had accepted cash collateral relating to the securities lending program in the amount of $183.5 million and $533.5 million as of December 31, 2008 and 2007, respectively, all of which was re-invested in certain cash instruments and other available-for-sale securities.  The Company records the collateral investments at fair value in the consolidated balance sheets in other invested assets and changes in the fair value of the available-for-sale securities are recorded in other comprehensive income.  The fair value of the collateral investments at December 31, 2008 and 2007 was $179.9 million and $517.7 million, respectively.

The Company earns income from the reinvestment of the cash collateral.  The Company recorded before-tax income from securities lending transactions, net of lending fees, of $2.6 million, $2.2 million and $2.3 million for the years ended December 31, 2008, 2007 and 2006, respectively, which was included in net investment income.

LEVERAGED LEASES

The Company is an owner participant in a trust that is a lessor in a leveraged lease agreement entered into on October 21, 1994, under which equipment having an estimated economic life of 25-40 years was originally leased through a VIE for a term of 9.78 years.  During 2001, the lease term was extended until 2010.  The Company's equity investment in this VIE represented 8.33% of the partnership that provided 22.9% of the purchase price of the equipment.  The balance of the purchase price was furnished by third-party long-term debt financing, collateralized by the equipment, and is non-recourse to the Company.  At the end of the lease term, the master lessee may exercise a fixed price purchase option to purchase the equipment.  The leveraged lease is included as a part of other invested assets.

The Company's net investment in the leveraged lease is composed of the following elements:

	Year ended December 31,
	2008	2007
Lease contract receivable	$          7,042	$         12,836
Less: non-recourse debt	-	-
Net Receivable	7,042	12,836
Estimated value of leased assets	20,795	20,795
Less: unearned and deferred income	(2,373)	(4,304)
Investment in leveraged leases	25,464	29,327
Less: fees	(37)	(87)
Net investment in leveraged leases	$        25,427	$         29,240

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, 2008, 2007 and 2006

4. INVESTMENTS (CONTINUED)

DERIVATIVES

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

As a component of its investment strategy and to reduce its exposure to interest rate risk, the Company utilizes interest rate swap agreements.  Interest rate swap agreements are agreements to exchange with a counter-party interest rate payments of differing character (e.g., fixed-rate payments exchanged for variable-rate payments) based on an underlying principal balance (notional principal) as an economic hedge against interest rate changes. No cash is exchanged at the outset of the contract and no principal payments are made by either party.  A single net payment is usually made by one counter-party at each interest payment date. The net payment is recorded as a component of derivative income. Because the underlying principal is not exchanged, the Company's maximum exposure to counter-party credit risk is the difference in payments exchanged.  The fair value of swap agreements is included with derivative instruments - receivable or derivative instruments - payable in the accompanying balance sheet.

The Company utilizes payer swaptions to hedge exposure to interest rate risk.  Swaptions give the buyer the option to enter into an interest rate swap per the terms of the original swaption agreement.  A premium is paid on settlement date and no further cash transactions occur until the positions expire.  At expiration, the swaption either cash settles for value, settles into an interest rate swap, or expires worthless per the terms of the original swaption agreement. Swaptions are carried at fair value which is included in derivative instruments - receivable in the accompanying balance sheet and the change in value is offset to derivative income.

The Company utilizes over-the-counter (“OTC”) put options and exchange traded futures on the Standard & Poor’s 500 Composite Stock Price Index (“S&P 500 Index”) (“S&P”, “S&P 500”, and “Standard & Poor's” are trademarks of The McGraw Hill Companies, Inc. and have been licensed for use by the Company) and other indexes to hedge against stock market exposure inherent in the GMDB and living benefit features of the Company's variable annuities.  The Company also purchases OTC call options on the S&P 500 Index to economically hedge its obligation under certain fixed annuity contracts.  Options are carried at fair value and are included with derivative instruments - receivable in the Company’s balance sheet.

Standard & Poor’s indexed futures contracts are entered into for purposes of hedging fixed index products.  The interest credited on these 1-, 5-, 7- and 10-year term products is based on the changes in the S&P 500 Index.  On the trade date, an initial cash margin is exchanged.  Daily cash is exchanged to settle the daily variation margin and the offset is recorded in derivative income.

The Company issues annuity contracts that contain a derivative instrument that is embedded in the contract.  Upon issuing the contract, the embedded derivative is separated from the host contract (annuity contract) and is carried at fair value.

On September 6, 2006 the Company entered into an agreement with the CARS Trust.  Through this agreement, the Company purchased a funded note, which is referenced through a credit default swap to the credit performance of a portfolio of corporate reference entities.  The Company entered into this credit structure for yield enhancement.  As the sole beneficiary of the CARS Trust, the Company is required to consolidate this trust under the requirements of FIN 46(R).  As a result of the consolidation, the Company has recorded in its balance sheet a credit default swap held by the CARS Trust.   At issue, the swap had a seven year term, maturing in 2013.  Under the terms of the swap, the CARS Trust will be required to make payments to the swap counterparty upon the occurrence of a credit event, with respect to any reference entity, that is in excess of the threshold amount specified in the swap agreement.  At December 31, 2008, the CARS Trust has not had to make any payments under the terms of the swap as the sum of all credit events has not exceeded the threshold amount.  At December 31, 2008 the fair value of the credit default swap is $(42.1) million.  Under the terms of the credit derivative, the maximum future payments the CARS Trust could be required to make is $55.0 million.  In the event the trust was required to make any payments under the swap, the underlying assets held by the trust would be liquidated to fund the payment.  If the disposition of these assets is insufficient to fund the payment calculated, then under the terms of the agreement, the cash settlement amount would be capped at the amount of the proceeds from the sale of the underlying assets.  As of December 31, 2008, the fair value of the assets held as collateral by the CARS Trust was $42.3 million.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2008, 2007 and 2006

4. INVESTMENTS (CONTINUED)

DERIVATIVES (continued)

From 2000 through 2002, the Company marketed GICs to unrelated third parties.  Each transaction is highly-individualized but typically involves the issuance of foreign currency denominated contracts backed by cross currency swaps or equity-linked cross currency swaps.  The combination of the currency swaps with interest rate swaps allows the Company to lock in U.S. dollar fixed rate payments for the life of the contract.

Included in derivative income are gains (losses) on the translation of foreign currency denominated GIC liabilities of $167.7 million, $45.5 million and $(90.2) million for the years ended December 31, 2008, 2007 and 2006, respectively.

The Company does not employ hedge accounting.  The Company believes that its derivatives provide economic hedges and the cost of formally documenting hedge effectiveness in accordance with the provisions of SFAS No.133 is not justified.  As a result, all changes in the fair value of derivatives are recorded in the current period operations as a component of derivative income.

Net derivative (loss) income for the years ended December 31 consisted of the following:

		2008		2007		2006
Net (expense) income on swap agreements	$	(54,513)	$	6,943	$	(7,749)
Change in fair value of swap agreements (interest rate, currency, and equity)		(613,961)		(255,727)		8,392
Change in fair value of options, futures and embedded derivatives		(203,070)		55,660		8,446
Total derivative (losses) income	$	(871,544)	$	(193,124)	$	9,089

The Company is required to pledge and receive collateral for open derivative contracts.  The amount of collateral required is determined by agreed upon thresholds with the counterparties.  The Company currently pledges cash and U.S. Treasury bonds to satisfy this collateral requirement.  At December 31, 2008 and 2007, $400.7 million and $132.9 million, respectively, of fixed maturities were pledged as collateral and are included with fixed maturities.

The Company’s underlying notional or principal amounts associated with open derivatives positions and the fair value of the (liability) asset were as follows for the years ended December 31:

	2008
	Notional		Fair Value
	Principal		(Liability)
	Amounts		Asset
Interest rate swaps	$	14,036,100	$	(881,867)
Currency swaps		408,773		50,554
Credit default swaps		55,000		(42,067)
Equity swaps		5,400		2,668
Currency forwards		-		-
Futures		1,991,840		(22,819)
Swaptions		1,150,000		1,863
S&P 500 index call options		1,166,148		17,125
S&P 500 index put options		591,385		107,305
Total	$	19,404,646	$	(767,238)

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, 2008, 2007 and 2006

4. INVESTMENTS (CONTINUED)

DERIVATIVES (continued)

	2007
	Notional		Fair Value
	Principal		Asset
	Amounts		(Liability)
Interest rate swaps	$	11,423,788	$	(310,616)
Currency swaps		452,533		174,311
Credit default swaps		55,000		(6,915)
Equity swaps		71,656		19,361
Currency forwards		45		-
Futures		2,099,368		608
Swaptions		500,000		14
S&P 500 index call options		2,619,948		250,311
S&P 500 index put options		646,640		35,547
Total	$	17,868,978	$	162,621

5. FAIR VALUE MEASUREMENT

On January 1, 2008, the Company adopted SFAS No. 157.  SFAS No. 157 defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value and enhances disclosure requirements for fair value measurements.  SFAS No. 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  In determining fair value, the Company uses various methods including market, income and cost approaches.  The Company utilizes valuation techniques that maximize the use of observable inputs and minimizes the use of unobservable inputs.

The impact on January 1, 2008, of adopting SFAS No. 157 was a reduction to the value of the Company’s embedded derivative liabilities of $166.1 million.  This change is primarily a result of changes to the valuation assumptions regarding policyholder behavior, primarily lapses, as well as the incorporation of risk margins and the Company’s own credit standing in the valuation of embedded derivatives.

In compliance with SFAS No. 157, the Company has categorized its financial instruments, based on the priority of the inputs to the valuation technique, into a three-level hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument.

Please refer to Note 8 regarding the valuation techniques utilized by the Company to measure the fair values included herein.  There were no changes to these techniques during the year ended December 31, 2008.

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, 2008, 2007 and 2006

5. FAIR VALUE MEASUREMENT (CONTINUED)

Financial assets and liabilities recorded at fair value on the Balance Sheets are categorized as follows:

Level 1

·   Unadjusted quoted prices for identical assets or liabilities in an active market.

The types of assets and liabilities utilizing Level 1 valuations include U.S. Treasury and agency securities, investments in publicly-traded mutual funds with quoted market prices and listed derivatives.

Level 2

·   Quoted prices in markets that are not active or significant inputs that are observable either directly or indirectly.

Level 2 inputs include the following:

a)   Quoted prices for similar assets or liabilities in active markets

b)   Quoted prices for identical or similar assets or liabilities in non-active markets

c)   Inputs other than quoted market prices that are observable

d)   Inputs that are derived principally from or corroborated by observable market data through correlation or other means

The types of assets and liabilities utilizing Level 2 valuations generally include U.S. Government securities not backed by the full faith and credit of the Government, municipal bonds, structured notes and certain MBS and ABS, certain corporate debt, certain private equity investments and certain derivates.

Level 3

·   Prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. They reflect management's own assumptions about the assumptions a market participant would use in pricing the asset or liability.

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, 2008, 2007 and 2006

5. FAIR VALUE MEASUREMENT (CONTINUED)

Generally, the types of assets and liabilities utilizing Level 3 valuations are certain MBS and ABS, certain corporate debt, certain private equity investments, certain mutual fund holdings and certain derivatives, including derivatives embedded in annuity contracts and funding agreements.

Fair Value Hierarchy

The following table presents the Company's categories for its assets measured at fair value on a recurring basis as of December 31, 2008:

	Level 1		Level 2		Level 3		Total
Assets
Available-for-sale fixed maturities
Asset-backed and mortgage-backed securities	$	-	$	54,793	$	4,466	$	59,259
Foreign government		-		472		-		472
States and political subdivisions		-		-		-
U.S. Treasury and agency securities		56,478		18,503		-		74,981
Corporate securities		-		531,420		7,888		539,308
Total available-for-sale fixed maturities		56,478		605,188		12,354		674,020
Trading fixed maturities
Asset-backed and mortgage-backed securities		-		1,771,382		462,253		2,233,635
Foreign governments		-		84,615		9,200		93,815
States and political subdivisions		-		528		-		528
U.S. Treasury and agency securities		445,732		57,373		-		503,105
Corporate securities		-		8,796,558		134,505		8,931,063
Total trading fixed maturities		445,732		10,710,456		605,958		11,762,146
Derivative instruments - receivable		-		724,435		2,668		727,103
Other invested assets		36,300		143,645		-		179,945
Cash and cash equivalents		1,624,149		-		-		1,624,149
Total investments and cash		2,162,659		12,183,724		620,980		14,967,363
Other assets
Separate account assets (1) (2)		376,709		18,957,344		801,873		20,135,926
Total assets measured at fair value on a recurring basis	$	2,539,368	$	31,141,068	$	1,422,853	$	35,103,289

(1) Pursuant to the conditions set forth in AICPA SOP 03-1, the value of separate account liabilities is set to equal the fair value for separate account assets.

(2) Excludes $395.8 million, primarily related to investment sales receivable, net of investment purchases payable, that are not subject to SFAS No. 157.

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, 2008, 2007 and 2006

5. FAIR VALUE MEASUREMENT (CONTINUED)

Fair Value Hierarchy (continued)

The following table presents the Company's categories for its liabilities measured at fair value on a recurring basis as of December 31, 2008:

	Level 1		Level 2		Level 3		Total
Liabilities
Other policy liabilities
Guaranteed minimum withdrawal benefit liability	$	-	$	-	$	335,612	$	335,612
Guaranteed minimum accumulation benefit liability		-		-		358,604		358,604
Derivatives embedded in reinsurance contracts		-		(50,792)		-		(50,792)
Fixed index annuities		-		-		106,619		106,619
Total other policy liabilities		-		(50,792)		800,835		750,043
Derivative instruments – payable		22,818		1,429,457		42,066		1,494,341
Other liabilities
Bank overdrafts		87,534		-		-		87,534
Total liabilities measured at fair value on a recurring basis	$	110,352	$	1,378,665	$	842,901	$	2,331,918

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, 2008, 2007 and 2006

5. FAIR VALUE MEASUREMENT (CONTINUED)

The following table shows a reconciliation of the beginning and ending balances for assets and liabilities which are categorized as Level 3 for the year ended December 31, 2008:

Assets	Beginning balance	Total realized and unrealized gains (losses)		Purchases, issuances, and settlements (net)	Transfers in and/or (out) of level 3 (2)	Ending balance	Change in unrealized gains (losses) included in earnings relating to instruments still held at the reporting date
		Included in earnings	Included in other comprehensive income
Available-for-sale fixed maturities
Asset-backed and mortgage-backed securities	$       4,330	(591)	(1,990)	-	2,717	4,466	-
Foreign government	-	-	-	-	-	-	-
States and political subdivisions	-	-	-	-	-	-	-
U.S. Treasury and agency securities	-	-	-	-	-	-	-
Corporate securities	9,039	583	(4,808)	(1,403)	4,477	7,888	-
Total available-for-sale fixed maturities	13,369	(8)	(6,798)	(1,403)	7,194	12,354	-
Trading fixed maturities
Asset-backed and mortgage-backed securities	1,085,287	(728,122)	-	38,480	66,608	462,253	(627,739)
Foreign governments	63,331	(1,250)	-	-	(52,881)	9,200	-
States and political subdivisions	-	-	-	-	-	-	-
U.S. Treasury and agency securities	-	-	-	-	-	-	-
Corporate securities	134,446	(37,157)	-	(2,305)	39,521	134,505	(18,872)
Total trading fixed maturities	1,283,064	(766,529)	-	36,175	53,248	605,958	(646,611)
Derivative instruments – receivable	24,073	2,487	-	(24,255)	363	2,668	2,668
Other invested assets	-	-	-		-	-	-
Cash and cash equivalents	-	-	-		-	-	-
Total investments and cash	1,320,506	(764,050)	(6,798)	10,517	60,805	620,980	(643,943)
Other assets
Separate account assets (1)	1,752,495	(322,652)	-	192,166	(820,136)	801,873	(238,261)
Total assets measured at fair value on a recurring basis	3,073,001	(1,086,702)	(6,798)	202,683	(759,331)	1,422,853	(882,204)

(1)   The realized/unrealized gains (losses) included in net income for separate account assets are offset by an equal amount for separate account liabilities which results in a net zero impact on net income for the Company.

(2)   Transfer in and/or (out) of level 3 during the year ended December 31, 2008 are primarily attributable to changes in the observability of inputs used to price the securities.

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, 2008, 2007 and 2006

5. FAIR VALUE MEASUREMENT (CONTINUED)

The following table shows a reconciliation of the beginning and ending balances for assets and liabilities which are categorized as Level 3 for the year ended December 31, 2008:

Liabilities	Beginning balance	Total realized and unrealized (gains) losses		Purchases, issuances, and settlements (net)	Transfers in and/or (out) of level 3	Ending balance	Change in unrealized (gains) losses included in earnings relating to instruments still held at the reporting date
		Included in earnings	Included in other comprehensive income
Other policy liabilities
Guaranteed minimum withdrawal benefit liability	10,151	296,048	-	29,413	-	335,612	297,426
Guaranteed minimum accumulation benefit liability	22,649	313,928	-	22,027	-	358,604	315,548
Derivatives embedded in reinsurance contracts	-	-	-	-	-	-	-
Fixed index annuities	392,017	(263,765)	-	(21,633)	-	106,619	(206,413)
Total other policy liabilities	424,817	346,211	-	29,807	-	800,835	406,561
Derivative instruments – payable	11,627	30,439	-	-	-	42,066	30,440
Total liabilities measured at fair value on a recurring basis	436,444	376,650	-	29,807	-	842,901	437,001

The FV Option

SFAS No. 159 provides entities the option to measure certain financial assets and financial liabilities at fair value with changes in fair value recognized in earnings each period.  SFAS No. 159 permits the FV option election on an instrument-by-instrument basis at initial recognition of an asset or liability or upon an event that gives rise to a new basis of accounting for that instrument.  The Company adopted SFAS No. 159 as of January 1, 2008.  The Company elected to apply the provisions of SFAS No. 159 for all fixed maturity securities attributable to certain life, health and annuity products, which had previously been designated as available-for-sale.  At December 31, 2007 such available-for-sale securities had a market value of $10.7 billion and an amortized cost of $11.1 billion, and are now classified as trading securities.

The Company adopted the FV option to more closely align the changes in the fair values of its derivative instruments, which are reported as a component of net derivative loss in the statement of operations, with the changes in the fair value of its fixed maturity investments, a significant portion of which are now reported as a component of net investment income in the statement of operations, due to the election of the FV option.  The Company does not employ hedge accounting for any of its derivative instruments.  The Company primarily uses interest rate swaps as part of its asset-liability management strategy, which generally experiences changes in fair value due to interest rate changes.  As such, the Company is attempting to mitigate earnings volatility by electing the FV option for a significant portion of its fixed maturity investment portfolio, which is expected to experience inverse movements in fair value related to interest rate changes.  Additionally, this election provides greater accounting consistency with the Parent and SLF, and will make it possible for the Company to employ different investment strategies in the future, whereby portfolio trading will not influence the Company’s accounting.

In accordance with SFAS No. 159 and SFAS No. 95, “Statement of Cash Flows (as amended),” the Company has changed the presentation of purchases and sales of its fixed maturity securities previously designated as trading in the statement of cash flows, which supports the nature and purpose for which those securities were acquired, which was to not sell them in the near term.  The prior period cash flow has been reclassified to conform to this change.  Purchases and sales of these securities are reported gross in the investing section of the statement of 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, 2008, 2007 and 2006

5. FAIR VALUE MEASUREMENT (CONTINUED)

The FV Option (continued)

Investment income for both trading and available-for-sale fixed maturities is recognized when earned, including amortization of any premium or accrual of any discount, and the effect of estimated principal repayments, if applicable.  Investment income is reported as a component of net investment income in the statement of operations.

As a result of adoption of SFAS No. 159, the Company recorded an increase to opening accumulated other comprehensive income and a related decrease to opening retained earnings of $88.4 million, related to the unrealized loss on investments, net of DAC, VOBA, policyholder liabilities, and tax effects at January 1, 2008, the date of adoption.

6. NET REALIZED INVESTMENT LOSSES

Net realized investment losses on available-for-sale fixed maturities and other investments consisted of the following for the years ended December 31:

	2008	2007	2006
Fixed maturities	$            2,162	$          (4,107)	$          (53,120)
Equity securities	-	395	519
Mortgage and other loans	360	780	1,543
Real estate	431	-	-
Other invested assets	175	(32)	(19)
Other-than-temporary impairments	(41,864)	(68,092)	(6,329)
Sales of previously impaired assets	495	10,008	12,895
Net realized investment losses	$        (38,241)	$          (61,048)	$          (44,511)

7. NET INVESTMENT (LOSS) INCOME

Net investment (loss) income by asset class consisted of the following for the years ended December 31:

	2008	2007	2006
Fixed maturities - Interest and other income	$      930,217	$          998,246	$        1,073,114
Fixed maturities - Change in fair value and net realized (losses) gains on trading securities	(3,143,862)	(83,743)	15,608
Mortgages and other loans	134,963	153,228	135,515
Real estate	8,575	9,347	10,460
Policy loans	44,601	43,708	44,516
Assumed under funds withheld reinsurance agreements	295,409	27,477	-
Ceded under funds withheld reinsurance agreements	(63,513)	(78,246)	(96,984)
Other	23,604	44,426	38,858
Gross investment (loss) income	(1,770,006)	1,114,488	1,221,087
Less: Investment expenses	19,829	15,896	15,006
Net investment (loss) income	$  (1,789,835)	$        1,098,592	$        1,206,081

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, 2008, 2007 and 2006

7. NET INVESTMENT (LOSS) INCOME (CONTINUED)

Investment income on funds withheld reinsurance portfolios is included as a component of net investment income and is accounted for consistent with the policies outlined in Note 1.

The assumed and ceded investment income relates to certain funds withheld reinsurance agreements. The $267.9 million increase in assumed investment income during 2008 as compared to 2007 relates to the funds withheld reinsurance agreement between Sun Life Vermont, a subsidiary of the Company, and SLOC.  This reinsurance agreement was effective during the fourth quarter of 2007.  The $14.7 million decrease in ceded investment income during 2008 as compared to 2007, primarily relates to the funds withheld reinsurance agreement between the Company and SLOC.

8.  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:

	2008		2007
	Carrying	Estimated	Carrying	Estimated
	Amount	Fair Value	Amount	Fair Value
Financial assets:
Cash and cash equivalents	$           1,624,149	$           1,624,149	$              1,169,701	$             1,169,701
Fixed maturities	12,436,166	12,436,166	15,370,241	15,370,241
Mortgages	2,083,003	2,083,089	2,318,341	2,324,351
Derivative instruments -receivables	727,103	727,103	609,261	605,058
Policy loans	729,407	768,658	712,633	712,633
Other invested assets	179,945	179,945	533,476	533,476
Separate accounts	20,531,724	20,531,724	24,996,603	24,996,603
Financial liabilities:
Contractholder deposit funds and other policy liabilities	14,292,665	13,256,964	15,716,209	14,060,467
Derivative instruments - payables	1,494,341	1,494,341	446,640	442,437
Long-term debt to affiliates	1,998,000	1,998,000	1,945,000	1,945,000
Other liabilities	87,534	87,534	105,154	105,154
Separate accounts	20,531,724	20,531,724	24,996,603	24,996,603

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

Interest receivable on the above financial instruments is stated at carrying value which approximates fair value.

Cash and cash equivalents: The carrying value for cash and cash equivalents approximates fair values due to the short-term nature and liquidity of the balance.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2008, 2007 and 2006

8. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

Fixed maturities: The Company determines the fair value of its publicly traded fixed maturities using four primary pricing methods: third-party pricing services, non-binding broker quotes, pricing matrices, and pricing models.  Prices are first sought from third-party pricing services; the remaining unpriced securities are priced using one of the remaining three methods.  Third-party pricing services derive the security prices through recently reported trades for identical or similar securities with adjustments for trading volumes and market observable information through the reporting date.  In the event that there are no recent market trades, pricing services and brokers may use pricing matrices and models to develop a security price based on future expected cash flows discounted at an estimated market rate using collateral performance and vintages.  The Company generally does not adjust quotes or prices obtained from brokers or pricing services.

Structured securities, such as CMOs, CMBS, and ABS, are priced using a matrix, fair value model or independent broker quotations.  CMBS securities, which are a subset of the Company's CMO holdings, are priced using the last sale price of the day or a broker quote, if no sales were transacted that day.  Other CMOs and ABS are priced using matrices, models and independent broker quotations.  Typical inputs used by these three pricing methods include, but are not limited to, reported trades, benchmark yields, issuer spreads, bids and/or estimated cash flows and prepayment speeds.  In addition, estimates of expected future prepayments are factors in determining the price of ABS, MBS, CMBS, and CMOs.  These estimates are based on the underlying collateral and structure of the security, as well as prepayment speeds previously experienced in the market at interest rate levels projected for the underlying collateral.  Actual prepayment experience may vary from these estimates.

For privately placed fixed maturities, fair values are estimated using matrices, which take into account credit spreads for publicly traded securities of similar credit risk, maturity, prepayment and liquidity characteristics.  A portion of privately placed fixed maturities are also priced using market prices or broker quotes.

Mortgages: 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.

Derivative instruments, receivables and payables: The fair values of swaps are based on current settlement values, dealer quotes and market prices.  Fair values for options and futures are also based on dealer quotes and market prices.

Policy loans:  The fair value of policy loans is determined by estimating future cash flows, discounted at the current average policy loan rate.

Other invested assets:  This financial instrument primarily consists of certain cash instruments and fixed maturity securitites, which were purchased using cash collateral related to a securities lending program in which the Company participates.  The fair value of the cash instrument is consistent with the method used in calculating the fair value of the cash and cash equivalents, as described above.  The pricing methods used for the fixed maturity securities component of the securities lending is as explained in the fair value of fixed maturities above.

Separate accounts, assets and liabilities: The estimated fair value of assets held in separate accounts is based on quoted market prices.  The fair value of liabilities related to separate accounts is the amount payable on demand, which excludes surrender charges.

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, 2008, 2007 and 2006

8. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

Contractholder deposit funds and other policy liabilities: The fair values of the Company's general account insurance reserves and contractholder deposits under investment-type contracts (insurance, annuity and pension contracts that do not involve mortality or morbidity risks) are estimated using discounted cash flow analyses or surrender values based on interest rates currently being offered for similar contracts with maturities consistent with those remaining for all contracts being valued. Those contracts that are deemed to have short-term guarantees have a carrying amount equal to the estimated market value.  The fair values of other deposits with future maturity dates are estimated using discounted cash flows.  The fair values of S&P 500 Index and other equity-linked embedded derivatives are produced using standard derivative valuation techniques.  GMABs or GMWBs are considered to be derivatives under SFAS No. 133 and are included in contractholder deposit funds.  Prior to the adoption of SFAS No. 157, the fair value of the embedded derivatives was calculated stochastically using risk neutral scenarios over a fifty-year projection.  Policyholder assumptions were based on experience studies and industry standards.  Consistent with the provisions of SFAS No. 157, effective January 1, 2008, the Company began incorporating risk margins and the Company’s own credit standing, as well as changes in assumptions regarding policyholder behavior, in the calculation of the fair value of embedded derivatives.

Long term debt: The fair value of notes payable and other borrowings is based on future cash flow discounted at the stated interest rate, considering all appropriate terms of the related agreements. Due to provisions included in such agreements, whereby the issuer of the notes has the ability to call each note at par with appropriate approvals, the fair value is equal to par value.

Other liabilities:  This financial instrument consists of issued checks and transmitted wires that have not been cashed and processed in the Company’s bank accounts at the end of the reporting period.  The fair value of other liabilities is consistent with the method used in calculating the fair value of the cash and cash equivalents, as described above.

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, 2008, 2007 and 2006

9. REINSURANCE

Reinsurance ceded contracts do not relieve the Company from its obligations to policyholders.  The Company remains liable to its policyholders for the portion reinsured to the extent that any reinsurer does not meet the obligations assumed under the reinsurance agreement.  To minimize its exposure to significant losses from reinsurer insolvencies, the Company regularly evaluates the financial condition of its reinsurers and monitors concentrations of credit risk.  Management believes that any liability from this contingency is unlikely.

The effects of the Company’s reinsurance agreement were as follows:

	For the Years Ended December 31,
	2008	2007	2006
Premiums and annuity considerations:
Direct	$           67,938	$          62,645	$          61,713
Assumed	58,961	50,986	-
Ceded	(4,166)	(3,015)	(2,521)
Net premiums and annuity considerations	$         122,733	$        110,616	$          59,192
Policyowner benefits:
Direct	$          482,737	$        260,008	$        197,872
Assumed	95,086	30,430	-
Ceded	(134,306)	(60,953)	(40,902)
Net policyowner benefits:	$          443,517	$        229,485	$        156,970
Commission and expense:
Direct	$            13,203	$            5,617	$       25,175
Assumed	28,490	7,521	-
Ceded	(9,560)	(502)	(200)
Net commission and expense	$            32,133	$          12,636	$        24,975
Interest Credited:
Direct	$          601,435	$         693,665	$      705,943
Assumed	38,834	14,075	8,749
Ceded	(78,643)	(77,917)	(81,287)
Net interest credited	$          561,626	$         629,823	$      633,405
Fee and other income:
Direct	$          608,066	$         599,132	$       477,600
Assumed	114,762	4,495	-
Ceded	(158,075)	(123,723)	(78,978)
Net fee and other income	$          564,753	$         479,904	$       398,622

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, 2008, 2007 and 2006

9. REINSURANCE (CONTINUED)

A brief discussion of the Company’s significant reinsurance agreements by business segment follows.  (See Note 17 for additional information on the Company's business segments).

Wealth Management Segment

The Wealth Management Segment manages a closed block of single premium whole life (“SPWL”) insurance policies, a retirement-oriented tax-advantaged life insurance product.  The Company discontinued sales of SPWL policies in response to certain tax law changes in the 1980s.  The Company had SPWL policyholder balances of approximately $1.6 billion as of December 31, 2008 and 2007.  On December 31, 2003, this entire block of business was reinsured on a funds withheld coinsurance basis with SLOC, an affiliate.

Related to this agreement, the Company held the following assets and liabilities at December 31:

	2008		2007
Assets
Reinsurance receivables	$	1,560,946	$	1,591,315
Other assets		38,998		6,380
Liabilities
Contractholder deposit funds and other policy liabilities		1,428,331		1,591,315
Reinsurance payable to an affiliate		1,509,989		1,574,516

The funds withheld assets are comprised of trading bonds and mortgages being managed by the Company.  The significant decline in the value of the funds withheld assets during the year ended December 31, 2008 increased the value of an embedded derivative which has been separated from the host reinsurance contract and recorded at fair value in the Company’s consolidated balance sheet.  The fair value of the embedded derivative reduced contractholder deposit funds and other policy liabilities by $130.6 million at December 31, 2008 and resulted in derivative income of $130.6 million for the year ended December 31, 2008.  Reinsurance payable to affiliates includes a funds withheld liability of $1,510.0 million and $1,534.0 million at December 31, 2008 and 2007.

By reinsuring the SPWL policies, the Company reduced net investment income by $60.3 million, $78.2 million and $97.0 million for the years ended December 31, 2008, 2007 and 2006, respectively.  The Company also reduced interest credited by $74.8 million, $74.8 million and $76.0 million for the years ended December 31, 2008, 2007 and 2006, respectively.  In addition, the Company increased net investment income, relating to an experience rating refund under the reinsurance agreement with SLOC, by $5.3 million, $8.9 million and $13.0 million for the years ended December 31, 2008, 2007 and 2006, 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, 2008, 2007 and 2006

9. REINSURANCE (CONTINUED)

Individual Protection Segment

The Company has agreements with SLOC and several unrelated companies, which provide for reinsurance of portions of the net-amount-at-risk under certain individual variable universal life, UL, individual private placement variable universal life, bank owned life insurance (“BOLI”), and corporate owned life insurance (“COLI”) policies. These amounts are reinsured on either a monthly renewable or a yearly renewable term basis.  In accordance with these agreements, fee income was reduced by $80.0 million, $21.6 million and $37.8 million for the years ended December 31, 2008, 2007 and 2006, respectively.

Pursuant to a reinsurance agreement with SLOC that was effective November 8, 2007, Sun Life Vermont will fund AXXX reserves, attributable to certain UL policies sold by SLOC through its United States branch (the “Branch”).  Sun Life Vermont is reinsuring, on a coinsurance basis, a 100% quota share of SLOC's risk on the UL policies covered under the reinsurance agreement.  New UL business issued through December 31, 2008 has been reinsured under this agreement.  Sun Life Vermont's obligations will be secured in part through a reinsurance trust and in part on a funds-withheld basis.  On November 8, 2007, pursuant to the reinsurance agreement, Sun Life Vermont recorded total assets of $576.9 million, including a funds withheld reinsurance receivable of $551.8 million, deferred costs of $22.4 million, and other assets of $2.8 million.  Total liabilities assumed on November 8, 2007 of $576.9 million consisted of $553.7 million in contractholder deposit account value, $20.4 million in future contract and policy benefits, and other liabilities of $2.8 million.  Under the reinsurance agreement, Sun Life Vermont held the following assets and liabilities at December 31:

	2008		2007
Assets
Reinsurance receivable for funds withheld	$	1,105,722	$	626,608
Reinsurance receivable for deferred costs		19,686		22,322
Liabilities
Contractholder deposit funds and other policy liabilities		813,387		580,613
Future contract and policy benefits		73,058		23,692
Other liabilities		12,004		33,150

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, 2008, 2007 and 2006

9. REINSURANCE (CONTINUED)

Individual Protection Segment (continued)

Funds withheld assets comprised of trading bonds, mortgages and derivatives, amounting to $1,105.7 million and $626.6 million at December 31, 2008 and 2007, respectively, are being held in a separate trust account for the protection of policyholders and claimants of the Branch.  The Company recorded assumed investment income of $295.4 million and $27.5 million for the years ended December 31, 2008 and 2007, respectively.  The assets of the trust are managed by SLOC with all of the investment returns, net of expenses, inuring to the Company.  The funds withheld asset is reported as reinsurance receivable.  The coinsurance treaty with funds withheld gives rise to an embedded derivative requiring that it be separated from the host reinsurance contract.  The fair value of the embedded derivative increased contractholder deposit funds and other policy liabilities by $91.8 million and $3.1 million at December 31, 2008 and 2007, respectively.  Included in derivative income are losses of $88.7 million and $3.1 million for the years ended December 31, 2008 and 2007, respectively, related to the embedded derivative.

In addition, the reinsurance agreement between SLOC and Sun Life Vermont has increased revenues by approximately $321.2 million and $29.7 million for the years ended December 31, 2008 and 2007, respectively, and increased expenses by $134.0 million and $14.1 million for the years ended December 31, 2008 and 2007, respectively.

Effective December 31, 2007, SLNY entered into a reinsurance agreement with SLOC under which SLOC will fund AXXX reserves, attributable to certain UL policies sold by SLNY.  Under this agreement SLNY ceded, and SLOC assumed, on a funds withheld 90% coinsurance basis certain in-force policies at December 31, 2007.  Future new business will also be reinsured under this agreement.  Related to this agreement, SLNY held the following assets and liabilities at December 31:

	2008		2007
Assets
Reinsurance receivables	$	77,628	$	117,293
Other assets		2,676		-
Liabilities
Contractholder deposit funds and other policy liabilities		63,210		66,170
Future contract and policy benefits		3,162		3,974
Reinsurance payable to an affiliate		140,832		117,367
Other liabilities		1,057		-

Reinsurance payable to an affiliate includes a funds withheld liability of $89.4 million and $71.6 million at December 31, 2008 and 2007, respectively; and, a deferred gain of $51.4 million and $45.7 million at December 31, 2008 and 2007, respectively.  The funds withheld assets comprised of trading bonds and mortgages being managed by the Company.  The coinsurance treaty with funds withheld gives rise to an embedded derivative requiring that it be separated from the host reinsurance contract.  The fair value of the embedded derivative reduced contractholder deposit funds and other policy liabilities by $12.0 million at December 31, 2008 and resulted in derivative income of 12.0 million for the year ended December 31, 2008.

In addition, the reinsurance agreement between SLOC and SLNY has decreased revenues by $9.7 million and decreased expenses by $11.5 million for the year ended December 31, 2008.

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, 2008, 2007 and 2006

9. REINSURANCE (CONTINUED)

Group Protection Segment

The Company, through its subsidiary, SLNY, has several agreements with unrelated companies whereby the unrelated companies reinsure the mortality and morbidity risks of certain of the Company’s group contracts.

The Company, through its subsidiary, SLNY, has also an agreement, effective May 31, 2007, to assume the net risks of SLHIC’s New York issued contracts.  At December 31, 2008, SLNY held policyholder liabilities of $32.8 million related to this agreement. In addition, the activities related to the reinsurance agreement have increased revenues by $59.0 million and $51.0 million for the years ended December 31, 2008 and 2007, respectively, and increased expenses by $48.6 million and $34.6 million for the years ended December 31, 2008 and 2007, 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, 2008, 2007 and 2006

10.  RETIREMENT PLANS

Prior to the December 31, 2008 merger of plans described below, the Company sponsored three non-contributory defined benefit pension plans for its employees and certain affiliated employees.  These plans were the staff qualified pension plan (“staff pension plan”), the agents’ qualified pension plan (“agents’ pension plan”) and the staff nonqualified pension plan (“UBF plan”) (collectively, the “Pension Plans”).  Expenses are allocated to participating companies based in a manner consistent with the allocation of employee compensation expenses.  The Company's funding policies for the staff pension plan is to contribute amounts which at least satisfy the minimum amount required by the Employee Retirement Income Security Act of 1974 (“ERISA”).  Most pension plan assets consist of separate accounts of SLOC or other insurance company contracts.

Effective December 31, 2008, the agents’ pension plan was merged into the staff pension plan. The plan merger resulted in a transfer from the agents’ pension plan to the staff pension plan of a projected benefit obligation of $8.8 million and plan assets of $28.3 million. The plan merger did not change the provisions of the agents’ pension plan.

Until the funding requirements for the 2009 plan year under the Pension Protection Act of 2006 are determined in April of 2009, the Company is not expected to make contributions to the staff pension plan in 2009.  The Company will be required to make a contribution for the 2009 plan year by September 2010.

Effective November 7, 2007, IFMG ceased to be an affiliated employer under the staff pension plan, when IFMG was sold by the Parent. As of that date, the staff pension plan was amended to allow IFMG to continue as a participating employer. Effective December 9, 2008 the staff pension plan was amended to eliminate IFMG as a participating employer.

Effective January 1, 2007, the agents’ pension plan was amended for a cost of living adjustment for eligible participants.

The Company sponsors a postretirement benefit plan for its employees and certain affiliated employees providing certain health, dental and life insurance benefits for retired employees and dependents (the “Other Post Retirement Benefit Plan”).  Expenses are allocated to participating companies based on the number of participants.  Substantially all employees of the participating companies may become eligible for these benefits if they reach normal retirement age while working for the Company, or retire early upon satisfying an alternate age plus service condition.  Life insurance benefits are generally set at a fixed amount.

On May 31, 2007, as part of Sun Life Financial’s acquisition of EBG, the Company provided prior service credit under its retiree medical plan to the transferred EBG employees not currently eligible for those benefits under the corresponding Genworth plan.  Additionally, as part of the acquisition, the fair value of the liabilities assumed by the Company included the unfunded accumulated postretirement benefit obligation (“APBO”) attributable to the prior service cost associated with the transferred EBG employees.  The final purchase price was adjusted at May 31, 2007, to settle the unfunded APBO undertaken by the Company.

On September 29, 2006, the FASB issued SFAS No. 158, which requires recognition of the overfunded or underfunded status of pension and other postretirement benefit plans on the balance sheet.  The measurement date – the date at which the benefit obligation and plan assets are measured – is required to be the Company's fiscal year end.  The Company adopted the balance sheet recognition provisions of SFAS No. 158 at December 31, 2006 and adopted the year end measurement date provisions effective January 1, 2008.  The adoption of the year-end measurement date provisions resulted in a net of tax cumulative-effect decrease of $0.3 million to the Company’s January 1, 2008, other comprehensive income (“OCI”).

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, 2008, 2007 and 2006

10.  RETIREMENT PLANS (CONTINUED)

The following tables set forth the change in the Pension Plans’ and Other Post Retirement Benefit Plan’s projected benefit obligations and assets, as well as information on the plans’ funded status at December 31:

	Pension Plans		Other Post Retirement Benefit Plan
	2008	2007	2008	2007
Change in projected benefit obligation:
Projected benefit obligation at beginning of year	$         262,757	$        261,380	$         52,229	$         45,852
Effect of eliminating early measurement date	1,982	-	705	-
Service cost	3,520	4,108	1,616	1,234
Interest cost	16,617	15,754	3,332	2,915
Actuarial (gain) loss	(3,424)	(11,210)	(6,729)	213
Benefits paid	(10,550)	(8,577)	(2,266)	(2,979)
Plan amendments	-	1,302	-	-
Federal subsidy	-	-	225	194
Unfunded APBO as a result of EBG acquisition	-	-	-	4,800
Projected benefit obligation at end of year	$         270,902	$        262,757	$         49,112	$         52,229

	Pension Plans		Other Post Retirement Benefit Plan
	2008	2007	2008	2007
Change in fair value of plan assets:
Fair value of plan assets at beginning of year	$          291,824	$        269,712	$              -	$                   -
Effect of eliminating early measurement date	1,981	-	-	-
Employer contributions	-	-	2,266	2,979
Other	350	(262)	-	-
Actual return on plan assets	(88,094)	30,951	-	-
Benefits paid	(10,550)	(8,577)	(2,266)	(2,979)
Fair value of plan assets at end of year	$          195,511	$        291,824	$              -	$                   -

	Pension Plans		Other Post Retirement Benefit Plan
	2008	2007	2008	2007
Information on the funded status of the plan:
Funded status	$          (75,391)	$         29,067	$      (49,112)	$       (52,229)
4th quarter contribution	-	(710)	-	532
(Accrued) prepaid benefit cost	$          (75,391)	$         28,357	$      (49,112)	$       (51,697)

The accumulated benefit obligation for the Pension Plans at December 31, 2008 and 2007 was $263.1 million and $253.6 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, 2008, 2007 and 2006

10.  RETIREMENT PLANS (CONTINUED)

The Pension Plans were underfunded at December 31, 2008.  For the year ended December 31, 2007, the UBF plan was underfunded. The following table provides information on the projected benefit obligation, accumulated benefit obligation and fair value of plan assets for pension plans with an accumulated benefit obligation in excess of plan assets as of December 31:

	Pension Plans	Pension Plans
	2008	2007
Projected benefit obligations	$        270,902	$        27,277
Accumulated benefit obligation	263,142	25,138
Plan assets	195,511	-

The staff pension plan and agent’s pension plan were overfunded at December 31, 2007.

Amounts recognized in the Company’s consolidated balance sheets for the Pension Plans and Other Post Retirement Benefit Plan consist of the following, as of December 31:

	Pension Plans		Other Post Retirement Benefit Plan
	2008	2007	2008	2007
Other assets	$                      -	$         59,423	$                    -	$                   -
Other liabilities	(75,391)	(31,066)	(49,112)	(51,697)
	$           (75,391)	$         28,357	$         (49,112)	$        (51,697)

Amounts recognized in the Company’s AOCI consist of the following:

	Pension Plans		Other Post Retirement Benefit Plan
	2008	2007	2008	2007
Net actuarial loss (gain)	$          86,528	$        (22,103)	$           5,563	$          13,437
Prior service cost	4,109	4,529	(3,890)	(4,551)
Transition asset	(3,589)	(6,206)	-	-
	$           87,048	$        (23,780)	$           1,673	$            8,886

The following table sets forth the effect on retained earnings and AOCI of eliminating the early measurement date:

	Pension Plans 2008	Other Post Retirement Benefit Plan 2008
Retained earnings	$     (1,346)	$     1,334
Amounts amortized from AOCI:
Amortization of actuarial loss (gain)	$          198	$     (229)
Amortization of prior service (cost) credit	(83)	132
Amortization of transition asset	524	-
Total amortization from AOCI	$          639	$      (97)

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, 2008, 2007 and 2006

10.  RETIREMENT PLANS (CONTINUED)

The following table sets forth the components of the net periodic benefit cost and the Company’s share of net periodic benefit costs related to the Pension Plans and Other Post Retirement Benefit Plan for the years ended December 31:

	Pension Plans			Other Post Retirement Benefit Plan
	2008	2007	2006	2008	2007	2006
Components of net periodic (benefit) cost:
Service cost	$     3,520	$    4,108	$ 6,024	$     1,616	$   1,234	$    1,311
Interest cost	16,617	15,754	15,065	3,332	2,915	2,967
Expected return on plan assets	(22,972)	(21,874)	(21,672)	-	-	-
Amortization of transition obligation asset	(2,093)	(2,093)	(2,093)	-	-	-
Amortization of prior service cost	337	337	266	(529)	(529)	(529)
Recognized net actuarial (gain) loss	(792)	(107)	437	916	912	1,450
Net periodic (benefit) cost	$    (5,383)	$   (3,875)	$    (1,973)	$     5,335	$    4,532	$    5,199
The Company’s share of net periodic (benefit) cost	$    (5,383)	$   (3,875)	$    (1,973)	$     4,638	$    3,910	$    4,501

The following table shows changes in the Company’s AOCI related to the Pension Plans and Other Post Retirement Benefit Plan for the following years:

	Pension Plans			Other Post Retirement Benefit Plan
	2008	2007	2006	2008	2007	2006
Net actuarial loss (gain) arising during the year	$  107,641	$  (20,287)	$   (1,923)	$  (6,729)	$       279	$ 14,070
Net actuarial gain (loss) recognized during the year	792	107	-	(916)	(912)	-
Prior service cost arising during the year	-	1,302	3,564	-	-	(5,080)
Prior service cost recognized during the year	(337)	(337)	-	529	529	-
Transition asset recognized during the year	2,093	2,093	-	-	-	-
Transition asset arising during the year	-	-	(8,299)	-	-	-
Change in effect of additional minimum liability	-	-	(2,834)	-	-	-
Total recognized in AOCI	110,189	(17,122)	(9,492)	(7,116)	(104)	8,990
Tax effect	(38,566)	5,993	3,322	2,491	36	(3,147)
Total recognized in AOCI, net of tax	71,623	(11,129)	(6,170)	(4,625)	(68)	5,843
Total recognized in net periodic benefit cost and other comprehensive income, net of tax	$   66,240	$  (15,004)	$   (8,143)	$        13	$    3,842	$ 10,344

The estimated amounts that will be amortized from AOCI into net periodic benefit costs in 2009 are as follows:

	Pension Plans	Other Post Retirement Benefit Plan
Actuarial gain	$          2,470	$            379
Prior service cost	337	(529)
Transition asset	(2,093)	-
Total	$            714	$           (150)

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, 2008, 2007 and 2006

10.  RETIREMENT PLANS (CONTINUED)

Assumptions

Weighted average assumptions used to determine benefit obligations for the Pension Plans and Other Post Retirement Benefit Plan were as follows:

	Pension Plans			Other Post Retirement Benefit Plan
	2008	2007	2006	2008	2007	2006
Discount rate	6.5%	6.35%	6.0%	6.5%	6.35%	6.0%
Rate of compensation increase	3.75%	4.0%	4.0%	n/a	n/a	n/a

Weighted average assumptions used to determine net benefit cost for the Pension Plans and Other Post Retirement Benefit Plan were as follows:

	Pension Plans			Other Post Retirement Benefit Plan
	2008	2007	2006	2008	2007	2006
Discount rate	6.35%	6.0%	5.8%	6.35%	6.0%	5.8%
Expected long term return on plan assets	8.0%	8.25%	8.75%	n/a	n/a	n/a
Rate of compensation increase	4.0%	4.0%	4.0%	n/a	n/a	n/a

The Company determines the expected long-term rate of return on plan assets by taking the weighted average return expectations based on the long-term return expectations and investment strategy then adjusted for the impact of rebalancing. The difference between actual and expected returns is recognized as a component of unrecognized gains/losses, which is recognized over the average remaining lifetime of inactive participants or the average remaining service lifetime of active participants in the plan, as provided by accounting standards.

In order to measure the Other Post Retirement Benefit Plan’s obligation for 2008, the Company assumed a 9% annual rate of increase in the per capita cost of covered healthcare benefits.  In addition, medical cost inflation is assumed to be 8.5% in 2009 and assumed to decrease gradually to 5.00% for 2014 and remain at that level thereafter.  Assumed healthcare cost trend rates have a significant effect on the amounts reported for the healthcare plans.  A one-percentage point change in assumed health care cost trend rates would have the following effect:

	1- Percentage-Point	1- Percentage-Point
	Increase	Decrease
Effect on post retirement benefit obligation	$           3,608	$        (3,446)
Effect on total of service and interest cost	$              434	$           (433)

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, 2008, 2007 and 2006

10.  RETIREMENT PLANS (CONTINUED)

Plan Assets

The asset allocation for the Company’s staff pension plan assets for 2008 measurement and staff pension plan and agents’ plan assets for 2007 measurement, and the target allocation for 2009, by asset category, are as follows:

	Target Allocation	Percentage of Plan Assets
Asset Category	2009	2008	2007
Equity Securities	60%	54%	65%
Debt Securities	25%	30%	26%
Commercial Mortgages	15%	16%	9%
Total	100%	100%	100%

The target allocations were established to reflect the Company’s investment risk posture and to achieve the desired level of return commensurate with the needs of the fund.  The target ranges are based upon a three to five-year time horizon and may be changed as circumstances warrant.

The portfolio of investments should, over a period of time, earn a gross annualized rate of return that:

1)	exceeds the assumed actuarial rate;
2)	exceeds the return of customized index created by combining benchmark returns in appropriate weightings based on an average asset mix of funds; and
3)	generates a real rate of return of at least 3% after inflation, and sufficient income or liquidity to pay retirement benefits on a timely basis.

The objective of the fund is to maximize the rate of return on assets over the long term. Safety of principal, credit quality and diversification are important considerations. Pursuant with this objective the fund will invest in a diversified portfolio of common stocks and fixed income investments. The fund is permitted to invest in derivative securities as long as the total derivatives exposure does not exceed 20% of the fund’s value.

Cash Flow

The Company does not expect to make contributions to the staff pension plan in 2009. However, the Company will contribute $1.3 million to the UBF plan in 2009.

The Company has estimated the following future benefit payments for the Pension Plans and the future benefit payments and expected federal subsidy for the Other Post Retirement Benefit Plan for the years 2009 through 2018:

		Other Post Retirement Benefit Plan’s
	Pension Plans’ Benefits	Benefits	Expected Federal Subsidy
2009	$           10,109	$           3,128	$           224
2010	10,769	3,275	226
2011	11,594	3,448	227
2012	12,485	3,620	227
2013	13,261	3,831	223
2014 to 2018	80,720	23,054	982

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, 2008, 2007 and 2006

10.  RETIREMENT PLANS (CONTINUED)

Savings and Investment Plan

The Company sponsors and participates in a savings plan that qualifies under Section 401(k) of the Internal Revenue Code (“the 401(k) Plan”) for which substantially all employees of at least age 21 are eligible to participate at date of hire. Under the 401(k) Plan, the Company matches, up to specified amounts, the employees’ contributions to the plan.

On September 21, 2005, the Board of Directors of the Company approved amendments pertaining to the 401(k) Plan including the following:

Effective January 1, 2006, the 401 (k) Plan also includes a retirement investment account that qualifies under Section 401(a) of the Internal Revenue Code (“the RIA”).  The Company contributes a percentage of the participant’s eligible compensation determined under the following chart based on the sum of the participant’s age and service on January 1 of the applicable plan year.

Age Plus Service	Company Contribution
Less than 40	3%
At least 40 but less than 55	5%
At least 55	7%

For RIA participants who are at least age 40 on January 1, 2006 and whose age plus service on January 1, 2006 equals or exceeds 45, the Company also contributes to the RIA from January 1, 2006 through December 31, 2015, a percentage of the participant’s eligible compensation determined under the following chart based on the participant’s age and service on January 1, 2006.

