485BPOS 1 file.htm file.htm
 
 

 

As Filed with the Securities and Exchange Commission on May 1, 2014

REGISTRATION NO. 033-41628
811-05846


SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Post-Effective Amendment No 37

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 132

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
(Exact Name of Registrant)

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Name of Depositor)

96 Worcester Street
Wellesley Hills, Massachusetts 02481
(Address of Depositor's Principal Executive Offices)

Depositor's Telephone Number: (781) 237-6030

Michael S. Bloom, Vice President and General Counsel
Sun Life Assurance Company of Canada (U.S.)
96 Worcester Street, DL 1235
Wellesley Hills, Massachusetts 02481
(Name and Address of Agent for Service)



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

£ immediately upon filing pursuant to paragraph (b) of Rule 485
R on May 1, 2014 pursuant to paragraph (b) of Rule 485
£ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
£ on (date) pursuant to paragraph (a)(1) of Rule 485.

If appropriate, check the following box:
£ this post-effective amendment designates a new effective date for a previously filed post-effective amendment.

Title of Securities Being Registered: Flexible Premium Deferred Variable Annuity Contracts.

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



 
 

 



PART A



 
 

 

MAY 1, 2014
MFS® REGATTA GOLD PROSPECTUS

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, when available, fixed interest options. Currently no fixed interest options are available other than those included in our dollar-cost averaging program. (See “Other Programs.”) The variable options are Sub-Accounts in the Variable Account. Each Sub-Account invests in one of the following investment options of the MFS® Variable Insurance Trust and MFS® Variable Insurance Trust II (the “Funds”):

Large-Cap Equity Funds
Specialty/Sector Funds
MFS® Blended Research® Core Equity Portfolio, Initial Class
MFS® Technology Portfolio, Initial Class
MFS® Core Equity Portfolio, Initial Class
MFS® Utilities Portfolio, Initial Class
MFS® Growth Series, Initial Class
Asset Allocation Fund
MFS® Massachusetts Investors Growth Stock
MFS® Total Return Series, Initial Class
Portfolio, Initial Class
Global Asset Allocation Fund
MFS® Value Portfolio, Initial Class
MFS® Global Tactical Allocation Portfolio, Initial Class
Mid-Cap Equity Fund
Money Market Fund
MFS® Mid Cap Growth Series, Initial Class
MFS® Money Market Portfolio, Initial Class1
Small-Cap Equity Fund
Intermediate-Term Bond Funds
MFS® New Discovery Portfolio, Initial Class
MFS® Bond Portfolio, Initial Class
International/Global Equity Funds
MFS® Government Securities Portfolio, Initial Class
MFS® Global Growth Portfolio, Initial Class
Multi-Sector Bond Fund
MFS® Global Research Portfolio, Initial Class
MFS® Strategic Income Portfolio, Initial Class
MFS® International Growth Portfolio, Initial Class
High Yield Bond Fund
MFS® International Value Portfolio, Initial Class
MFS® High Yield Portfolio, Initial Class
MFS® Research International Portfolio, Initial Class
World Bond Fund
Emerging Markets Equity Fund
MFS® Global Governments Portfolio, Initial Class
MFS® Emerging Markets Equity Portfolio, Initial Class
 

1 There is no assurance that the MFS Money Market Portfolio will be able to maintain a stable net asset value per share. In addition, during extended periods of low interest rates, and partly as a result of asset based separate account charges, the yield on this investment account may possibly become low and possibly negative.

Massachusetts Financial Services Company serves as investment adviser to all of the Funds in the MFS® Variable Insurance Trusts.

We have filed a Statement of Additional Information dated May 1, 2014 (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 42 of this Prospectus. You may obtain a copy without charge by writing to us at the address shown below or by telephoning (800) 752-7216. 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 has a website (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. Please read this Prospectus and the Trust prospectus carefully before investing and keep them for future reference. They contain important information about the Contracts and the Trust.

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]
Electronic Account Information                                                      [INSERT PAGE NUMBER]
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                                                                                           [INSERT PAGE NUMBER]
THE VARIABLE ACCOUNT                                                      [INSERT PAGE NUMBER]
VARIABLE ACCOUNT OPTIONS: THE TRUSTS                                                                                     [INSERT PAGE NUMBER]
Selection of Funds                                [INSERT PAGE NUMBER]
THE FIXED ACCOUNT                                           [INSERT PAGE NUMBER]
THE FIXED ACCOUNT OPTIONS: THE GUARANTEE PERIODS                                                                                                                     [INSERT PAGE NUMBER]
Guarantee Periods                                [INSERT PAGE NUMBER]
Guaranteed Interest Rates                                           [INSERT PAGE NUMBER]
Early Withdrawals                                [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; Credits; Bonus Guaranteed Interest Rates                                                                                                                     [INSERT PAGE NUMBER]
Other Programs                                [INSERT PAGE NUMBER]
WITHDRAWALS, WITHDRAWAL CHARGES, AND MARKET VALUE ADJUSTMENT                                                                                                                                                     [INSERT PAGE NUMBER]
Cash Withdrawals                                [INSERT PAGE NUMBER]
Withdrawal Charge                                [INSERT PAGE NUMBER]
Alternate Withdrawal Charge                                                      [INSERT PAGE NUMBER]
Types of Withdrawals Not Subject to Withdrawal Charge                                                                                                [INSERT PAGE NUMBER]
Market Value Adjustment                                           [INSERT PAGE NUMBER]
CONTRACT CHARGES                                           [INSERT PAGE NUMBER]
Account Fee                      [INSERT PAGE NUMBER]
Administrative Expense Charge                                                      [INSERT PAGE NUMBER]
Mortality and Expense Risk Charge                                                                [INSERT PAGE NUMBER]
Premium Taxes                                [INSERT PAGE NUMBER]
Fund Expenses                                [INSERT PAGE NUMBER]
Modification in the Case of Group Contracts                                                                           [INSERT PAGE NUMBER]
DEATH BENEFIT                                [INSERT PAGE NUMBER]
Amount of Death Benefit                                           [INSERT PAGE NUMBER]
Spousal Continuance                                           [INSERT PAGE NUMBER]
Method of Paying Death Benefit                                                      [INSERT PAGE NUMBER]
Selection and Change of Beneficiary                                                                [INSERT PAGE NUMBER]
Payment of Death Benefit                                           [INSERT PAGE NUMBER]
Due Proof of Death                                [INSERT PAGE NUMBER]
THE INCOME PHASE - ANNUITY PROVISIONS                                                                                     [INSERT PAGE NUMBER]
Selection of the Annuitant or Co-Annuitant                                                                           [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]
Transfer 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]
Death of Participant                                [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]
Limitation or 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 Provisions                                                      [INSERT PAGE NUMBER]
ADMINISTRATION OF THE CONTRACTS                                                                           [INSERT PAGE NUMBER]
DISTRIBUTION OF THE CONTRACTS                                                                           [INSERT PAGE NUMBER]
AVAILABLE INFORMATION                                                      [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 - WITHDRAWALS, WITHDRAWAL CHARGES, AND MARKET VALUE ADJUSTMENT[INSERT PAGE NUMBER]
APPENDIX C - 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 capitalized 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 capitalized 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 capitalized 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

Regatta Gold 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 of the Variable Account options or, if available, the 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 death benefit if you die during the Accumulation Phase.

The Accumulation Phase

Under most circumstances, you can buy the Contract with an initial Purchase Payment of $5,000 or more ($10,000 or more if you live in California, Maryland, or Texas), and you can make additional Purchase Payments at any time during the Accumulation Phase. Currently, there is no minimum amount required for additional Purchase Payments. However, we reserve the right to limit additional Purchase Payments to at least $1,000. We will not normally accept a Purchase Payment if your Account Value is over $1 million or, if the Purchase Payment would cause your Account Value to exceed $1 million.

Variable Account Options: The Funds

You can allocate your Purchase Payments among Sub-Accounts, each of which invests in a separate securities portfolio of the MFS® Variable Insurance Trust and the MFS® Variable Insurance Trust II, open-end management investment companies registered under the Investment Company Act of 1940.  Massachusetts Financial Services Company (“MFS®”), serves as the investment adviser to the Trusts. The investment returns on the Funds are not guaranteed. You can make or lose money. You may also transfer among the Funds and, if available, the Fixed Account Options.

The Fixed Account Options: The Guarantee Periods

From time to time, we make Fixed Account options available. When we do, you can allocate your Purchase Payments to the Fixed Account and elect to invest in one or more of the available Guarantee Periods. Each Guarantee Period earns interest at a Guaranteed Interest Rate that we publish. We may change the Guaranteed Interest Rate from time to time, but no Guaranteed Interest Rate will ever be less than the minimum guaranteed interest rate permitted by law. Once we have accepted your allocation to a particular Guarantee Period, we promise that the Guaranteed Interest Rate applicable to that allocation will not change for the duration of the Guarantee Period. We may offer Guarantee Periods of different durations or stop offering some Guarantee Periods. Once we stop offering a Guarantee Period of a particular duration, future allocations or transfers into that Guarantee Period will not be permitted. On January 31, 2011, we stopped accepting any new investments (Purchase Payments and transfers) into any Guarantee Periods, other than in connection with our dollar-cost averaging program.

Fees and Expenses

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

Each year for the first five Account Years, we deduct an annual Account Fee equal to the lesser of $30 or 2% of your Account Value. After the fifth Account Year, we may increase the fee annually, but it will never exceed the lesser of $50 or 2% of your Account Value. During the Income Phase, the annual Account Fee is $30. We will not charge the annual Account Fee if your Account had been allocated only to the Fixed Account during the applicable Account Year, or your Account Value is more than $75,000 on your Account Anniversary.

During the Accumulation Phase, we deduct a mortality and expense risk charge at an annual rate of 1.25% of the average daily value of the Contract invested in the Variable Account. We also deduct an administrative charge at an annual rate of 0.15% of the average daily value of the Contract invested in the Variable Account.

If you take more than a specified amount of money out of your Contract, we assess a withdrawal charge against each Purchase Payment withdrawn. For each Purchase Payment, the withdrawal charge (also known as a “contingent deferred sales charge”) starts at 6% and declines to 0% after the Purchase Payment has been in the Contract for seven years.

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

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.

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 options.

Death Benefit

If you die before the Contract reaches the Income Phase, the beneficiary will receive a death benefit. The amount of the death benefit depends upon your age on the Contract Date. If you are 86 or older on your Contract Date, the death benefit is equal to the amount we would pay on a full surrender of your Contract (“Surrender Value”). If you are 85 or younger on your Contract Date, the death benefit pays the greatest of the following amounts: (1) your Account Value on your Death Benefit Date, (2) your Surrender Value on your Death Benefit Date, (3) your Account Value on the Seven-Year Account Anniversary (adjusted for subsequent payments, withdrawals, and charges), or (4) subject to certain limitations, your total Purchase Payments minus withdrawals, plus interest accrued on each payment and each withdrawal at 5% per year.

Withdrawals, Withdrawal Charges and Market Value Adjustment

You can withdraw money from your Contract during the Accumulation Phase. You may withdraw a portion of your Account Value each year without the imposition of a withdrawal charge. For any Account Year, this “free withdrawal amount” equals 10% of all Purchase Payments made during the last seven Account Years (including the current Account Year), plus all Purchase Payments we have held for at least seven Account Years. Withdrawals made from the Fixed Account may also 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 required 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 ordinary income. If you are younger than 59½ when you take money out, you may be charged a 10% federal tax penalty on taxable amounts.

                                      

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

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

Sun Life Assurance Company of Canada (U.S.)
P. O. Box 9133
Wellesley Hills, Massachusetts 02481
Toll Free (800) 752-7216
www.delawarelife.com/contact-us/


 
 

 

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

 
Maximum Withdrawal Charge (as a percentage of Purchase Payments withdrawn):
 
6%1

Number of Complete Account Years Since
Purchase Payment has been in the Account
0-1
2-3
4-5
6
7 or more
           
Withdrawal Charge
6%
5%
4%
3%
0%

 
Maximum Fee Per Transfer (currently $0):
 
$152
       
 
Premium Taxes (as a percentage of Account Value or total Purchase Payments):
 
0% - 3.5%3


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
$ 504

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

 
Mortality and Expense Risk Charge:
1.25%
 
Administrative Expenses Charge:
0.15%
     
Total Variable Account Annual Expenses:
1.40%


The table below shows the minimum and maximum total operating expenses charged by the Funds for the year ended December 31, 2013.

 
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)
0.55%
1.46%

The expenses shown, which include any acquired fund fees and expenses, are those incurred for the year ended December 31, 2013, and were provided by the Funds. We have not independently verified the accuracy of the Fund expense information. Current or future expenses may be greater or less than those shown. For more information about Fund expenses, including a description of any applicable fee waiver or expense reimbursement arrangement, see the Fund prospectuses.


1
A portion of your Account may be withdrawn each year without imposition of any withdrawal charge and, after a Purchase Payment has been in your Account for seven Account Years, it may be withdrawn free of the withdrawal charge. (See “Withdrawal Charge.”)
   
2
Currently, we impose no fee upon transfers; however, we reserve the right to impose a fee of up to $15 per transfer. We do impose certain restrictions upon the number and frequency of transfers. (See “Transfer Privilege.”)
   
3
The premium tax rate and base vary by your state of residence and the type of Certificate you own. Currently, we may deduct premium taxes from Certificate Value upon full surrender (including surrender for the death benefit) or annuitization. (See “Premium Taxes.”)
   
4
The Annual Account Fee is equal to the lesser of $30 or 2% of your Account Value in Account Years 1 through 5; thereafter, the Annual Account Fee may be changed annually but it will never exceed the lesser of $50 or 2% of your Account Value. The Annual Account Fee is waived if your Account Value has been allocated only to the Fixed Account for the applicable Account Year or if your Account Value is $75,000 or more on your Account Anniversary. (See “Account Fee.”)


 
 

 

EXAMPLE

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

The Example assumes that you invest $10,000 in the Contract for the time periods indicated. 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 purpose of converting the annual contract fee to a percentage, the Example assumes an average Contract size of $30,000. 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.

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
         
 
$851
$1,297
$1,800
$3,316

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

 
1 year
3 years
5 years
10 years
         
 
$299
$915
$1,557
$3,316

(3)
If you do not surrender your Contract:

 
1 year
3 years
5 years
10 years
         
 
$299
$915
$1,557
$3,316

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. 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. 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.

For information concerning compensation paid for the sale of the Contracts, see “Distribution of the Contract.”

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 C.

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 on a group basis in connection with retirement plans. 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 participating individuals under Group Contracts as “Participants” and we address Participants as “you”; we use the term “Contracts” to include Group Contracts and Certificates issued under Group Contracts. For the purpose of determining benefits under the 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 and an Income Phase. During the Accumulation Phase, you make Purchase Payments under the Contract and allocate them to one or more of the Variable Account options or, if available, the Fixed Account options. During the Income Phase, we make payments based on the amount you have accumulated. Annuity payments can be fixed or variable. When you choose variable options, you assume the investment risk. When you choose fixed options, we assume the investment risk.

           It also has 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.

           It provides a death benefit if the Annuitant dies during the Accumulation Phase.

           If you so elect, during the Income Phase, it provides payments to you or someone else for life or for another period that you choose.

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 others 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.

COMMUNICATING TO US ABOUT YOUR CONTRACT

You may submit transaction requests or otherwise communicate with us in writing or by telephone. All materials sent to us, including Purchase Payments, must be sent to us at our mailing address as set forth on the first page of this Prospectus. For all telephone communications, you must call (800) 752-7216. In addition, the authorized registered representative of the broker-dealer of record may submit transfer requests on your behalf in writing, by telephone, or over the Internet on our broker website. To use the broker website, the registered representative must first consent to our online terms of use. (See “Requests for Transfers” under “Transfer Privilege.”)

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, in Good Order, at our mailing address or at (800) 752-7216. However, we will consider all financial transactions, including Purchase Payments, withdrawal requests and transfer instructions to be received on the next Business Day if we receive them (1) on a day that is not a Business Day or (2) after 4:00 p.m., Eastern Time. In some cases, receipt of financial transactions by the broker-dealer of record will be deemed to be constructive receipt by us. This would include only cases where we have a specific agreement with the broker-dealer that provides for this treatment and the broker-dealer electronically forwards to us the request promptly after the end of the Business Day on which it receives the request in good order. In such cases, financial transactions received by us in good order will be priced that Business Day, provided the broker-dealer received the request before the earlier of (a) 4:00 p.m. Eastern Time on a Business Day, or (b) the close of the New York Stock Exchange on days that the Stock Exchange closes before 4:00 p.m. For information about whether we have this type of arrangement with your broker-dealer, you may call us at the above number.

Certain methods of contacting us, such as by telephone or over the Internet, may be unavailable or delayed. Any computer or telephone system (including yours, ours, and your registered representative’s) can experience delays or outages that may delay or prevent us from processing your request. While we have taken reasonable precautions to allow our systems to accommodate heavy usage, we do not guarantee access or reliability under all circumstances. If you experience delays or an outage, you may submit your request to us in writing to our mailing address, as set forth at the beginning of this Prospectus.

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.

Electronic Account Information

Contract Owners may elect to receive prospectuses, transaction confirmations, reports and other communications in electronic format, instead of receiving paper copies of these documents. To enroll in this optional electronic delivery service Contract Owners must register and log on to our Internet customer website at https://customerlink.sunlife-usa.com which can be reached directly or via www.delawarelife.com. First-time users of this website can enroll in this electronic delivery service by selecting “eDeliver Documents” when registering to use the website. If you are already a registered user of this website, you can enroll in the electronic delivery service by logging on to your account and selecting “eDeliver Documents” on the “Update Profile” page. The electronic delivery service is subject to various terms and conditions, including a requirement that you promptly notify us of any change in your e-mail address, in order to avoid any disruption of deliveries to you. You may obtain more information and assistance at the above-mentioned internet location or by writing us at our mailing address or by telephone at (800) 752-7216.

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. The address for our Executive Office is 96 Worcester Street, Wellesley Hills, Massachusetts 02481.

Our parent is Delaware Life Holdings, LLC (“Delaware Life”), a limited liability company organized under the laws of the State of Delaware on December 12, 2012. Delaware Life is ultimately controlled by Todd L. Boehly and Mark R. Walter.

Delaware Life acquired the Company from Sun Life Financial, Inc. in August of 2013. The Company is no longer affiliated with Sun Life Financial, Inc. and the Sun Life names and marks are used under license. In accordance with the Company’s change of ownership, we expect the Company to change its name from “Sun Life Assurance Company of Canada (U.S.)” to “Delaware Life Insurance Company” during 2014.

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 Contracts described in this Prospectus and other variable annuity contracts that provide benefits that vary in accordance with the investment performance of the Variable Account. The assets maintained in the Variable Account will not be charged with any liabilities arising out of any other business we conduct. All obligations arising under the Contracts, including the promise to make annuity payments, are general corporate obligations of the Company and, as such, are subject to the claims of the Company’s creditors.

The assets of the Variable Account are divided into Sub-Accounts. Each Sub-Account invests exclusively in shares of a specific Fund of the MFS® Variable Insurance Trust or the MFS® Variable Insurance Trust II. 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 Fund 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 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 TRUSTS

The MFS® Variable Insurance Trust and the MFS® Variable Insurance Trust II (the “Trusts”) are open-end management investment companies registered under the Investment Company Act of 1940.  Massachusetts Financial Services Company (“MFS®”), serves as the investment adviser to the Trusts.

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

Each Fund pays fees to MFS® for its services pursuant to investment advisory agreements. MFS® also serves as investment adviser to each of the funds in the MFS Family of Funds®, and to certain other investment companies established by MFS®. MFS® and its predecessor organizations have a history of money management dating from 1924. MFS® operates as an autonomous organization and the obligation of performance with respect to the investment advisory and underwriting agreements is solely that of MFS®. We undertake no obligation in this regard.

MFS® may serve as the investment adviser to other mutual funds which have similar investment goals and principal investment policies and risks as the Fund, and which 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 Trusts also offer shares to other separate accounts established by the Company and our New York subsidiary in connection with variable annuity and variable life insurance contracts. Although we do not anticipate any disadvantages to this arrangement, there is a possibility that a material conflict may arise between the interests of the Variable Account and one or more of the other separate accounts investing in the Trusts. A conflict may occur due to differences in tax laws affecting the operations of variable life and variable annuity separate accounts, or some other reason. We and each Trust’s Board of Trustees will monitor events for such conflicts, and, in the event of a conflict, we will take steps necessary to remedy the conflict, including withdrawal of the Variable Account from participation in the Fund which is involved in the conflict or substitution of shares of other Funds or other mutual funds.

Certain Funds may employ hedging strategies to provide for downside protection during sharp downward movements in equity markets. The cost of these hedging strategies could limit the upside participation of the Fund in rising equity markets relative to other Funds. You should consult with your registered representative to determine which combination of investment choices is appropriate for you.

More comprehensive information about the Trusts and the management, investment objectives, policies, restrictions, expenses and potential risks of each Fund may be found in the current Trust prospectuses. You should read the Trust prospectuses carefully before investing. The statement of additional information for each of the Trusts is available by calling us at (800) 752-7216.

Selection of Funds

The Funds offered through the Contract are selected by the Company. We review the Funds periodically and may remove a Fund or limit its availability to new premiums and/or transfers of Account Value if we determine that a Fund no longer satisfies one or more of the selection criteria, and/or if the Fund has not attracted significant allocations from Contract Owners. We do not recommend or endorse any particular fund, and we do not provide investment advice. You bear the risk of any decline in your Account Value resulting from the performance of the Funds you have chosen.

We may consider various factors, including, but not limited to, asset class coverage, the alignment of the investment objectives of a Fund with our hedging strategy, the strength of an adviser’s or sub-adviser’s reputation and tenure, brand recognition, performance, and the capability and qualification of each investment firm. Another factor that we may consider is whether the Fund or its service providers (e.g., the investment adviser or sub-advisers) or its affiliates will make payments to us or our affiliates in connection with certain administrative, marketing, and support services, or whether affiliates of the Fund can provide marketing and distribution support for the sale of the Contracts. Accordingly, we may receive compensation from an investment adviser, distributor and/or affiliates(s) of one or more of the Funds based upon an annual percentage of the average assets we hold in the investment options. These amounts, which may vary by adviser, are intended to compensate us for administrative and other services we provide to the Funds and/or affiliate(s) and may be significant. In addition, the Company or the principal underwriter of the Contracts may receive 12b-1 fees (fees which may be levied against the total balance of a mutual fund’s assets and may be used to pay marketing and brokerage expenses of the Fund) deducted from certain Fund assets attributable to the Contract for providing distribution and shareholder support services to some investment options.

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 four 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

Guarantee Periods

You may elect one or more Guarantee Period(s) from those we make available from time to time. When available, we may offer Guarantee Periods of different durations; however, we may stop offering some or all Guarantee Periods at any time. Once we stop offering a Guarantee Period for a particular duration, allocations or transfers into that Guarantee Period will not be permitted.

Effective January 31, 2011, we stopped accepting any additional amounts for allocation to certain Guarantee Periods, regardless of when the Contract was issued. Under this change, all Guarantee Periods were closed to new amounts from:

           initial or subsequent Purchase Payments you may make, except for Purchase Payments that you allocate to our dollar-cost averaging program;

           transfers of Account Value into a Guarantee Period from any other Guarantee Period or Sub-Account; and

           any other new allocation of money.

Any of your Account Value held in a Guarantee Period on January 31, 2011, will not be affected by our closing the Guarantee Periods to new amounts. At the end of that Guarantee Period, unless you instruct us otherwise, we will automatically renew your Guarantee Period allocation into a new Guarantee Period of the same duration as the last Guarantee Period. (See “Renewals” under “Fixed Account Value.”) Although we have the discretion to once again make new Guarantee Periods available for new allocations, we do not have any current intention to do so.

Because we are not currently offering new Guarantee Periods in connection with our Secured Future Program, that program is no longer available to those who are not already participating in it. (See “Secured Future Program” under “Other Programs.”)

Guaranteed Interest Rates

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

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

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

Early Withdrawals

Early withdrawals from your allocation to a Guarantee Period, including cash withdrawals, transfers, and commencement of an annuity, may be subject to a Market Value Adjustment, which could increase the value of your Account. (See “Withdrawals, Withdrawal Charges and Market Value Adjustment.”)

THE ACCUMULATION PHASE

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



Issuing Your Contract

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

We will credit your initial Purchase Payment to your Account within two Business Days of receiving your completed Application, in good order. If your Application is not in good order, we will notify you. If we do not have the necessary information to complete the Application within five Business Days, we will send your money back to you or ask your permission to retain your Purchase Payment until the Application is in good order. Once the Application is in good order, we will then apply the Purchase Payment within two Business Days.

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 $5,000 ($10,000 if you live in California, Maryland or Texas), 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, unless we have given our approval in advance, we will not accept a Purchase Payment if your Account Value is over $1 million, or if the Purchase Payment would cause your Account Value to exceed $1 million. Within these limits, you may make Purchase Payments at any time during the Accumulation Phase.

Allocation of Net Purchase Payments

You may allocate your Purchase Payments among the different Sub-Accounts and Guarantee Periods currently available.

In your Application, you may specify the percentage of each Purchase Payment to be allocated to each Sub-Account or Guarantee Period. These percentages are called your allocation factors. Your allocation factors will remain in effect as long as your selected Sub-Accounts and Guarantee Periods continue to be available for investment. You may, however, change the allocation factors for future Purchase Payments by sending us notice of the change in a form acceptable to us. We will use your new allocation factors for Purchase Payments we receive with or after we have received notice of the change 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 “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 two 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 two components are calculated separately, as described below under the headings “Variable Account Value” and “Fixed Account Value.”

Variable Account Value

Variable Accumulation Units

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

Variable Accumulation Unit Value

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

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

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.

The Guarantee Period begins the day we apply your allocation and ends when the number of calendar years (or months if the Guarantee Period is less than one year) in the Guarantee Period (measured from the end of the calendar month in which the amount was allocated to the Guarantee Period) have elapsed. The last day of the Guarantee Period is its Expiration Date. Guarantee Periods may not always be available for allocation. (See “Fixed Account Options: The Guarantee Periods.”)

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. You can find out about our current Guaranteed Interest Rates by calling us at (800) 752-7216.

Guarantee Amounts

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

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

           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. 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 next available Guarantee Period.

Early Withdrawals

If you withdraw, transfer, or annuitize an allocation from a Guarantee Period more than 30 days prior to the Expiration Date, we will apply a Market Value Adjustment to the transaction. This could result in an increase of your Account Value, depending on interest rates at the time. (See “Withdrawals, Withdrawal Charges, 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:

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

           the amount transferred from a Guarantee Period must be the entire Guarantee Amount, except for transfers of interest credited during the current Account Year;

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

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

           we impose additional restrictions on market timers, which are further described below. (See “Short-Term Trading.”)

These restrictions do not apply to transfers made under any optional program. (See “Other Programs.”)

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 occurring more than 30 days before the Renewal Date or any time after the Expiration Date or any time after the Expiration Date will be subject to the Market Value Adjustment described under “Withdrawals, Withdrawal Charges and Market Value Adjustment.” We will notify you of any change in writing prior to its effectiveness. Under current law there is no tax liability for transfers.

Requests for Transfers

You, your authorized registered representative of the broker-dealer of record, or another authorized third party may request transfers in writing or by telephone. Registered representatives of broker-dealer firms that have entered into selling agreements with us may, on behalf of their clients, submit transfer requests electronically over the Internet on our broker website. To use this electronic transfer service, a registered representative must agree to our online terms of use. You can contact us by telephone at (800) 752-7216 to identify broker-dealers with registered representatives that use this service.

If a written, telephone, or electronic transfer request is received 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., the transfer will be priced 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 have established procedures reasonably designed to confirm that instructions communicated to us by telephone or electronically are genuine. These procedures may require any person requesting a transfer made by telephone or electronically to provide personal identifying information. We will not be liable for following instructions communicated by telephone that we reasonably believe are genuine.

We reserve the right to deny any and all transfer requests made by telephone or electronically and to require that certain transfer requests be submitted in writing. A transfer request may be denied if it is not in good order or if it does not comply with the terms of our short-term trading policy or the trading policy of a fund involved in the transfer. If an electronic or a telephone transfer request is denied, we will immediately notify you and your authorized registered representative.

We also reserve the right to suspend, modify, restrict, or terminate the telephone or electronic transfer privilege at any time. Your ability (or the ability of your authorized registered representative or another authorized third party) to request transfers by telephone and/or electronically may also be limited due to circumstances beyond our control, such as during system outages or periods of high volume.

A transfer request will be priced at the Variable Accumulation Unit value next determined at 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 priced on the next Business Day.

No more than one transfer request of Account Values may be made on the same Business Day regardless of whether the request is made by you, your authorized registered representative, or another authorized third party, and regardless of whether the request is submitted in writing, by telephone, or electronically. The Company has established reasonable procedures for handling multiple transfer requests received on the same Business Day, including processing the first transfer request received in good order on a Business Day (unless otherwise cancelled in accordance with the cancellation procedures described in the next paragraph).

You, your authorized registered representative, or another authorized third party may cancel a transfer request by contacting us by telephone at (800) 752-7216 before the end of the Business Day during which the transfer request was submitted. We may also permit your authorized registered representative to request cancellation of a transfer request electronically over the Internet, provided we receive the electronic request before the end of the Business Day during which the transfer request was submitted.

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 limit the number and frequency of transfers of Account Value. The Company also reserves the right to charge a fee for transfers to discourage frequent trading. In no event will the total charge assessed in connection with a transfer, that includes this fee as well as any charge that we may assess on a permitted transfer of Account Value among Sub-Accounts (see “Permitted Transfers,” above), exceed the maximum fee per transfer presented in the table of “Fees and Expenses” in this Prospectus.

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 more narrowly than the policies described under “Permitted Transfers,” 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 Account 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. In the last situation, we will not transfer any of the Sub-Account value. Instead, we will deem the request not in good order and immediately notify you.

We will provide you written notification of any restrictions imposed.

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

           when a new broker of record is designated for the Contract;

           when the Participant changes;

           when control of the Contract passes to the designated beneficiary upon the death of the Participant or Annuitant;

           when necessary in our view to avoid hardship to a Participant; or

           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. 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; Credits; Bonus Guaranteed Interest Rates

We may reduce or waive the withdrawal charge or annual Account Fee, credit additional amounts, or grant bonus Guaranteed Interest Rates in certain situations. These situations may include sales of Contracts (1) where selling and/or maintenance costs associated with the Contracts are reduced, such as the sale of several Contracts to the same Participant, sales of large Contracts, and certain group sales, and (2) to officers, directors and employees of the Company or its affiliates, registered representatives and employees of broker-dealers with a current selling agreement with the Company and affiliates of such representatives and broker-dealers, employees of affiliated asset management firms, and persons who have retired from such positions (“Eligible Employees”) and immediate family members of Eligible Employees. Eligible Employees and their immediate family members may also purchase a Contract without regard to minimum Purchase Payment requirements. For other situations in which withdrawal charges may be waived, see “Withdrawals, Withdrawal Charges and Market Value Adjustment.”