	Service
Age	Less than 5 years	5 or more years
At least 40 but less than 43	3.0%	5.0%
At least 43 but less than 45	3.5%	5.5%
At least 45	4.5%	6.5%

For RIA participants who did not become participants in the Other Post Retirement Benefit Plan before January 1, 2006, the Company made a one-time RIA contribution in January 2006 based on their applicable percentage from the first chart above as of January 1, 2006 and their eligible compensation paid during the period beginning on their hire date and ending on December 31, 2005.

The amount of the 2008 employer contributions under the 401(k) Plan for the Company and its affiliates was $22.7 million.  Amounts are allocated to affiliates based on their respective employees’ contributions.  The Company’s portion of the expense was $18.1 million, $16.1 million and $10.8 million for the years ended December 31, 2008, 2007 and 2006, 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, 2008, 2007 and 2006

11. FEDERAL INCOME TAXES

The Company accounts for current and deferred income taxes in the manner prescribed by SFAS No. 109.  A summary of the components of income tax (benefit) expense in the consolidated statements of operations for the years ended December 31 is as follows:

		2008		2007		2006
Income tax (benefit) expense:
Current	$	(85,841)	$	(108,526)	$	(5,792)
Deferred		(773,142)		84,668		4,180
Total income tax benefit	$	(858,983)	$	(23,858)	$	(1,612)

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

		2008		2007		2006
Expected federal income tax (benefit) expense	$	(1,082,838)	$	407	$	26,838
Low income housing credit		(4,016)		(5,490)		(6,225)
Separate account dividend received deduction		(18,144)		(11,988)		(13,090)
Prior year adjustments/settlements		(7,279)		932		(8,396)
Valuation allowance		79,963		-		-
Goodwill impairment not deductible		176,885		-		-
FIN 48 adjustments/settlements		(932)		(6,375)		-
Other items		(2,628)		(1,775)		(844)
Federal income tax benefit		(858,989)		(24,289)		(1,717)
State income tax expense		6		431		105
Total income tax benefit	$	(858,983)	$	(23,858)	$	(1,612)

The net deferred tax asset 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 net deferred tax asset as of December 31 were as follows:

		2008		2007
Deferred tax assets:
Actuarial liabilities	$	194,253	$	110,617
Net operating loss		98,958		-
Investments, net		1,331,665		230,416
Other		80,233		-
		1,705,109		341,033
Valuation allowance		(79,963)		-
Total deferred tax assets		1,625,146		341,033
Deferred tax liabilities:
Deferred policy acquisition costs		(768,301)		(322,461)
Other		-		(2,627)
Total deferred tax liabilities		(768,301)		(325,088)
Net deferred tax asset	$	856,845	$	15,945

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, 2008, 2007 and 2006

11. FEDERAL INCOME TAXES (CONTINUED)

The Company’s net deferred tax asset of $856.8 million at December 31, 2008 is comprised of gross deferred tax assets, gross deferred tax liabilities and a valuation allowance.  The gross deferred tax assets are primarily related to realized and unrealized investment security losses, actuarial liabilities, as well as a current period net operating loss (“NOL”) which, if unutilized, will expire in 2023.

The Company recorded a valuation allowance of $79.9 million in the statement of operations relating to the tax benefits associated with realized investment impairment losses recorded during the third and fourth quarter of 2008.  Management has determined that it is not more likely than not that the losses will be utilized either against prior year capital gains or through the generation of future capital gains within the applicable carry-forward period.

The Company believes that it is more likely than not that the deferred tax assets related to the remaining unrealized investment losses will be realized due to the Company’s intent and ability to hold the related investment securities to recovery of value, whereby a capital loss will not be realized for tax purposes.  Based on the sufficient positive evidence available, specifically existing taxable temporary differences that will reverse in future periods and projected future taxable income, the Company also believes that it is more likely than not that the deferred tax assets for the NOL, tax reserves and other items will be realized.

The Company adopted FIN 48 on January 1, 2007.  FIN 48 establishes a comprehensive reporting model which addresses how a business entity should recognize, measure, present and disclose uncertain tax positions that the entity has taken or plans to take on a tax return.

As a result of the implementation of FIN 48, the Company recognized a decrease of $5.2 million in the liability for UTBs and related net interest, which was accounted for as an increase to its January 1, 2007 balance of retained earnings.  The liability for UTBs related to permanent and temporary tax adjustments, exclusive of interest, was $50.7 million and $63.0 million at December 31, 2008 and December 31, 2007, respectively.  Of the $50.7 million, $6.7 million represents the amount of UTBs that, if recognized, would favorably affect the Company’s effective income tax rate in future periods, exclusive of any related interest.  In addition, consistent with the provisions of FIN 48, the Company reclassified $78.3 million of income taxes from deferred tax liabilities to accrued expenses and taxes at December 31, 2008.

The net (decrease) increase in the tax liability for UTBs of $(12.4) million and $8.9 million in the years ended December 31, 2008 and 2007, respectively, resulted from the following:

		2008		2007
Balance at January 1	$	63,043	$	54,086
Gross increases related to tax positions in prior years		111,473		20,717
Gross decreases related to tax positions in prior years		(90,772)		(11,760)
Gross increases related to tax positions in current year		-		-
Settlements		(33,065)		-
Close of tax examinations/statutes of limitations		-		-
Balance at December 31	$	50,679	$	63,043

The Company has elected on a prospective basis, with the adoption of FIN 48, to recognize interest and penalties accrued related to UTBs in interest expense.  During the year ended December 31, 2008 and 2007, the Company recognized $3.4 million and $2.0 million, respectively, in gross interest related to UTBs.  The Company did not accrue any penalties.

While the Company expects the amount of unrecognized tax liabilities to change in the next twelve months, it does not expect the change to have a significant impact on its results of operations or financial position.

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, 2008, 2007 and 2006

11. FEDERAL INCOME TAXES (CONTINUED)

The Company files federal income tax returns and income tax returns in various state and local jurisdictions.  With few exceptions, the Company is no longer subject to examinations by the tax authorities in these jurisdictions for tax years before 2001.  In August 2006, the IRS issued a Revenue Agent’s Report for the Company’s 2001 and 2002 tax years.  The Company is currently at the Appeals Division of the IRS (“Appeals”) with respect to that two-year audit cycle.  In the first quarter of 2007, the IRS commenced an examination of the Company’s U.S. federal income tax returns for the tax years 2003 and 2004. In October 2008, the IRS issued a Revenue Agent’s Report for the Company’s tax years 2003 and 2004. The Company filed a protest and expects that it will be assigned to Appeals in 2009.  While the final outcome of the appeal and ongoing tax examinations is not determinable, the Company has adequate liabilities accrued as prescribed by FIN 48 and does not believe that any adjustments would be material to its financial position.

The Company will file a consolidated return with SLC -U.S. Ops Holdings for the year ended December 31, 2008 as the Company did for the years ended December 31, 2007 and 2006. The Company’s subsidiaries, INDY and Sun Life Vermont were included as part of the consolidation for the year ended December 31, 2007.  For the year ended December 31, 2007 and 2006, SLNY filed stand-alone federal income tax returns.  INDY filed a stand-alone federal income tax return for the year ended December 31, 2006.

The Company makes or receives payments under certain tax sharing agreements with SLC – U.S. Ops Holdings.  Under these agreements, such payments are determined based on the Company’s stand-alone taxable income (as if it were filing as a separate company) and based upon the SLC - U.S. Ops Holdings’ consolidated group’s overall taxable position.  Sun Life Vermont is subject to an adjustment in the amount payable or receivable under its Tax Allocation Agreement to the extent of a subsequent change in its stand-alone taxable income.  Sun Life Vermont is not required to pay SLC – U.S. Ops Holdings for changes in the consolidated federal tax liability that may result from changes in the timing of the utilization of Sun Life Vermont’s losses in the consolidated federal tax return.  The Company received income tax refunds of $113.2 million and $16.2 million in 2008 and 2007, respectively, and made income tax payments of $22.7 million in 2006.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2008, 2007 and 2006

12.  LIABILITY FOR UNPAID CLAIMS AND CLAIMS ADJUSTMENT EXPENSES

Activity in the liability for unpaid claims and claims adjustment expenses, which is related to the Company’s group life, group disability insurance, group dental and stop loss products is summarized below:

	2008	2007
Balance at January 1	$    74,878	$      36,689
Less reinsurance recoverable	(5,921)	(5,906)
Net balance at January 1	68,957	30,783
Incurred related to:
Current year	79,725	96,377
Prior years	(6,557)	(1,805)
Total incurred	73,168	94,572
Paid losses related to:
Current year	(53,615)	(47,531)
Prior years	(22,541)	(8,867)
Total paid	(76,156)	(56,398)
Balance at December 31	71,316	74,878
Less reinsurance recoverable	(5,347)	(5,921)
Net balance at December 31	$    65,969	$      68,957

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

As a result of changes in estimates of insured events in prior years, the liability for unpaid claims and claims adjustment expense decreased by $6.6 million and $1.8 million in 2008 and 2007, respectively.  The favorable development experienced in both years was driven mainly by better than expected loss experience in group life.

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, 2008, 2007 and 2006

13.  LIABILITIES FOR CONTRACT GUARANTEES

The major provisions of AICPA SOP 03-1 that affect the Company require:

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

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

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

The Company offers various guarantees to certain policyholders including a return of no less than (a) total deposits made on the contract adjusted for any customer withdrawals, (b) total deposits made on the contract adjusted for any customer withdrawals plus a minimum return, or (c) the highest contract value on a specified anniversary date minus any customer withdrawals following the contract anniversary.  These guarantees include benefits that are payable in the event of death, upon annuitization, or at specified dates during the accumulation period of an annuity.

The table below represents information regarding the Company’s variable annuity contracts with guarantees at December 31, 2008:

Benefit Type	Account Balance	Net Amount at Risk 1	Average Attained Age
Minimum Death	$          12,627,787	$           4,398,559	66.7
Minimum Income	$               189,863	$              130,177	60.8
Minimum Accumulation or Withdrawal	$            4,961,237	$              857,764	63.0

The table below represents information regarding the Company’s variable annuity contracts with guarantees at December 31, 2007:

Benefit Type	Account Balance	Net Amount at Risk 1	Average Attained Age
Minimum Death	$          17,771,546	$         1,318,150	66.4
Minimum Income	$               343,853	$              43,233	60.3
Minimum Accumulation or Withdrawal	$            5,321,780	$                4,204	62.4

1Net amount at risk represents the difference between guaranteed benefits and account balance.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2008, 2007 and 2006

13.  LIABILITIES FOR CONTRACT GUARANTEES (CONTINUED)

The following roll-forward summarizes the change in reserve for the GMDBs and GMIBs for the year ended December 31, 2008:

	Guaranteed Minimum Death Benefit	Guaranteed Minimum Income Benefit	Total
Balance at January 1, 2008	$              39,673	$           4,817	$          44,490
Benefit Ratio Change / Assumption Changes	193,678	15,867	209,545
Incurred guaranteed benefits	19,072	906	19,978
Paid guaranteed benefits	(58,226)	(3,244)	(61,470)
Interest	7,451	427	7,878
Balance at December 31, 2008	$             201,648	$             18,773	$           220,421

The following roll-forward summarizes the change in reserve for the GMDBs and GMIBs for the year ended December 31, 2007:

	Guaranteed Minimum Death Benefit	Guaranteed Minimum Income Benefit	Total
Balance at January 1, 2007	$             39,923	$           1,448	$          41,371
Benefit Ratio Change / Assumption Changes	3,016	9,206	12,222
Incurred guaranteed benefits	24,841	704	25,545
Paid guaranteed benefits	(30,158)	(6,613)	(36,771)
Interest	2,051	72	2,123
Balance at December 31, 2007	$             39,673	$            4,817	$         44,490

The liability for death and income benefit guarantees is established equal to a benefit ratio multiplied by the cumulative contract charges earned, plus accrued interest less contract benefit payments.  The benefit ratio is calculated as the estimated present value of all expected contract benefits divided by the present value of all expected contract charges.  The benefit ratio may be in excess of 100%.  For guarantees in the event of death, benefits represent the current guaranteed minimum death payments in excess of the current account balance.  For guarantees at annuitization, benefits represent the present value of the minimum guaranteed annuity benefits in excess of the current account balance.

Projected benefits and assessments used in determining the liability for contract guarantees are developed using models and stochastic scenarios that are also used in the development of estimated expected future gross profits.  Underlying assumptions for the liability related to income benefits include assumed future annuitization elections based upon factors such as eligibility conditions and the annuitant’s attained age.

The liability for guarantees is re-evaluated regularly, and adjustments are made to the liability balance through a charge or credit to policyholder benefits.

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, 2008, 2007 and 2006

13.  LIABILITIES FOR CONTRACT GUARANTEES (CONTINUED)

Guaranteed minimum accumulation benefits (“GMABs”) and withdrawal benefits (“GMWBs”) are considered to be derivatives under SFAS No. 133 and are recorded at fair value through earnings. Prior to the adoption of SFAS No. 157, the fair value of the embedded derivatives was calculated stochastically using risk neutral scenarios over a fifty-year projection.  Policyholder assumptions were based on experience studies and industry standards.  Consistent with the provisions of SFAS No. 157, effective January 1, 2008, the Company began incorporating the following unobservable inputs in its calculation of the embedded derivatives:

Actively-Managed Volatility Adjustments - This component incorporates the basis differential between the observable implied volatilities for each index and the actively-managed funds underlying the variable annuity product.  The adjustment is based on historical actively-managed fund volatilities and historical weighted-average index volatilities.

Credit Standing Adjustment - This component makes an adjustment that market participants would make to reflect the non-performance risk associated with the embedded derivatives.  The adjustment is based on the published credit spread for insurance companies with a rating equal to the rating of the Company.

Behavior Risk Margin - This component adds a margin that market participants would require for the risk that the Company's best estimate policyholder behavior assumptions could differ from actual experience.  This risk margin is determined by taking the difference between the fair value based on adverse policyholder behavior assumptions and the fair value based on best estimate policyholder behavior assumptions, using assumptions the Company believes market participants would use in developing risk margins.

The net balance of GMABs and GMWBs constituted a liability in the amount of $694.2 million and $37.4 million at December 31, 2008 and 2007, respectively.

14. DEFERRED POLICY ACQUISITION COSTS

The changes in DAC for the years ended December 31 were as follows:

	2008		2007
Balance at January 1	$	1,603,397	$	1,234,206
Acquisition costs deferred		365,918		356,087
Amortized to expense during the year		893,086		(169,799)
Adjustment for unrealized investment losses during the year		-		182,903
Balance at December 31	$	2,862,401	$	1,603,397

See Note 1 for information regarding the deferral and amortization methodologies related to DAC.  The Company tests its DAC asset for future recoverability, and has determined that the asset is not impaired at December 31, 2008.

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, 2008, 2007 and 2006

15. VALUE OF BUSINESS AND CUSTOMER RENEWALS ACQUIRED

The changes in VOBA and VOCRA for the years ended December 31 were as follows:

	2008		2007
Balance at January 1	$	51,806	$	47,744
Amount capitalized due to acquisition of new business		-		23,854
Amortized to expense during the year		128,019		(19,322)
Adjustment for unrealized investment gains during the year		-		(470)
Balance at December 31	$	179,825	$	51,806

Additions to VOBA and VOCRA for the year ended December 31, 2007, were a result of the SLHIC to SLNY asset transfer, as described in Note 2.  VOBA transferred was $7.6 million and the value of customer renewals transferred was $16.2 million. Decreased actual gross profits in 2008 contributed to negative amortization and an increase to the VOBA asset.  The Company tests its VOBA asset for future recoverability, and has determined that the asset is not impaired at December 31, 2008.

16. CONSOLIDATING FINANCIAL INFORMATION

The following consolidating financial statements are provided in compliance with Regulation S-X of the U.S. Securities and Exchange Commission (the “SEC”) and in accordance with SEC Rule 12h-5.

The Company’s wholly-owned subsidiary, SLNY, sells, among other products, combination fixed and variable annuity contracts (the “Contracts”) in the State of New York.  These Contracts contain a fixed investment option, where interest is paid at a guaranteed rate for a specified period of time, and withdrawals made before the end of the specified period may be subject to a market value adjustment that can increase or decrease the amount of the withdrawal proceeds (the “fixed investment option period”).  Effective September 27, 2007, the Company provided a full and unconditional guarantee (the “guarantee”) of SLNY’s obligation related to the Contracts’ fixed investment option period related to policies currently in-force or sold on or after September 30, 2007.  The guarantee relieves SLNY of its obligation to file annual, quarterly, and current reports with the SEC on Form 10-K, Form 10-Q and Form 8-K.

In the following presentation of consolidating financial statements, the term “SLUS as Parent” is used to denote the Company as a stand-alone entity, isolated from its subsidiaries and the term “Other Subs” is used to denote the Company's other subsidiaries, with the exception of SLNY.  All consolidating financial statements are presented in thousands.

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, 2008, 2007 and 2006

16. CONSOLIDATING FINANCIAL INFORMATION (CONTINUED)

Consolidating Statements of Operations

For the year ended December 31, 2008

	SLUS as Parent		SLNY		Other Subs		Elimination		Consolidated Company
Revenues
Premiums and annuity considerations	$	16,066	$	106,667	$	-	$	-	$	122,733
Net investment (loss) income (1)		(1,862,501)		(112,508)		185,174		-		(1,789,835)
Net derivative loss (2)		(573,399)		(32,059)		(266,086)		-		(871,544)
Net realized investment losses		(21,852)		(10,986)		(5,403)		-		(38,241)
Fee and other income		436,075		9,681		118,997		-		564,753
		(2,005,611)		(39,205)		32,682		-		(2,012,134)
Total revenues
Benefits and Expenses
Interest credited		483,769		45,129		32,728		-		561,626
Interest expense		60,887		(602)		46,492		-		106,777
Policyowner benefits		306,404		80,789		56,324		-		443,517
Amortization of DAC, VOBA and VOCRA (3)		(963,422)		(82,218)		24,614		-		(1,021,026)
Goodwill impairment		658,051		37,788		5,611		-		701,450
Other operating expenses		214,654		44,725		29,967		-		289,346
Total benefits and expenses		760,343		125,611		195,736		-		1,081,690
Loss before income tax benefit		(2,765,954)		(164,816)		(163,054)		-		(3,093,824)
Income tax benefit expense		(772,699)		(41,418)		(44,866)		-		(858,983)
Equity in the net loss of subsidiaries		(241,586)		-		-		241,586		-
Net loss	$	(2,234,841)	$	(123,398)	$	(118,188)	$	241,568	$	(2,234,841)

(1) SLUS’, SLNY’s and Other Subs’ net investment (loss) income includes a decrease in market value of $2,448.8 million, $154.9 million and $159.2 million, respectively, for the year ended December 31, 2008, related to the Company’s trading securities.

(2) SLUS’ and SLNY’s net derivative loss for the year ended December 31, 2008 includes $165.8 million and $0.3 million, respectively, of income related to the Company’s adoption of SFAS No. 157, which is further discussed in Note 5.

(3) SLUS’ and SLNY’s amortization of DAC, VOBA, and VOCRA for year ended December 31, 2008 includes $3.0 million and $0.2 million, respectively, of expenses related to the Company’s adoption of SFAS No. 157, which is further discussed in Note 5.

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, 2008, 2007 and 2006

16. CONSOLIDATING FINANCIAL INFORMATION (CONTINUED)

Consolidating Statements of Operations

For the year ended December 31, 2007

	SLUS as Parent		SLNY		Other Subs		Elimination		Consolidated Company
Revenues
Premiums and annuity considerations	$	15,330	$	95,286	$	-	$	-	$	110,616
Net investment income (1)		941,185		94,309		63,098		-		1,098,592
Net derivative loss		(185,682)		(3,967)		(3,475)		-		(193,124)
Net realized investment losses		(57,547)		(3,487)		(14)		-		(61,048)
Fee and other income		445,248		26,648		8,008		-		479,904
Subordinated notes early redemption premium		-		-		25,578		-		25,578
Total revenues		1,158,534		208,789		93,195		-		1,460,518
Benefits and Expenses
Interest credited		571,309		51,390		7,124		-		629,823
Interest expense		75,052		74		26,406		-		101,532
Policyowner benefits		155,903		69,309		4,273		-		229,485
Amortization of DAC, VOBA and VOCRA		165,666		19,921		3,534		-		189,121
Other operating expenses		238,810		37,061		7,944		-		283,815
Partnership capital securities early redemption payment		-		-		25,578		-		25,578
Total benefits and expenses		1,206,740		177,755		74,859		-		1,459,354
(Loss) income before income tax (benefit) expense		(48,206)		31,034		18,336		-		1,164
Income tax (benefit) expense		(40,222)		10,231		6,133		-		(23,858)
Equity in the net income of subsidiaries		33,006		-		1,811		(34,817)		-
Net income	$	25,022	$	20,803	$	14,014	$	(34,817)	$	25,022

(1) SLUS’ and Other Subs’ net investment income includes a (decrease) increase in market value of $(89.2) million and $0.8 million, respectively, for the year ended December 31, 2007 related to the Company’s trading securities.

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, 2008, 2007 and 2006

16. CONSOLIDATING FINANCIAL INFORMATION (CONTINUED)

Consolidating Statements of Operations

For the year ended December 31, 2006

	SLUS as Parent		SLNY		Other Subs		Elimination		Consolidated Company
Revenues
Premiums and annuity considerations	$	20,870	$	38,322	$	-	$	-	$	59,192
Net investment income (1)		1,049,425		97,365		59,784		(493)		1,206,081
Net derivative income		8,596		-		-		493		9,089
Net realized investment losses		(38,327)		(6,081)		(103)		-		(44,511)
Fee and other income		375,144		21,083		2,395		-		398,622
Total revenues		1,415,708		150,689		62,076		-		1,628,473
Benefits and Expenses
Interest credited		573,178		56,379		3,848		-		633,405
Interest expense		79,637		-		51,157		8		130,802
Policyowner benefits		126,393		29,257		1,320		-		156,970
Amortization DAC, VOBA and VOCRA		380,760		18,422		-		-		399,182
Other operating expenses		207,903		22,988		551		(8)		231,434
Total benefits and expenses		1,367,871		127,046		56,876		-		1,551,793
Income before income tax (benefit) expense		47,837		23,643		5,200		-		76,680
Income tax (benefit) expense		(10,495)		7,410		1,473		-		(1,612)
Equity in the net income of subsidiaries		19,960		-		3,096		(23,056)		-
Net income	$	78,292	$	16,233	$	6,823	$	(23,056)	$	78,292

(1) SLUS’ net investment income includes a decrease in market value of $15.2 million for the year ended December 31, 2006 related to the Company’s trading securities

 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 except per share data)

For the years ended December 31, 2008, 2007 and 2006

16. CONSOLIDATING FINANCIAL INFORMATION (CONTINUED)

Consolidating Balance Sheets at December 31, 2008

	SLUS as Parent		SLNY		Other Subs		Elimination		Consolidated Company
ASSETS
Investments
Available-for-sale fixed maturities at fair value	$	476,180	$	148,124	$	49,716	$	-	$	674,020
Trading fixed maturities at fair value		9,639,477		988,809		1,133,860		-		11,762,146
Investment in subsidiaries		450,444		-		-		(450,444)		-
Mortgage loans		1,911,114		171,889		-		-		2,083,003
Derivative instruments – receivable		727,103		-		-		-		727,103
Limited partnerships		78,289		-		-		-		78,289
Real estate		157,403		-		44,067		-		201,470
Policy loans		704,548		156		24,703		-		729,407
Other invested assets		206,902		4,529		-		-		211,431
Cash and cash equivalents		1,202,336		377,958		43,855		-		1,624,149
Total investments and cash		15,553,796		1,691,465		1,296,201		(450,444)		18,091,018
Accrued investment income		250,170		15,226		17,168		-		282,564
Deferred policy acquisition costs		2,555,042		233,401		73,958		-		2,862,401
Value of business and customer renewals acquired		169,083		10,742		-		-		179,825
Net deferred tax asset		910,344		22,627		-		(76,126)		856,845
Goodwill		-		7,299		-		-		7,299
Receivable for investments sold		6,743		430		375		-		7,548
Reinsurance receivable		1,872,687		82,976		1,120,952		-		3,076,615
Other assets		200,218		20,835		1,787		-		222,840
Separate account assets		19,797,280		690,524		43,920		-		20,531,724
Total assets	$	41,315,363	$	2,775,525	$	2,554,361	$	(526,570)	$	46,118,679
LIABILITIES
Contractholder deposit funds and other policy liabilities	$	15,351,097	$	1,348,109	$	846,515	$	-	$	17,545,721
Future contract and policy benefits		847,228		93,975		73,485		-		1,014,688
Payable for investments purchased		212,788		150,160		565		-		363,513
Accrued expenses and taxes		81,362		(21,325)		58,634		-		118,671
Deferred tax liability		-		-		76,126		(76,126)		-
Debt payable to affiliates		883,000		-		1,115,000		-		1,998,000
Reinsurance payable to affiliate		1,509,989		140,832		-		-		1,650,821
Derivative instruments – payable		1,327,126		-		167,215		-		1,494,341
Other liabilities		510,238		44,597		51,110		-		605,945
Separate account liabilities		19,797,280		690,524		43,920		-		20,531,724
Total liabilities		40,520,108		2,446,872		2,432,570		(76,126)		45,323,424
STOCKHOLDER’S EQUITY
Common stock	$	6,437	$	2,100	$	2,542	$	(4,642)	$	6,437
Additional paid-in capital		2,872,242		389,963		209,749		(599,712)		2,872,242
Accumulated other comprehensive loss		(129,884)		(20,008)		(3,626)		23,634		(129,884)
Accumulated deficit		(1,953,540)		(43,402)		(86,874)		130,276		(1,953,540)
Total stockholder’s equity		795,255		328,653		121,791		(450,444)		795,255
Total liabilities and stockholder’s equity	$	41,315,363	$	2,775,525	$	2,554,361	$	(526,570)	$	46,118,679

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 except in share data)

For the years ended December 31, 2008, 2007 and 2006

16. CONSOLIDATING FINANCIAL INFORMATION (CONTINUED)

Consolidating Balance Sheets at December 31, 2007

	SLUS as Parent		SLNY		Other Subs		Elimination		Consolidated Company
ASSETS
Investments
Available-for-sale fixed maturities at fair value	$	10,157,376	$	1,288,568	$	57,286	$	-	$	11,503,230
Trading fixed maturities at fair value		3,288,671		-		578,340		-		3,867,011
Investment in subsidiaries		559,851		-		-		(559,851)		-
Mortgage loans		2,146,286		170,205		1,850		-		2,318,341
Derivative instruments – receivable		609,261		-		-		-		609,261
Limited partnerships		164,464		-		-		-		164,464
Real estate		157,147		-		44,630		-		201,777
Policy loans		686,099		118		26,416		-		712,633
Other invested assets		499,538		69,138		-		-		568,676
Cash and cash equivalents		415,494		65,901		688,306		-		1,169,701
Total investments and cash		18,684,187		1,593,930		1,396,828		(559,851)		21,115,094
Accrued investment income		268,732		15,245		6,386		-		290,363
Deferred policy acquisition costs		1,469,976		118,126		15,295		-		1,603,397
Value of business and customer renewals acquired		35,735		16,071		-		-		51,806
Net deferred tax asset		171,899		-		-		(155,954)		15,945
Goodwill		658,051		45,167		5,611		-		708,829
Receivable for investments sold		2,796		615		71		-		3,482
Reinsurance receivable		1,937,814		123,214		648,221		-		2,709,249
Other assets		278,573		32,877		155,221		(154,672)		311,999
Separate account assets		23,996,463		929,008		71,132		-		24,996,603
Total assets	$	47,504,226	$	2,874,253	$	2,298,765	$	(870,477)	$	51,806,767
LIABILITIES
Contractholder deposit funds and other policy liabilities	$	16,361,329	$	1,285,259	$	615,981	$	-	$	18,262,569
Future contract and policy benefits		706,657		93,001		23,930		-		823,588
Payable for investments purchased		169,606		635		28,969		-		199,210
Accrued expenses and taxes		169,532		22,915		85,290		(154,672)		123,065
Deferred tax liability		-		1,045		154,909		(155,954)		-
Debt payable to affiliates		945,000		-		1,000,000		-		1,945,000
Reinsurance payable to affiliate		1,574,517		117,367		-		-		1,691,884
Derivative instruments – payable		446,508		-		132		-		446,640
Other liabilities		704,467		107,458		76,136		-		888,061
Separate account liabilities		23,996,463		929,008		71,132		-		24,996,603
Total liabilities		45,074,079		2,556,688		2,056,479		(310,626)		49,376,620
STOCKHOLDER’S EQUITY
Common stock, $1,000 par value	$	6,437	$	2,100	$	2,542	$	(4,642)	$	6,437
Additional paid-in capital		2,146,436		239,963		274,555		(514,518)		2,146,436
Accumulated other comprehensive loss		(92,403)		(11,924)		(1,333)		13,257		(92,403)
Retained earnings (Accumulated deficit)		369,677		87,426		(33,478)		(53,948)		369,677
Total stockholder’s equity		2,430,147		317,565		242,286		(559,851)		2,430,147
Total liabilities and stockholder’s equity	$	47,504,226	$	2,874,253	$	2,298,765	$	(870,477)	$	51,806,767

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, 2008, 2007 and 2006

16. CONSOLIDATING FINANCIAL INFORMATION (CONTINUED)

Consolidating Statements of Cash Flow

For the year ended December 31, 2008

	SLUS as Parent		SLNY		Other Subs		Elimination		Consolidated Company
Cash Flows From Operating Activities:
Net loss from operations	$	(2,234,841)	$	(123,398)	$	(118,188)	$	241,586	$	(2,234,841)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Net amortization of premiums on investments		27,009		2,663		(1,301)		-		28,371
Amortization of DAC, VOBA and VOCRA		(963,422)		(82,218)		24,614		-		(1,021,026)
Depreciation and amortization		5,478		311		922		-		6,711
Net loss on derivatives		522,838		32,059		257,820		-		812,717
Net realized losses on available-for-sale investments		21,852		10,986		5,403		-		38,241
Changes in fair value of trading investments		2,448,822		154,926		159,145		-		2,762,893
Net realized losses on trading investments		324,369		30,622		25,978		-		380,969
Net change in unrealized and undistributed losses in private equity limited partnerships		(9,796)		-		-		-		(9,796)
Interest credited to contractholder deposits		483,769		45,129		32,728		-		561,626
Goodwill impairment		658,051		37,788		5,611		-		701,450
Investment in subsidiaries		241,586		-		-		(241,586)		-
Deferred federal income taxes		(680,276)		(15,318)		(77,549)		-		(773,143)
Changes in assets and liabilities:
Additions to DAC, VOBA and VOCRA		(254,761)		(27,648)		(83,277)		-		(365,686)
Accrued investment income		18,562		19		(10,782)		-		7,799
Net reinsurance receivable/payable		145,172		66,699		(472,731)		-		(260,860)
Future contract and policy benefits		140,571		898		49,555		-		191,024
Dividends received from subsidiaries		-		-		-		-		-
Other, net		29,356		122,486		101,318		-		253,160
Net cash provided by (used in) operating activities		924,339		256,004		(100,734)		-		1,079,609
Cash Flows From Investing Activities:
Sales, maturities and repayments of:
Available-for-sale fixed maturities		89,468		6,440		5,849		-		101,757
Trading fixed maturities		1,469,669		194,980		143,849		-		1,808,498
Mortgage loans		258,736		15,202		20,672		-		294,610
Real estate		1,141		-		-		-		1,141
Other invested assets		629,692		64,482		(2,017)		-		692,157
Purchases of:
Available-for-sale fixed maturities		(107,709)		(14,027)		(7,738)		-		(129,474)
Trading fixed maturities		(1,005,670)		(258,714)		(910,759)		-		(2,175,143)
Mortgage loans		(23,285)		(16,650)		(19,000)		-		(58,935)
Real estate		(5,055)		-		(359)		-		(5,414)
Other invested assets		(122,447)		-		-		-		(122,447)
Net change in other investments		(285,810)		(64,154)		-		-		(349,964)
Net change in policy loans		(18,449)		(38)		1,713		-		(16,774)
Net cash provided by (used in) investing activities	$	880,281	$	(72,479)	$	(767,790)	$	-	$	40,012

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, 2008, 2007 and 2006

16. CONSOLIDATING FINANCIAL INFORMATION (CONTINUED)

Consolidating Statements of Cash Flow (continued)

For the year ended December 31, 2008

	SLUS as Parent		SLNY		Other Subs		Elimination		Consolidated Company
Cash Flows From Financing Activities:
Additions to contractholder deposit funds	$	1,744,752	$	330,909	$	114,438	$	-	$	2,190,099
Withdrawals from contractholder deposit funds		(3,262,864)		(348,243)		(5,351)		-		(3,616,458)
Additional capital contribution to subsidiaries		(150,000)		-		-		150,000		-
Debt proceeds		60,000		-		115,000		-		175,000
Repayments of debt		(122,000)		-		-		-		(122,000)
Capital contribution from parent		725,000		150,000		-		(150,000)		725,000
Other, net		(12,666)		(4,134)		(14)		-		(16,814)
Net cash used in financing activities		(1,017,778)		128,532		224,073		-		(665,173)
Net change in cash and cash equivalents		786,842		312,057		(644,451)		-		454,448
Cash and cash equivalents, beginning of period		415,494		65,901		688,306		-		1,169,701
Cash and cash equivalents, end of period	$	1,202,336	$	377,958	$	43,855	$	-	$	1,624,149

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, 2008, 2007 and 2006

16. CONSOLIDATING FINANCIAL INFORMATION (CONTINUED)

Consolidating Statements of Cash Flow

For the year ended December 31, 2007

	SLUS as Parent		SLNY		Other Subs		Elimination		Consolidated Company
Cash Flows From Operating Activities:
Net income from operations	$	25,022	$	20,803	$	14,014	$	(34,817)	$	25,022
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization of premiums on investments		38,661		1,782		225		-		40,668
Amortization of DAC, VOBA and VOCRA		165,666		19,921		3,534		-		189,121
Depreciation and amortization		6,467		164		829		-		7,460
Net loss on derivatives		124,290		3,970		3,243		-		131,503
Net realized losses on available-for-sale investments		57,547		3,487		14		-		61,048
Changes in fair value of trading investments		89,159		-		(761)		-		88,398
Net realized gains on trading investments		(3,438)		-		(1,217)		-		(4,655)
Net change in unrealized and undistributed gains in private equity limited partnerships		(23,027)		-		-		-		(23,027)
Interest credited to contractholder deposits		571,309		51,390		7,124		-		629,823
Deferred federal income taxes		(114,110)		290		157,186		-		43,366
Equity in net income of subsidiaries		(33,006)		-		(1,811)		34,817		-
Changes in assets and liabilities:
DAC, VOBA and VOCRA additions		(304,466)		(56,650)		(18,825)		-		(379,941)
Accrued investment income		(2,591)		(120)		3,566		-		855
Net reinsurance receivable/payable		127,619		59		(94,517)		-		33,161
Future contract and policy benefits		3,184		39,436		23,930		-		66,550
Dividends received from subsidiaries		63,995		-		-		(63,995)		-
Other, net		(122,356)		4,931		(16,931)		-		(134,356)
Net cash provided by operating activities		669,925		89,463		79,603		(63,995)		774,996
Cash Flows From Investing Activities:
Sales, maturities and repayments of:
Available-for-sale fixed maturities		3,847,569		337,825		67,386		-		4,252,780
Trading fixed maturities		608,231		-		120,402		-		728,633
Mortgage loans		314,620		40,526		-		-		355,146
Other invested assets		669,930		24		960		(3,231)		667,683
Redemption of subordinated note from affiliate		-		-		600,000		-		600,000
Purchases of:
Available-for-sale fixed maturities		(2,366,255)		(205,932)		14,346		-		(2,557,841)
Trading fixed maturities		(132,891)		-		(696,578)		-		(829,469)
Mortgage loans		(348,256)		(49,460)		(1,850)		-		(399,566)
Real estate		(3,590)		-		(15,849)		-		(19,439)
Other invested assets		(57,864)		(3,231)		-		3,231		(57,864)
Early redemption premium		-		-		25,578		-		25,578
Net change in other investing activities		(365,012)		3,231		-		-		(361,781)
Net change in policy loans		(13,546)		21		10,518		-		(3,007)
Net cash provided by investing activities	$	2,152,936	$	123,004	$	124,913	$	-	$	2,400,853

Continued on next page

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, 2008, 2007 and 2006

16. CONSOLIDATING FINANCIAL INFORMATION (CONTINUED)

Consolidating Statements of Cash Flow (continued)

For the year ended December 31, 2007

	SLUS as Parent		SLNY		Other Subs		Elimination		Consolidated Company
Cash Flows From Financing Activities:
Additions to contractholder deposit funds	$	1,725,614	$	180,702	$	18,468	$	-	$	1,924,784
Withdrawals from contractholder deposit funds		(4,132,822)		(388,199)		(12,384)		-		(4,533,405)
Repayments of debt		(380,000)		-		(600,000)		-		(980,000)
Debt proceeds		-		-		1,000,000		-		1,000,000
Dividends paid to parent		-		-		(63,995)		63,995		-
Early redemption payment		-		-		(25,578)		-		(25,578)
Additional capital contributed to subsidiaries		(156,620)		-		156,620		-		-
Other, net		23,271		6,700		-		-		29,971
Net cash used in financing activities		(2,920,557)		(200,797)		473,131		63,995		(2,584,228)
Net change in cash and cash equivalents		(97,696)		11,670		677,647		-		591,621
Cash and cash equivalents, beginning of period		513,190		54,231		10,659		-		578,080
Cash and cash equivalents, end of period	$	415,494	$	65,901	$	688,306	$	-	$	1,169,701

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, 2008, 2007 and 2006

16. CONSOLIDATING FINANCIAL INFORMATION (CONTINUED)

Consolidating Statements of Cash Flow

For the year ended December 31, 2006

	SLUS as Parent		SLNY		Other Subs		Elimination		Consolidated Company
Cash Flows From Operating Activities:
Net income from operations	$	78,292	$	16,233	$	6,823	$	(23,056)	$	78,292
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization of premiums on investments		53,995		3,956		801		-		58,752
Amortization of DAC and VOBA		380,760		18,422		-		-		399,182
Depreciation and amortization		4,008		-		600		-		4,608
Net gains on derivatives		(11,360)		-		-		(493)		(11,853)
Net realized losses on available-for-sale investments		38,328		6,081		102		-		44,511
Changes in fair value of trading investments		(15,235)		-		-		-		(15,235)
Net realized gains on trading investments		(373)		-		-		-		(373)
Net change in unrealized and undistributed gains in private equity limited partnerships		(29,120)		-		-		-		(29,120)
Interest credited to contractholder deposits		573,178		56,379		3,848		-		633,405
Deferred federal income taxes		(6,146)		10,193		133		-		4,180
Equity in net income of subsidiaries		(19,960)		-		(3,096)		23,056		-
Changes in assets and liabilities:
DAC additions		(238,986)		(23,909)		-		-		(262,895)
Accrued investment income		(32,925)		3,275		(61)		-		(29,711)
Net reinsurance receivable/payable		77,083		(20)		-		-		77,063
Future contract and policy benefits		(9,725)		3,106		-		-		(6,619)
Dividends received from subsidiaries		8,000		-		-		(8,000)		-
Other, net		39,943		(24,855)		(1,313)		493		14,268
Net cash provided by operating activities		889,757		68,861		7,837		(8,000)		958,455
Cash Flows From Investing Activities:
Sales, maturities and repayments of:
Available-for-sale fixed maturities		5,041,508		757,662		73,020		-		5,872,190
Trading fixed maturities		2,172,797		-		-		-		2,172,797
Mortgage loans		218,849		29,415		-		-		248,264
Other invested assets		184,646		-		-		-		184,646
Purchases of:
Available-for-sale fixed maturities		(3,380,467)		(549,218)		(72,559)		-		(4,002,244)
Trading fixed maturities		(4,038,950)		-		-		-		(4,038,950)
Mortgage loans		(734,307)		(46,285)		-		-		(780,592)
Real estate		(20,464)		-		(155)		-		(20,619)
Other invested assets		(423,635)		(65,858)		-		-		(489,493)
Net change in other investing activities		333,669		65,845		-		-		399,514
Net change in policy loans		(9,979)		49		2,073		-		(7,857)
Net cash (used in) provided by investing activities	$	(656,333)	$	191,610	$	2,379	$	-	$	(462,344)

Continued on next page

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, 2008, 2007 and 2006

16. CONSOLIDATING FINANCIAL INFORMATION (CONTINUED)

Consolidating Statements of Cash Flow (continued)

For the year ended December 31, 2006

	SLUS as Parent		SLNY		Other Subs		Elimination		Consolidated Company
Cash Flows From Financing Activities:
Additions to contractholder deposit funds	$	3,395,794	$	121,837	$	-	$	2,507	$	3,520,138
Withdrawals from contractholder deposit funds		(3,301,631)		(382,617)		(3,596)		(2,507)		(3,690,351)
Debt proceeds		200,000		-		-		-		200,000
Dividends paid to parent		(300,000)		-		(8,000)		8,000		(300,000)
Additional capital contributed to subsidiaries		(265)		-		265		-		-
Other, net		4,528		-		-		-		4,528
Net cash used in financing activities		(1,574)		(260,780)		(11,331)		8,000		(265,685)
Net change in cash and cash equivalents		231,850		(309)		(1,115)		-		230,426
Cash and cash equivalents, beginning of period		281,340		54,540		11,774		-		347,654
Cash and cash equivalents, end of period	$	513,190	$	54,231	$	10,659	$	-	$	578,080

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, 2008, 2007 and 2006

17. SEGMENT INFORMATION

As described below, the Company conducts business primarily in three operating segments and maintains a Corporate Segment to provide for the capital needs of the three operating segments and to engage in other financing related activities.  Each segment is defined consistently with the way results are evaluated by the chief operating decision-maker.

Net investment income is allocated based on segmented assets, including allocated capital, by line of business.  Allocations of operating expenses among segments are made using both standard rates and actual expenses incurred.  Management evaluates the results of the operating segments on an after-tax basis.  The Company does not depend on one or a few customers, brokers or agents for a significant portion of its operations.

Wealth Management

The Wealth Management Segment markets, sells and administers funding agreements, individual and group variable annuity products, individual and group fixed annuity products and other retirement benefit products.  These contracts may contain any of a number of features including variable or fixed interest rates and equity index options and may be denominated in foreign currencies.  The Company uses derivative instruments to manage the risks inherent in the contract options.  Additionally, the Company consolidates the CARS Trust as a component of the Wealth Management Segment.

Individual Protection

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

Group Protection

The Group Protection Segment markets, sells and administers group life, group long-term disability, group short-term disability, group dental and group stop loss insurance products to small and mid-size employers in the State of New York through the Company’s subsidiary, SLNY.

Corporate

The Corporate Segment includes the unallocated capital of the Company, its debt financing, its consolidated investments in VIEs, and items not otherwise attributable to the other segments.

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, 2008, 2007 and 2006

17. SEGMENT INFORMATION (CONTINUED)

The following amounts pertain to the various business segments:

	Year ended December 31, 2008
	Wealth	Individual	Group
	Management	Protection	Protection	Corporate	Totals
Total revenues	$    (2,207,978)	$      113,357	$   102,827	$  (20,340)	$ (2,012,134)
Total expenditures	645,665	301,604	111,097	23,324	1,081,690
Loss before income tax benefit	(2,853,643)	(188,247)	(8,270)	(43,664)	(3,093,824)
Net loss	(2,017,095)	(122,220)	(5,335)	(90,191)	(2,234,841)
Total assets	$    33,357,432	$   12,154,968	$   164,123	$ 442,156	$ 46,118,679
	Year ended December 31, 2007
	Wealth	Individual	Group
	Management	Protection	Protection	Corporate	Totals
Total revenues	$     1,087,817	$       184,315	$       97,657	$     90,729	$    1,460,518
Total expenditures	1,139,538	148,122	93,950	77,744	1,459,354
(Loss) income before income tax (benefit) expense	(51,721)	36,193	3,707	12,985	1,164
Net (loss) income	(19,734)	23,665	2,409	18,682	25,022
Total assets	$    39,855,777	$   10,767,117	$     121,096	$1,062,777	$  51,806,767
	Year ended December 31, 2006
	Wealth	Individual	Group
	Management	Protection	Protection	Corporate	Totals
Total revenues	$        1,386,626	$         101,447	$       39,833	$   100,567	$    1,628,473
Total expenditures	1,354,554	95,815	35,356	66,068	1,551,793
Income before income tax expense	32,072	5,632	4,477	34,499	76,680
Net income	39,857	3,801	2,910	31,724	78,292
Total assets	$      41,485,295	$     5,784,705	$       78,838	$1,633,710	$  48,982,548

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, 2008, 2007 and 2006

18.  REGULATORY FINANCIAL INFORMATION

The Company and its insurance subsidiaries are required to file annual statements with state regulatory authorities prepared on a statutory accounting basis prescribed or permitted by such authorities.  For the year ended December 31, 2008, the Company followed one permitted practice relating to the treatment of its deferred tax assets.  For the years ended December 31, 2007 and 2006, there were no permitted practices followed.  Statutory surplus differs from stockholder's equity reported in accordance with GAAP primarily because policy acquisition costs are expensed when incurred, policy liabilities are based on different assumptions, investments are valued differently, post-retirement benefit costs are based on different assumptions, and deferred income taxes are calculated differently.  The Company’s statutory financials are not prepared on a consolidated basis.

At December 31, the Company and its insurance subsidiaries’ combined statutory capital and surplus and net (loss) income were as follows:

	Unaudited for the Years ended December 31,
	2008	2007	2006
Statutory capital and surplus	$     1,949,215	$       1,790,457	$      1,610,425
Statutory net (loss) income	$   (1,431,516)	(913,114)	123,305

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, 2008, 2007 and 2006

19. DIVIDEND RESTRICTIONS

The Company’s and its insurance company subsidiaries’ ability to pay dividends is subject to certain statutory restrictions.  Delaware, New York, Rhode Island, and Vermont, states in which the Company and its insurance company subsidiaries are domiciled, have enacted laws governing the payment of dividends to stockholders by domestic insurers.

Pursuant to Delaware's statute, the maximum amount of dividends and other distributions that a domestic insurer may pay in any twelve-month period without prior approval of the Delaware Commissioner of Insurance is limited to the greater of (i) ten percent of its statutory surplus as of the preceding December 31, or (ii) the individual company's statutory net gain from operations for the preceding calendar year.  Any dividends to be paid by an insurer from a source other than statutory surplus, whether or not in excess of the aforementioned threshold, would also require the prior approval of the Delaware Commissioner of Insurance.  The Company is permitted to pay dividends up to a maximum of $126.7 million in 2009 without prior approval from the Delaware Commissioner of Insurance.

In 2008 and 2007, the Company did not pay any dividends to the Parent.  In 2006, the Company’s board of directors approved and the Company paid a $300.0 million dividend to the Parent.

New York law permits a domestic stock life insurance company to distribute a dividend to its shareholders without prior notice to the New York Superintendent of Insurance, where the aggregate amount of such dividends in any calendar year does not exceed the lesser of: (i) ten percent of its surplus to policyholders as of the immediately preceding calendar year; or (ii) its net gain from operations for the immediately preceding calendar year, not including realized capital gains.  SLNY is permitted to pay dividends up to a maximum of $20.7 million in 2009 without prior approval from the New York Commissioner of Insurance.  No dividends were paid by SLNY during 2008, 2007 or 2006.

Rhode Island law requires prior regulatory approval for any dividend where the amount of such dividend paid during the preceding twelve-month period would exceed the lesser of (i) ten percent of the insurance company’s surplus as of the December 31 next preceding, or (ii) its net gain from operations, not including realized capital gains, for the immediately preceding calendar year, excluding pro rata distributions of any class of the insurance company’s own securities.  INDY is permitted to pay dividends up to a maximum of $2.8 million in 2009 without prior approval from the Rhode Island Commissioner of Insurance.  No dividends were paid by INDY during 2008, 2007 or 2006.

The Company’s Vermont domestic insurance company subsidiary, Sun Life Vermont, is permitted to pay dividends only to the extent that such dividends or distributions would not jeopardize its ability to fulfill its respective obligations pursuant to the reinsurance agreement with SLOC or any related transaction.  Sun Life Vermont may declare and pay dividends or distributions with respect to its common stock from its capital and surplus, subject to the following: (i) its total adjusted capital will equal or exceed 200% of its company action level risk-based capital after giving effect to the dividend or distribution and (ii) notice of each dividend or distribution is provided to the Vermont regulator within five days following the payment of the dividend or distribution.  No dividends were paid by Sun Life Vermont during 2008 and 2007.

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, 2008, 2007 and 2006

20. COMPONENTS OF ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

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

	2008	2007	2006
Unrealized (losses) gains on available-for-sale securities	$     (111,099)	$     (317,402)	$         38,400
Changes in reserves due to unrealized losses on available-for-sale securities	-	(26,702)	(9,346)
Unrealized (losses) gains on pension and other postretirement plan adjustments	(88,721)	14,894	(2,332)
Changes in DAC due to unrealized losses (gains) on available-for-sale securities	-	189,687	(2,719)
Changes in VOBA due to unrealized gains on available-for-sale securities	-	-	470
Tax effect and other	69,936	47,120	(10,443)
Accumulated other comprehensive (loss) income	$    (129,884)	$     (92,403)	$          14,030

21. COMMITMENTS AND CONTINGENCIES

Regulation and Regulatory Developments

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, Income Taxes and Other Matters

In Revenue Ruling 2007-61, issued on September 25, 2007, the IRS announced its intention to issue regulations with respect to certain computational aspects of the dividends-received-deduction (the “DRD”) on separate account assets held in connection with variable annuity contracts.  Revenue Ruling 2007-61 suspended Revenue Ruling 2007-54, issued on August 16, 2007, that purported to change accepted industry and IRS interpretations of the statutes governing computational questions impacting the DRD.  New DRD regulations that the IRS proposes for issuance on this matter will be subject to public comment, at which time the insurance industry and other interested parties will have the opportunity to raise comments and questions about the content, scope, and application of new regulations.  The timing, substance, and effective date of the new regulations are unknown, but they could result in the elimination of some or all of the separate account DRD tax benefit that the Company ultimately receives.  For the years ended December 31, 2008 and 2007, the financial statements reflect benefits of $24.5 million and $12.0 million, respectively, related to the separate account DRD.

The Company is not aware of any contingent liabilities arising from litigation or other matters that could have a material effect upon the financial position, results of operations or cash flows of the Company.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2008, 2007 and 2006

21. COMMITMENTS AND CONTINGENCIES (CONTINUED)

Indemnities

In the normal course of its business, the Company has entered into agreements that include indemnities in favor of third parties, such as contracts with advisors and consultants, outsourcing agreements, underwriting and agency agreements, information technology agreements, distribution agreements, and service agreements.  The Company has also agreed to indemnify its directors and certain of its officers and employees in accordance with the Company’s by-laws.  The Company believes any potential liability under these agreements is neither probable nor estimatable. Therefore, the Company has not recorded any associated liability.

Lease Commitments

The Company leases various facilities and equipment under operating leases with terms of up to five years. As of December 31, 2008, minimum future lease payments under such leases were as follows:

2009	$             301
2010	49
2011	-
Total	350

Total rental expense for the years ended December 31, 2008, 2007 and 2006 was $8.2 million, $9.4 million and $7.6 million, respectively.

The Company has two noncancelable sublease agreements that expire on June 30, 2009 and December 31, 2009.  As of December 31, 2008, the minimum future lease payment under the sublease agreements was $0.1 million.

22. SUBSEQUENT EVENTS

Effective January 1, 2009, the Company is required to prospectively adopt Statement of Statutory Accounting Principles (“SSAP”) No. 98, “Treatment of Cash Flows When Quantifying Changes in Valuation and Impairments, an Amendment of SSAP No. 43 - Loan-backed and Structured Securities.”  The Company anticipates that the effect of adopting SSAP No. 98 will decrease its statutory surplus between $150.0 million and $200.0 million.  After adoption, the Company expects its statutory surplus will continue to exceed minimum company action level requirements.

In January 2009, the Company undertook an action to reduce the Company’s cost structure and staffing levels due to the current economic environment.  The Company severed 143 employees and incurred $2.1 million in expenses in connection with this initiative.

In 2009, the Company received capital contributions totaling $623.7 million from the Parent.

After receiving regulatory approval, on February 11, 2009, the Company entered into a reinsurance agreement effective January 1, 2009 with Sun Life Reinsurance (Barbados) No. 3 Corp (“BarbCo 3”), an affiliate, to cede all of the risks associated with certain in-force corporate owned variable universal life and private placement variable universal life policies on a combination coinsurance, coinsurance with funds withheld basis and a modified coinsurance basis.  Future new business will also be ceded under this agreement.

BarbCo 3 paid an initial ceding commission to the Company of $41.5 million on February 11, 2009 and will pay a percentage of first year and single premiums as an ongoing ceding commission on a quarterly basis.  The funds withheld payable to BarbCo 3 and related reinsurance receivable at the inception of the transaction are $247.9 million and $329.2 million, respectively.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Participants of Regatta, Regatta Gold, Regatta Classic, Regatta Platinum, Regatta Extra, Regatta Access, Regatta Choice, Regatta Flex Four, Regatta Flex II, Regatta Choice II, Sun Life Financial Master Extra, Sun Life Financial Masters Choice, Sun Life Financial Masters Access, Sun Life Financial Masters Flex, Sun Life Financial Masters IV, and Sun Life Financial Masters VII Contracts of Sun Life of Canada (U.S.) Variable Account F and the Board of Directors of Sun Life Assurance Company of Canada (U.S.) (the “Sponsor”):

We have audited the accompanying statements of assets and liabilities of AllianceBernstein VPS Balanced Wealth Strategy Portfolio Sub-Account, AllianceBernstein VPS International Growth Portfolio Sub-Account, AllianceBernstein VPS International Value Portfolio Sub-Account, AllianceBernstein VPS Wealth Appreciation Strategy Portfolio Sub-Account, BlackRock Global Allocation V.I. Fund Sub-Account, Columbia Small Cap Value Fund, Variable Series Sub-Account, Columbia Marsico 21st Century Fund, Variable Series Sub-Account, Columbia Marsico 21st Century Fund, Variable Series Sub-Account, Columbia Marsico Growth Fund, Variable Series Sub-Account, Columbia Marsico Growth Fund, Variable Series Sub-Account, Columbia Marsico International Opportunities Fund, Variable Series Sub-Account, Fidelity Contrafund Portfolio Sub-Account, Fidelity Balanced Portfolio Sub-Account, Fidelity Mid Cap Portfolio Sub-Account, Fidelity Freedom 2010 Portfolio Sub-Account, Fidelity Freedom 2015 Portfolio Sub-Account, Fidelity Freedom 2020 Portfolio Sub-Account, First Eagle Overseas Variable Fund Sub-Account, Franklin Templeton VIP Founding Funds Allocation Fund Sub-Account, Franklin Templeton VIP Franklin Income Securities Fund Sub-Account, Franklin Templeton VIP Franklin Small Cap Value Securities Fund Sub-Account, Franklin Templeton VIP Franklin Strategic Income Securities Fund Sub-Account, Franklin Templeton VIP Mutual Shares Securities Fund Sub-Account, Franklin Templeton VIP Templeton Developing Markets Securities Fund Sub-Account, Franklin Templeton VIP Templeton Growth Securities Fund Sub-Account, Franklin Templeton VIP Templeton Foreign Securities Fund Sub-Account, Huntington VA Dividend Capture Fund Sub-Account, Huntington VA Growth Fund Sub-Account, Huntington VA Income Equity Fund Sub-Account, Huntington VA International Equity Fund Sub-Account, Huntington VA Macro 100 Fund Sub-Account, Huntington VA Mid Corp America Fund Sub-Account, Huntington VA Mortgage Securities Fund Sub-Account, Huntington VA New Economy Fund Sub-Account, Huntington VA Real Strategies Fund Sub-Account, Huntington VA Rotating Markets Fund Sub-Account, Huntington VA Situs Small Cap Fund Sub-Account, Lazard Retirement Emerging Markets Equity Portfolio Sub-Account, Lord Abbett All Value Portfolio Sub-Account, Lord Abbett Growth & Income Portfolio Sub-Account, Lord Abbett Growth Opportunities Portfolio Sub-Account, Lord Abbett Mid Cap Value Portfolio Sub-Account, MFS Bond Portfolio S Class Sub-Account, MFS Bond Portfolio Sub-Account, MFS Capital Appreciation Portfolio S Class Sub-Account, MFS Capital Appreciation Portfolio Sub-Account, MFS Growth Portfolio S Class Sub-Account, MFS Growth Portfolio Sub-Account, MFS Emerging Markets Equity Portfolio S Class Sub-Account, MFS Emerging Markets Equity Portfolio Sub-Account, MFS Global Governments Portfolio S Class Sub-Account, MFS Global Governments Portfolio Sub-Account, MFS Global Growth Portfolio S Class Sub-Account, MFS Global Growth Portfolio Sub-Account, MFS Global Total Return Portfolio S Class Sub-Account, MFS Global Total Return Portfolio Sub-Account, MFS Government Securities Portfolio S Class Sub-Account, MFS Government Securities Portfolio Sub-Account, MFS High Yield Portfolio S Class Sub-Account, MFS High Yield Portfolio Sub-Account, MFS International Growth Portfolio S Class Sub-Account, MFS International Growth Portfolio Sub-Account, MFS International Value Portfolio S Class Sub-Account, MFS International Value Portfolio Sub-Account, MFS Massachusetts Investors Growth Stock Portfolio S Class Sub-Account, MFS Massachusetts Investors Growth Stock Portfolio Sub-Account, MFS Blended Research Core Equity Portfolio S Class Sub-Account, MFS Blended Research Core Equity Portfolio Sub-Account, MFS Mid Cap Growth Portfolio S Class Sub-Account, MFS Mid Cap Growth Portfolio Sub-Account, MFS Mid Cap Value Portfolio S Class Sub-Account, MFS Money Market Portfolio S Class Sub-Account, MFS Money Market Portfolio Sub-Account, MFS New Discovery Portfolio S Class Sub-Account, MFS New Discovery Portfolio Sub-Account, MFS Global Research Portfolio S Class Sub-Account, MFS Global Research Portfolio Sub-Account, MFS Core Equity Portfolio S Class Sub-Account, MFS Core Equity Portfolio Sub-Account, MFS Research International Portfolio S Class Sub-Account, MFS Research International Portfolio Sub-Account, MFS Strategic Income Portfolio S Class Sub-Account, MFS Strategic Income Portfolio Sub-Account, MFS Strategic Value Portfolio S Class Sub-Account, MFS Technology Portfolio S Class Sub-Account, MFS Technology Portfolio Sub-Account, MFS Total Return Portfolio S Class Sub-Account, MFS Total Return Portfolio Sub-Account, MFS Utilities Portfolio S Class Sub-Account, MFS Utilities Portfolio Sub-Account, MFS Value Portfolio S Class Sub-Account, MFS Value Portfolio Sub-Account, Oppenheimer Balanced Fund/VA Sub-Account, Oppenheimer Capital Appreciation Fund Sub-Account, Oppenheimer Global Securities Fund Sub-Account, Oppenheimer Main Street Fund Sub-Account, Oppenheimer Main Street Small Cap Fund Sub-Account, PIMCO Emerging Markets Bond Portfolio Sub-Account, PIMCO Low Duration Portfolio Sub-Account, PIMCO Real Return Portfolio Sub-Account, PIMCO Total Return Portfolio Sub-Account, PIMCO VIT All Asset Portfolio Sub-Account, PIMCO VIT Commodity Real Return Strategy Portfolio Sub-Account, SC AIM Small Cap Growth Fund Sub-Account, SC Oppenheimer Large Cap Core Fund Sub-Account, SC AllianceBernstein International Value Fund Sub-Account, SC BlackRock Inflation Protected Bond Fund Sub-Account, SC Davis Venture Value Fund Sub-Account, SC Dreman Small Cap Value Fund Sub-Account, SC WMC Large Cap Growth Fund Sub-Account, SC Goldman Sachs Mid Cap Value Fund I Class Sub-Account, SC Goldman Sachs Mid Cap Value Fund S Class Sub-Account, SC Goldman Sachs Short Duration Fund I Class Sub-Account, SC Goldman Sachs Short Duration Fund S Class Sub-Account, SC Ibbotson Balanced Fund Sub-Account, SC Ibbotson Growth Fund Sub-Account, SC Ibbotson Moderate Fund Sub-Account, Sun Capital Investment Grade Bond Fund Sub-Account, SC Lord Abbett Growth & Income Fund I Class Sub-Account, SC Lord Abbett Growth & Income Fund S Class Sub-Account, SC Oppenheimer Main Street Small Cap S Class Sub-Account, SC PIMCO High Yield Fund S Class Sub-Account, SC PIMCO Total Return Fund Sub-Account, Sun Capital Global Real Estate Fund S Class Sub-Account, Sun Capital Global Real Estate Fund I Class Sub-Account, Sun Capital Money Market S Class Sub-Account, SC WMC Blue Chip Mid-Cap Fund Sub-Account, UIF Equity and Income Portfolio Sub-Account, UIF Mid Cap Growth Portfolio Sub-Account, UIF US Mid Cap Value Portfolio Sub-Account, Van Kampen Life Investment Trust Comstock Portfolio Sub-Account, Wanger Select Sub-Account, and Wanger USA Sub-Account of Sun Life of Canada (U.S.) Variable Account F (collectively the "Sub-Accounts"), as of December 31, 2008, and 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 the Sponsor’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Sub-Accounts are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Sub-Accounts’ internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  Our procedures included confirmation of securities owned as of December 31, 2008, by correspondence with the asset managers.  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 each of the Sub-Accounts as of December 31, 2008, 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.

/s/DELOITTE & TOUCHE LLP

Boston, Massachusetts

April 24, 2009

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF ASSETS AND LIABILITIES

DECEMBER 31, 2008

Assets		Shares	Cost	Value
Investments at fair value:
AllianceBernstein Variable Products Series Fund Inc.
	AllianceBernstein Balanced Wealth Strategy Portfolio Sub-Account (AVB)	1,326,133	$        13,138,708	$        11,378,225
	AllianceBernstein International Growth Portfolio Sub-Account (AN4)	118,145	1,963,531	1,466,176
	AllianceBernstein International Value Portfolio Sub-Account (IVB)	6,211,641	103,908,609	67,893,236
	AllianceBernstein Wealth Appreciation Strategy Portfolio Sub-Account (AVW)	247,344	1,961,463	1,543,426
BlackRock Advisors, LLC
	BlackRock Global Allocation V.I. Fund Sub-Account (9XX)	1,491,387	16,453,561	16,852,673
Columbia Funds Variable Insurance Trust
	Columbia Small Cap Value Fund, Variable Series Sub-Account (CSC)	716	12,744	8,097
Columbia Funds Variable Insurance Trust I
	Columbia Marsico 21st Century Fund, Variable Series Sub-Account (NMT)	9,401	116,802	76,146
	Columbia Marsico 21st Century Fund, Variable Series Sub-Account (MCC)	13,953,450	171,051,974	112,464,805
	Columbia Marsico Growth Fund, Variable Series Sub-Account (CMG)	838,345	16,020,341	11,258,978
	Columbia Marsico Growth Fund, Variable Series Sub-Account (NNG)	13,113	233,743	176,374
	Columbia Marsico International Opportunities Fund, Variable Series Sub-Account (NMI)	828,738	15,672,224	8,660,311
Fidelity Variable Insurance Products Fund II
	Contrafund Portfolio (FL1)	3,233,489	62,735,509	48,955,023
Fidelity Variable Insurance Products III
	Balanced Portfolio Sub-Account (FVB)	1,719,163	23,260,194	16,761,837
	Mid Cap Portfolio Sub-Account (FVM)	6,152,923	186,728,811	111,490,972
Fidelity Variable Insurance Products V
	Freedom 2010 Portfolio Sub-Account (F10)	1,242,911	13,099,519	10,204,299
	Freedom 2015 Portfolio Sub-Account (F15)	2,110,405	23,796,405	17,220,907
	Freedom 2020 Portfolio Sub-Account (F20)	3,629,228	42,045,762	27,908,761
First Eagle Variable Fund
	First Eagle Overseas Variable Fund Sub-Account (SGI)	7,105,379	190,106,854	147,791,874
Franklin Templeton Variable Insurance Products Trust
	Founding Funds Allocation Fund Sub-Account (S17)	6,230,011	45,325,468	34,950,364
	Franklin Income Securities Fund Sub-Account (ISC)	4,262,142	67,761,231	48,332,687
	Franklin Small Cap Value Securities Fund Sub-Account (FVS)	2,137,943	36,148,711	22,555,294
	Franklin Strategic Income Securities Fund Sub-Account (SIC)	864,433	10,252,358	8,998,750
	Mutual Shares Securities Fund Sub-Account (FMS)	9,889,629	174,997,364	116,499,829
	Templeton Developing Markets Securities Fund Sub-Account (TDM)	8,354,321	103,426,088	50,460,099
	Templeton Growth Securities Fund Sub-Account (FTG)	3,111,943	44,791,370	25,517,931
	Templeton Foreign Securities Fund Sub-Account (FTI)	26,086,252	429,388,469	280,688,071
Huntington VA Funds
	Huntington VA Dividend Capture Fund Sub-Account (HVD)	116,011	1,094,095	822,517
	Huntington VA Growth Fund Sub-Account (HVG)	44,197	365,032	271,371
	Huntington VA Income Equity Fund Sub-Account (HVI)	67,118	566,786	440,962
	Huntington VA International Equity Fund Sub-Account (HVE)	91,835	1,265,097	923,861
	Huntington VA Macro 100 Fund Sub-Account (HVM)	1,536	13,284	10,047
	Huntington VA Mid Corp America Fund Sub-Account (HVC)	36,717	538,318	395,811
	Huntington VA Mortgage Securities Fund Sub-Acccount (HVS)	10,294	115,907	109,325
	Huntington VA New Economy Fund Sub-Account (HVN)	21,892	256,771	177,544
	Huntington VA Real Strategies Fund Sub-Account (HRS)	28,963	240,866	164,218
	Huntington VA Rotating Markets Fund Sub-Account (HVR)	17,081	183,222	134,085
	Huntington VA Situs Small Cap Fund Sub-Account (HSS)	72,749	822,597	635,831

Continued on next page

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)

DECEMBER 31, 2008

	Shares	Cost	Value
Investments at fair value (continued):
Lazard
Lazard Retirement Emerging Markets Equity Portfolio Sub-Account (LRE)	1,205,815	$            22,393,571	$             13,975,390
Lord Abbett Series Fund, Inc.
All Value Portfolio Sub-Account (LAV)	2,253,947	35,833,147	26,664,191
Growth & Income Portfolio Sub-Account (LA1)	20,713,790	569,373,065	357,727,148
Growth Opportunities Portfolio Sub-Account (LA9)	4,166,775	59,223,885	41,167,735
Mid Cap Value Portfolio Sub-Account (LA2)	5,453,788	105,957,639	57,319,316
MFS Variable Insurance Trust II
Bond Portfolio S Class Sub-Account (MF7)	5,657,349	60,505,691	51,142,431
Bond Portfolio Sub-Account (BDS)	7,603,398	82,936,397	69,266,956
Capital Appreciation Portfolio S Class Sub-Account (MFD)	1,021,075	18,032,875	14,427,789
Capital Appreciation Portfolio Sub-Account (CAS)	13,891,872	258,598,147	198,098,097
Growth Portfolio S Class Sub-Account (MFF)	815,034	12,898,037	11,206,726
Growth Portfolio Sub-Account (EGS)	8,558,316	140,694,972	119,730,839
Emerging Markets Equity Portfolio S Class Sub-Account (EM1)	946,953	18,149,331	8,295,305
Emerging Markets Equity Portfolio Sub-Account (EME)	3,382,302	70,918,391	30,034,844
Global Governments Portfolio S Class Sub-Account (GG1)	551,170	6,054,412	6,321,924
Global Governments Portfolio Sub-Account (GGS)	2,896,879	32,278,992	33,574,826
Global Growth Portfolio S Class Sub-Account (GG2)	436,383	5,509,477	4,603,842
Global Growth Portfolio Sub-Account (GGR)	5,586,615	65,439,372	59,329,848
Global Total Return Portfolio S Class Sub-Account (GT2)	966,009	15,882,680	12,355,250
Global Total Return Portfolio Sub-Account (GTR)	7,003,081	113,377,967	90,269,712
Government Securities Portfolio S Class Sub-Account (MFK)	17,985,410	224,940,582	236,508,145
Government Securities Portfolio Sub-Account (GSS)	16,148,831	205,391,394	213,649,037
High Yield Portfolio S Class Sub-Account (MFC)	21,675,180	132,572,329	91,252,510
High Yield Portfolio Sub-Account (HYS)	18,638,720	119,461,619	79,028,171
International Growth Portfolio S Class Sub-Account (IG1)	1,862,229	27,195,405	16,462,100
International Growth Portfolio Sub-Account (IGS)	6,641,037	99,517,900	59,105,233
International Value Portfolio S Class Sub-Account (MI1)	14,058,078	253,086,223	167,431,706
International Value Portfolio  Sub-Account (MII)	4,669,839	84,058,988	56,178,166
Massachusetts Investors Growth Stock Portfolio S Class Sub-Account (M1B)	7,345,490	73,107,761	53,181,350
Massachusetts Investors Growth Stock Portfolio Sub-Account (MIS)	18,488,825	180,805,265	134,968,427
Blended Research Core Equity Portfolio S Class Sub-Account (MFL)	7,826,090	233,652,782	177,026,161
Blended Research Core Equity Portfolio Sub-Account (MIT)	13,748,309	396,805,359	313,461,450
Mid Cap Growth Portfolio S Class Sub-Account (MC1)	4,354,019	22,082,745	14,019,943
Mid Cap Growth Portfolio Sub-Account (MCS)	4,831,831	27,704,686	15,800,086
Mid Cap Value Portfolio S Class Sub-Account (MCV)	1,972,749	19,738,441	11,047,396
Money Market Portfolio S Class Sub-Account (MM1)	228,575,935	228,575,935	228,575,935
Money Market Portfolio Sub-Account (MMS)	199,320,570	199,320,570	199,320,570
New Discovery Portfolio S Class Sub-Account (M1A)	9,527,784	128,788,808	77,937,272
New Discovery Portfolio Sub-Account (NWD)	5,456,110	71,813,854	45,667,641
Global Research Portfolio S Class Sub-Account (RE1)	1,337,592	21,617,192	17,669,586
Global Research Portfolio Sub-Account (RES)	9,751,553	158,651,264	129,695,660
Core Equity Portfolio S Class Sub-Account (RG1)	2,280,084	34,185,783	21,341,583
Core Equity Portfolio Sub-Account (RGS)	10,168,888	166,265,050	95,892,613

Continued on next page

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)

DECEMBER 31, 2008

	Shares	Cost	Value
Investments at fair value (continued):
MFS Variable Insurance Trust II (continued)
Research International Portfolio S Class Sub-Account (RI1)	10,916,343	$        186,862,938	$       107,198,487
Research International Portfolio Sub-Account (RIS)	4,055,812	70,836,310	40,314,773
Strategic Income Portfolio S Class Sub-Account (SI1)	1,309,733	13,445,286	10,870,783
Strategic Income Portfolio Sub-Account (SIS)	3,589,148	36,703,457	29,969,383
Strategic Value Portfolio S Class Sub-Account (SVS)	575,386	5,158,652	2,554,715
Technology Portfolio S Class Sub-Account (TE1)	315,033	1,546,718	989,205
Technology Portfolio Sub-Account (TEC)	2,510,249	12,954,914	8,057,898
Total Return Portfolio S Class Sub-Account (MFJ)	44,169,810	817,371,234	605,126,404
Total Return Portfolio Sub-Account (TRS)	38,928,964	696,402,784	538,387,570
Utilities Portfolio S Class Sub-Account (MFE)	4,728,302	110,313,488	72,957,695
Utilities Portfolio Sub-Account (UTS)	9,973,288	177,164,391	155,483,563
Value Portfolio S Class Sub-Account (MV1)	15,009,056	222,028,189	159,246,084
Value Portfolio Sub-Account (MVS)	11,653,394	179,487,859	124,691,316
Oppenheimer Variable Account Funds
Balanced Fund/VA Sub-Account (OBV)	426,501	5,061,375	3,574,079
Capital Appreciation Fund Sub-Account (OCA)	827,861	31,255,904	21,044,236
Global Securities Fund Sub-Account (OGG)	1,186,409	38,535,503	23,751,907
Main Street Fund Sub-Account (OMG)	32,313,677	711,078,267	465,963,229
Main Street Small Cap Fund Sub-Account (OMS)	858,943	14,628,716	9,053,263
PIMCO Variable Insurance Trust
Emerging Markets Bond Portfolio Sub-Account (PMB)	941,413	12,439,686	9,715,387
Low Duration Portfolio Sub-Account (PLD)	61,887,801	625,309,411	599,073,911
Real Return Porfolio Sub-Account (PRR)	9,997,213	124,472,615	112,568,613
Total Return Portfolio Sub-Account (PTR)	32,701,539	338,615,268	337,152,868
VIT All Asset Portfolio Sub-Account (PRA)	413,035	4,762,864	3,799,922
VIT Commodity Real Return Strategy Portfolio Sub-Account (PCR)	5,451,895	63,378,427	38,163,263
Sun Capital Advisers Trust
SC AIM Small Cap Growth Fund Sub-Account (1XX)	55,696	395,553	417,717
SC Oppenheimer Large Cap Core Fund Sub-Account (SSA)	683,535	7,434,149	4,695,884
SC AllianceBernstein International Value Fund Sub-Account (3XX)	8,778	68,301	69,521
SC BlackRock Inflation Protected Bond Fund Sub-Account (5XX)	270,891	2,600,372	2,673,696
SC Davis Venture Value Fund Sub-Account  (SVV)	9,424,008	105,825,226	78,407,742
SC Dreman Small Cap Value Fund Sub-Account (2XX)	26,276	202,095	209,422
SC WMC Large Cap Growth Fund Sub-Account (LGF)	291,794	2,743,856	1,727,419
SC Goldman Sachs Mid Cap Value Fund I Class Sub-Account (SGC)	218,906	1,683,599	1,517,022
SC Goldman Sachs Mid Cap Value Fund S Class Sub-Account (S13)	468,740	3,867,592	3,248,365
SC Goldman Sachs Short Duration Fund I Class Sub-Account (SDC)	3,623,131	35,982,995	36,702,316
SC Goldman Sachs Short Duration Fund S Class Sub-Account (S15)	5,749,159	56,969,300	58,238,982
SC Ibbotson Balanced Fund Sub-Account (7XX)	4,171,102	36,447,250	37,790,183
SC Ibbotson Growth Fund Sub-Account (8XX)	3,563,941	30,025,136	31,612,159
SC Ibbotson Moderate Fund Sub-Account (6XX)	3,590,662	31,967,635	32,962,278

Continued on next page

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)

DECEMBER 31, 2008

	Shares	Cost	Value
Investments at fair value (continued):
Sun Capital Advisers Trust (continued)
Sun Capital Investment Grade Bond Fund Sub-Account (IGB)	2,495,103	$        23,358,927	$      19,711,311
SC Lord Abbett Growth & Income Fund I Class Sub-Account (SLC)	42,052	366,129	297,731
SC Lord Abbett Growth & Income Fund S Class Sub-Account (S12)	262,801	2,193,665	1,860,629
SC Oppenheimer Main Street Small Cap S Class Sub-Account (VSC)	14,158,439	169,585,634	108,453,645
SC PIMCO High Yield Fund S Class Sub-Account (S14)	1,291,788	11,212,478	10,424,727
SC PIMCO Total Return Fund Sub-Account (4XX)	1,544,289	15,852,428	16,292,247
Sun Capital Global Real Estate Fund S Class Sub-Account (SRE)	12,074,631	220,760,560	117,969,145
Sun Capital Global Real Estate Fund I Class Sub-Account (SC3)	709,528	11,922,844	6,378,652
Sun Capital Money Market S Class Sub-Account (CMM)	52,723,182	52,723,182	52,723,182
SC WMC Blue Chip Mid-Cap Fund Sub-Account (S16)	3,215,499	44,670,902	29,871,985
Universal Institutional Funds Inc.
Equity and Income Portfolio Sub-Account (VKU)	403,822	4,851,093	4,349,163
Mid Cap Growth Portfolio Sub-Account (VKM)	108,515	840,618	626,133
US Mid Cap Value Portfolio Sub-Account (VKC)	55,320	540,725	422,645
Van Kampen Life Insurance Trust
Van Kampen Life Investment Trust Comstock II Class Portfolio Sub-Account (VLC)	1,347,813	16,111,888	11,079,024
Wanger Advisors Trust
Wanger Select  Sub-Account (WTF)	72,201	1,593,582	1,001,434
Wanger USA Sub-Account (USC)	2,065	67,685	39,860
Total investments		11,995,937,426	9,016,416,400
Total assets		$ 11,995,937,426	$ 9,016,416,400
Liabilities
Payable to sponsor			$        4,772,407
Total liabilities			$        4,772,407

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)

DECEMBER 31, 2008

		Applicable to Owners of				Reserve for
		Deferred Variable Annuity Contracts				Variable
		Units		Value		Annuities		Total
Net Assets
Alliance Variable Products Series Fund, Inc.
	AVB	1,484,739	$	11,378,225	$	-	$	11,378,225
	AN4	258,506		1,466,176		-		1,466,176
	IVB	12,644,113		67,893,236		-		67,893,236
	AVW	234,830		1,543,426		-		1,543,426
BlackRock Advisors, LLC
	9XX	1,673,259		16,852,673		-		16,852,673
Columbia Funds Variable Insurance Trust
	CSC	956		8,097		-		8,097
Columbia Funds Variable Insurance Trust I
	NMT	8,756		76,146		-		76,146
	MCC	16,749,454		112,449,513		14,768		112,464,281
	CMG	1,610,257		11,258,978		-		11,258,978
	NNG	22,574		176,374		-		176,374
	NMI	1,018,267		8,660,311		-		8,660,311
Fidelity Variable Insurance Products Funds II
	FL1	7,352,882		48,955,023		-		48,955,023
Fidelity Variable Insurance Products Funds III
	FVB	2,412,176		16,761,837		-		16,761,837
	FVM	16,082,303		111,488,603		2,271		111,490,874
Fidelity Variable Insurance Products Funds V
	F10	1,173,750		10,204,299		-		10,204,299
	F15	1,989,150		17,220,907		-		17,220,907
	F20	3,412,422		27,908,761		-		27,908,761
First Eagle Variable Fund
	SGI	17,385,339		147,777,551		13,803		147,791,354
Franklin Templeton Variable Insurance Products Trust
	S17	4,966,898		34,950,364		-		34,950,364
	ISC	6,865,436		48,332,687		-		48,332,687
	FVS	1,779,602		22,547,751		6,606		22,554,357
	SIC	997,893		8,998,750		-		8,998,750
	FMS	10,659,488		116,489,301		9,528		116,498,829
	TDM	6,078,724		50,460,099		-		50,460,099
	FTG	2,275,331		25,517,931		-		25,517,931
	FTI	22,475,438		280,598,325		84,407		280,682,732
Huntington VA Funds
	HVD	116,273		822,517		-		822,517
	HVG	43,321		271,371		-		271,371
	HVI	71,105		440,962		-		440,962
	HVE	153,543		923,861		-		923,861
	HVM	1,521		10,047		-		10,047
	HVC	64,289		395,811		-		395,811
	HVS	10,776		109,325		-		109,325
	HVN	36,987		177,544		-		177,544
	HRS	34,039		164,218		-		164,218
	HVR	22,935		134,085		-		134,085
	HSS	107,313		635,831		-		635,831
Lazard
	LRE	2,539,966		13,975,390		-		13,975,390

Continued on next page

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)

DECEMBER 31, 2008

		Applicable to Owners of		Reserve for
		Deferred Variable Annuity Contracts		Variable
		Units	Value	Annuities	Total
Net Assets (continued)
Lord Abbett Series Fund, Inc.
	LAV	2,597,685	$                  26,664,191	$                          -	$                 26,664,191
	LA1	32,204,879	357,620,358	100,193	357,720,551
	LA9	4,668,640	41,155,708	11,445	41,167,153
	LA2	5,303,970	57,299,830	17,900	57,317,730
MFS Variable Insurance Trust II
	MF7	4,635,465	51,137,258	4,257	51,141,515
	BDS	5,203,097	69,005,673	196,730	69,202,403
	MFD	2,225,709	14,423,442	3,015	14,426,457
	CAS	20,862,870	195,787,571	1,654,537	197,442,108
	MFF	1,316,168	11,206,403	-	11,206,403
	EGS	14,615,786	119,130,146	467,473	119,597,619
	EM1	710,442	8,295,305	-	8,295,305
	EME	1,900,227	29,759,672	196,203	29,955,875
	GG1	410,545	6,314,986	5,709	6,320,695
	GGS	1,783,352	33,336,269	197,888	33,534,157
	GG2	440,668	4,596,661	6,289	4,602,950
	GGR	4,323,307	58,881,078	362,853	59,243,931
	GT2	873,958	12,345,933	8,272	12,354,205
	GTR	4,598,290	89,317,092	650,295	89,967,387
	MFK	19,623,926	236,255,404	236,852	236,492,256
	GSS	12,130,442	212,391,979	1,094,304	213,486,283
	MFC	9,170,448	91,195,459	52,811	91,248,270
	HYS	6,745,555	78,413,103	361,935	78,775,038
	IG1	1,645,540	16,461,538	-	16,461,538
	IGS	5,162,799	58,877,731	172,452	59,050,183
	MI1	22,385,237	167,431,706	-	167,431,706
	MII	3,503,901	55,838,945	277,999	56,116,944
	M1B	6,598,033	53,172,505	8,218	53,180,723
	MIS	22,457,175	134,582,023	355,081	134,937,104
	MFL	17,800,165	176,969,039	53,374	177,022,413
	MIT	28,659,325	311,522,882	1,455,303	312,978,185
	MC1	2,534,232	14,016,979	2,236	14,019,215
	MCS	5,304,731	15,771,450	23,339	15,794,789
	MCV	1,163,909	11,019,642	26,850	11,046,492
	MM1	22,125,007	228,470,229	100,265	228,570,494
	MMS	15,465,643	197,354,678	1,447,940	198,802,618
	M1A	8,571,360	77,904,337	29,613	77,933,950
	NWD	6,367,778	45,523,680	121,785	45,645,465
	RE1	1,840,427	17,663,272	5,504	17,668,776
	RES	11,057,121	128,755,245	696,299	129,451,544
	RG1	2,883,536	21,324,922	13,811	21,338,733
	RGS	11,214,418	95,561,883	250,937	95,812,820
	RI1	7,836,028	107,173,627	23,666	107,197,293
	RIS	3,693,283	40,203,037	118,082	40,321,119
	SI1	956,921	10,859,038	10,207	10,869,245

Continued on next page

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)

DECEMBER 31, 2008

		Applicable to Owners of		Reserve for
		Deferred Variable Annuity Contracts		Variable
		Units	Value	Annuities	Total
Net Assets (continued)
MFS Variable Insurance Trust II (continued)
	SIS	2,463,406	$             29,835,717	$                 122,636	$                 29,958,353
	SVS	322,503	2,554,715	-	2,554,715
	TE1	183,490	989,205	-	989,205
	TEC	3,206,181	8,047,800	8,074	8,055,874
	MFJ	53,879,494	604,957,715	143,579	605,101,294
	TRS	29,892,193	533,847,405	3,486,683	537,334,088
	MFE	3,731,129	72,940,138	15,078	72,955,216
	UTS	8,400,706	154,669,321	561,640	155,230,961
	MV1	13,424,854	159,226,381	17,129	159,243,510
	MVS	9,654,222	123,948,507	682,073	124,630,580
Oppenheimer Variable Account Funds
	OBV	626,984	3,574,079	-	3,574,079
	OCA	2,290,263	21,037,810	5,660	21,043,470
	OGG	2,451,893	23,751,907	-	23,751,907
	OMG	48,485,735	465,864,769	93,311	465,958,080
	OMS	760,213	9,053,263	-	9,053,263
PIMCO Variable Insurance Trust
	PMB	593,875	9,715,387	-	9,715,387
	PLD	57,102,477	598,916,839	144,714	599,061,553
	PRR	9,486,271	112,568,613	-	112,568,613
	PTR	26,948,277	337,044,177	103,124	337,147,301
	PRA	411,581	3,799,922	-	3,799,922
	PCR	5,813,511	38,163,263	-	38,163,263
Sun Capital Advisers Trust
	1XX	46,329	417,717	-	417,717
	SSA	645,382	4,695,884	-	4,695,884
	3XX	7,549	69,521	-	69,521
	5XX	260,820	2,673,696	-	2,673,696
	SVV	12,154,042	78,387,961	19,115	78,407,076
	2XX	22,414	209,422	-	209,422
	LGF	304,806	1,727,419	-	1,727,419
	SGC	215,255	1,517,022	-	1,517,022
	S13	461,987	3,248,365	-	3,248,365
	SDC	3,609,661	36,702,316	-	36,702,316
	S15	5,738,613	58,238,982	-	58,238,982
	7XX	3,745,513	37,790,183	-	37,790,183
	8XX	3,096,720	31,612,159	-	31,612,159
	6XX	3,332,280	32,962,278	-	32,962,278
	IGB	2,115,205	19,711,311	-	19,711,311
	SLC	41,059	297,731	-	297,731
	S12	257,078	1,860,629	-	1,860,629
	VSC	18,181,464	108,447,300	6,139	108,453,439
	S14	1,225,378	10,424,727	-	10,424,727
	4XX	1,540,689	16,292,247	-	16,292,247

Continued on next page

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)

DECEMBER 31, 2008

		Applicable to Owners of				Reserve for
		Deferred Variable Annuity Contracts				Variable
		Units		Value		Annuities		Total
Net Assets (continued)
Sun Capital Advisers Trust (continued)
	SRE	14,063,340		117,953,410		14,994		117,968,404
	SC3	536,020		6,374,452		3,700		6,378,152
	CMM	4,996,815		52,624,569		98,346		52,722,915
	S16	3,999,122		29,871,985		-		29,871,985
Universal Institutional Funds Inc.
	VKU	521,533		4,349,163		-		4,349,163
	VKM	99,801		626,133		-		626,133
	VKC	64,684		422,645		-		422,645
Van Kampen Life Insurance Trust
	VLC	1,778,846		11,079,024		-		11,079,024
Wanger Advisors Trust
	WTF	137,209		1,001,434		-		1,001,434
	USC	5,569		39,860		-		39,860
Total net assets			$	8,995,164,693	$	16,479,300	$	9,011,643,993

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2008

	AVB			AN4			IVB
	Sub-Account1			Sub-Account1			Sub-Account1
Income:
Dividend income	$	118,508		$	-		$	102,328
Expenses:
Mortality and expense risk charges		(61,062	)		(11,082	)		(495,050	)
Distribution and administrative expense charges		(7,327	)		(1,330	)		(59,406	)
Net investment income (loss)	$	50,119		$	(12,412	)	$	(452,128	)
Net realized and change in unrealized losses:
Net realized losses on sale of fund shares	$	(85,237	)	$	(275,642	)	$	(1,104,253	)
Realized gain distributions		37,411			2,812			732,087
Net realized losses	$	(47,826	)	$	(272,830	)	$	(372,166	)
Net change in unrealized appreciation/depreciation	$	(1,760,483	)	$	(497,355	)	$	(36,015,373	)
Net realized and change in unrealized losses	$	(1,808,309	)	$	(770,185	)	$	(36,387,539	)
Decrease in net assets from operations	$	(1,758,190	)	$	(782,597	)	$	(36,839,667	)
	AVW			9XX			CSC
	Sub-Account1			Sub-Account2			Sub-Account
Income:
Dividend income	$	911		$	440,261		$	75
Expenses:
Mortality and expense risk charges		(8,424	)		(24,145	)		(216	)
Distribution and administrative expense charges		(1,011	)		(2,897	)		(26	)
Net investment (loss) income	$	(8,524	)	$	413,219		$	(167	)
Net realized and change in unrealized (losses) gains:
Net realized (losses) gains on sale of fund shares	$	(13,754	)	$	3,168		$	(2,569	)
Realized gain distributions		13,644			82,627			2,017
Net realized (losses) gains	$	(110	)	$	85,795		$	(552	)
Net change in unrealized appreciation/depreciation	$	(418,037	)	$	399,112		$	(3,606	)
Net realized and change in unrealized (losses) gains	$	(418,147	)	$	484,907		$	(4,158	)
(Decrease) increase in net assets from operations	$	(426,671	)	$	898,126		$	(4,325	)

1  For the period March 10, 2008 (commencement of operations) through December 31, 2008.

2 For the period October 6, 2008 (commencement of operations) through December 31, 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF OPERATIONS (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 2008

	NMT			MCC			CMG
	Sub-Account			Sub-Account			Sub-Account
Income:
Dividend income	$	-		$	-		$	4,453
Expenses:
Mortality and expense risk charges		(1,444	)		(1,572,772	)		(172,083	)
Distribution and administrative expense charges		(173	)		(188,733	)		(20,650	)
Net investment loss	$	(1,617	)	$	(1,761,505	)	$	(188,280	)
Net realized and change in unrealized losses:
Net realized losses on sale of fund shares	$	(1,457	)	$	(2,571,975	)	$	(228,054	)
Realized gain distributions		2,170			2,268,034			-
Net realized gains (losses)	$	713		$	(303,941	)	$	(228,054	)
Net change in unrealized appreciation/depreciation	$	(58,722	)	$	(60,909,616	)	$	(5,089,937	)
Net realized and change in unrealized losses	$	(58,009	)	$	(61,213,557	)	$	(5,317,991	)
Decrease in net assets from operations	$	(59,626	)	$	(62,975,062	)	$	(5,506,271	)
	NNG			NMI			FL1
	Sub-Account			Sub-Account			Sub-Account1
Income:
Dividend income	$	517		$	132,261		$	507,942
Expenses:
Mortality and expense risk charges		(2,998	)		(149,252	)		(287,131	)
Distribution and administrative expense charges		(360	)		(17,910	)		(34,456	)
Net investment (loss) gain	$	(2,841	)	$	(34,901	)	$	186,355
Net realized and change in unrealized losses:
Net realized gains (losses) on sale of fund shares	$	137		$	(1,205,028	)	$	(645,104	)
Realized gain distributions		-			2,018,932			-
Net realized gains (losses)	$	137		$	813,904		$	(645,104	)
Net change in unrealized appreciation/depreciation	$	(96,218	)	$	(7,253,241	)	$	(13,780,486	)
Net realized and change in unrealized losses	$	(96,081	)	$	(6,439,337	)	$	(14,425,590	)
Decrease in net assets from operations	$	(98,922	)	$	(6,474,238	)	$	(14,239,235	)

1 For the period March 10, 2008 (commencement of operations) through December 31, 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF OPERATIONS (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 2008

	FVB			FVM			F10
	Sub-Account			Sub-Account			Sub-Account
Income:
Dividend income	$	324,010		$	342,612		$	334,321
Expenses:
Mortality and expense risk charges		(227,054	)		(2,082,750	)		(140,099	)
Distribution and administrative expense charges		(27,247	)		(249,930	)		(16,812	)
Net investment income (loss)	$	69,709		$	(1,990,068	)	$	177,410
Net realized and change in unrealized losses:
Net realized losses on sale of fund shares	$	(715,628	)	$	(6,320,595	)	$	(647,670	)
Realized gain distributions		423,080			21,441,024			449,901
Net realized (losses) gains	$	(292,548	)	$	15,120,429		$	(197,769	)
Net change in unrealized appreciation/depreciation	$	(6,354,096	)	$	(78,276,179	)	$	(2,900,275	)
Net realized and change in unrealized losses	$	(6,646,644	)	$	(63,155,750	)	$	(3,098,044	)
Decrease in net assets from operations	$	(6,576,935	)	$	(65,145,818	)	$	(2,920,634	)
	F15			F20			SGI
	Sub-Account			Sub-Account			Sub-Account
Income:
Dividend income	$	550,087		$	861,614		$	2,120,529
Expenses:
Mortality and expense risk charges		(291,185	)		(536,168	)		(1,814,472	)
Distribution and administrative expense charges		(34,942	)		(64,340	)		(217,737	)
Net investment income	$	223,960		$	261,106		$	88,320
Net realized and change in unrealized losses:
Net realized losses on sale of fund shares	$	(230,769	)	$	(1,411,229	)	$	(4,862,578	)
Realized gain distributions		913,235			1,857,311			17,158,659
Net realized gains	$	682,466		$	446,082		$	12,296,081
Net change in unrealized appreciation/depreciation	$	(6,906,535	)	$	(14,923,804	)	$	(41,793,224	)
Net realized and change in unrealized losses	$	(6,224,069	)	$	(14,477,722	)	$	(29,497,143	)
Decrease in net assets from operations	$	(6,000,109	)	$	(14,216,616	)	$	(29,408,823	)

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF OPERATIONS (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 2008

	S17			ISC			FVS
	Sub-Account1			Sub-Account			Sub-Account
Income:
Dividend income	$	918,610		$	2,639,361		$	353,335
Expenses:
Mortality and expense risk charges		(224,744	)		(734,883	)		(483,539	)
Distribution and administrative expense charges		(26,969	)		(88,186	)		(58,025	)
Net investment income (loss)	$	666,897		$	1,816,292		$	(188,229	)
Net realized and change in unrealized losses:
Net realized losses on sale of fund shares	$	(342,024	)	$	(2,169,730	)	$	(2,314,756	)
Realized gain distributions		911,146			1,105,161			2,447,136
Net realized gains (losses)	$	569,122		$	(1,064,569	)	$	132,380
Net change in unrealized appreciation/depreciation	$	(10,375,104	)	$	(18,667,396	)	$	(11,450,701	)
Net realized and change in unrealized losses	$	(9,805,982	)	$	(19,731,965	)	$	(11,318,321	)
Decrease in net assets from operations	$	(9,139,085	)	$	(17,915,673	)	$	(11,506,550	)
	SIC			FMS			TDM
	Sub-Account			Sub-Account			Sub-Account
Income:
Dividend income	$	544,873		$	3,924,116		$	1,885,424
Expenses:
Mortality and expense risk charges		(122,616	)		(1,737,732	)		(1,075,295	)
Distribution and administrative expense charges		(14,714	)		(208,528	)		(129,035	)
Net investment income	$	407,543		$	1,977,856		$	681,094
Net realized and change in unrealized losses:
Net realized losses on sale of fund shares	$	(298,842	)	$	(1,400,332	)	$	(6,593,022	)
Realized gain distributions		19,251			5,581,406			14,132,579
Net realized (losses) gains	$	(279,591	)	$	4,181,074		$	7,539,557
Net change in unrealized appreciation/depreciation	$	(1,292,953	)	$	(60,794,808	)	$	(58,443,997	)
Net realized and change in unrealized losses	$	(1,572,544	)	$	(56,613,734	)	$	(50,904,440	)
Decrease in net assets from operations	$	(1,165,001	)	$	(54,635,878	)	$	(50,223,346	)

1 For the period March 10, 2008 (commencement of operations) through December 31, 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF OPERATIONS (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 2008

	FTG			FTI			HVD
	Sub-Account			Sub-Account			Sub-Account3
Income:
Dividend income	$	617,557		$	9,145,366		$	78,216
Expenses:
Mortality and expense risk charges		(537,342	)		(6,138,774	)		(5,639	)
Distribution and administrative expense charges		(64,481	)		(736,653	)		(677	)
Net investment income	$	15,734		$	2,269,939		$	71,900
Net realized and change in unrealized losses:
Net realized (losses) gains on sale of fund shares	$	(1,629,735	)	$	6,883,722		$	(8,755	)
Realized gain distributions		2,433,555			37,429,546			15,888
Net realized gains	$	803,820		$	44,313,268		$	7,133
Net change in unrealized appreciation/depreciation	$	(19,556,167	)	$	(245,132,086	)	$	(271,578	)
Net realized and change in unrealized losses	$	(18,752,347	)	$	(200,818,818	)	$	(264,445	)
Decrease in net assets from operations	$	(18,736,613	)	$	(198,548,879	)	$	(192,545	)
	HVG			HVI			HVE
	Sub-Account3			Sub-Account3			Sub-Account3
Income:
Dividend income	$	2,539		$	22,913		$	26,764
Expenses:
Mortality and expense risk charges		(1,980	)		(2,932	)		(6,497	)
Distribution and administrative expense charges		(238	)		(352	)		(780	)
Net investment income	$	321		$	19,629		$	19,487
Net realized and change in unrealized losses:
Net realized losses on sale of fund shares	$	(3,392	)	$	(6,721	)	$	(22,960	)
Realized gain distributions		10,346			9,534			7,516
Net realized gains (losses)	$	6,954		$	2,813		$	(15,444	)
Net change in unrealized appreciation/depreciation	$	(93,661	)	$	(125,824	)	$	(341,236	)
Net realized and change in unrealized losses	$	(86,707	)	$	(123,011	)	$	(356,680	)
Decrease in net assets from operations	$	(86,386	)	$	(103,382	)	$	(337,193	)

3 Commencement of operations was December 17, 2007; first activity in 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF OPERATIONS (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 2008

	HVM			HVC			HVS
	Sub-Account3			Sub-Account3			Sub-Account3
Income:
Dividend income	$	238		$	3,695		$	8,244
Expenses:
Mortality and expense risk charges		(128	)		(2,573	)		(1,148	)
Distribution and administrative expense charges		(15	)		(309	)		(138	)
Net investment income	$	95		$	813		$	6,958
Net realized and change in unrealized losses:
Net realized losses on sale of fund shares	$	(34	)	$	(2,728	)	$	(712	)
Realized gain distributions		-			5,886			151
Net realized (losses) gains	$	(34	)	$	3,158		$	(561	)
Net change in unrealized appreciation/depreciation	$	(3,237	)	$	(142,507	)	$	(6,582	)
Net realized and change in unrealized losses	$	(3,271	)	$	(139,349	)	$	(7,143	)
Decrease in net assets from operations	$	(3,176	)	$	(138,536	)	$	(185	)
	HVN			HRS			HVR
	Sub-Account3			Sub-Account3			Sub-Account3
Income:
Dividend income	$	570		$	1,163		$	3,112
Expenses:
Mortality and expense risk charges		(1,051	)		(808	)		(965	)
Distribution and administrative expense charges		(126	)		(97	)		(116	)
Net investment (loss) income	$	(607	)	$	258		$	2,031
Net realized and change in unrealized losses:
Net realized losses on sale of fund shares	$	(1,856	)	$	(2,067	)	$	(853	)
Realized gain distributions		5,082			65			4,504
Net realized gains (losses)	$	3,226		$	(2,002	)	$	3,651
Net change in unrealized appreciation/depreciation	$	(79,227	)	$	(76,648	)	$	(49,137	)
Net realized and change in unrealized losses	$	(76,001	)	$	(78,650	)	$	(45,486	)
Decrease in net assets from operations	$	(76,608	)	$	(78,392	)	$	(43,455	)

3 Commencement of operations was December 17, 2007; first activity in 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF OPERATIONS (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 2008

	HSS			LRE			LAV
	Sub-Account3			Sub-Account1			Sub-Account
Income:
Dividend income	$	2,057		$	514,556		$	178,396
Expenses:
Mortality and expense risk charges		(4,160	)		(103,855	)		(474,881	)
Distribution and administrative expense charges		(499	)		(12,463	)		(56,986	)
Net investment (loss) income	$	(2,602	)	$	398,238		$	(353,471	)
Net realized and change in unrealized losses:
Net realized losses on sale of fund shares	$	(4,001	)	$	(348,768	)	$	(256,703	)
Realized gain distributions		4,011			1,071,932			204,325
Net realized gains (losses)	$	10		$	723,164		$	(52,378	)
Net change in unrealized appreciation/depreciation	$	(186,766	)	$	(8,418,181	)	$	(10,031,393	)
Net realized and change in unrealized losses	$	(186,756	)	$	(7,695,017	)	$	(10,083,771	)
Decrease in net assets from operations	$	(189,358	)	$	(7,296,779	)	$	(10,437,242	)
	LA1			LA9			LA2
	Sub-Account			Sub-Account			Sub-Account
Income:
Dividend income	$	7,320,399		$	-		$	1,034,933
Expenses:
Mortality and expense risk charges		(7,306,735	)		(899,087	)		(1,272,272	)
Distribution and administrative expense charges		(876,808	)		(107,890	)		(152,673	)
Net investment loss	$	(863,144	)	$	(1,006,977	)	$	(390,012	)
Net realized and change in unrealized losses:
Net realized (losses) gains on sale of fund shares	$	(10,080,591	)	$	408,602		$	(8,421,142	)
Realized gain distributions		1,713,759			823,604			3,458,311
Net realized (losses) gains	$	(8,366,832	)	$	1,232,206		$	(4,962,831	)
Net change in unrealized appreciation/depreciation	$	(201,435,486	)	$	(26,424,788	)	$	(34,204,061	)
Net realized and change in unrealized losses	$	(209,802,318	)	$	(25,192,582	)	$	(39,166,892	)
Decrease in net assets from operations	$	(210,665,462	)	$	(26,199,559	)	$	(39,556,904	)

1 For the period March 10, 2008 (commencement of operations) through December 31, 2008.

3 Commencement of operations was December 17, 2007; first activity in 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF OPERATIONS (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 2008

	MF7			BDS			MFD
	Sub-Account			Sub-Account			Sub-Account
Income:
Dividend income	$	4,485,990		$	6,131,794		$	35,769
Expenses:
Mortality and expense risk charges		(958,660	)		(1,123,809	)		(285,276	)
Distribution and administrative expense charges		(115,039	)		(134,857	)		(34,233	)
Net investment income (loss)	$	3,412,291		$	4,873,128		$	(283,740	)
Net realized and change in unrealized losses:
Net realized (losses) gains on sale of fund shares	$	(5,681,049	)	$	(5,759,247	)	$	434,277
Realized gain distributions		-			-			-
Net realized (losses) gains	$	(5,681,049	)	$	(5,759,247	)	$	434,277
Net change in unrealized appreciation/depreciation	$	(6,057,075	)	$	(9,346,634	)	$	(9,491,636	)
Net realized and change in unrealized losses	$	(11,738,124	)	$	(15,105,881	)	$	(9,057,359	)
Decrease in net assets from operations	$	(8,325,833	)	$	(10,232,753	)	$	(9,341,099	)
	CAS			MFF			EGS
	Sub-Account			Sub-Account			Sub-Account
Income:
Dividend income	$	1,490,298		$	-		$	450,234
Expenses:
Mortality and expense risk charges		(3,679,655	)		(231,096	)		(2,306,277	)
Distribution and administrative expense charges		(441,559	)		(27,731	)		(276,753	)
Net investment loss	$	(2,630,916	)	$	(258,827	)	$	(2,132,796	)
Net realized and change in unrealized losses:
Net realized (losses) gains on sale of fund shares	$	(6,094,948	)	$	1,015,631		$	4,690,204
Realized gain distributions		-			-			-
Net realized (losses) gains	$	(6,094,948	)	$	1,015,631		$	4,690,204
Net change in unrealized appreciation/depreciation	$	(120,415,245	)	$	(8,036,470	)	$	(82,452,921	)
Net realized and change in unrealized losses	$	(126,510,193	)	$	(7,020,839	)	$	(77,762,717	)
Decrease in net assets from operations	$	(129,141,109	)	$	(7,279,666	)	$	(79,895,513	)