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 transfers per year allowed under the section entitled “Transfer Privilege.”

Dollar-Cost Averaging

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.)

Dollar-cost averaging allows you to invest gradually over time. Each month or quarter, as you select, 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. If you elected to participate in dollar-cost averaging when you purchased your Contract, then all future Purchase Payments will be allocated to dollar-cost averaging, unless you specify otherwise.

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.

No Market Value Adjustment will apply to amounts automatically transferred from the Fixed Account under the dollar-cost averaging program, except that 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. Since you transfer the same dollar amount to the Sub-Accounts at set intervals, dollar cost averaging allows you to purchase more Variable Accumulation Units (and, indirectly, more Fund shares) when prices are low and fewer Variable Accumulation Units (and, indirectly, fewer Fund shares) when prices are high. Therefore, you may achieve a lower average cost per Variable Accumulation Unit over the long term. A dollar-cost averaging program allows you to take advantage of market fluctuations. However, it is important to understand that a dollar-cost averaging program does not insure a profit or protect against loss in a declining market. We do not allow transfers into any of the Guarantee Periods pursuant to the dollar-cost averaging program.

Asset Allocation

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

We have no discretionary authority or control over your investment decisions. We do not recommend asset allocation models or otherwise provide advice as to what asset allocation model may be appropriate for you.

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

Our asset allocation programs are “static” programs. That is to say, if you elect an asset allocation program, we automatically rebalance your Account Value among the Sub-Accounts represented in the model you chose. While we will not alter the Sub-Account allocation percentages used in any asset allocation model, your asset allocation model and allocation weightings could be affected by mergers, liquidations, fund substitutions or closures.

You will not be provided with information regarding the periodic updates to models that we may offer to new Contract purchasers. Any new models will only be offered to Contracts issued on or after the date the new model goes into effect or to Participants who elect an asset allocation program on or after that date. Participants of any existing asset allocation programs may make an independent decision to change their asset allocations at any time. You should consult your financial adviser periodically to consider whether the model you have selected is still appropriate for you.


Systematic Withdrawal 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 to you, or reinvest, interest credited for all Guarantee Periods you have chosen. Withdrawals under these programs may be subject to surrender charges and 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 $10,000.

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

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

Secured Future Program

Under the Secured Future Program, at issue, we divide your initial Purchase Payment between the Fixed Account and the Variable Account. For the Fixed Account portion, you choose a Guarantee Period from among those we offer, and we 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 initial 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 Sub-Accounts of your choice. At the end of the Guarantee Period, you will be guaranteed the amount of your 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. The Secured Future Program is subject to availability. Your Secured Future Program terminates at the end of the Guarantee Period and is not renewable into a new Guarantee Period. The Secured Future Program is not available when Guarantee Periods are not being offered. (See “The Fixed Account Options: The Guarantee Periods.”)

WITHDRAWALS, WITHDRAWAL CHARGES, 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 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.

All withdrawals may be subject to a withdrawal charge (see “Withdrawal Charge”) and withdrawals from your Fixed Account Value also may be subject to a Market Value Adjustment. (See “Market Value Adjustment.”) Upon request we will notify you of the amount we would pay in the event of a full or partial withdrawal. Withdrawals also may have adverse federal income tax consequences, including a 10% penalty tax. (See “Tax Considerations.”) You should carefully consider these tax consequences before requesting a cash withdrawal.

Full Withdrawals

If you request a full withdrawal, we calculate the amount we will pay you as follows: We start with 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; we add the amount of any Market Value Adjustment applicable to your Fixed Account Value; and finally, we deduct any applicable withdrawal charge.

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

Partial Withdrawals

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

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

Partial withdrawals may affect the death benefit amount. (See “Amount of Death Benefit.”)

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 (i.e., a surrender of your Contract).

Time of Payment

We will pay you the applicable amount of any full or partial withdrawal within seven days after we receive your withdrawal request, except in cases where we are permitted 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:

           when the New York Stock Exchange is closed (except weekends and holidays) or when the SEC determines trading on the New York Stock Exchange is restricted;

           when the SEC determines that an emergency exists and that it is not reasonably practical (i) to dispose of securities held in the variable Account or (ii) to determine the value of the net assets of the Variable Account;

           when an SEC order permits us to defer payment for the protection of Participants; or

           if mandated by applicable law.

If, pursuant to SEC rules, the MFS® Money Market Portfolio suspends payment of redemption proceeds in connection with a liquidation of the Fund, we will delay payment of any transfer, partial withdrawal, surrender, loan, or death benefit from the Money Market Sub-Account until the Fund is liquidated. We also may defer payment of amounts you withdraw from the Fixed Account for up to six months from the date we receive your withdrawal request. We do not pay interest on the amount of any payments we defer.

If mandated under applicable law, we may be required to reject a Purchase Payment and/or block a Contract Owner's account and thereby refuse to pay any request for transfers, withdrawals, surrenders or death benefits until instructions are received from the appropriate regulators. We may also be required to provide additional information about you or your account to governmental regulators.

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.”)

When you make a withdrawal, we consider the oldest Purchase Payment that you have not already withdrawn to be withdrawn first, then the second oldest Purchase Payment, and so forth. Once all Purchase Payments are withdrawn, the balance withdrawn is considered to be accumulated value.

Withdrawal Charge

We do not deduct any sales charge from your Purchase Payments when they are made. However, we may impose a withdrawal charge (known as a “contingent deferred sales charge”) on certain amounts you withdraw. We impose this charge primarily to defray some of our expenses related to the sale of the Contracts, such as commissions we pay to agents, the cost of sales literature, and other promotional costs and transaction expenses.

If you purchased your Contract before November 1994, or if your state does not permit our current withdrawal charge, we use the Alternate Withdrawal Charge, described below.

The withdrawal charge will never be greater than 6% of the aggregate amount of Purchase Payments you make under the Contract.

We may modify the withdrawal charges and limits, upon notice to the Owner of the Group Contract. However, any modification will only apply to Accounts established after the date of the modification.

Free Withdrawal Amount

In each Account Year you may withdraw a portion of your Account Value, which we will call the “free withdrawal amount,” before incurring the withdrawal charge. For any year, the free withdrawal amount is equal to (1) 10% of the amount of all Purchase Payments you have made during the last seven Account Years, including the current Account Year (the “Annual Withdrawal Allowance”), plus (2) the amount of all Purchase Payments made before the last seven Account Years that you have not previously withdrawn. Any portion of the Annual Withdrawal Allowance that you do not use in an Account Year is cumulative, that is, it is carried forward and available for use in future years.

For convenience, we refer to Purchase Payments made during the last seven Account Years (including the current Account Year) as “New Payments,” and all Purchase Payments made before the last seven Account Years as “Old Payments.”

For example, assume you wish to make a withdrawal from your Contract in Account Year 10. You made an initial Purchase Payment of $10,000 in Account Year 1, you made one additional Purchase Payment of $8,000 in Account Year 8, and you have made no previous withdrawals. Your Account Value in Account Year 10 is $35,000. The free withdrawal amount for Account Year 10 is $19,400, calculated as follows:

           $800, which is the Annual Withdrawal Allowance for Account Year 10 (10% of the $8,000 Purchase Payment made in Account Year 8, the only New Payment); plus

           $8,600, which is the total of the unused Annual Withdrawal Allowances of $1,000 for each of Account Years 1 through 7 and $800 for each of Account Years 8 and 9 that are carried forward and available for use in Account Year 10; plus

           $10,000, which is the amount of all Old Payments that you have not previously withdrawn.

Withdrawal Charge on Purchase Payments

If you withdraw more than the free withdrawal amount in any Account Year, we consider the excess amount to be withdrawn first from New Payments that you have not previously withdrawn. We impose the withdrawal charge on the amount of these New Payments. Thus, the maximum amount on which we will impose the withdrawal charge in any year will never be more than the total of all New Payments that you have not previously withdrawn.

The amount of your withdrawal, if any, that exceeds the total of the free withdrawal amount plus the aggregate amount of all New Payments not previously withdrawn, is not subject to the withdrawal charge.

Order of Withdrawal

New Payments are withdrawn on a first-in first-out basis until all New Payments have been withdrawn. For example, assume the same facts as in the example above. In Account Year 10 you wish to withdraw $25,000. We attribute the withdrawal first to the free withdrawal amount of $19,400, which is not subject to the withdrawal charge. The remaining $5,600 is withdrawn from the Purchase Payment made in Account Year 8 (the only New Payment) and is subject to the withdrawal charge. The $2,400 balance of the Account Year 8 Purchase Payment will remain in your Account. If you make a subsequent $5,000 withdrawal in Account Year 10, $2,400 of that amount will be withdrawn from the remainder of the Account Year 8 Purchase Payment and will be subject to the withdrawal charge. The other $2,600 of your withdrawal (which exceeds the amount of all New Payments not previously withdrawn) will not be subject to the withdrawal charge.

Calculation of Withdrawal Charge

We calculate the amount of the withdrawal charge by multiplying the Purchase Payments you withdraw by a percentage. The percentage varies according to the number of Account Years the Purchase Payment has been held in your Account, including the year in which you made the Purchase Payment, but not the year in which you withdraw it. Each Purchase Payment begins a new seven-year period and moves down a declining surrender charge scale at each Account Anniversary. Purchase Payments received during the current Account Year will be charged 6% if withdrawn. On your next scheduled Account Anniversary, that Purchase Payment along with any other Purchase Payments made during that Account Year, will be considered to be in their second Account Year and will have a 5% withdrawal charge. On the next Account Anniversary, these Purchase Payments will move into their third Account Year and will have a withdrawal charge of 5%. The withdrawal charge decreases according to the number of Account Years the Purchase Payment has been in your Account. The declining withdrawal charge scale is as follows:

Number of Account Years Purchase Payment has been in your Account
 
Withdrawal Charge
0-1
6%
2-3
5%
4-5
4%
6
3%
7 or more
0%

For example, using the same facts as in the example in “Free Withdrawal Amount” above, the percentage applicable to the withdrawals in Account Year 10 of Purchase Payments made in Account Year 8 would be 5%, because the number of Account Years the Purchase Payments have been held in your Account would be 2. You may want to consider deferring a withdrawal because withdrawal charges decline the longer the Purchase Payment is held in your Account.

For additional examples of how we calculate withdrawal charges, see Appendix B.

Alternate Withdrawal Charge

If you purchased your Contract before November 1994, or if your state does not permit the withdrawal charge described above, we will impose the withdrawal charge as follows:

Free Withdrawal Amount

In each Account Year you may withdraw a portion of your Account Value, which we will call the “free withdrawal amount,” before incurring the withdrawal charge. For any year, the free withdrawal amount is equal to (1) 10% of the amount of all Purchase Payments you have made during the last seven Account Years, including the current Account Year (the “Annual Withdrawal Allowance”), plus (2) the amount of all Purchase Payments made before the last seven Account Years that you have not previously withdrawn. The Annual Withdrawal Allowance is not cumulative; any portion of the Annual Withdrawal Allowance that you do not use in an Account Year will not be carried forward or available for use in future years.

For convenience, we refer to Purchase Payments made during the last seven Account Years (including the current Account Year) as “New Payments,” and all Purchase Payments made before the last seven Account Years as “Old Payments.” Your Account Value minus New Payments and Old Payments is called “accumulated value.”

Order of Withdrawal

When you make a withdrawal, we consider the oldest Payment that you have not already withdrawn to be withdrawn first, then the next oldest, and so forth. Once all Old Payments and New Payments are withdrawn, the balance withdrawn is considered to be accumulated value.

Calculation of Withdrawal Charge

We calculate the amount of the withdrawal charge by multiplying the Purchase Payments you withdraw by a percentage. The percentage varies according to the number of Account Years the Purchase Payment has been held in your Account, including the year in which you made the Purchase Payment, but not the year in which you withdraw it. Each Purchase Payment begins a new seven-year period and moves down a declining surrender charge scale at each Account Anniversary. Purchase Payments received during the current Account Year will be charged 6% if withdrawn. On your next scheduled Account Anniversary, that Purchase Payment along with any other Purchase Payments made during that Account Year, will be considered to be in their second Account Year and will have a 5% withdrawal charge. On the next Account Anniversary, these Purchase Payments will move into their third Account Year and will have a withdrawal charge of 5%. The withdrawal charge decreases according to the number of Account Years the Purchase Payment has been in your Account. The declining withdrawal charge scale is as follows:

Number of Account Years Purchase
Payment has been in your Account
 
Withdrawal Charge
0-1
6%
2-3
5%
4-5
4%
6
3%
7 or more
0%

For additional examples of how we calculate the Alternate Withdrawal Charge, see Appendix B. You may want to consider deferring a withdrawal because withdrawal charges decline the longer the Purchase Payment is held in your Account.
Types of Withdrawals Not Subject to Withdrawal Charge

We do not impose a withdrawal charge on withdrawals from the Accounts of (a) our employees, (b) employees of our affiliates, or (c) licensed insurance agents who sell the Contracts. We also may waive withdrawal charges with respect to Purchase Payments derived from the surrender of other annuity contracts we issue.

Nursing Home Waiver

We will waive the withdrawal charge for a full withdrawal if:

           the nursing home waiver is approved in the state of issue;

           at least one year has passed since we issued your Contract; and

           you are confined to an eligible nursing home and have been confined there for at least the preceding 180 days, or any shorter period required by your state.

An “eligible nursing home” means a licensed hospital or licensed skilled or intermediate care nursing facility at which medical treatment is available on a daily basis and daily medical records are kept for each patient. You must provide us evidence of confinement in the form we determine. To find out where the nursing home waiver is approved, you can call us at (800) 752-7216.

Other Withdrawals

We do not impose the withdrawal charge:
           on amounts you apply to provide an annuity;
           on amounts we pay as a death benefit;
           amounts you transfer among the Sub-Accounts, between the Sub-Accounts and the Fixed Account, or within the Fixed Account; or
           on any amounts transferred as a part of an optional program.

Market Value Adjustment

Market Value Adjustments only apply to Contracts investing in the Fixed Account and are only applicable to Contracts that have allocated money to the Fixed Account Guarantee Period options that we make available from time to time.

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 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 lower than your Guaranteed Interest Rate, the Market Value Adjustment is likely to increase your Account Value.

Effective March 19, 2012, we have amended your Contract or Certificate by limiting (i.e., putting a “floor” on) any downward Market Value Adjustment that might be applied after March 19, 2012, to withdrawals or transfers out of a Guarantee Period. The “floor” ensures that, if you withdraw or transfer money from your Fixed Account Value more than 30 days before the end of the applicable Guarantee Period, we will not apply a Market Value Adjustment that would reduce the amount withdrawn before the deduction of any applicable Contract charges. We will, however, continue to apply any positive Market Value Adjustment that would increase the amount withdrawn.

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
 

where:

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

We will apply the Market Value Adjustment to the amount being withdrawn after deduction of any Account Fee, if applicable, but before we impose any withdrawal charge 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 to help cover the administrative expenses we incur related to the issuance of Contracts and the maintenance of Accounts. We deduct the Account Fee on each Account Anniversary, which is the anniversary of the first day of the month after we issue your Contract. In Account Years 1 through 5, the Account Fee is equal to the lesser of (a) $30 and (b) 2% of your Account Value. After Account Year 5, we may change the Account Fee each year, but the Account Fee will never exceed the lesser of (a) $50 and (b) 2% of your Account Value. We deduct the Account Fee pro rata from each Sub-Account and each Guarantee Period, based on the allocation of your Account Value on your Account Anniversary.

We will not charge you the annual Account Fee if:

           your Account Value has been allocated only to the Fixed Account during the applicable Account Year; or

           your Account Value is more than $75,000 on your Account Anniversary.

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

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

Administrative Expense Charge

We deduct an administrative expense charge from the assets of the Variable Account during both the Accumulation Phase and the Income Phase. During the Accumulation Phase, this charge is deducted at an annual effective rate equal to 0.15% of your average daily Variable Account Value. During the Income Phase, this charge is included as part of the total insurance charges deducted from Annuity Unit values. This charge is designed to reimburse us for expenses we incur in administering the Contracts, the Accounts and the Variable Account that are not covered by the annual Account Fee.

Depending on the amount of expenses that we incur, we expect that we may earn a profit from this charge. 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 1.25%. 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 Annuitant 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 will exceed the amount of the charges we deduct for those riders; and (4) the risk that the Account Fee and the administrative expense charge we assess under the Contracts may be insufficient to cover the actual total administrative expenses we incur. If the amount of the charge is insufficient to cover 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 the risks, we will make a profit on the charge. We may use this profit for any proper corporate purpose, including the payment of marketing and distribution expenses for the Contracts. 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.

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 you could be subject to a premium tax and the amount of any tax.

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

Fund Expenses

There are fees and expenses deducted from each Fund of the Trust. These fees and expenses are described in the relevant Fund’s prospectus and related Statement of Additional Information.

Modification in the Case of Group Contracts

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

DEATH BENEFIT

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

Amount of Death Benefit

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

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

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

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

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

(3)           your Account Value on the Seven-Year Anniversary immediately before the Death Benefit Date, adjusted for subsequent Purchase Payments and partial withdrawals and charges made between the Seven-Year Anniversary and the Death Benefit Date; and

(4)           your total Purchase Payments minus the sum of partial withdrawals; interest will accrue daily on each Purchase Payment and each partial withdrawal at a rate equivalent to a rate of 5% per year until the first day of the month following the Annuitant’s 80th birthday, or until the Purchase Payment or partial withdrawal has doubled in amount, whichever is earlier.

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

If the death benefit we pay is amount (2), (3) or (4), your Account Value will be increased by the excess, if any, of that amount over amount (1). Any such increase will be allocated to the Sub-Accounts in proportion to your Account Value in those Sub-Accounts on the Death Benefit Date. Also, any portion of this new Account Value attributed to the Fixed Account will be transferred to the Money Market Sub-Account (without the application of a Market Value Adjustment). The Beneficiary may then transfer to the Fixed Account and begin a new Guarantee Period, if we are then currently offering Fixed Account Options.

If your Contract is a traditional Individual Retirement Annuity or a 403(b) TSA annuity, required minimum distributions under the Internal Revenue Code may affect the value of your death benefit. Please refer to “Required Minimum Distribution Requirements for Tax-Sheltered Annuities and Traditional Individual Retirement Annuities” under “TAX CONSIDERATIONS” for more information regarding tax issues that you should consider before choosing a death benefit.

Spousal Continuance

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

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 mailing address an election form, which we will provide. If no such election is in effect on the date of the Annuitant’s death, the Beneficiary may elect either a single cash payment or an annuity. If you were the Annuitant and the Beneficiary is your spouse, the Beneficiary may elect to continue the Contract. This election is made by sending us a letter of instruction. If we do not receive the Beneficiary’s election within 60 days after we receive Due Proof of Death, we will pay the death benefit in a single cash payment.

If we pay the death benefit in the form of an Annuity Option, the Beneficiary becomes the Annuitant/Payee under the terms of that Annuity Option (see “The Income Phase - Annuity Provisions”). Neither you nor the Beneficiary may exercise rights that would adversely affect the treatment of the Contract as an annuity contract under the Internal Revenue Code (see “Other Contract Provisions - Death of Participant.”)

Selection and Change of Beneficiary

You select your Beneficiary in your Application. You may change your Beneficiary at any time 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.

Every state has unclaimed property laws which generally declare annuity contracts to be abandoned after a period of inactivity of three to five years from the contract’s Annuity Commencement Date or date the death benefit is due and payable. For example, if the payment of a death benefit has been triggered, but, if after a thorough search, we are still unable to locate your Beneficiary, or your Beneficiary does not come forward to claim the death benefit in a timely manner, the death benefit will be paid to the abandoned property division or unclaimed property office of the state in which you or your Beneficiary last resided, as shown on our books and records, or to our state of domicile. This “escheatment” is revocable, however, and the state is obligated to pay the death benefit if your Beneficiary steps forward to claim it with the proper documentation. To prevent such escheatment, it is important that you update your Beneficiary designations, including full names and complete addresses, if and as they change.

Payment of Death Benefit

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

Due Proof of Death

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

           an original certified copy of an official death certificate;

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

           any other proof we find satisfactory.

THE INCOME PHASE - ANNUITY PROVISIONS

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

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

Once the Income Phase begins, no lump sum settlement option or cash withdrawals are permitted, except pursuant to Annuity Option D, Monthly Payments for a Specified Period Certain, as described under “Annuity Options,” and you cannot change the Annuity Option(s) 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, Withdrawal Charges and Market Value Adjustment.”)

Selection of the Annuitant or Co-Annuitant

You select the Annuitant in your Application. The Annuitant is the person who receives annuity payments during the Income Phase and on whose life these payments are based. In your Contract, the Annuity Option(s) refer to the Annuitant as the “Payee.”

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

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

Selection of the Annuity Commencement Date

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

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

           The latest possible Annuity Commencement Date is the first day of the month following the Annuitant’s 95th birthday (“maximum Annuity Commencement Date”) or, if there is a Co-Annuitant, the 95th birthday of the younger of the Annuitant and Co-Annuitant.

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

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

           We must receive your notice, in good order, at least 30 days before the current Annuity Commencement Date.

           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, except that Option E is available only for a Fixed Annuity. We may also agree to other settlement options, at our discretion.

Annuity Option A - Life Annuity

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

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

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

Annuity Option C - Joint and Survivor Annuity

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

Annuity Option D - Monthly Payments for a Specified Period Certain

We make monthly payments for a specified period of time from 5 to 30 years, as you elect. 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 some or all of the discounted value of the remaining payments, less any applicable withdrawal charge; the discount rate for this purpose will be the assumed interest rate in effect. If the Annuitant dies during the period selected, the remaining income payments are made as described above for payments to a Beneficiary under Annuity Option B. The election of this Annuity Option may result in the imposition of a penalty tax.

Annuity Option E - Fixed Payments

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



Selection of Annuity Option

You select one or more of the Annuity Options, which you may change 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 must 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 annuity payments will remain the same. If you do not specify a Variable Annuity or a Fixed Annuity, your Adjusted Account Value will be divided between Variable Annuities and Fixed Annuities in the same proportions as your Account Value was divided between the Variable and Fixed Accounts on the Annuity Commencement Date. You may allocate your Adjusted Account Value applied to a Variable Annuity among the Sub-Accounts, or we will use your existing allocations.

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

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

Amount of Annuity Payments

Adjusted Account Value

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

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

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

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

Variable Annuity Payments

Variable Annuity payments may vary each month. We determine the dollar amount of the first payment using the portion of your adjusted Account Value applied to a Variable Annuity and the “annuity payment rates” in your Contract, which are based on an assumed interest rate of 3% per year, compounded annually. See “Annuity Payment Rates.”

To calculate the remaining payments, we convert the amount of the first payment into Annuity Units for each Sub-Account; we determine the number of those Annuity Units by dividing the portion of the first payment attributable to the Sub-Account by the Annuity Unit value of that Sub-Account for the Valuation Period ending just before the Annuity Commencement Date. This number of Annuity Units for each Sub-Account will remain constant (unless the Annuitant requests a transfer among Sub-Accounts). 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, which are based on a minimum guaranteed interest rate of 3% per year, compounded annually, or (2) new rates we have published and are using on the Annuity Commencement Date, if they are more favorable (see “Annuity Payment Rates”).

Minimum Payments

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

Transfer of Variable Annuity Units

During the Income Phase, the Annuitant may transfer Annuity Units from one Sub-Account to another, up to 12 times each Account Year. Any such transfers 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 a transfer, the Annuitant sends us, at our mailing address, a written request stating the number of Annuity Units in the Sub-Account he or she wishes to transfer 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 transfer would not be affected. To calculate this number, we use Annuity Unit values for the Valuation Period during which we receive the transfer request.

Before transferring Annuity Units from one Sub-Account to another, the Annuitant should carefully review the relevant Fund prospectus for the investment objectives and risk disclosure of the Fund in which the Sub-Accounts invest.

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

Account Fee

During the Income Phase, we deduct the annual Account Fee in equal amounts from each Variable Annuity payment. We do not deduct the annual Account Fee from Fixed Annuity payments (see “Contract Charges - Account Fee”).

Annuity Payment Rates

The Contract contains annuity payment rate schedules for each Annuity Option described in this Prospectus. These schedules show, for each $1,000 applied, the dollar amount of: (a) the first monthly Variable Annuity payment based on the assumed interest rate specified in the applicable Contract (at least 3% per year, compounded annually); and (b) the monthly Fixed Annuity payment, when this payment is based on the minimum guaranteed interest rate specified in the Contract (at least 3% per year, compounded annually). We may change these rates under Group Contracts for Accounts established after the effective date of such change (see “Other Contract Provisions - Modification”).

The annuity payment rates may vary according to the Annuity Option(s) elected and the adjusted age of the Annuitant. The Contract also describes the method of determining the adjusted age of the Annuitant. The mortality table used in determining the annuity payment rates for Options A, B and C is the 1983 Individual Annuitant Mortality Table.

Annuity Options as Method of Payment for Death Benefit

You or your Beneficiary may also select one or more Annuity Options to be used in the event of the Annuitant’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/Payee. The Annuity Commencement Date will be the first day of the second month beginning after the Death Benefit Date.

OTHER CONTRACT PROVISIONS

Exercise of Contract Rights

A 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 Annuitant. Such Payee may thereafter exercise such rights and privileges, if any, of ownership which continue.

Change of Ownership

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

The Owner of a Non-Qualified Contract may change the ownership of the Contract prior to the last Annuity Commencement Date, and each Participant, in like manner, may change the ownership interest in a Contract.

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

Death of Participant

If your Contract is a Non-Qualified Contract and you die prior to the Annuitant and before the Annuity Commencement Date, special distribution rules apply. In that case, your Account Value, plus or minus any Market Value Adjustment, must be distributed to your “designated beneficiary” within the meaning of Section 72(s) of the Internal Revenue Code, either (1) as a lump sum within 5 years after your death or (2) if in the form of an annuity, over a period not greater than the life or expected life of the designated beneficiary, with payments beginning no later than one year after your death.

The person you have named as Beneficiary under your Contract, if any, will be the “designated beneficiary.” If the named Beneficiary is not living, the Annuitant automatically becomes the designated beneficiary.

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

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

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

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

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

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

Voting of Fund Shares

To the extent required by law, we will vote all shares held in the Variable Account in accordance with instructions we receive from persons with voting interests in the Funds. During the Accumulation Phase, you will have the right to give voting instructions, except in the case of a Group Contract in which 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 the right to give voting instructions.

Before a vote of the shareholders of a Fund occurs, each person with voting interests in the Fund will receive voting materials from us. We will ask those persons to instruct us on how to vote and to return their respective voting instructions to us in a timely manner. Each such person is permitted to cast votes based on the dollar value of the shares of each Fund that we hold for your Contract in the corresponding Sub-Account. We calculate this value based on the number of Variable Accumulation Units or Variable Annuity Units allocated to your Contract as of the date set by the Fund and the value of each Variable Accumulation Unit or Variable Annuity Unit on that date. We count fractional votes.

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 person(s) with voting interests in the Fund. Because of this method of proportional voting, a small number of persons with voting interests in the Fund may determine the outcome of a shareholder vote. If, however, we determine that we are permitted to vote the Fund shares in our own right, then we may do so.

Note: Owners of Qualified Contracts issued on a group basis may be subject to other voting provisions of the particular retirement plan and under the Investment Company Act of 1940. Employees who contribute to retirement 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 retirement plans may also provide the additional extent, if any, to which an Owner shall follow voting instructions of persons with rights under those plans. If no voting instructions are received from any such person with respect to a particular Contract, the Owner may instruct us as to how to vote the number of Fund shares for which instructions may be given.

Reports to Owners

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

In addition, within five business days after each calendar 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 calendar 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, 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.

If you have enrolled in the electronic delivery service and consented to receive documents electronically, we will send you an email at the address you provided notifying you when we have posted your confirmations, statements, and reports on our website.

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 of the Trust may not always be available for investment under the Contract. We may add or delete Funds or other investment companies as variable investment options under the Contracts. We may also substitute shares of another Fund or shares of another registered open-end investment company or unit investment trust for the shares held in any Sub-Account, provided that the substitution has been approved, if required, by the SEC. You will receive notice of any such Fund changes that affect your Contract by a supplement to this Prospectus.

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 supplement this Prospectus to reflect the change and take such other action as we deem necessary and appropriate to effect the change.

Splitting Units

We reserve the right to split or combine the value of Variable Accumulation Units, Annuity Units or any of them. In effecting any such change of unit values, strict equity will be preserved and no change will have a material effect on the benefits or other provisions of the Contracts. Any changes we make by splitting or combining Variable Accumulation Unit values must comply with federal securities laws and regulations.

Modification

Upon notice to the Owner and Participant(s), (or the Payee(s) during the Income Phase), we may modify the Contract if such modification is consistent with federal securities laws and regulations and: (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 supplement this Prospectus to reflect such modification.

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

Limitation or Discontinuance of New Participants

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

Reservation of Rights

We reserve the right, to the extent permitted by law, to: (1) combine any two or more variable accounts or Sub-Accounts; (2) add or delete Series, sub-series thereof or other investment companies and corresponding Sub-Accounts; (3) add or remove Guarantee Periods available at any time for election by a Participant; and (4) restrict or eliminate any of the voting rights of Participants (or Owners) or other persons who have voting rights as to the Variable Account. Where required by law, we will obtain approval of changes from Participants or any appropriate regulatory authority. In the event of any change pursuant to this provision, we may supplement this Prospectus and make appropriate endorsement to the Contract as necessary 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 mailing address as shown on the cover of this Prospectus within 10 days, or longer if required 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. However, 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 seven days after your Contract Date. Upon such revocation, we will refund your Purchase Payment(s). This right of revocation with respect to an IRA is in addition to the return privilege set forth in the preceding paragraph. We allow a Participant establishing an IRA a “ten day free-look,” notwithstanding the provisions of the Internal Revenue Code.

TAX CONSIDERATIONS

This section provides general information on the federal income tax consequences of ownership of a Contract and is not intended as tax advice. 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 state or other income tax laws, any state and local estate or inheritance tax, or other tax consequences of ownership or receipt of distributions under a Contract. 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.