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF OPERATIONS (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 2008

	EM1			EME			GG1
	Sub-Account			Sub-Account			Sub-Account
Income:
Dividend income	$	177,868		$	858,864		$	420,357
Expenses:
Mortality and expense risk charges		(238,550	)		(783,958	)		(76,638	)
Distribution and administrative expense charges		(28,626	)		(94,075	)		(9,197	)
Net investment (loss) income	$	(89,308	)	$	(19,169	)	$	334,522
Net realized and change in unrealized (losses) gains:
Net realized losses on sale of fund shares	$	(3,326,655	)	$	(5,824,460	)	$	(18,880	)
Realized gain distributions		5,154,641			19,193,951			-
Net realized gains (losses)	$	1,827,986		$	13,369,491		$	(18,880	)
Net change in unrealized appreciation/depreciation	$	(13,231,511	)	$	(56,384,021	)	$	101,929
Net realized and change in unrealized (losses) gains	$	(11,403,525	)	$	(43,014,530	)	$	83,049
(Decrease) increase in net assets from operations	$	(11,492,833	)	$	(43,033,699	)	$	417,571
	GGS			GG2			GGR
	Sub-Account			Sub-Account			Sub-Account
Income:
Dividend income	$	2,883,061		$	52,183		$	958,846
Expenses:
Mortality and expense risk charges		(449,089	)		(96,292	)		(1,161,792	)
Distribution and administrative expense charges		(53,891	)		(11,555	)		(139,415	)
Net investment income (loss)	$	2,380,081		$	(55,664	)	$	(342,361	)
Net realized and change in unrealized gains (losses):
Net realized (losses) gains on sale of fund shares	$	(128,899	)	$	381,864		$	6,734,323
Realized gain distributions		-			-			-
Net realized (losses) gains	$	(128,899	)	$	381,864		$	6,734,323
Net change in unrealized appreciation/depreciation	$	543,522		$	(3,562,424	)	$	(50,035,265	)
Net realized and change in unrealized gains (losses)	$	414,623		$	(3,180,560	)	$	(43,300,942	)
Increase (decrease) in net assets from operations	$	2,794,704		$	(3,236,224	)	$	(43,643,303	)

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF OPERATIONS (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 2008

	GT2			GTR			MFK
	Sub-Account			Sub-Account			Sub-Account
Income:
Dividend income	$	895,050		$	6,315,470		$	13,451,392
Expenses:
Mortality and expense risk charges		(233,694	)		(1,467,806	)		(4,079,369	)
Distribution and administrative expense charges		(28,043	)		(176,137	)		(489,524	)
Net investment income	$	633,313		$	4,671,527		$	8,882,499
Net realized and change in unrealized (losses) gains:
Net realized losses on sale of fund shares	$	(1,000,905	)	$	(1,303,835	)	$	(271,475	)
Realized gain distributions		1,674,318			11,212,377			-
Net realized gains (losses)	$	673,413		$	9,908,542		$	(271,475	)
Net change in unrealized appreciation/depreciation	$	(4,518,492	)	$	(35,473,195	)	$	8,341,737
Net realized and change in unrealized (losses) gains	$	(3,845,079	)	$	(25,564,653	)	$	8,070,262
(Decrease) increase in net assets from operations	$	(3,211,766	)	$	(20,893,126	)	$	16,952,761
	GSS			MFC			HYS
	Sub-Account			Sub-Account			Sub-Account
Income:
Dividend income	$	12,789,593		$	10,650,928		$	10,895,082
Expenses:
Mortality and expense risk charges		(2,923,627	)		(1,758,450	)		(1,453,524	)
Distribution and administrative expense charges		(350,835	)		(211,014	)		(174,423	)
Net investment income	$	9,515,131		$	8,681,464		$	9,267,135
Net realized and change in unrealized gains (losses):
Net realized losses on sale of fund shares	$	(4,206,481	)	$	(7,445,076	)	$	(7,617,904	)
Realized gain distributions		-			-			-
Net realized losses	$	(4,206,481	)	$	(7,445,076	)	$	(7,617,904	)
Net change in unrealized appreciation/depreciation	$	10,115,961		$	(36,952,373	)	$	(37,148,994	)
Net realized and change in unrealized gains (losses)	$	5,909,480		$	(44,397,449	)	$	(44,766,898	)
Increase (decrease) in net assets from operations		15,424,611		$	(35,715,985	)	$	(35,499,763	)

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF OPERATIONS (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 2008

	IG1			IGS			MI1
	Sub-Account			Sub-Account			Sub-Account
Income:
Dividend income	$	252,401		$	1,227,718		$	1,945,515
Expenses:
Mortality and expense risk charges		(326,508	)		(1,178,651	)		(3,181,940	)
Distribution and administrative expense charges		(39,181	)		(141,438	)		(381,833	)
Net investment loss	$	(113,288	)	$	(92,371	)	$	(1,618,258	)
Net realized and change in unrealized losses:
Net realized (losses) gains on sale of fund shares	$	(1,015,061	)	$	6,776,198		$	(9,379,251	)
Realized gain distributions		4,270,386			16,922,007			12,994,505
Net realized gains	$	3,255,325		$	23,698,205		$	3,615,254
Net change in unrealized appreciation/depreciation	$	(14,702,660	)	$	(68,083,596	)	$	(82,613,237	)
Net realized and change in unrealized losses	$	(11,447,335	)	$	(44,385,391	)	$	(78,997,983	)
Decrease in net assets from operations	$	(11,560,623	)	$	(44,477,762	)	$	(80,616,241	)
	MII			M1B			MIS
	Sub-Account			Sub-Account			Sub-Account
Income:
Dividend income	$	891,972		$	281,242		$	1,351,763
Expenses:
Mortality and expense risk charges		(1,071,436	)		(1,214,228	)		(2,727,960	)
Distribution and administrative expense charges		(128,572	)		(145,707	)		(327,355	)
Net investment loss	$	(308,036	)	$	(1,078,693	)	$	(1,703,552	)
Net realized and change in unrealized losses:
Net realized gains (losses) on sale of fund shares	$	1,829,592		$	2,788,643		$	(6,632,724	)
Realized gain distributions		5,325,499			-			-
Net realized gains (losses)	$	7,155,091		$	2,788,643		$	(6,632,724	)
Net change in unrealized appreciation/depreciation	$	(38,034,612	)	$	(37,352,516	)	$	(84,123,832	)
Net realized and change in unrealized losses	$	(30,879,521	)	$	(34,563,873	)	$	(90,756,556	)
Decrease in net assets from operations	$	(31,187,557	)	$	(35,642,566	)	$	(92,460,108	)

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF OPERATIONS (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 2008

	MFL			MIT			MC1
	Sub-Account			Sub-Account			Sub-Account
Income:
Dividend income	$	3,038,895		$	7,131,725		$	-
Expenses:
Mortality and expense risk charges		(3,783,261	)		(5,884,666	)		(334,536	)
Distribution and administrative expense charges		(453,991	)		(706,160	)		(40,144	)
Net investment (loss) income	$	(1,198,357	)	$	540,899		$	(374,680	)
Net realized and change in unrealized losses:
Net realized gains (losses) on sale of fund shares	$	4,919,127		$	(8,691,377	)	$	675,111
Realized gain distributions		-			-			-
Net realized gains (losses)	$	4,919,127		$	(8,691,377	)	$	675,111
Net change in unrealized appreciation/depreciation	$	(105,695,711	)	$	(184,796,740	)	$	(14,452,557	)
Net realized and change in unrealized losses	$	(100,776,584	)	$	(193,488,117	)	$	(13,777,446	)
Decrease in net assets from operations	$	(101,974,941	)	$	(192,947,218	)	$	(14,152,126	)
	MCS			MCV			MM1
	Sub-Account			Sub-Account			Sub-Account
Income:
Dividend income	$	-		$	186,537		$	4,333,170
Expenses:
Mortality and expense risk charges		(403,349	)		(241,143	)		(3,834,235	)
Distribution and administrative expense charges		(48,402	)		(28,937	)		(460,108	)
Net investment (loss) income	$	(451,751	)	$	(83,543	)	$	38,827
Net realized and change in unrealized losses:
Net realized gains (losses) on sale of fund shares	$	924,270		$	(1,512,063	)	$	-
Realized gain distributions		-			2,345,508			-
Net realized gains	$	924,270		$	833,445		$	-
Net change in unrealized appreciation/depreciation	$	(19,116,158	)	$	(8,800,826	)	$	-
Net realized and change in unrealized losses	$	(18,191,888	)	$	(7,967,381	)	$	-
(Decrease) increase in net assets from operations	$	(18,643,639	)	$	(8,050,924	)	$	38,827

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF OPERATIONS (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 2008

	MMS			M1A			NWD
	Sub-Account			Sub-Account			Sub-Account
Income:
Dividend income	$	3,927,047		$	-		$	-
Expenses:
Mortality and expense risk charges		(2,474,755	)		(1,660,167	)		(927,391	)
Distribution and administrative expense charges		(296,971	)		(199,220	)		(111,287	)
Net investment income (loss)	$	1,155,321		$	(1,859,387	)	$	(1,038,678	)
Net realized and change in unrealized losses:
Net realized (losses) gains on sale of fund shares	$	-		$	(2,111,748	)	$	3,078,673
Realized gain distributions		-			20,469,987			12,943,455
Net realized gains	$	-		$	18,358,239		$	16,022,128
Net change in unrealized appreciation/depreciation	$	-		$	(65,625,870	)	$	(47,770,550	)
Net realized and change in unrealized losses	$	-		$	(47,267,631	)	$	(31,748,422	)
Increase (decrease) in net assets from operations	$	1,155,321		$	(49,127,018	)	$	(32,787,100	)
	RE1			RES			RG1
	Sub-Account			Sub-Account			Sub-Account
Income:
Dividend income	$	88,829		$	1,330,023		$	129,055
Expenses:
Mortality and expense risk charges		(338,482	)		(2,456,199	)		(411,059	)
Distribution and administrative expense charges		(40,618	)		(294,744	)		(49,327	)
Net investment loss	$	(290,271	)	$	(1,420,920	)	$	(331,331	)
Net realized and change in unrealized losses:
Net realized gains (losses) on sale of fund shares	$	993,534		$	2,983,598		$	(1,889,461	)
Realized gain distributions		-			-			2,259,998
Net realized gains	$	993,534		$	2,983,598		$	370,537
Net change in unrealized appreciation/depreciation	$	(10,950,367	)	$	(86,833,195	)	$	(14,094,050	)
Net realized and change in unrealized losses	$	(9,956,833	)	$	(83,849,597	)	$	(13,723,513	)
Decrease in net assets from operations	$	(10,247,104	)	$	(85,270,517	)	$	(14,054,844	)

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF OPERATIONS (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 2008

	RGS			RI1			RIS
	Sub-Account			Sub-Account			Sub-Account
Income:
Dividend income	$	992,926		$	2,265,399		$	1,249,950
Expenses:
Mortality and expense risk charges		(1,956,094	)		(2,313,247	)		(895,689	)
Distribution and administrative expense charges		(234,731	)		(277,590	)		(107,483	)
Net investment (loss) income	$	(1,197,899	)	$	(325,438	)	$	246,778
Net realized and change in unrealized losses:
Net realized (losses) gains on sale of fund shares	$	(7,675,512	)	$	(344,320	)	$	5,843,482
Realized gain distributions		11,853,857			22,104,391			10,220,643
Net realized gains	$	4,178,345		$	21,760,071		$	16,064,125
Net change in unrealized appreciation/depreciation	$	(73,406,212	)	$	(103,123,422	)	$	(52,344,850	)
Net realized and change in unrealized losses	$	(69,227,867	)	$	(81,363,351	)	$	(36,280,725	)
Decrease in net assets from operations	$	(70,425,766	)	$	(81,688,789	)	$	(36,033,947	)
	SI1			SIS			SVS
	Sub-Account			Sub-Account			Sub-Account
Income:
Dividend income	$	1,234,278		$	3,274,968		$	44,445
Expenses:
Mortality and expense risk charges		(210,349	)		(507,317	)		(64,405	)
Distribution and administrative expense charges		(25,242	)		(60,878	)		(7,729	)
Net investment income (loss)	$	998,687		$	2,706,773		$	(27,689	)
Net realized and change in unrealized losses:
Net realized losses on sale of fund shares	$	(1,052,107	)	$	(2,364,524	)	$	(1,183,890	)
Realized gain distributions		-			-			915,473
Net realized losses	$	(1,052,107	)	$	(2,364,524	)	$	(268,417	)
Net change in unrealized appreciation/depreciation	$	(2,187,017	)	$	(5,950,212	)	$	(2,132,093	)
Net realized and change in unrealized losses	$	(3,239,124	)	$	(8,314,736	)	$	(2,400,510	)
Decrease in net assets from operations	$	(2,240,437	)	$	(5,607,963	)	$	(2,428,199	)

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF OPERATIONS (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 2009

	TE1			TEC			MFJ
	Sub-Account			Sub-Account			Sub-Account
Income:
Dividend income	$	-		$	-		$	23,295,341
Expenses:
Mortality and expense risk charges		(32,052	)		(196,545	)		(11,086,229	)
Distribution and administrative expense charges		(3,846	)		(23,586	)		(1,330,348	)
Net investment (loss) income	$	(35,898	)	$	(220,131	)	$	10,878,764
Net realized and change in unrealized losses:
Net realized gains (losses) on sale of fund shares	$	140,975		$	1,432,250		$	(17,447,706	)
Realized gain distributions		-			-			53,497,650
Net realized gains	$	140,975		$	1,432,250		$	36,049,944
Net change in unrealized appreciation/depreciation	$	(1,584,047	)	$	(10,544,761	)	$	(234,778,817	)
Net realized and change in unrealized losses	$	(1,443,072	)	$	(9,112,511	)	$	(198,728,873	)
Decrease in net assets from operations	$	(1,478,970	)	$	(9,332,642	)	$	(187,850,109	)
	TRS			MFE			UTS
	Sub-Account			Sub-Account			Sub-Account
Income:
Dividend income	$	25,091,681		$	1,621,026		$	4,759,629
Expenses:
Mortality and expense risk charges		(8,988,906	)		(1,455,418	)		(3,136,475	)
Distribution and administrative expense charges		(1,078,669	)		(174,650	)		(376,377	)
Net investment income (loss)	$	15,024,106		$	(9,042	)	$	1,246,777
Net realized and change in unrealized losses:
Net realized (losses) gains on sale of fund shares	$	(10,880,448	)	$	4,462,285		$	29,857,498
Realized gain distributions		52,976,940			16,956,283			43,763,423
Net realized gains	$	42,096,492		$	21,418,568		$	73,620,921
Net change in unrealized appreciation/depreciation	$	(235,815,307	)	$	(67,130,219	)	$	(183,284,733	)
Net realized and change in unrealized losses	$	(193,718,815	)	$	(45,711,651	)	$	(109,663,812	)
Decrease in net assets from operations	$	(178,694,709	)	$	(45,720,693	)	$	(108,417,035	)

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF OPERATIONS (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 2008

	MV1			MVS			OBV
	Sub-Account			Sub-Account			Sub-Account
Income:
Dividend income	$	2,178,262		$	3,612,033		$	58,287
Expenses:
Mortality and expense risk charges		(2,192,378	)		(2,403,861	)		(45,146	)
Distribution and administrative expense charges		(263,085	)		(288,463	)		(5,417	)
Net investment (loss) income	$	(277,201	)	$	919,709		$	7,724
Net realized and change in unrealized losses:
Net realized gains (losses) on sale of fund shares	$	1,493,837		$	11,934,817		$	(375,182	)
Realized gain distributions		21,211,425			30,275,364			156,713
Net realized gains (losses)	$	22,705,262		$	42,210,181		$	(218,469	)
Net change in unrealized appreciation/depreciation	$	(87,318,131	)	$	(115,973,797	)	$	(1,449,188	)
Net realized and change in unrealized losses	$	(64,612,869	)	$	(73,763,616	)	$	(1,667,657	)
Decrease in net assets from operations	$	(64,890,070	)	$	(72,843,907	)	$	(1,659,933	)
	OCA			OGG			OMG
	Sub-Account			Sub-Account			Sub-Account
Income:
Dividend income	$	-		$	433,556		$	7,466,110
Expenses:
Mortality and expense risk charges		(506,871	)		(521,215	)		(9,430,269	)
Distribution and administrative expense charges		(60,824	)		(62,546	)		(1,131,632	)
Net investment loss	$	(567,695	)	$	(150,205	)	$	(3,095,791	)
Net realized and change in unrealized losses:
Net realized gains (losses) on sale of fund shares	$	842,383		$	(1,651,824	)	$	(1,458,685	)
Realized gain distributions		-			2,324,843			39,243,437
Net realized gains	$	842,383		$	673,019		$	37,784,752
Net change in unrealized appreciation/depreciation	$	(17,700,232	)	$	(17,445,513	)	$	(317,777,139	)
Net realized and change in unrealized losses	$	(16,857,849	)	$	(16,772,494	)	$	(279,992,387	)
Decrease in net assets from operations	$	(17,425,544	)	$	(16,922,699	)	$	(283,088,178	)

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF OPERATIONS (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 2008

	OMS			PMB			PLD
	Sub-Account			Sub-Account			Sub-Account
Income:
Dividend income	$	36,126		$	743,687		$	33,247,536
Expenses:
Mortality and expense risk charges		(204,185	)		(183,575	)		(12,756,698	)
Distribution and administrative expense charges		(24,502	)		(22,029	)		(1,530,804	)
Net investment (loss) income	$	(192,561	)	$	538,083		$	18,960,034
Net realized and change in unrealized losses:
Net realized losses on sale of fund shares	$	(644,738	)	$	(547,474	)	$	(8,617,043	)
Realized gain distributions		751,306			534,798			11,953,411
Net realized gains (losses)	$	106,568		$	(12,676	)	$	3,336,368
Net change in unrealized appreciation/depreciation	$	(5,916,365	)	$	(2,637,948	)	$	(42,227,842	)
Net realized and change in unrealized losses	$	(5,809,797	)	$	(2,650,624	)	$	(38,891,474	)
Decrease in net assets from operations	$	(6,002,358	)	$	(2,112,541	)	$	(19,931,440	)
	PRR			PTR			PRA
	Sub-Account			Sub-Account			Sub-Account
Income:
Dividend income	$	3,169,094		$	14,393,410		$	280,494
Expenses:
Mortality and expense risk charges		(1,423,547	)		(5,006,383	)		(75,604	)
Distribution and administrative expense charges		(170,826	)		(600,766	)		(9,072	)
Net investment income	$	1,574,721		$	8,786,261		$	195,818
Net realized and change in unrealized losses:
Net realized (losses) gains on sale of fund shares	$	(1,445,203	)	$	621,096		$	(254,110	)
Realized gain distributions		184,492			7,545,146			13,124
Net realized (losses) gains	$	(1,260,711	)	$	8,166,242		$	(240,986	)
Net change in unrealized appreciation/depreciation	$	(12,918,618	)	$	(8,531,946	)	$	(938,513	)
Net realized and change in unrealized losses	$	(14,179,329	)	$	(365,704	)	$	(1,179,499	)
(Decrease) increase in net assets from operations	$	(12,604,608	)	$	8,420,557		$	(983,681	)

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF OPERATIONS (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 2008

	PCR			1XX			SSA
	Sub-Account			Sub-Account2			Sub-Account
Income:
Dividend income	$	1,733,134		$	-		$	25,173
Expenses:
Mortality and expense risk charges		(424,845	)		(762	)		(99,431	)
Distribution and administrative expense charges		(50,981	)		(91	)		(11,932	)
Net investment income (loss)	$	1,257,308		$	(853	)	$	(86,190	)
Net realized and change in unrealized (losses) gains:
Net realized gains (losses) on sale of fund shares	$	1,455,110		$	(167	)	$	(853,028	)
Realized gain distributions		453,328			-			22,321
Net realized gains (losses)	$	1,908,438		$	(167	)	$	(830,707	)
Net change in unrealized appreciation/depreciation	$	(26,382,238	)	$	22,164		$	(2,009,983	)
Net realized and change in unrealized (losses) gains	$	(24,473,800	)	$	21,997		$	(2,840,690	)
(Decrease) increase in net assets from operations	$	(23,216,492	)	$	21,144		$	(2,926,880	)
	3XX			5XX			SVV
	Sub-Account2			Sub-Account2			Sub-Account
Income:
Dividend income	$	63		$	6,832		$	392,559
Expenses:
Mortality and expense risk charges		(79	)		(3,351	)		(751,579	)
Distribution and administrative expense charges		(9	)		(402	)		(90,189	)
Net investment (loss) income	$	(25	)	$	3,079		$	(449,209	)
Net realized and change in unrealized gains (losses):
Net realized (losses) gains on sale of fund shares	$	(199	)	$	1,907		$	(1,486,864	)
Realized gain distributions		-			-			650,324
Net realized (losses) gains	$	(199	)	$	1,907		$	(836,540	)
Net change in unrealized appreciation/depreciation	$	1,220		$	73,324		$	(27,022,672	)
Net realized and change in unrealized gains (losses)	$	1,021		$	75,231		$	(27,859,212	)
Increase (decrease) in net assets from operations	$	996		$	78,310		$	(28,308,421	)

2 For the period October 6, 2008 (commencement of operations) through December 31, 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF OPERATIONS (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 2008

	2XX			LGF			SGC
	Sub-Account2			Sub-Account			Sub-Account1
Income:
Dividend income	$	262		$	-		$	13,376
Expenses:
Mortality and expense risk charges		(470	)		(32,537	)		(7,627	)
Distribution and administrative expense charges		(56	)		(3,905	)		(915	)
Net investment (loss) income	$	(264	)	$	(36,442	)	$	4,834
Net realized and change in unrealized gains (losses):
Net realized losses on sale of fund shares	$	(237	)	$	(31,582	)	$	(157,794	)
Realized gain distributions		-			315			-
Net realized losses	$	(237	)	$	(31,267	)	$	(157,794	)
Net change in unrealized appreciation/depreciation	$	7,327		$	(1,131,457	)	$	(166,577	)
Net realized and change in unrealized gains (losses)	$	7,090		$	(1,162,724	)	$	(324,371	)
Increase (decrease) in net assets from operations	$	6,826		$	(1,199,166	)	$	(319,537	)
	S13			SDC			S15
	Sub-Account1			Sub-Account1			Sub-Account1
Income:
Dividend income	$	22,341		$	317,717		$	605,951
Expenses:
Mortality and expense risk charges		(19,643	)		(203,563	)		(459,914	)
Distribution and administrative expense charges		(2,357	)		(24,428	)		(55,190	)
Net investment income	$	341		$	89,726		$	90,847
Net realized and change in unrealized (losses) gains:
Net realized (losses) gains on sale of fund shares	$	(320,615	)	$	118,059		$	79,640
Realized gain distributions		-			101,941			161,790
Net realized (losses) gains	$	(320,615	)	$	220,000		$	241,430
Net change in unrealized appreciation/depreciation	$	(619,227	)	$	719,321		$	1,269,682
Net realized and change in unrealized (losses) gains	$	(939,842	)	$	939,321		$	1,511,112
(Decrease) increase in net assets from operations	$	(939,501	)	$	1,029,047		$	1,601,959

1 For the period March 10, 2008 (commencement of operations) through December 31, 2008.

2 For the period October 6, 2008 (commencement of operations) through December 31, 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF OPERATIONS (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 2008

	7XX			8XX			6XX
	Sub-Account2			Sub-Account2			Sub-Account2
Income:
Dividend income	$	-		$	-		$	-
Expenses:
Mortality and expense risk charges		(43,808	)		(45,434	)		(42,409	)
Distribution and administrative expense charges		(5,257	)		(5,452	)		(5,089	)
Net investment loss	$	(49,065	)	$	(50,886	)	$	(47,498	)
Net realized and change in unrealized gains:
Net realized (losses) gains on sale of fund shares	$	(4,171	)	$	65,613		$	(13,334	)
Realized gain distributions		-			-			-
Net realized (losses) gains	$	(4,171	)	$	65,613		$	(13,334	)
Net change in unrealized appreciation/depreciation	$	1,342,933		$	1,587,023		$	994,643
Net realized and change in unrealized gains	$	1,338,762		$	1,652,636		$	981,309
Increase in net assets from operations	$	1,289,697		$	1,601,750		$	933,811
	IGB			SLC			S12
	Sub-Account			Sub-Account1			Sub-Account1
Income:
Dividend income	$	1,293,863		$	2,599		$	12,881
Expenses:
Mortality and expense risk charges		(377,461	)		(1,810	)		(10,708	)
Distribution and administrative expense charges		(45,295	)		(217	)		(1,285	)
Net investment income	$	871,107		$	572		$	888
Net realized and change in unrealized losses:
Net realized losses on sale of fund shares	$	(914,501	)	$	(4,939	)	$	(38,976	)
Realized gain distributions		-			-			-
Net realized losses	$	(914,501	)	$	(4,939	)	$	(38,976	)
Net change in unrealized appreciation/depreciation	$	(3,476,022	)	$	(68,398	)	$	(333,036	)
Net realized and change in unrealized losses	$	(4,390,523	)	$	(73,337	)	$	(372,012	)
Decrease in net assets from operations	$	(3,519,416	)	$	(72,765	)	$	(371,124	)

1 For the period March 10, 2008 (commencement of operations) through December 31, 2008.

2 For the period October 6, 2008 (commencement of operations) through December 31, 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF OPERATIONS (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 2008

	VSC			S14			4XX
	Sub-Account			Sub-Account1			Sub-Account2
Income:
Dividend income	$	20,360		$	254,253		$	16,611
Expenses:
Mortality and expense risk charges		(1,703,569	)		(49,146	)		(22,107	)
Distribution and administrative expense charges		(204,428	)		(5,898	)		(2,653	)
Net investment (loss) income	$	(1,887,637	)	$	199,209		$	(8,149	)
Net realized and change in unrealized (losses) gains:
Net realized (losses) gains on sale of fund shares	$	(6,756,390	)	$	(193,039	)	$	5,847
Realized gain distributions		4,832,189			71,057			2,535
Net realized (losses) gains	$	(1,924,201	)	$	(121,982	)	$	8,382
Net change in unrealized appreciation/depreciation	$	(47,924,248	)	$	(787,751	)	$	439,819
Net realized and change in unrealized (losses) gains	$	(49,848,449	)	$	(909,733	)	$	448,201
(Decrease) increase in net assets from operations	$	(51,736,086	)	$	(710,524	)	$	440,052
	SRE			SC3			CMM
	Sub-Account			Sub-Account			Sub-Account
Income:
Dividend income	$	2,823,603		$	212,185		$	211,501
Expenses:
Mortality and expense risk charges		(2,222,300	)		(161,853	)		(246,138	)
Distribution and administrative expense charges		(266,676	)		(19,422	)		(29,537	)
Net investment income (loss)	$	334,627		$	30,910		$	(64,174	)
Net realized and change in unrealized losses:
Net realized losses on sale of fund shares	$	(4,400,834	)	$	(345,111	)	$	-
Realized gain distributions		12,408,941			823,749			-
Net realized gains	$	8,008,107		$	478,638		$	-
Net change in unrealized appreciation/depreciation	$	(79,030,430	)	$	(4,922,987	)	$	-
Net realized and change in unrealized losses	$	(71,022,323	)	$	(4,444,349	)	$	-
Decrease in net assets from operations	$	(70,687,696	)	$	(4,413,439	)	$	(64,174	)

1 For the period March 10, 2008 (commencement of operations) through December 31, 2008.

2 For the period October 6, 2008 (commencement of operations) through December 31, 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF OPERATIONS (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 2008

	S16			VKU			VKM
	Sub-Account1			Sub-Account1			Sub-Account1
Income:
Dividend income	$	44,707		$	35,275		$	1,631
Expenses:
Mortality and expense risk charges		(223,973	)		(23,841	)		(3,789	)
Distribution and administrative expense charges		(26,877	)		(2,861	)		(455	)
Net investment (loss) income	$	(206,143	)	$	8,573		$	(2,613	)
Net realized and change in unrealized losses:
Net realized losses on sale of fund shares	$	(524,753	)	$	(56,133	)	$	(40,716	)
Realized gain distributions		5,282,821			47,475			62,172
Net realized gains (losses)	$	4,758,068		$	(8,658	)	$	21,456
Net change in unrealized appreciation/depreciation	$	(14,798,917	)	$	(501,930	)	$	(214,485	)
Net realized and change in unrealized losses	$	(10,040,849	)	$	(510,588	)	$	(193,029	)
Decrease in net assets from operations	$	(10,246,992	)	$	(502,015	)	$	(195,642	)
	VKC			VLC			WTF
	Sub-Account1			Sub-Account			Sub-Account
Income:
Dividend income	$	982		$	231,454		$	-
Expenses:
Mortality and expense risk charges		(2,567	)		(181,357	)		(19,523	)
Distribution and administrative expense charges		(308	)		(21,763	)		(2,343	)
Net investment (loss) income	$	(1,893	)	$	28,334		$	(21,866	)
Net realized and change in unrealized losses:
Net realized losses on sale of fund shares	$	(51,035	)	$	(1,208,822	)	$	(19,368	)
Realized gain distributions		41,195			568,451			41,614
Net realized (losses) gains	$	(9,840	)	$	(640,371	)	$	22,246
Net change in unrealized appreciation/depreciation	$	(118,080	)	$	(4,420,574	)	$	(758,079	)
Net realized and change in unrealized losses	$	(127,920	)	$	(5,060,945	)	$	(735,833	)
Decrease in net assets from operations	$	(129,813	)	$	(5,032,611	)	$	(757,699	)

1 For the period March 10, 2008 (commencement of operations) through December 31, 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENT OF OPERATIONS (CONTINUED)

FOR THE YEAR ENDED DECEMBER 31, 2008

	USC
	Sub-Account
Income:
Dividend income	$	-
Expenses:
Mortality and expense risk charges		(968	)
Distribution and administrative expense charges		(116	)
Net investment loss	$	(1,084	)
Net realized and change in unrealized losses:
Net realized losses on sale of fund shares	$	(4,050	)
Realized gain distributions		7,048
Net realized gains	$	2,998
Net change in unrealized appreciation/depreciation	$	(28,799	)
Net realized and change in unrealized losses	$	(25,801	)
Decrease in net assets from operations	$	(26,885	)

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	AVB					AN4
	Sub-Account					Sub-Account
	Period Ended			Year Ended		Period Ended			Year Ended
	December 31,			December 31,		December 31,			December 31,
	20081			2007		20081			2007
Operations:
Net investment income (loss)	$	50,119		$	-	$	(12,412	)	$	-
Net realized losses		(47,826	)		-		(272,830	)		-
Net change in unrealized appreciation/
depreciation		(1,760,483	)		-		(497,355	)		-
Decrease in net assets
from operations	$	(1,758,190	)	$	-	$	(782,597	)	$	-
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	10,240,315		$	-	$	1,041,162		$	-
Net transfers between Sub-Accounts
and/or Fixed Account		2,934,670			-		1,293,202			-
Withdrawals, surrenders, annuitizations
and contract charges		(38,570	)		-		(85,591	)		-
Net accumulation activity	$	13,136,415		$	-	$	2,248,773		$	-
Annuitization Activity:
Annuitizations	$	-		$	-	$	-		$	-
Annuity payments and contract charges		-			-		-			-
Net transfers between Sub-Accounts		-			-		-			-
Adjustments to annuity reserves		-			-		-			-
Net annuitization activity	$	-		$	-	$	-		$	-
Increase in net assets from
contract owner transactions	$	13,136,415		$	-	$	2,248,773		$	-
Increase in net assets	$	11,378,225		$	-	$	1,466,176		$	-
Net Assets:
Beginning of year	$	-		$	-	$	-		$	-
End of year	$	11,378,225		$	-	$	1,466,176		$	-
Unit Transactions:
Beginning of year		-			-		-			-
Purchased		1,167,627			-		131,089			-
Transferred between Sub-Accounts
and/or Fixed Account		341,026			-		143,925			-
Withdrawn, Surrendered, and Annuitized		(23,914	)		-		(16,508	)		-
End of year		1,484,739			-		258,506			-

1 For the period March 10, 2008 (commencement of operations) through December 31, 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	IVB					AVW
	Sub-Account					Sub-Account
	Period Ended			Year Ended		Period Ended			Year Ended
	December 31,			December 31,		December 31,			December 31,
	20081			2007		20081			2007
Operations:
Net investment loss	$	(452,128	)	$	-	$	(8,524	)	$	-
Net realized losses		(372,166	)		-		(110	)		-
Net change in unrealized appreciation/
depreciation		(36,015,373	)		-		(418,037	)		-
Decrease in net assets
from operations	$	(36,839,667	)	$	-	$	(426,671	)	$	-
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	51,642,938		$	-	$	830,685		$	-
Net transfers between Sub-Accounts
and/or Fixed Account		54,970,365			-		1,144,896			-
Withdrawals, surrenders, annuitizations
and contract charges		(1,880,400	)		-		(5,484	)		-
Net accumulation activity	$	104,732,903		$	-	$	1,970,097		$	-
Annuitization Activity:
Annuitizations	$	-		$	-	$	-		$	-
Annuity payments and contract charges		-			-		-			-
Net transfers between Sub-Accounts		-			-		-			-
Adjustments to annuity reserves		-			-		-			-
Net annuitization activity	$	-		$	-	$	-		$	-
Increase in net assets from
contract owner transactions	$	104,732,903		$	-	$	1,970,097		$	-
Increase in net assets	$	67,893,236		$	-	$	1,543,426		$	-
Net Assets:
Beginning of year	$	-		$	-	$	-		$	-
End of year	$	67,893,236		$	-	$	1,543,426		$	-
Unit Transactions:
Beginning of year		-			-		-			-
Purchased		5,564,791			-		103,246			-
Transferred between Sub-Accounts
and/or Fixed Account		7,394,531			-		132,288			-
Withdrawn, Surrendered, and Annuitized		(315,209	)		-		(704	)		-
End of year		12,644,113			-		234,830			-

1 For the period March 10, 2008 (commencement of operations) through December 31, 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	9XX					CSC
	Sub-Account					Sub-Account
	Period Ended			Year Ended		Year Ended			Year Ended
	December 31,			December 31,		December 31,			December 31,
	20083			2007		2008			2007
Operations:
Net investment income (loss)	$	413,219		$	-	$	(167	)	$	(249	)
Net realized gains (losses)		85,795			-		(552	)		1,976
Net change in unrealized appreciation/
depreciation		399,112			-		(3,606	)		(2,497	)
Increase (decrease) in net assets
from operations	$	898,126		$	-	$	(4,325	)	$	(770	)
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	10,896,068		$	-	$	-		$	-
Net transfers between Sub-Accounts
and/or Fixed Account		5,095,354			-		(5,624	)		1,282
Withdrawals, surrenders, annuitizations
and contract charges		(36,875	)		-		(55	)		(61	)
Net accumulation activity	$	15,954,547		$	-	$	(5,679	)	$	1,221
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	$	15,954,547		$	-	$	(5,679	)	$	1,221
Increase (decrease) in net assets	$	16,852,673		$	-	$	(10,004	)	$	451
Net Assets:
Beginning of year	$	-		$	-	$	18,101		$	17,650
End of year	$	16,852,673		$	-	$	8,097		$	18,101
Unit Transactions:
Beginning of year		-			-		1,509			1,411
Purchased		1,141,184			-		-			-
Transferred between Sub-Accounts
and/or Fixed Account		536,453			-		(548	)		103
Withdrawn, Surrendered, and Annuitized		(4,378	)		-		(5	)		(5	)
End of year		1,673,259			-		956			1,509
3 For the period October 6, 2008 (commencement of operations) through December 31, 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	NMT						MCC
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Period Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			20072
Operations:
Net investment loss	$	(1,617	)	$	(1,256	)	$	(1,761,505	)	$	(426,307	)
Net realized gains (losses)		713			8,552			(303,941	)		1,816,488
Net change in unrealized appreciation/
depreciation		(58,722	)		12,344			(60,909,616	)		2,322,447
(Decrease) increase in net assets
from operations	$	(59,626	)	$	19,640		$	(62,975,062	)	$	3,712,628
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	-		$	39,106		$	55,956,466		$	59,908,830
Net transfers between Sub-Accounts
and/or Fixed Account		7,250			(4,292	)		47,245,196			14,261,897
Withdrawals, surrenders, annuitizations
and contract charges		(7,458	)		(1,561	)		(4,948,438	)		(701,230	)
Net accumulation activity	$	(208	)	$	33,253		$	98,253,224		$	73,469,497
Annuitization Activity:
Annuitizations	$	-		$	-		$	6,168		$	-
Annuity payments and contract charges		-			-			(1,650	)		-
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		-			-			(524	)		-
Net annuitization activity	$	-		$	-		$	3,994		$	-
(Decrease) increase in net assets from
contract owner transactions	$	(208	)	$	33,253		$	98,257,218		$	73,469,497
(Decrease) increase in net assets	$	(59,834	)	$	52,893		$	35,282,156		$	77,182,125
Net Assets:
Beginning of year	$	135,980		$	83,087		$	77,182,125		$	-
End of year	$	76,146		$	135,980		$	112,464,281		$	77,182,125
Unit Transactions:
Beginning of year		8,690			6,233			6,356,718			-
Purchased		-			2,825			5,636,587			5,221,770
Transferred between Sub-Accounts
and/or Fixed Account		751			(264	)		5,390,010			1,217,807
Withdrawn, Surrendered, and Annuitized		(685	)		(104	)		(633,861	)		(82,859	)
End of year		8,756			8,690			16,749,454			6,356,718

2 For the period March 5, 2007 (commencement of operations) through December 31, 2007.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	CMG						NNG
	Sub-Account						Sub-Account
	Year Ended			Period Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			20072			2008			2007
Operations:
Net investment loss	$	(188,280	)	$	(43,640	)	$	(2,841	)	$	(3,820	)
Net realized (losses) gains		(228,054	)		45,441			137			15,585
Net change in unrealized appreciation/
depreciation		(5,089,937	)		328,574			(96,218	)		25,311
(Decrease) increase in net assets
from operations	$	(5,506,271	)	$	330,375		$	(98,922	)	$	37,076
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	4,232,712		$	5,920,249		$	1		$	-
Net transfers between Sub-Accounts
and/or Fixed Account		5,407,002			1,352,946			84,975			(70,920	)
Withdrawals, surrenders, annuitizations
and contract charges		(423,174	)		(54,861	)		(1,253	)		(1,179	)
Net accumulation activity	$	9,216,540		$	7,218,334		$	83,723		$	(72,099	)
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	$	9,216,540		$	7,218,334		$	83,723		$	(72,099	)
Increase (decrease) in net assets	$	3,710,269		$	7,548,709		$	(15,199	)	$	(35,023	)
Net Assets:
Beginning of year	$	7,548,709		$	-		$	191,573		$	226,596
End of year	$	11,258,978		$	7,548,709		$	176,374		$	191,573
Unit Transactions:
Beginning of year		640,690			-			14,570			19,841
Purchased		436,980			526,212			-			-
Transferred between Sub-Accounts
and/or Fixed Account		580,095			121,380			8,123			(5,177	)
Withdrawn, Surrendered, and Annuitized		(47,508	)		(6,902	)		(119	)		(94	)
End of year		1,610,257			640,690			22,574			14,570

2 For the period March 5, 2007 (commencement of operations) through December 31, 2007.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	NMI						FL1
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Period Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			20081			2007
Operations:
Net investment (loss) income	$	(34,901	)	$	(41,428	)	$	186,355		$	-
Net realized gains (losses)		813,904			114,989			(645,104	)		-
Net change in unrealized appreciation/
Depreciation		(7,253,241	)		226,832			(13,780,486	)		-
(Decrease) increase in net assets
from operations	$	(6,474,238	)	$	300,393		$	(14,239,235	)	$	-
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	3,267,561		$	4,686,269		$	37,220,605		$	-
Net transfers between Sub-Accounts
and/or Fixed Account		3,590,403			3,698,982			26,603,259			-
Withdrawals, surrenders, annuitizations
and contract charges		(476,182	)		(98,222	)		(629,606	)		-
Net accumulation activity	$	6,381,782		$	8,287,029		$	63,194,258		$	-
Annuitization Activity:
Annuitizations	$	-		$	-		$	-		$	-
Annuity payments and contract charges		-			-			-			-
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		-			-			-			-
Net annuitization activity	$	-		$	-		$	-		$	-
Increase in net assets from
contract owner transactions	$	6,381,782		$	8,287,029		$	63,194,258		$	-
(Decrease) increase in net assets	$	(92,456	)	$	8,587,422		$	48,955,023		$	-
Net Assets:
Beginning of year	$	8,752,767		$	165,345		$	-		$	-
End of year	$	8,660,311		$	8,752,767		$	48,955,023		$	-
Unit Transactions:
Beginning of year		522,074			11,385			-			-
Purchased		254,922			300,401			4,395,712			-
Transferred between Sub-Accounts
and/or Fixed Account		280,563			227,995			3,074,154			-
Withdrawn, Surrendered, and Annuitized		(39,292	)		(17,707	)		(116,984	)		-
End of year		1,018,267			522,074			7,352,882			-

1 For the period March 10, 2008 (commencement of operations) through December 31, 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	FVB						FVM
	Sub-Account						Sub-Account
	Year Ended			Period Ended			Year Ended			Period Ended
	December 31,			December 31,			December 31,			December 31,
	2008			20072			2008			20072
Operations:
Net investment income (loss)	$	69,709		$	107,493		$	(1,990,068	)	$	(627,501	)
Net realized (losses) gains		(292,548	)		3,697			15,120,429			109,267
Net change in unrealized appreciation/
Depreciation		(6,354,096	)		(144,261	)		(78,276,179	)		3,038,340
(Decrease) increase in net assets
from operations	$	(6,576,935	)	$	(33,071	)	$	(65,145,818	)	$	2,520,106
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	7,144,029		$	11,284,487		$	20,675,842		$	112,628,706
Net transfers between Sub-Accounts
and/or Fixed Account		3,506,766			2,024,387			24,464,746			25,354,571
Withdrawals, surrenders, annuitizations
and contract charges		(553,022	)		(34,804	)		(7,284,860	)		(1,725,966	)
Net accumulation activity	$	10,097,773		$	13,274,070		$	37,855,728		$	136,257,311
Annuitization Activity:
Annuitizations	$	-		$	-		$	4,023		$	-
Annuity payments and contract charges		-			-			(378	)		-
Net transfers between Sub-Accounts		-			-			-
Adjustments to annuity reserves		-			-			(98	)		-
Net annuitization activity	$	-		$	-		$	3,547		$	-
Increase in net assets from
contract owner transactions	$	10,097,773		$	13,274,070		$	37,859,275		$	136,257,311
Increase (decrease) in net assets	$	3,520,838		$	13,240,999		$	(27,286,543	)	$	138,777,417
Net Assets:
Beginning of year	$	13,240,999		$	-		$	138,777,417		$	-
End of year	$	16,761,837		$	13,240,999		$	111,490,874		$	138,777,417
Unit Transactions:
Beginning of year		1,234,324			-			11,884,177			-
Purchased		835,889			1,049,762			1,984,578			9,897,828
Transferred between Sub-Accounts
and/or Fixed Account		405,284			187,797			3,012,035			2,190,917
Withdrawn, Surrendered, and Annuitized		(63,321	)		(3,235	)		(798,487	)		(204,568	)
End of year		2,412,176			1,234,324			16,082,303			11,884,177

2 For the period March 5, 2007 (commencement of operations) through December 31, 2007.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	F10						F15
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment income	$	177,410		$	71,155		$	223,960		$	189,971
Net realized (losses) gains		(197,769	)		297,735			682,466			527,414
Net change in unrealized appreciation/
depreciation		(2,900,275	)		(89,889	)		(6,906,535	)		71,408
(Decrease) increase in net assets
from operations	$	(2,920,634	)	$	279,001		$	(6,000,109	)	$	788,793
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	569,452		$	3,000,621		$	3,929,383		$	5,208,788
Net transfers between Sub-Accounts
and/or Fixed Account		6,190,785			917,950			2,640,528			4,077,064
Withdrawals, surrenders, annuitizations
and contract charges		(564,512	)		(242,462	)		(1,007,165	)		(505,227	)
Net accumulation activity	$	6,195,725		$	3,676,109		$	5,562,746		$	8,780,625
Annuitization Activity:
Annuitizations	$	-		$	-		$	-		$	-
Annuity payments and contract charges		-			-			-			-
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		-			-			-			-
Net annuitization activity	$	-		$	-		$	-		$	-
Increase in net assets from
contract owner transactions	$	6,195,725		$	3,676,109		$	5,562,746		$	8,780,625
Increase (decrease) in net assets	$	3,275,091		$	3,955,110		$	(437,363	)	$	9,569,418
Net Assets:
Beginning of year	$	6,929,208		$	2,974,098		$	17,658,270		$	8,088,852
End of year	$	10,204,299		$	6,929,208		$	17,220,907		$	17,658,270
Unit Transactions:
Beginning of year		585,651			268,016			1,457,747			715,554
Purchased		51,214			261,167			364,791			438,948
Transferred between Sub-Accounts
and/or Fixed Account		594,083			77,586			262,668			345,411
Withdrawn, Surrendered, and Annuitized		(57,198	)		(21,118	)		(96,056	)		(42,166	)
End of year		1,173,750			585,651			1,989,150			1,457,747

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	F20						SGI
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Period Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			20072
Operations:
Net investment income (loss)	$	261,106		$	213,040		$	88,320			(529,539	)
Net realized gains		446,082			1,273,585			12,296,081			71,138
Net change in unrealized appreciation/
depreciation		(14,923,804	)		294,230			(41,793,224	)		(521,756	)
(Decrease) increase in net assets
from operations	$	(14,216,616	)	$	1,780,855		$	(29,408,823	)		(980,157	)
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	5,776,291		$	14,466,914		$	70,719,253			65,846,491
Net transfers between Sub-Accounts
and/or Fixed Account		1,942,875			6,859,478			29,257,306			18,942,858
Withdrawals, surrenders, annuitizations
and contract charges		(2,038,638	)		(1,646,550	)		(5,757,328	)		(834,864	)
Net accumulation activity	$	5,680,528		$	19,679,842		$	94,219,231			83,954,485
Annuitization Activity:
Annuitizations	$	-		$	-		$	8,563			-
Annuity payments and contract charges		-			-			(1,425	)		-
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		-			-			(520	)		-
Net annuitization activity	$	-		$	-		$	6,618			-
Increase in net assets from
contract owner transactions	$	5,680,528		$	19,679,842		$	94,225,849			83,954,485
(Decrease) increase in net assets	$	(8,536,088	)	$	21,460,697		$	64,817,026			82,974,328
Net Assets:
Beginning of year	$	36,444,849		$	14,984,152		$	82,974,328			-
End of year	$	27,908,761		$	36,444,849		$	147,791,354			82,974,328
Unit Transactions:
Beginning of year		2,944,857			1,308,908			7,791,583			-
Purchased		558,273			1,266,324			7,561,266			6,114,623
Transferred between Sub-Accounts
and/or Fixed Account		113,120			570,795			2,729,302			1,758,234
Withdrawn, Surrendered, and Annuitized		(203,828	)		(201,170	)		(696,812	)		(81,274	)
End of year		3,412,422			2,944,857			17,385,339			7,791,583

2 For the period March 5, 2007 (commencement of operations) through December 31, 2007.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	S17					ISC
	Sub-Account					Sub-Account
	Period Ended			Year Ended		Year Ended			Period Ended
	December 31,			December 31,		December 31,			December 31,
	20081			2007		2008			20072
Operations:
Net investment income	$	666,897		$	-	$	1,816,292		$	74,901
Net realized gains (losses)		569,122			-		(1,064,569	)		8,540
Net change in unrealized appreciation/
depreciation		(10,375,104	)		-		(18,667,396	)		(761,148	)
Decrease in net assets
from operations	$	(9,139,085	)	$	-	$	(17,915,673	)	$	(677,707	)
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	26,046,471		$	-	$	15,644,681		$	30,398,015
Net transfers between Sub-Accounts
and/or Fixed Account		18,954,776			-		12,988,301			11,488,143
Withdrawals, surrenders, annuitizations
and contract charges		(911,798	)		-		(2,928,798	)		(664,275	)
Net accumulation activity	$	44,089,449		$	-	$	25,704,184		$	41,221,883
Annuitization Activity:
Annuitizations	$	-		$	-	$	-		$	-
Annuity payments and contract charges		-			-		-			-
Net transfers between Sub-Accounts		-			-		-			-
Adjustments to annuity reserves		-			-		-			-
Net annuitization activity	$	-		$	-	$	-		$	-
Increase in net assets from
contract owner transactions	$	44,089,449		$	-	$	25,704,184		$	41,221,883
Increase in net assets	$	34,950,364		$	-	$	7,788,511		$	40,544,176
Net Assets:
Beginning of year	$	-		$	-	$	40,544,176		$	-
End of year	$	34,950,364		$	-	$	48,332,687		$	40,544,176
Unit Transactions:
Beginning of year		-			-		3,983,472			-
Purchased		2,976,096			-		1,738,512			2,940,282
Transferred between Sub-Accounts
and/or Fixed Account		2,102,928			-		1,501,870			1,112,795
Withdrawn, Surrendered, and Annuitized		(112,126	)		-		(358,418	)		(69,605	)
End of year		4,966,898			-		6,865,436			3,983,472

1For the period March 10, 2008 (commencement of operations) through December 31, 2008.

2For the period March 5, 2007 (commencement of operations) through December 31, 2007.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	FVS						SIC
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Period Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			20072
Operations:
Net investment (loss) income	$	(188,229	)	$	(433,590	)	$	407,543		$	29,959
Net realized gains (losses)		132,380			4,534,158			(279,591	)		(20,264	)
Net change in unrealized appreciation/
depreciation		(11,450,701	)		(6,169,357	)		(1,292,953	)		39,345
(Decrease) increase in net assets
from operations	$	(11,506,550	)	$	(2,068,789	)	$	(1,165,001	)	$	49,040
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	1,744,650		$	10,658,874		$	2,545,705		$	3,745,076
Net transfers between Sub-Accounts
and/or Fixed Account		(1,915,768	)		504,856			2,733,783			2,251,144
Withdrawals, surrenders, annuitizations
and contract charges		(3,458,899	)		(3,415,384	)		(861,124	)		(299,873	)
Net accumulation activity	$	(3,630,017)		$	7,748,346		$	4,418,364		$	5,696,347
Annuitization Activity:
Annuitizations	$	-		$	-		$	-		$	-
Annuity payments and contract charges		(2,109	)		(2,555	)		-			-
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		283			(198	)		-			-
Net annuitization activity	$	(1,826	)	$	(2,753	)	$	-		$	-
(Decrease) increase in net assets from
contract owner transactions	$	(3,631,843	)	$	7,745,593		$	4,418,364		$	5,696,347
(Decrease) increase in net assets	$	(15,138,393	)	$	5,676,804		$	3,253,363		$	5,745,387
Net Assets:
Beginning of year	$	37,692,750		$	32,015,946		$	5,745,387		$	-
End of year	$	22,554,357		$	37,692,750		$	8,998,750		$	5,745,387
Unit Transactions:
Beginning of year		1,960,878			1,597,154			556,077			-
Purchased		110,553			509,404			264,839			365,706
Transferred between Sub-Accounts
and/or Fixed Account		(84,884	)		22,542			270,798			220,113
Withdrawn, Surrendered, and Annuitized		(206,945	)		(168,222	)		(93,821	)		(29,742	)
End of year		1,779,602			1,960,878			997,893			556,077

2 For the period March 5, 2007 (commencement of operations) through December 31, 2007.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	FMS						TDM
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment income (loss)	$	1,977,856		$	(342,306	)	$	681,094		$	61,504
Net realized gains		4,181,074			5,128,408			7,539,557			3,279,418
Net change in unrealized appreciation/
depreciation		(60,794,808	)		(5,239,071	)		(58,443,997	)		4,586,525
(Decrease) increase in net assets
from operations	$	(54,635,878	)	$	(452,969	)	$	(50,223,346	)	$	7,927,447
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	46,529,219		$	49,979,954		$	8,481,585		$	54,816,444
Net transfers between Sub-Accounts
and/or Fixed Account		22,594,745			9,701,085			18,182,212			9,311,256
Withdrawals, surrenders, annuitizations
and contract charges		(9,145,113	)		(6,142,981	)		(3,833,734	)		(1,417,777	)
Net accumulation activity	$	59,978,851		$	53,538,058		$	22,830,063		$	62,709,923
Annuitization Activity:
Annuitizations	$	5,396		$	-		$	-		$	-
Annuity payments and contract charges		(2,461	)		(2,429	)		-			-
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		193			(260	)		-			-
Net annuitization activity	$	3,128		$	(2,689	)	$	-		$	-
Increase in net assets from
contract owner transactions	$	59,981,979		$	53,535,369		$	22,830,063		$	62,709,923
Increase (decrease) in net assets	$	5,346,101		$	53,082,400		$	(27,393,283	)	$	70,637,370
Net Assets:
Beginning of year	$	111,152,728		$	58,070,328		$	77,853,382		$	7,216,012
End of year	$	116,498,829		$	111,152,728		$	50,460,099		$	77,853,382
Unit Transactions:
Beginning of year		6,318,116			3,368,514			4,360,786			511,631
Purchased		3,352,717			2,765,022			551,043			3,385,335
Transferred between Sub-Accounts
and/or Fixed Account		1,646,407			543,065			1,489,531			564,446
Withdrawn, Surrendered, and Annuitized		(657,752	)		(358,485	)		(322,636	)		(100,626	)
End of year		10,659,488			6,318,116			6,078,724			4,360,786

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	FTG						FTI
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment income (loss)	$	15,734		$	(156,864	)	$	2,269,939		$	987,772
Net realized gains		803,820			2,240,694			44,313,268			52,835,963
Net change in unrealized appreciation/
depreciation		(19,556,167	)		(2,342,080	)		(245,132,086	)		10,086,338
(Decrease) increase in net assets
from operations	$	(18,736,613	)	$	(258,250	)	$	(198,548,879	)	$	63,910,073
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	3,637,435		$	18,162,024		$	4,650,135		$	53,353,349
Net transfers between Sub-Accounts
and/or Fixed Account		1,999,775			3,829,450			13,052,860			(29,738,016	)
Withdrawals, surrenders, annuitizations
and contract charges		(3,351,101	)		(1,857,863	)		(40,765,084	)		(34,710,111	)
Net accumulation activity	$	2,286,109		$	20,133,611		$	(23,062,089	)	$	(11,094,778	)
Annuitization Activity:
Annuitizations	$	-		$	-		$	22,266		$	95,020
Annuity payments and contract charges		-			-			(22,682	)		(25,320	)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		-			-			2,056			(4,550	)
Net annuitization activity	$	-		$	-		$	1,640		$	65,150
Increase (decrease) in net assets
from contract owner transactions	$	2,286,109		$	20,133,611		$	(23,060,449	)	$	(11,029,628	)
(Decrease) increase in net assets	$	(16,450,504	)	$	19,875,361		$	(221,609,328	)	$	52,880,445
Net Assets:
Beginning of year	$	41,968,435		$	22,093,074		$	502,292,060		$	449,411,615
End of year	$	25,517,931		$	41,968,435		$	280,682,732		$	502,292,060
Unit Transactions:
Beginning of year		2,128,221			1,134,629			23,555,118			23,906,416
Purchased		218,730			895,454			248,952			2,770,455
Transferred between Sub-Accounts
and/or Fixed Account		135,003			192,070			1,040,484			(1,380,657	)
Withdrawn, Surrendered, and Annuitized		(206,623	)		(93,932	)		(2,369,116	)		(1,741,096	)
End of year		2,275,331			2,128,221			22,475,438			23,555,118

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	HVD					HVG
	Sub-Account					Sub-Account
	Period Ended			Year Ended		Period Ended			Year Ended
	December 31,			December 31,		December 31,			December 31,
	20084			2007		20084			2007
Operations:
Net investment income	$	71,900		$	-	$	321		$	-
Net realized gains		7,133			-		6,954			-
Net change in unrealized appreciation/
depreciation		(271,578	)		-		(93,661	)		-
Decrease in net assets
from operations	$	(192,545	)	$	-	$	(86,386	)	$	-
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	480,866		$	-	$	148,191		$	-
Net transfers between Sub-Accounts
and/or Fixed Account		548,008			-		214,411			-
Withdrawals, surrenders, annuitizations
and contract charges		(13,812	)		-		(4,845	)		-
Net accumulation activity	$	1,015,062		$	-	$	357,757		$	-
Annuitization Activity:
Annuitizations	$	-		$	-	$	-		$	-
Annuity payments and contract charges		-			-		-			-
Net transfers between Sub-Accounts		-			-		-			-
Adjustments to annuity reserves		-			-		-			-
Net annuitization activity	$	-		$	-	$	-		$	-
Increase in net assets from
contract owner transactions	$	1,015,062		$	-	$	357,757		$	-
Increase in net assets	$	822,517		$	-	$	271,371		$	-
Net Assets:
Beginning of year	$	-		$	-	$	-		$	-
End of year	$	822,517		$	-	$	271,371		$	-
Unit Transactions:
Beginning of year		-			-		-			-
Purchased		50,916			-		15,612			-
Transferred between Sub-Accounts
and/or Fixed Account		67,208			-		28,394			-
Withdrawn, Surrendered, and Annuitized		(1,851	)		-		(685	)		-
End of year		116,273			-		43,321			-

4Commencement of operations was December 17, 2007; first activity in 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	HVI					HVE
	Sub-Account					Sub-Account
	Period Ended			Year Ended		Period Ended			Year Ended
	December 31,			December 31,		December 31,			December 31,
	20084			2007		20084			2007
Operations:
Net investment income	$	19,629		$	-	$	19,487		$	-
Net realized gains (losses)		2,813			-		(15,444)			-
Net change in unrealized appreciation/
depreciation		(125,824	)		-		(341,236	)		-
Decrease in net assets
from operations	$	(103,382	)	$	-	$	(337,193	)	$	-
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	259,529		$	-	$	853,656		$	-
Net transfers between Sub-Accounts
and/or Fixed Account		288,756			-		417,751			-
Withdrawals, surrenders, annuitizations
and contract charges		(3,941	)		-		(10,353	)		-
Net accumulation activity	$	544,344		$	-	$	1,261,054		$	-
Annuitization Activity:
Annuitizations	$	-		$	-	$	-		$	-
Annuity payments and contract charges		-			-		-			-
Net transfers between Sub-Accounts		-			-		-			-
Adjustments to annuity reserves		-			-		-			-
Net annuitization activity	$	-		$	-	$	-		$	-
Increase in net assets from
contract owner transactions	$	544,344		$	-	$	1,261,054		$	-
Increase in net assets	$	440,962		$	-	$	923,861		$	-
Net Assets:
Beginning of year	$	-		$	-	$	-		$	-
End of year	$	440,962		$	-	$	923,861		$	-
Unit Transactions:
Beginning of year		-			-		-			-
Purchased		30,656			-		98,524			-
Transferred between Sub-Accounts
and/or Fixed Account		41,002			-		56,584			-
Withdrawn, Surrendered, and Annuitized		(553	)		-		(1,565	)		-
End of year		71,105			-		153,543			-

4 Commencement of operations was December 17, 2007; first activity in 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	HVM					HVC
	Sub-Account					Sub-Account
	Period Ended			Year Ended		Period Ended			Year Ended
	December 31,			December 31,		December 31,			December 31,
	2008 4			2007		2008 4			2007
Operations:
Net investment income	$	95		$	-	$	813		$	-
Net realized (losses) gains		(34	)		-		3,158			-
Net change in unrealized appreciation/
depreciation		(3,237	)		-		(142,507	)		-
Decrease in net assets
from operations	$	(3,176	)	$	-	$	(138,536	)	$	-
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	12,239		$	-	$	337,479		$	-
Net transfers between Sub-Accounts
and/or Fixed Account		1,031			-		200,938			-
Withdrawals, surrenders, annuitizations
and contract charges		(47	)		-		(4,070	)		-
Net accumulation activity	$	13,223		$	-	$	534,347		$	-
Annuitization Activity:
Annuitizations	$	-		$	-	$	-		$	-
Annuity payments and contract charges		-			-		-			-
Net transfers between Sub-Accounts		-			-		-			-
Adjustments to annuity reserves		-			-		-			-
Net annuitization activity	$	-		$	-	$	-		$	-
Increase in net assets from
contract owner transactions	$	13,223		$	-	$	534,347		$	-
Increase in net assets	$	10,047		$	-	$	395,811		$	-
Net Assets:
Beginning of year	$	-		$	-	$	-		$	-
End of year	$	10,047		$	-	$	395,811		$	-
Unit Transactions:
Beginning of year		-			-		-			-
Purchased		1,331			-		37,215			-
Transferred between Sub-Accounts
and/or Fixed Account		197			-		27,646			-
Withdrawn, Surrendered, and Annuitized		(7	)		-		(572	)		-
End of year		1,521			-		64,289			-

4Commencement of operations was December 17, 2007; first activity in 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	HVS					HVN
	Sub-Account					Sub-Account
	Period Ended			Year Ended		Period Ended			Year Ended
	December 31,			December 31,		December 31,			December 31,
	20084			2007		20084			2007
Operations:
Net investment income (loss)	$	6,958		$	-	$	(607	)	$	-
Net realized (losses) gains		(561	)		-		3,226			-
Net change in unrealized appreciation/
depreciation		(6,582	)		-		(79,227	)		-
Decrease in net assets
from operations	$	(185	)	$	-	$	(76,608	)	$	-
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	73,935		$	-	$	91,003		$	-
Net transfers between Sub-Accounts
and/or Fixed Account		37,148			-		166,681			-
Withdrawals, surrenders, annuitizations
and contract charges		(1,573	)		-		(3,532	)		-
Net accumulation activity	$	109,510		$	-	$	254,152		$	-
Annuitization Activity:
Annuitizations	$	-		$	-	$	-		$	-
Annuity payments and contract charges		-			-		-			-
Net transfers between Sub-Accounts		-			-		-			-
Adjustments to annuity reserves		-			-		-			-
Net annuitization activity	$	-		$	-	$	-		$	-
Increase in net assets from
contract owner transactions	$	109,510		$	-	$	254,152		$	-
Increase in net assets	$	109,325		$	-	$	177,544		$	-
Net Assets:
Beginning of year	$	-		$	-	$	-		$	-
End of year	$	109,325		$	-	$	177,544		$	-
Unit Transactions:
Beginning of year		-			-		-			-
Purchased		7,272			-		11,760			-
Transferred between Sub-Accounts
and/or Fixed Account		3,660			-		25,758			-
Withdrawn, Surrendered, and Annuitized		(156	)		-		(531	)		-
End of year		10,776			-		36,987			-

4Commencement of operations was December 17, 2007; first activity in 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	HRS					HVR
	Sub-Account					Sub-Account
	Period Ended			Year Ended		Period Ended			Year Ended
	December 31,			December 31,		December 31,			December 31,
	20084			2007		20084			2007
Operations:
Net investment income	$	258		$	-	$	2,031		$	-
Net realized (losses) gains		(2,002	)		-		3,651			-
Net change in unrealized appreciation/
depreciation		(76,648	)		-		(49,137	)		-
Decrease in net assets
from operations	$	(78,392	)	$	-	$	(43,455	)	$	-
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	144,185		$	-	$	116,491		$	-
Net transfers between Sub-Accounts
and/or Fixed Account		100,073			-		62,180			-
Withdrawals, surrenders, annuitizations
and contract charges		(1,648	)		-		(1,131	)		-
Net accumulation activity	$	242,610		$	-	$	177,540		$	-
Annuitization Activity:
Annuitizations	$	-		$	-	$	-		$	-
Annuity payments and contract charges		-			-		-			-
Net transfers between Sub-Accounts		-			-		-			-
Adjustments to annuity reserves		-			-		-			-
Net annuitization activity	$	-		$	-	$	-		$	-
Increase in net assets from
contract owner transactions	$	242,610		$	-	$	177,540		$	-
Increase in net assets	$	164,218		$	-	$	134,085		$	-
Net Assets:
Beginning of year	$	-		$	-	$	-		$	-
End of year	$	164,218		$	-	$	134,085		$	-
Unit Transactions:
Beginning of year		-			-		-			-
Purchased		16,935			-		13,829			-
Transferred between Sub-Accounts
and/or Fixed Account		17,422			-		9,273			-
Withdrawn, Surrendered, and Annuitized		(318	)		-		(167	)		-
End of year		34,039			-		22,935			-

4Commencement of operations was December 17, 2007; first activity in 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	HSS					LRE
	Sub-Account					Sub-Account
	Period Ended			Year Ended		Period Ended			Year Ended
	December 31,			December 31,		December 31,			December 31,
	20084			2007		20081			2007
Operations:
Net investment (loss) income	$	(2,602	)	$	-	$	398,238		$	-
Net realized gains		10			-		723,164			-
Net change in unrealized appreciation/
depreciation		(186,766	)		-		(8,418,181	)		-
Decrease in net assets
from operations	$	(189,358	)	$	-	$	(7,296,779	)	$	-
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	521,376		$	-	$	11,306,888		$	-
Net transfers between Sub-Accounts
and/or Fixed Account		311,607			-		10,270,114			-
Withdrawals, surrenders, annuitizations
and contract charges		(7,794	)		-		(304,833	)		-
Net accumulation activity	$	825,189		$	-	$	21,272,169		$	-
Annuitization Activity:
Annuitizations	$	-		$	-	$	-		$	-
Annuity payments and contract charges		-			-		-			-
Net transfers between Sub-Accounts		-			-		-			-
Adjustments to annuity reserves		-			-		-			-
Net annuitization activity	$	-		$	-	$	-		$	-
Increase in net assets from
contract owner transactions	$	825,189		$	-	$	21,272,169		$	-
Increase in net assets	$	635,831		$	-	$	13,975,390		$	-
Net Assets:
Beginning of year	$	-		$	-	$	-		$	-
End of year	$	635,831		$	-	$	13,975,390		$	-
Unit Transactions:
Beginning of year		-			-		-			-
Purchased		62,076			-		1,252,181			-
Transferred between Sub-Accounts
and/or Fixed Account		46,432			-		1,343,835			-
Withdrawn, Surrendered, and Annuitized		(1,195	)		-		(56,050	)		-
End of year		107,313			-		2,539,966			-

1 For the period March 10, 2008 (commencement of operations) through December 31, 2008.

4 Commencement of operations was December 17, 2007; first activity in 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	LAV						LA1
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment loss	$	(353,471	)	$	(330,019	)	$	(863,144	)	$	(847,064	)
Net realized (losses) gains		(52,378	)		2,063,671			(8,366,832	)		38,153,073
Net change in unrealized appreciation/
depreciation		(10,031,393	)		(667,540	)		(201,435,486	)		(34,847,567	)
(Decrease) increase in net assets
from operations	$	(10,437,242	)	$	1,066,112		$	(210,665,462	)	$	2,458,442
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	4,044,014		$	9,053,961		$	31,107,793		$	205,629,540
Net transfers between Sub-Accounts
and/or Fixed Account		4,382,778			1,369,043			39,918,288			50,319,395
Withdrawals, surrenders, annuitizations
and contract charges		(2,542,178	)		(1,610,844	)		(40,103,081	)		(27,857,693	)
Net accumulation activity	$	5,884,614		$	8,812,160		$	30,923,000		$	228,091,242
Annuitization Activity:
Annuitizations	$	-		$	-		$	41,398		$	49,368
Annuity payments and contract charges		-			-			(20,148	)		(23,159	)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		-			-			1,679			(3,745	)
Net annuitization activity	$	-		$	-		$	22,929		$	22,464
Increase in net assets
from contract owner transactions	$	5,884,614		$	8,812,160		$	30,945,929		$	228,113,706
(Decrease) increase in net assets	$	(4,552,628	)	$	9,878,272		$	(179,719,533	)	$	230,572,148
Net Assets:
Beginning of year	$	31,216,819		$	21,338,547		$	537,440,084		$	306,867,936
End of year	$	26,664,191		$	31,216,819		$	357,720,551		$	537,440,084
Unit Transactions:
Beginning of year		2,132,144			1,530,051			30,273,162			17,651,095
Purchased		316,272			631,107			1,906,613			11,423,326
Transferred between Sub-Accounts
and/or Fixed Account		361,154			95,287			2,806,891			2,819,498
Withdrawn, Surrendered, and Annuitized		(211,885	)		(124,301	)		(2,781,787	)		(1,620,757	)
End of year		2,597,685			2,132,144			32,204,879			30,273,162

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	LA9						LA2
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment loss	$	(1,006,977	)	$	(1,265,255	)	$	(390,012	)	$	(1,323,219	)
Net realized gains (losses)		1,232,206			9,625,547			(4,962,831	)		15,923,908
Net change in unrealized appreciation/
depreciation		(26,424,788	)		3,808,816			(34,204,061	)		(17,131,349	)
(Decrease) increase in net assets
from operations	$	(26,199,559	)	$	12,169,108		$	(39,556,904	)	$	(2,530,660	)
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	1,440,527		$	9,122,992		$	2,320,735		$	26,776,365
Net transfers between Sub-Accounts
and/or Fixed Account		(2,302,412	)		(2,720,890	)		(3,514,863	)		5,830,515
Withdrawals, surrenders, annuitizations
and contract charges		(5,350,506	)		(4,715,038	)		(7,143,628	)		(6,701,760	)
Net accumulation activity	$	(6,212,391	)	$	1,687,064		$	(8,337,756	)	$	25,905,120
Annuitization Activity:
Annuitizations	$	2,706		$	19,022		$	-		$	17,799
Annuity payments and contract charges		(2,750	)		(3,080	)		(6,224	)		(8,160	)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		217			(687	)		723			(890	)
Net annuitization activity	$	173		$	15,255		$	(5,501	)	$	8,749
(Decrease) increase in net assets
from contract owner transactions	$	(6,212,218	)	$	1,702,319		$	(8,343,257	)	$	25,913,869
(Decrease) increase in net assets	$	(32,411,777	)	$	13,871,427		$	(47,900,161	)	$	23,383,209
Net Assets:
Beginning of year	$	73,578,930		$	59,707,503		$	105,217,891		$	81,834,682
End of year	$	41,167,153		$	73,578,930		$	57,317,730		$	105,217,891
Unit Transactions:
Beginning of year		5,069,578			4,902,578			5,809,005			4,471,238
Purchased		117,981			704,682			145,834			1,393,672
Transferred between Sub-Accounts
and/or Fixed Account		(65,185	)		(184,572	)		(157,247	)		306,849
Withdrawn, Surrendered, and Annuitized		(453,734	)		(353,110	)		(493,622	)		(362,754	)
End of year		4,668,640			5,069,578			5,303,970			5,809,005

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	MF7						BDS
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment income	$	3,412,291		$	3,077,639		$	4,873,128		$	5,426,215
Net realized losses		(5,681,049	)		(1,907,910	)		(5,759,247	)		(2,957,466	)
Net change in unrealized appreciation/
depreciation		(6,057,075	)		92,715			(9,346,634	)		(191,419	)
(Decrease) increase in net assets
from operations	$	(8,325,833	)	$	1,262,444		$	(10,232,753	)	$	2,277,330
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	5,232,449		$	6,335,834		$	1,783,121		$	1,979,571
Net transfers between Sub-Accounts
and/or Fixed Account		(7,768,166	)		4,553,418			(37,974	)		7,014,116
Withdrawals, surrenders, annuitizations
and contract charges		(14,650,809	)		(11,189,614	)		(26,000,713	)		(26,308,757	)
Net accumulation activity	$	(17,186,526	)	$	(300,362	)	$	(24,255,566	)	$	(17,315,070	)
Annuitization Activity:
Annuitizations	$	-		$	-		$	-		$	-
Annuity payments and contract charges		(1,683	)		(1,737	)		(25,647	)		(137,975	)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		31			(135	)		(162,950	)		23,794
Net annuitization activity	$	(1,652	)	$	(1,872	)	$	(188,597	)	$	(114,181	)
Decrease in net assets
from contract owner transactions	$	(17,188,178	)	$	(302,234	)	$	(24,444,163	)	$	(17,429,251	)
(Decrease) increase in net assets	$	(25,514,011	)	$	960,210		$	(34,676,916	)	$	(15,151,921	)
Net Assets:
Beginning of year	$	76,655,526		$	75,695,316		$	103,879,319		$	119,031,240
End of year	$	51,141,515		$	76,655,526		$	69,202,403		$	103,879,319
Unit Transactions:
Beginning of year		6,110,178			6,133,332			6,896,916			8,059,857
Purchased		440,599			512,582			123,349			133,647
Transferred between Sub-Accounts
and/or Fixed Account		(699,451	)		285,146			(43,538	)		450,029
Withdrawn, Surrendered, and Annuitized		(1,215,861	)		(820,882	)		(1,773,630	)		(1,746,617	)
End of year		4,635,465			6,110,178			5,203,097			6,896,916

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	MFD						CAS
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment loss	$	(283,740	)	$	(429,027	)	$	(2,630,916	)	$	(5,074,076	)
Net realized gains (losses)		434,277			2,025,567			(6,094,948	)		(2,422,855	)
Net change in unrealized appreciation/
depreciation		(9,491,636	)		911,005			(120,415,245	)		46,886,276
(Decrease) increase in net assets
from operations	$	(9,341,099	)	$	2,507,545		$	(129,141,109	)	$	39,389,345
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	193,802		$	367,977		$	2,636,370		$	3,732,036
Net transfers between Sub-Accounts
and/or Fixed Account		372,832			(864,626	)		(6,463,854	)		(16,997,326	)
Withdrawals, surrenders, annuitizations
and contract charges		(3,075,229	)		(4,841,668	)		(55,119,482	)		(90,428,470	)
Net accumulation activity	$	(2,508,595	)	$	(5,338,317	)	$	(58,946,966	)	$	(103,693,760	)
Annuitization Activity:
Annuitizations	$	-		$	-		$	86,241		$	136,869
Annuity payments and contract charges		(4,668	)		(2,014	)		(398,117	)		(463,905	)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		961			(370	)		330,295			(223,011	)
Net annuitization activity	$	(3,707	)	$	(2,384	)	$	18,419		$	(550,047	)
Decrease in net assets
from contract owner transactions	$	(2,512,302	)	$	(5,340,701	)	$	(58,928,547	)	$	(104,243,807	)
Decrease in net assets	$	(11,853,401	)	$	(2,833,156	)	$	(188,069,656	)	$	(64,854,462	)
Net Assets:
Beginning of year	$	26,279,858		$	29,113,014		$	385,511,764		$	450,366,226
End of year	$	14,426,457		$	26,279,858		$	197,442,108		$	385,511,764
Unit Transactions:
Beginning of year		2,498,904			3,012,379			26,120,429			33,490,792
Purchased		21,804			33,040			238,947			269,669
Transferred between Sub-Accounts
and/or Fixed Account		59,727			(88,522	)		(533,621	)		(1,149,494	)
Withdrawn, Surrendered, and Annuitized		(354,726	)		(457,993	)		(4,962,885	)		(6,490,538	)
End of year		2,225,709			2,498,904			20,862,870			26,120,429

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	MFF						EGS
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment loss	$	(258,827	)	$	(320,760	)	$	(2,132,796	)	$	(3,646,903	)
Net realized gains		1,015,631			1,779,941			4,690,204			5,549,744
Net change in unrealized appreciation/
depreciation		(8,036,470	)		2,007,977			(82,452,921	)		43,565,601
(Decrease) increase in net assets
from operations	$	(7,279,666	)	$	3,467,158		$	(79,895,513	)	$	45,468,442
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	153,789		$	625,216		$	1,475,192		$	1,832,860
Net transfers between Sub-Accounts
and/or Fixed Account		(561,520	)		317,096			(5,032,629	)		(15,262,692	)
Withdrawals, surrenders, annuitizations
and contract charges		(1,796,194	)		(2,457,485	)		(35,101,251	)		(57,096,418	)
Net accumulation activity	$	(2,203,925	)	$	(1,515,173	)	$	(38,658,688	)	$	(70,526,250	)
Annuitization Activity:
Annuitizations	$	-		$	-		$	40,290		$	58,636
Annuity payments and contract charges		-			-			(98,557	)		(110,643	)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		193			(89	)		(30,269	)		(14,286	)
Net annuitization activity	$	193		$	(89	)	$	(88,536	)	$	(66,293	)
Decrease in net assets
from contract owner transactions	$	(2,203,732	)	$	(1,515,262	)	$	(38,747,224	)	$	(70,592,543	)
(Decrease) increase in net assets	$	(9,483,398	)	$	1,951,896		$	(118,642,737	)	$	(25,124,101	)
Net Assets:
Beginning of year	$	20,689,801		$	18,737,905		$	238,240,356		$	263,364,457
End of year	$	11,206,403		$	20,689,801		$	119,597,619		$	238,240,356
Unit Transactions:
Beginning of year		1,464,903			1,615,364			18,485,750			24,616,070
Purchased		12,588			40,530			134,399			157,539
Transferred between Sub-Accounts
and/or Fixed Account		(9,646)			6,662			(439,170	)		(1,537,134	)
Withdrawn, Surrendered, and Annuitized		(151,677	)		(197,653	)		(3,565,193	)		(4,750,725	)
End of year		1,316,168			1,464,903			14,615,786			18,485,750

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	EM1						EME
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment (loss) income	$	(89,308	)	$	45,889		$	(19,169	)	$	519,661
Net realized gains		1,827,986			5,776,088			13,369,491			31,261,715
Net change in unrealized appreciation/
depreciation		(13,231,511	)		230,838			(56,384,021	)		(5,566,348	)
(Decrease) increase in net assets
from operations	$	(11,492,833	)	$	6,052,815		$	(43,033,699	)	$	26,215,028
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	427,656		$	1,378,748		$	754,381		$	847,037
Net transfers between Sub-Accounts
and/or Fixed Account		(1,139,315	)		(407,570	)		(6,895,802	)		(2,681,541	)
Withdrawals, surrenders, annuitizations
and contract charges		(2,321,644	)		(2,749,338	)		(12,838,118	)		(20,077,214	)
Net accumulation activity	$	(3,033,303	)	$	(1,778,160	)	$	(18,979,539	)	$	(21,911,718	)
Annuitization Activity:
Annuitizations	$	-		$	-		$	-		$	-
Annuity payments and contract charges		-			-			(35,994	)		(39,502	)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		-			-			93,690			(40,001	)
Net annuitization activity	$	-		$	-		$	57,696		$	(79,503	)
Decrease in net assets
from contract owner transactions	$	(3,033,303	)	$	(1,778,160	)	$	(18,921,843	)	$	(21,991,221	)
(Decrease) increase in net assets	$	(14,526,136	)	$	4,274,655		$	(61,955,542	)	$	4,223,807
Net Assets:
Beginning of year	$	22,821,441		$	18,546,786		$	91,911,417		$	87,687,610
End of year	$	8,295,305		$	22,821,441		$	29,955,875		$	91,911,417
Unit Transactions:
Beginning of year		808,424			813,675			2,587,959			3,300,914
Purchased		37,766			95,301			26,217			28,721
Transferred between Sub-Accounts
and/or Fixed Account		(27,134	)		11,246			(262,738	)		(95,926	)
Withdrawn, Surrendered, and Annuitized		(108,614	)		(111,798	)		(451,211	)		(645,750	)
End of year		710,442			808,424			1,900,227			2,587,959

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	GG1						GGS
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment income	$	334,522		$	7,594		$	2,380,081		$	212,967
Net realized losses		(18,880	)		(43,581	)		(128,899	)		(1,005,448	)
Net change in unrealized appreciation/
depreciation		101,929			280,616			543,522			3,087,661
Increase in net assets
from operations	$	417,571		$	244,629		$	2,794,704		$	2,295,180
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	22,451		$	76,010		$	386,741		$	259,192
Net transfers between Sub-Accounts
and/or Fixed Account		2,879,324			288,035			4,000,299			1,729,548
Withdrawals, surrenders, annuitizations
and contract charges		(1,019,430	)		(346,259	)		(7,270,167	)		(6,797,944	)
Net accumulation activity	$	1,882,345		$	17,786		$	(2,883,127	)	$	(4,809,204	)
Annuitization Activity:
Annuitizations	$	-		$	-		$	-		$	10,069
Annuity payments and contract charges		(1,918	)		(1,771	)		(32,555	)		(24,435	)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		(200	)		(189	)		(3,453	)		(14,231	)
Net annuitization activity	$	(2,118	)	$	(1,960	)	$	(36,008	)	$	(28,597	)
Increase (decrease) in net assets
from contract owner transactions	$	1,880,227		$	15,826		$	(2,919,135	)	$	(4,837,801	)
Increase (decrease) in net assets	$	2,297,798		$	260,455		$	(124,431	)	$	(2,542,621	)
Net Assets:
Beginning of year	$	4,022,897		$	3,762,442		$	33,658,588		$	36,201,209
End of year	$	6,320,695		$	4,022,897		$	33,534,157		$	33,658,588
Unit Transactions:
Beginning of year		284,890			283,792			1,951,821			2,234,976
Purchased		1,503			5,766			21,886			15,722
Transferred between Sub-Accounts
and/or Fixed Account		193,924			21,311			239,251			114,644
Withdrawn, Surrendered, and Annuitized		(69,772	)		(25,979	)		(429,606	)		(413,521	)
End of year		410,545			284,890			1,783,352			1,951,821

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	GG2						GGR
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment (loss) income	$	(55,664	)	$	(13,724	)	$	(342,361	)	$	357,226
Net realized gains		381,864			763,954			6,734,323			12,581,196
Net change in unrealized appreciation/
depreciation		(3,562,424	)		155,493			(50,035,265	)		2,129,750
(Decrease) increase in net assets
from operations	$	(3,236,224	)	$	905,723		$	(43,643,303	)	$	15,068,172
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	85,146		$	240,942		$	1,163,208		$	1,041,532
Net transfers between Sub-Accounts
and/or Fixed Account		203,820			70,960			(4,415,619	)		(2,083,948	)
Withdrawals, surrenders, annuitizations
and contract charges		(1,038,946	)		(1,248,858	)		(18,518,169	)		(29,513,166	)
Net accumulation activity	$	(749,980	)	$	(936,956	)	$	(21,770,580	)	$	(30,555,582	)
Annuitization Activity:
Annuitizations	$	-		$	-		$	-		$	57,741
Annuity payments and contract charges		(2,049	)		(2,372	)		(93,742	)		(102,476	)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		385			(352	)		(39,457	)		(308	)
Net annuitization activity	$	(1,664	)	$	(2,724	)	$	(133,199	)	$	(45,043	)
Decrease in net assets
from contract owner transactions	$	(751,644	)	$	(939,680	)	$	(21,903,779	)	$	(30,600,625	)
Decrease in net assets	$	(3,987,868	)	$	(33,957	)	$	(65,547,082	)	$	(15,532,453	)
Net Assets:
Beginning of year	$	8,590,818		$	8,624,775		$	124,791,013		$	140,323,466
End of year	$	4,602,950		$	8,590,818		$	59,243,931		$	124,791,013
Unit Transactions:
Beginning of year		494,318			548,900			5,626,403			7,063,308
Purchased		4,938			13,397			73,119			53,165
Transferred between Sub-Accounts
and/or Fixed Account		4,579			6,233			(308,710)			(76,521)
Withdrawn, Surrendered, and Annuitized		(63,167	)		(74,212	)		(1,067,505	)		(1,413,549	)
End of year		440,668			494,318			4,323,307			5,626,403

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	GT2							GTR
	Sub-Account							Sub-Account
	Year Ended			Year Ended				Year Ended				Year Ended
	December 31,			December 31,				December 31,				December 31,
	2008			2007				2008				2007
Operations:
Net investment income	$	633,313			$	89,789			$	4,671,527			$	1,175,198
Net realized gains		673,413				2,366,012				9,908,542				20,435,227
Net change in unrealized appreciation/
depreciation		(4,518,492	)			(1,201,886	)			(35,473,195	)			(10,966,142	)
(Decrease) increase in net assets
from operations	$	(3,211,766	)		$	1,253,915			$	(20,893,126	)		$	10,644,283
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	181,990			$	528,470			$	1,313,369			$	1,179,483
Net transfers between Sub-Accounts
and/or Fixed Account		(1,796,991	)			2,194,451				(5,436,060	)			3,413,309
Withdrawals, surrenders, annuitizations
and contract charges		(2,591,327	)			(2,491,669	)			(25,421,666	)			(30,965,381	)
Net accumulation activity	$	(4,206,328	)		$	231,252			$	(29,544,357	)		$	(26,372,589	)
Annuitization Activity:
Annuitizations	$	-			$	-			$	38,917			$	64,849
Annuity payments and contract charges		(2,135)				(2,271	)			(98,702	)			(130,860	)
Net transfers between Sub-Accounts		-				-				-				-
Adjustments to annuity reserves		38				(263	)			53,124				(28,067	)
Net annuitization activity	$	(2,097	)		$	(2,534	)		$	(6,661	)		$	(94,078	)
(Decrease) increase in net assets
from contract owner transactions	$	(4,208,425	)		$	228,718			$	(29,551,018	)		$	(26,466,667	)
(Decrease) increase in net assets	$	(7,420,191	)		$	1,482,633			$	(50,444,144	)		$	(15,822,384	)
Net Assets:
Beginning of year	$	19,774,396			$	18,291,763			$	140,411,531			$	156,233,915
End of year	$	12,354,205			$	19,774,396			$	89,967,387			$	140,411,531
Unit Transactions:
Beginning of year		1,161,693				1,149,650				6,117,487				7,258,332
Purchased		11,074				30,920				62,958				57,936
Transferred between Sub-Accounts
and/or Fixed Account		(133,551	)			129,881				(316,814	)			200,728
Withdrawn, Surrendered, and Annuitized		(165,258	)			(148,758	)			(1,265,341	)			(1,399,509	)
End of year		873,958				1,161,693				4,598,290				6,117,487

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	MFK						GSS
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment income	$	8,882,499		$	8,575,850		$	9,515,131		$	9,406,899
Net realized losses		(271,475	)		(3,552,381	)		(4,206,481	)		(5,789,686	)
Net change in unrealized appreciation/
depreciation		8,341,737			9,328,731			10,115,961			10,692,666
Increase in net assets
from operations	$	16,952,761		$	14,352,200		$	15,424,611		$	14,309,879
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	18,938,384		$	20,690,626		$	3,333,866		$	4,066,786
Net transfers between Sub-Accounts
and/or Fixed Account		(41,727,641	)		6,362,810			7,830,704			5,388,539
Withdrawals, surrenders, annuitizations
and contract charges		(39,435,693	)		(31,968,523	)		(60,110,743	)		(59,410,627	)
Net accumulation activity	$	(62,224,950	)	$	(4,915,087	)	$	(48,946,173	)	$	(49,955,302	)
Annuitization Activity:
Annuitizations	$	35,445		$	11,994		$	67,828		$	248,454
Annuity payments and contract charges		(24,472	)		(19,668	)		(432,403	)		(286,679	)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		(4,578	)		(4,302	)		(285,595	)		20,897
Net annuitization activity	$	6,395		$	(11,976	)	$	(650,170	)	$	(17,328	)
Decrease in net assets
from contract owner transactions	$	(62,218,555	)	$	(4,927,063	)	$	(49,596,343	)	$	(49,972,630	)
(Decrease) increase in net assets	$	(45,265,794	)	$	9,425,137		$	(34,171,732	)	$	(35,662,751	)
Net Assets:
Beginning of year	$	281,758,050		$	272,332,913		$	247,658,015		$	283,320,766
End of year	$	236,492,256		$	281,758,050		$	213,486,283		$	247,658,015
Unit Transactions:
Beginning of year		24,954,225			25,308,705			15,336,252			18,582,159
Purchased		1,663,753			1,940,859			211,353			259,281
Transferred between Sub-Accounts
and/or Fixed Account		(3,564,923	)		571,437			364,570			342,298
Withdrawn, Surrendered, and Annuitized		(3,429,129	)		(2,866,776	)		(3,781,733	)		(3,847,486	)
End of year		19,623,926			24,954,225			12,130,442			15,336,252

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	MFC						HYS
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment income	$	8,681,464		$	6,668,419		$	9,267,135		$	10,368,657
Net realized (losses) gains		(7,445,076	)		(339,994	)		(7,617,904	)		423,897
Net change in unrealized appreciation/
depreciation		(36,952,373	)		(6,741,766	)		(37,148,994	)		(9,411,284	)
(Decrease) increase in net assets
from operations	$	(35,715,985	)	$	(413,341	)	$	(35,499,763	)	$	1,381,270
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	4,922,577		$	25,582,682		$	1,406,391		$	1,785,028
Net transfers between Sub-Accounts
and/or Fixed Account		5,838,182			8,721,734			(4,053,813	)		(5,930,991	)
Withdrawals, surrenders, annuitizations
and contract charges		(16,382,513	)		(16,039,152	)		(28,399,802	)		(38,001,842	)
Net accumulation activity	$	(5,621,754	)	$	18,265,264		$	(31,047,224	)	$	(42,147,805	)
Annuitization Activity:
Annuitizations	$	11,842		$	1,435		$	1,626		$	59,075
Annuity payments and contract charges		(14,113	)		(8,093	)		(86,404	)		(91,381	)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		558			(1,439	)		101,980			(84,893	)
Net annuitization activity	$	(1,713	)	$	(8,097	)	$	17,202		$	(117,199	)
(Decrease) increase in net assets
from contract owner transactions	$	(5,623,467	)	$	18,257,167		$	(31,030,022	)	$	(42,265,004	)
(Decrease) increase in net assets	$	(41,339,452	)	$	17,843,826		$	(66,529,785	)	$	(40,883,734	)
Net Assets:
Beginning of year	$	132,587,722		$	114,743,896		$	145,304,823		$	186,188,557
End of year	$	91,248,270		$	132,587,722		$	78,775,038		$	145,304,823
Unit Transactions:
Beginning of year		9,231,715			8,020,269			8,811,448			11,347,579
Purchased		354,220			1,736,329			99,707			99,588
Transferred between Sub-Accounts
and/or Fixed Account		862,336			533,797			(193,800	)		(339,736	)
Withdrawn, Surrendered, and Annuitized		(1,277,823	)		(1,058,680	)		(1,971,800	)		(2,295,983	)
End of year		9,170,448			9,231,715			6,745,555			8,811,448

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	IG1						IGS
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment loss	$	(113,288	)	$	(105,219	)	$	(92,371	)	$	(59,213)
Net realized gains		3,255,325			5,712,936			23,698,205			35,496,592
Net change in unrealized appreciation/
depreciation		(14,702,660	)		(2,664,142	)		(68,083,596	)		(17,246,747	)
(Decrease) increase in net assets
from operations	$	(11,560,623	)	$	2,943,575		$	(44,477,762	)	$	18,190,632
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	2,070,762		$	3,425,925		$	836,671		$	1,179,946
Net transfers between Sub-Accounts
and/or Fixed Account		2,038,506			2,511,685			(1,380,089	)		2,608,670
Withdrawals, surrenders, annuitizations
and contract charges		(2,523,450	)		(3,347,246	)		(20,503,955	)		(28,493,641	)
Net accumulation activity	$	1,585,818		$	2,590,364		$	(21,047,373	)	$	(24,705,025	)
Annuitization Activity:
Annuitizations	$	-		$	-		$	1,594		$	14,124
Annuity payments and contract charges		-			-			(49,092	)		(39,524	)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		374			(131	)		10,258			(16,857	)
Net annuitization activity	$	374		$	(131	)	$	(37,240	)	$	(42,257	)
Increase (decrease) in net assets
from contract owner transactions	$	1,586,192		$	2,590,233		$	(21,084,613	)	$	(24,747,282	)
(Decrease) increase in net assets	$	(9,974,431	)	$	5,533,808		$	(65,562,375	)	$	(6,556,650	)
Net Assets:
Beginning of year	$	26,435,969		$	20,902,161		$	124,612,558		$	131,169,208
End of year	$	16,461,538		$	26,435,969		$	59,050,183		$	124,612,558
Unit Transactions:
Beginning of year		1,455,023			1,126,228			6,494,572			7,850,731
Purchased		199,991			283,884			51,080			63,927
Transferred between Sub-Accounts
and/or Fixed Account		164,675			213,249			(93,143	)		123,701
Withdrawn, Surrendered, and Annuitized		(174,149	)		(168,338	)		(1,289,710	)		(1,543,787	)
End of year		1,645,540			1,455,023			5,162,799			6,494,572

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	MI1						MII
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment (loss) income	$	(1,618,258	)	$	(859,883	)	$	(308,036	)	$	255,665
Net realized gains		3,615,254			6,574,607			7,155,091			28,602,214
Net change in unrealized appreciation/
depreciation		(82,613,237	)		(5,527,663	)		(38,034,612	)		(21,344,562	)
(Decrease) increase in net assets
from operations	$	(80,616,241	)	$	187,061		$	(31,187,557	)	$	7,513,317
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	28,581,425		$	165,373,309		$	1,154,450		$	913,074
Net transfers between Sub-Accounts
and/or Fixed Account		20,304,253			35,794,844			(8,847,777	)		1,768,872
Withdrawals, surrenders, annuitizations
and contract charges		(12,539,127	)		(4,354,821	)		(18,687,229	)		(26,124,567	)
Net accumulation activity	$	36,346,551		$	196,813,332		$	(26,380,556	)	$	(23,442,621	)
Annuitization Activity:
Annuitizations	$	-		$	-		$	-		$	9,734
Annuity payments and contract charges		-			-			(39,236	)		(57,259)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		-			-			10,258			(9,974)
Net annuitization activity	$	-		$	-		$	(28,978	)	$	(57,499)
Increase (decrease) in net assets
from contract owner transactions	$	36,346,551		$	196,813,332		$	(26,409,534	)	$	(23,500,120	)
(Decrease) increase in net assets	$	(44,269,690	)	$	197,000,393		$	(57,597,091	)	$	(15,986,803	)
Net Assets:
Beginning of year	$	211,701,396		$	14,701,003		$	113,714,035		$	129,700,838
End of year	$	167,431,706		$	211,701,396		$	56,116,944		$	113,714,035
Unit Transactions:
Beginning of year		18,793,055			703,270			4,858,869			5,838,111
Purchased		2,859,836			15,207,992			54,924			39,770
Transferred between Sub-Accounts
and/or Fixed Account		2,042,763			3,258,596			(480,444	)		104,829
Withdrawn, Surrendered, and Annuitized		(1,310,417	)		(376,803	)		(929,448	)		(1,123,841	)
End of year		22,385,237			18,793,055			3,503,901			4,858,869

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	M1B						MIS
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment loss	$	(1,078,693	)	$	(1,562,711	)	$	(1,703,552	)	$	(3,294,802	)
Net realized gains (losses)		2,788,643			6,019,760			(6,632,724)			(12,150,016	)
Net change in unrealized appreciation/
depreciation		(37,352,516	)		3,929,227			(84,123,832	)		43,913,123
(Decrease) increase in net assets
from operations	$	(35,642,566	)	$	8,386,276		$	(92,460,108	)	$	28,468,305
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	680,678		$	3,144,694		$	2,207,393		$	2,257,232
Net transfers between Sub-Accounts
and/or Fixed Account		(4,377,418	)		33,103,692			(11,999,075	)		9,684,829
Withdrawals, surrenders, annuitizations
and contract charges		(15,453,894	)		(15,302,153	)		(48,946,578	)		(63,722,187	)
Net accumulation activity	$	(19,150,634	)	$	20,946,233		$	(58,738,260	)	$	(51,780,126	)
Annuitization Activity:
Annuitizations	$	4,875		$	-		$	25,507		$	22,807
Annuity payments and contract charges		(2,518	)		(1,576	)		(81,770	)		(98,009)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		238			(350	)		17,364			(17,600	)
Net annuitization activity	$	2,595		$	(1,926	)	$	(38,899	)	$	(92,802	)
(Decrease) increase in net assets
from contract owner transactions	$	(19,148,039	)	$	20,944,307		$	(58,777,159	)	$	(51,872,928	)
(Decrease) increase in net assets	$	(54,790,605	)	$	29,330,583		$	(151,237,267	)	$	(23,404,623	)
Net Assets:
Beginning of year	$	107,971,328		$	78,640,745		$	286,174,371		$	309,578,994
End of year	$	53,180,723		$	107,971,328		$	134,937,104		$	286,174,371
Unit Transactions:
Beginning of year		8,274,394			6,763,495			30,064,891			35,387,641
Purchased		62,052			248,522			262,998			248,716
Transferred between Sub-Accounts
and/or Fixed Account		(332,751	)		2,464,393			(1,579,919	)		1,294,892
Withdrawn, Surrendered, and Annuitized		(1,405,662	)		(1,202,016	)		(6,290,795	)		(6,866,358	)
End of year		6,598,033			8,274,394			22,457,175			30,064,891

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	MFL						MIT
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment (loss) income	$	(1,198,357	)	$	(2,374,685	)	$	540,899		$	(1,755,896	)
Net realized gains (losses)		4,919,127			10,464,466			(8,691,377	)		7,368,859
Net change in unrealized appreciation/
depreciation		(105,695,711	)		4,464,408			(184,796,740	)		28,177,928
(Decrease) increase in net assets
from operations	$	(101,974,941	)	$	12,554,189		$	(192,947,218	)	$	33,790,891
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	2,291,743		$	25,250,054		$	4,721,444		$	6,614,247
Net transfers between Sub-Accounts
and/or Fixed Account		(6,403,778	)		4,979,728			(19,372,546	)		(28,361,335	)
Withdrawals, surrenders, annuitizations
and contract charges		(27,598,540	)		(27,767,453	)		(95,954,581	)		(154,520,107	)
Net accumulation activity	$	(31,710,575	)	$	2,462,329		$	(110,605,683	)	$	(176,267,195	)
Annuitization Activity:
Annuitizations	$	12,047		$	71,145		$	185,854		$	248,090
Annuity payments and contract charges		(24,840	)		(9,920	)		(459,062	)		(501,405	)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		2,779			(3,135	)		17,256			(82,245	)
Net annuitization activity	$	(10,014	)	$	58,090		$	(255,952	)	$	(335,560	)
(Decrease) increase in net assets
from contract owner transactions	$	(31,720,589	)	$	2,520,419		$	(110,861,635	)	$	(176,602,755	)
(Decrease) increase in net assets	$	(133,695,530	)	$	15,074,608		$	(303,808,853	)	$	(142,811,864	)
Net Assets:
Beginning of year	$	310,717,943		$	295,643,335		$	616,787,038		$	759,598,902
End of year	$	177,022,413		$	310,717,943		$	312,978,185		$	616,787,038
Unit Transactions:
Beginning of year		19,982,665			19,922,745			36,869,229			47,922,260
Purchased		171,640			1,599,468			339,416			423,587
Transferred between Sub-Accounts
and/or Fixed Account		(181,612	)		318,232			(1,328,975	)		(1,949,041	)
Withdrawn, Surrendered, and Annuitized		(2,172,528	)		(1,857,780	)		(7,220,345	)		(9,527,577	)
End of year		17,800,165			19,982,665			28,659,325			36,869,229

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	MC1						MCS
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment loss	$	(374,680	)	$	(573,384	)	$	(451,751	)	$	(733,275	)
Net realized gains		675,111			2,647,730			924,270			5,385,885
Net change in unrealized appreciation/
depreciation		(14,452,557	)		671,488			(19,116,158	)		(421,700	)
(Decrease) increase in net assets
from operations	$	(14,152,126	)	$	2,745,834		$	(18,643,639	)	$	4,230,910
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	128,752		$	451,083		$	394,078		$	512,450
Net transfers between Sub-Accounts
and/or Fixed Account		959,092			(1,214,252	)		(3,014,995	)		(2,429,252	)
Withdrawals, surrenders, annuitizations
and contract charges		(4,585,968	)		(5,661,933	)		(7,849,494	)		(10,858,112	)
Net accumulation activity	$	(3,498,124	)	$	(6,425,102	)	$	(10,470,411	)	$	(12,774,914	)
Annuitization Activity:
Annuitizations	$	-		$	-		$	-		$	-
Annuity payments and contract charges		(1,435	)		(1,670	)		(11,730	)		(10,478	)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		691			(219	)		6,429			(506	)
Net annuitization activity	$	(744	)	$	(1,889	)	$	(5,301	)	$	(10,984	)
Decrease in net assets
from contract owner transactions	$	(3,498,868	)	$	(6,426,991	)	$	(10,475,712	)	$	(12,785,898	)
Decrease in net assets	$	(17,650,994	)	$	(3,681,157	)	$	(29,119,351	)	$	(8,554,988	)
Net Assets:
Beginning of year	$	31,670,209		$	35,351,366		$	44,914,140		$	53,469,128
End of year	$	14,019,215		$	31,670,209		$	15,794,789		$	44,914,140
Unit Transactions:
Beginning of year		2,822,330			3,386,735			7,235,851			9,323,613
Purchased		13,264			35,543			78,545			82,591
Transferred between Sub-Accounts
and/or Fixed Account		200,951			(100,388	)		(565,128	)		(440,951	)
Withdrawn, Surrendered, and Annuitized		(502,313	)		(499,560	)		(1,444,537	)		(1,729,402	)
End of year		2,534,232			2,822,330			5,304,731			7,235,851

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	MCV						MM1
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment (loss) income	$	(83,543	)	$	(292,547	)	$	38,827		$	4,940,305
Net realized gains		833,445			1,645,318			-			-
Net change in unrealized appreciation/
depreciation		(8,800,826	)		(1,229,576	)		-			-
(Decrease) increase in net assets
from operations	$	(8,050,924	)	$	123,195		$	38,827		$	4,940,305
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	70,626		$	423,312		$	23,242,209		$	61,717,905
Net transfers between Sub-Accounts
and/or Fixed Account		95,431			456,673			83,305,534			56,182,300
Withdrawals, surrenders, annuitizations
and contract charges		(2,909,638	)		(3,524,533	)		(97,525,549	)		(57,245,912	)
Net accumulation activity	$	(2,743,581	)	$	(2,644,548)		$	9,022,194		$	60,654,293
Annuitization Activity:
Annuitizations	$	-		$	-		$	46,684		$	2,397
Annuity payments and contract charges		(2,605	)		(2,514	)		(24,793	)		(24,204	)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		(29	)		(811	)		(1,711	)		(2,041	)
Net annuitization activity	$	(2,634	)	$	(3,325	)	$	20,180		$	(23,848	)
(Decrease) increase in net assets
from contract owner transactions	$	(2,746,215	)	$	(2,647,873	)	$	9,042,374		$	60,630,445
(Decrease) increase in net assets	$	(10,797,139	)	$	(2,524,678	)	$	9,081,201		$	65,570,750
Net Assets:
Beginning of year	$	21,843,631		$	24,368,309		$	219,489,293		$	153,918,543
End of year	$	11,046,492		$	21,843,631		$	228,570,494		$	219,489,293
Unit Transactions:
Beginning of year		1,314,251			1,467,221			21,267,373			15,330,003
Purchased		4,651			23,721			2,297,262			6,167,044
Transferred between Sub-Accounts
and/or Fixed Account		51,127			25,867			7,867,748			5,016,618
Withdrawn, Surrendered, and Annuitized		(206,120	)		(202,558	)		(9,307,376	)		(5,246,292	)
End of year		1,163,909			1,314,251			22,125,007			21,267,373