When you invest in an annuity contract, you usually do not pay taxes on your investment gains until you withdraw the money – generally for retirement purposes. If you invest in a variable annuity as part of an individual retirement plan, pension plan or employer-sponsored retirement program, your Contract is called a “Qualified Contract.” If your annuity is independent of any formal retirement or pension plan, it is termed a “Non-Qualified Contract.” The tax rules applicable to Qualified Contracts vary according to the type of retirement plan and the terms and conditions of the plan.

U.S. Federal Income Tax Considerations

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

Taxation of Non-Qualified Contracts

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 a Participant 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 Participant 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 Participant of a Contract), less any Purchase Payments that were amounts previously received which were not includable in income).

Annuity Payments. 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.

Penalty Tax on Certain Withdrawals. 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). Other exceptions may be applicable under certain circumstances and special rules may be applicable in connection with the exceptions enumerated above. Also, additional exceptions apply to distributions from a Qualified Contract. You should consult a qualified tax professional with regard to exceptions from the penalty tax.

Taxation of Death Benefit Proceeds. Death benefits paid upon the death of a contract owner 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.

Transfers, Assignments or Exchanges of a Contract. A transfer or assignment of ownership of a Contract, the designation of an Annuitant other than the Owner, the selection of certain maturity dates, or the exchange of a Contract may result in certain tax consequences to you that are not discussed herein. An Owner contemplating any such transfer, assignment or exchange should consult a qualified tax professional as to the tax consequences.

Withholding. Annuity distributions are generally subject to withholding for the recipient’s federal income tax liability.  Recipients can generally elect, however, not to have tax withheld from distributions.

Multiple Contracts. All non-qualified deferred annuity contracts that are issued by us (or our affiliates) to the same owner during any calendar year are treated as one annuity contract for purposes of determining the amount includible in such owner’s income when a taxable distribution occurs.

Partial Annuitization. Under a new tax provision enacted in 2010, if part of an annuity contract’s value is applied to an annuity option that provides payments for one or more lives and for a period of at least ten years, those payments may be taxed as annuity payments instead of withdrawals. None of the payment options under the Contract is intended to qualify for this “partial annuitization” treatment.

Taxation of Qualified Contracts

“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.  Adverse tax consequences may result if you do not ensure that contributions, distributions and other transactions with respect to the Contract comply with the law.

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. Adverse tax consequences to the retirement plan, the participant or both may result if the Contract is transferred to any individual as a means to provide benefit payments, unless the plan complies with all the requirements applicable to such benefits prior to transferring the Contract.

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. We no longer accept any additional Purchase Payments to any previously issued TSAs.

The Internal Revenue Service’s (“IRS”) comprehensive TSA regulations are generally 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:

           deductible medical expenses incurred by you, your spouse, or your dependents;
           payments of tuition and related educational fees for the next 12 months of post-secondary education for you, your spouse, or your dependents;
           costs related to the purchase of your principal residence (not including mortgage payments);
           payment necessary to prevent eviction from your principal residence or foreclosure of the mortgage on your principal residence;
           payments for burial or funeral expenses for your parent, spouse, children, or dependents; or
           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 Accounts and Annuities. Individual Retirement Accounts and Annuities (“IRAs”), as defined in Section 408 of the Code, permit eligible individuals to make annual contributions of up to the lesser of a specified dollar amount for the year or the amount of compensation includible in the individual’s gross income for the year. The contributions may be deductible in whole or in part, depending on the individual’s income. In addition, certain distributions from some other types of retirement plans may be “rolled over” into an IRA on a tax-deferred basis without regard to these limits.  Amounts in the IRA (other than nondeductible contributions) are taxed when distributed from the IRA. A 10% penalty tax generally applies to distributions made before age 59½, unless an exception applies. 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 certain eligible individuals 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 roll over from or convert a traditional IRA 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.  Distributions from a Roth IRA are generally not taxed, except that once aggregate distributions exceed contributions to the Roth IRA, income tax and a 10% penalty tax may apply to distributions made (1) before age 59½ (subject to certain exceptions) or (2) during the five taxable years starting with the year in which the first contribution is made to any Roth IRA.  A 10% penalty tax may apply to amounts attributable to a conversion from an IRA if they are distributed during the five taxable years beginning with the year in which the conversion was made.

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.

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

If you receive a distribution for a Qualified Contract used in connection with a qualified pension plan, from a tax-sheltered annuity, a governmental Code Section 457 plan or an 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:

           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;

           any required minimum distribution, or

           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 be 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, a non-surviving-spouse beneficiary may elect a direct rollover only to a so-called inherited IRA. 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.

In certain circumstances, owners of variable annuity contracts have been considered for Federal income tax purposes to be the owners of the assets of the separate account supporting their contracts due to their ability to exercise investment control over those assets. When this is the case, the contract owners have been currently taxed on income and gains attributable to the variable account assets. There is limited guidance in this area, and some features of our Contracts, such as the flexibility of an owner to allocate premium payments and transfer amounts among the investment divisions of the separate account, have not been explicitly addressed in published rulings. While we believe that the Contracts do not give Owners investment control over separate account assets, we reserve the right to modify the Contracts as necessary to prevent an Owner from being treated as the Owner of the separate account assets supporting the Contract. 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.

Required Minimum Distribution Requirements

If your Contract is a Qualified Contract other than a Roth IRA, 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.

The IRS’s RMD regulations provide that the annual RMD amount is to be calculated based on the Contract’s Account Value as of 12/31 plus “the actuarial present value of any additional benefits” that are provided under your Contract (such as optional death benefits) which is also calculated as of 12/31. When we notify you yearly of the RMD amount, we will inform you if the calculation included the actuarial present value of any additional benefits since such inclusion would have increased your RMD amount.  Because of the above requirements, a death benefit in your Contract could cause your RMD amount to be higher than it would be without such a benefit.

You may take an RMD amount calculated for a particular Individual Retirement Annuity from that Annuity or from another IRA 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.

For Qualified Contracts issued other than as Individual Retirement Annuities, (1) we do not calculate your annual RMD amount nor do we notify you of such amount and (2) 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 so that it can be used by the trustee or custodian in the Account’s RMD calculations.

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 your information about your withdrawal. Under the Internal Revenue Code, any withdrawal from a Non-Qualified Contract is taxable to the extent the annuity’s cash value (determined without regard to surrender charges) exceeds the investment in the contract. There is no definition of “cash value” in the Code and, for tax reporting purposes, we are currently treating it as the Account Value of the Contract. However, there can be no assurance that the IRS will agree that this is the correct cash value. You should consult with a qualified tax professional as to the meaning of “cash value.”

Federal Defense of Marriage Act and Same-Sex Marriages

The Contract provides that upon your death a surviving spouse may have certain continuation rights that he or she may elect to exercise for the Contract’s death benefit. Under federal law, all such Contract continuation rights are available only to a person who is defined as a “spouse.” Previously, under the federal Defense of Marriage Act, that definition did not include a same-sex spouse. In 2013, the U.S. Supreme Court ruled that section 3 of the Defense of Marriage Act is unconstitutional; therefore same-sex marriages that are recognized under state law are now also recognized under federal law. The Treasury Department and the IRS have recently announced that spousal status will be determined based on the marriage laws of the state or country in which the marriage was celebrated, regardless of the marriage laws of the state in which an individual resides. Some uncertainty remains, however, and you should consult with a qualified tax professional for further information.

Federal Estate Taxes

While no attempt is being made to discuss the Federal estate tax implications of the Contract, a purchaser should keep in mind that the value of an annuity contract owned by a decedent and payable to a beneficiary by virtue of an annuity contract owned by a decedent and payable to a beneficiary by virtue of surviving the decedent is included in the decedent’s gross estate. Depending on the terms of the annuity contract, the value of the annuity included in the gross estate may be the value of the lump sum payment payable to the designated beneficiary or the actuarial value of the payments to be received by the beneficiary. Please consult an estate planning advisor for more information.

Generation-skipping Transfer Tax

Under certain circumstances, the Code may impose a “generation-skipping transfer tax” when all or part of an annuity contract is transferred to, or a death benefit is paid to, an individual two or more generations younger than the Owner. Regulations issued under the Code may require us to deduct the tax from your Contract, or from any applicable payment, and pay it directly to the IRS. Please consult a qualified tax professional for more information.

American Taxpayer Relief Act of 2012

The American Taxpayer Relief Act of 2012 (ATRA) permanently extended the laws governing estate taxes, gift taxes and generation skipping transfer taxes that were put in place by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (TRA 2010), with one notable exception – the top estate tax, gift tax and generation skipping tax rate increases from 35% to 40%.

Medicare Tax

Beginning in 2013, distributions from non-qualified annuity policies will be considered “investment income” for purposes of the newly enacted Medicare tax on investment income. Thus, in certain circumstances, a 3.8% tax may be applied to some or all of the taxable portion of distributions (e.g. earnings) to individuals whose income exceeds certain threshold amounts ($200,000 for filing single, $250,000 for married filing jointly and $125,000 for married filing separately.) Please consult a tax advisor for more information.

Annuity Purchases by Residents of Puerto Rico

The Internal Revenue Service has announced that income received by residents of Puerto Rico under life insurance or annuity contracts issued by a Puerto Rico branch of a United States life insurance company is U.S.-source income that is generally subject to United States Federal income tax.

Annuity Purchases by Nonresident Aliens and Foreign Corporations

The discussion above provides general information regarding U.S. federal income tax consequences to annuity purchasers that are U.S. citizens or residents. Purchasers that are not U.S. citizens or residents will generally be subject to U.S. federal withholding tax on taxable distributions from annuity contracts at a 30% rate, unless a lower treaty rate applies. In addition, purchasers may be subject to state and/or municipal taxes and taxes that may be imposed by the purchaser’s country of citizenship or residence. Prospective purchasers are advised to consult with a qualified tax professional regarding U.S. state, and foreign taxation with respect to an annuity contract purchase.

Possible Tax Law Changes

Although the likelihood of legislative changes is uncertain, there is always the possibility that the tax treatment of the Contract could change by legislation or otherwise. Consult a qualified tax professional with respect to legislative developments and their effect on the Contract.

We have the right to modify the Contract in response to legislative changes that could otherwise diminish the favorable tax treatment that annuity contract owners currently receive. We make no guarantee regarding the tax status of any contact and do not intend the above discussion as tax advice.

Puerto Rico Tax Provisions

The Contract offered by this Prospectus is considered an annuity contract under Section 1022 of the Puerto Rico Internal Revenue Code of 1994, as amended and Section 1031.01 of the 2011 Internal Revenue Code for a New Puerto Rico, as amended (collectively the “Puerto Rico Code”). Under the current provisions of the Puerto Rico 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 Puerto Rico 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  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 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 CONTRACTS

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

DISTRIBUTION OF THE CONTRACTS

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 or 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”), 96 Worcester Street, 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 Contract Owner or the separate account. The Company intends to recoup this compensation through fees and charges imposed under the Contract, and from profits on payments received by the Company for providing administrative, marketing, and other support and services to the Funds.

The amount and timing of commissions the Company may pay to Selling Broker-Dealers may vary depending on the selling agreement but is not expected to be more than 8.50% of Purchase Payments, and 1.25% annually of the Participant’s Account Value. The Company may pay or allow other promotional incentives or payments in the form of cash or other compensation to the extent permitted by 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 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” compensations, or reimbursements to Selling Broker-Dealers in recognition of their marketing and distribution, transaction processing and/or administrative services support. These payments are not offered to all Selling Broker-Dealers, and the terms of any particular agreement governing the payments may vary among Selling Broker-Dealers depending on, among other things, the level and type of marketing and distribution support provided. Marketing and distribution support services may include, among other services, placement of the Company’s products on the Selling Broker-Dealers’ preferred or recommended list, access to the Selling Broker-Dealers’ registered representatives for purposes of promoting sales of the Company’s products, assistance in training and education of the Selling Agents, and opportunities for the Company to participate in sales conferences and educational seminars. The payments or reimbursements may be calculated as a percentage of the particular Selling Broker-Dealer’s actual or expected aggregate sales of our variable contracts (including the Contract) or assets held within those contracts 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 Contracts 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 Company makes numerous forms of payments and engages in a variety of other activities 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 and other activities may be significantly greater or less in connection with the Contracts than in connection with other products offered and sold by the Company or by others. Accordingly, our payments and other activities 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; Credits; Special Guaranteed Interest Rates.” During 2011, 2012, and 2013, approximately $17,866, $23.208, and $2,416,632, respectively, in commissions were paid to but not retained by Clarendon in connection with the distribution of the Contracts described in this Prospectus.

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. 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 location: 100 F Street, N.E., Washington, D.C. 20549-0102, telephone (202) 551-8090. The SEC’s public reference room will also provide copies by mail for a fee. You may also find these materials on the SEC’s website (www.sec.gov).

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 State of Delaware and 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 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. Such insurance holding company legislation protects the Company’s ability to pay all guaranteed contract benefits. 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. A state’s assessment on insurers in connection with the state guaranty fund would not affect the Company’s obligation to pay guaranteed contract benefits. If an assessment were so large as to affect the Company’s own ability to meet its obligations, then the provisions to excuse, defer, or offset such assessment would allow the Company to pay guaranteed contract benefits.

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

The Company, like other insurance companies, is involved in lawsuits, including class action lawsuits. Although the outcome of any litigation cannot be predicted with certainty, Sun Life (U.S.) believes that, at the present time, there are no pending or threatened lawsuits that are reasonably likely to have a material adverse impact on the Variable Account, on the ability of Clarendon Insurance Agency, Inc. to perform under its principal underwriting agreement, or on our ability to meet our obligations under the Contract.

FINANCIAL STATEMENTS

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

The financial statements of the Variable Account for the year ended December 31, 2013 are also included in the Statement of Additional Information.

TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION

Sun Life Assurance Company of Canada (U.S.)
2
Advertising and Sales Literature
2
Tax-Deferred Accumulation
3
Calculations
4
Example of Net Investment Factor Calculation
4
Example of Variable Accumulation Unit Value Calculation
4
Annuity Provisions
4
Determination of Annuity Payments
4
Annuity Unit Value
5
Example of Variable Annuity Unit Calculation
5
Example of Variable Annuity Payment Calculation
5
Distribution of the Contracts
6
Custodian
6
Experts
6
Financial Statements
6



 
 

 

APPENDIX A -
GLOSSARY

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

ACCOUNT or PARTICIPANT ACCOUNT: An account established for each Participant to which Net Purchase Payments are credited.

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

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

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

*ANNUITANT: The person or persons named in the Application and on whose life the first annuity payment is to be made. In a Non-Qualified Contract, if you name someone other than yourself as Annuitant, you may also name a co-annuitant. If you do, all provisions of the Contract based on the death of the Annuitant will be based on the date of death of the last surviving of the persons named. By example, if the Annuitant dies prior to the Annuity Commencement Date, the co-annuitant will become the new annuitant. The death benefit will become due only on the death before the Annuity Commencement Date of the last surviving annuitant and co-annuitant named. These persons are referred to collectively in the Contract as “Annuitants.” If you have not named a sole Annuitant on the 30th day before the Annuity Commencement Date and both the Annuitant and Co-Annuitant are living, the Co-Annuitant will be the sole Annuitant during the Income Phase.

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

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

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

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

*BENEFICIARY: The person or entity having the right to receive the death benefit and, for Non-Qualified Contracts, who is the “designated beneficiary” for purposes of Section 72(s) of the Internal Revenue Code.

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

DEATH BENEFIT DATE: If you have elected a death benefit payment option before the Annuitant’s death that remains in effect, the date on which we receive Due Proof of Death. If your Beneficiary elects the death benefit payment option, the later of (a) the date on which we receive the Beneficiary’s election and (b) the date on which we receive Due Proof of Death. If we do not receive the Beneficiary’s election within 60 days after we receive Due Proof of Death, the Death Benefit Date will be the last day of the 60 day period and we will pay the death benefit in cash.

DUE PROOF OF DEATH: An original certified copy of an official death certificate, an original certified copy of a decree of a court of competent jurisdiction as to the finding of death, or any other proof satisfactory to the Company.

EXPIRATION DATE: The last day of a Guarantee Period.

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

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

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

GOOD ORDER: An instruction that is received by the Company, that is sufficiently complete and clear, along with all forms, information and supporting legal documentation (including any required spousal or joint owner’s consents) so that the Company does not need to exercise any discretion to follow such instruction. All orders to process a withdrawal request, a request to surrender your Contract, a fund transfer request, or a death benefit claim must be in good order.

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.

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

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

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

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

*PARTICIPANT: The person named in the Certificate who is entitled to exercise all rights and privileges of ownership under the Certificate, except as reserved by the Owner.

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

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

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

SEVEN-YEAR ANNIVERSARY: The seventh Account Anniversary and each succeeding Account Anniversary occurring at any seven year interval thereafter; for example, the 14th, 21st and 28th Account Anniversaries.

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

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


 
 

 

APPENDIX B -
WITHDRAWALS, WITHDRAWAL CHARGES, AND MARKET VALUE ADJUSTMENT

Part 1: Variable Account (The Market Value Adjustment does not apply to the Variable Account)

Withdrawal Charge Calculation for Certificates with Date of Coverage on or After November 1, 1994 Which Contain the Cumulative Withdrawal Provision:

Full Surrender:

Assume a Purchase Payment of $40,000 is made on the Date of Coverage, no additional Purchase Payments are made and there are no partial withdrawals. The table below presents four examples of the withdrawal charge resulting from a full surrender of the Participant’s Account, based on hypothetical Account Values.

Account Year
Hypothetical
Account
Value
Free
Withdrawal
Amount
Purchase
Payments
Withdrawn
Withdrawal
Charge
Percentage
Withdrawal
Charge
Amount
1
$41,000
$  4,000(a)
$37,000
6.00%
$2,220
3
$52,000
$12,000(b)
$40,000
5.00%
$2,000
7
$80,000
$28,000(c)
$40,000
3.00%
$1,200
9
$98,000
$68,000(d)
$40,000
0.00%
$       0

(a)
The free withdrawal amount during an Account Year is equal to 10% of new payments (those payments made in current Account Year or in the six immediately preceding Account Years) less any prior partial withdrawals in that Account Year. Any portion of the free withdrawal amount that is not used in the current Account Year is carried forward into future years. In the first Account Year 10% of new payments is $4,000. Therefore, on full surrender $4,000 is withdrawn free of the withdrawal charge and the Purchase Payment liquidated is $37,000 (Account Value less free withdrawal amount). The withdrawal charge amount is determined by applying the withdrawal charge percentage to the Purchase Payment withdrawn.
 
(b)
In Account Year 3, the free withdrawal amount is equal to $12,000 ($4,000 for the current Account Year, plus an additional $8,000 for Account Years 1 and 2 because no partial withdrawals were taken and the unused free withdrawal amount is carried forward into future Account Years). The withdrawal charge percentage is applied to the Purchase Payment withdrawn (Account Value less free withdrawal amount).
 
(c)
In Account Year 7, the free withdrawal amount is equal to $28,000 ($4,000 for the current Account Year, plus an additional $24,000 for Account Years 1 through 6, $4,000 for each Account Year because no partial withdrawals were taken and the unused free withdrawal amount is carried forward into future Account Years). The withdrawal charge percentage is applied to the Purchase Payment withdrawn (Account Value less free withdrawal amount, but not greater than actual Purchase Payments).
 
(d)
In Account Year 9, the free withdrawal amount is $68,000, calculated as follows: There are no Annual Withdrawal Allowances for Account Years 8 or 9 because there are no New Payments in those years. The $40,000 Purchase Payment made in Account Year 1 is now an Old Payment that constitutes a portion of the free withdrawal amount. In addition, the unused Annual Withdrawal Allowances of $4,000 for each of Account Years 1 through 7 are carried forward and available for use in Account Year 9. The $98,000 full withdrawal is attributed first to the free withdrawal amount. Because the remaining $30,000 is not withdrawn from New Payments, this part of the withdrawal also will not be subject to the withdrawal charge.

Partial Withdrawal:

Assume a single Purchase Payment of $40,000 is deposited at issue, no additional Purchase Payments are made, no partial withdrawals have been taken prior to the fifth Account Year, and there are a series of 3 partial withdrawals made during the fifth Account Year of $9,000, $12,000, and $15,000.

 
Hypothetical
Account
Value
Partial
Withdrawal
Amount
Free
Withdrawal
Amount
Purchase
Payments
Withdrawn
Withdrawal
Charge
Percentage
Withdrawal
Charge
Amount
(a)
$64,000
$  9,000
$20,000
$         0
4.00%
$    0
(b)
$56,000
$12,000
$11,000
$  1,000
4.00%
$  40
(c)
$40,000
$15,000
$         0
$15,000
4.00%
$600

(a)
The free withdrawal amount during an Account Year is equal to 10% of New Payments (those payments made in current account year or in the six immediately preceding Account Years) less any prior partial withdrawals in that Account Year. Any portion of the free withdrawal amount that is not used in the current account year is carried forward into future years. In Account Year 5, the free withdrawal amount is equal to $20,000 ($4,000 for the current Account Year, plus an additional $16,000 for Account Years 1 through 4, $4,000 for each Account Year because no partial withdrawals were taken). The partial withdrawal amount ($9,000) is less than the free withdrawal amount so no Purchase Payments are withdrawn and no withdrawal charge applies.
 
(b)
Since a partial withdrawal of $9,000 was taken, the remaining free withdrawal amount is equal to $11,000. The $12,000 partial withdrawal will first be applied against the $11,000 free withdrawal amount, and then will withdraw Purchase Payments of $1,000, incurring a withdrawal charge of $40.
 
(c)
The free withdrawal amount is zero since the previous partial withdrawals have already used the free withdrawal amount. The entire partial withdrawal amount will result in Purchase Payments being withdrawn and will incur a withdrawal charge. At the beginning of the next Account Year, 10% of Purchase Payments would be available for withdrawal requests during that Account Year.


 
 

 

Withdrawal Charge Calculation for Certificates with Date of Coverage Before November 1, 1994 and Certificates Issued After That Date Which Do Not Contain the Cumulative Withdrawal Provision.

This example assumes that the date of the full surrender or partial withdrawal is during the 9th Account Year.

1
2
3
4
5
6
1
     $  1,000
     $1,000
  $         0
       0%
$        0
2
1,200
       1,200
       0
0
          0
3
1,400
       1,280
   120
3
     3.60
4
1,600
              0
1,600
4
   64.00
5
1,800
      0
1,800
4
   72.00
6
2,000
      0
2,000
5
 100.00
7
2,000
      0
2,000
5
 100.00
8
2,000
      0
2,000
6
 120.00
9
2,000
      0
2,000
6
 120.00
 
     $ 15,000
     $3,480
  $11,520
 
        $579.60

Explanation of Columns in Table

Columns 1 and 2:

Represent Purchase Payments (“Payments”) and amounts of Payments. Each Payment was made on the first day of each Account Year.

Column 3:

Represents the amounts that may be withdrawn without the imposition of withdrawal charges, as
follows:

(a)
Payments 1 and 2, $1,000 and $1,200, respectively, have been credited to the Certificate for more than 7 years.
   
(b)
$1,280 of Payment 3 represents 10% of Payments that have been credited to the Certificate for less than 7 years. The 10% amount is applied to the oldest unliquidated Payment, then the next oldest and so forth.

Column 4:

Represents the amount of each Payment that is subject to a withdrawal charge. It is determined by subtracting the amount in Column 3 from the Payment in Column 2.

Column 5:

Represents the withdrawal charge percentages imposed on the amounts in Column 4.

Column 6:

Represents the withdrawal charge imposed on each Payment. It is determined by multiplying the amount in Column 4 by the percentage in Column 5.

For example, the withdrawal charge imposed on Payment 8

 
=   Payment 8, Column 4 x Payment 8, Column 5
 
=   $2,000 x 6%
 
=   $120

Full Surrender:

The total of Column 6, $579.60, represents the total amount of withdrawal charges imposed on Payments in this example.

Partial Withdrawal:

The sum of amounts in Column 6 for as many Payments as are liquidated reflects the withdrawal charges imposed in the case of a partial withdrawal.
For example, if $7,000 of Payments (Payments 1, 2, 3, 4 and 5) were withdrawn, the amount of the withdrawal charges imposed would be the sum of amounts in Column 6 for Payments 1, 2, 3, 4 and 5, which is $139.60.

Part 2 - Fixed Account - Examples of the Market Value Adjustment (MVA)

The MVA factor is:

(
1 + I
)
N/12
-  1
1 + J
 


 
 

 

These examples assume the following:

The Guarantee Amount was allocated to a five year Guarantee Period with a Guaranteed Interest Rate of 6% or .06 (l).
The date of surrender is 2 years from the Expiration Date (N = 24).
The value of the Guarantee Amount on the date of surrender is $11,910.16.
The interest earned in the current Account Year is $674.16.
No transfers or partial withdrawals affecting this Guarantee Amount have been made.
Withdrawal charges, if any, are calculated in the same manner as shown in the examples in Part 1.

Example of a Positive MVA:

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

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

The value of the Guarantee Amount less interested 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 .019 = $213.48

$213.48 represents the MVA that would be added to the value of the Guarantee Amount before the deduction of any withdrawal charge.

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 before the deduction of any withdrawal charge.


 
 

 

APPENDIX C -
CONDENSED FINANCIAL INFORMATION

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

 
Accumulation
Accumulation
Number of
 
 
Unit Value
Unit Value
Accumulation
 
 
Beginning
End
Units End
 
Sub-Account
of Period
of Period
of Period
Year
         
MFS® Bond Portfolio
$21.7157
 
$21.3571
 
1,200,584
 
2013
 
19.7832
 
21.7157
 
1,510,789
 
2012
 
18.8121
 
19.7832
 
1,565,690
 
2011
 
17.2072
 
18.8121
 
1,672,082
 
2010
 
13.6359
 
17.2072
 
1,701,157
 
2009
 
15.4552
 
13.6359
 
1,614,161
 
2008
 
15.1385
 
15.4552
 
1,931,316
 
2007
 
14.5916
 
15.1385
 
2,202,707
 
2006
 
14.5404
 
14.5916
 
2,789,785
 
2005
 
13.8771
 
14.5404
 
3,403,895
 
2004
               
MFS® Core Equity Portfolio
17.9953
 
23.8915
 
1,503,199
 
2013
 
15.6692
 
17.9953
 
1,636,855
 
2012
 
16.0387
 
15.6692
 
1.835,472
 
2011
 
13.8744
 
16.0387
 
2,058,859
 
2010
 
10.5987
 
13.8744
 
2,354,246
 
2009
 
17.5124
 
10.5987
 
2,796,503
 
2008
 
16.3353
 
17.5124
 
3,504,637
 
2007
 
14.5629
 
16.3353
 
1,224,159
 
2006
 
13.8577
 
14.5629
 
1,456,085
 
2005
 
12.2587
 
13.8577
 
1,743,731
 
2004
               
MFS® Growth Series
28.8923
 
38.9941
 
1,800,827
 
2013
 
24.9498
 
28.8923
 
2,041,183
 
2012
 
25.4132
 
24.9498
 
2,347,557
 
2011
 
22.2503
 
25.4132
 
2,618,877
 
2010
 
16.3805
 
22.2503
 
3,005,702
 
2009
 
26.5064
 
16.3805
 
3,441,742
 
2008
 
22.1692
 
26.5064
 
4,143,165
 
2007
 
20.8097
 
22.1692
 
5,401,495
 
2006
 
19.3335
 
20.8097
 
7,148,591
 
2005
 
17.3124
 
19.3335
 
9,647,055
 
2004
               
MFS® Emerging Markets Equity Portfolio
29.8883
 
27.9397
 
400,655
 
2013
 
25.4726
 
29.8883
 
448,453
 
2012
 
31.7038
 
25.4726
 
528,076
 
2011
 
25.9779
 
31.7038
 
626,168
 
2010
 
15.6253
 
25.9779
 
671,941
 
2009
 
35.2833
 
15.6253
 
709,307
 
2008
 
26.3750
 
35.2833
 
930,342
 
2007
 
20.5458
 
26.3750
 
1,134,541
 
2006
 
15.2325
 
20.5458
 
1,438,423
 
2005
 
12.1452
 
15.2325
 
1,448,045
 
2004
               
MFS® Global Governments Portfolio
24.5776
 
22.9637
 
354,976
 
2013
 
27.7647
 
24.5776
 
435,395
 
2012
 
23.6760
 
27.7647
 
491,345
 
2011
 
22.9488
 
23.6760
 
550,251
 
2010
 
22.3616
 
22.9488
 
614,603
 
2009
 
20.5372
 
22.3616
 
714,156
 
2008
 
19.1592
 
20.5372
 
773,043
 
2007
 
18.5077
 
19.1592
 
946,862
 
2006
 
20.2232
 
18.5077
 
1,152,866
 
2005
 
18.6328
 
20.2232
 
1,450,465
 
2004
               
MFS® Global Growth Portfolio
33.5420
 
40.1105
 
853,959
 
2013
 
28.4106
 
33.5420
 
991,565
 
2012
 
30.7722
 
28.4106
 
1,154,321
 
2011
 
27.9081
 
30.7722
 
1,349,039
 
2010
 
20.2403
 
27.9081
 
1,561,749
 
2009
 
33.6110
 
20.2403
 
1,814,137
 
2008
 
30.0902
 
33.6110
 
2,244,642
 
2007
 
25.9940
 
30.0902
 
2,807,284
 
2006
 
23.9533
 
25.9940
 
3,532,607
 
2005
 
21.0097
 
23.9533
 
4,498,440
 
2004
               
MFS® Global Research Portfolio
27.7288
 
33.9096
 
2,239,601
 
2013
 
24.0718
 
27.7288
 
2,555,305
 
2012
 
26.1691
 
24.0718
 
2,951,963
 
2011
 
23.5528
 
26.1691
 
3,330,374
 
2010
 
18.0325
 
23.5528
 
3,852,702
 
2009
 
28.7650
 
18.0325
 
4,554,541
 
2008
 
25.7597
 
28.7650
 
5,567,610
 
2007
 
23.6255
 
25.7597
 
7,146,220
 
2006
 
22.1793
 
23.6255
 
9,387,650
 
2005
 
19.4171
 
22.1793
 
12,224,074
 
2004
               
MFS® Global Tactical Allocation Portfolio
32.2897
 
34.6578
 
1,125,068
 
2013
 
29.8872
 
32.2897
 
1,197,513
 
2012
 
29.8428
 
29.8872
 
1,414,610
 
2011
 
28.6751
 
29.8428
 
1,613,041
 
2010
 
25.2490
 
28.6751
 
1,816,836
 
2009
 
30.2719
 
25.2490
 
2,132,079
 
2008
 
28.1973
 
30.2719
 
2,631,812
 
2007
 
24.3793
 
28.1973
 
3,204,557
 
2006
 
23.8232
 
24.3793
 
3,885,948
 
2005
 
20.6270
 
23.8232
 
4,435,705
 
2004
               
MFS® Government Securities Portfolio
25.4107
 
24.4098
 
2,192,350
 
2013
 
25.1329
 
25.4107
 
2,579,531
 
2012
 
23.7279
 
25.1329
 
2,798,435
 
2011
 
22.9687
 
23.7279
 
3,238,583
 
2010
 
22.2886
 
22.9687
 
3,736,291
 
2009
 
20.8220
 
22.2886
 
4,114,380
 
2008
 
19.7009
 
20.8220
 
4,560,880
 
2007
 
19.2661
 
19.7009
 
5,443,310
 
2006
 
19.0953
 
19.2661
 
7,183,766
 
2005
 
18.6615
 
19.0953
 
9,106,218
 
2004
               
MFS® High Yield Portfolio
34.5235
 
36.2343
 
994,604
 
2013
 
30.4674
 
34.5235
 
1,137,414
 
2012
 
29.6662
 
30.4674
 
1,250,624
 
2011
 
26.0372
 
29.6662
 
1,480,115
 
2010
 
17.5590
 
26.0372
 
1,661,312
 
2009
 
25.3151
 
17.5590
 
1,903,207
 
2008
 
25.1862
 
25.3151
 
2,242,825
 
2007
 
23.1337
 
25.1862
 
2,900,471
 
2006
 
22.9531
 
23.1337
 
3,805,343
 
2005
 
21.2473
 
22.9531
 
5,033,143
 
2004
               
MFS® International Growth Portfolio
20.5874
 
23.1292
 
637,781
 
2013
 
17.4127
 
20.5874
 
682,759
 
2012
 
19.8148
 
17.4127
 
774,883
 
2011
 
17.4471
 
19.8148
 
870,580
 
2010
 
12.8141
 
17.4471
 
996,642
 
2009
 
21.5941
 
12.8141
 
1,141,730
 
2008
 
18.7829
 
21.5941
 
1,343,367
 
2007
 
15.1103
 
18.7829
 
1,575,398
 
2006
 
13.3332
 
15.1103
 
1,807,900
 
2005
 
11.3673
 
13.3332
 
2,215,618
 
2004
               
MFS® International Value Portfolio
29.2411
 
36.8849
 
587,576
 
2013
 
25.5125
 
29.2411
 
622,672
 
2012
 
26.2684
 
25.5125
 
743,674
 
2011
 
24.4127
 
26.2684
 
843,490
 
2010
 
19.7452
 
24.4127
 
974,379
 
2009
 
29.1921
 
19.7452
 
1,180,521
 
2008
 
27.5761
 
29.1921
 
1,536,380
 
2007
 
21.6372
 
27.5761
 
1,903,861
 
2006
 
19.0416
 
21.6372
 
2,019,222
 
2005
 
15.0821
 
19.0416
 
2,033,093
 
2004
               
MFS® Massachusetts Investors Growth Stock Portfolio
13.5227
 
17.3893
 
8,535,565
 
2013
 
11.6957
 
13.5227
 
9,689,635
 
2012
 
11.7655
 
11.6957
 
11,227,315
 
2011
 
10.5433
 
11.7655
 
13,056,050
 
2010
 
7.6288
 
10.5433
 
15,441,534
 
2009
 
12.3219
 
7.6288
 
3,095,126
 
2008
 
11.2036
 
12.3219
 
3,804,248
 
2007
 
10.5513
 
11.2036
 
4,438,087
 
2006
 
10.2504
 
10.5513
 
5,803,432
 
2005
 
9.4830
 
10.2504
 
7,661,427
 
2004
 
7.7932
 
9.4830
 
9,560,648
 
2003
               
MFS® Blended Research® Core Equity Portfolio
36.9102
 
49.6504
 
3,309,628
 
2013
 
32.4419
 
36.9102
 
3,771,841
 
2012
 
32.2588
 
32.4419
 
4,325,476
 
2011
 
28.0861
 
32.2588
 
4,970,181
 
2010
 
22.7363
 
28.0861
 
5,700,012
 
2009
 
35.4438
 
22.7363
 
6,677,151
 
2008
 
33.9245
 
35.4438
 
8,198,829
 
2007
 
30.3594
 
33.9245
 
10,319,669
 
2006
 
28.5811
 
30.3594
 
13,429,903
 
2005
 
25.8800
 
28.5811
 
17,348,097
 
2004
               
MFS® Mid Cap Growth Series
5.7108
 
7.7565
 
939,288
 
2013
 
4.9643
 
5.7108
 
901,989
 
2012
 
5.3544
 
4.9643
 
1,040,334
 
2011
 
4.2007
 
5.3544
 
1,287,990
 
2010
 
2.9930
 
4.2007
 
1,260,591
 
2009
 
6.2376
 
2.9930
 
1,343,940
 
2008
 
5.7585
 
6.2376
 
1,580,546
 
2007
 
5.7054
 
5.7585
 
2,042,284
 
2006
 
5.6109
 
5.7054
 
3,021,012
 
2005
 
4.9637
 
5.6109
 
4,364,051
 
2004
               
MFS® Money Market Portfolio
13.6826
 
13.4937
 
2,582,917
 
2013
 
13.8752
 
13.6826
 
2,891,794
 
2012
 
14.0690
 
13.8752
 
3,267,909
 
2011
 
14.2659
 
14.0690
 
3,787,383
 
2010
 
14.4656
 
14.2659
 
4,716,665
 
2009
 
14.3759
 
14.4656
 
6,245,954
 
2008
 
13.9039
 
14.3759
 
6,062,638
 
2007
 
13.4788
 
13.9039
 
5,993,059
 
2006
 
13.3052
 
13.4788
 
6,628,919
 
2005
 
13.3815
 
13.3052
 
8,543,602
 
2004
               
MFS® New Discovery Portfolio
22.8214
 
31.8335
 
431,623
 
2013
 
19.0911
 
22.8214
 
472,771
 
2012
 
21.5981
 
19.0911
 
523,911
 
2011
 
16.0341
 
21.5981
 
595,229
 
2010
 
9.9768
 
16.0341
 
683,428
 
2009
 
16.7427
 
9.9768
 
783,190
 
2008
 
16.5548
 
16.7427
 
967,198
 
2007
 
14.8325
 
16.5548
 
1,230,731
 
2006
 
14.2954
 
14.8325
 
1,635,547
 
2005
 
13.4865
 
14.2954
 
2,394,620
 
2004
               
MFS® Research International Portfolio
18.8309
 
22.1012
 
284,327
 
2013
 
16.3780
 
18.8309
 
316,487
 
2012
 
18.6353
 
16.3780
 
369,195
 
2011
 
17.0807
 
18.6353
 
433,025
 
2010
 
13.2278
 
17.0807
 
494,653
 
2009
 
23.3232
 
13.2278
 
575,021
 
2008
 
20.9024
 
23.3232
 
769,388
 
2007
 
16.6266
 
20.9024
 
999,966
 
2006
 
14.4633
 
16.6266
 
974,878
 
2005
 
12.1009
 
14.4633
 
1,012,883
 
2004
               
MFS® Strategic Income Portfolio
19.0033
 
19.0154
 
576,097
 
2013
 
17.4523
 
19.0033
 
641,812
 
2012
 
16.9064
 
17.4523
 
617,200
 
2011
 
15.5468
 
16.9064
 
627,839
 
2010
 
12.3470
 
15.5468
 
664,049
 
2009
 
14.3994
 
12.3470
 
616,138
 
2008
 
14.1101
 
14.3994
 
743,909
 
2007
 
13.4074
 
14.1101
 
830,757
 
2006
 
13.3427
 
13.4074
 
1,059,976
 
2005
 
12.5227
 
13.3427
 
1,247,856
 
2004
               
MFS® Technology Portfolio
5.6819
 
7.5749
 
417,289
 
2013
 
5.0279
 
5.6819
 
486,716
 
2012
 
5.0392
 
5.0279
 
539,180
 
2011
 
4.2356
 
5.0392
 
575,801
 
2010
 
2.4315
 
4.2356
 
607,733
 
2009
 
5.0237
 
2.4315
 
431,545
 
2008
 
4.2375
 
5.0237
 
632,984
 
2007
 
3.5227
 
4.2375
 
725,339
 
2006
 
3.3636
 
3.5227
 
880,395
 
2005
 
3.3296
 
3.3636
 
1,228,881
 
2004
               
MFS® Total Return Series
37.7417
 
10.7199
 
21,410,649
 
2013
 
34.3748
 
37.7417
 
6,012,960
 
2012
 
34.1963
 
34.3748
 
6,778,021
 
2011
 
31.5325
 
34.1963
 
7,751,602
 
2010
 
27.0755
 
31.5325
 
8,908,301
 
2009
 
34.9980
 
27.0755
 
10,626,512
 
2008
 
34.0205
 
34.9980
 
13,145,592
 
2007
 
30.7387
 
34.0205
 
16,229,276
 
2006
 
30.2533
 
30.7387
 
21,043,573
 
2005
 
27.5211
 
30.2533
 
26,071,521
 
2004
               
MFS® Utilities Portfolio
60.8539
 
72.3830
 
882,646
 
2013
 
54.0596
 
60.8539
 
1,007,617
 
2012
 
51.1708
 
54.0596
 
1,162,521
 
2011
 
45.5539
 
51.1708
 
1,328,567
 
2010
 
34.6332
 
45.5539
 
1,566,394
 
2009
 
55.8020
 
34.6332
 
1,844,778
 
2008
 
44.0096
 
55.8020
 
2,290,350
 
2007
 
33.7338
 
44.0096
 
2,805,865
 
2006
 
29.1618
 
33.7338
 
3,459,001
 
2005
 
22.6819
 
29.1618
 
4,006,793
 
2004
               
MFS® Value Portfolio
20.2290
 
27.1043
 
1,362,339
 
2013
 
17.6511
 
20.2290
 
1,471,964
 
2012
 
17.8977
 
17.6511
 
1,642,920
 
2011
 
16.2751
 
17.8977
 
1,857,647
 
2010
 
13.6962
 
16.2751
 
2,090,666
 
2009
 
20,6198
 
13.6962
 
2,456,004
 
2008
 
19.3746
 
20.6198
 
3,055,496
 
2007
 
16.2414
 
19.3746
 
3,936,360
 
2006
 
15.4490
 
16.2414
 
4,872,966
 
2005
 
13.5609
 
15.4490
 
5,926,427
 
2004


 
 

 

This Prospectus sets forth information about the Contracts and the Variable Account that a prospective purchaser should know before investing. Additional information about the Contracts and the Variable Account has been filed with the Securities and Exchange Commission in a Statement of Additional Information dated May 1, 2014 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) 752-7216.

                                                                                                                                                                                               

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


Name:
 
   
Address:
 
   
   
   
City:
 
State:
 
Zip Code:
 
           
Telephone:
 



 
 

 

MAY 1, 2014
MFS® REGATTA PLATINUM PROSPECTUS

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, when available, fixed interest options. Currently no fixed interest options are available other than those included in our dollar-cost averaging program. (See “Other Programs.”) The variable options are Sub-Accounts in the Variable Account. Each Sub-Account invests in one of the following investment options of the MFS® Variable Insurance Trust and MFS® Variable Insurance Trust II (the “Funds”):

Large-Cap Equity Funds
Specialty/Sector Funds
MFS® Blended Research® Core Equity Portfolio, Initial Class
MFS® Technology Portfolio, Initial Class
MFS® Core Equity Portfolio, Initial Class
MFS® Utilities Portfolio, Initial Class
MFS® Growth Series, Initial Class
Asset Allocation Fund
MFS® Massachusetts Investors Growth Stock
MFS® Total Return Series, Initial Class
Portfolio, Initial Class
Global Asset Allocation Fund
MFS® Value Portfolio, Initial Class
MFS® Global Tactical Allocation Portfolio, Initial Class
Mid-Cap Equity Fund
Money Market Fund
MFS® Mid Cap Growth Series, Initial Class
MFS® Money Market Portfolio, Initial Class1
Small-Cap Equity Fund
Intermediate-Term Bond Funds
MFS® New Discovery Portfolio, Initial Class
MFS® Bond Portfolio, Initial Class
International/Global Equity Funds
MFS® Government Securities Portfolio, Initial Class
MFS® Global Growth Portfolio, Initial Class
Multi-Sector Bond Fund
MFS® Global Research Portfolio, Initial Class
MFS® Strategic Income Portfolio, Initial Class
MFS® International Growth Portfolio, Initial Class
High Yield Bond Fund
MFS® International Value Portfolio, Initial Class
MFS® High Yield Portfolio, Initial Class
MFS® Research International Portfolio, Initial Class
World Bond Fund
Emerging Markets Equity Fund
MFS® Global Governments Portfolio, Initial Class
MFS® Emerging Markets Equity Portfolio, Initial Class
 

1 There is no assurance that the MFS Money Market Portfolio will be able to maintain a stable net asset value per share. In addition, during extended periods of low interest rates, and partly as a result of asset based separate account charges, the yield on this investment account may possibly become low and possibly negative.

Massachusetts Financial Services Company serves as investment adviser to all of the Funds in the MFS® Variable Insurance Trusts.

We have filed a Statement of Additional Information dated May 1, 2014 (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 41 of this Prospectus. You may obtain a copy without charge by writing to us at the address shown below or by telephoning (800) 752-7216. 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 has a website (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. Please read this Prospectus and the Trust prospectus carefully before investing and keep them for future reference. They contain important information about the Contract and the Funds.

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]
Electronic Account Information                                                             [INSERT PAGE NUMBER]
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                                                                                           [INSERT PAGE NUMBER]
THE VARIABLE ACCOUNT                                                      [INSERT PAGE NUMBER]
VARIABLE ACCOUNT OPTIONS: THE TRUSTS                                                                                     [INSERT PAGE NUMBER]
Selection of Funds                                        [INSERT PAGE NUMBER]
THE FIXED ACCOUNT                                           [INSERT PAGE NUMBER]
THE FIXED ACCOUNT OPTIONS: THE GUARANTEE PERIODS                                                                                                                     [INSERT PAGE NUMBER]
Guarantee Periods                                        [INSERT PAGE NUMBER]
Guaranteed Interest Rates                                                   [INSERT PAGE NUMBER]
Early Withdrawals                                        [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; Credits; Bonus Guaranteed Interest Rates                                                                                                                  [INSERT PAGE NUMBER]
Other Programs                              [INSERT PAGE NUMBER]
WITHDRAWALS, WITHDRAWAL CHARGES, AND MARKET VALUE ADJUSTMENT                                                                                                                                                     [INSERT PAGE NUMBER]
Cash Withdrawals                                        [INSERT PAGE NUMBER]
Withdrawal Charge                                        [INSERT PAGE NUMBER]
Types of Withdrawals Not Subject to Withdrawal Charge                                                                                             [INSERT PAGE NUMBER]
Market Value Adjustment                                                   [INSERT PAGE NUMBER]
CONTRACT CHARGES                                           [INSERT PAGE NUMBER]
Account Fee                              [INSERT PAGE NUMBER]
Administrative Expense Charge                                                             [INSERT PAGE NUMBER]
Mortality and Expense Risk Charge                                                             [INSERT PAGE NUMBER]
Premium Taxes                              [INSERT PAGE NUMBER]
Fund Expenses                              [INSERT PAGE NUMBER]
Modification in the Case of Group Contracts                                                                        [INSERT PAGE NUMBER]
DEATH BENEFIT                                [INSERT PAGE NUMBER]
Amount of Death Benefit                                                   [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]
Due Proof of Death                                        [INSERT PAGE NUMBER]
THE INCOME PHASE - ANNUITY PROVISIONS                                                                                     [INSERT PAGE NUMBER]
Selection of the Annuitant or Co-Annuitant                                                                        [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]
Transfer 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]
Limitation or 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 Provisions                                                   [INSERT PAGE NUMBER]
ADMINISTRATION OF THE CONTRACTS                                                                           [INSERT PAGE NUMBER]
DISTRIBUTION OF THE CONTRACTS                                                                           [INSERT PAGE NUMBER]
AVAILABLE INFORMATION                                                      [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 - WITHDRAWALS, WITHDRAWAL CHARGES, AND MARKET VALUE ADJUSTMENT[INSERT PAGE NUMBER]
APPENDIX C - 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 capitalized 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 capitalized 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 capitalized 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

Regatta Platinum 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 of the Variable Account options or, if available, the 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 death benefit if you die during the Accumulation Phase.

The Accumulation Phase

Under most circumstances, you can buy the Contract with an initial Purchase Payment of $10,000 or more, and you can make additional Purchase Payments at any time during the Accumulation Phase. Currently, there is no minimum amount required for additional Purchase Payments. However, we reserve the right to limit additional Purchase Payments to at least $1,000. We will not normally accept a Purchase Payment if your Account Value is over $2 million or, if the Purchase Payment would cause your Account Value to exceed $2 million.

Variable Account Options: The Funds

You can allocate your Purchase Payments among Sub-Accounts, each of which invests in a separate securities portfolio of the MFS® Variable Insurance Trust and the MFS® Variable Insurance Trust II, open-end management investment companies registered under the Investment Company Act of 1940.  Massachusetts Financial Services Company (“MFS®”), serves as the investment adviser to the Trusts. The investment returns on the Funds are not guaranteed. You can make or lose money. You may also transfer among the Funds and, if available, the Fixed Account Options.

The Fixed Account Options: The Guarantee Periods

From time to time, we make Fixed Account options available. When we do, you can allocate your Purchase Payments to the Fixed Account and elect to invest in one or more of the available Guarantee Periods. Each Guarantee Period earns interest at a Guaranteed Interest Rate that we publish. We may change the Guaranteed Interest Rate from time to time, but no Guaranteed Interest Rate will ever be less than the minimum guaranteed interest rate permitted by law. Once we have accepted your allocation to a particular Guarantee Period, we promise that the Guaranteed Interest Rate applicable to that allocation will not change for the duration of the Guarantee Period. We may offer Guarantee Periods of different durations or stop offering some Guarantee Periods. Once we stop offering a Guarantee Period of a particular duration, future allocations or transfers into that Guarantee Period will not be permitted. On January 31, 2011, we stopped accepting any new investments (Purchase Payments and transfers) into any Guarantee Periods, other than in connection with our dollar-cost averaging program.

Fees and Expenses

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

Each year for the first five Account Years, we deduct an annual Account Fee equal to the lesser of $35 or 2% of your Account Value. After the fifth Account Year, we may increase the fee annually, but it will never exceed the lesser of $50 or 2% of your Account Value. During the Income Phase, the annual Account Fee is $35. We will not charge the annual Account Fee if your Account had been allocated only to the Fixed Account during the applicable Account Year, or your Account Value is more than $75,000 on your Account Anniversary.

During the Accumulation Phase, we deduct a mortality and expense risk charge at an annual rate of 1.25% of the average daily value of the Contract invested in the Variable Account. We also deduct an administrative charge at an annual rate of 0.15% of the average daily value of the Contract invested in the Variable Account.

If you take more than a specified amount of money out of your Contract, we assess a withdrawal charge against each Purchase Payment withdrawn. For each Purchase Payment, the withdrawal charge (also known as a “contingent deferred sales charge”) starts at 6% and declines to 0% after the Purchase Payment has been in the Contract for seven years.

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

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.

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 options.

Death Benefit

If you die before the Contract reaches the Income Phase, the Beneficiary will receive a death benefit. The amount of the death benefit depends upon your age on the Contract Date. If you are 86 or older on your Contract Date, the death benefit is equal to the amount we would pay on a full surrender of your Contract (“Surrender Value”). If you are 85 or younger on your Contract Date, the death benefit pays the greatest of the following amounts: (1) your Account Value on your Death Benefit Date, (2) your Surrender Value on your Death Benefit Date, (3) your Account Value on the Seven-Year Account Anniversary (adjusted for subsequent payments, withdrawals, and charges), (4) your highest Account Value on any Account Anniversary before your 81st birthday (adjusted for subsequent payment, withdrawals and charges), or (5) subject to certain limitations, your total Purchase Payments, adjusted for withdrawals, plus interest accrued on each Purchase Payment or transfers to the Variable Account at 5% per year.

Withdrawals, Withdrawal Charges and Market Value Adjustment

You can withdraw money from your Contract during the Accumulation Phase. You may withdraw a portion of your Account Value each year without the imposition of a withdrawal charge. For any Account Year, this “free withdrawal amount” equals 10% of all Purchase Payments made during the last seven Account Years (including the current Account Year), plus all Purchase Payments we have held for at least seven Account Years. Withdrawals made from the Fixed Account may also 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 required 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 ordinary income. If you are younger than 59½ when you take money out, you may be charged a 10% federal tax penalty on taxable amounts.
                                              

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

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

Sun Life Assurance Company of Canada (U.S.)
P. O. Box 9133
Wellesley Hills, Massachusetts 02481
Toll Free (800) 752-7216
www.delawarelife.com/contact-us/


 
 

 

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

 
Maximum Withdrawal Charge (as a percentage of Purchase Payments withdrawn):
 
6%1

Number of Complete Account Years Since
Purchase Payment has been in the Account
0-1
2-3
4-5
6
7 or more
           
Withdrawal Charge
6%
5%
4%
3%
0%

 
Maximum Fee Per Transfer (currently $0):
 
$152
       
 
Premium Taxes (as a percentage of Account Value or total Purchase Payments):
 
0% - 3.5%3


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
$ 504

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

 
Mortality and Expense Risk Charge:
1.25%
 
Administrative Expenses Charge:
0.15%
     
Total Variable Account Annual Expenses:
1.40%


The table below shows the minimum and maximum total operating expenses charged by the Funds for the year ended December 31, 2013.

 
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)
0.55%
1.46%

The expenses shown, which include any acquired fund fees and expenses, are those incurred for the year ended December 31, 2013, and were provided by the Funds. We have not independently verified the accuracy of the Fund expense information. Current or future expenses may be greater or less than those shown. For more information about Fund expenses, including a description of any applicable fee waiver or expense reimbursement arrangement, see the Fund prospectuses.


1
A portion of your Account may be withdrawn each year without imposition of any withdrawal charge and, after a Purchase Payment has been in your Account for seven Account Years, it may be withdrawn free of the withdrawal charge. (See “Withdrawal Charge.”)
   
2
Currently, we impose no fee upon transfers; however, we reserve the right to impose a fee of up to $15 per transfer. We do impose certain restrictions upon the number and frequency of transfers. (See “Transfer Privilege.”)
   
3
The premium tax rate and base vary by your state of residence and the type of Certificate you own. Currently, we may deduct premium taxes from Certificate Value upon full surrender (including surrender for the death benefit) or annuitization. (See “Premium Taxes.”)
   
4
The Annual Account Fee is equal to the lesser of $30 or 2% of your Account Value in Account Years 1 through 5; thereafter, the Annual Account Fee may be changed annually but it will never exceed the lesser of $50 or 2% of your Account Value. The Annual Account Fee is waived if your Account Value has been allocated only to the Fixed Account during the applicable Account Year or if your Account Value is $75,000 in value on your Account Anniversary. (See “Account Fee.”)

EXAMPLE

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

The Example assumes that you invest $10,000 in the Contract for the time periods indicated. 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 purpose of converting the annual contract fee to a percentage, the Example assumes an average Contract size of $35,000. 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.

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
         
 
$851
$1,297
$1,800
$3,303

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

 
1 year
3 years
5 years
10 years
         
 
$299
$915
$1,557
$3,303

(3)
If you do not surrender your Contract:

 
1 year
3 years
5 years
10 years
         
 
$299
$915
$1,557
$3,303

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. 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. 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.

For information concerning compensation paid for the sale of the Contracts, see “Distribution of the Contract.”

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 C.

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 those Participants as “you”; we use the term “Contracts” to include Individual Contracts, Group Contracts and Certificates issued under Group Contracts. For the purpose of determining benefits under both Individual Contracts and Group Contracts, we establish an Account for each Participant, which we will refer to as “your” Account or a “Participant Account.”

Your Contract provides a number of important benefits for your retirement planning.

 
·
It has an Accumulation Phase and an Income Phase. During the Accumulation Phase, you make Purchase Payments under the Contract and allocate them to one or more of the Variable Account options or, if available, the Fixed Account options. During the Income Phase, we make payments based on the amount you have accumulated. Annuity payments can be fixed or variable. When you choose variable options, you assume the investment risk. When you choose fixed options, we assume the investment risk.

 
·
It also has 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.

 
·
It provides a death benefit if you die during the Accumulation Phase.

 
·
If you so elect, during the Income Phase, it provides annuity payments to you or someone else for life or for another period that you choose.

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 others 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.

COMMUNICATING TO US ABOUT YOUR CONTRACT

You may submit transaction requests or otherwise communicate with us in writing or by telephone. All materials sent to us, including Purchase Payments, must be sent to us at our mailing address, as set forth on the first page of this Prospectus. For all telephone communications, you must call (800) 752-7216. In addition, the authorized registered representative of the broker-dealer of record may submit transfer requests on your behalf in writing, by telephone, or over the Internet on our broker website. To use the broker website, the registered representative must first consent to our online terms of use. (See “Requests for Transfers” under “Transfer Privilege.”)

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, in good order, at our mailing address or at (800) 752-7216. However, we will consider all financial transactions, including Purchase Payments, withdrawal requests and transfer instructions to be received on the next Business Day if we receive them (1) on a day that is not a Business Day or (2) after 4:00 p.m., Eastern Time. In some cases, receipt of financial transactions by the broker-dealer of record will be deemed to be constructive receipt by us. This would include only cases where we have a specific agreement with the broker-dealer that provides for this treatment and the broker-dealer electronically forwards to us the request promptly after the end of the Business Day on which it receives the request in good order. In such cases, financial transactions received by us in good order will be priced that Business Day, provided the broker-dealer received the request before the earlier of (a) 4:00 p.m. Eastern Time on a Business Day, or (b) the close of the New York Stock Exchange on days that the Stock Exchange closes before 4:00 p.m. For information about whether we have this type of arrangement with your broker-dealer, you may call us at the above number.

Certain methods of contacting us, such as by telephone or over the Internet, may be unavailable or delayed. Any computer or telephone system (including yours, ours, and your registered representative’s) can experience delays or outages that may delay or prevent us from processing your request. While we have taken reasonable precautions to allow our systems to accommodate heavy usage, we do not guarantee access or reliability under all circumstances. If you experience delays or an outage, you may submit your request to us in writing to our mailing address, as set forth at the beginning of this Prospectus.

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.



Electronic Account Information

Contract Owners may elect to receive prospectuses, transaction confirmations, reports and other communications in electronic format, instead of receiving paper copies of these documents. To enroll in this optional electronic delivery service Contract Owners must register and log on to our Internet customer website at https://customerlink.sunlife-usa.com which can be reached directly or via www.delawarelife.com. First-time users of this website can enroll in this electronic delivery service by selecting “eDeliver Documents” when registering to use the website. If you are already a registered user of this website, you can enroll in the electronic delivery service by logging on to your account and selecting “eDeliver Documents” on the “Update Profile” page. The electronic delivery service is subject to various terms and conditions, including a requirement that you promptly notify us of any change in your e-mail address, in order to avoid any disruption of deliveries to you. You may obtain more information and assistance at the above-mentioned internet location or by writing us at our mailing address or by telephone at (800) 752-7216.

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. The address for our Executive Office is 96 Worcester Street, Wellesley Hills, Massachusetts 02481.

Our parent is Delaware Life Holdings, LLC (“Delaware Life”) , a limited liability company organized under the laws of the State of Delaware on December 12, 2012. Delaware Life is ultimately controlled by Todd L. Boehly and Mark R. Walter.

Delaware Life acquired the Company from Sun Life Financial, Inc. in August of 2013. The Company is no longer affiliated with Sun Life Financial, Inc. and the Sun Life names and marks are used under license. In accordance with the Company’s change of ownership, we expect the Company to change its name from “Sun Life Assurance Company of Canada (U.S.)” to “Delaware Life Insurance Company” during 2014.

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 described in this Prospectus and other variable annuity contracts that provide benefits that vary in accordance with the investment performance of the Variable Account. The assets maintained in the Variable Account will not be charged with any liabilities arising out of any other business we conduct. All obligations arising under the Contracts, including the promise to make annuity payments, are general corporate obligations of the Company and, as such, are subject to the claims of the Company’s creditors.

The assets of the Variable Account are divided into Sub-Accounts. Each Sub-Account invests exclusively in shares of a specific Fund of the MFS® Variable Insurance Trust or the MFS® Variable Insurance Trust II. 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 Trust 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 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 TRUSTS

The MFS® Variable Insurance Trust and the MFS® Variable Insurance Trust II (the “Trusts”) are open-end management investment companies registered under the Investment Company Act of 1940.  Massachusetts Financial Services Company (“MFS®”), serves as the investment adviser to the Trusts.

The Trusts are composed of a number of independent portfolios of securities, each of which has separate investment objectives and policies. Shares of the Trusts are issued in a number of investment options (each, a “Fund”), each corresponding to one of the portfolios. Additional portfolios may be added to the Trusts which may or may not be available for investment by the Variable Account.

Each Fund pays fees to MFS® for its services pursuant to investment advisory agreements. MFS® also serves as investment adviser to each of the funds in the MFS Family of Funds®, and to certain other investment companies established by MFS®. MFS® and its predecessor organizations have a history of money management dating from 1924. MFS® operates as an autonomous organization and the obligation of performance with respect to the investment advisory and underwriting agreements is solely that of MFS®. We undertake no obligation in this regard.

MFS® may serve as the investment adviser to other mutual funds which have similar investment goals and principal investment policies and risks as the Funds, and which 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 Trusts also offer shares to other separate accounts established by the Company and our New York subsidiary in connection with variable annuity and variable life insurance contracts. Although we do not anticipate any disadvantages to this arrangement, there is a possibility that a material conflict may arise between the interests of the Variable Account and one or more of the other separate accounts investing in the Trusts. A conflict may occur due to differences in tax laws affecting the operations of variable life and variable annuity separate accounts, or some other reason. We and each Trust’s Board of Trustees will monitor events for such conflicts, and, in the event of a conflict, we will take steps necessary to remedy the conflict, including withdrawal of the Variable Account from participation in the Fund which is involved in the conflict or substitution of shares of other Funds or other mutual funds.

Certain Funds may employ hedging strategies to provide for downside protection during sharp downward movements in equity markets. The cost of these hedging strategies could limit the upside participation of the Fund in rising equity markets relative to other Funds. You should consult with your registered representative to determine which combination of investment choices is appropriate for you.

More comprehensive information about the Trusts and the management, investment objectives, policies, restrictions, expenses and potential risks of each Fund may be found in the current Trust prospectuses. You should read the Trust prospectuses carefully before investing. The statement of additional information for each of the Trusts is available by calling us at (800) 752-7216.