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	MMS						M1A
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment income (loss)	$	1,155,321		$	6,321,461		$	(1,859,387	)	$	(2,459,736	)
Net realized gains		-			-			18,358,239			8,818,705
Net change in unrealized appreciation/
depreciation		-			-			(65,625,870	)		(5,628,373	)
Increase (decrease) in net assets
from operations	$	1,155,321		$	6,321,461		$	(49,127,018	)	$	730,596
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	6,291,820		$	6,039,243		$	891,468		$	11,308,806
Net transfers between Sub-Accounts
and/or Fixed Account		152,542,706			141,114,496			(173,955	)		8,506,963
Withdrawals, surrenders, annuitizations
and contract charges		(149,490,605	)		(147,571,380	)		(11,851,478	)		(10,426,000	)
Net accumulation activity	$	9,343,921		$	(417,641	)	$	(11,133,965	)	$	9,389,769
Annuitization Activity:
Annuitizations	$	22,633		$	257,183		$	6,919		$	28,288
Annuity payments and contract charges		(230,515	)		(237,884	)		(9,819	)		(11,419	)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		(12,854	)		(27,582	)		1,629			(1,408	)
Net annuitization activity	$	(220,736	)	$	(8,283	)	$	(1,271	)	$	15,461
Increase (decrease) in net assets
from contract owner transactions	$	9,123,185		$	(425,924	)	$	(11,135,236	)	$	9,405,230
Increase (decrease) in net assets	$	10,278,506		$	5,895,537		$	(60,262,254	)	$	10,135,826
Net Assets:
Beginning of year	$	188,524,112		$	182,628,575		$	138,196,204		$	128,060,378
End of year	$	198,802,618		$	188,524,112		$	77,933,950		$	138,196,204
Unit Transactions:
Beginning of year		14,742,422			14,751,948			9,051,054			8,544,360
Purchased		489,634			477,864			66,647			683,806
Transferred between Sub-Accounts
and/or Fixed Account		12,352,255			10,788,463			426,403			522,343
Withdrawn, Surrendered, and Annuitized		(12,118,668	)		(11,275,853	)		(972,744	)		(699,455	)
End of year		15,465,643			14,742,422			8,571,360			9,051,054

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	NWD						RE1
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment loss	$	(1,038,678	)	$	(1,736,012	)	$	(290,271	)	$	(293,756	)
Net realized gains		16,022,128			12,481,529			993,534			2,236,724
Net change in unrealized appreciation/
depreciation		(47,770,550	)		(8,078,171	)		(10,950,367	)		1,175,042
(Decrease) increase in net assets
from operations	$	(32,787,100	)	$	2,667,346		$	(10,247,104	)	$	3,118,010
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	670,464		$	1,056,526		$	220,781		$	837,414
Net transfers between Sub-Accounts
and/or Fixed Account		(3,338,961	)		(3,235,178	)		2,869,146			(489,934	)
Withdrawals, surrenders, annuitizations
and contract charges		(17,891,055	)		(26,834,328	)		(3,211,199	)		(3,879,835	)
Net accumulation activity	$	(20,559,552	)	$	(29,012,980	)	$	(121,272	)	$	(3,532,355	)
Annuitization Activity:
Annuitizations	$	1,463		$	7,411		$	2,311		$	-
Annuity payments and contract charges		(39,276	)		(48,833	)		(2,397	)		(2,154	)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		10,136			(1,622	)		360			(252	)
Net annuitization activity	$	(27,677	)	$	(43,044	)	$	274		$	(2,406	)
Decrease in net assets
from contract owner transactions	$	(20,587,229	)	$	(29,056,024	)	$	(120,998	)	$	(3,534,761	)
Decrease in net assets	$	(53,374,329	)	$	(26,388,678	)	$	(10,368,102	)	$	(416,751	)
Net Assets:
Beginning of year	$	99,019,794		$	125,408,472		$	28,036,878		$	28,453,629
End of year	$	45,645,465		$	99,019,794		$	17,668,776		$	28,036,878
Unit Transactions:
Beginning of year		8,362,104			10,624,368			1,853,837			2,112,711
Purchased		77,035			84,464			17,521			53,043
Transferred between Sub-Accounts
and/or Fixed Account		(222,597	)		(245,156	)		238,063			(38,054	)
Withdrawn, Surrendered, and Annuitized		(1,848,764	)		(2,101,572	)		(268,994	)		(273,863	)
End of year		6,367,778			8,362,104			1,840,427			1,853,837

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	RES						RG1
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment loss	$	(1,420,920	)	$	(1,619,869	)	$	(331,331	)	$	(335,034	)
Net realized gains		2,983,598			7,068,936			370,537			2,472,872
Net change in unrealized appreciation/
depreciation		(86,833,195	)		26,413,830			(14,094,050	)		(1,535,254	)
(Decrease) increase in net assets
from operations	$	(85,270,517	)	$	31,862,897		$	(14,054,844	)	$	602,584
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	2,158,131		$	2,286,679		$	3,224,472		$	3,850,512
Net transfers between Sub-Accounts
and/or Fixed Account		(8,593,874	)		(11,505,580	)		1,494,701			20,141,336
Withdrawals, surrenders, annuitizations
and contract charges		(36,664,982	)		(62,360,691	)		(3,778,401	)		(2,768,458	)
Net accumulation activity	$	(43,100,725	)	$	(71,579,592	)	$	940,772		$	21,223,390
Annuitization Activity:
Annuitizations	$	78,735		$	45,806		$	-		$	-
Annuity payments and contract charges		(121,412	)		(197,292	)		(6,810	)		(7,133	)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		47,287			(40,974	)		1,429			(4,279	)
Net annuitization activity	$	4,610		$	(192,460	)	$	(5,381	)	$	(11,412	)
(Decrease) increase in net assets
from contract owner transactions	$	(43,096,115	)	$	(71,772,052	)	$	935,391		$	21,211,978
(Decrease) increase in net assets	$	(128,366,632	)	$	(39,909,155	)	$	(13,119,453	)	$	21,814,562
Net Assets:
Beginning of year	$	257,818,176		$	297,727,331		$	34,458,186		$	12,643,624
End of year	$	129,451,544		$	257,818,176		$	21,338,733		$	34,458,186
Unit Transactions:
Beginning of year		14,094,806			18,185,522			2,707,973			979,416
Purchased		144,826			154,953			356,518			353,852
Transferred between Sub-Accounts
and/or Fixed Account		(629,050	)		(641,942	)		187,396			1,596,866
Withdrawn, Surrendered, and Annuitized		(2,553,461	)		(3,603,727	)		(368,351	)		(222,161	)
End of year		11,057,121			14,094,806			2,883,536			2,707,973

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	RGS						RI1
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment loss	$	(1,197,899	)	$	(1,906,348	)	$	(325,438	)	$	(1,451,257	)
Net realized gains		4,178,345			21,505,040			21,760,071			27,563,445
Net change in unrealized appreciation/
depreciation		(73,406,212	)		(15,660,361	)		(103,123,422	)		(8,532,154	)
(Decrease) increase in net assets
from operations	$	(70,425,766	)	$	3,938,331		$	(81,688,789	)	$	17,580,034
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	1,708,130		$	1,570,844		$	7,332,010		$	42,320,004
Net transfers between Sub-Accounts
and/or Fixed Account		(8,224,424	)		161,515,167			6,997,669			(2,667,190	)
Withdrawals, surrenders, annuitizations
and contract charges		(35,489,824	)		(36,633,773	)		(16,895,001	)		(14,443,391	)
Net accumulation activity	$	(42,006,118	)	$	126,452,238		$	(2,565,322	)	$	25,209,423
Annuitization Activity:
Annuitizations	$	30,497		$	44,855		$	-		$	50,551
Annuity payments and contract charges		(58,625	)		(55,434	)		(6,264	)		(8,101	)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		31,424			(108,983	)		793			(1,705	)
Net annuitization activity	$	3,296		$	(119,562	)	$	(5,471	)	$	40,745
(Decrease) increase in net assets
from contract owner transactions	$	(42,002,822	)	$	126,332,676		$	(2,570,793	)	$	25,250,168
(Decrease) increase in net assets	$	(112,428,588	)	$	130,271,007		$	(84,259,582	)	$	42,830,202
Net Assets:
Beginning of year	$	208,241,408		$	77,970,401		$	191,456,875		$	148,626,673
End of year	$	95,812,820		$	208,241,408		$	107,197,293		$	191,456,875
Unit Transactions:
Beginning of year		14,862,669			6,003,584			7,944,489			6,902,034
Purchased		147,953			99,747			341,746			1,806,168
Transferred between Sub-Accounts
and/or Fixed Account		(738,352	)		11,383,393			457,684			(113,894	)
Withdrawn, Surrendered, and Annuitized		(3,057,852	)		(2,624,055	)		(907,891	)		(649,819	)
End of year		11,214,418			14,862,669			7,836,028			7,944,489

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	RIS						SI1
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment income (loss)	$	246,778		$	(360,469	)	$	998,687		$	717,300
Net realized gains (losses)		16,064,125			27,384,938			(1,052,107	)		(61,146	)
Net change in unrealized appreciation/
depreciation		(52,344,850	)		(14,987,861	)		(2,187,017	)		(314,549	)
(Decrease) increase in net assets
from operations	$	(36,033,947	)	$	12,036,608		$	(2,240,437	)	$	341,605
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	795,703		$	875,793		$	328,780		$	239,251
Net transfers between Sub-Accounts
and/or Fixed Account		(5,880,291	)		(473,891	)		(2,192,075	)		(184,118)
Withdrawals, surrenders, annuitizations
and contract charges		(16,729,408	)		(25,676,317	)		(3,967,116	)		(3,146,036	)
Net accumulation activity	$	(21,813,996	)	$	(25,274,415	)	$	(5,830,411	)	$	(3,090,903	)
Annuitization Activity:
Annuitizations	$	23,610		$	8,672		$	-		$	-
Annuity payments and contract charges		(32,369	)		(38,132	)		(2,919	)		(3,105	)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		(21,842	)		(5,942	)		46			(279	)
Net annuitization activity	$	(30,601	)	$	(35,402	)	$	(2,873	)	$	(3,384	)
Decrease in net assets
from contract owner transactions	$	(21,844,597	)	$	(25,309,817	)	$	(5,833,284	)	$	(3,094,287	)
Decrease in net assets	$	(57,878,544	)	$	(13,273,209	)	$	(8,073,721	)	$	(2,752,682	)
Net Assets:
Beginning of year	$	98,199,663		$	111,472,872		$	18,942,966		$	21,695,648
End of year	$	40,321,119		$	98,199,663		$	10,869,245		$	18,942,966
Unit Transactions:
Beginning of year		5,162,219			6,522,015			1,425,992			1,662,083
Purchased		55,466			49,462			27,757			17,967
Transferred between Sub-Accounts
and/or Fixed Account		(409,807	)		(47,976	)		(179,851	)		(15,427	)
Withdrawn, Surrendered, and Annuitized		(1,114,595	)		(1,361,282	)		(316,977	)		(238,631	)
End of year		3,693,283			5,162,219			956,921			1,425,992

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	SIS						SVS
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment income (loss)	$	2,706,773		$	2,080,382		$	(27,689	)	$	(14,978	)
Net realized (losses) gains		(2,364,524	)		(182,539	)		(268,417	)		853,455
Net change in unrealized appreciation/
depreciation		(5,950,212	)		(894,533	)		(2,132,093	)		(1,096,675	)
(Decrease) increase in net assets
from operations	$	(5,607,963	)	$	1,003,310		$	(2,428,199	)	$	(258,198	)
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	437,745		$	338,126		$	49,919		$	139,421
Net transfers between Sub-Accounts
and/or Fixed Account		(1,559,022	)		4,120,664			(1,218,727	)		(266,580	)
Withdrawals, surrenders, annuitizations
and contract charges		(11,297,463	)		(10,118,336	)		(1,058,301	)		(1,388,128	)
Net accumulation activity	$	(12,418,740	)	$	(5,659,546	)	$	(2,227,109	)	$	(1,515,287	)
Annuitization Activity:
Annuitizations	$	-		$	22,814		$	-		$	-
Annuity payments and contract charges		(25,301	)		(29,674	)		-			-
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		2,479			(206	)		-			-
Net annuitization activity	$	(22,822	)	$	(7,066	)	$	-		$	-
Decrease in net assets
from contract owner transactions	$	(12,441,562	)	$	(5,666,612	)	$	(2,227,109	)	$	(1,515,287	)
Decrease in net assets	$	(18,049,525	)	$	(4,663,302	)	$	(4,655,308	)	$	(1,773,485	)
Net Assets:
Beginning of year	$	48,007,878		$	52,671,180		$	7,210,023		$	8,983,508
End of year	$	29,958,353		$	48,007,878		$	2,554,715		$	7,210,023
Unit Transactions:
Beginning of year		3,392,931			3,797,869			511,648			611,352
Purchased		32,281			24,084			4,775			9,590
Transferred between Sub-Accounts
and/or Fixed Account		(129,375	)		280,282			(92,954	)		(13,881	)
Withdrawn, Surrendered, and Annuitized		(832,431	)		(709,304	)		(100,966	)		(95,413	)
End of year		2,463,406			3,392,931			322,503			511,648

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	TE1						TEC
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment loss	$	(35,898	)	$	(47,991	)	$	(220,131	)	$	(283,139	)
Net realized gains		140,975			307,680			1,432,250			1,783,165
Net change in unrealized appreciation/
depreciation		(1,584,047	)		258,863			(10,544,761	)		1,594,324
(Decrease) increase in net assets
from operations	$	(1,478,970	)	$	518,552		$	(9,332,642	)	$	3,094,350
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	25,856		$	31,787		$	207,463		$	120,620
Net transfers between Sub-Accounts
and/or Fixed Account		(406,723	)		387,667			(150,371	)		2,212,705
Withdrawals, surrenders, annuitizations
and contract charges		(703,779	)		(533,155	)		(3,834,686	)		(3,075,660)
Net accumulation activity	$	(1,084,646	)	$	(113,701	)	$	(3,777,594	)	$	(742,335	)
Annuitization Activity:
Annuitizations	$	-		$	-		$	-		$	-
Annuity payments and contract charges		-			-			(2,612	)		(2,979	)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		-			-			2,084			(743	)
Net annuitization activity	$	-		$	-		$	(528	)	$	(3,722	)
Decrease in net assets
from contract owner transactions	$	(1,084,646	)	$	(113,701	)	$	(3,778,122	)	$	(746,057	)
(Decrease) increase in net assets	$	(2,563,616	)	$	404,851		$	(13,110,764	)	$	2,348,293
Net Assets:
Beginning of year	$	3,552,821		$	3,147,970		$	21,166,638		$	18,818,345
End of year	$	989,205		$	3,552,821		$	8,055,874		$	21,166,638
Unit Transactions:
Beginning of year		314,493			332,775			4,080,642			4,306,342
Purchased		2,457			3,048			57,800			24,005
Transferred between Sub-Accounts
and/or Fixed Account		(50,498	)		29,488			(72,015	)		387,395
Withdrawn, Surrendered, and Annuitized		(82,962	)		(50,818	)		(860,246	)		(637,100	)
End of year		183,490			314,493			3,206,181			4,080,642

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	MFJ						TRS
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment income	$	10,878,764		$	7,851,296		$	15,024,106		$	15,992,007
Net realized gains		36,049,944			42,049,747			42,096,492			67,803,564
Net change in unrealized appreciation/
depreciation		(234,778,817	)		(32,899,725	)		(235,815,307	)		(51,735,705	)
(Decrease) increase in net assets
from operations	$	(187,850,109	)	$	17,001,318		$	(178,694,709	)	$	32,059,866
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	76,585,680		$	153,464,603		$	7,622,794		$	9,198,952
Net transfers between Sub-Accounts
and/or Fixed Account		(38,882,944	)		(3,746,061	)		(39,177,583	)		(8,962,313	)
Withdrawals, surrenders, annuitizations
and contract charges		(85,164,960	)		(77,469,086	)		(151,698,609	)		(213,076,042	)
Net accumulation activity	$	(47,462,224	)	$	72,249,456		$	(183,253,398	)	$	(212,839,403	)
Annuitization Activity:
Annuitizations	$	-		$	-		$	235,719		$	466,223
Annuity payments and contract charges		(73,731	)		(78,251	)		(840,946	)		(1,080,675	)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		(14,668	)		(1,787	)		230,678			(115,616	)
Net annuitization activity	$	(88,399	)	$	(80,038	)	$	(374,549	)	$	(730,068	)
(Decrease) increase in net assets
from contract owner transactions	$	(47,550,623	)	$	72,169,418		$	(183,627,947	)	$	(213,569,471	)
(Decrease) increase in net assets	$	(235,400,732	)	$	89,170,736		$	(362,322,656	)	$	(181,509,605	)
Net Assets:
Beginning of year	$	840,502,026		$	751,331,290		$	899,656,744		$	1,081,166,349
End of year	$	605,101,294		$	840,502,026		$	537,334,088		$	899,656,744
Unit Transactions:
Beginning of year		57,895,390			53,249,495			39,711,318			49,201,194
Purchased		5,857,464			10,277,018			373,601			447,176
Transferred between Sub-Accounts
and/or Fixed Account		(3,101,273	)		(291,912	)		(2,244,846	)		(401,229	)
Withdrawn, Surrendered, and Annuitized		(6,772,087	)		(5,339,211	)		(7,947,880	)		(9,535,823	)
End of year		53,879,494			57,895,390			29,892,193			39,711,318

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	MFE						UTS
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment (loss) income	$	(9,042	)	$	(518,543	)	$	1,246,777		$	(350,614	)
Net realized gains		21,418,568			7,936,076			73,620,921			37,208,278
Net change in unrealized appreciation/
depreciation		(67,130,219	)		11,753,804			(183,284,733	)		43,345,002
(Decrease) increase in net assets
from operations	$	(45,720,693	)	$	19,171,337		$	(108,417,035	)	$	80,202,666
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	14,443,610		$	27,336,040		$	4,060,458		$	3,734,801
Net transfers between Sub-Accounts
and/or Fixed Account		5,936,096			6,129,999			(15,914,216	)		(3,935,175	)
Withdrawals, surrenders, annuitizations
and contract charges		(10,744,707	)		(8,542,296	)		(54,166,314	)		(77,700,064	)
Net accumulation activity	$	9,634,999		$	24,923,743		$	(66,020,072	)	$	(77,900,438	)
Annuitization Activity:
Annuitizations	$	6,333		$	-		$	173,310		$	116,931
Annuity payments and contract charges		(6,150	)		(5,734	)		(123,356	)		(124,921	)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		917			(1,057	)		16,216			(91,949	)
Net annuitization activity	$	1,100		$	(6,791	)	$	66,170		$	(99,939	)
Increase (decrease) in net assets
from contract owner transactions	$	9,636,099		$	24,916,952		$	(65,953,902	)	$	(78,000,377	)
(Decrease) increase in net assets	$	(36,084,594	)	$	44,088,289		$	(174,370,937	)	$	2,202,289
Net Assets:
Beginning of year	$	109,039,810		$	64,951,521		$	329,601,898		$	327,399,609
End of year	$	72,955,216		$	109,039,810		$	155,230,961		$	329,601,898
Unit Transactions:
Beginning of year		3,613,171			2,880,540			11,423,450			14,522,188
Purchased		496,444			854,510			164,094			142,204
Transferred between Sub-Accounts
and/or Fixed Account		87,250			209,052			(777,602	)		(249,547	)
Withdrawn, Surrendered, and Annuitized		(465,736	)		(330,931	)		(2,409,236	)		(2,991,395	)
End of year		3,731,129			3,613,171			8,400,706			11,423,450

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	MV1						MVS
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment (loss) income	$	(277,201	)	$	(439,988	)	$	919,709		$	465,331
Net realized gains		22,705,262			17,693,498			42,210,181			48,116,827
Net change in unrealized appreciation/
depreciation		(87,318,131	)		(9,036,739	)		(115,973,797	)		(28,902,871	)
(Decrease) increase in net assets
from operations	$	(64,890,070	)	$	8,216,771		$	(72,843,907	)	$	19,679,287
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	65,445,909		$	11,797,057		$	2,293,910		$	3,617,975
Net transfers between Sub-Accounts
and/or Fixed Account		41,147,148			(1,343,640	)		(16,364,913	)		(13,712,865	)
Withdrawals, surrenders, annuitizations
and contract charges		(20,663,417	)		(19,149,693	)		(47,224,351	)		(65,111,435	)
Net accumulation activity	$	85,929,640		$	(8,696,276	)	$	(61,295,354	)	$	(75,206,325	)
Annuitization Activity:
Annuitizations	$	6,276		$	-		$	144,176		$	62,269
Annuity payments and contract charges		(5,966	)		(6,370	)		(116,809	)		(132,254	)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		672			(645	)		8,122			(12,380	)
Net annuitization activity	$	982		$	(7,015	)	$	35,489		$	(82,365	)
Increase (decrease) in net assets
from contract owner transactions	$	85,930,622		$	(8,703,291	)	$	(61,259,865	)	$	(75,288,690	)
Increase (decrease) in net assets	$	21,040,552		$	(486,520	)	$	(134,103,772	)	$	(55,609,403	)
Net Assets:
Beginning of year	$	138,202,958		$	138,689,478		$	258,734,352		$	314,343,755
End of year	$	159,243,510		$	138,202,958		$	124,630,580		$	258,734,352
Unit Transactions:
Beginning of year		8,166,089			8,782,638			13,437,738			17,360,967
Purchased		4,016,916			650,402			139,867			184,242
Transferred between Sub-Accounts
and/or Fixed Account		2,742,841			(101,345	)		(1,047,498	)		(724,215	)
Withdrawn, Surrendered, and Annuitized		(1,500,992	)		(1,165,606	)		(2,875,885	)		(3,383,256	)
End of year		13,424,854			8,166,089			9,654,222			13,437,738

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	OBV						OCA
	Sub-Account						Sub-Account
	Year Ended			Period Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			20072			2008			2007
Operations:
Net investment income (loss)	$	7,724		$	(12,122	)	$	(567,695	)	$	(788,051	)
Net realized (losses) gains		(218,469	)		3,673			842,383			3,114,782
Net change in unrealized appreciation/
depreciation		(1,449,188	)		(38,108	)		(17,700,232	)		2,460,900
(Decrease) increase in net assets
from operations	$	(1,659,933	)	$	(46,557	)	$	(17,425,544	)	$	4,787,631
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	2,208,072		$	1,632,668		$	1,779,018		$	4,173,302
Net transfers between Sub-Accounts
and/or Fixed Account		1,189,580			475,878			761,735			(2,037,223	)
Withdrawals, surrenders, annuitizations
and contract charges		(211,927	)		(13,702	)		(5,364,414	)		(5,440,291	)
Net accumulation activity	$	3,185,725		$	2,094,844		$	(2,823,661	)	$	(3,304,212	)
Annuitization Activity:
Annuitizations	$	-		$	-		$	-		$	-
Annuity payments and contract charges		-			-			(1,972	)		(2,319	)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		-			-			453			(354	)
Net annuitization activity	$	-		$	-		$	(1,519	)	$	(2,673	)
Increase (decrease) in net assets
from contract owner transactions	$	3,185,725		$	2,094,844		$	(2,825,180	)	$	(3,306,885	)
Increase (decrease) in net assets	$	1,525,792		$	2,048,287		$	(20,250,724	)	$	1,480,746
Net Assets:
Beginning of year	$	2,048,287		$	-		$	41,294,194		$	39,813,448
End of year	$	3,574,079		$	2,048,287		$	21,043,470		$	41,294,194
Unit Transactions:
Beginning of year		199,285			-			2,405,555			2,590,414
Purchased		299,360			157,474			125,422			255,045
Transferred between Sub-Accounts
and/or Fixed Account		154,886			45,735			139,753			(111,311	)
Withdrawn, Surrendered, and Annuitized		(26,547	)		(3,924	)		(380,467	)		(328,593)
End of year		626,984			199,285			2,290,263			2,405,555

2For the period March 5, 2007 (commencement of operations) through December 31, 2007.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	OGG						OMG
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment loss	$	(150,205	)	$	(281,790	)	$	(3,095,791	)	$	(6,311,500	)
Net realized gains		673,019			2,934,926			37,784,752			7,564,726
Net change in unrealized appreciation/
depreciation		(17,445,513	)		(1,265,972	)		(317,777,139	)		7,610,545
(Decrease) increase in net assets
from operations	$	(16,922,699	)	$	1,387,164		$	(283,088,178	)	$	8,863,771
Contract Owner Transactions:
Accumulation Activity:								136,285			546,585
Purchase payments received	$	2,775,670		$	11,501,103		$	43,038,618		$	195,700,625
Net transfers between Sub-Accounts
and/or Fixed Account		(1,534,773	)		2,130,956			53,658,481			53,452,547
Withdrawals, surrenders, annuitizations								(39,384	)		(26,169	)
and contract charges		(4,356,955	)		(2,813,721	)		(54,168,772)			(36,293,367	)
Net accumulation activity	$	(3,116,058	)	$	10,818,338		$	42,528,327		$	212,859,805
Annuitization Activity:
Annuitizations	$	-		$	-		$	33,952		$	107,519
Annuity payments and contract charges		-			-			(22,192	)		(25,286	)
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		-			-			1,657			(4,154	)
Net annuitization activity	$	-		$	-		$	13,417		$	78,079
(Decrease) increase in net assets
from contract owner transactions	$	(3,116,058	)	$	10,818,338		$	42,541,744		$	212,937,884
(Decrease) increase in net assets	$	(20,038,757	)	$	12,205,502		$	(240,546,434	)	$	221,801,655
Net Assets:
Beginning of year	$	43,790,664		$	31,585,162		$	706,504,514		$	484,702,859
End of year	$	23,751,907		$	43,790,664		$	465,958,080		$	706,504,514
Unit Transactions:
Beginning of year		2,653,815			1,996,825			44,367,479			31,198,650
Purchased		200,781			705,259			3,057,870			12,108,664
Transferred between Sub-Accounts
and/or Fixed Account		(80,766	)		132,682			5,250,823			3,379,878
Withdrawn, Surrendered, and Annuitized		(321,937	)		(180,951	)		(4,190,437	)		(2,319,713	)
End of year		2,451,893			2,653,815			48,485,735			44,367,479

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	OMS						PMB
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment (loss) income	$	(192,561	)	$	(314,838	)	$	538,083		$	440,296
Net realized gains (losses)		106,568			1,985,388			(12,676	)		322,862
Net change in unrealized appreciation/
depreciation		(5,916,365	)		(2,190,032	)		(2,637,948	)		(346,945	)
(Decrease) increase in net assets
from operations	$	(6,002,358	)	$	(519,482	)	$	(2,112,541	)	$	416,213
Contract Owner Transactions:
Accumulation Activity:		8,483,701			-			282,223			442,602
Purchase payments received	$	224,448		$	1,535,764		$	1,436,618		$	2,713,672
Net transfers between Sub-Accounts
and/or Fixed Account		(799,123	)		(975,003	)		(402,004	)		299,024
Withdrawals, surrenders, annuitizations		(270,575	)		-			(52,969	)		(17,531	)
and contract charges		(1,371,556	)		(1,718,008	)		(1,592,400	)		(1,041,024	)
Net accumulation activity	$	(1,946,231	)	$	(1,157,247	)	$	(557,786	)	$	1,971,672
Annuitization Activity:
Annuitizations	$	-		$	-		$	-		$	-
Annuity payments and contract charges		-			-			-			-
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		-			-			-			-
Net annuitization activity	$	-		$	-		$	-		$	-
(Decrease) increase in net assets
from contract owner transactions	$	(1,946,231	)	$	(1,157,247	)	$	(557,786	)	$	1,971,672
(Decrease) increase in net assets	$	(7,948,589	)	$	(1,676,729	)	$	(2,670,327	)	$	2,387,885
Net Assets:
Beginning of year	$	17,001,852		$	18,678,581		$	12,385,714		$	9,997,829
End of year	$	9,053,263		$	17,001,852		$	9,715,387		$	12,385,714
Unit Transactions:
Beginning of year		870,402			925,673			635,006			534,239
Purchased		12,364			73,617			74,100			139,768
Transferred between Sub-Accounts
and/or Fixed Account		(37,468	)		(45,777	)		(32,325	)		15,629
Withdrawn, Surrendered, and Annuitized		(85,085	)		(83,111	)		(82,906	)		(54,630	)
End of year		760,213			870,402			593,875			635,006

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	PLD						PRR
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment income	$	18,960,034		$	19,556,922		$	1,574,721		$	1,270,296
Net realized gains (losses)		3,336,368			(385,400	)		(1,260,711	)		(512,076	)
Net change in unrealized appreciation/
depreciation		(42,227,842	)		19,824,045			(12,918,618	)		3,320,222
(Decrease) increase in net assets
from operations	$	(19,931,440	)	$	38,995,567		$	(12,604,608	)	$	4,078,442
Contract Owner Transactions:
Accumulation Activity:		6,959			1,119			-			-
Purchase payments received	$	52,757,006		$	329,612,646		$	42,002,487		$	15,629,142
Net transfers between Sub-Accounts
and/or Fixed Account		(228,760,224	)		70,401,093			39,714,443			914,464
Withdrawals, surrenders, annuitizations		(31	)		-			-			-
and contract charges		(69,755,366	)		(37,920,745	)		(9,959,865	)		(4,818,938	)
Net accumulation activity	$	(245,758,584	)	$	362,092,994		$	71,757,065		$	11,724,668
Annuitization Activity:
Annuitizations	$	24,359		$	9,594		$	-		$	-
Annuity payments and contract charges		(30,738	)		(28,779	)		-			-
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		(2,506	)		(3,040	)		-			-
Net annuitization activity	$	(8,885	)	$	(22,225	)	$	-		$	-
(Decrease) increase in net assets
from contract owner transactions	$	(245,767,469	)	$	362,070,769		$	71,757,065		$	11,724,668
(Decrease) increase in net assets	$	(265,698,909	)	$	401,066,336		$	59,152,457		$	15,803,110
Net Assets:
Beginning of year	$	864,760,462		$	463,694,126		$	53,416,156		$	37,613,046
End of year	$	599,061,553		$	864,760,462		$	112,568,613		$	53,416,156
Unit Transactions:
Beginning of year		80,692,069			45,681,184			4,125,528			3,162,459
Purchased		4,920,372			31,961,455			3,198,155			1,282,395
Transferred between Sub-Accounts
and/or Fixed Account		(21,887,102	)		6,879,714			2,977,027			80,424
Withdrawn, Surrendered, and Annuitized		(6,622,862	)		(3,830,284	)		(814,439	)		(399,750	)
End of year		57,102,477			80,692,069			9,486,271			4,125,528

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	PTR						PRA
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment income	$	8,786,261		$	4,325,210		$	195,818		$	196,099
Net realized gains (losses)		8,166,242			(199,728	)		(240,986	)		(451	)
Net change in unrealized appreciation/
depreciation		(8,531,946	)		8,656,848			(938,513	)		(13,416	)
Increase (decrease) in net assets
from operations	$	8,420,557		$	12,782,330		$	(983,681	)	$	182,232
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	110,719,979		$	143,374,022		$	315,778		$	771,345
Net transfers between Sub-Accounts
and/or Fixed Account		2,727,152			28,774,745			1,600,815			935,005
Withdrawals, surrenders, annuitizations		-			-			-			-
and contract charges		(28,650,850	)		(11,358,436	)		(935,568	)		(107,611	)
Net accumulation activity	$	84,796,281		$	160,790,331		$	981,025		$	1,598,739
Annuitization Activity:
Annuitizations	$	58,469		$	-		$	-		$	-
Annuity payments and contract charges		(9,215	)		(4,765	)		-			-
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		(2,494	)		(1,102	)		-			-
Net annuitization activity	$	46,760		$	(5,867	)	$	-		$	-
Increase in net assets
from contract owner transactions	$	84,843,041		$	160,784,464		$	981,025		$	1,598,739
Increase (decrease) in net assets	$	93,263,598		$	173,566,794		$	(2,656	)	$	1,780,971
Net Assets:
Beginning of year	$	243,883,703		$	70,316,909		$	3,802,578		$	2,021,607
End of year	$	337,147,301		$	243,883,703		$	3,799,922		$	3,802,578
Unit Transactions:
Beginning of year		20,114,681			6,231,960			340,476			192,534
Purchased		9,032,484			12,421,198			30,107			71,121
Transferred between Sub-Accounts
and/or Fixed Account		232,837			2,506,871			138,600			86,767
Withdrawn, Surrendered, and Annuitized		(2,431,725	)		(1,045,348	)		(97,602	)		(9,946	)
End of year		26,948,277			20,114,681			411,581			340,476

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	PCR						1XX
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Period Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			20083			2007
Operations:
Net investment income (loss)	$	1,257,308		$	258,938		$	(853	)	$	-
Net realized gains (losses)		1,908,438			95,790			(167	)		-
Net change in unrealized appreciation/
depreciation		(26,382,238	)		1,431,193			22,164			-
(Decrease) increase in net assets
from operations	$	(23,216,492	)	$	1,785,921		$	21,144		$	-
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	21,370,531		$	4,107,848		$	109,861		$	-
Net transfers between Sub-Accounts
and/or Fixed Account		30,829,259			1,146,404			288,845			-
Withdrawals, surrenders, annuitizations		-			-			-			-
and contract charges		(2,430,459	)		(281,879	)		(2,133	)		-
Net accumulation activity	$	49,769,331		$	4,972,373		$	396,573		$	-
Annuitization Activity:
Annuitizations	$	-		$	-		$	-		$	-
Annuity payments and contract charges		-			-			-			-
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		-			-			-			-
Net annuitization activity	$	-		$	-		$	-		$	-
Increase in net assets
from contract owner transactions	$	49,769,331		$	4,972,373		$	396,573		$	-
Increase in net assets	$	26,552,839		$	6,758,294		$	417,717		$	-
Net Assets:
Beginning of year	$	11,610,424		$	4,852,130		$	-		$	-
End of year	$	38,163,263		$	11,610,424		$	417,717		$	-
Unit Transactions:
Beginning of year		977,885			494,790			-			-
Purchased		1,695,854			393,965			13,181			-
Transferred between Sub-Accounts
and/or Fixed Account		3,393,378			116,250			33,404			-
Withdrawn, Surrendered, and Annuitized		(253,606	)		(27,120	)		(256	)		-
End of year		5,813,511			977,885			46,329			-
3For the period October 6, 2008 (commencement of operations) through December 31, 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	SSA						3XX
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Period Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			20083			2007
Operations:
Net investment loss	$	(86,190	)	$	(76,055	)	$	(25	)	$	-
Net realized (losses) gains		(830,707	)		562,012			(199	)		-
Net change in unrealized appreciation/
depreciation		(2,009,983	)		(1,115,575	)		1,220			-
(Decrease) increase in net assets
from operations	$	(2,926,880	)	$	(629,618	)	$	996		$	-
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	831,644		$	2,870,994		$	58,021		$	-
Net transfers between Sub-Accounts
and/or Fixed Account		(175,731	)		654,129			10,531			-
Withdrawals, surrenders, annuitizations		-			-			-			-
and contract charges		(610,906	)		(461,493	)		(27	)		-
Net accumulation activity	$	45,007		$	3,063,630		$	68,525		$	-
Annuitization Activity:
Annuitizations	$	-		$	-		$	-		$	-
Annuity payments and contract charges		-			-			-			-
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		-			-			-			-
Net annuitization activity	$	-		$	-		$	-		$	-
Increase in net assets
from contract owner transactions	$	45,007		$	3,063,630		$	68,525		$	-
(Decrease) increase in net assets	$	(2,881,873	)	$	2,434,012		$	69,521		$	-
Net Assets:
Beginning of year	$	7,577,757		$	5,143,745		$	-		$	-
End of year	$	4,695,884		$	7,577,757		$	69,521		$	-
Unit Transactions:
Beginning of year		643,565			403,028			-			-
Purchased		103,342			224,850			6,317			-
Transferred between Sub-Accounts
and/or Fixed Account		(34,208	)		52,116			1,235			-
Withdrawn, Surrendered, and Annuitized		(67,317	)		(36,429	)		(3	)		-
End of year		645,382			643,565			7,549			-
3For the period October 6, 2008 (commencement of operations) through December 31, 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	5XX					SVV
	Sub-Account					Sub-Account
	Period Ended			Year Ended		Year Ended			Period Ended
	December 31,			December 31,		December 31,			December 31,
	20083			2007		2008			20072
Operations:
Net investment income (loss)	$	3,079		$	-	$	(449,209	)	$	(122,133	)
Net realized gains (losses)		1,907			-		(836,540	)		40,195
Net change in unrealized appreciation/
depreciation		73,324			-		(27,022,672	)		(394,812	)
Increase (decrease) in net assets
from operations	$	78,310		$	-	$	(28,308,421	)	$	(476,750	)
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	1,435,115		$	-	$	49,360,683		$	20,367,569
Net transfers between Sub-Accounts
and/or Fixed Account		1,163,815			-		32,083,258			7,065,978
Withdrawals, surrenders, annuitizations		-			-		-			-
and contract charges		(3,544	)		-		(1,570,473	)		(117,186	)
Net accumulation activity	$	2,595,386		$	-	$	79,873,468		$	27,316,361
Annuitization Activity:
Annuitizations	$	-		$	-	$	5,077		$	-
Annuity payments and contract charges		-			-		(1,993	)		-
Net transfers between Sub-Accounts		-			-		-			-
Adjustments to annuity reserves		-			-		(666	)		-
Net annuitization activity	$	-		$	-	$	2,418		$	-
Increase in net assets
from contract owner transactions	$	2,595,386		$	-	$	79,875,886		$	27,316,361
Increase in net assets	$	2,673,696		$	-	$	51,567,465		$	26,839,611
Net Assets:
Beginning of year	$	-		$	-	$	26,839,611		$	-
End of year	$	2,673,696		$	-	$	78,407,076		$	26,839,611
Unit Transactions:
Beginning of year		-			-		2,540,048			-
Purchased		143,540			-		6,021,693			1,904,899
Transferred between Sub-Accounts
and/or Fixed Account		118,260			-		3,850,197			657,249
Withdrawn, Surrendered, and Annuitized		(980	)		-		(257,896	)		(22,100	)
End of year		260,820			-		12,154,042			2,540,048
2 For the period March 5, 2007 (commencement of operations) through December 31, 2007.
3 For the period October 6, 2008 (commencement of operations) through December 31, 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	2XX					LGF
	Sub-Account					Sub-Account
	Period Ended			Year Ended		Year Ended			Year Ended
	December 31,			December 31,		December 31,			December 31,
	20083			2007		2008			2007
Operations:
Net investment loss	$	(264	)	$	-	$	(36,442	)	$	(29,278	)
Net realized (losses) gains		(237	)		-		(31,267	)		30,268
Net change in unrealized appreciation/
depreciation		7,327			-		(1,131,457	)		72,110
Increase (decrease) in net assets
from operations	$	6,826		$	-	$	(1,199,166	)	$	73,100
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	72,097		$	-	$	265,985		$	1,101,951
Net transfers between Sub-Accounts
and/or Fixed Account		131,435			-		383,688			375,495
Withdrawals, surrenders, annuitizations		-			-		-			-
and contract charges		(936	)		-		(35,232	)		(36,167	)
Net accumulation activity	$	202,596		$	-	$	614,441		$	1,441,279
Annuitization Activity:
Annuitizations	$	-		$	-	$	-		$	-
Annuity payments and contract charges		-			-		-			-
Net transfers between Sub-Accounts		-			-		-			-
Adjustments to annuity reserves		-			-		-			-
Net annuitization activity	$	-		$	-	$	-		$	-
Increase in net assets
contract owner transactions	$	202,596		$	-	$	614,441		$	1,441,279
Increase (decrease) in net assets	$	209,422		$	-	$	(584,725	)	$	1,514,379
Net Assets:
Beginning of year	$	-		$	-	$	2,312,144		$	797,765
End of year	$	209,422		$	-	$	1,727,419		$	2,312,144
Unit Transactions:
Beginning of year		-			-		223,425			80,896
Purchased		8,181			-		37,307			108,815
Transferred between Sub-Accounts
and/or Fixed Account		14,342			-		48,442			37,375
Withdrawn, Surrendered, and Annuitized		(109	)		-		(4,368	)		(3,661	)
End of year		22,414			-		304,806			223,425
3For the period October 6, 2008 (commencement of operations) through December 31, 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	SGC					S13
	Sub-Account					Sub-Account
	Period Ended			Year Ended		Period Ended			Year Ended
	December 31,			December 31,		December 31,			December 31,
	20081			2007		20081			2007
Operations:
Net investment income	$	4,834		$	-	$	341		$	-
Net realized losses		(157,794	)		-		(320,615	)		-
Net change in unrealized appreciation/
depreciation		(166,577	)		-		(619,227	)		-
Decrease in net assets
from operations	$	(319,537	)	$	-	$	(939,501	)	$	-
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	(12,663	)	$	-	$	2,960,976		$	-
Net transfers between Sub-Accounts
and/or Fixed Account		1,864,151			-		1,297,662			-
Withdrawals, surrenders, annuitizations		-			-		-			-
and contract charges		(14,929	)		-		(70,772	)		-
Net accumulation activity	$	1,836,559		$	-	$	4,187,866		$	-
Annuitization Activity:
Annuitizations	$	-		$	-	$	-		$	-
Annuity payments and contract charges		-			-		-			-
Net transfers between Sub-Accounts		-			-		-			-
Adjustments to annuity reserves		-			-		-			-
Net annuitization activity	$	-		$	-	$	-		$	-
Increase in net assets
contract owner transactions	$	1,836,559		$	-	$	4,187,866		$	-
Increase in net assets	$	1,517,022		$	-	$	3,248,365		$	-
Net Assets:
Beginning of year	$	-		$	-	$	-		$	-
End of year	$	1,517,022		$	-	$	3,248,365		$	-
Unit Transactions:
Beginning of year		-			-		-			-
Purchased		2,730			-		320,669			-
Transferred between Sub-Accounts
and/or Fixed Account		214,579			-		152,603			-
Withdrawn, Surrendered, and Annuitized		(2,054	)		-		(11,285	)		-
End of year		215,255			-		461,987			-

1For the period March 10, 2008 (commencement of operations) through December 31, 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	SDC					S15
	Sub-Account					Sub-Account
	Period Ended			Year Ended		Period Ended			Year Ended
	December 31,			December 31,		December 31,			December 31,
	20081			2007		20081			2007
Operations:
Net investment income	$	89,726		$	-	$	90,847		$	-
Net realized gains		220,000			-		241,430			-
Net change in unrealized appreciation/
depreciation		719,321			-		1,269,682			-
Increase in net assets
from operations	$	1,029,047		$	-	$	1,601,959		$	-
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	892,047		$	-	$	48,480,916		$	-
Net transfers between Sub-Accounts
and/or Fixed Account		37,602,758			-		9,856,968			-
Withdrawals, surrenders, annuitizations		-			-		-			-
and contract charges		(2,821,536	)		-		(1,700,861	)		-
Net accumulation activity	$	35,673,269		$	-	$	56,637,023		$	-
Annuitization Activity:
Annuitizations	$	-		$	-	$	-		$	-
Annuity payments and contract charges		-			-		-			-
Net transfers between Sub-Accounts		-			-		-			-
Adjustments to annuity reserves		-			-		-			-
Net annuitization activity	$	-		$	-	$	-		$	-
Increase in net assets
contract owner transactions	$	35,673,269		$	-	$	56,637,023		$	-
Increase in net assets	$	36,702,316		$	-	$	58,238,982		$	-
Net Assets:
Beginning of year	$	-		$	-	$	-		$	-
End of year	$	36,702,316		$	-	$	58,238,982		$	-
Unit Transactions:
Beginning of year		-			-		-			-
Purchased		94,753			-		4,954,378			-
Transferred between Sub-Accounts
and/or Fixed Account		3,798,510			-		1,011,065			-
Withdrawn, Surrendered, and Annuitized		(283,602	)		-		(226,830	)		-
End of year		3,609,661			-		5,738,613			-

1For the period March 10, 2008 (commencement of operations) through December 31, 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	7XX					8XX
	Sub-Account					Sub-Account
	Period Ended			Year Ended		Period Ended			Year Ended
	December 31,			December 31,		December 31,			December 31,
	20083			2007		20083			2007
Operations:
Net investment loss	$	(49,065	)	$	-	$	(50,886	)	$	-
Net realized (losses) gains		(4,171	)		-		65,613			-
Net change in unrealized appreciation/
depreciation		1,342,933			-		1,587,023			-
Increase in net assets
from operations	$	1,289,697		$	-	$	1,601,750		$	-
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	30,820,658		$	-	$	25,650,532		$	-
Net transfers between Sub-Accounts
and/or Fixed Account		5,697,088			-		4,369,082			-
Withdrawals, surrenders, annuitizations		-			-		-			-
and contract charges		(17,260	)		-		(9,205	)		-
Net accumulation activity	$	36,500,486		$	-	$	30,010,409		$	-
Annuitization Activity:
Annuitizations	$	-		$	-	$	-		$	-
Annuity payments and contract charges		-			-		-			-
Net transfers between Sub-Accounts		-			-		-			-
Adjustments to annuity reserves		-			-		-			-
Net annuitization activity	$	-		$	-	$	-		$	-
Increase in net assets
contract owner transactions	$	36,500,486		$	-	$	30,010,409		$	-
Increase in net assets	$	37,790,183		$	-	$	31,612,159		$	-
Net Assets:
Beginning of year	$	-		$	-	$	-		$	-
End of year	$	37,790,183		$	-	$	31,612,159		$	-
Unit Transactions:
Beginning of year		-			-		-			-
Purchased		3,163,705			-		2,637,299			-
Transferred between Sub-Accounts
and/or Fixed Account		583,933			-		461,360			-
Withdrawn, Surrendered, and Annuitized		(2,125	)		-		(1,939	)		-
End of year		3,745,513			-		3,096,720			-

3For the period October 6, 2008 (commencement of operations) through December 31, 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	6XX					IGB
	Sub-Account					Sub-Account
	Period Ended			Year Ended		Year Ended			Year Ended
	December 31,			December 31,		December 31,			December 31,
	20083			2007		2008			2007
Operations:
Net investment (loss) income	$	(47,498	)	$	-	$	871,107		$	521,137
Net realized losses		(13,334	)		-		(914,501	)		(80,573	)
Net change in unrealized appreciation/
depreciation		994,643			-		(3,476,022	)		(138,664	)
Increase (decrease) in net assets
from operations	$	933,811		$	-	$	(3,519,416	)	$	301,900
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	25,751,025		$	-	$	3,914,836		$	10,998,295
Net transfers between Sub-Accounts
and/or Fixed Account		6,313,040			-		(1,529,566	)		4,767,273
Withdrawals, surrenders, annuitizations		-			-		-			-
and contract charges		(35,598	)		-		(2,993,768	)		(976,901	)
Net accumulation activity	$	32,028,467		$	-	$	(608,498	)	$	14,788,667
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
contract owner transactions	$	32,028,467		$	-	$	(608,498	)	$	14,788,667
Increase (decrease) in net assets	$	32,962,278		$	-	$	(4,127,914	)	$	15,090,567
Net Assets:
Beginning of year	$	-		$	-	$	23,839,225		$	8,748,658
End of year	$	32,962,278		$	-	$	19,711,311		$	23,839,225
Unit Transactions:
Beginning of year		-			-		2,196,971			821,108
Purchased		2,678,916			-		377,745			1,031,152
Transferred between Sub-Accounts
and/or Fixed Account		657,912			-		(169,021	)		443,678
Withdrawn, Surrendered, and Annuitized		(4,548	)		-		(290,490	)		(98,967	)
End of year		3,332,280			-		2,115,205			2,196,971

3For the period October 6, 2008 (commencement of operations) through December 31, 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	SLC					S12
	Sub-Account					Sub-Account
	Period Ended			Year Ended		Period Ended			Year Ended
	December 31,			December 31,		December 31,			December 31,
	20081			2007		20081			2007
Operations:
Net investment income	$	572		$	-	$	888		$	-
Net realized losses		(4,939	)		-		(38,976	)		-
Net change in unrealized appreciation/
depreciation		(68,398	)		-		(333,036	)		-
Decrease in net assets
from operations	$	(72,765	)	$	-	$	(371,124	)	$	-
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	2,776		$	-	$	1,487,925		$	-
Net transfers between Sub-Accounts
and/or Fixed Account		371,072			-		758,499			-
Withdrawals, surrenders, annuitizations		-			-		-			-
and contract charges		(3,352	)		-		(14,671	)		-
Net accumulation activity	$	370,496		$	-	$	2,231,753		$	-
Annuitization Activity:
Annuitizations	$	-		$	-	$	-		$	-
Annuity payments and contract charges		-			-		-			-
Net transfers between Sub-Accounts		-			-		-			-
Adjustments to annuity reserves		-			-		-			-
Net annuitization activity	$	-		$	-	$	-		$	-
Increase in net assets from
contract owner transactions	$	370,496		$	-	$	2,231,753		$	-
Increase in net assets	$	297,731		$	-	$	1,860,629		$	-
Net Assets:
Beginning of year	$	-		$	-	$	-		$	-
End of year	$	297,731		$	-	$	1,860,629		$	-
Unit Transactions:
Beginning of year		-			-		-			-
Purchased		507			-		170,016			-
Transferred between Sub-Accounts
and/or Fixed Account		40,966			-		89,258			-
Withdrawn, Surrendered, and Annuitized		(414	)		-		(2,196	)		-
End of year		41,059			-		257,078			-

1For the period March 10, 2008 (commencement of operations) through December 31, 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	VSC						S14
	Sub-Account						Sub-Account
	Year Ended			Period Ended			Period Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			20072			20081			2007
Operations:
Net investment (loss) income	$	(1,887,637	)	$	(669,606	)	$	199,209		$	-
Net realized (losses) gains		(1,924,201	)		7,056,106			(121,982	)		-
Net change in unrealized appreciation/
depreciation		(47,924,248	)		(13,207,741	)		(787,751	)		-
Decrease in net assets
from operations	$	(51,736,086	)	$	(6,821,241)		$	(710,524	)	$	-
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	37,346,650		$	83,815,170		$	4,401,214		$	-
Net transfers between Sub-Accounts
and/or Fixed Account		29,324,050			23,184,836			7,236,437			-
Withdrawals, surrenders, annuitizations		-			-			-			-
and contract charges		(5,653,095	)		(1,006,053	)		(502,400	)		-
Net accumulation activity	$	61,017,605		$	105,993,953		$	11,135,251		$	-
Annuitization Activity:
Annuitizations	$	-		$	-		$	-		$	-
Annuity payments and contract charges		(586	)		-			-			-
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		(206	)		-			-			-
Net annuitization activity	$	(792	)	$	-		$	-		$	-
Increase in net assets
from contract owner transactions	$	61,016,813		$	105,993,953		$	11,135,251		$	-
Increase in net assets	$	9,280,727		$	99,172,712		$	10,424,727		$	-
Net Assets:
Beginning of year	$	99,172,712		$	-		$	-		$	-
End of year	$	108,453,439		$	99,172,712		$	10,424,727		$	-
Unit Transactions:
Beginning of year		10,111,572			-			-			-
Purchased		4,326,960			8,006,001			480,198			-
Transferred between Sub-Accounts
and/or Fixed Account		4,501,002			2,246,829			802,760			-
Withdrawn, Surrendered, and Annuitized		(758,070	)		(141,258	)		(57,580	)		-
End of year		18,181,464			10,111,572			1,225,378			-

1For the period March 10, 2008 (commencement of operations) through December 31, 2008.