Selection of Funds

The Funds offered through the Contract are selected by the Company. We review the Funds periodically and may remove a Fund or limit its availability to new premiums and/or transfers of Account Value if we determine that a Fund no longer satisfies one or more of the selection criteria, and/or if the Fund has not attracted significant allocations from Contract Owners. We do not recommend or endorse any particular fund, and we do not provide investment advice. You bear the risk of any decline in your Account Value resulting from the performance of the Funds you have chosen.

We may consider various factors, including, but not limited to, asset class coverage, the alignment of the investment objectives of a Fund with our hedging strategy, the strength of an adviser’s or sub-adviser’s reputation and tenure, brand recognition, performance, and the capability and qualification of each investment firm. Another factor that we may consider is whether the Fund or its service providers (e.g., the investment adviser or sub-advisers) or its affiliates will make payments to us or our affiliates in connection with certain administrative, marketing, and support services, or whether affiliates of the Fund can provide marketing and distribution support for the sale of the Contracts. Accordingly, we may receive compensation from an investment adviser, distributor and/or affiliates(s) of one or more of the Funds based upon an annual percentage of the average assets we hold in the investment options. These amounts, which may vary by adviser, are intended to compensate us for administrative and other services we provide to the Funds and/or affiliate(s) and may be significant. In addition, the Company or the principal underwriter of the Contracts may receive 12b-1 fees (fees which may be levied against the total balance of a mutual fund’s assets and may be used to pay marketing and brokerage expenses of the Fund) deducted from certain Fund assets attributable to the Contract for providing distribution and shareholder support services to some investment options.

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

Guarantee Periods

You may elect one or more Guarantee Period(s) from those we make available from time to time. When available, we may offer Guarantee Periods of different durations; however, we may stop offering some or all Guarantee Periods at any time. Once we stop offering a Guarantee Period for a particular duration, allocations or transfers into that Guarantee Period will not be permitted.

Effective January 31, 2011, we stopped accepting any additional amounts for allocation to certain Guarantee Periods, regardless of when the Contract was issued. Under this change, all Guarantee Periods were closed to new amounts from:

 
initial or subsequent Purchase Payments you may make, except for Purchase Payments that you allocate to our dollar-cost averaging program;

 
transfers of Account Value into a Guarantee Period from any other Guarantee Period or Sub-Account; and

 
any other new allocation of money.

Any of your Account Value held in a Guarantee Period on January 31, 2011, will not be affected by our closing the Guarantee Periods to new amounts. At the end of that Guarantee Period, unless you instruct us otherwise, we will automatically renew your Guarantee Period allocation into a new Guarantee Period of the same duration as the last Guarantee Period. (See “Renewals” under “Fixed Account Value.”) Although we have the discretion to once again make new Guarantee Periods available for new allocations, we do not have any current intention to do so.

Because we are not currently offering new Guarantee Periods in connection with our Secured Future Program, that program is no longer available to those who are not already participating in it. (See “Secured Future Program” under “Other Programs.”)

Guaranteed Interest Rates

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

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

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

Early Withdrawals

Early withdrawals from your allocation to a Guarantee Period, including cash withdrawals, transfers, and commencement of an annuity, may be subject to a Market Value Adjustment, which could increase the value of your Account. (See “Withdrawals, Withdrawal Charges and Market Value Adjustment.”)

THE ACCUMULATION PHASE

During the Accumulation Phase of your Contract, you make Purchase 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 die before the Annuity Commencement Date.

Issuing Your Contract

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

We will credit your initial Purchase Payment to your Account within two Business Days of receiving your completed Application, in good order. If your Application is not in good order, we will notify you. If we do not have the necessary information to complete the Application within five Business Days, we will send your money back to you or ask your permission to retain your Purchase Payment until the Application is in good order. Once the Application is in good order, we will then apply the Purchase Payment within two Business Days.

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 $10,000, 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, unless we have given our approval in advance, 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. Within these limits, you may make Purchase Payments at any time during the Accumulation Phase, except that if you own a Contract issued in the state of Oregon, you may make Purchase Payments only during the first three Account Years, rather than at any time during the Accumulation Phase.

Allocation of Net Purchase Payments

You may allocate your Purchase Payments among the different Sub-Accounts and Guarantee Periods currently available.

In your Application, you may specify the percentage of each Purchase Payment to be allocated to each Sub-Account or Guarantee Period. These percentages are called your allocation factors. Your allocation factors will remain in effect as long as your selected Sub-Accounts and Guarantee Periods continue to be available for investment. You may, however, change the allocation factors for future Purchase Payments by sending us notice of the change in a form acceptable to us. We will use your new allocation factors for Purchase Payments we receive with or after we have received notice of the change 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 “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 two 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 two components are calculated separately, as described below under the headings “Variable Account Value” and “Fixed Account Value.”

Variable Account Value

Variable Accumulation Units

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




Variable Accumulation Unit Value

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

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

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.

The Guarantee Period begins the day we apply your allocation and ends when the number of calendar years (or months if the Guarantee Period is less than one year) in the Guarantee Period (measured from the end of the calendar month in which the amount was allocated to the Guarantee Period) have elapsed. The last day of the Guarantee Period is its Expiration Date. Guarantee Periods may not always be available for allocation. (See “Fixed Account Options: The Guarantee Periods.”)

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. You can find out about our current Guaranteed Interest Rates by calling us at (800) 752-7216.

Guarantee Amounts

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

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

 
·
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. 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 next available Guarantee Period.

Early Withdrawals

If you withdraw, transfer, or annuitize an allocation from a Guarantee Period more than 30 days prior to the Expiration Date, we will apply a Market Value Adjustment to the transaction. This could result in an increase of your Account Value, depending on interest rates at the time. (See “Withdrawals, Withdrawal Charges, 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:

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

 
·
the amount transferred from a Guarantee Period must be the entire Guarantee Amount, except for transfers of interest credited during the current Account Year;

 
·
at least 30 days must elapse between transfers to and from Guarantee Periods;

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

 
·
we impose additional restrictions on market timers, which are further described below. (See “Short-Term Trading.”)

These restrictions do not apply to transfers made under any optional program. (See “Other Programs.”) 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 occurring more than 30 days before the Renewal Date or any time after the Expiration Date or any time after the Expiration Date will be subject to the Market Value Adjustment described under “Withdrawals, Withdrawal Charges and Market Value Adjustment.” We will notify you of any change in writing prior to its effectiveness. Under current law there is no tax liability for transfers.

Requests for Transfers

You, your authorized registered representative of the broker-dealer of record, or another authorized third party may request transfers in writing or by telephone. Registered representatives of broker-dealer firms that have entered into selling agreements with us may, on behalf of their clients, submit transfer requests electronically over the Internet on our broker website. To use this electronic transfer service, a registered representative must agree to our online terms of use. You can contact us by telephone at (800) 752-7216 to identify broker-dealers with registered representatives that use this service.

If a written, telephone, or electronic transfer request is received 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., the transfer will be priced 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 have established procedures reasonably designed to confirm that instructions communicated to us by telephone or electronically are genuine. These procedures may require any person requesting a transfer made by telephone or electronically to provide personal identifying information. We will not be liable for following instructions communicated by telephone that we reasonably believe are genuine.

We reserve the right to deny any and all transfer requests made by telephone or electronically and to require that certain transfer requests be submitted in writing. A transfer request may be denied if it is not in good order or if it does not comply with the terms of our short-term trading policy or the trading policy of a fund involved in the transfer. If an electronic or a telephone transfer request is denied, we will immediately notify you and your authorized registered representative.

We also reserve the right to suspend, modify, restrict, or terminate the telephone or electronic transfer privilege at any time. Your ability (or the ability of your authorized registered representative or another authorized third party) to request transfers by telephone and/or electronically may also be limited due to circumstances beyond our control, such as during system outages or periods of high volume.

A transfer request will be priced at the Variable Accumulation Unit value next determined at 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 priced on the next Business Day.

No more than one transfer request of Account Values may be made on the same Business Day regardless of whether the request is made by you, your authorized registered representative, or another authorized third party, and regardless of whether the request is submitted in writing, by telephone, or electronically. The Company has established reasonable procedures for handling multiple transfer requests received on the same Business Day, including processing the first transfer request received in good order on a Business Day (unless otherwise cancelled in accordance with the cancellation procedures described in the next paragraph).

You, your authorized registered representative, or another authorized third party may cancel a transfer request by contacting us by telephone at (800) 752-7216 before the end of the Business Day during which the transfer request was submitted. We may also permit your authorized registered representative to request cancellation of a transfer request electronically over the Internet, provided we receive the electronic request before the end of the Business Day during which the transfer request was submitted.

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 limit the number and frequency of transfers of Account Value. The Company also reserves the right to charge a fee for transfers to discourage frequent trading. In no event will the total charge assessed in connection with a transfer, that includes this fee as well as any charge that we may assess on a permitted transfer of Account Value among Sub-Accounts (see “Permitted Transfers,” above), exceed the maximum fee per transfer presented in the table of “Fees and Expenses” in this Prospectus.

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 restricts your transfer privileges more narrowly than the policies described under “Permitted Transfers,” 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 Account 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. In the last situation, we will not transfer any of the Sub-Account value. Instead, we will deem the request not in good order and immediately notify you.

We will provide you written notification of any restrictions imposed.

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

 
·
when a new broker of record is designated for the Contract;

 
·
when the Participant changes;

 
·
when control of the Contract passes to the designated beneficiary upon the death of the Participant or Annuitant;

 
·
when necessary in our view to avoid hardship to a Participant; or

 
·
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. Short-term trading could increase costs for all Participants as a result of excessive portfolio transaction fees. In addition, 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. 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; Credits; Bonus Guaranteed Interest Rates

We may reduce or waive the withdrawal charge or annual Account Fee, credit additional amounts, or grant bonus Guaranteed Interest Rates in certain situations. These situations may include sales of Contracts (1) where selling and/or maintenance costs associated with the Contracts are reduced, such as the sale of several Contracts to the same Participant, sales of large Contracts, and certain group sales, and (2) to officers, directors and employees of the Company or its affiliates, registered representatives and employees of broker-dealers with a current selling agreement with the Company and affiliates of such representatives and broker-dealers, employees of affiliated asset management firms, and persons who have retired from such positions (“Eligible Employees”) and immediate family members of Eligible Employees. Eligible Employees and their immediate family members may also purchase a Contract without regard to minimum Purchase Payment requirements. For other situations in which withdrawal charges may be waived, see “Withdrawals, Withdrawal Charges and Market Value Adjustment.”


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 transfers per year allowed under the section entitled “Transfer Privilege.”

Dollar-Cost Averaging

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.)

Dollar-cost averaging allows you to invest gradually over time. Each month or quarter, as you select, 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. If you elected to participate in dollar-cost averaging when you purchased your Contract, then all future Purchase Payments will be allocated to dollar-cost averaging, unless you specify otherwise.

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.

No Market Value Adjustment will apply to amounts automatically transferred from the Fixed Account under the dollar-cost averaging program, except that 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. Since you transfer the same dollar amount to the Sub Accounts at set intervals, dollar-cost averaging allows you to purchase more Variable Accumulation Units (and, indirectly, more Fund shares) when prices are low and fewer Variable Accumulation Units (and, indirectly, fewer Fund shares) when prices are high. Therefore, you may achieve a lower average cost per Variable Accumulation Unit over the long term. A dollar-cost averaging program allows you to take advantage of market fluctuations. However, it is important to understand that a dollar-cost averaging program does not insure a profit or protect against loss in a declining market. We do not allow transfers into any of the Guarantee Periods pursuant to the dollar-cost averaging program.

Asset Allocation

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

We have no discretionary authority or control over your investment decisions. We do not recommend asset allocation models or otherwise provide advice as to what asset allocation model may be appropriate for you.

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

Our asset allocation programs are “static” programs. That is to say, if you elect an asset allocation program, we automatically rebalance your Account Value among the Sub-Accounts represented in the model you chose. While we will not alter the Sub-Account allocation percentages used in any asset allocation model, your asset allocation model and allocation weightings could be affected by mergers, liquidations, fund substitutions or closures.

You will not be provided with information regarding the periodic updates to models that we may offer to new Contract purchasers. Any new models will only be offered to Contracts issued on or after the date the new model goes into effect or to Participants who elect an asset allocation program on or after that date. Participants of any existing asset allocation programs may make an independent decision to change their asset allocations at any time. You should consult your financial adviser periodically to consider whether the model you have selected is still appropriate for you.

Systematic Withdrawal 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 to you, or reinvest, interest credited for all Guarantee Periods you have chosen. Withdrawals under these programs may be subject to surrender charges and 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 $10,000.

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

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

Secured Future Program

Under the Secured Future Program, at issue, we divide your initial Purchase Payment between the Fixed Account and the Variable Account. For the Fixed Account portion, you choose a Guarantee Period from among those we offer, and we 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 initial 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 Sub-Accounts of your choice. At the end of the Guarantee Period, you will be guaranteed the amount of your 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. The Secured Future Program is subject to availability. Your Secured Future Program terminates at the end of the Guarantee Period and is not renewable into a new Guarantee Period. The Secured Future Program is not available when Guarantee Periods are not being offered. (See “The Fixed Account Options: The Guarantee Periods.”)

WITHDRAWALS, WITHDRAWAL CHARGES, 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 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.

All withdrawals may be subject to a withdrawal charge (see “Withdrawal Charge” below) and withdrawals from your Fixed Account Value also may be subject to a Market Value Adjustment. (See “Market Value Adjustment.”) Upon request we will notify you of the amount we would pay in the event of a full or partial withdrawal. Withdrawals also may have adverse federal income tax consequences, including a 10% penalty tax. (See “Tax Considerations.”) You should carefully consider these tax consequences before requesting a cash withdrawal.

Full Withdrawals

If you request a full withdrawal, we calculate the amount we will pay you as follows: We start with 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; we add the amount of any Market Value Adjustment applicable to your Fixed Account Value; and finally, we deduct any applicable withdrawal charge.

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


Partial Withdrawals

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

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

Partial withdrawals may affect the death benefit amount. In calculating the amount payable under the death benefit, we may reduce the benefit amount to an amount equal to the benefit amount payable immediately before the withdrawal multiplied by the ratio of the Account Value immediately after withdrawal to the Account Value immediately before the withdrawal. (See “Calculating the Death Benefit.”)

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 (i.e., a surrender of your Contract).

Time of Payment

We will pay you the applicable amount of any full or partial withdrawal within seven days after we receive your withdrawal request, except in cases where we are permitted 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:

 
·
when the New York Stock Exchange is closed (except weekends and holidays) or when the SEC determines trading on the New York Stock Exchange is restricted;

 
·
when the SEC determines that an emergency exists and that it is not reasonably practical (i) to dispose of securities held in the Variable Account or (ii) to determine the value of the net assets of the Variable Account;

 
·
when an SEC order permits us to defer payment for the protection of Participants; or

 
·
if mandated by applicable law.

If, pursuant to SEC rules, the MFS® Money Market Portfolio suspends payment of redemption proceeds in connection with a liquidation of the Fund, we will delay payment of any transfer, partial withdrawal, surrender, loan, or death benefit from the Money Market Sub-Account until the Fund is liquidated. We also may defer payment of amounts you withdraw from the Fixed Account for up to six months from the date we receive your withdrawal request. We do not pay interest on the amount of any payments we defer.

If mandated under applicable law, we may be required to reject a Purchase Payment and/or block a Contract Owner's account and thereby refuse to pay any request for transfers, withdrawals, surrenders or death benefits until instructions are received from the appropriate regulators. We may also be required to provide additional information about you or your account to governmental regulators.

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.”)

When you make a withdrawal, we consider the oldest Purchase Payment that you have not already withdrawn to be withdrawn first, then the second oldest Purchase Payment, and so forth. Once all Purchase Payments are withdrawn, the balance withdrawn is considered to be accumulated value.



Withdrawal Charge

We do not deduct any sales charge from your Purchase Payments when they are made. However, we may impose a withdrawal charge (known as a “contingent deferred sales charge”) on certain amounts you withdraw. We impose this charge primarily to defray some of our expenses related to the sale of the Contracts, such as commissions we pay to agents, the cost of sales literature, and other promotional costs and transaction expenses.

Free Withdrawal Amount

In each Account Year you may withdraw a portion of your Account Value, which we call the “free withdrawal amount,” before incurring the withdrawal charge. For any year, the free withdrawal amount is equal to (1) 10% of the amount of all Purchase Payments you have made during the last seven Account Years, including the current Account Year (the “Annual Withdrawal Allowance”), plus (2) the amount of all Purchase Payments made before the last seven Account Years that you have not previously withdrawn. Any portion of the Annual Withdrawal Allowance that you do not use in an Account Year is cumulative, that is, it is carried forward and available for use in future years.

For convenience, we refer to Purchase Payments made during the last seven Account Years (including the current Account Year) as “New Payments,” and all Purchase Payments made before the last seven Account Years as “Old Payments.”

For example, assume you wish to make a withdrawal from your Contract in Account Year 10. You made an initial Purchase Payment of $10,000 in Account Year 1, you made one additional Purchase Payment of $8,000 in Account Year 8, and you made no previous withdrawals. Your Account Value in Account Year 10 is $35,000. The free withdrawal amount for Account Year 10 is $19,400, calculated as follows:

 
·
$800, which is the Annual Withdrawal Allowance for Account Year 10 (10% of the $8,000 Purchase Payment made in Account Year 8, the only New Payment); plus

 
·
$8,600, which is the total of the unused Annual Withdrawal Allowances of $1,000 for each of Account Years 1 through 7 and $800 for each of Account Years 8 and 9 that are carried forward and available for use in Account Year 10; plus

 
·
$10,000, which is the amount of all Old Payments that you have not previously withdrawn.

Withdrawal Charge on Purchase Payments

If you withdraw more than the free withdrawal amount in any Account Year, we consider the excess amount to be withdrawn first from New Payments that you have not previously withdrawn. We impose the withdrawal charge on the amount of these New Payments. Thus, the maximum amount on which we will impose the withdrawal charge in any year will never be more than the total of all New Payments that you have not previously withdrawn.

The amount of your withdrawal, if any, that exceeds the total of the free withdrawal amount plus the aggregate amount of all New Payments not previously withdrawn, is not subject to the withdrawal charge.

Order of Withdrawal

New Payments are withdrawn on a first-in first-out basis until all New Payments have been withdrawn. For example, assume the same facts as in the example above. In Account Year 10 you wish to withdraw $25,000. We attribute the withdrawal first to the free withdrawal amount of $19,400, which is not subject to the withdrawal charge. The remaining $5,600 is withdrawn from the Purchase Payment made in Account Year 8 (the only New Payment) and is subject to the withdrawal charge. The $2,400 balance of the Account Year 8 Purchase Payment will remain in your Account. If you make a subsequent $5,000 withdrawal in Account Year 10, $2,400 of that amount will be withdrawn from the remainder of the Account Year 8 Purchase Payment and will be subject to the withdrawal charge. The other $2,600 of your withdrawal (which exceeds the amount of all New Payments not previously withdrawn) will not be subject to the withdrawal charge.

Calculation of Withdrawal Charge

We calculate the amount of the withdrawal charge by multiplying the Purchase Payments you withdraw by a percentage. The percentage varies according to the number of Account Years the Purchase Payment has been held in your Account, including the year in which you made the Purchase Payment, but not the year in which you withdraw it. Each Purchase Payment begins a new seven-year period and moves down a declining surrender charge scale at each Account Anniversary. Purchase Payments received during the current Account Year will be charged 6% if withdrawn. On your next scheduled Account Anniversary, that Purchase Payment along with any other Purchase Payments made during that Account Year, will be considered to be in their second Account Year and will have a 5% withdrawal charge. On the next Account Anniversary, these Purchase Payments will move into their third Account Year and will have a withdrawal charge of 5%. The withdrawal charge decreases according to the number of Account Years the Purchase Payment has been in your Account. The declining withdrawal charge scale is as follows:

Number of Account Years Purchase Payment has been in Your Account
Withdrawal Charge
0-1
6%
2-3
5%
4-5
4%
6
3%
7 or more
0%

For example, using the same facts as in the example in “Free Withdrawal Amount” above, the percentage applicable to the withdrawals in Account Year 10 of Purchase Payments made in Account Year 8 would be 5%, because the number of Account Years the Purchase Payments have been held in your Account would be 2. You may want to consider deferring a withdrawal because withdrawal charges decline the longer the Purchase Payment is held in your Account.

The withdrawal charge will never be greater than 6% of the aggregate amount of Purchase Payments you make under the Contract.

For a Group Contract, we may modify the withdrawal charges and limits, upon notice to the Owner of the Group Contract. However, any modification will only apply to Accounts established after the date of the modification.

For additional examples of how we calculate withdrawal charges, see Appendix B.

Types of Withdrawals Not Subject to Withdrawal Charge

We do not impose a withdrawal charge on withdrawals from the Accounts of (a) our employees, (b) employees of our affiliates, or (c) licensed insurance agents who sell the Contracts. We also may waive withdrawal charges with respect to Purchase Payments derived from the surrender of other annuity contracts we issue.

Nursing Home Waiver

We will waive the withdrawal charge for a full withdrawal if:

 
·
the nursing home waiver is approved in the state of issue;

 
·
at least one year has passed since we issued your Contract; and

 
·
you are confined to an eligible nursing home and have been confined there for at least the preceding 180 days, or any shorter period required by your state.

An “eligible nursing home” means a licensed hospital or licensed skilled or intermediate care nursing facility at which medical treatment is available on a daily basis and daily medical records are kept for each patient. You must provide us evidence of confinement in the form we determine. To find out where the nursing home waiver is approved, you can call us at (800) 752-7216.

Minimum Distributions

For each Qualified Contract, the free withdrawal amount in any Account Year will be the greater of the free withdrawal amount described above and any amounts required to be withdrawn to comply with the minimum distribution requirement of the Internal Revenue Code. This applies only to the portion of the required minimum distribution attributable to that Qualified Contract.

Other Withdrawals

We do not impose withdrawal charges:
 
·
on amounts you apply to provide an annuity;
 
·
on amounts withdrawn from a Non-Qualified Contract as part of our non-qualified stretch program;
 
·
on amounts we pay as a death benefit;
 
·
on amounts you transfer among the Sub-Accounts, between the Sub-Accounts and the Fixed Account, or within the Fixed Account; or
 
·
on any amounts transferred as a part of an optional program.

Market Value Adjustment

Market Value Adjustments only apply to Contracts investing in the Fixed Account and are only applicable to Contracts that have allocated money to the Fixed Account Guarantee Period options that we make available from time to time.

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 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 lower than your Guaranteed Interest Rate, the Market Value Adjustment is likely to increase your Account Value.

Effective March 19, 2012, we have amended your Contract or Certificate by limiting (i.e., putting a “floor” on) any downward Market Value Adjustment that might be applied after March 19, 2012, to withdrawals or transfers out of a Guarantee Period. The “floor” ensures that, if you withdraw or transfer money from your Fixed Account Value more than 30 days before the end of the applicable Guarantee Period, we will not apply a Market Value Adjustment that would reduce the amount withdrawn before the deduction of any applicable Contract charges. We will, however, continue to apply any positive Market Value Adjustment that would increase the amount withdrawn.

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.

We will apply the Market Value Adjustment to the amount being withdrawn after deduction of any Account Fee, if applicable, but before we impose any withdrawal charge on the amount withdrawn.

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

No Market Value Adjustment will apply to Contracts issued in the states of Maryland, Texas and Washington, or to one-year Guarantee Periods under Contracts issued in the State of Oregon.

CONTRACT CHARGES

Account Fee

During the Accumulation Phase of your Contract, we will deduct from your Account an annual Account Fee to help cover the administrative expenses we incur related to the issuance of Contracts and the maintenance of Accounts. We deduct the Account Fee on each Account Anniversary, which is the anniversary of the first day of the month after we issue your Contract. In Account Years 1 through 5, the Account Fee is equal to the lesser of $35 or 2% of your Account Value. After Account Year 5, we may change the Account Fee each year, but the Account Fee will never exceed the lesser of $50 or 2% of your Account Value. 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 annual Account Fee if:

 
·
your Account Value has been allocated only to the Fixed Account during the applicable Account Year; or

 
·
your Account Value is more than $75,000 on your Account Anniversary.

If you make a full withdrawal of your Account, we 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 deduct an annual Account Fee of $35 in the aggregate in equal amounts from each Variable Annuity payment we make during the year. We do not deduct any Account Fee from Fixed Annuity payments.

Administrative Expense Charge

We deduct an administrative expense charge from the assets of the Variable Account during both the Accumulation Phase and the Income Phase. During the Accumulation Phase, this charge is deducted at an annual effective rate equal to 0.15% of your average daily Variable Account Value. During the Income Phase, this charge is included as part of the total insurance charges deducted from Annuity Unit values. This charge is designed to reimburse us for expenses we incur in administering the Contracts, the Accounts and the Variable Account that are not covered by the annual Account Fee.

Depending on the amount of expenses that we incur, we expect that we may earn a profit from this charge. 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 1.25%. 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 will exceed the amount of the charges we deduct for those riders; and (4) the risk that the annual Account Fee and the administrative expense charge we assess under the Contracts may be insufficient to cover the actual total administrative expenses we incur. If the amount of the charge is insufficient to cover 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 the risks, we will make a profit on the charge. We may use this profit for any proper corporate purpose, including the payment of marketing and distribution expenses for the Contracts. 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.

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 you  could be subject to a premium tax and the amount of any tax.

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

Fund Expenses

There are fees and expenses deducted from each Fund of the Trust. These fees and expenses are described in the relevant Fund’s prospectus and related Statement of Additional Information.

Modification in the Case of Group Contracts

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

DEATH BENEFIT

If you die during the Accumulation Phase, we will 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 your death, we will pay the death benefit to the Annuitant, or, if the Annuitant is not then living, in one sum to your estate. We do not pay a death benefit if you die during the Income Phase. However, the Beneficiary will receive any payments provided under an Annuity Option that is in effect.

Amount of Death Benefit

To calculate the amount of your death benefit, we use a “Death Benefit Date.” The Death Benefit Date is the date we receive proof of your death in an acceptable form (“Due Proof of Death”) if you have elected a death benefit payment method before your death and it remains effective. Otherwise, the Death Benefit Date is the later of the date we receive Due Proof of Death or the date we receive 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, the Death Benefit Date will be the last day of the 60 day period.

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

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

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

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

 
(3)
your Account Value on the Seven-Year Anniversary immediately before the Death Benefit Date, adjusted for subsequent Purchase Payments and partial withdrawals and charges made between the Seven-Year Anniversary and the Death Benefit Date;

 
(4)
your highest Account Value on any Account Anniversary before your 81st birthday, adjusted for subsequent Purchase Payments and partial withdrawals made between that Account Anniversary and the Death Benefit Date; and

 
(5)
your total Purchase Payments plus interest accruals thereon, adjusted for partial withdrawals; interest will accrue on Purchase Payments allocated to and transfers to the Variable Account while they remain in the Variable Account at a rate of 5% per year until the first day of the month following your 80th birthday, or until the Purchase Payment or amount transferred has doubled in amount, whichever is earlier.

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

If your Contract is a traditional Individual Retirement Annuity or a 403(b) TSA annuity, required minimum distributions under the Internal Revenue Code may affect the value of your death benefit. Please refer to “Required Minimum Distribution Requirements for Tax-Sheltered Annuities and Traditional Individual Retirement Annuities” under “TAX CONSIDERATIONS” for more information regarding tax issues that you should consider before choosing a death benefit.



Spousal Continuance

If your spouse is your Beneficiary, upon your death your spouse may elect to continue the Contract as the Participant, rather than receive the death benefit. In that case, the amount of your death benefit, calculated as described under “Amount of Death Benefit,” will become the Contract’s Account Value on the Death Benefit Date. All other provisions of the Contract, including any withdrawal charges, will continue as if your spouse had purchased the Contract on the original date of coverage. Upon surrender or annuitization, this increased amount will not be treated as premium, but will be treated as income.

Calculating the Death Benefit

In calculating the death benefit amount payable under (3), (4) and (5) above, any partial withdrawals will reduce the amount by the ratio of the Account Value immediately following the withdrawal to the Account Value immediately before the withdrawal.

If the death benefit is amount (2), (3), (4) or (5) above, your Account Value will be increased by the excess, if any, of that amount over amount (1). Any such increase will be allocated to the Sub-Accounts in proportion to your Account Value in those Sub-Accounts on the Death Benefit Date. Also, any portion of this new Account Value attributed to the Fixed Account will be transferred to the Money Market Sub-Account (without the application of a Market Value Adjustment). The Beneficiary may then transfer to the Fixed Account and begin a new Guarantee Period, if we are then currently offering Fixed Account options.

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 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 the Participant’s spouse, the Beneficiary may elect to continue the Contract. This election is made by sending us a letter of instruction. If we do not receive the Beneficiary’s election within 60 days after we receive Due Proof of Death, we will pay the death benefit in a single cash payment.

If we pay the death benefit in the form of an Annuity Option, the Beneficiary becomes the Annuitant/Payee under the terms of that Annuity Option. (See “The Income Phase - Annuity Provisions.”)

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 five 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 a 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 Annuitant 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,” above.

During the Income Phase, if the Annuitant dies, the remaining value of the Annuity Option(s) 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, the special distribution rules apply on a change in, or the death of, any Annuitant or Co-Annuitant.

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

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.

Every state has unclaimed property laws which generally declare annuity contracts to be abandoned after a period of inactivity of three to five years from the contract’s Annuity Commencement Date or date the death benefit is due and payable. For example, if the payment of a death benefit has been triggered, but, if after a thorough search, we are still unable to locate your Beneficiary, or your Beneficiary does not come forward to claim the death benefit in a timely manner, the death benefit will be paid to the abandoned property division or unclaimed property office of the state in which you or your Beneficiary last resided, as shown on our books and records, or to our state of domicile. This “escheatment” is revocable, however, and the state is obligated to pay the death benefit if your Beneficiary steps forward to claim it with the proper documentation.  To prevent such escheatment, it is important that you update your Beneficiary designations, including full names and complete addresses, if and as they change.

Payment of Death Benefit

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

Due Proof of Death

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

 
·
an original certified copy of an official death certificate;

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

 
·
any other proof we find satisfactory.

THE INCOME PHASE - ANNUITY PROVISIONS

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

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

Once the Income Phase begins, no lump sum settlement option or cash withdrawals are permitted, except pursuant to Annuity Option D, Monthly Payments for a Specified Period Certain, as described under “Annuity Options,” and you cannot change the Annuity Option(s) 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, Withdrawal Charges and Market Value Adjustment.”)

Selection of the Annuitant or Co-Annuitant

You select the Annuitant in your Application. The Annuitant is the person who receives annuity payments during the Income Phase and on whose life these payments are based. In your Contract, the Annuity 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.

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

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

Selection of the Annuity Commencement Date

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

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

 
·
The latest possible Annuity Commencement Date is the first day of the month following the Annuitant’s 95th birthday (“maximum Annuity Commencement Date”) or, if there is a Co-Annuitant, the 95th birthday of the younger of the Annuitant and Co-Annuitant.

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

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

 
·
We must receive your notice, in good order, at least 30 days before the current Annuity Commencement Date.

 
·
The new Annuity Commencement Date must be at least 30 days after we receive the notice.

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

Annuity Options

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

Annuity Option A - Life Annuity

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

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

We make monthly payments during the lifetime of the Annuitant. In addition, we guarantee that the Beneficiary will receive monthly payments for the remainder of the period certain, if the Annuitant dies during that period. The election of a longer period results in smaller monthly payments. If no Beneficiary is designated, we pay the discounted value of the remaining payments in one sum to the Annuitant’s estate. The Beneficiary may also elect to receive the discounted value of the remaining payments in one sum. The discount rate for a Variable Annuity will be the assumed interest rate of 3%; 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 some or all of the discounted value of the remaining payments, less any applicable withdrawal charge; the discount rate for this purpose will be the assumed interest rate of 3%. If the Annuitant dies during the period selected, the remaining income payments are made as described above for 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 must specify the proportion of your Adjusted Account Value you wish to provide a Variable Annuity or a Fixed Annuity. Under a Variable Annuity, the dollar amount of annuity payments will vary, while under a Fixed Annuity, the dollar amount of payments will remain the same. If you do not specify a Variable Annuity or a Fixed Annuity, your Adjusted Account Value will be divided between Variable Annuities and Fixed Annuities in the same proportions as your Account Value was divided between the Variable and Fixed Accounts on the Annuity Commencement Date. You may allocate your Adjusted Account Value applied to a Variable Annuity among the Sub-Accounts, or we will use your existing allocations.

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

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

Amount of Annuity Payments

Adjusted Account Value

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

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

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

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

Variable Annuity Payments

Variable Annuity payments may vary each month. We determine the dollar amount of the first payment using the portion of your adjusted Account Value applied to a Variable Annuity and the annuity payment rates in your Contract, which are based on an assumed interest rate of 3% per year, compounded annually. (See “Annuity Payment Rates.”)

To calculate the remaining payments, we convert the amount of the first payment into Annuity Units for each Sub-Account; we determine the number of those Annuity Units by dividing the portion of the first payment attributable to the Sub-Account by the Annuity Unit value of that Sub-Account for the Valuation Period ending just before the Annuity Commencement Date. This number of Annuity Units for each Sub-Account will remain constant (unless the Annuitant requests a transfer among Sub-Accounts). 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, which are based on a minimum guaranteed interest rate of 3% per year, compounded annually, or (2) new rates we have published and are using on the Annuity Commencement Date, if they are more favorable. (See “Annuity Payment Rates.”)

Minimum Payments

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

Transfer of Variable Annuity Units

During the Income Phase, the Annuitant may transfer Annuity Units from one Sub-Account to another, up to 12 times each Account Year. Any such transfers 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 a transfer, the Annuitant sends us, at our mailing address, a written request stating the number of Annuity Units in the Sub-Account he or she wishes to transfer 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 transfer would not be affected. To calculate this number, we use Annuity Unit values for the Valuation Period during which we receive the transfer request.

Before transferring Annuity Units from one Sub-Account to another, the Annuitant should carefully review the Fund prospectus for the investment objectives and risk disclosure of the Fund in which the Sub-Accounts invest.

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

Account Fee

During the Income Phase, we deduct the annual Account Fee in equal amounts from each Variable Annuity payment. We do not deduct the annual Account Fee from Fixed Annuity payments (See “Contract Charges - Account Fee”.)

Annuity Payment Rates

Annuity payment rates are the rates we use to determine the dollar amount of an annuity payment under each Annuity Option. The Contract contains annuity payment rate schedules for each Annuity Option described in this Prospectus. These schedules show, for each $1,000 applied, the dollar amount of: (a) the first monthly Variable Annuity payment based on the assumed interest rate specified in the applicable Contract (at least 3% per year, compounded annually); and (b) the monthly Fixed Annuity payment, when this payment is based on the minimum guaranteed interest rate specified in the Contract (at least 3% per year, compounded annually). We may change these rates under Group Contracts for Accounts established after the effective date of such change (See “Other Contract Provisions - Modification”.)

The annuity payment rates may vary according to the Annuity Option(s) elected and the adjusted age of the Annuitant. The Contract also describes the method of determining the adjusted age of the Annuitant. The mortality table used in determining the annuity payment rates for Options A, B, and C is the 1983 Individual Annuitant Mortality Table.

Annuity Options as Method of Payment for Death Benefit

You or your Beneficiary may also select one or more Annuity Options to be used in the event of your death before the Income Phase, as described under the “Death Benefit” section of this Prospectus. In that case, your Beneficiary will be the Annuitant/Payee. 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 Participant 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 last Annuity Commencement Date, and each Participant, in like manner, may change the ownership interest in a Contract. A change of ownership will not be binding on us until we receive written notification. When we receive such notification, the change will be effective as of the date on which the request for change was signed by the Owner or Participant, as appropriate, but the change will be without prejudice to us on account of any payment we make or any action we take before receiving the change. If you change the Owner of a Non-Qualified Contract, you will become immediately liable for the payment of taxes on any gain realized under the Contract prior to the change of ownership, including possible liability for a 10% federal excise tax.

Voting of Fund Shares

To the extent required by law, we will vote all shares held in the Variable Account in accordance with instructions we receive from persons with voting interests in the Funds. During the Accumulation Phase, you will have the right to give voting instructions, except in the case of a Group Contract in which 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 the right to give voting instructions.

Before a vote of the shareholders of a Fund occurs, each person with voting interests in the Fund will receive voting materials from us. We will ask those persons to instruct us on how to vote and to return their respective voting instructions to us in a timely manner. Each such person is permitted to cast votes based on the dollar value of the shares of each Fund that we hold for your Contract in the corresponding Sub-Account. We calculate this value based on the number of Variable Accumulation Units or Variable Annuity Units allocated to your Contract as of the date set by the Fund and the value of each Variable Accumulation Unit or Variable Annuity Unit on that date. We count fractional votes.

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 person(s) with voting interests in the Fund. Because of this method of proportional voting, a small number of persons with voting interests in the Fund may determine the outcome of a shareholder vote. If, however, we determine that we are permitted to vote the Fund shares in our own right, then we may do so.

Note: Owners of Qualified Contracts issued on a group basis may be subject to other voting provisions of the particular retirement plan and under the Investment Company Act of 1940. Employees who contribute to retirement 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 retirement plans may also provide the additional extent, if any, to which an Owner shall follow voting instructions of persons with rights under those plans. If no voting instructions are received from any such person with respect to a particular Contract, the Owner may instruct us as to how to vote the number of Fund shares for which instructions may be given.

Reports to Owners

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

In addition, within five business days after each calendar 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 calendar 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, 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.

If you have enrolled in the electronic delivery service and consented to receive documents electronically, we will send you an email at the address you provided notifying you when we have posted your confirmations, statements, and reports on our website.

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 of the Trust may not always be available for investment under the Contract. We may add or delete Funds or other investment companies as variable investment options under the Contracts. We may also substitute 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 for the shares held in any Sub-Account, provided that the substitution has been approved, if required, by the SEC. You will receive notice of any such Fund changes that affect your Contract by a supplement to this Prospectus.

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 Trust 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 supplement this Prospectus to reflect the change and take such other action as we deem necessary and appropriate to effect the change.

Splitting Units

We reserve the right to split or combine the value of Variable Accumulation Units, Annuity Units or any of them. In effecting any such change of unit values, strict equity will be preserved and no change will have a material effect on the benefits or other provisions of the Contracts. Any changes we make by splitting or combining Variable Accumulation Unit values must comply with federal securities laws and regulations.

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 is consistent with federal securities laws and regulations and: (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 supplement this Prospectus to reflect such modification.

In addition, upon notice to the Owner, we may modify a Group Contract to change the withdrawal charges, 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.

Limitation or Discontinuance of New Participants

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

Reservation of Rights

We reserve the right, to the extent permitted by law, to: (1) combine any two or more variable accounts or Sub-Accounts; (2) add or delete Series, sub-series thereof or other investment companies and corresponding Sub-Accounts; (3) add or remove Guarantee Periods available at any time for election by a Participant; and (4) restrict or eliminate any of the voting rights of Participants (or Owners) or other persons who have voting rights as to the Variable Account. Where required by law, we will obtain approval of changes from Participants or any appropriate regulatory authority. In the event of any change pursuant to this provision, we may supplement this Prospectus and make appropriate endorsement to the Contract as necessary 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 mailing address as shown on the cover of this Prospectus within 10 days, or longer if required 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. However, 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 Contract Date. Upon such revocation, we will refund your Purchase Payment(s). This right of revocation with respect to an IRA is in addition to the return privilege set forth in the preceding paragraph. We allow a Participant establishing an IRA a “ten day free-look,” notwithstanding the provisions of the Internal Revenue Code.

TAX CONSIDERATIONS

This section provides general information on the federal income tax consequences of ownership of a Contract and is not intended as tax advice. 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 state or other income tax laws, any state and local estate or inheritance tax, or other tax consequences of ownership or receipt of distributions under a Contract. 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.

When you invest in an annuity contract, you usually do not pay taxes on your investment gains until you withdraw the money – generally for retirement purposes. If you invest in a variable annuity as part of an individual retirement plan, pension plan or employer-sponsored retirement program, your Contract is called a “Qualified Contract.” If your annuity is independent of any formal retirement or pension plan, it is termed a “Non-Qualified Contract.” The tax rules applicable to Qualified Contracts vary according to the type of retirement plan and the terms and conditions of the plan.

U.S. Federal Income Tax Considerations

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

Taxation of Non-Qualified Contracts

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 nontaxable 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 a Participant 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 Participant 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 Participant of a Contract), less any Purchase Payments that were amounts previously received which were not includable in income).

Annuity Payments. 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.

Penalty Tax on Certain Withdrawals. 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). Other exceptions may be applicable under certain circumstances and special rules may be applicable in connection with the exceptions enumerated above. Also, additional exceptions apply to distributions from a Qualified Contract. You should consult a qualified tax professional with regard to exceptions from the penalty tax.

Taxation of Death Benefit Proceeds. Death benefits paid upon the death of a Participant are not life insurance benefits and will generally be includible in the income of the recipient to the extent they represent investment earnings under the contract. For this purpose, the amount of the investment in the contract is not affected by the 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.

Transfers, Assignments or Exchanges of a Contract. A transfer or assignment of ownership of a Contract, the designation of an Annuitant other than the Owner, the selection of certain maturity dates, or the exchange of a Contract may result in certain tax consequences to you that are not discussed herein. An Owner contemplating any such transfer, assignment or exchange should consult a qualified tax professional as to the tax consequences.

Withholding. Annuity distributions are generally subject to withholding for the recipient’s federal income tax liability.  Recipients can generally elect, however, not to have tax withheld from distributions.

Multiple Contracts. All non-qualified deferred annuity contracts that are issued by us (or our affiliates) to the same owner during any calendar year are treated as one annuity contract for purposes of determining the amount includible in such owner’s income when a taxable distribution occurs.

Partial Annuitization. Under a new tax provision enacted in 2010, if part of an annuity contract’s value is applied to an annuity option that provides payments for one or more lives and for a period of at least ten years, those payments may be taxed as annuity payments instead of withdrawals. None of the payment options under the Contract is intended to qualify for this “partial annuitization” treatment.

Taxation of Qualified Contracts

“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.  Adverse tax consequences may result if you do not ensure that contributions, distributions and other transactions with respect to the Contract comply with the law.

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. Adverse tax consequences to the retirement plan, the participant or both may result if the Contract is transferred to any individual as a means to provide benefit payments, unless the plan complies with all the requirements applicable to such benefits prior to transferring the Contract.

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. We no longer accept any additional Purchase Payments to any previously issued TSAs.

The Internal Revenue Service’s (“IRS”) comprehensive TSA regulations are generally 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:

 
·
deductible medical expenses incurred by you, your spouse, or your dependents;
 
·
payments of tuition and related educational fees for the next 12 months of post-secondary education for you, your spouse, or your dependents;
 
·
costs related to the purchase of your principal residence (not including mortgage payments);
 
·
payment necessary to prevent eviction from your principal residence or foreclosure of the mortgage on your principal residence;
 
·
payments for burial or funeral expenses for your parent, spouse, children, or dependents; or
 
·
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 Accounts and Annuities. Individual Retirement Accounts and Annuities (“IRAs”), as defined in Section 408 of the Code, permit eligible individuals to make annual contributions of up to the lesser of a specified dollar amount for the year or the amount of compensation includible in the individual’s gross income for the year. The contributions may be deductible in whole or in part, depending on the individual’s income. In addition, certain distributions from some other types of retirement plans may be “rolled over” into an IRA on a tax-deferred basis without regard to these limits.  Amounts in the IRA (other than nondeductible contributions) are taxed when distributed from the IRA. A 10% penalty tax generally applies to distributions made before age 59½, unless an exception applies. The Internal Revenue Service imposes special information requirements with respect to IRAs and we will provide purchasers of the Contracts as Individual Retirement Annuties 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 certain eligible individuals 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 roll over from or convert a traditional IRA 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.  Distributions from a Roth IRA are generally not taxed, except that once aggregate distributions exceed contributions to the Roth IRA, income tax and a 10% penalty tax may apply to distributions made (1) before age 59½ (subject to certain exceptions) or (2) during the five taxable years starting with the year in which the first contribution is made to any Roth IRA.  A 10% penalty tax may apply to amounts attributable to a conversion from an IRA if they are distributed during the five taxable years beginning with the year in which the conversion was made.

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.

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

If you receive a distribution for a Qualified Contract used in connection with a qualified pension plan, from a tax-sheltered annuity, a governmental Code Section 457 plan or an 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:

 
·
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;

 
·
any required minimum distribution, or

 
·
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 be 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, a non-surviving-spouse beneficiary may elect a direct rollover only to a so-called inherited IRA. 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.

In certain circumstances, owners of variable annuity contracts have been considered for Federal income tax purposes to be the owners of the assets of the separate account supporting their contracts due to their ability to exercise investment control over those assets. When this is the case, the contract owners have been currently taxed on income and gains attributable to the variable account assets. There is limited guidance in this area, and some features of our Contracts, such as the flexibility of an owner to allocate premium payments and transfer amounts among the investment divisions of the separate account, have not been explicitly addressed in published rulings. While we believe that the Contracts do not give Owners investment control over separate account assets, we reserve the right to modify the Contracts as necessary to prevent an Owner from being treated as the Owner of the separate account assets supporting the Contract. 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.

Required Minimum Distribution Requirements

If your Contract is a Qualified Contract other than a Roth IRA, 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.

The IRS’s RMD regulations provide that the annual RMD amount is to be calculated based on the Contract’s Account Value as of 12/31 plus “the actuarial present value of any additional benefits” that are provided under your Contract (such as optional death benefits) which is also calculated as of 12/31. When we notify you yearly of the RMD amount, we will inform you if the calculation included the actuarial present value of any additional benefits since such inclusion would have increased your RMD amount. Because of the above requirements, a death benefit in your Contract could cause your RMD amount to be higher than it would be without such a benefit.

You may take an RMD amount calculated for a particular Individual Retirement Annuity from that Annuity or from another IRA 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.

For Qualified Contracts issued other than as Individual Retirement Annuities, (1) we do not calculate your annual RMD amount nor do we notify you of such amount and (2) 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 so that it can be used by the trustee or custodian in the Account’s RMD calculations.

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 your information about your withdrawal. Under the Internal Revenue Code, any withdrawal from a Non-Qualified Contract is taxable to the extent the annuity’s cash value (determined without regard to surrender charges) exceeds the investment in the contract. There is no definition of “cash value” in the Code and, for tax reporting purposes, we are currently treating it as the Account Value of the Contract. However, there can be no assurance that the IRS will agree that this is the correct cash value. You should consult with a qualified tax professional as to the meaning of “cash value.”

Federal Defense of Marriage Act and Same-Sex Marriages

The Contract provides that upon your death a surviving spouse may have certain continuation rights that he or she may elect to exercise for the Contract’s death benefit. Under federal law, all such Contract continuation rights are available only to a person who is defined as a “spouse.” Previously, under the federal Defense of Marriage Act, that definition did not include a same-sex spouse. In 2013, the U.S. Supreme Court ruled that section 3 of the Defense of Marriage Act is unconstitutional; therefore same-sex marriages that are recognized under state law are now also recognized under federal law. The Treasury Department and the IRS have recently announced that spousal status will be determined based on the marriage laws of the state or country in which the marriage was celebrated, regardless of the marriage laws of the state in which an individual resides. Some uncertainty remains, however, and you should consult with a qualified tax professional for further information.

Federal Estate Taxes

While no attempt is being made to discuss the Federal estate tax implications of the Contract, a purchaser should keep in mind that the value of an annuity contract owned by a decedent and payable to a beneficiary by virtue of an annuity contract owned by a decedent and payable to a beneficiary by virtue of surviving the decedent is included in the decedent’s gross estate. Depending on the terms of the annuity contract, the value of the annuity included in the gross estate may be the value of the lump sum payment payable to the designated beneficiary or the actuarial value of the payments to be received by the beneficiary. Please consult an estate planning advisor for more information.

Generation-skipping Transfer Tax

Under certain circumstances, the Code may impose a “generation-skipping transfer tax” when all or part of an annuity contract is transferred to, or a death benefit is paid to, an individual two or more generations younger than the Owner. Regulations issued under the Code may require us to deduct the tax from your Contract, or from any applicable payment, and pay it directly to the IRS. Please consult a qualified tax professional for more information.

American Taxpayer Relief Act of 2012

The American Taxpayer Relief Act of 2012 (ATRA) permanently extended the laws governing estate taxes, gift taxes and generation skipping transfer taxes that were put in place by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (TRA 2010), with one notable exception – the top estate tax, gift tax and generation skipping tax rate increases from 35% to 40%.

Medicare Tax

Beginning in 2013, distributions from non-qualified annuity policies will be considered “investment income” for purposes of the newly enacted Medicare tax on investment income. Thus, in certain circumstances, a 3.8% tax may be applied to some or all of the taxable portion of distributions (e.g. earnings) to individuals whose income exceeds certain threshold amounts ($200,000 for filing single, $250,000 for married filing jointly and $125,000 for married filing separately.) Please consult a tax advisor for more information.

Annuity Purchases by Residents of Puerto Rico

The Internal Revenue Service has announced that income received by residents of Puerto Rico under life insurance or annuity contracts issued by a Puerto Rico branch of a United States life insurance company is U.S.-source income that is generally subject to United States Federal income tax.

Annuity Purchases by Nonresident Aliens and Foreign Corporations

The discussion above provides general information regarding U.S. federal income tax consequences to annuity purchasers that are U.S. citizens or residents. Purchasers that are not U.S. citizens or residents will generally be subject to U.S. federal withholding tax on taxable distributions from annuity contracts at a 30% rate, unless a lower treaty rate applies. In addition, purchasers may be subject to state and/or municipal taxes and taxes that may be imposed by the purchaser’s country of citizenship or residence. Prospective purchasers are advised to consult with a qualified tax professional regarding U.S. state, and foreign taxation with respect to an annuity contract purchase.

Possible Tax Law Changes

Although the likelihood of legislative changes is uncertain, there is always the possibility that the tax treatment of the Contract could change by legislation or otherwise. Consult a qualified tax professional with respect to legislative developments and their effect on the Contract.

We have the right to modify the Contract in response to legislative changes that could otherwise diminish the favorable tax treatment that annuity contract owners currently receive. We make no guarantee regarding the tax status of any contact and do not intend the above discussion as tax advice.

Puerto Rico Tax Provisions

The Contract offered by this Prospectus is considered an annuity contract under Section 1022 of the Puerto Rico Internal Revenue Code of 1994, as amended and Section 1031.01 of the 2011 Internal Revenue Code for a New Puerto Rico, as amended (collectively the “Puerto Rico Code”). Under the current provisions of the Puerto Rico 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 Puerto Rico 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 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 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”, and “Withholding”. 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 CONTRACTS

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

DISTRIBUTION OF THE CONTRACTS

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 or 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”), 96 Worcester Street, 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 Contract Owner or the separate account. The Company intends to recoup this compensation through fees and charges imposed under the Contract, and from profits on payments received by the Company for providing administrative, marketing, and other support and services to the Funds.

The amount and timing of commissions the Company may pay to Selling Broker-Dealers may vary depending on the selling agreement but is not expected to be more than 8.50% of Purchase Payments, and 1.25% annually of the Participant’s Account Value. The Company may pay or allow other promotional incentives or payments in the form of cash or other compensation to the extent permitted by 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 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” compensations, or reimbursements to Selling Broker-Dealers in recognition of their marketing and distribution, transaction processing and/or administrative services support. These payments are not offered to all Selling Broker-Dealers, and the terms of any particular agreement governing the payments may vary among Selling Broker-Dealers depending on, among other things, the level and type of marketing and distribution support provided. Marketing and distribution support services may include, among other services, placement of the Company’s products on the Selling Broker-Dealers’ preferred or recommended list, access to the Selling Broker-Dealers’ registered representatives for purposes of promoting sales of the Company’s products, assistance in training and education of the Selling Agents, and opportunities for the Company to participate in sales conferences and educational seminars. The payments or reimbursements may be calculated as a percentage of the particular Selling Broker-Dealer’s actual or expected aggregate sales of our variable contracts (including the Contract) or assets held within those contracts 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 Contracts 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 Company makes numerous forms of payments and engages in a variety of other activities 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 and other activities may be significantly greater or less in connection with the Contracts than in connection with other products offered and sold by the Company or by others. Accordingly, our payments and other activities 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; Credits; Special Guaranteed Interest Rates.” During 2011, 2012, and 2013, approximately $7,895, $7,359, and $3,616,322, respectively, in commissions were paid to but not retained by Clarendon in connection with the distribution of the Contracts described in this Prospectus.

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. 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 location: 100 F Street, N.E., Washington, D.C. 20549-0102, telephone (202) 551-8090. The SEC’s public reference room will also provide copies by mail for a fee. You may also find these materials on the SEC’s website (www.sec.gov).

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 State of Delaware and 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 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. Such insurance holding company legislation protects the Company’s ability to pay all guaranteed contract benefits. 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. A state’s assessment on insurers in connection with the state guaranty fund would not affect the Company’s obligation to pay guaranteed contract benefits. If an assessment were so large as to affect the Company’s own ability to meet its obligations, then the provisions to excuse, defer, or offset such assessment would allow the Company to pay guaranteed contract benefits.

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

The Company, like other insurance companies, is involved in lawsuits, including class action lawsuits. Although the outcome of any litigation cannot be predicted with certainty, Sun Life (U.S.) believes that, at the present time, there are no pending or threatened lawsuits that are reasonably likely to have a material adverse impact on the Variable Account, on the ability of Clarendon Insurance Agency, Inc. to perform under its principal underwriting agreement, or on our ability to meet our obligations under the Contract.

FINANCIAL STATEMENTS

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

The financial statements of the Variable Account for the year ended December 31, 2013 are also included in the Statement of Additional Information.

TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION

Sun Life Assurance Company of Canada (U.S.)
2
Advertising and Sales Literature
2
Tax-Deferred Accumulation
3
Calculations
4
Example of Net Investment Factor Calculation
4
Example of Variable Accumulation Unit Value Calculation
4
Annuity Provisions
4
Determination of Annuity Payments
4
Annuity Unit Value
5
Example of Variable Annuity Unit Calculation
5
Example of Variable Annuity Payment Calculation
5
Distribution of the Contracts
6
Custodian
6
Experts
6
Financial Statements
6



 
 

 

APPENDIX A -
GLOSSARY

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

ACCOUNT or PARTICIPANT ACCOUNT: An account established for each Participant to which Net Purchase Payments are credited.

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

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

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

*ANNUITANT: The person or persons to whom the first annuity payment is made. If the Annuitant dies prior to the Annuity Commencement Date, the new Annuitant will be the Co-Annuitant, if any. If the Co-Annuitant dies or if no Co-Annuitant is named, the Participant becomes the Annuitant upon the Annuitant’s death prior to the Annuity Commencement Date. If you have not named a sole Annuitant on the 30th day before the Annuity Commencement Date and both the Annuitant and Co-Annuitant are living, the Co-Annuitant will be the sole Annuitant during the Income Phase.

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

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

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

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

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

BUSINESS DAY: Any day the New York Stock Exchange is open for trading. 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 DATE: The date on which we issue your Contract. This is called the “Date of Coverage” in the Contract.

DEATH BENEFIT DATE: If you have elected a death benefit payment option before your death that remains in effect, the date on which we receive Due Proof of Death. If your Beneficiary elects the death benefit payment option, the later of (a) the date on which we receive the Beneficiary’s election and (b) the date on which we receive Due Proof of Death. If we do not receive the Beneficiary’s election within 60 days after we receive Due Proof of Death, the Death Benefit Date will be the last day of the 60 day period and we will pay the death benefit in cash.

DUE PROOF OF DEATH: An original certified copy of an official death certificate, an original certified copy of a decree of a court of competent jurisdiction as to the finding of death, or any other proof satisfactory to the Company.

EXPIRATION DATE: The last day of a Guarantee Period.

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

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

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

GOOD ORDER: An instruction that is received by the Company, that is sufficiently complete and clear, along with all forms, information and supporting legal documentation (including any required spousal or joint owner’s consents) so that the Company does not need to exercise any discretion to follow such instruction. All orders to process a withdrawal request, a request to surrender your Contract, a fund transfer request, or a death benefit claim must be in good order.

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

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

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

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

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

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

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

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

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

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

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

PAYEE: A recipient of payments under a Contract. The term includes an Annuitant or a Beneficiary who becomes entitled to benefits upon the death of the Participant.

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.

SEVEN-YEAR ANNIVERSARY: The seventh Account Anniversary and each succeeding Account Anniversary occurring at any seven year interval thereafter; for example, the 14th, 21st and 28th Account Anniversaries.

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

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

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

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

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

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

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


 
 

 

APPENDIX B -
WITHDRAWALS, WITHDRAWAL CHARGES, AND MARKET VALUE ADJUSTMENT

Part 1: Variable Account (the Market Value Adjustment does not apply to the Variable Account)

Withdrawal Charge Calculation:

Full Withdrawal:

Assume a Purchase Payment of $40,000 is made on the Contract Date, no additional Purchase Payments are made and there are no partial withdrawals. The table below presents four examples of the withdrawal charge resulting from a full withdrawal of your Account, based on hypothetical Account Values.

 
Account Year
Hypothetical
Account Value
Free Withdrawal
Amount
New Payments
Withdrawn
Withdrawal
Charge Percentage
Withdrawal
Charge Amount
(a)
1
$ 41,000
$   4,000
$ 37,000
6.00%
$ 2,220
(b)
3
$ 52,000
$ 12,000
$ 40,000
5.00%
$ 2,000
(c)
7
$ 80,000
$ 28,000
$ 40,000
3.00%
$ 1,200
(d)
9
$ 98,000
$ 68,000
$          0
0.00%
$       0

(a)
The free withdrawal amount in any Account Year is equal to (1) the Annual Withdrawal Allowance for that year (i.e., 10% of all Purchase Payments made in the last 7 Account Years (“New Payments”)); plus (2) any unused Annual Withdrawal Allowances from previous years; plus (3) any Purchase Payments made before the last seven Account Years (“Old Payments”) not previously withdrawn. In Account Year 1, the free withdrawal amount is $4,000 (the Annual Withdrawal Allowance for that year) because there are no unused Annual Withdrawal Allowances from previous years and no Old Payments. The $41,000 full withdrawal is attributed first to the $4,000 free withdrawal amount. The remaining $37,000 is withdrawn from the Purchase Payment made in Account Year 1 and is subject to the withdrawal charge.
   
(b)
In Account Year 3, the free withdrawal amount is $12,000 (the $4,000 Annual Withdrawal Allowance for the current year plus the unused $4,000 Annual Withdrawal Allowances for each of Account Years 1 and 2). The $52,000 full withdrawal is attributed first to the free withdrawal amount and the remaining $40,000 is withdrawn from the Purchase Payment made in Account Year 1.
   
(c)
In Account Year 7, the free withdrawal amount is $28,000 (the $4,000 Annual Withdrawal Allowance for the current Account Year plus the unused Annual Withdrawal Allowance of $4,000 for each of Account Years 1 through 6). The $80,000 full withdrawal is attributed first to the free withdrawal amount. The next $40,000 is withdrawn from the Purchase Payment made in Account Year 1 and is subject to the withdrawal charge. The remaining $12,000 exceeds the total of the free withdrawal amount plus all New Payments not previously withdrawn, so it is not subject to the withdrawal charge.
   
(d)
In Account Year 9, the free withdrawal amount is $68,000, calculated as follows. There are no Annual Withdrawal Allowances for Account Years 8 or 9 because there are no New Payments in those years. The $40,000 Purchase Payment made in Account Year 1 is now an Old Payment that constitutes a portion of the free withdrawal amount. In addition, the unused Annual Withdrawal Allowances of $4,000 for each of Account Years 1 through 7 are carried forward and available for use in Account Year 9. The $98,000 full withdrawal is attributed first to the free withdrawal amount. Because the remaining $30,000 is not withdrawn from New Payments, this part of the withdrawal also will not be subject to the withdrawal charge.

Partial Withdrawal:

Assume a single Purchase Payment of $40,000 is made on the Contract Date, no additional Purchase Payments are made, no partial withdrawals have been taken prior to the fifth Account Year, and there are a series of three partial withdrawals made during the fifth Account Year of $9,000, $12,000, and $15,000.

 
Hypothetical
Account Value
Partial
Withdrawal Amount
Free Withdrawal
Amount
New Payments
Withdrawn
Withdrawal
Charge Percentage
Withdrawal
Charge Amount
(a)
$64,000
$  9,000
$20,000
$         0
4.00%
$    0
(b)
$56,000
$12,000
$11,000
$  1,000
4.00%
$  40
(c)
$40,000
$15,000
$         0
$15,000
4.00%
$600

(a)
In Account Year 5, the free withdrawal amount is equal to $20,000 (the $4,000 Annual Withdrawal Allowance for the current year, plus the unused $4,000 for each of the Account Years 1 through 4). The partial withdrawal amount ($9,000) is less than the free withdrawal amount so no New Payments are withdrawn and no withdrawal charge applies.
   
(b)
Since a partial withdrawal of $9,000 was taken, the remaining free withdrawal amount is equal to $11,000. The $12,000 partial withdrawal will first be applied against the $11,000 free withdrawal amount. The remaining $1,000 will be withdrawn from the $40,000 New Payment, incurring a withdrawal charge of $40.
   