2For the period March  5, 2007 (commencement of operations) through December 31, 2007.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	4XX					SRE
	Sub-Account					Sub-Account
	Period Ended			Year Ended		Year Ended			Year Ended
	December 31,			December 31,		December 31,			December 31,
	20083			2007		2008			2007
Operations:
Net investment (loss) income	$	(8,149	)	$	-	$	334,627		$	(639,552	)
Net realized gains		8,382			-		8,008,107			18,746,425
Net change in unrealized appreciation/
depreciation		439,819			-		(79,030,430	)		(41,858,450	)
Increase (decrease) in net assets
from operations	$	440,052		$	-	$	(70,687,696	)	$	(23,751,577	)
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	12,971,265		$	-	$	19,993,505		$	60,096,994
Net transfers between Sub-Accounts
and/or Fixed Account		2,901,746			-		18,891,697			31,866,115
Withdrawals, surrenders, annuitizations		-			-		-			-
and contract charges		(20,816	)		-		(11,266,815	)		(6,733,697	)
Net accumulation activity	$	15,852,195		$	-	$	27,618,387		$	85,229,412
Annuitization Activity:
Annuitizations	$	-		$	-	$	4,165		$	32,839
Annuity payments and contract charges		-			-		(4,726	)		(5,541	)
Net transfers between Sub-Accounts		-			-		-			-
Adjustments to annuity reserves		-			-		436			(930	)
Net annuitization activity	$	-		$	-	$	(125	)	$	26,368
Increase in net assets
from contract owner transactions	$	15,852,195		$	-	$	27,618,262		$	85,255,780
Increase (decrease) in net assets	$	16,292,247		$	-	$	(43,069,434	)	$	61,504,203
Net Assets:
Beginning of year	$	-		$	-	$	161,037,838		$	99,533,635
End of year	$	16,292,247		$	-	$	117,968,404		$	161,037,838
Unit Transactions:
Beginning of year		-			-		10,404,402			5,480,387
Purchased		1,268,668			-		1,381,977			3,434,567
Transferred between Sub-Accounts
and/or Fixed Account		282,439			-		3,123,693			1,892,301
Withdrawn, Surrendered, and Annuitized		(10,418	)		-		(846,732	)		(402,853	)
End of year		1,540,689			-		14,063,340			10,404,402

3For the period October 6, 2008 (commencement of operations) through December 31, 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	SC3						CMM
	Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	2008			2007			2008			2007
Operations:
Net investment income (loss)	$	30,910		$	(97,124	)	$	(64,174	)	$	41,185
Net realized gains		478,638			4,369,969			-			-
Net change in unrealized appreciation/
depreciation		(4,922,987	)		(6,667,961	)		-			-
(Decrease) increase in net assets
from operations	$	(4,413,439	)	$	(2,395,116	)	$	(64,174	)	$	41,185
Contract Owner Transactions:
Accumulation Activity:								-			-
Purchase payments received	$	60,987		$	234,754		$	26,841,260		$	136,285
Net transfers between Sub-Accounts
and/or Fixed Account		74,537			330,836			35,785,522			344,595
Withdrawals, surrenders, annuitizations		-			-			-			-
and contract charges		(2,680,906	)		(4,661,810	)		(11,650,716	)		(39,384	)
Net accumulation activity	$	(2,545,382	)	$	(4,096,220	)	$	50,976,066		$	441,496
Annuitization Activity:
Annuitizations	$	-		$	-		$	102,126		$	-
Annuity payments and contract charges		(1,388	)		(1,785	)		(3,652	)		-
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		282			(54	)		(267	)		-
Net annuitization activity	$	(1,106	)	$	(1,839	)	$	98,207		$	-
(Decrease) increase in net assets
from contract owner transactions	$	(2,546,488	)	$	(4,098,059	)	$	51,074,273		$	441,496
(Decrease) increase in net assets	$	(6,959,927	)	$	(6,493,175	)	$	51,010,099		$	482,681
Net Assets:
Beginning of year	$	13,338,079		$	19,831,254		$	1,712,816		$	1,230,135
End of year	$	6,378,152		$	13,338,079		$	52,722,915		$	1,712,816
Unit Transactions:
Beginning of year		608,427			769,769			161,444			119,244
Purchased		2,725			8,697			2,657,872			13,116
Transferred between Sub-Accounts
and/or Fixed Account		60,620			18,964			3,389,852			32,847
Withdrawn, Surrendered, and Annuitized		(135,752	)		(189,003	)		(1,212,353	)		(3,763	)
End of year		536,020			608,427			4,996,815			161,444

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	S16					VKU
	Sub-Account					Sub-Account
	Period Ended			Year Ended		Period Ended			Year Ended
	December 31,			December 31,		December 31,			December 31,
	20081			2007		20081			2007
Operations:
Net investment (loss) income	$	(206,143	)	$	-	$	8,573		$	-
Net realized gains (losses)		4,758,068			-		(8,658	)		-
Net change in unrealized appreciation/
depreciation		(14,798,917	)		-		(501,930	)		-
Decrease in net assets
from operations	$	(10,246,992	)	$	-	$	(502,015	)	$	-
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	23,058,711		$	-	$	3,430,115		$	-
Net transfers between Sub-Accounts
and/or Fixed Account		17,751,831			-		1,470,259			-
Withdrawals, surrenders, annuitizations		-			-		-			-
and contract charges		(691,565	)		-		(49,196	)		-
Net accumulation activity	$	40,118,977		$	-	$	4,851,178		$	-
Annuitization Activity:
Annuitizations	$	-		$	-	$	-		$	-
Annuity payments and contract charges		-			-		-			-
Net transfers between Sub-Accounts		-			-		-			-
Adjustments to annuity reserves		-			-		-			-
Net annuitization activity	$	-		$	-	$	-		$	-
Increase in net assets
from contract owner transactions	$	40,118,977		$	-	$	4,851,178		$	-
Increase in net assets	$	29,871,985		$	-	$	4,349,163		$	-
Net Assets:
Beginning of year	$	-		$	-	$	-		$	-
End of year	$	29,871,985		$	-	$	4,349,163		$	-
Unit Transactions:
Beginning of year		-			-		-			-
Purchased		2,184,228			-		367,173			-
Transferred between Sub-Accounts
and/or Fixed Account		1,915,850			-		160,107			-
Withdrawn, Surrendered, and Annuitized		(100,956	)		-		(5,747	)		-
End of year		3,999,122			-		521,533			-

1For the period March 10, 2008 (commencement of operations) through December 31, 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	VKM					VKC
	Sub-Account					Sub-Account
	Period Ended			Year Ended		Period Ended			Year Ended
	December 31,			December 31,		December 31,			December 31,
	20081			2007		20081			2007
Operations:
Net investment loss	$	(2,613	)	$	-	$	(1,893	)	$	-
Net realized gains (losses)		21,456			-		(9,840	)		-
Net change in unrealized appreciation/
depreciation		(214,485	)		-		(118,080	)		-
Decrease in net assets
from operations	$	(195,642	)	$	-	$	(129,813	)	$	-
Contract Owner Transactions:
Accumulation Activity:		-			-
Purchase payments received	$	325,494		$	-	$	376,133		$	-
Net transfers between Sub-Accounts
and/or Fixed Account		507,814			-		183,445			-
Withdrawals, surrenders, annuitizations		-			-		-			-
and contract charges		(11,533	)		-		(7,120	)		-
Net accumulation activity	$	821,775		$	-	$	552,458		$	-
Annuitization Activity:
Annuitizations	$	-		$	-	$	-		$	-
Annuity payments and contract charges		-			-		-			-
Net transfers between Sub-Accounts		-			-		-			-
Adjustments to annuity reserves		-			-		-			-
Net annuitization activity	$	-		$	-	$	-		$	-
Increase in net assets from
contract owner transactions	$	821,775		$	-	$	552,458		$	-
Increase in net assets	$	626,133		$	-	$	422,645		$	-
Net Assets:
Beginning of year	$	-		$	-	$	-		$	-
End of year	$	626,133		$	-	$	422,645		$	-
Unit Transactions:
Beginning of year		-			-		-			-
Purchased		36,068			-		41,130			-
Transferred between Sub-Accounts
and/or Fixed Account		65,354			-		24,377			-
Withdrawn, Surrendered, and Annuitized		(1,621	)		-		(823	)		-
End of year		99,801			-		64,684			-

1For the period March 10, 2008 (commencement of operations) through December 31, 2008.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	VLC						WTF
	Sub-Account						Sub-Account
	Period Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,
	20081			2007			2008			2007
Operations:
Net investment gain (loss)	$	28,334			(73,479	)	$	(21,866	)	$	(24,185	)
Net realized (losses) gains		(640,371	)		(14,041	)		22,246			70,788
Net change in unrealized appreciation/
depreciation		(4,420,574	)		(612,290	)		(758,079	)		24,061
(Decrease) increase in net assets
from operations	$	(5,032,611	)		(699,810	)	$	(757,699	)	$	70,664
Contract Owner Transactions:
Accumulation Activity:		-			-
Purchase payments received	$	3,608,221			8,483,701		$	21,970		$	282,223
Net transfers between Sub-Accounts
and/or Fixed Account		2,079,152			3,388,985			233,377			261,882
Withdrawals, surrenders, annuitizations		-			-			-			-
and contract charges		(478,039	)		(270,575	)		(89,430	)		(52,969	)
Net accumulation activity	$	5,209,334			11,602,111		$	165,917		$	491,136
Annuitization Activity:
Annuitizations	$	-			-		$	-		$	-
Annuity payments and contract charges		-			-			-			-
Net transfers between Sub-Accounts		-			-			-			-
Adjustments to annuity reserves		-			-			-			-
Net annuitization activity	$	-			-		$	-		$	-
Increase in net assets
from contract owner transactions	$	5,209,334			11,602,111		$	165,917		$	491,136
Increase (decrease) in net assets	$	176,723			10,902,301		$	(591,782	)	$	561,800
Net Assets:
Beginning of year	$	10,902,301			-		$	1,593,216		$	1,031,416
End of year	$	11,079,024			10,902,301		$	1,001,434		$	1,593,216
Unit Transactions:
Beginning of year		1,104,540			-			109,329			76,127
Purchased		423,551			823,078			1,686			19,144
Transferred between Sub-Accounts
and/or Fixed Account		315,167			324,642			33,929			17,578
Withdrawn, Surrendered, and Annuitized		(64,412	)		(43,180	)		(7,735	)		(3,520	)
End of year		1,778,846			1,104,540			137,209			109,329

1For the period March 10, 2008 (commencement of operations) through December 31, 2008.

2For the period March  5, 2007 (commencement of operations) through December 31, 2007.

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

	USC
	Sub-Account
	Year Ended			Year Ended
	December 31,			December 31,
	2008			2007
Operations:
Net investment loss	$	(1,084	)	$	(850	)
Net realized gains		2,998			1,818
Net change in unrealized appreciation/
depreciation		(28,799	)		(429	)
(Decrease) increase in net assets
from operations	$	(26,885	)	$	539
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	1		$	6,959
Net transfers between Sub-Accounts
and/or Fixed Account		9,649			24,733
Withdrawals, surrenders, annuitizations		-			-
and contract charges		(6,216	)		(31	)
Net accumulation activity	$	3,434		$	31,661
Annuitization Activity:
Annuitizations	$	-		$	-
Annuity payments and contract charges		-			-
Net transfers between Sub-Accounts		-			-
Adjustments to annuity reserves		-			-
Net annuitization activity	$	-		$	-
Increase in net assets from
contract owner transactions	$	3,434		$	31,661
(Decrease) increase in net assets	$	(23,451	)	$	32,200
Net Assets:
Beginning of year	$	63,311		$	31,111
End of year	$	39,860		$	63,311
Unit Transactions:
Beginning of year		5,229			2,650
Purchased		-			587
Transferred between Sub-Accounts Fixed
Accumulation Account		1,061			1,995
Withdrawn, Surrendered, and Annuitized		(721	)		(3	)
End of year		5,569			5,229

The accompanying notes are an integral part of these financial statements.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

NOTES TO FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2008

1. BUSINESS AND ORGANIZATION

Sun Life of Canada (U.S.) Variable Account F (the “Variable Account”) is a separate account of Sun Life Assurance Company of Canada (U.S.) (the “Sponsor”) and 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, Sun Life Financial Masters Extra contracts, Sun Life Financial Masters Choice contracts, Sun Life Financial Masters Access contracts, Sun Life Financial Masters Flex contracts, Sun Life Financial Masters IV contracts, Sun Life Financial Masters VII 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 amended, as a unit investment trust existing 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 specific mutual fund, or series thereof, selected by contract owners from available mutual funds (the "Funds") registered under the Investment Company Act of 1940, as amended.

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.  Assets applicable to the Variable Account are not chargeable with liabilities arising out of any other business the Sponsor may conduct.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).  The preparation of financial statements in conformity with GAAP requires the Sponsor’s management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  Actual results could differ from these estimates.

Investment Valuation and Transactions

Investments made in mutual funds are valued at their closing net asset value each business day. Transactions are recorded on a trade date basis.  Realized gains and losses on sales of investments are determined on the first in, first out basis.  Dividend income and realized gain distributions are reinvested in additional fund shares and recognized on the ex-dividend date.

Transfers

Transfers between Sub-Accounts requested by contract participants are recorded in the new Sub-Account upon receipt of the redemption proceeds at the net asset value at the time of receipt.  In addition, transfers can be made between the Sub-Accounts and the Fixed Account.  The Fixed Account is part of the general account of the Sponsor in which purchase payments or contract values may be allocated or transferred.

Federal Income Tax Status

The operations of the Variable Account are part of the operations of the Sponsor and are not taxed separately. The Sponsor qualifies for the federal income tax treatment granted to life insurance companies under Subchapter L of the Internal Revenue Code (the “Code”). Under existing federal income tax law, investment income and realized gain distributions earned by the Variable Account on contract owner reserves are not taxable, and therefore, no provision has been made for federal income taxes. The Sponsor will periodically review the status of this policy in the event of changes in the tax law. A provision may be made in future years for any federal income taxes that would be attributable to the contract.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

New and Adopted Accounting Pronouncements

In June 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes–an interpretation of FASB Statement No. 109” (“FIN 48”).  FIN 48 clarifies the accounting for uncertainty in income taxes recognized in accordance with FASB Statement No. 109, “Accounting for Income Taxes.”  This interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  It also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.  FIN 48 is effective during the first required financial reporting period for fiscal years beginning after December 15, 2006.  The Sub-Accounts adopted FIN 48 on January 1, 2007.  The Sub-Accounts are not responsible for the payment or recording of income taxes and therefore the adoption of FIN 48 did not have an impact on the financial statements.

In September 2006, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements,” which defines fair value, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value and expands disclosures about fair value measurements. SFAS No. 157 does not change existing guidance as to whether or not an instrument is carried at fair value.  On January 1, 2008, the Variable Account adopted SFAS No. 157 and applied the provisions of the statement prospectively to assets and liabilities measured and disclosed at fair value.

In October 2008, the FASB issued Staff Position (“FSP”) No. FAS 157-3, “Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active”. FSP No. FAS 157-3 clarifies the application of SFAS No. 157 in a market that is not active and provides an example to illustrate key considerations in the determination of the fair value of a financial asset when the market for that asset is not active. FSP No. FAS 157-3 was effective upon issuance and did not have an impact on the Variable Account’s financial statements.

3. RELATED PARTY TRANSACTIONS

Massachusetts Financial Services Company is the investment adviser to the MFS/Sun Life Series Trust.  Sun Capital Advisers LLC is the investment adviser to Sun Capital Advisers Trust.  Both are affiliates of the Sponsor and charge management fees at an annual rate ranging from 0.55% to 1.05% and 0.12% to 1.05% of the underlying funds’ average daily net assets, respectively.

4. CONTRACT CHARGES

Mortality and expense risk charges

Charges for mortality and expense risks, optional death benefit riders, the Lifetime Income Bonus Benefit (available on Sun Life Financial Masters IV contracts and Sun Life Financial Masters VII contracts), and the Secured Returns Optional Living Benefit (available on Sun Life Financial Masters Choice contracts, Sun Life Financial Masters Extra contracts, and Sun Life Financial Masters Flex contracts) are based on the average daily Variable Account assets and are deducted from the Variable Account at the end of each valuation period to cover the risks assumed by the Sponsor. The deductions are transferred periodically to the Sponsor. At December 31, 2008, the deduction is at an effective annual rate as follows:

	Level 1	Level 2	Level 3	Level 4	Level 5	Level 6	Level 7	Level 8
Regatta	1.25%	-	-	-	-	-	-	-
Regatta Gold	1.25%	-	-	-	-	-	-	-
Regatta Classic	1.00%	-	-	-	-	-	-	-

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

4. CONTRACT CHARGES (CONTINUED)

Mortality and expense risk charges (continued)

	Level 1	Level 2	Level 3	Level 4	Level 5	Level 6	Level 7	Level 8
Regatta Platinum	1.25%	-	-	-	-	-	-	-
Regatta Extra	1.30%	1.45%	1.55%	1.70%	-	-	-	-
Regatta Choice	0.85%	1.00%	1.10%	1.15%	1.25%	1.40%	-	-
Regatta Access	1.00%	1.15%	1.25%	1.40%	1.50%	1.65%	-	-
Regatta Flex 4	0.95%	1.10%	1.20%	1.35%	1.45%	1.60%	-	-
Regatta Flex II	1.30%	1.50%	1.55%	1.70%	1.75%	1.90%	1.95%	2.15%
Regatta Choice II	1.05%	1.25%	1.30%	1.45%	1.50%	1.65%	1.70%	1.90%
Sun Life Financial Masters Extra	1.40%	1.60%	1.65%	1.80%	1.85%	2.00%	2.05%	2.25%
Sun Life Financial Masters Choice	1.05%	1.25%	1.30%	1.45%	1.50%	1.65%	1.70%	1.90%
Sun Life Financial Masters Access	1.35%	1.55%	1.60%	1.75%	1.80%	1.95%	-	-
Sun Life Financial Masters Flex	1.30%	1.50%	1.55%	1.70%	1.75%	1.90%	1.95%	2.15%
Sun Life Financial Masters IV	1.05%	1.25%	1.30%	1.45%	1.65%	1.70%	1.85	-
Sun Life Financial Masters VII	1.00%	1.05%	1.20%	1.25%	1.30%	1.40%	1.45%	1.60%

Administration charges

Each year on the account anniversary, an account administration fee (“Account Fee”) equal to the lesser of $30 or 2% of the participant’s account value in the case of Regatta and 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, Sun Life Financial Masters Extra, Sun Life Financial Masters Choice, Sun Life Financial Masters Access, Sun Life Financial Masters Flex, Sun Life Financial Masters IV, and Sun Life Financial Masters VII 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, reflected in the statement of changes in net assets, 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.

For Regatta Gold, Regatta Classic, Regatta Platinum, Regatta Extra, Regatta Access, Regatta Choice, Regatta Flex 4, Regatta Flex II, Regatta Choice II, Sun Life Financial Masters Extra, Sun Life Financial Masters Choice, Sun Life Financial Masters Access, Sun Life Financial Masters Flex, Sun Life Financial Masters IV, and Sun Life Financial Masters VII contracts, an administrative expense charge is deducted from the assets of the Variable Account at an annual effective rate equal to 0.15% of the average daily Variable Account value.  This charge is designed to reimburse the Sponsor for expenses incurred in administering the contracts, the accounts and the Variable Account that are not covered by the annual Account Fee, as reflected in the statement of operations.

Optional living benefit rider charges

A quarterly charge, equal to 0.125% of account value, is deducted on the last day of the Account Quarter (“Account Quarters” are defined as three-month periods, with the first Account Quarter beginning on the date the contracts were issued) if one of the following optional living benefit riders has been elected:  Secured Returns 2, Secured Returns for Life, or Secured Returns for Life Plus. These three optional living benefit riders are available on Sun Life Financial Masters Choice contracts, Sun Life Financial Masters Extra contracts, Sun Life Financial Masters Flex contracts, Sun Life Financial Masters IV contracts, and Sun Life Financial Masters VII contracts. A quarterly charge of 0.1625% for single life coverage and 0.2125% for joint life coverage is deducted on the last day of the Account Quarter if the Income ON Demand optional living benefit rider has been elected or 0.0875% if the Retirement Asset Protector optional living benefit rider has been elected. These two optional living benefit riders are available on Sun Life Financial Masters Choice contracts, Sun Life Financial Masters Extra contracts, Sun Life Financial Masters Flex contracts, Sun Life Financial Masters IV contracts, and Sun Life Financial Masters VII contracts.

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

4. CONTRACT CHARGES (CONTINUED)

Surrender charges

The Sponsor does not deduct a sales charge from purchase payments.  However, a surrender charge (contingent deferred sales charge) may be deducted as a percentage of the amount withdrawn to cover certain expenses relating to the sale of the contracts and certificates.

	Surrender
Sub-Account	Charge
	(up to % below)
Regatta contracts	6%
Regatta Gold contracts	6%
Regatta Platinum contracts	6%
Regatta Extra contracts	8%
Regatta Choice contracts	7%
Regatta Flex 4 contracts	6%
Regatta Flex II contracts	8%
Regatta Choice II contracts	8%
Sun Life Financial Masters Extra contracts	8%
Sun Life Financial Masters Choice contracts	8%
Sun Life Financial Masters Flex contracts	8%
Sun Life Financial Masters IV contracts	8%
Sun Life Financial Masters VII contracts	8%

Distribution charges

For assuming the risk that surrender charges may be insufficient to compensate the Sponsor for the costs of distributing the contracts, the Sponsor makes a deduction from the Sub-Account at the end of each valuation period for the first seven account years at an effective annual rate of 0.15% of the average daily value of the contract invested in the Sub-Account attributable to Regatta, Regatta Gold, Regatta Platinum, Sun Life Financial Masters Extra, and Sun Life Financial Masters Choice at an effective annual rate of 0.20% of the average daily value of the contract invested in the Sub-Account attributable to Sun Life Financial Masters Access, Sun Life Financial Masters Flex, Sun Life Financial Masters IV, and Sun Life Financial Masters VII contracts.

For the year ended December 31, 2008, the Sponsor received the following amounts related to the above mentioned Account Fee, surrender, and benefit charges. These charges are reflected in the “Withdrawals, surrenders, annuitizations, and contract charges” line of the Statement of Changes in Net Assets for each Sub-Account.

					Surrender
	Account Fee		Benefit Fees		Charges
AllianceBernstein Variable Products Series Fund Inc.
AVB	$	12	$	11,740	$	161
AN4		55		1,491		3,081
IVB		1,690		68,893		38,331
AVW		82		879		21
BlackRock Advisors, LLC
9XX		13		273		-

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

4. CONTRACT CHARGES (CONTINUED)

					Surrender
	Account Fee		Benefit Fees		Charges
Columbia Funds Variable Insurance Trust
CSC	$	7	$	-	$	-
Columbia Funds Variable Insurance Trust I
NMT		15		-		273
MCC		22,114		62,977		102,638
CMG		1,551		3,726		2,987
NNG		13		-		-
NMI		1,730		3,683		7,371
Fidelity Variable Insurance Products Funds II
FL1		1,565		54,697		14,183
Fidelity Variable Insurance Products Funds III
FVB		2,682		6,004		1,201
FVM		35,248		4,046		169,819
Fidelity Variable Insurance Products Funds V
F10		1,885		1,648		5,816
F15		5,169		1,222		5,898
F20		9,369		1,486		36,116
First Eagle Variable Fund
SGI		20,541		73,794		63,809
Franklin Templeton Variable Insurance Products Trust
S17		609		41,406		31,191
ISC		8,206		12,508		41,534
FVS		10,992		2,157		19,532
SIC		1,389		4,056		16,810
FMS		24,131		58,788		77,015
TDM		31,788		-		87,973
FTG		9,140		1,924		43,891
FTI		98,703		-		538,512
Huntington VA Funds
HVD		5		1,007		67
HVG		2		244		33
HVI		3		676		33
HVE		-		1,363		-
HVM		-		21		-
HVC		-		1,270		50
HVS		-		-		-
HVN		-		536		-
HRS		-		466		-
HVR		-		171		-
HSS		-		1,223		49
Lazard
LRE		707		47,244		2,161
Lord Abbett Series Fund, Inc.
LAV		6,306		4,693		56,404
LA1		123,927		-		255,801
LA9		46,226		256		94,521
LA2		39,492		-		45,232

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

 4. CONTRACT CHARGES (CONTINUED)

					Surrender
	Account Fee		Benefit Fees		Charges
MFS Variable Insurance Trust II
MF7	$	20,232	$	4,729	$	122,492
BDS		30,578		-		5,317
MFD		6,735		-		23,510
CAS		191,680		-		38,597
MFF		5,907		-		8,695
EGS		130,597		-		1,282
EM1		4,845		-		14,314
EME		22,318		-		7,954
GG1		1,312		-		8,274
GGS		15,865		-		3,394
GG2		2,193		-		5,183
GGR		44,482		-		16,542
GT2		3,833		-		14,072
GTR		43,278		-		2,652
MFK		91,770		18,905		483,842
GSS		90,499		-		63,903
MFC		59,234		-		209,973
HYS		56,267		-		27,919
IG1		6,174		1,243		19,453
IGS		38,696		-		7,762
MI1		40,684		1,889		268,156
MII		31,676		-		8,755
M1B		29,555		-		145,358
MIS		121,566		-		22,331
MFL		80,135		-		412,930
MIT		246,113		-		78,208
MC1		10,741		-		24,598
MCS		15,244		-		1,455
MCV		6,945		-		24,045
MM1		82,338		-		1,383,870
MMS		108,685		-		45,539
M1A		61,440		-		191,975
NWD		36,694		-		18,657
RE1		7,770		-		30,408
RES		122,272		-		4,917
RG1		7,938		2,159		36,874
RGS		84,259		-		6,419
RI1		63,578		2,825		181,953
RIS		24,536		-		3,708
SI1		4,586		-		14,862
SIS		12,294		-		3,695

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

4. CONTRACT CHARGES (CONTINUED)

					Surrender
	Account Fee		Benefit Fees		Charges
MFS Variable Insurance Trust II (continued)
SVS	$	1,881	$	-	$	9,015
TE1		1,076		-		1,658
TEC		7,516		-		4,047
MFJ		236,060		37,757		1,293,798
TRS		305,368		-		70,946
MFE		23,336		13,943		130,390
UTS		91,870		-		39,845
MV1		32,437		77,872		200,021
MVS		67,405		-		19,923
Oppenheimer Variable Account Funds
OBV		609		1,133		4,354
OCA		10,078		773		42,346
OGG		8,477		1,547		39,301
OMG		133,545		14,900		939,651
OMS		5,090		-		11,400
PIMCO Variable Insurance Trust
PMB		3,202		2,344		10,483
PLD		154,035		-		1,349,501
PRR		17,973		79,528		103,179
PTR		63,757		147,051		422,227
PRA		1,039		-		1,786
PCR		6,212		64,003		43,325
Sun Capital Advisers Trust
1XX		13		46		59
SSA		1,467		122		14,127
3XX		-		-		-
5XX		10		46		84
SVV		5,553		59,094		39,526
2XX		13		46		-
LGF		250		73		357
SGC		158		18		60
S13		4		4,407		-
SDC		2,518		118		70,007
S15		217		74,188		35,011
7XX		25		-		-
8XX		100		402		-
6XX		227		136		5
IGB		6,268		1,681		39,942
SLC		11		-		-
S12		-		1,910		79
VSC		31,614		54,939		132,604
S14		807		12,909		12,127
4XX		20		234		160
SRE		79,259		46,203		212,606

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

4. CONTRACT CHARGES (CONTINUED)

					Surrender
	Account Fees		Benefit Fees		Charges
Sun Capital Advisers Trust (continued)
SC3	$	5,222	$	-	$	19,743
CMM		3,510		5,989		142,870
S16		809		54,587		11,532
Universal Institutional Funds Inc.
VKU		40		3,691		55
VKM		43		471		417
VKC		21		404		276
Van Kampen Life Insurance Trust
VLC		2,474		2,218		5,034
Wanger Advisors Trust
WTF		828		-		3,531
USC		15		-		412

A deduction, when applicable, is made for premium taxes or similar state or local taxes.  It is currently the policy of the Sponsor to deduct the taxes from the amount applied to provide an annuity at the time annuity payments commence. However, the Sponsor reserves the right to deduct such taxes when incurred.

5. RESERVE FOR VARIABLE ANNUITIES

Reserve for variable annuities represents the actuarial present value of future contract benefits for those contract holders who are in the payout phase of their contract and who chose the variable payout option. Annuity reserves are calculated using the 1983 Individual Annuitant Mortality Table and an assumed interest rate of at least 3% or 4% per year, for Regatta, Regatta Gold, Regatta Classic, and Regatta Platinum as stated in each participant’s contract or certificate, as applicable if the contract’s annuity commencement date is before January 1, 2000.  Annuity reserves are calculated using the 2000 Individual Annuitant Mortality Table at an assumed interest rate of at least 3% or 4% per year, for Regatta, Regatta Gold, Regatta Classic, and Regatta Platinum as stated in each participant’s contract or certificate, as applicable if the contract’s annuity commencement date is on or after January 1, 2000.  Annuity reserves are calculated using the 2000 Annuitant Mortality Table at an assumed interest rate of 3% for Regatta Extra, Regatta Access, Regatta Choice, Regatta Choice II, Regatta Flex II, Regatta Flex 4, Sun Life Financial Masters Choice, Sun Life Financial Masters Access, Sun Life Financial Masters Extra, Sun Life Financial Masters Flex, Sun Life Financial Masters IV, and Sun Life Financial Masters.

6.  INVESTMENT PURCHASES AND SALES

The cost of purchases and proceeds from sales of investments for the year ended December 31, 2008 were as follows:

	Purchases		Sales
AllianceBernstein Variable Products Series Fund Inc.
AVB	$	13,589,880	$	365,935
AN4		2,681,499		442,326
IVB		107,043,568		2,030,706
AVW		1,997,419		22,202

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

6.  INVESTMENT PURCHASES AND SALES (CONTINUED)

	Purchases		Sales
BlackRock Advisors, LLC
9XX	$	16,596,176	$	145,783
Columbia Funds Variable Insurance Trust
CSC		3,397		7,226
Columbia Funds Variable Insurance Trust I
NMT		9,976		9,631
MCC		106,463,304		7,699,033
CMG		10,103,359		1,075,099
NNG		85,896		5,014
NMI		11,304,674		2,938,861
Fidelity Variable Insurance Products Fund II
FL1		65,245,456		1,864,843
Fidelity Variable Insurance Products Fund III
FVB		15,580,223		4,989,661
FVM		76,833,313		19,522,984
Fidelity Variable Insurance Products Fund V
F10		9,919,392		3,096,356
F15		9,600,886		2,900,945
F20		15,244,364		7,445,419
First Eagle Variable Fund
SGI		131,235,570		19,762,222
Franklin Templeton Variable Insurance Products Trust
S17		46,998,123		1,330,631
ISC		36,434,397		7,808,760
FVS		10,376,552		11,749,771
SIC		7,233,819		2,388,661
FMS		84,162,936		16,621,888
TDM		49,271,189		11,627,453
FTG		12,066,049		7,330,651
FTI		102,255,217		85,618,237
Huntington VA Funds
HVD		1,136,987		34,137
HVG		382,414		13,990
HVI		608,555		35,048
HVE		1,354,474		66,417
HVM		14,517		1,199
HVC		569,350		28,304
HVS		143,582		26,963
HVN		263,108		4,481
HRS		245,888		2,955
HVR		186,484		2,409
HSS		871,741		45,143
Lazard
LRE		23,675,735		933,396
Lord Abbett Series Fund, Inc.
LAV		11,613,640		5,878,172
LA1		96,901,666		65,106,801
LA9		11,298,432		17,694,240
LA2		16,394,311		21,669,992

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

6.  INVESTMENT PURCHASES AND SALES (CONTINUED)

	Purchases		Sales
MFS Variable Insurance Trust II
MF7	$	16,653,476	$	30,429,394
BDS		14,836,875		34,244,960
MFD		2,300,613		5,097,616
CAS		11,571,492		73,461,250
MFF		2,176,266		4,639,018
EGS		6,873,316		47,723,067
EM1		10,488,286		8,456,256
EME		26,646,415		26,487,166
GG1		5,863,278		3,648,329
GGS		14,884,748		15,420,349
GG2		1,725,156		2,532,849
GGR		3,578,280		25,784,963
GT2		4,916,959		6,817,791
GTR		23,652,236		37,372,474
MFK		78,497,230		131,828,708
GSS		58,111,481		97,907,098
MFC		36,290,295		33,232,856
HYS		22,194,190		44,059,057
IG1		12,406,533		6,663,617
IGS		26,269,889		30,535,124
MI1		71,909,703		24,186,905
MII		9,286,895		30,689,224
M1B		6,619,366		26,846,334
MIS		5,271,209		65,769,284
MFL		29,369,006		62,290,731
MIT		16,154,042		126,492,034
MC1		4,298,854		8,173,093
MCS		2,818,800		13,752,692
MCV		5,048,876		5,533,097
MM1		168,449,762		159,366,850
MMS		145,281,008		134,989,648
M1A		40,732,107		33,258,372
NWD		18,518,671		27,211,259
RE1		5,406,625		5,818,254
RES		4,629,366		49,193,688
RG1		11,812,924		8,950,295
RGS		15,864,084		47,242,372
RI1		51,906,632		32,699,265
RIS		14,647,833		26,003,167
SI1		2,331,733		7,166,376
SIS		7,731,466		17,468,734
SVS		1,508,000		2,847,325
TE1		447,776		1,568,320
TEC		2,597,159		6,597,496

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

6.  INVESTMENT PURCHASES AND SALES (CONTINUED)

	Purchases		Sales
MFS Variable Insurance Trust II (continued)
MFJ	$	162,572,463	$	145,732,004
TRS		91,252,414		207,109,993
MFE		60,941,992		34,359,569
UTS		59,482,412		80,442,330
MV1		139,945,563		33,081,389
MVS		39,774,334		69,847,248
Oppenheimer Variable Account Funds
OBV		4,147,000		796,838
OCA		7,310,713		10,704,041
OGG		10,252,711		11,194,131
OMG		168,173,956		89,486,223
OMS		3,284,797		4,672,283
PIMCO Variable Insurance Trust
PMB		5,123,691		4,608,596
PLD		113,019,975		327,871,493
PRR		94,496,608		20,980,330
PTR		206,065,981		104,889,040
PRA		3,184,986		1,995,019
PCR		62,415,752		10,935,785
Sun Capital Advisers Trust
1XX		413,681		17,961
SSA		2,045,613		2,064,475
3XX		83,459		14,959
5XX		2,636,231		37,766
SVV		84,380,292		4,302,625
2XX		214,784		12,452
LGF		803,518		225,204
SGC		2,500,479		659,086
S13		5,380,618		1,192,411
SDC		44,491,378		8,626,442
S15		80,069,297		23,179,637
7XX		36,862,894		411,473
8XX		31,793,451		1,833,928
6XX		32,754,165		773,196
IGB		10,707,672		10,445,063
SLC		429,923		58,855
S12		2,480,997		248,356
VSC		77,518,965		13,557,394
S14		12,407,562		1,002,045
4XX		16,067,105		220,524
SRE		64,970,430		24,609,036
SC3		2,930,384		4,622,495
CMM		70,352,481		19,342,115
S16		46,673,560		1,477,905

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

6.  INVESTMENT PURCHASES AND SALES (CONTINUED)

	Purchases		Sales
Universal Institutional Funds Inc.
VKU	$	5,145,793	$	238,567
VKM		915,853		34,519
VKC		645,615		53,855
Van Kampen Life Insurance Trust
VLC		9,242,223		3,436,104
Wanger Advisors Trust
WTF		554,370		368,705
USC		19,006		9,608

7. FAIR VALUE MEASUREMENTS

The following section applies the SFAS No. 157 fair value hierarchy and disclosure requirements to the Variable Account’s financial instruments that are carried at fair value. SFAS No. 157 clarifies that fair value is an exit price, representing the amount that would be exchanged to sell an asset or transfer a liability in an orderly transaction between market participants. The statement establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels (i.e., Level 1, 2 and 3). Level 1 inputs are observable inputs that reflect quoted prices for identical assets or liabilities in active markets that the Variable Account has the ability to access at the measurement date. Level 2 inputs are observable inputs, other than quoted prices included in Level 1, for the asset or liability or prices for similar assets and liabilities. Level 3 inputs are unobservable inputs reflecting the reporting entity’s estimates of the assumptions that market participants would use in pricing the asset or liability. SFAS No. 157 requires that a fair value measurement technique include an adjustment for risks inherent in a particular valuation technique (such as a pricing model) and/or the risks inherent in the inputs to the model, if market participants would also include such an adjustment.

In compliance with SFAS No. 157, the Variable Account has categorized its financial instruments, based on the priority of the inputs to the valuation technique, into the three level hierarchy described above.  If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument.

The adoption did not have a material impact on the results of the Variable Account. As of December 31, 2008, the Funds of the Variable Account are identical to public mutual funds, but are only available to the contract holders of the Variable Account.  The inputs used to price the Funds are observable and are identical to mutual funds readily tradable in public markets and represent Level 1 assets under the SFAS No. 157 hierarchy levels. There were no Level 2 or 3 investments in the Variable Account.

Fair Value Hierarchy

The following table presents the Variable Account's categories for its assets measured at fair value on a recurring basis as of December 31, 2008:

	Level 1		Level 2		Level 3		Total
Assets
Investment in the Funds	$	9,016,416,400	$	-	$	-	$	9,016,416,400
Total assets measured at
fair value on a recurring basis	$	9,016,416,400	$	-	$	-	$	9,016,416,400

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

8. FINANCIAL HIGHLIGHTS

The summary of units outstanding, unit values (some of which may be rounded), net assets, investment income ratios, expense ratios (excluding expenses of the underlying funds), and the total return, for each of the five years in the period ended December 31, is as follows:

		At December 31					For the year ended December 31
			Unit Value				Investment		Expense Ratio					Total Return
		Units	lowest to highest			Net Assets	Income Ratio1		lowest to highest2					lowest to highest3
AVB
	2008 7	1,484,739	$    7.6393	to	$   7.6837	$  11,378,225	2.36	%	1.35	%	to	2.05	%	(23.61	)%	to	(23.16	)%
AN4
	2008 7	258,506	5.6447	to	5.6893	1,466,176	-		1.35		to	2.30		(43.55	)	to	(43.11	)
IVB
	2008 7	12,644,113	5.3309	to	5.3866	67,893,236	0.26		1.30		to	2.55		(46.69	)	to	(46.13	)
AVW
	2008 7	234,830	6.5521	to	6.5930	1,543,426	0.13		1.35		to	2.10		(34.48	)	to	(34.07	)
9XX
	2008 8	1,673,259	10.0629	to	10.0781	16,852,673	6.00		1.35		to	2.10		0.63		to	0.78
CSC
	2008	956	8.4535			8,097	0.50		1.65					(29.35)
	2007	1,509	11.9646	to	11.9984	18,101	0.26		1.55		to	1.65		(4.19	)	to	(4.10	)
	2006	1,411	12.2863	to	12.5560	17,650	0.26		1.55		to	1.65		17.40		to	17.52
	2005 4	583	10.6376	to	10.6460	6,200	-		1.55		to	1.65		6.38		to	6.46
NMT
	2008	8,756	8.6480	to	8.7482	76,146	-		1.35		to	1.65		(44.50	)	to	(44.33	)
	2007	8,690	15.5826	to	15.7150	135,980	0.53		1.35		to	1.65		17.31		to	17.67
	2006	6,233	13.0685	to	13.3555	83,087	0.12		1.35		to	1.65		17.77		to	18.13
	2005 4	462	11.2788			5,204	-		1.65					12.79
MCC
	2008	16,749,454	6.6062	to	6.7622	112,464,281	-		1.30		to	2.55		(45.21	)	to	(44.50	)
	2007 6	6,356,718	12.0821	to	12.1839	77,182,125	0.25		1.30		to	2.30		20.82		to	21.84
CMG
	2008	1,610,257	6.9442	to	7.0418	11,258,978	0.04		1.35		to	2.10		(40.87	)	to	(40.41	)
	2007 6	640,690	11.7433	to	11.8174	7,548,709	-		1.35		to	2.10		17.43		to	18.17
NNG
	2008	22,574	7.8041	to	7.8343	176,374	0.27		1.75		to	1.85		(40.57	)	to	(40.51	)
	2007	14,570	13.1322	to	13.1694	191,573	-		1.35		to	1.85		15.29		to	15.88
	2006	19,841	11.2465	to	11.4935	226,596	-		1.35		to	1.85		4.14		to	4.66
	2005 4	4,598	10.9467			50,336	-		1.75					9.47
NMI
	2008	1,018,267	6.2580	to	8.7297	8,660,311	1.36		1.30		to	2.10		(49.57	)	to	(49.16	)
	2007	522,074	12.3894	to	17.1796	8,752,767	0.08		1.35		to	2.30		16.91		to	24.52
	2006	11,385	14.2400	to	14.5526	165,345	0.19		1.35		to	1.65		21.19		to	21.56
	2005 4	1,299	11.9430	to	11.9524	15,506	0.08		1.55		to	1.65		19.43		to	19.52

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

8. FINANCIAL HIGHLIGHTS (CONTINUED)

				At December 31						For the year ended December 31
					Unit Value					Investment		Expense Ratio								Total Return
				Units	lowest to highest			Net Assets		Income Ratio1		lowest to highest2								lowest to highest3
FL1
	2008 7			7,352,882	$    6.6235	to	$   6.6786	48,955,023		2.15	%	1.30		%	to		2.30	%		(33.77		)%	to	(33.21		)%
FVB
		2008	2,412,176		6.8929	to	6.9899	16,761,837	2.12				1.35		to	2.10			(35.54		)		to		(35.04		)
		2007 6	1,234,324		10.6929	to	10.7604	13,240,999	3.47				1.35		to	2.10			6.93				to		7.60
FVM
		2008	16,082,303		6.8485	to	6.9838	111,490,874	0.25				1.30		to	2.35			(41.03		)		to		(40.40		)
		2007 6	11,884,177		11.6141	to	11.7169	138,777,417	0.47				1.30		to	2.35			16.14				to		17.17
F10
		2008	1,173,750		8.5543	to	8.8065	10,204,299	3.71				1.35		to	2.25			(26.86		)		to		(26.18		)
		2007	585,651		11.6955	to	11.9301	6,929,208	3.24				1.35		to	2.25			5.97				to		6.95
		2006	268,016		10.9973	to	11.1613	2,974,098	3.37				1.35		to	2.25			7.12				to		8.10
		2005 5	23,605		10.3185			243,563	0.87				1.35						3.18
F15
		2008	1,989,150		8.5186	to	8.7840	17,220,907	2.98				1.30		to	2.25			(28.94		)		to		(28.24		)
		2007	1,457,747		11.9744	to	12.2416	17,658,270	3.26				1.30		to	2.30			6.55				to		7.65
		2006	715,554		11.2046	to	11.3717	8,088,852	2.49				1.30		to	2.30			8.30				to		9.40
		2005 5	25,858		10.3850	to	10.3937	268,544	1.11				1.35		to	1.85			3.85				to		3.94
F20
		2008	3,412,422		8.0187	to	8.2819	27,908,761	2.45				1.30		to	2.30			(34.35		)		to		(33.68		)
		2007	2,944,857		12.2148	to	12.4873	36,444,849	2.52				1.30		to	2.30			7.42				to		8.53
		2006	1,308,908		11.3368	to	11.5058	14,984,152	3.47				1.30		to	2.30			9.14				to		10.26
		2005 5	10,353		10.4250	to	10.4346	107,943	0.83				1.35		to	1.90			4.25				to		4.35
SGI
		2008	17,385,339		8.4022	to	8.5521	147,791,354	1.76				1.35		to	2.30			(20.70		)		to		(19.92		)
		2007 6	7,791,583		10.6128	to	10.6798	82,974,328	-				1.35		to	2.10			6.13				to		6.80
S17
		2008 7	4,966,898		6.9997	to	7.0549	34,950,364	5.05				1.35		to	2.30			(30.00		)		to		(29.45		)
ISC
		2008	6,865,436		6.9325	to	7.0894	48,332,687	5.43				1.30		to	2.50			(31.42		)		to		(30.57		)
		2007 6	3,983,472		10.1431	to	10.2071	40,544,176	1.80				1.35		to	2.10			1.43				to		2.07
FVS
		2008	1,779,602		9.1117	to	13.1231	22,554,357	1.14				1.30		to	2.50			(34.70		)		to		(33.89		)
		2007	1,960,878		13.8819	to	19.8610	37,692,750	0.66				1.30		to	2.50			(4.83		)		to		(3.66		)
		2006	1,597,154		14.4771	to	20.6252	32,015,946	0.63				1.30		to	2.50			14.06				to		15.46
		2005	1,065,024		12.6580	to	17.8718	18,622,511	0.75				1.30		to	2.30			6.27				to		7.36
		2004	784,791		11.8836	to	16.6555	12,898,583	0.18				1.25		to	2.30			18.84				to		22.07
SIC
		2008	997,893		8.9508	to	9.0765	8,998,750	6.90				1.35		to	2.10			(13.11		)		to		(12.44		)
		2007 6	556,077		10.3009	to	10.3659	5,745,387	2.79				1.35		to	2.10			3.01				to		3.66
FMS
		2008	10,659,488		8.7183	to	11.2279	116,498,829	3.43				1.30		to	2.35			(38.59		)		to		(37.93		)
		2007	6,318,116		14.1466	to	18.0981	111,152,728	1.37				1.30		to	2.35			1.03				to		2.13
		2006	3,368,514		13.9177	to	17.7303	58,070,328	1.22				1.30		to	2.35			15.61				to		16.85
		2005	1,886,907		12.0251	to	15.1818	27,978,414	0.87				1.30		to	2.30			8.02				to		9.12
		2004	1,146,446		11.1069	to	13.9198	15,778,515	0.75				1.25		to	2.30			10.03				to		11.15

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

8. FINANCIAL HIGHLIGHTS (CONTINUED)

		At December 31								For the year ended December 31
				Unit Value						Investment		Expense Ratio						Total Return
		Units		lowest to highest				Net Assets		Income Ratio1		lowest to highest2						lowest to highest3
TDM
	2008		6,078,724	$     8.1300	to	$    8.4105	$    50,460,099		2.68		%	1.30	%	to	2.35	%	(53.82		) %	to	(53.32	)%
	2007		4,360,786	17.6061	to	18.0187	77,853,382		1.85			1.30		to	2.35		25.74			to	27.10
	2006		511,631	13.9683	to	14.1765	7,216,012		1.18			1.30		to	2.30		25.15			to	26.43
	2005 5		82,552	11.1943	to	11.2121	924,837		-			1.35		to	2.30		11.94			to	12.12
FTG
	2008		2,275,331	8.2593	to	11.7171	25,517,931		1.77			1.30		to	2.35		(43.69		)	to	(43.08	)
	2007		2,128,221	14.6136	to	20.5944	41,968,435		1.30			1.30		to	2.35		(0.07		)	to	1.01
	2006		1,134,629	14.5363	to	20.3990	22,093,074		1.21			1.30		to	2.35		18.95			to	20.23
	2005		518,022	12.2061	to	16.9753	8,461,348		0.99			1.30		to	2.30		6.37			to	7.45
	2004 9		185,270	11.4492	to	15.8060	2,822,852		1.01			1.25		to	2.30		13.35			to	14.58
FTI
	2008		22,475,438	9.8476	to	12.9916	280,682,732		2.33			1.30		to	2.55		(41.91		)	to	(41.16	)
	2007		23,555,118	16.8727	to	22.1685	502,292,060		1.98			1.30		to	2.55		12.50			to	13.95
	2006		23,906,416	14.9290	to	19.5344	449,411,615		1.19			1.30		to	2.55		18.36			to	19.87
	2005		15,021,292	12.5557	to	16.3623	236,905,307		1.11			1.30		to	2.55		7.37			to	8.74
	2004		8,240,520	11.6449	to	15.1080	120,369,576		1.01			1.25		to	2.55		15.50			to	16.92
HVD
	2008 10		116,273	7.0493	to	7.0906	822,517		19.06			1.35		to	1.90		(29.46		)	to	(29.06	)
HVG
	2008 10		43,321	6.2416	to	6.2781	271,371		1.69			1.35		to	1.90		(39.09		)	to	(38.75	)
HVI
	2008 10		71,105	6.1669	to	6.2162	440,962		10.28			1.35		to	2.10		(39.15		)	to	(38.68	)
HVE
	2008 10		153,543	5.9849	to	6.0328	923,861		5.38			1.35		to	2.10		(41.18		)	to	(41.36	)
HVM
	2008 10		1,521	6.5957	to	6.6343	10,047		3.05			1.35		to	1.90		(35.17		)	to	(34.81	)
HVC
	2008 10		64,289	6.1242	to	6.1732	395,811		1.82			1.35		to	2.10		(40.12		)	to	(39.66	)
HVS
	2008 10		10,776	10.1182	to	10.1611	109,325		9.36			1.35		to	1.75		0.36			to	0.77
HVN
	2008 10		36,987	4.7757	to	4.8140	177,544		0.68			1.35		to	2.10		(53.65		)	to	(53.30	)
HRS
	2008 10		34,039	4.8112	to	4.8356	164,218		1.41			1.35		to	2.10		(51.89		)	to	(51.64	)
HVR
	2008 10		22,935	5.8258	to	5.8599	134,085		4.24			1.35		to	1.90		(43.17		)	to	(42.85	)
HSS
	2008 10		107,313	5.8910	to	5.9382	635,831		0.64			1.35		to	2.10		(42.47		)	to	(42.03	)
LRE
	2008 7		2,539,966	5.4621	to	5.5191	13,975,390		6.16			1.30		to	2.55		(45.38		)	to	(44.81	)

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

8. FINANCIAL HIGHLIGHTS (CONTINUED)

		At December 31								For the year ended December 31
				Unit Value						Investment		Expense Ratio						Total Return
		Units		lowest to highest				Net Assets		Income Ratio1		lowest to highest2						lowest to highest3
LAV
	2008	2,597,685	$    9.9573		to	$  10.4851	$   26,664,191		0.59		%		1.30	%	to	2.35	%	(30.35	)%	to	(29.60	)%
	2007	2,132,144	14.3086		to	14.9014	31,216,819		0.58				1.30		to	2.30		4.25		to	5.33
	2006	1,530,051	13.6347		to	14.1549	21,338,547		0.81				1.35		to	2.30		12.01		to	13.10
	2005	673,060	12.1780		to	12.5157	8,330,401		0.45				1.35		to	2.30		4.50		to	5.51
	2004 9	344,432	11.6270		to	11.8619	4,063,023		0.73				1.25		to	2.30		13.04		to	16.27
LA1
	2008	32,204,879	8.3720		to	11.6127	357,720,551		1.55				1.30		to	2.55		(38.05	)	to	(37.25	)
	2007	30,273,162	13.4519		to	18.5163	537,440,084		1.57				1.30		to	2.55		0.79		to	2.09
	2006	17,651,095	13.2854		to	18.1473	306,867,936		1.54				1.30		to	2.55		14.29		to	15.75
	2005	11,563,674	11.5708		to	15.6855	174,257,651		1.17				1.30		to	2.55		0.62		to	1.91
	2004	8,986,821	11.4511		to	15.3996	133,211,678		1.31				1.25		to	2.55		9.77		to	14.82
LA9
	2008	4,668,640	8.4333		to	9.7176	41,167,153		-				1.30		to	2.55		(39.83	)	to	(39.05	)
	2007	5,069,578	14.0149		to	15.9436	73,578,930		-				1.30		to	2.55		18.17		to	19.70
	2006	4,902,578	11.8596		to	13.3200	59,707,503		-				1.30		to	2.55		5.15		to	6.50
	2005	2,675,259	11.2788		to	12.5076	30,716,359		-				1.30		to	2.55		1.96		to	3.27
	2004 9	1,203,674	11.0616		to	12.1119	13,428,847		-				1.25		to	2.55		8.39		to	21.12
LA2
	2008	5,303,970	8.0841		to	11.2837	57,317,730		1.26				1.30		to	2.55		(40.91	)	to	(40.15	)
	2007	5,809,005	13.6038		to	18.8622	105,217,891		0.47				1.30		to	2.55		(2.00	)	to	(0.73	)
	2006	4,471,238	13.7695		to	19.0113	81,834,682		0.63				1.30		to	2.55		9.38		to	10.78
	2005	2,743,587	12.5489		to	17.1707	45,585,122		0.51				1.30		to	2.55		5.47		to	6.82
	2004	2,592,930	11.8315		to	16.0827	40,628,899		0.51				1.25		to	2.55		18.32		to	22.36
MF7
	2008	4,635,465	8.7578		to	11.6903	51,141,515		6.74				1.00		to	2.50		(13.00	)	to	(11.66	)
	2007	6,110,178	9.9948		to	13.2334	76,655,526		5.69				1.00		to	2.55		(0.05	)	to	2.24
	2006	6,133,332	10.5636		to	12.9429	75,695,316		5.91				1.00		to	2.55		2.20		to	3.82
	2005	6,270,011	10.3358		to	12.4661	75,047,190		5.84				1.00		to	2.55		(0.99	)	to	0.58
	2004	6,078,648	10.4393		to	12.3943	72,842,791		5.91				1.00		to	2.55		3.20		to	4.85
BDS
	2008	5,203,097	12.3042		to	13.7497	69,202,403		7.02				1.15		to	1.85		(12.19	)	to	(11.55	)
	2007	6,896,916	14.1153		to	15.5456	103,879,319		6.26				1.15		to	1.85		1.60		to	2.35
	2006	8,059,857	13.7634		to	15.1894	119,031,240		6.18				1.15		to	1.85		3.26		to	4.00
	2005	9,925,405	13.3159		to	14.6046	141,413,865		6.16				1.15		to	1.85		(0.12	)	to	0.60
	2004	11,381,676	13.3189		to	14.5404	161,562,164		6.19				1.15		to	1.85		4.28		to	5.04
MFD
	2008	2,225,709	6.0658		to	10.3830	14,426,457		0.17				1.00		to	2.30		(38.67	)	to	(37.85	)
	2007	2,498,904	9.8452		to	16.7408	26,279,858		-				1.00		to	2.30		8.36		to	9.81
	2006	3,012,379	9.0437		to	15.2763	29,113,014		-				1.00		to	2.30		3.62		to	5.00
	2005	3,518,217	8.6877		to	14.5788	32,540,878		0.37				1.00		to	2.30		(1.67	)	to	(0.37	)
	2004	3,522,979	8.7952		to	14.6624	32,971,898		-				1.00		to	2.10		8.23		to	9.67

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

8. FINANCIAL HIGHLIGHTS (CONTINUED)

		At December 31								For the year ended December 31
				Unit Value						Investment		Expense Ratio						Total Return
		Units		lowest to highest				Net Assets		Income Ratio1		lowest to highest2						lowest to highest3
CAS
	2008	20,862,870	$    3.8114		to	$  19.2780	$ 197,442,108		0.50		%		1.00	%	to	1.85	%	(38.19	) %	to	(37.66	)%
	2007	26,120,429	6.1637		to	33.9807	385,511,764		0.20				1.00		to	1.85		9.07		to	10.02
	2006	33,490,792	5.6481		to	28.3245	450,366,226		0.20				1.00		to	1.85		4.41		to	5.31
	2005	41,628,520	5.4069		to	26.9998	548,698,901		0.64				1.00		to	1.85		(0.95	)	to	(0.09	)
	2004	41,868,827	5.4557		to	27.1281	564,955,111		0.06				1.00		to	1.85		8.96		to	9.91
MFF
	2008	1,316,168	7.3320		to	12.8024	11,206,403		-				1.00		to	2.30		(38.97	)	to	(38.16	)
	2007	1,464,903	11.9589		to	20.7435	20,689,801		-				1.00		to	2.30		18.20		to	19.78
	2006	1,615,364	10.0706		to	17.3526	18,737,905		-				1.00		to	2.30		5.23		to	6.62
	2005	1,747,003	9.5267		to	16.3077	18,519,452		-				1.00		to	2.30		6.40		to	7.81
	2004	1,863,783	8.9127		to	15.1566	18,305,802		-				1.00		to	2.25		10.36		to	11.83
EGS
	2008	14,615,786	3.8453		to	16.3806	119,597,619		0.25				1.00		to	1.85		(38.50	)	to	(37.96	)
	2007	18,485,750	6.2491		to	26.5065	238,240,356		-				1.00		to	1.85		18.99		to	20.03
	2006	24,616,070	5.2490		to	22.1693	263,364,457		-				1.00		to	1.85		6.03		to	6.94
	2005	30,633,904	4.9480		to	20.8097	315,569,435		-				1.00		to	1.85		7.12		to	8.05
	2004	37,868,174	4.6166		to	19.3335	375,214,309		-				1.00		to	1.85		11.14		to	12.11
EM1
	2008	710,442	8.1987		to	19.6098	8,295,305		1.08				1.15		to	2.50		(56.32	)	to	(55.71	)
	2007	808,424	18.7701		to	44.3000	22,821,441		1.85				1.15		to	2.50		31.88		to	33.72
	2006	813,675	14.2242		to	33.1470	18,546,786		0.90				1.15		to	2.50		26.66		to	28.41
	2005	441,657	11.2417		to	25.8270	10,352,754		0.51				1.15		to	2.25		12.42		to	34.88
	2004	340,870	15.4356		to	19.1577	6,301,071		0.84				1.15		to	1.85		24.28		to	25.42
EME
	2008	1,900,227	14.3267		to	17.2377	29,955,875		1.39				1.00		to	1.85		(55.93	)	to	(55.54	)
	2007	2,587,959	32.5066		to	38.9119	91,911,417		2.02				1.00		to	1.85		33.14		to	34.29
	2006	3,300,914	24.4161		to	29.5347	87,687,610		1.12				1.00		to	1.85		27.76		to	28.87
	2005	3,923,235	19.1105		to	22.6447	81,260,933		0.68				1.00		to	1.85		34.24		to	35.40
	2004	3,707,620	14.2359		to	16.7834	57,029,517		1.02				1.00		to	1.85		24.82		to	25.91
GG1
	2008	410,545	13.8804		to	16.2887	6,320,695		7.46				1.15		to	2.05		7.86		to	8.85
	2007	284,890	12.8359		to	15.0094	4,022,897		-				1.15		to	1.85		6.46		to	7.23
	2006	283,792	10.4123		to	14.0408	3,762,442		-				1.15		to	1.85		2.77		to	3.50
	2005	327,850	11.8827		to	13.6067	4,232,469		10.41				1.15		to	1.85		(9.20	)	to	(8.56	)
	2004	340,389	13.0273		to	14.9250	4,820,154		12.26				1.15		to	1.85		7.76		to	8.53
GGS
	2008	1,783,352	15.5702		to	22.3616	33,534,157		8.21				1.00		to	1.85		8.36		to	9.30
	2007	1,951,821	14.3685		to	25.1849	33,658,588		-				1.00		to	1.85		6.68		to	7.61
	2006	2,234,976	13.4688		to	19.1593	36,201,209		-				1.00		to	1.85		3.03		to	3.92
	2005	2,809,654	13.0728		to	18.5077	43,876,264		10.70				1.00		to	1.85		(8.92	)	to	(8.13	)
	2004	3,280,149	14.3527		to	20.2232	56,460,907		12.59				1.00		to	1.85		8.02		to	8.96

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

8. FINANCIAL HIGHLIGHTS (CONTINUED)

		At December 31						For the year ended December 31
			Unit Value					Investment		Expense Ratio						Total Return
		Units	lowest to highest				Net Assets	Income Ratio1		lowest to highest2						lowest to highest3
GG2
	2008	440,668		$    9.3883	to	$ 13.1983	$     4,602,950	0.76	%		1.00	%	to	2.30	%		(40.48	)%	to	(39.68	)%
	2007	494,318		15.6997	to	21.9248	8,590,818	1.43			1.00		to	2.10			10.65		to	11.90
	2006	548,900		14.1520	to	19.6328	8,624,775	0.33			1.00		to	2.10			14.55		to	15.84
	2005	552,979		12.3227	to	16.9829	7,538,233	0.23			1.00		to	2.10			7.44		to	8.64
	2004	614,351		11.4406	to	15.6639	7,740,130	0.31			1.00		to	2.10			12.75		to	14.25
GGR
	2008	4,323,307		6.5693	to	20.2403	59,243,931	1.03			1.00		to	1.85			(40.07	)	to	(39.55)
	2007	5,626,403		10.9557	to	33.6111	124,791,013	1.69			1.00		to	1.85			11.17		to	12.13
	2006	7,063,308		9.8502	to	30.0902	140,323,466	0.56			1.00		to	1.85			15.21		to	16.20
	2005	8,221,692		8.5455	to	25.9940	145,928,483	0.47			1.00		to	1.85			8.00		to	8.94
	2004	9,885,010		7.9081	to	23.9533	165,248,378	0.48			1.00		to	1.85			13.47		to	14.45
GT2
	2008	873,958		13.6216	to	15.4312	12,354,205	5.24			1.15		to	1.85			(17.15	)	to	(16.56)
	2007	1,161,693		16.4422	to	18.5035	19,774,396	1.99			1.15		to	2.05			6.39		to	7.37
	2006	1,149,650		14.9739	to	17.2425	18,291,763	0.66			1.15		to	2.05			14.52		to	15.57
	2005	1,195,804		13.4408	to	14.9273	16,498,684	3.81			1.00		to	2.05			1.42		to	2.51
	2004	1,049,400		13.2252	to	14.5915	14,165,553	2.33			1.15		to	2.05			14.47		to	15.53
GTR
	2008	4,598,290		13.1070	to	25.2490	89,967,387	5.42			1.15		to	1.85			(16.99	)	to	(16.39)
	2007	6,117,487		15.7818	to	30.2720	140,411,531	2.22			1.15		to	1.85			6.84		to	7.62
	2006	7,258,332		14.7633	to	28.1974	156,233,915	0.92			1.15		to	1.85			15.11		to	15.95
	2005	8,201,461		12.8186	to	24.3793	156,049,255	4.27			1.15		to	1.85			1.85		to	2.59
	2004	8,363,603		12.5796	to	23.8232	160,297,490	2.50			1.15		to	1.85			14.94		to	15.78
MFK
	2008	19,623,926		10.9374	to	13.3271	236,492,256	5.08			1.00		to	2.55			5.53		to	7.21
	2007	24,954,225		10.3645	to	12.4309	281,758,050	4.76			1.00		to	2.55			4.17		to	5.83
	2006	25,308,705		9.9499	to	11.7457	272,332,913	4.56			1.00		to	2.55			0.84		to	2.44
	2005	19,255,861		9.8669	to	11.4658	205,291,955	4.32			1.00		to	2.55			(0.59	)	to	0.99
	2004	15,785,190		9.9252	to	11.3535	169,069,438	5.19			1.00		to	2.55			0.86		to	2.51
GSS
	2008	12,130,442		13.8850	to	22.2887	213,486,283	5.57			1.15		to	1.85			6.53		to	7.31
	2007	15,336,252		13.0202	to	24.6917	247,658,015	5.01			1.00		to	1.85			5.19		to	6.10
	2006	18,582,159		12.3657	to	19.7009	283,320,766	5.07			1.00		to	1.85			1.77		to	2.65
	2005	22,849,712		12.1380	to	19.2660	344,042,581	4.75			1.00		to	1.85			0.42		to	1.28
	2004	26,991,543		12.0756	to	19.0953	406,733,201	5.63			1.00		to	1.85			1.84		to	2.72
MFC
	2008	9,170,448		7.8311	to	10.4078	91,248,270	9.27			1.00		to	2.55			(31.44	)	to	(30.35	)
	2007	9,231,715		11.3703	to	14.9734	132,587,722	7.08			1.00		to	2.55			(1.04	)	to	0.54
	2006	8,020,269		11.4368	to	14.9231	114,743,896	8.08			1.00		to	2.55			7.25		to	8.95
	2005	7,227,900		10.6154	to	13.7254	95,167,528	7.45			1.00		to	2.55			(0.66	)	to	0.92
	2004	7,034,638		10.6489	to	13.6280	92,066,666	6.45			1.00		to	2.55			6.49		to	8.27

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

8. FINANCIAL HIGHLIGHTS (CONTINUED)

		At December 31						For the year ended December 31
			Unit Value					Investment		Expense Ratio						Total Return
		Units	lowest to highest				Net Assets	Income Ratio1		lowest to highest2						lowest to highest3
HYS
	2008	6,745,555		$    8.8989	to	$ 17.5591	$   78,775,038	9.54	%		1.00	%	to	1.85	%		(30.97	)%	to	(30.37	)%
	2007	8,811,448		12.8913	to	30.7416	145,304,823	7.61			1.00		to	1.85			0.03		to	0.90
	2006	11,347,579		12.8873	to	25.1862	186,188,557	8.37			1.00		to	1.85			8.36		to	9.29
	2005	14,094,783		11.8935	to	23.1337	214,798,743	8.45			1.00		to	1.85			0.31		to	1.17
	2004	17,473,238		11.8536	to	22.9531	267,795,978	7.78			1.00		to	1.85			7.51		to	8.45
IG1
	2008	1,645,540		6.9084	to	15.6748	16,461,538	1.09			1.00		to	2.10			(41.23	)	to	(40.56	)
	2007	1,455,023		11.7343	to	26.4253	26,435,969	1.10			1.00		to	2.30			13.87		to	18.28
	2006	1,126,228		17.9775	to	23.0061	20,902,161	0.45			1.00		to	2.05			23.18		to	24.50
	2005	1,221,898		14.5644	to	18.5160	18,247,713	0.70			1.00		to	2.05			12.28		to	13.48
	2004	1,328,474		12.9450	to	16.3494	17,567,913	0.38			1.00		to	2.05			16.14		to	17.39
IGS
	2008	5,162,799		9.7806	to	13.5618	59,050,183	1.33			1.00		to	1.85			(40.94	)	to	(40.43	)
	2007	6,494,572		16.5529	to	22.7974	124,612,558	1.41			1.00		to	1.85			14.42		to	15.41
	2006	7,850,731		14.4597	to	19.7805	131,169,208	0.68			1.00		to	1.85			23.72		to	24.78
	2005	8,840,529		11.6819	to	15.8737	119,334,575	0.93			1.00		to	1.85			12.79		to	13.76
	2004	9,969,224		10.3519	to	13.9724	119,165,042	0.56			1.00		to	1.85			16.73		to	17.75
MI1
	2008	22,385,237		7.2338	to	17.6653	167,431,706	0.93			1.15		to	2.35			(33.19	)	to	(32.37	)
	2007	18,793,055		10.8274	to	26.1320	211,701,396	0.76			1.15		to	2.35			4.83		to	9.23
	2006	703,270		20.2099	to	24.7123	14,701,003	1.07			1.15		to	2.05			26.32		to	27.47
	2005	661,889		15.9668	to	19.3959	10,873,687	0.88			1.15		to	1.85			12.81		to	13.62
	2004	464,476		14.1533	to	17.0802	6,685,849	0.67			1.15		to	1.85			25.37		to	26.27
MII
	2008	3,503,901		12.4412	to	19.7453	56,116,944	1.05			1.00		to	1.85			(32.68	)	to	(32.10	)
	2007	4,858,869		18.4723	to	29.1921	113,714,035	1.65			1.00		to	1.85			5.35		to	6.27
	2006	5,838,111		17.5246	to	27.5761	129,700,838	1.24			1.00		to	1.85			26.84		to	27.94
	2005	5,984,457		13.8089	to	21.6372	105,062,829	1.11			1.00		to	1.85			13.09		to	14.07
	2004	5,206,659		12.2041	to	19.0416	82,150,477	0.73			1.00		to	1.85			25.65		to	26.74
M1B
	2008	6,598,033		6.4453	to	9.9977	53,180,723	0.34			1.00		to	2.55			(38.96	)	to	(37.98	)
	2007	8,274,394		10.4829	to	16.1531	107,971,328	-			1.00		to	2.55			8.41		to	10.15
	2006	6,763,495		9.6001	to	14.6951	78,640,745	-			1.00		to	2.55			4.68		to	6.34
	2005	7,285,892		9.1054	to	13.8464	78,659,290	0.28			1.00		to	2.55			1.51		to	3.12
	2004	7,277,585		8.9065	to	13.4550	75,706,711	-			1.00		to	2.55			6.56		to	8.26
MIS
	2008	22,457,175		4.3169	to	7.8323	134,937,104	0.63			1.00		to	1.85			(38.38	)	to	(37.85	)
	2007	30,064,891		7.0025	to	12.6193	286,174,371	0.36			1.00		to	1.85			9.46		to	10.41
	2006	35,387,641		6.3943	to	11.4456	309,578,994	0.10			1.00		to	1.85			5.68		to	6.59
	2005	43,809,878		6.0476	to	10.7527	365,666,252	0.52			1.00		to	1.85			2.45		to	3.33
	2004	52,900,145		5.9002	to	10.4204	431,900,622	0.07			1.00		to	1.85			7.58		to	8.51

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

8. FINANCIAL HIGHLIGHTS (CONTINUED)

		At December 31						For the year ended December 31
			Unit Value					Investment		Expense Ratio						Total Return
		Units	lowest to highest				Net Assets	Income Ratio1		lowest to highest2						lowest to highest3
MFL
	2008	17,800,165		$    7.5820	to	$ 11.0833	$ 177,022,413	1.22	%		1.00	%	to	2.55	%		(36.78	)%	to	(35.77	)%
	2007	19,982,665		11.9080	to	17.2918	310,717,943	1.00			1.00		to	2.55			2.98		to	4.63
	2006	19,922,745		11.4804	to	16.5607	295,643,335	0.60			1.00		to	2.55			10.17		to	11.91
	2005	14,452,676		10.3470	to	14.8278	185,054,959	0.84			1.00		to	2.55			4.69		to	6.35
	2004	7,171,814		9.8134	to	13.9709	75,087,391	0.83			1.00		to	2.25			9.16		to	14.32
MIT
	2008	28,659,325		6.3519	to	22.7364	312,978,185	1.52			1.00		to	1.85			(36.16	)	to	(35.60	)
	2007	36,869,229		9.9446	to	35.4439	616,787,038	1.18			1.00		to	1.85			3.98		to	4.88
	2006	47,922,260		9.5591	to	33.9245	759,598,902	0.82			1.00		to	1.85			11.21		to	12.17
	2005	59,467,044		8.5910	to	30.3594	858,600,168	0.97			1.00		to	1.85			5.72		to	6.63
	2004	71,195,865		8.1222	to	28.5811	993,646,065	1.03			1.00		to	1.85			9.91		to	10.86
MC1
	2008	2,534,232		3.9148	to	8.7136	14,019,215	-			1.00		to	2.50			(52.65	)	to	(51.92	)
	2007	2,822,330		8.2136	to	18.1607	31,670,209	-			1.00		to	2.55			6.78		to	8.49
	2006	3,386,735		7.6371	to	16.7744	35,351,366	-			1.00		to	2.55			(0.40	)	to	1.18
	2005	3,978,465		7.6135	to	16.6129	40,389,836	-			1.00		to	2.55			0.16		to	1.75
	2004	4,467,480		7.5470	to	16.3597	44,072,943	-			1.00		to	2.55			11.36		to	13.14
MCS
	2008	5,304,731		2.7880	to	3.0536	15,794,789	-			1.15		to	1.85			(52.25	)	to	(51.90	)
	2007	7,235,851		5.8323	to	6.3480	44,914,140	-			1.15		to	1.85			7.80		to	8.59
	2006	9,323,613		5.4047	to	5.8972	53,469,128	-			1.15		to	1.85			0.45		to	1.18
	2005	12,048,420		5.3749	to	5.7777	68,651,430	-			1.15		to	1.85			1.20		to	1.93
	2004	14,935,080		5.3057	to	5.6681	83,825,087	-			1.15		to	1.85			12.50		to	13.32
MCV
	2008	1,163,909		7.7492	to	10.8513	11,046,492	1.14			1.15		to	2.50			(43.77	)	to	(42.98	)
	2007	1,314,251		13.7171	to	19.0418	21,843,631	-			1.15		to	2.55			(1.00	)	to	0.43
	2006	1,467,221		13.7842	to	18.9695	24,368,309	-			1.15		to	2.55			8.19		to	9.74
	2005	1,682,084		12.6762	to	17.2950	25,549,351	-			1.15		to	2.55			4.67		to	6.17
	2004	1,649,863		12.0488	to	16.2981	23,975,740	-			1.15		to	2.55			18.64		to	20.35
MM1
	2008	22,125,007		9.9147	to	10.8617	228,570,494	1.77			1.00		to	2.55			(0.80	)	to	0.78
	2007	21,267,373		9.9894	to	10.7777	219,489,293	4.47			1.00		to	2.55			1.91		to	3.54
	2006	15,330,003		9.7773	to	10.4095	153,918,543	4.28			1.00		to	2.55			1.68		to	3.29
	2005	11,958,338		9.5912	to	10.1022	117,199,576	2.49			1.00		to	2.55			(0.14)		to	1.44
	2004	8,633,307		9.5804	to	9.9889	84,038,433	0.64			1.00		to	2.55			(2.00	)	to	(0.11	)
MMS
	2008	15,465,643		10.7978	to	14.4657	198,802,618	2.02			1.00		to	1.85			0.14		to	1.01
	2007	14,742,422		10.7767	to	16.0468	188,524,112	4.78			1.00		to	1.85			2.90		to	3.80
	2006	14,751,948		10.3731	to	13.9040	182,628,575	4.56			1.00		to	1.85			2.66		to	3.55
	2005	15,938,732		10.1733	to	13.4788	191,927,367	2.67			1.00		to	1.85			0.82		to	1.70
	2004	19,134,186		10.0645	to	13.3052	228,260,816	0.80			1.00		to	1.85			(1.04	)	to	(0.19	)

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

8. FINANCIAL HIGHLIGHTS (CONTINUED)

		At December 31								For the year ended December 31
				Unit Value						Investment			Expense Ratio						Total Return
		Units		lowest to highest				Net Assets		Income Ratio1			lowest to highest2						lowest to highest3
M1A
	2008		8,571,360		$    6.2340	to	$ 10.1266	$   77,933,950	-		%	1.00		%	to	2.55	%	(41.31		)%	to	(40.37	)%
	2007		9,051,054		10.5672	to	17.0170	138,196,204	-			1.00			to	2.55		(0.35		)	to	1.25
	2006		8,544,360		10.5494	to	16.8413	128,060,378	-			1.00			to	2.55		10.02			to	11.77
	2005		6,422,025		9.5394	to	15.0983	82,239,579	-			1.00			to	2.55		2.29			to	3.91
	2004		4,707,914		9.2786	to	14.5596	54,151,676	-			1.00			to	2.55		4.47			to	26.21
NWD
	2008		6,367,778		5.1269	to	10.2431	45,645,465	-			1.00			to	1.85		(40.70		)	to	(40.18	)
	2007		8,362,104		8.6186	to	17.1469	99,019,794	-			1.00			to	1.85		0.65			to	1.53
	2006		10,624,368		8.5367	to	16.9125	125,408,472	-			1.00			to	1.85		11.08			to	12.04
	2005		12,797,342		7.6617	to	15.1157	137,501,927	-			1.00			to	1.85		3.27			to	4.16
	2004		15,598,558		7.3969	to	14.5325	164,314,000	-			1.00			to	1.85		5.49			to	6.41
RE1
	2008		1,840,427		7.7566	to	11.9309	17,668,776	0.37			1.10			to	2.30		(38.03		)	to	(37.27	)
	2007		1,853,837		12.4596	to	19.0382	28,036,878	0.61			1.10			to	2.30		10.36			to	11.72
	2006		2,112,711		11.2383	to	17.0586	28,453,629	0.42			1.10			to	2.30		7.79			to	9.11
	2005		2,260,668		10.3786	to	15.6503	27,431,958	0.37			1.10			to	2.25		5.29			to	6.53
	2004		2,212,955		9.8168	to	14.7062	24,899,828	0.76			1.10			to	2.10		13.05			to	17.40
RES
	2008		11,057,121		5.4090	to	18.0325	129,451,544	0.67			1.15			to	1.85		(37.61		)	to	(37.16	)
	2007		14,094,806		8.6654	to	28.7651	257,818,176	0.84			1.15			to	1.85		11.13			to	11.94
	2006		18,185,522		7.7933	to	25.7598	297,727,331	0.66			1.15			to	1.85		8.52			to	9.30
	2005		23,187,138		7.1781	to	23.6255	352,950,696	0.58			1.15			to	1.85		6.02			to	6.78
	2004		28,414,936		6.7673	to	22.1793	416,020,180	0.93			1.15			to	1.85		13.68			to	14.51
RG1
	2008		2,883,536		6.4648	to	11.3256	21,338,733	0.44			1.00			to	2.30		(40.21		)	to	(39.41	)
	2007		2,707,973		10.8166	to	18.7295	34,458,186	0.16			1.00			to	2.25		6.17			to	8.99
	2006		979,416		12.3578	to	17.4884	12,643,624	0.41			1.00			to	2.05		11.12			to	12.31
	2005		870,283		11.1213	to	15.6035	9,951,870	0.44			1.10			to	2.05		4.21			to	5.22
	2004		905,199		10.6715	to	14.8441	9,872,571	0.47			1.10			to	2.05		11.94			to	13.03
RGS
	2008		11,214,418		6.9635	to	10.7101	95,812,820	0.65			1.00			to	1.85		(39.77		)	to	(39.24	)
	2007		14,862,669		11.5494	to	17.6526	208,241,408	0.23			1.00			to	1.85		6.69			to	7.62
	2006		6,003,584		10.8138	to	16.4253	77,970,401	0.60			1.00			to	1.85		11.64			to	12.60
	2005		6,688,530		9.7530	to	14.6071	78,190,704	0.69			1.00			to	1.85		4.59			to	5.49
	2004		7,171,116		9.2426	to	13.8656	80,437,148	0.67			1.00			to	1.85		12.50			to	13.48
RI1
	2008		7,836,028		10.4310	to	14.5578	107,197,293	1.49			1.00			to	2.55		(44.07		)	to	(43.17	)
	2007		7,944,489		18.5446	to	25.6706	191,456,875	0.92			1.00			to	2.55		9.92			to	11.67
	2006		6,902,034		16.7358	to	23.0340	148,626,673	0.93			1.00			to	2.55		24.02			to	25.98
	2005		5,123,155		13.4517	to	18.3201	87,231,876	0.59			1.15			to	2.55		13.24			to	14.86
	2004		4,045,282		11.8126	to	15.9581	59,726,643	0.38			1.15			to	2.55		17.87			to	19.57

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

8. FINANCIAL HIGHLIGHTS (CONTINUED)

		At December 31							For the year ended December 31
			Unit Value						Investment			Expense Ratio						Total Return
		Units	lowest to highest				Net Assets		Income Ratio1			lowest to highest2						lowest to highest3
RIS
	2008	3,693,283	$    8.9085	to	$ 15.9949	$   40,321,119		1.80		%	1.15		%	to	1.85	%	(43.56		)%	to	(43.14	)%
	2007	5,162,219	15.7747	to	28.1322	98,199,663		1.14			1.15			to	1.85		11.05			to	11.86
	2006	6,522,015	14.1980	to	25.1497	111,472,872		1.14			1.15			to	1.85		25.12			to	26.03
	2005	6,756,158	11.3347	to	19.9559	91,829,693		0.79			1.15			to	1.85		14.41			to	15.24
	2004	7,228,881	9.8769	to	17.3169	85,264,194		0.48			1.15			to	1.85		18.95			to	19.82
SI1
	2008	956,921	10.6423	to	11.7277	10,869,245		8.07			1.15			to	2.30		(15.21		)	to	(14.21	)
	2007	1,425,992	12.5520	to	13.6707	18,942,966		5.10			1.15			to	2.30		0.85			to	2.04
	2006	1,662,083	11.2160	to	13.5062	21,695,648		5.71			1.15			to	2.30		4.01			to	5.23
	2005	1,805,113	11.9667	to	12.7313	22,487,758		6.66			1.15			to	2.30		(0.72		)	to	0.44
	2004	1,930,592	12.0538	to	12.6752	24,035,088		5.67			1.15			to	2.25		5.34			to	6.59
SIS
	2008	2,463,406	11.4995	to	12.5692	29,958,353		8.29			1.15			to	1.85		(14.66		)	to	(14.04	)
	2007	3,392,931	13.4684	to	14.6222	48,007,878		5.51			1.15			to	1.85		1.56			to	2.30
	2006	3,797,869	13.2544	to	14.2929	52,671,180		6.07			1.15			to	1.85		4.74			to	5.50
	2005	4,397,877	12.6479	to	13.5477	58,018,808		7.12			1.15			to	1.85		0.01			to	0.73
	2004	4,922,159	12.6404	to	13.4491	64,706,617		4.80			1.15			to	1.85		6.04			to	6.81
SVS
	2008	322,503	6.4839	to	9.5447	2,554,715		0.98			1.15			to	2.35		(44.14		)	to	(43.45	)
	2007	511,648	11.5718	to	16.8871	7,210,023		1.52			1.15			to	2.35		(4.92		)	to	(3.75	)
	2006	611,352	12.1335	to	17.5537	8,983,508		0.55			1.15			to	2.35		11.25			to	12.62
	2005	796,494	10.8728	to	15.5949	10,531,335		0.75			1.15			to	2.30		(3.00		)	to	(1.86	)
	2004	847,507	11.1803	to	15.8984	11,455,484		0.23			1.15			to	2.25		15.05			to	16.41
TE1
	2008	183,490	5.1259	to	11.3963	989,205		-			1.15			to	1.85		(52.00		)	to	(51.66	)
	2007	314,493	10.6793	to	23.5856	3,552,821		-			1.15			to	2.05		17.53			to	18.61
	2006	332,775	9.0680	to	19.8947	3,147,970		-			1.15			to	1.85		19.35			to	20.20
	2005	419,282	7.5980	to	16.5602	3,377,159		-			1.15			to	1.85		4.07			to	4.81
	2004	482,254	7.3009	to	15.8084	3,633,413		-			1.15			to	1.85		(0.13		)	to	0.79
TEC
	2008	3,206,181	2.3219	to	2.6520	8,055,874		-			1.15			to	1.85		(51.83		)	to	(51.49	)
	2007	4,080,642	4.8154	to	5.4664	21,166,638		-			1.15			to	1.85		17.99			to	18.83
	2006	4,306,342	4.0772	to	4.6453	18,818,345		-			1.15			to	1.85		19.72			to	20.57
	2005	5,244,561	3.4021	to	3.8152	18,988,564		-			1.15			to	1.85		4.23			to	4.99
	2004	6,675,608	3.2606	to	3.6344	23,074,612		-			1.15			to	1.85		0.54			to	1.27
MFJ
	2008	53,879,494	9.4214	to	11.9241	605,101,294		3.15			1.00			to	2.55		(23.74		)	to	(22.52	)
	2007	57,895,390	12.2852	to	15.4222	840,502,026		2.67			1.00			to	2.55		1.41			to	3.03
	2006	53,249,495	12.0173	to	14.9995	751,331,290		2.50			1.00			to	2.55		9.06			to	10.79
	2005	49,480,358	10.9837	to	13.5657	629,492,828		2.32			1.00			to	2.55		0.20			to	1.79
	2004	35,062,662	10.9007	to	13.3545	433,233,722		2.17			1.00			to	2.55		8.30			to	10.03

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

8. FINANCIAL HIGHLIGHTS (CONTINUED)

		At December 31							For the year ended December 31
			Unit Value						Investment			Expense Ratio					Total Return
		Units	lowest to highest				Net Assets		Income Ratio1			lowest to highest2					lowest to highest3
TRS
	2008	29,892,193		$  10.5464	to	$ 27.0755	$ 537,334,088	3.47		%	1.15		%	to	1.85	%	(23.01	)%	to	(22.45	)%
	2007	39,711,318		13.6838	to	42.0157	899,656,744	3.01			1.15			to	1.85		2.38		to	3.13
	2006	49,201,194		13.3518	to	34.0206	1,081,166,349	2.82			1.15			to	1.85		10.15		to	10.95
	2005	61,210,836		12.1091	to	30.7387	1,229,097,435	2.66			1.15			to	1.85		1.12		to	1.85
	2004	70,122,337		11.9625	to	30.2533	1,417,695,061	2.52			1.00			to	1.85		9.40		to	10.35
MFE
	2008	3,731,129		13.0308	to	22.6677	72,955,216	1.66			1.00			to	2.35		(38.74	)	to	(37.88	)
	2007	3,613,171		21.1610	to	36.5673	109,039,810	1.09			1.00			to	2.35		25.25		to	26.99
	2006	2,880,540		16.8080	to	28.8532	64,951,521	2.61			1.00			to	2.35		28.87		to	30.65
	2005	2,310,367		12.9764	to	22.1297	37,623,081	0.76			1.00			to	2.30		14.35		to	15.81
	2004	1,823,681		11.3020	to	19.1479	24,246,657	1.74			1.00			to	2.25		21.17		to	28.71
UTS
	2008	8,400,706		10.9193	to	34.6333	155,230,961	1.91			1.15			to	1.85		(38.23	)	to	(37.78)
	2007	11,423,450		17.6690	to	55.8021	329,601,898	1.34			1.15			to	1.85		26.19		to	27.11
	2006	14,522,188		13.9930	to	44.0096	327,399,609	2.98			1.15			to	1.85		29.84		to	30.78
	2005	16,956,503		10.7441	to	33.7338	299,205,027	0.99			1.15			to	1.85		15.13		to	15.96
	2004	18,353,815		9.3039	to	29.1618	285,330,031	1.95			1.15			to	1.85		27.96		to	28.89
MV1
	2008	13,424,854		9.6688	to	13.0299	159,243,510	1.45			1.00			to	2.55		(34.59	)	to	(33.54	)
	2007	8,166,089		14.7056	to	19.6462	138,202,958	1.35			1.00			to	2.55		4.91		to	6.59
	2006	8,782,638		13.9154	to	18.4691	138,689,478	1.28			1.00			to	2.55		17.59		to	19.46
	2005	9,478,274		11.7960	to	15.4922	124,900,820	1.19			1.00			to	2.55		3.64		to	5.28
	2004	9,411,407		11.3265	to	14.7447	117,692,787	1.14			1.00			to	2.55		12.24		to	14.03
MVS
	2008	9,654,222		9.9861	to	14.3424	124,630,580	1.92			1.15			to	1.85		(33.90	)	to	(33.41	)
	2007	13,437,738		15.0910	to	21.5393	258,734,352	1.62			1.15			to	1.85		5.92		to	6.69
	2006	17,360,967		14.2333	to	20.1884	314,343,755	1.54			1.15			to	1.85		18.73		to	19.59
	2005	20,463,991		11.9762	to	16.8820	311,868,666	1.40			1.15			to	1.85		4.63		to	5.39
	2004	22,855,509		11.4346	to	16.0188	332,260,043	1.30			1.00			to	1.85		13.38		to	14.36
OBV
	2008	626,984		5.6546	to	5.7342	3,574,079	1.96			1.35			to	2.10		(44.81	)	to	(44.38	)
	2007 6	199,285		10.2449	to	10.3095	2,048,287	0.09			1.35			to	2.10		2.45		to	3.10
OCA
	2008	2,290,263		7.1367	to	9.7242	21,043,470	-			1.30			to	2.55		(47.05	)	to	(46.37	)
	2007	2,405,555		13.4033	to	18.1418	41,294,194	0.01			1.30			to	2.55		10.94		to	12.37
	2006	2,590,414		11.9843	to	16.1528	39,813,448	0.18			1.30			to	2.55		4.94		to	6.29
	2005	2,328,976		11.4153	to	15.2053	33,917,242	0.71			1.30			to	2.55		2.20		to	3.50
	2004	2,178,624		12.2953	to	14.6981	30,806,058	0.22			1.25			to	2.55		3.89		to	5.17
OGG
	2008	2,451,893		9.4003	to	9.9232	23,751,907	1.28			1.30			to	2.30		(41.71	)	to	(41.11	)
	2007	2,653,815		16.1268	to	16.8504	43,790,664	1.05			1.30			to	2.30		3.63		to	4.69
	2006	1,996,825		15.4407	to	16.0948	31,585,162	0.68			1.30			to	2.30		14.67		to	15.84
	2005	991,457		13.5710	to	13.8938	13,587,975	0.67			1.30			to	2.30		11.44		to	12.58
	2004 9	514,788		12.1774	to	12.3035	6,301,890	0.10			1.25			to	2.30		16.14		to	17.27

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

8. FINANCIAL HIGHLIGHTS (CONTINUED)

		At December 31							For the year ended December 31
				Unit Value					Investment			Expense Ratio						Total Return
		Units		lowest to highest			Net Assets		Income Ratio1			lowest to highest2						lowest to highest3
OMG
	2008	48,485,735	$  7.9130		to	$ 10.0143		$  465,958,080		1.23	%		1.30	%	to	2.55	%		(40.20	)%	to	(39.43	)%
	2007	44,367,479	13.1710		to	16.5411		706,504,514		0.74			1.30		to	2.55			1.48		to	2.79
	2006	31,198,650	12.9188		to	16.1003		484,702,859		0.79			1.30		to	2.55			11.84		to	13.27
	2005	17,938,766	11.4982		to	14.2212		246,848,978		0.91			1.30		to	2.55			3.05		to	4.37
	2004	8,686,835	11.1107		to	13.6327		114,799,188		0.25			1.25		to	2.55			6.36		to	11.40
OMS
	2008	760,213	8.8544		to	12.3428		9,053,263		0.28			1.30		to	2.30			(39.44	)	to	(38.81	)
	2007	870,402	14.5452		to	20.1827		17,001,852		0.17			1.30		to	2.30			(3.67	)	to	(2.68	)
	2006	925,673	14.9139		to	20.7493		18,678,581		0.02			1.30		to	2.30			12.03		to	13.17
	2005	595,796	13.3787		to	18.3437		10,694,455		-			1.35		to	2.30			7.20		to	8.24
	2004	489,698	15.2353		to	16.9475		8,170,089		-			1.25		to	2.30			16.43		to	17.57
PMB
	2008	593,875	11.0277		to	17.3159		9,715,387		6.51			1.30		to	2.15			(16.44	)	to	(15.71	)
	2007	635,006	13.1766		to	20.5534		12,385,714		5.76			1.30		to	2.25			3.43		to	4.44
	2006	534,239	12.6765		to	19.6898		9,997,829		5.39			1.30		to	2.25			6.82		to	7.86
	2005	290,180	11.8652		to	18.2643		5,141,808		5.13			1.35		to	2.25			8.30		to	9.29
	2004 9	96,856	15.8431		to	16.7115		1,583,863		4.20			1.25		to	2.25			9.59		to	10.61
PLD
	2008	57,102,477	10.0528		to	10.6962		599,061,553		4.09			1.30		to	2.55			(2.96	)	to	(1.71	)
	2007	80,692,069	10.3597		to	10.8883		864,760,462		4.75			1.30		to	2.55			4.62		to	5.97
	2006	45,681,184	9.9020		to	10.2799		463,694,126		4.25			1.30		to	2.55			1.33		to	2.63
	2005	23,604,352	9.7717		to	10.0216		234,513,041		2.90			1.30		to	2.55			(1.56	)	to	(0.30	)
	2004 9	11,851,375	9.9261		to	10.0564		118,663,580		1.46			1.25		to	2.55			(0.75	)	to	0.47
PRR
	2008	9,486,271	10.1007		to	12.1928		112,568,613		3.52			1.30		to	2.55			(9.43	)	to	(8.27	)
	2007	4,125,528	11.0670		to	13.2982		53,416,156		4.64			1.30		to	2.35			8.05		to	9.22
	2006	3,162,459	10.1108		to	12.1816		37,613,046		4.23			1.30		to	2.35			(1.65	)	to	(0.59	)
	2005	2,712,386	10.2970		to	12.2602		32,648,274		2.84			1.30		to	2.30			(0.24	)	to	0.77
	2004	1,942,972	10.2697		to	12.1722		23,367,250		1.04			1.25		to	2.30			2.70		to	7.44
PTR
	2008	26,948,277	11.1260		to	12.8042		337,147,301		4.48			1.30		to	2.55			2.12		to	3.44
	2007	20,114,681	10.8948		to	12.3852		243,883,703		4.78			1.30		to	2.55			5.97		to	7.34
	2006	6,231,960	10.2806		to	11.5442		70,316,909		4.41			1.30		to	2.55			1.21		to	2.51
	2005	5,192,072	10.1577		to	11.2677		57,410,982		3.44			1.30		to	2.55			(0.15	)	to	1.12
	2004	4,491,441	10.1448		to	11.1480		49,373,803		1.90			1.25		to	2.55			1.45		to	3.47
PRA
	2008	411,581	9.1402		to	9.3641		3,799,922		6.07			1.35		to	2.10			(17.62	)	to	(16.98	)
	2007	340,476	11.0947		to	11.2797		3,802,578		8.56			1.35		to	2.25			5.88		to	6.86
	2006	192,534	10.4068		to	10.5620		2,021,607		6.50			1.35		to	2.25			2.31		to	3.25
	2005 5	18,761	10.2116		to	10.2236		191,646		4.67			1.35		to	2.05			2.12		to	2.24
PCR
	2008	5,813,511	6.3854		to	6.6490		38,163,263		6.32			1.30		to	2.55			(45.23	)	to	(44.52	)
	2007	977,885	11.7108		to	11.9855		11,610,424		4.99			1.30		to	2.35			20.33		to	21.63
	2006	494,790	9.7092		to	9.8541		4,852,130		6.00			1.30		to	2.30			(5.32	)	to	(4.36	)
	2005 5	49,012	10.2856		to	10.3019		504,509		2.08			1.35		to	2.30			2.86		to	3.02

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

8. FINANCIAL HIGHLIGHTS (CONTINUED)

		At December 31						For the year ended December 31
			Unit Value					Investment			Expense Ratio						Total Return
		Units	lowest to highest				Net Assets	Income Ratio1			lowest to highest2						lowest to highest3
1XX
	2008 8	46,329	$    9.0099	to	$   9.0227	$       417,717			-	%		1.35	%	to	2.05	%		(9.90	)%	to	(9.77	)%
SSA
	2008	645,382	7.0636	to	7.8469	4,695,884			0.39			1.30		to	2.30			(38.60	)	to	(37.97	)
	2007	643,565	11.5044	to	12.6500	7,577,757			0.69			1.30		to	2.30			(8.24	)	to	(7.30	)
	2006	403,028	12.4447	to	13.6457	5,143,745			1.56			1.30		to	2.30			17.03		to	18.22
	2005	146,395	10.7134	to	11.5423	1,582,621			-			1.30		to	2.30			(3.25	)	to	(2.26	)
	2004 9	99,939	11.0730	to	11.1712	1,110,866			0.09			1.25		to	2.30			10.73		to	11.71
3XX
	2008 8	7,549	9.2051	to	9.2190	69,521			0.25			1.35		to	2.10			(7.95	)	to	(7.81	)
5XX
	2008 8	260,820	10.2403	to	10.2557	2,673,696			0.63			1.35		to	2.10			2.40		to	2.56
SVV
	2008	12,154,042	6.3694	to	6.4953	78,407,076			0.77			1.30		to	2.35			(39.39	)	to	(38.74	)
	2007 6	2,540,048	10.5313	to	10.5978	26,839,611			0.52			1.35		to	2.10			5.31		to	5.98
2XX
	2008 8	22,414	9.3391	to	9.3523	209,422			0.22			1.35		to	2.05			(6.61	)	to	(6.48	)
LGF
	2008	304,806	5.6083	to	5.7240	1,727,419			-			1.35		to	2.10			(45.48	)	to	(45.06	)
	2007	223,425	10.2859	to	10.4178	2,312,144			-			1.35		to	2.10			4.53		to	5.33
	2006  11
		80,896	9.8104	to	9.8937	797,765			-			1.35		to	2.10			(1.60	)	to	(1.10	)
SGC
	2008 7	215,255	7.0092	to	7.0676	1,517,022			2.11			1.30		to	2.30			(29.91	)	to	(29.32	)
S13
	2008 7	461,987	7.0070	to	7.0506	3,248,365			1.40			1.35		to	2.10			(29.93	)	to	(29.49	)
SDC
	2008 7	3,609,661	10.0968	to	10.2017	36,702,316			2.00			1.30		to	2.55			0.97		to	2.02
S15
	2008 7	5,738,613	10.1141	to	10.1769	58,238,982			1.67			1.35		to	2.10			1.14		to	1.77
7XX
	2008 8	3,745,513	10.0806	to	10.0958	37,790,183			-			1.35		to	2.10			0.81		to	0.96
8XX
	2008 8	3,096,720	10.2006	to	10.2150	31,612,159			-			1.35		to	2.05			2.01		to	2.15
6XX
	2008 8	3,332,280	9.8788	to	9.8977	32,962,278			-			1.35		to	2.30			(1.21	)	to	(1.02	)
IGB
	2008	2,115,205	9.0304	to	9.4941	19,711,311			5.41			1.30		to	2.35			(14.75	)	to	(13.83	)
	2007	2,196,971	10.5929	to	11.0236	23,839,225			4.94			1.30		to	2.35			1.07		to	2.16
	2006	821,108	10.4189	to	10.7963	8,748,658			5.05			1.30		to	2.30			2.73		to	3.78
	2005	340,324	10.2177	to	10.4083	3,511,097			4.45			1.30		to	2.30			(0.60	)	to	0.41
	2004 9	67,201	10.2282	to	10.3705	694,126			4.32			1.25		to	2.30			2.28		to	3.71
SLC
	2008 7	41,059	7.2019	to	7.2710	297,731			1.73			1.35		to	2.50			(27.98	)	to	(27.29	)

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

8. FINANCIAL HIGHLIGHTS (CONTINUED)

		At December 31						For the year ended December 31
			Unit Value					Investment			Expense Ratio					Total Return
		Units	lowest to highest				Net Assets	Income Ratio1			lowest to highest2					lowest to highest3
S12
	2008 7	257,078		$    7.2115	to	$   7.2565	$     1,860,629		1.47	%	1.35	%	to	2.10	%		(27.88	)%	to	(27.44	)%
VSC
	2008	18,181,464		5.8697	to	6.0083	108,453,439		0.02		1.30		to	2.55			(39.72	)	to	(38.95	)
	2007 6	10,111,572		9.7546	to	9.8411	99,172,712		-		1.30		to	2.35			(2.45	)	to	(1.59	)
S14													to						to
	2008 7	1,225,378		8.4648	to	8.5386	10,424,727		6.30		1.30		to	2.35			(15.35	)	to	(14.61	)
4XX													to						to
	2008 8	1,540,689		10.5661	to	10.5820	16,292,247		0.26		1.35			2.10			5.66			5.82
SRE													to						to
	2008	14,063,340		8.0442	to	8.5432	117,968,404		1.95		1.30			2.55			(46.31	)		(45.61	)
	2007	10,404,402		14.9817	to	15.7163	161,037,838		1.28		1.30		to	2.55			(15.56	)	to	(14.47	)
	2006	5,480,387		17.7423	to	18.3844	99,533,635		1.38		1.30			2.55			35.12			36.85
	2005	3,596,058		13.1306	to	13.4410	47,926,006		1.38		1.30		to	2.55			6.58		to	7.95
	2004 9	1,693,151		12.3194	to	12.4577	20,994,795		-		1.25		to	2.55			23.19		to	24.58
SC3
	2008	536,020		10.4035	to	12.7026	6,378,152		2.15		1.35		to	2.55			(46.15	)	to	(45.48	)
	2007	608,427		19.3181	to	23.3818	13,338,079		1.33		1.35			2.55			(15.36	)		(14.31	)
	2006	769,769		22.8241	to	27.3850	19,831,254		1.58		1.35		to	2.55			35.43		to	37.09
	2005	967,700		16.8526	to	20.0460	18,256,525		1.61		1.35		to	2.55			6.88		to	8.19
	2004	1,046,871		15.7675	to	18.5935	18,344,566		1.68		1.25			2.55			29.91			31.52
CMM													to						to
	2008	4,996,815		9.9446	to	10.7798	52,722,915		1.26		1.30			2.30			(0.55	)		0.62
	2007	161,444		10.5037	to	10.7137	1,712,816		4.50		1.35		to	2.05			2.46		to	3.19
	2006	119,244		10.1589	to	10.3821	1,230,135		4.30		1.35			2.05			2.21			2.93
	2005 4	48,728		10.0463	to	10.0862	490,142		2.24		1.35		to	1.85			0.46		to	0.86
S16
	2008 7	3,999,122		7.4152	to	7.4925	29,871,985		0.25		1.30		to	2.55			(25.85	)	to	(25.08	)
VKU
	2008 7	521,533		8.2827	to	8.3619	4,349,163		1.79		1.35		to	2.50			(17.17	)	to	(16.38	)
VKM
	2008 7	99,801		6.2488	to	6.2877	626,133		0.54		1.35		to	2.10			(37.51	)	to	(37.12	)
VKC
	2008 7	64,684		6.5138	to	6.5544	422,645		0.51		1.35		to	2.10			(34.86	)	to	(34.46	)
VLC
	2008	1,778,846		6.1599	to	6.2700	11,079,024		1.96		1.35		to	2.30			(37.29	)	to	(36.67	)
	2007 6	1,104,540		9.8387	to	9.9008	10,902,301		-		1.35			2.10			(1.61	)		(0.99	)
WTF													to						to
	2008	137,209		7.1403	to	7.3924	1,001,434		-		1.35		to	2.25			(50.22)		to	(49.75	)
	2007	109,329		14.3426	to	14.7127	1,593,216		-		1.35		to	2.25			6.92		to	7.91
	2006	76,127		13.3415	to	13.6344	1,031,416		0.29		1.35		to	2.25			17.02		to	18.09
	2005	36,338		11.4820	to	11.5458	418,444		-		1.35		to	2.05			14.82		to	15.46
USC
	2008	5,569		7.1099	to	7.2205	39,860		-		1.65		to	2.05			(40.93	)	to	(40.69	)
	2007	5,229		12.0360	to	12.1732	63,311		-		1.65		to	2.05			3.22		to	3.64
	2006	2,650			11.7457		31,111		0.13				1.65						6.10
	2005	699			11.0707		7,735		-				1.65						10.71

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

(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

8. FINANCIAL HIGHLIGHTS (CONTINUED)

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

2 Ratio represents the annualized contract expenses of the Sub-Account, consisting primarily of mortality and expense charges. 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.

3 Ratio represents the total return for the year indicated and reflects a deduction only for expenses assessed through the daily unit value calculation.  The total return does not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in 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 year indicated or from the effective date through the end of the reporting period.

4 For the period April 25, 2005 (commencement of operations) through December 31, 2005.

5 For the period October 31, 2005 (commencement of operations) through December 31, 2005.

6 For the period March 5, 2007 (commencement of operations) through December 31, 2007.

7 For the period March 10, 2008 (commencement of operations) through December 31, 2008.

8 For the period October 6, 2008 (commencement of operations) through December 31, 2008.

9 For the period February 2, 2004 (commencement of operations) through December 31, 2004.

10 Commencement of operations was December 17, 2007; first activity in 2008.

11 For the period May 1, 2006 (commencement of operations) through December 31, 2006.

9. TAX DIVERSIFICATION REQUIREMENTS

Under the provisions of Section 817(h) of the Code, a variable contract, other than a contract issued in connection with certain types of employee benefit plans, is not treated as an annuity contract for federal tax purposes for any period in which the investments of the segregated asset account on which the contract is based are not adequately diversified.  The Code provides that the “adequately diversified” requirement may be met if the underlying investments satisfy either a statutory safe harbor test or diversification requirements set forth in regulations issued by the Secretary of Treasury.

The Internal Revenue Service has issued regulations under Section 817(h) of the Code which allows the contract owner to avoid current taxation of both current and built-up earnings of the contract.  The Sponsor believes that the Variable Account satisfies the current requirements of the regulations, and it intends that the Variable Account will continue to meet such requirements.

10. SUBSEQUENT EVENTS

In February 2009, the following Sub-Account substitutions were made:

Sub-Account at December 31, 2008:	Substituted by:
Lord Abbett Growth & Income Portfolio Sub-Account	SC Lord Abbett Growth & Income Fund Sub-Account
PIMCO VIT Low Duration Portfolio Sub-Account	SC Goldman Sachs Short Duration Sub-Account
PIMCO VIT Total Return Portfolio Sub-Account	SC PIMCO Total Return Sub-Account