(c)
The free withdrawal amount is zero since the previous partial withdrawals have already used the free withdrawal amount. The entire partial withdrawal amount will result in New Payments being withdrawn and will incur a withdrawal charge.

Part 2 - 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:

l
The Guarantee Amount was allocated to a five year Guarantee Period with a Guaranteed Interest Rate of 6% or .06.
l
The date of surrender is two years from the Expiration Date (N = 24).
l
The value of the Guarantee Amount on the date of surrender is $11,910.16.
l
The interest earned in the current Account Year is $674.16.
l
No transfers or partial withdrawals affecting this Guarantee Amount have been made.
l
Withdrawal charges, if any, are calculated in the same manner as shown in the examples in Part 1.

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

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 before the deduction of any withdrawal charge.

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 before the deduction of any withdrawal charge.


 
 

 

APPENDIX C -
CONDENSED FINANCIAL INFORMATION

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

 
Accumulation
Accumulation
Number of
 
 
Unit Value
Unit Value
Accumulation
 
 
Beginning
End
Units End
 
Sub-Account
of Period
of Period
of Period
Year
         
MFS® Bond Portfolio
$21.3042
 
20.9483
 
1,159.051
 
2013
 
19.4121
 
21.3042
 
1,405,032
 
2012
 
18.4629
 
19.4121
 
1,520,174
 
2011
 
16.8911
 
18.4629
 
1,641,672
 
2010
 
13.3880
 
16.8911
 
1,702,404
 
2009
 
15.1773
 
13.3880
 
1,544,627
 
2008
 
14.8692
 
15.1773
 
1,889,321
 
2007
 
14.3349
 
14.8692
 
2,341,399
 
2006
 
14.2874
 
14.3349
 
3,163,320
 
2005
 
13.6383
 
14.2874
 
3,593,610
 
2004
               
MFS® Core Equity Portfolio
14.1017
 
18.7185
 
1,997,137
 
2013
 
12.2813
 
14.1017
 
2,259,021
 
2012
 
12.5734
 
12.2813
 
2,491,713
 
2011
 
10.8789
 
12.5734
 
2,740,341
 
2010
 
8.3120
 
10.8789
 
3,085,747
 
2009
 
13.7368
 
8.3120
 
3,555,482
 
2008
 
12.8160
 
13.7368
 
4,388,587
 
2007
 
11.4278
 
12.8160
 
2,038,030
 
2006
 
10.8765
 
11.4278
 
2,497,342
 
2005
 
9.6234
 
10.8765
 
2,615,901
 
2004
               
MFS® Growth Series
14.4832
 
19.5432
 
2,226,662
 
2013
 
12.5094
 
14.4832
 
2,463,.162
 
2012
 
12.7442
 
12.5094
 
2,794,992
 
2011
 
11.1603
 
12.7442
 
3,118,447
 
2010
 
8.2177
 
11.1603
 
3,402,773
 
2009
 
13.3003
 
8.2177
 
3,840,853
 
2008
 
11.1262
 
13.3003
 
4,499,568
 
2007
 
10.4459
 
11.1262
 
5,999,908
 
2006
 
9.7069
 
10.4459
 
7,766,452
 
2005
 
8.6938
 
9.7069
 
9,760,164
 
2004
               
MFS® Emerging Markets Equity Portfolio
32.6026
 
30.4710
 
321,649
 
2013
 
27.7914
 
32.6026
 
347,866
 
2012
 
34.5967
 
27.7914
 
413,318
 
2011
 
28.3539
 
34.5967
 
431,719
 
2010
 
17.0578
 
28.3539
 
433,432
 
2009
 
38.5257
 
17.0578
 
462,895
 
2008
 
28.8045
 
38.5257
 
607,606
 
2007
 
22.4427
 
28.8045
 
805,402
 
2006
 
16.6421
 
22.4427
 
979,129
 
2005
 
13.2717
 
16.6421
 
911,007
 
2004
               
MFS® Global Governments Portfolio
18.1126
 
16.9199
 
246.544
 
2013
 
18.2541
 
18.1126
 
284,521
 
2012
 
17.4550
 
18.2541
 
324,711
 
2011
 
16.9223
 
17.4550
 
360,389
 
2010
 
16.4925
 
16.9223
 
356,081
 
2009
 
15.1500
 
16.4925
 
350,685
 
2008
 
14.1362
 
15.1500
 
352,640
 
2007
 
13.6582
 
14.1362
 
408,052
 
2006
 
14.9272
 
13.6582
 
505,123
 
2005
 
13.7560
 
14.9272
 
560,132
 
2004
               
MFS® Global Growth Portfolio
19.4665
 
23.2740
 
557,716
 
2013
 
16.4917
 
19.4665
 
607,855
 
2012
 
17.8660
 
16.4917
 
669,519
 
2011
 
16.2064
 
17.8660
 
731,893
 
2010
 
11.7559
 
16.2064
 
831,059
 
2009
 
19.5258
 
11.7559
 
888,572
 
2008
 
17.4839
 
19.5258
 
1,058,514
 
2007
 
15.1068
 
17.4839
 
1,372,092
 
2006
 
13.9236
 
15.1068
 
1,648,464
 
2005
 
12.2149
 
13.9236
 
1,881,671
 
2004
               
MFS® Global Research Portfolio
12.8500
 
15.7112
 
1,616,741
 
2013
 
11.1575
 
12.8500
 
1,767,209
 
2012
 
12.1320
 
11.1575
 
2,019,911
 
2011
 
10.9212
 
12.1320
 
2,266,549
 
2010
 
8.3631
 
10.9212
 
2,600,467
 
2009
 
13.3433
 
8.3631
 
2,938,604
 
2008
 
11.9516
 
13.3433
 
3,599,995
 
2007
 
10.9636
 
11.9516
 
4,833,638
 
2006
 
10.2945
 
10.9636
 
6,307,383
 
2005
 
9.0142
 
10.2945
 
7,464,197
 
2004
               
MFS® Global Tactical Allocation Portfolio
19.6057
 
21.0395
 
781,972
 
2013
 
18.1505
 
19.6057
 
842,652
 
2012
 
18.1272
 
18.1505
 
918,913
 
2011
 
17.4213
 
18.1272
 
967,964
 
2010
 
15.3428
 
17.4213
 
1,019,466
 
2009
 
18.3987
 
15.3428
 
1,078,017
 
2008
 
17.1412
 
18.3987
 
1,364,245
 
2007
 
14.8232
 
17.1412
 
1,603,358
 
2006
 
14.4879
 
14.8232
 
1,892,995
 
2005
 
12.5467
 
14.4879
 
1,758,581
 
2004
               
MFS® Government Securities Portfolio
17.4794
 
16.7877
 
1,992,985
 
2013
 
17.2918
 
17.4794
 
2,217,386
 
2012
 
16.3283
 
17.2918
 
2,323,002
 
2011
 
15.8090
 
16.3283
 
2,827,421
 
2010
 
15.3440
 
15.8090
 
3,080,401
 
2009
 
14.3371
 
15.3440
 
3,333,304
 
2008
 
13.5678
 
14.3371
 
3,849,441
 
2007
 
13.2710
 
13.5678
 
4,942,559
 
2006
 
13.1560
 
13.2710
 
6,392,852
 
2005
 
12.8596
 
13.1560
 
7,537,044
 
2004
               
MFS® High Yield Portfolio
18.1553
 
19.0513
 
1,258,782
 
2013
 
16.0255
 
18.1553
 
1,395,636
 
2012
 
15.6071
 
16.0255
 
1,482,699
 
2011
 
13.7006
 
15.6071
 
1,710,271
 
2010
 
9.2413
 
13.7006
 
1,947,306
 
2009
 
13.3259
 
9.2413
 
2,199,008
 
2008
 
13.2607
 
13.3259
 
2,661,756
 
2007
 
12.1824
 
13.2607
 
3,538,317
 
2006
 
12.0897
 
12.1824
 
4,480,283
 
2005
 
11.1934
 
12.0897
 
5,335,134
 
2004
               
MFS® International Growth Portfolio
20.1434
 
22.6259
 
820,121
 
2013
 
17.0405
 
20.1434
 
877,458
 
2012
 
19.3951
 
17.0405
 
1,008,024
 
2011
 
17.0809
 
19.3951
 
1,122,090
 
2010
 
12.5476
 
17.0809
 
1,253,403
 
2009
 
21.1492
 
12.5476
 
1,405,350
 
2008
 
18.3996
 
21.1492
 
1,686,552
 
2007
 
14.8049
 
18.3996
 
2,167,605
 
2006
 
13.0663
 
14.8049
 
2,603,702
 
2005
 
11.1419
 
13.0663
 
2,878,185
 
2004
               
MFS® International Value Portfolio
22.9178
 
28.9030
 
551,381
 
2013
 
19.9995
 
22.9178
 
597,362
 
2012
 
20.5961
 
19.9995
 
670,776
 
2011
 
19.1448
 
20.5961
 
736,199
 
2010
 
15.4876
 
19.1448
 
822,456
 
2009
 
22.9020
 
15.4876
 
926,474
 
2008
 
21.6385
 
22.9020
 
1,195,703
 
2007
 
16.9817
 
21.6385
 
1,504,714
 
2006
 
14.9475
 
16.9817
 
1,640,661
 
2005
 
11.8417
 
14.9475
 
1,364,003
 
2004
               
MFS® Massachusetts Investors Growth Stock Portfolio
13.4245
 
17.2595
 
6,176,328
 
2013
 
11.6130
 
13.4245
 
6,897,429
 
2012
 
11.6846
 
11.6130
 
7,785,090
 
2011
 
10.4729
 
11.6846
 
8,853,864
 
2010
 
7.5793
 
10.4729
 
9,955,657
 
2009
 
12.2445
 
7.5793
 
7,283,111
 
2008
 
11.1354
 
12.2445
 
8,997,471
 
2007
 
10.4891
 
11.1354
 
11,308,403
 
2006
 
10.1920
 
10.4891
 
14,863,281
 
2005
 
9.4309
 
10.1920
 
17,913,505
 
2004
               
MFS® Blended Research® Core Equity Portfolio
12.5289
 
16.8502
 
5,859,722
 
2013
 
11.0144
 
12.5289
 
6,606,268
 
2012
 
10.9544
 
11.0144
 
7,561,868
 
2011
 
9.5393
 
10.9544
 
8,615,073
 
2010
 
7.7238
 
9.5393
 
9,701,572
 
2009
 
12.0431
 
7.7238
 
11,071,231
 
2008
 
11.5291
 
12.0431
 
13,556,623
 
2007
 
10.3196
 
11.5291
 
17,925,188
 
2006
 
9.7170
 
10.3196
 
23,626,164
 
2005
 
8.8005
 
9.7170
 
28,027,975
 
2004
               
MFS® Mid Cap Growth Series
5.6970
 
7.7361
 
888,193
 
2013
 
4.9533
 
5.6970
 
906,915
 
2012
 
5.3436
 
4.9533
 
1,108,275
 
2011
 
4.1930
 
5.3436
 
1,176,746
 
2010
 
2.9881
 
4.1930
 
1,134,697
 
2009
 
6.2286
 
2.9881
 
1,131,388
 
2008
 
5.7513
 
6.2286
 
1,401,777
 
2007
 
5.6994
 
5.7513
 
1,879,752
 
2006
 
5.6061
 
5.6994
 
2,561,587
 
2005
 
4.9605
 
5.6061
 
3,127,074
 
2004
               
MFS® Money Market Portfolio
11.3681
 
11.2089
 
1,629,740
 
2013
 
11.5304
 
11.3681
 
1,735,507
 
2012
 
11.6937
 
11.5304
 
1,849,477
 
2011
 
11.8597
 
11.6937
 
2,005,452
 
2010
 
12.0281
 
11.8597
 
2,493,774
 
2009
 
11.9558
 
12.0281
 
3,527,607
 
2008
 
11.2142
 
11.9558
 
2,705,920
 
2007
 
11.2143
 
11.2142
 
3,162,214
 
2006
 
11.0719
 
11.2143
 
3,178,274
 
2005
 
11.1377
 
11.0719
 
3,803,794
 
2004
               
MFS® New Discovery Portfolio
22.5132
 
31.3974
 
789,705
 
2013
 
18.8371
 
22.5132
 
885,007
 
2012
 
21.3148
 
18.8371
 
996,001
 
2011
 
15.8269
 
21.3148
 
1,120,869
 
2010
 
9.8498
 
15.8269
 
1,292,487
 
2009
 
16.5329
 
9.8498
 
1,496,661
 
2008
 
16.3506
 
16.5329
 
1,802,922
 
2007
 
14.6525
 
16.3506
 
2,387,997
 
2006
 
14.1246
 
14.6525
 
3,053,762
 
2005
 
13.3280
 
14.1246
 
3,711,049
 
2004
               
MFS® Research International Portfolio
19.0837
 
22.3935
 
535,648
 
2013
 
16.6012
 
19.0837
 
582,940
 
2012
 
18.8929
 
16.6012
 
650,000
 
2011
 
17.3203
 
18.8929
 
706,674
 
2010
 
13.4160
 
17.3203
 
786,718
 
2009
 
23.6597
 
13.4160
 
890,957
 
2008
 
21.2081
 
23.6597
 
1,130,332
 
2007
 
16.8731
 
21.2081
 
1,448,127
 
2006
 
14.6807
 
16.8731
 
1,557,186
 
2005
 
12.2852
 
14.6807
 
1,613,060
 
2004
               
MFS® Strategic Income Portfolio
18.7954
 
18.8037
 
677,581
 
2013
 
17.2649
 
18.7954
 
767,265
 
2012
 
16.7281
 
17.2649
 
742,537
 
2011
 
15.3859
 
16.7281
 
763,386
 
2010
 
12.2216
 
15.3859
 
815,056
 
2009
 
14.2560
 
12.2216
 
779,211
 
2008
 
13.9723
 
14.2560
 
944,605
 
2007
 
13.2791
 
13.9723
 
1,096,982
 
2006
 
13.2176
 
13.2791
 
1,432,028
 
2005
 
12.4078
 
13.2176
 
1,614,924
 
2004
               
MFS® Technology Portfolio
5.6679
 
7.5548
 
443,121
 
2013
 
5.0165
 
5.6679
 
483,976
 
2012
 
5.0288
 
5.0165
 
553,369
 
2011
 
4.2277
 
5.0288
 
567,267
 
2010
 
2.4274
 
4.2277
 
571,059
 
2009
 
5.0163
 
2.4274
 
453,203
 
2008
 
4.2321
 
5.0163
 
482,384
 
2007
 
3.5189
 
4.2321
 
417,567
 
2006
 
3.3607
 
3.5189
 
696,396
 
2005
 
3.3273
 
3.3607
 
924,930
 
2004
               
MFS® Total Return Series
17.5040
 
10.7191
 
8,646,654
 
2013
 
15.9457
 
17.5040
 
4,921,457
 
2012
 
15.8660
 
15.9457
 
5,471,487
 
2011
 
14.6330
 
15.8660
 
6,043,726
 
2010
 
12.5671
 
14.6330
 
6,831,307
 
2009
 
16.2476
 
12.5671
 
7,604,685
 
2008
 
15.7969
 
16.2476
 
9,863,273
 
2007
 
14.2759
 
15.7969
 
12,628,154
 
2006
 
14.0532
 
14.2759
 
16,915,503
 
2005
 
12.7866
 
14.0532
 
18,941,002
 
2004
               
MFS® Utilities Portfolio
30.0648
 
35.7537
 
1,455,076
 
2013
 
26.7134
 
30.0648
 
1,642,113
 
2012
 
25.2909
 
26.7134
 
1,846,160
 
2011
 
22.5191
 
25.2909
 
2,054,576
 
2010
 
17.1240
 
22.5191
 
2,373,729
 
2009
 
27.5962
 
17.1240
 
2,685,811
 
2008
 
21.7687
 
27.5962
 
3,422,613
 
2007
 
16.6892
 
21.7687
 
4,347,403
 
2006
 
14.4301
 
16.6892
 
5,438,570
 
2005
 
11.2259
 
14.4301
 
5,974,075
 
2004
               
MFS® Value Portfolio
20.3998
 
27.3277
 
1,527,184
 
2013
 
17.8036
 
20.3998
 
1,676,550
 
2012
 
18.0559
 
17.8036
 
1,983,177
 
2011
 
16.4222
 
18.0559
 
2,135,524
 
2010
 
13.8227
 
16.4222
 
2,330,359
 
2009
 
20.8144
 
13.8227
 
2,732,765
 
2008
 
19.5613
 
20.8144
 
3,399,030
 
2007
 
16.4012
 
19.5613
 
4,477,852
 
2006
 
15.6040
 
16.4012
 
5,656,587
 
2005
 
13.6997
 
15.6040
 
6,245,431
 
2004
               


 
 

 

This Prospectus sets forth information about the Contracts and the Variable Account that a prospective purchaser should know before investing. Additional information about the Contracts and the Variable Account has been filed with the Securities and Exchange Commission in a Statement of Additional Information dated May 1, 2014, 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) 752-7216.

                                                                                                                                                                                                

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


Name:
 
   
Address:
 
   
   
   
City:
 
State:
 
Zip Code:
 
           
Telephone:
 


 
 

 



PART B





 
 

 



MAY 1, 2014

MFS REGATTA GOLD
AND
MFS REGATTA PLATINUM

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.)
2
Advertising and Sales Literature
2
Tax-Deferred Accumulation
3
Calculations
4
Example of Net Investment Factor Calculation
4
Example of Variable Accumulation Unit Value Calculation
4
Annuity Provisions
4
Determination of Annuity Payments
4
Annuity Unit Value
5
Example of Variable Annuity Unit Calculation
5
Example of Variable Annuity Payment Calculation
5
Distribution of the Contract
6
Custodian
6
Experts
6
Financial Statements
6

The Statement of Additional Information sets forth information which may be of interest to prospective purchasers of MFS Regatta Gold and MFS Regatta Platinum (the “Contracts”) issued by Sun Life Assurance Company of Canada (U.S.) (the “Company”) in connection with Sun Life of Canada (U.S.) Variable Account F (the “Variable Account”) which is not included in the corresponding Prospectus dated May 1, 2014.  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.), P.O. Box 9133, Wellesley Hills, Massachusetts 02481, or by telephoning (800) 752-7215.

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


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


 
 

 

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

Delaware Life Holdings, LLC (“Delaware Life”) is the corporate parent of Sun Life (U.S.). Delaware Life is ultimately controlled by Todd L. Boehly and Mark R. Walter. Messrs. Boehly and Walter ultimately control the Company through the following intervening companies:  Delaware Life, Delaware Life Holdings Parent, LLC, Delaware Life Holdings Parent II, LLC, Delaware Life Equity Investors, LLC, DLICM, LLC and DLICT, LLC. The nature of the business of Messrs. Boehly and Walter and these intervening companies is investing in companies engaged in the business of life insurance and annuities.

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.

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 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, and the $50 annual Account Fee. In addition, the values shown would assume that the Participant has not surrendered his or her Contract or made any partial surrenders until the end of the period shown. The chart would assume a full surrender at the end of the period shown and the payment of federal and state taxes, at a rate of not more than 33%, on the amount in excess of the Purchase Payments.

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

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

We determine the net investment factor using the following formula:

Investment Factor
=
(
a + b
c
)
- d

where:

 
(a)
is the net asset value of a Fund share held in the Sub-Account at the end of that Valuation Period;

 
(b)
is the per share amount of any dividend or capital gains distribution made by that Fund during the Valuation Period;

 
(c)
is the net asset value per share of the Fund share at the end of the previous Valuation Period;

 
(d)
is a factor representing the asset-based insurance charges (the mortality and expense risk charge, the administrative expense charge, and the distribution fee) plus any applicable asset-based charge for an optional benefit for the Valuation Period.

Assume the following facts about a particular Variable Account at the end of the current Valuation Period.

 
(a)
the net asset value of a fund equals $ 18.38
 
(b)
the per share amount of any dividend or capital gains distributions equal $0
 
(c)
the net asset value per share of the Fund share at the end of the previous Valuation Period equals $18.32
 
(d)
the factor representing the asset-based insurance charges (the mortality and expense risk charge, the administrative expense charge, and the distribution fee) plus any applicable asset-based charge for an optional benefit for the Valuation Period equals 0.00004837.

The net investment factor is, therefore, determined as follows:

(18.38 + 0.00) – (.00004837)
=
1.00322674
18.32

Example of Variable Accumulation Unit Value Calculation

We calculate the Variable Accumulation Unit Value for any Valuation Period as follows: we multiply the Variable Accumulation Unit Value for the immediately preceding Valuation Period by the appropriate Net Investment Factor for the subsequent Valuation Period.

Assume the Variable Accumulation Unit value for the immediately preceding Valuation Period had been 14.5645672.  Assume that the Net Investment Factor for the subsequent Valuation Period is 1.00323648 as shown in the calculation above.  The value for the current Valuation Period would be, therefore, determined as follows:

(14.5645672 x 1.00323648)
=
14.6117052

ANNUITY PROVISIONS

Determination of Annuity Payments

On the Annuity Commencement Date the Contract’s Accumulation Account will be canceled and its adjusted value will be applied to provide a Variable Annuity or a Fixed Annuity or a combination of both. The adjusted value will be equal to the value of the Accumulation Account for the Valuation Period which ends immediately preceding the Annuity Commencement Date, reduced by any applicable premium or similar taxes and a proportionate amount of the contract maintenance charge to reflect the time elapsed between the last Contract Anniversary and the day before the Annuity Commencement Date.

The dollar amount of the first variable annuity payment will be determined in accordance with the annuity payment rates found in the Contract which are based on an assumed interest rate of 3% per year. All variable annuity payments other than the first are determined by means of Annuity Units credited to the Contract. The number of Annuity Units to be credited in respect of a particular Variable Account is determined by dividing that portion of the first variable annuity payment attributable to that Variable Account by the Annuity Unit value of that Variable Account for the Valuation Period which ends immediately preceding the Annuity Commencement Date. The number of Annuity Units of each particular Variable Account credited to the Contract then remains fixed unless an exchange of Annuity Units is made as described below. The dollar amount of each variable annuity payment after the first may increase, decrease or remain constant, and is equal to the sum of the amounts determined by multiplying the number of Annuity Units of a particular Variable Account credited to the Contract by the Annuity Unit value for the particular Variable Account for the Valuation Period which ends immediately preceding the due date of each subsequent payment.

Annuity Unit Value

The Annuity Unit value for each Variable Account was established at $10.00 for the first Valuation Period of the particular Variable Account. The Annuity Unit value for any subsequent Valuation Period is determined using the following formula:

Annuity Unit Value
=
(A x B) x C

where:

 
A
equals the Annuity Unit value for the immediately preceding Valuation Period
 
B
equals the Net Investment Factor for the current Valuation Period
 
C
equals a factor to neutralize the assumed interest rate of 3% per year used to establish the annuity payment rates found in the Contract. (This factor is 0.99991902 for a one day Valuation Period.)

Example of Variable Annuity Unit Calculation

Assume the value of an Annuity Unit for the immediately preceding Valuation Period had been 12.3456789. Assume that the Net Investment Factor for the subsequent Valuation Period is 1.00323648 as shown in the calculation above. 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 determined as follows:

(12.3456789 x 1.00323648) x 0.99991902
=
12.3846325

Example of Variable Annuity Payment Calculation

The first Variable Annuity payment is determined by multiplying the Variable Accumulation Unit value for the Valuation Period (as described under “Example of Variable Accumulation Unit Calculation”) by the annuity payment rate for the age and annuity option elected.

Assume the following facts:

 
·
the Account value being annuitized is made up of a particular Variable Account with 8,765.4321 Variable Accumulation Units;
 
·
at the end of the Valuation Period immediately preceding the Annuity Commencement Date, the Variable Accumulation Unit value and the Annuity Unit value for that Variable Account are 14.5645672 and 12.3456789, respectively;
 
·
the annuity payment rate for the age and option elected is $6.78 per $1,000; and
 
·
on the day prior to the second variable annuity payment date, the Annuity Unit value is 12.3724831.

The first Variable Annuity payment would be determined as follows:

(8,765.4321 x 14.5645672) x 6.78
=
$865.57
1,000

This first Variable Annuity payment of $865.57 represents 70.1112 Variable Annuity Units, which are calculated by dividing the first Variable Annuity Payment by the Variable Annuity Unit value at the end of the Valuation Period immediately preceding the Annuity Commencement Date. In this case, $865.57 divided by 12.3456789.

Subsequent Variable Annuity payments are determined by multiplying the number of Variable Annuity Units (calculated for the first Variable Annuity payment) by the Variable Annuity Unit value at the end of the Valuation Period immediately preceding the annuity payment date. Thus, the second Variable Annuity payment would be determined as follows:

70.1112 x 12.3846391
=
$868.30


 
 

 

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 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 the 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 Contracts, or of immediate family members of such employees or persons. In addition, commissions may be waived or reduced in connection with certain transactions described in the Prospectus under the heading “Waivers; Reduced Charges; Credits; Bonus Guaranteed Interest Rates.” Total commissions paid by the Variable Account to, but not retained by, Clarendon during 2011, 2012, and 2013, were approximately $29,279,164, $26,895,457, and $89,921,647, respectively.

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.

EXPERTS

The statutory-basis financial statements of Sun Life Assurance Company of Canada (U.S.) (the “Company”) as of December 31, 2013 and for the year ended December 31, 2013 (which report expresses an unmodified opinion in accordance with accounting practices prescribed or permitted by the Insurance Department of the State of Delaware and includes an emphasis-of-matter paragraph relating to the Company’s quasi reorganization), included in this Statement of Additional Information have been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting. Their office is located at 185 Asylum Street, Suite 2400, Hartford, Connecticut 06103.

The financial statements of Sun Life of Canada (U.S.) Variable Account F as of December 31, 2013 and for the year ended December 31, 2013, included in this Statement of Additional Information have been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

The statutory-basis financial statements of Sun Life Assurance Company of Canada (U.S.) (the “Company”) as of December 31, 2012 and for each of the two years in the period ended December 31, 2012 (which report expresses an unmodified opinion in accordance with accounting practices prescribed or permitted by the Insurance Department of the State of Delaware and includes an emphasis-of-matter paragraph relating to the Company adopting Statement of Statutory Accounting Principle (“SSAP”) No. 101 Income Taxes, A Replacement of SSAP No. 10R and SSAP No. 10 in 2012 and another matter paragraph relating to significant balances and transactions with affiliates), included in this Statement of Additional Information have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report appearing herein, and are 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 02116.

The financial statements of Sun Life of Canada (U.S.) Variable Account F, as of December 31, 2012 and for the year ended December 31, 2012, 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, and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.


 
 

 

FINANCIAL STATEMENTS

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

 
 

 

 
Independent Auditor’s Report
 


To the Board of Directors and Stockholders of
   Sun Life Assurance Company of Canada (U.S.)

We have audited the accompanying statutory financial statements of Sun Life Assurance Company of Canada (U.S.), which comprise the statutory statements of admitted assets, liabilities and capital stock and surplus as of December 31, 2013 and the related statutory statements of operations,  of changes in capital stock and surplus, and of cash flows for the year then ended.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the accounting practices prescribed or permitted by the Delaware Department of Insurance.  Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial statements based on our audit.  We conducted our audit in accordance with auditing standards generally accepted in the United States of America.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.  The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company's preparation and fair presentation of the financial statements in order to design 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.  Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.  We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles

As described in Note 1 to the financial statements, the financial statements are prepared by the Company on the basis of the accounting practices prescribed or permitted by the Delaware Department of Insurance, which is a basis of accounting other than accounting principles generally accepted in the United States of America.
 
 
The effects on the financial statements of the variances between the statutory basis of accounting described in Note 1 and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material.

Adverse Opinion on U.S. Generally Accepted Accounting Principles

In our opinion, because of the significance of the matter discussed in the “Basis for Adverse Opinion on U.S. Generally Accepted Accounting Principles” paragraph, the financial statements referred to above do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position of the Company as of December 31, 2013, or the results of its operations or its cash flows for the year then ended.

Opinion on Statutory Basis of Accounting

In our opinion, the financial statements referred to above present fairly, in all material respects, the admitted assets, liabilities and capital stock and surplus of the Company as of December 31, 2013, and the results of its operations and its cash flows for the year then ended, in accordance with the accounting practices prescribed or permitted by the Delaware Department of Insurance described in Note 1.

Emphasis of Matter

As described in Note 15, the Company recorded a restatement of gross paid-in and contributed surplus and unassigned funds under a quasi-reorganization in the current year.  Our opinion is not modified with respect to this matter.



/s/ PricewaterhouseCoopers LLP

April 29, 2014
Hartford CT

 
 

 

INDEPENDENT AUDITORS' REPORT
To the Board of Directors of
Sun Life Assurance Company of Canada (U.S.)
1 Sun Life Executive Park
Wellesley, Massachusetts 02481



We have audited the accompanying statutory-basis financial statements of Sun Life Assurance Company of Canada (U.S.) (the "Company"), which comprise the statutory-basis statements of admitted assets, liabilities, and capital stock and surplus as of December 31, 2012 and 2011, and the related statutory-basis statements of operations, changes in capital stock and surplus, and cash flows for each of the three years in the period ended December 31, 2012, and the related notes to the statutory-basis financial statements.

Management’s Responsibility for the Statutory-Basis Financial Statements

Management is responsible for the preparation and fair presentation of these statutory-basis financial statements in accordance with the accounting practices prescribed or permitted by the Insurance Department of the State of Delaware. Management is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these statutory-basis financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statutory-basis financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the statutory-basis financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the statutory-basis financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the statutory-basis financial statements in order to design 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. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the statutory-basis financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Basis for Adverse Opinion on Accounting Principles Generally Accepted in the United States of America

As described in Note 1 of the statutory-basis financial statements, the statutory-basis financial statements are prepared by Sun Life Assurance Company of Canada (U.S) using accounting practices prescribed or permitted by the Insurance Department of the State of Delaware, which is a basis of accounting other than accounting principles generally accepted in the United States of America, to meet the requirements of the Insurance Department of the State of Delaware.

The effects on the statutory-basis financial statements of the variances between the regulatory basis of accounting described in Note 1 to the statutory-basis financial statements and accounting principles generally accepted in the United States of America, although not reasonably determinable, are presumed to be material.

Adverse Opinion on Accounting Principles Generally Accepted in the United States of America

In our opinion, because of the significance of the matter discussed in the Basis for Adverse Opinion on Accounting Principles Generally Accepted in the United States of America paragraph, the statutory-basis financial statements referred to above do not present fairly, in accordance with accounting principles generally accepted in the United States of America, the financial position Sun Life Assurance Company of Canada (U.S.) as of December 31, 2012 and 2011, or the results of its operations or its cash flows for each of the three years in the period ended December 31, 2012.





Opinion on Regulatory Basis of Accounting

In our opinion, the statutory-basis financial statements referred to above present fairly, in all material respects, the admitted assets, liabilities, and capital stock and surplus of Sun Life Assurance Company of Canada (U.S.) as of December 31, 2012 and 2011, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2012, in accordance with the accounting practices prescribed or permitted by the Insurance Department of the State of Delaware as described in Note 1 to the statutory-basis financial statements.

Emphasis-of-Matter

As discussed in Note 1 to the statutory-basis financial statements, in 2012, the Company adopted Statement of Statutory Accounting Principle (“SSAP”) No. 101 Income Taxes, A Replacement of SSAP No. 10R and SSAP No. 10.

Other Matter

As discussed in Note 2 to the statutory-basis financial statements, the accompanying statutory-basis financial statements reflect significant balances and transactions with affiliates. The Company’s admitted assets, liabilities, and capital stock and surplus and results of its operations and cash flows may have been different if these balances and transactions had been with unrelated parties.

/s/ Deloitte & Touche LLP

Boston, Massachusetts
April 24, 2013





 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
 
(A Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)
 
STATUTORY STATEMENTS of admitted assets, liabilities and capital stock and surplus
AS OF DECEMBER 31, 2013 and 2012 (in thousands except share and per share data)

ADMITTED ASSETS
2013
 
2012
 
LIABILITIES, CAPITAL STOCK AND SURPLUS
2013
 
2012
GENERAL ACCOUNT ASSETS:
       
GENERAL ACCOUNT LIABILITIES:
     
Debt securities
$              4,759,852
 
$          7,308,199
 
Aggregate reserve for life contracts
$          6,682,361
$          6,750,774
Preferred stocks
23,150
 
23,000
 
Liability for deposit-type contracts
184,482
 
1,128,331
Common stocks
401,403
 
414,206
 
Contract claims
32,048
 
19,805
Mortgage loans on real estate
748,309
 
814,612
 
Other amounts payable on reinsurance
3,754
 
789
Properties held for the production of income
60,239
 
100,798
 
Interest maintenance reserve
-
 
64,711
Properties held for sale
39,319
 
93,033
 
Commissions to agents due or accrued
8,413
 
7,949
Cash, cash equivalents and short-term investments
1,440,125
 
341,431
 
General expenses due or accrued
57,097
 
20,733
Contract loans
537,058
 
564,071
 
Transfers from Separate Accounts due or accrued
(825,956)
 
(861,565)
Derivatives
174,613
 
312,424
 
Taxes, licenses and fees due or accrued
1,997
 
11,545
Other invested assets
192,397
 
121,773
 
Unearned investment income
13
 
114
Receivable for securities
46,716
 
3,382
 
Amounts withheld or retained by the Company
1,198
 
722
Investment income due and accrued
71,544
 
100,290
 
Remittances and items not allocated
1,289
 
1,581
Amounts recoverable from reinsurers
30,901
 
34,077
 
Borrowed money and accrued interest thereon
-
 
100,002
Current federal and foreign income tax recoverable
19,238
 
36,749
 
Asset valuation reserve
68,961
 
47,141
Net deferred tax asset
184,237
 
161,198
 
Payable for securities
438,039
 
1,030
Receivables from parent, subsidiaries and affiliates
570
 
70,954
 
Reinsurance in unauthorized companies
16
 
14
Other assets
34,789
 
12,588
 
Funds held under reinsurance treaties with unauthorized  reinsurers
252,457
 
285,222
         
Funds held under coinsurance
-
 
1,374,125
         
Derivatives
321,947
 
182,053
         
Other liabilities
97,376
 
142,310
Total general account assets
8,764,460
 
10,512,785
 
Total general account liabilities
7,325,492
 
9,277,386
SEPARATE ACCOUNT ASSETS
30,514,738
 
31,948,727
 
SEPARATE ACCOUNT LIABLITIES
30,543,286
 
31,948,272
         
Total liabilities
37,868,778
 
41,225,658
                   
         
CAPITAL STOCK AND SURPLUS:
     
         
Common capital stock, $1,000 par value - 10,000 shares
     
         
authorized; 6,437 shares issued and outstanding
6,437
 
6,437
         
Surplus notes
 
565,000
 
565,000
         
Gross paid in and contributed surplus
653,698
 
2,588,377
         
Unassigned funds
185,285
 
(1,923,960)
         
Total surplus
 
1,403,983
 
1,229,417
         
Total capital stock and surplus
1,410,420
 
1,235,854
                   
TOTAL ADMITTED ASSETS                                          
$39,279,198
 
$42,461,512
 
TOTAL LIABILITIES, CAPITAL STOCK AND SURPLUS
$39,279,198
 
$42,461,512
See notes to statutory financial statements.
                 



 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
 
(A Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)
 
STATUTORY STATEMENTS of operations
FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 and 2011 (in thousands)

 
2013
 
2012
 
2011
INCOME:
         
Premiums and annuity considerations
$        1,559,375
 
$           415,915
 
$        3,230,219
Considerations for supplementary contracts with life contingencies
23,283
 
18,123
 
11,474
Net investment (loss) income
(318,661)
 
613
 
605,357
Amortization of interest maintenance reserve
19,884
 
13,396
 
15,205
Commissions and expense allowances on reinsurance ceded
5,402
 
(557)
 
1,789
Reserve adjustments on reinsurance ceded
(141)
 
170
 
3,115
Income from fees associated with investment management, administration and contract guarantees from Separate Accounts
541,274
 
539,845
 
524,948
Other income
118,236
 
134,495
 
129,179
Total Income
1,948,652
 
1,122,000
 
4,521,286
BENEFITS AND EXPENSES:
         
Death benefits
119,471
 
35,535
 
29,376
Annuity benefits
714,186
 
756,487
 
765,760
Surrender benefits and withdrawals for life contracts
2,996,819
 
2,781,813
 
2,713,462
Interest and adjustments on contracts or deposit-type contract funds
(26,269)
 
(5,342)
 
2,747
Payments on supplementary contracts with life contingencies
14,146
 
11,929
 
12,561
(Decrease) increase in aggregate reserves for life and accident and health policies and contracts
(68,412)
 
(550,180)
 
380,852
Total Benefits
3,749,941
 
3,030,242
 
3,904,758
Commissions on premiums, annuity considerations and
deposit-type contract funds (direct business only)
105,117
 
109,722
 
272,446
Commissions and expense allowances on reinsurance assumed
132
 
131
 
132
General insurance expenses
191,813
 
152,556
 
207,334
Insurance taxes, licenses and fees, excluding federal income taxes
5,658
 
10,032
 
16,522
Net transfers (from) to Separate Accounts, net of reinsurance
(2,657,842)
 
(2,215,192)
 
463,339
Other deductions
67,601
 
76,306
 
80,010
Total Benefits and Expenses
1,462,420
 
1,163,797
 
4,944,541
           
Net income (loss) from operations before federal income tax benefit and net realized capital gains (losses)
486,232
 
(41,797)
 
(423,255)
Federal income tax benefit, excluding tax on
capital gains (losses)
(84,275)
 
(84,977)
 
(37,926)
Net income (loss) from operations after federal income taxes and before net realized capital gains (losses)
570,507
 
43,180
 
(385,329)
Net realized capital gains (losses) less capital gains tax and
transfers to the interest maintenance reserve
112,373
 
(443,936)
 
(131,722)
NET INCOME (LOSS)
$           682,880
 
$          (400,756)
 
$         (517,051)
See notes to statutory financial statements.
         



 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
 
(A Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)
 
STATUTORY STATEMENTS of changes in capital stock and surplus
FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 and 2011 (in thousands)

 
2013
 
2012
 
2011
CAPITAL STOCK AND SURPLUS, BEGINNING OF YEAR
$           1,235,854
 
$           1,315,271
 
$           1,879,856
Net income (loss)
682,880
 
(400,756)
 
(517,051)
Change in net unrealized capital (losses) gains, net of deferred income tax
(232,924)
 
158,563
 
230,011
Change in net unrealized foreign exchange capital (losses) gains
(4,954)
 
3,872
 
(5,354)
Change in net deferred income tax
(202,295)
 
(287,767)
 
169,379
Change in non-admitted assets
64,940
 
355,645
 
(40,194)
Change in liability for reinsurance in unauthorized companies
(2)
 
(7)
 
(8)
Change in asset valuation reserve
(21,820)
 
141,040
 
(106,042)
Changes in Separate Accounts surplus
(29,004)
 
54
 
(13)
Cumulative effect of changes in accounting principles (Note 1)
-
 
21,800
 
-
Decrease in surplus paid in
(82,794)
 
-
 
-
Dividends to stockholders
-
 
-
 
(300,000)
Stock option excess tax benefit
539
 
(184)
 
982
Increase in unassigned surplus - quasi reorganization
1,851,883
 
-
 
-
Decrease in gross paid in and contributed surplus - quasi reorganization
(1,851,883)
 
-
 
-
Surplus change from SSAP 10R
-
 
(71,677)
 
3,705
CAPITAL STOCK AND SURPLUS, END OF YEAR
$           1,410,420
 
$           1,235,854
 
$           1,315,271
See notes to statutory financial statements.
         




 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
 
(A Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)
 
STATUTORY STATEMENTs OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 and 2011 (IN THOUSANDS)

 
2013
 
2012
 
2011
CASH FROM OPERATIONS:
         
Premiums collected net of reinsurance
$             1,582,658
 
 $               428,308
 
 $          3,261,075
Net investment income
408,807
 
492,927
 
508,625
Federal and foreign income taxes received
73,478
 
56,336
 
30,269
Miscellaneous income
671,892
 
707,003
 
671,323
Total receipts
2,736,835
 
1,684,574
 
4,471,292
Benefits and loss related payments
3,806,068
 
3,768,957
 
3,632,429
Net transfers (from) to Separate Accounts
(2,693,451)
 
(2,307,128)
 
528,821
Commissions, expenses paid and aggregate write-ins for deductions
388,367
 
277,329
 
497,711
Total payments
1,500,984
 
1,739,158
 
4,658,961
Net cash from operations
1,235,851
 
(54,584)
 
(187,669)
CASH FROM INVESTMENTS:
         
Proceeds from investments sold, matured, repaid or received
5,056,787
 
2,404,110
 
3,278,741
Cost of investments acquired
(2,719,801)
 
(2,642,421)
 
(1,865,311)
Net increase in contract loans and premium notes
27,009
 
18,509
 
6,378
Net cash from investments
2,363,995
 
(219,802)
 
1,419,808
CASH FROM FINANCING AND MISCELLANEOUS SOURCES:
         
Capital and paid in surplus, less treasury stock
(82,796)
 
-
 
-
Borrowed funds
(100,002)
 
(18,003)
 
(99,998)
Net deposits on deposit-type contracts and other liabilities
(943,849)
 
(64,737)
 
(1,298,514)
Dividends to stockholders
-
 
-
 
(300,000)
Other cash provided (used)
(1,374,505)
 
(48,603)
 
6,567
Net cash from financing and miscellaneous sources
(2,501,152)
 
(131,343)
 
(1,691,945)
Net change in cash, cash equivalents, and short-term investments
1,098,694
 
(405,729)
 
(459,806)
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS:
         
Beginning of year
341,431
 
747,160
 
1,206,966
End of year
$             1,440,125
 
$               341,431
 
$               747,160
 
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
         
 
2013
 
2012
 
2011
Exchanges of debt securities
$                 82,024
 
$                 18,951
 
$                 49,042
Transfer of mortgages to other invested assets
11,816
 
41,120
 
23,400
Transfer of mortgages out of other invested assets
54,474
 
-
 
-
Transfer of real estate to other invested assets
11,637
 
-
 
-
Distribution of previously wholly-owned subsidiary to Former Parent
70,700
 
-
 
-
Quasi-reorganization
1,851,883
 
-
 
-
Premium related to SPWL recapture
1,331,908
 
-
 
-
Transfer of bonds to preferred stock
-
 
-
 
16,000
Transfer of other invested assets to real estate
-
 
-
 
28,921
See notes to statutory financial statements.
         



 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

1.
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

GENERAL

Sun Life Assurance Company of Canada (U.S.) (the “Company”) is a stock life insurance company incorporated under the laws of Delaware.  The Company is a direct wholly-owned subsidiary of Delaware Life Holdings, LLC (the “Parent”), a Delaware limited liability company.  Prior to August 2, 2013, the Company was a direct wholly-owned subsidiary of Sun Life of Canada (U.S.) Holdings, Inc. (the “Former Parent”) and an indirect wholly-owned subsidiary of Sun Life Assurance Company of Canada - U.S. Operations Holdings, Inc. (“SLC - U.S. Ops Holdings”).  SLC – U.S. Ops Holdings is an indirect wholly-owned subsidiary of Sun Life Financial Inc. (“SLF”), a reporting company under the Securities Exchange Act of 1934.  On December 17, 2012, SLF announced the execution of a definitive agreement to sell its domestic U.S. annuity business and certain life insurance businesses to the Parent including all of the issued and outstanding shares of the Company (the “Sale Transaction”).  After receiving all required regulatory approvals, the Sale Transaction closed on August 2, 2013 with an effective date of August 1, 2013.  In connection with the Sale Transaction and after receiving necessary regulatory approvals, certain transactions were executed prior to close.  (Refer to Note 2 for additional information.)

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 and Rhode Island.  The business of the Company and its subsidiaries includes a variety of wealth accumulation products, protection products and institutional investment contracts.  These products included individual and group fixed and variable annuities, individual and group variable life insurance, individual universal life insurance, group life, group disability, dental and stop loss insurance and funding agreements.

In the normal course of business, the Company and its wholly-owned subsidiary, SLNY, reinsure portions of their individual life insurance, annuity, group life insurance, group disability income and stop loss exposure with both affiliated and unaffiliated companies using traditional indemnity reinsurance agreements.

During the first quarter of 2012, the Company and SLNY received all necessary insurance regulatory approvals to amend the fixed investment option period in their combination fixed and variable annuity contracts and other contracts to remove any negative market value adjustment (“MVA”) that can decrease the amount of the withdrawal proceeds.  (Refer to Note 12 for additional information concerning MVA contracts.)  The Company and SLNY filed amendments to the associated registration statements to include the contract amendments and to remove from registration any fixed investment options that remained unsold. The U.S. Securities and Exchange Commission (the “SEC”) declared the associated amended registration statements effective on March 22, 2012.  As a result of the foregoing, the fixed investment option period in the contracts is no longer considered a “security” under the Securities Act of 1933, and the Company subsequently filed Form 15 on March 23, 2012 to provide notice of suspension of its duty to file reports under Section 15(d) of the Securities Exchange Act of 1934.  No other changes were made to the contracts, and all other terms and conditions of the contracts remain unchanged.  The contract amendments described above did not have a material impact on the Company’s financial position.






 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


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

On December 12, 2011, SLF announced the completion of a major strategic review of its businesses.  As a result of this strategic review, SLF announced that it would close its domestic U.S. variable annuity and individual life products to new sales effective December 30, 2011.  The Company, therefore, closed its variable annuity and individual life products to new sales effective December 30, 2011 and its corporate-owned life insurance was closed to new sales effective January 31, 2012, with certain limited exceptions.

The Company, through its subsidiary, SLNY, continued to offer group life, disability, dental and stop loss insurance.  Effective July 31, 2013, SLNY ceded 100% of its net group life, disability, dental and stop-loss insurance to an affiliate of SLF.

On September 27, 2013, following completion of the Sale Transaction, the Company’s Board of Directors authorized the Company to issue funding agreements, fixed annuities, variable annuities, single premium life insurance and private placement products on a fixed and variable basis and to utilize its existing Separate Accounts in connection therewith.  On November 4, 2013, the Company began writing new annuity business with the launch of a fixed annuity.


BASIS OF PRESENTATION

The accompanying statutory financial statements of the Company are presented on the basis of accounting principles prescribed or permitted by the Delaware Department of Insurance (the “Department”).  The Department recognizes only statutory accounting principles prescribed or permitted by the State of Delaware for determining and reporting the financial condition and results of operations of an insurance company and for determining its solvency under the Delaware Insurance Law.  The National Association of Insurance Commissioners’ (“NAIC”) Accounting Practices and Procedures Manual (“NAIC SAP”) has been adopted as a component of prescribed or permitted principles by the State of Delaware.  As of December 31, 2009 and until December 31, 2012, the Company had received a permitted practice from the Insurance Commissioner of the State of Delaware (the “Commissioner”) related to Statement of Statutory Accounting Principles (“SSAP”) No. 97, Investments in Subsidiary, Controlled and Affiliated Entities, A Replacement of SSAP No. 88 (“SSAP No. 97”), specifically paragraph 8.b.i to record the unaudited statutory equity of the Company’s previously wholly-owned subsidiary, Independence Life and Annuity Company (“ILAC”), as an admitted asset.  ILAC was not required to prepare audited financial statements under regulations adopted in its respective states of domicile, Delaware and Rhode Island, for the years ended 2012 and 2011, respectively.  Effective December 10, 2012, after receiving regulatory approval, ILAC redomesticated from the State of Rhode Island to the State of Delaware. The Company would not have triggered a regulatory event if the permitted practice had not been used.  During the first quarter of 2013, the Company distributed all of the issued and outstanding shares of ILAC to the Former Parent.  (Refer to Note 2 for additional information concerning the Company’s change of control on August 2, 2013, effective August 1, 2013.)








 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

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

A reconciliation of the Company’s capital and surplus between NAIC SAP and practices prescribed and permitted by the State of Delaware is shown below.  There is no difference in the Company’s net income (loss) between NAIC SSAP and practices prescribed and permitted by the State of Delaware.

(In Thousands)
State of
Domicile
 
2013
 
2012
 
2011
SURPLUS
             
Company state basis
Delaware
 
$1,410,420
 
$1,235,854
 
$1,315,271
State Permitted Practice that increase
             
NAIC SAP: unaudited subsidiary
Delaware
 
-
 
64,186
 
61,818
NAIC SAP
   
$1,410,420
 
$1,171,668
 
$1,253,453


Accounting principles and procedures of the NAIC as prescribed or permitted by the Department comprise a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America (“GAAP”).  The more significant differences that affect the Company are as follows:

Under statutory accounting principles, financial statements are not consolidated.  Investments in domestic life insurance subsidiaries, as defined by SSAP No. 97 are carried at their audited net statutory equity value.  The changes in value are recorded directly to surplus.  Non-public, non-insurance subsidiaries and controlled partnerships are carried at audited GAAP equity value.  Dividends paid by subsidiaries to the Company are included in the Company’s net investment income.

Statutory accounting principles do not recognize the following assets or liabilities, which are recognized under GAAP: deferred policy acquisition costs, unearned premium reserve and statutory non-admitted assets. Deferred policy acquisition costs do create a temporary tax difference as disclosed in Note 14.  An asset valuation reserve (“AVR”) and interest maintenance reserve (“IMR”) are established under statutory accounting principles but not under GAAP.  Methods for calculating real estate investment valuation allowances differ under statutory accounting principles and GAAP.  Actuarial assumptions and reserving methods differ under statutory accounting principles and GAAP.  There are certain limitations on net deferred tax assets (“DTAs”) under statutory accounting principles. The MVA contracts are classified within the General Account under GAAP, but are classified within the Separate Account under statutory accounting principles.







 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


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

Under GAAP, investments in fixed maturity securities classified as available-for-sale or trading are carried at aggregate fair value.  Changes in unrealized gains and losses are reported net of taxes in a separate component of stockholder’s equity for available-for-sale securities and changes in unrealized gains and losses on trading securities are recorded in net investment income.  Fixed maturity securities are generally carried at amortized cost under statutory accounting principles.

All derivatives are used for hedging purposes; however, the Company does not currently believe that the cost of employing hedge accounting is cost justified.  As a result, derivatives are carried at market value on both a U.S. GAAP and NAIC basis.  Unrealized gains and losses on derivatives are recognized in income for U.S. GAAP purposes and flow through surplus on an NAIC basis.

USE OF ESTIMATES

The preparation of financial statements in conformity with statutory accounting principles prescribed or permitted by the State of Delaware requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities.  It also requires disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period.  Actual results could differ from those estimates.  The most significant estimates are those used in determining the fair value of financial instruments, allowance for loan losses, aggregate reserves for life policies and contracts, deferred income taxes, provision for income taxes and other-than-temporary-impairments (“OTTI”) of investments.

CORRECTION OF ERRORS

The Company did not have any correction of errors during 2013 or 2012.  Adjustments were recorded during 2011 to correct the Company’s prior year contract loan balances which were overstated due to inaccurate interest rates on certain loan balances related to single premium whole life (“SPWL”) policies. The adjustments were as follows: a decrease to Contract loans of $107.2 million, an increase to Amounts recoverable from reinsurers of $3.0 million, an increase to Other liabilities of $2.3 million, and a decrease to Funds held under coinsurance of $106.5 million. These adjustments did not have an impact on the Company’s surplus or net income for the period the adjustment was made or prior periods due to the 100% funds-withheld reinsurance agreement with the Company’s former affiliate, Sun Life Assurance Company of Canada (“SLOC”), including its United States Branch (the “U.S. Branch”).

RECLASSIFICATIONS

Certain prior year amounts have been reclassified to conform with the current year financial statement presentation.

FINANCIAL INSTRUMENTS

In the normal course of business, the Company enters into transactions involving various types of financial instruments, including cash equivalents, short-term investments, debt and equity securities and mortgage loans.  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.


 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


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

SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies followed by the Company in preparing the accompanying statutory-based financial statements:

CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

Cash, cash equivalents and short-term investments are highly liquid securities.  The Company’s cash equivalents primarily include cash, commercial paper and money market investments which have an original term to maturity of less than three months.  Short-term investments include debt instruments with a term to maturity exceeding three months, but less than one year on the date of acquisition.  Cash equivalents and short-term investments are stated at amortized cost, which approximates fair value.

INVESTMENTS

Debt Securities

Investments in debt securities including bonds, mortgage-backed securities (“MBS”) and asset-backed securities (“ABS”) are stated at amortized cost using the scientific method.  Where the NAIC rating has fallen to 6 and the fair value has fallen below amortized cost, they are stated at fair value.  Adjustments to the value of MBS and ABS securities based on changes in cash flows, including those related to changes in prepayment assumptions, are made retrospectively.  As part of this process, a third-party vendor for each security type was appointed by the NAIC to develop a revised NAIC rating methodology.  The ratings for these residential mortgage-backed securities (“RMBS”) and commercial mortgage-backed securities (“CMBS”) were determined by comparing the insurer’s carrying value divided by remaining par value to price ranges provided by the third-party vendors corresponding to each NAIC designation.  Comparisons were initially made to the model based on amortized cost.  Where the resulting rating was a NAIC 6 per the model, further comparison based on fair value was required which, in some cases, resulted in a higher final NAIC rating.

The definition of structured securities under SSAP No. 43R, Loan Backed and Structured Securities – Revised (“SSAP No. 43R”), was modified in 2011 to include within the category of ABS certain debt securities that were previously classified by the Company as issuer obligations.  The types of securities reclassified under the revised definition included certain equipment trust certificates, guaranteed contracts, secured leases and secured contracts.  Note that certain types of ABS and MBS securities do not follow the revised rating methodology described above, including, but not limited to, equipment trust certificates, credit tenant loans, 5*/6* securities, interest only securities, and those with Securities Valuation Office (“SVO”) assigned NAIC designations.  Interest income on bonds, MBS, and ABS is recognized when earned based upon estimated principal repayments, if applicable.  For debt securities subject to prepayment risk, yields are recalculated and asset balances adjusted periodically so that expected return on future cash flows matches the expected return over the life of the investment from acquisition.  If the collection of all contractual cash flows is not probable, an OTTI may be indicated.  The process of analyzing securities for an OTTI adjustment is further described in Note 3.




 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


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

Preferred Stocks, Common Stocks and Other Equity Investments

Preferred stocks with an NAIC designation of 1 through 3 are stated at amortized cost.  Those with NAIC designations of 4 through 6 are stated at the lower of amortized cost or fair value.  Common stocks are stated at fair value except investments in subsidiaries.  The latter are carried based on the underlying statutory equity of the subsidiary.  The Company accounts for its investments in subsidiaries in accordance with SSAP No. 97 with the exception of the prior permitted practice granted by the Commissioner discussed previously.  The Company has ownership interests in joint ventures and partnerships which are carried at values based on the underlying equity of the investee in accordance with SSAP No. 48, Joint Ventures, Partnerships and Limited Liability Companies (“SSAP No. 48”), and SSAP No. 93, Accounting for Low Income Housing Tax Credit Property Investments (“SSAP No. 93”).  Audited financial statements are received on an annual basis.  OTTI on stocks is evaluated under the methodology described in Note 3.

Mortgage Loans

Mortgage loans are stated at unpaid principal balances, net of provisions for estimated losses.  Mortgage loans acquired at a premium or discount are stated at amortized cost using the effective interest rate method, net of provisions for estimated losses.  Purchases and sales of mortgage loans are recognized or derecognized in the Company’s balance sheet on the loan’s trade date, which is the date that the Company commits to purchase or sell the loan.  Transaction costs on mortgage loans are capitalized on initial recognition and are recognized in the Company’s Statement of Operations using the effective interest rate method.  Mortgage loans, which primarily include 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 regularly assesses the value of the collateral.

A mortgage loan is considered impaired when it is probable that the principal or interest is not collectible in accordance with the contractual terms of the loan. When a mortgage loan is classified as impaired, allowances for credit losses are established to adjust the carrying value of the loan to its net recoverable amount.

The allowance for credit losses are estimated using the present value of expected cash flows discounted at the loan’s effective interest rate or the fair value of the collateral, if the loan is collateral dependent.  A specific allowance for loan loss is established for an impaired loan if the present value of expected cash flows discounted at the loan’s effective interest rate, or the fair value of the collateral less cost to sell, is less than the recorded amount of the loan.  The full extent of impairment in the mortgage portfolio cannot be assessed solely by reviewing these loans individually.  A general allowance for loan loss is established based on an assessment of past loss experience on groups of loans with similar characteristics and current economic conditions.  While management believes that it uses the best information available to establish the loan loss allowances, future adjustments may become necessary if economic conditions differ from the assumptions used in calculating them.

Interest income is recognized on impaired mortgage loans when the collection of contractually specified future cash flows is probable, in which case cash receipts are recorded in accordance with the effective interest rate method.  Interest income is not




 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


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

recognized on impaired mortgage loans and these mortgage loans are placed on non-accrual status when the collection of contractually specified future cash flows is not probable, in which case cash receipts are applied in the following order: first against the carrying value of the loan, then against the provision, and then to income.  The accrual of interest resumes when the collection of contractually specified future cash flows becomes probable based on certain facts and circumstances.

Changes in allowances for losses are recorded as changes in unrealized gains and losses to surplus.  Once the conditions causing impairment improve and future payments are reasonably assured, the mortgages are no longer classified as impaired and the Company resumes accrual of income.  However, if the original terms of the contract have been changed resulting in the Company providing an economic concession to the borrower at below market rates, then the mortgage is reclassified as restructured.

If the conditions causing impairment do not improve and future payments remain unassured, the Company typically derecognizes the asset through disposition or foreclosure.  Uncollectible collateral-dependent loans are written off through realized losses for any difference between the carrying value and amount received for the underlying property at the time of disposition or foreclosure.

Real Estate

Real estate includes properties held for investment and properties held for sale. Real estate held for investment is stated at depreciated cost using the straight-line method net of encumbrances.  Properties held for sale are carried at the lower of depreciated cost or fair value less encumbrances and disposition costs.

Contract Loans

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

Asset Valuation Reserve and Interest Maintenance Reserve

The AVR is established as a liability based upon a formula prescribed by the NAIC to offset potential credit-related investment losses on all invested assets, with changes in the AVR charged or credited directly to surplus.  The IMR is established as a liability to capture realized gains and losses, net of income tax, on the sale of fixed income investments, principally bonds, mortgage loans and derivatives, resulting from changes in the general level of interest rates, and is amortized into income over the remaining years to expected maturity of the assets sold.

Derivatives

As part of the Company’s overall risk management policy, the Company uses interest rate swaps, over the counter (“OTC”) and listed options, exchange-traded futures, currency forwards, currency swaps and swaptions.  Swaps purchased are stated at fair value and changes in fair value are recorded through unrealized gains/losses within surplus.


 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


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

The Company utilized interest rate swaps to hedge interest rate risk arising from the variability of cash flows due to certain variable rate funding agreements.  These swaps were designated as cash flow hedges.  Interest rate swaps that qualify for hedge accounting treatment were recognized in a manner consistent with the hedged item, at amortized cost.  At the date of designation, the fair value of the associated interest rate swap which had previously been recorded as an unrealized loss to surplus is fixed with subsequent amortization into income through the related policy’s maturity date.  In the event a swap is not proven highly effective, it is stated at fair value and then changes in fair value are recorded through unrealized gains/losses within surplus. These swaps were used to hedge the Medium Term Note program which matured in October, 2013.

The Company utilizes OTC put options and exchange traded futures on the Standard & Poor’s 500 Composite Stock Price Index (the “S&P 500 Index”) and other indices to hedge against stock market exposure inherent in the mortality and expense risk charges and guaranteed minimum death and living benefit features of the Company's variable annuities.  These options are stated at fair value.  Changes in fair value for options purchased on January 1, 2003 and after are recorded in unrealized gains/losses within surplus.  The Company also purchases OTC and listed call options and exchange traded futures on the S&P 500 Index and other indices to economically hedge its obligation under certain fixed indexed annuity contracts.  The interest credited on these 1, 3, 5, 7 and 10 year term products are based on the changes in the S&P 500 Index.

The Company uses currency swaps to hedge against the risk of fluctuations in foreign currency exchange rates.  Currency swaps are marked to market.  Changes in fair value are recorded as unrealized gains/losses within surplus.  Swaptions are utilized by the Company to hedge exposure to interest rate risk.  At the trade date of a swaption, a premium is paid to the counterparty and recorded as an asset.  At expiration, swaptions either cash settle for value, settle into an interest rate swap or expire worthless.  Swaptions are marked to market and changes in fair value are recorded in unrealized gains/losses within surplus.  Credit valuation adjustments (“CVAs”) are necessary to properly reflect the component of fair value of derivative instruments that arises from default risk.  CVAs are based on a methodology that uses credit default swap (“CDS”) spreads as a key input in determining an implied level of expected loss over the total life of the derivative contract.  Where no observable CDS spreads are available, the counterparty’s or the Company’s credit spreads derived from bond yields are used instead.  CVAs are intended to achieve a fair value of the underlying contracts and are normally based on publicly available information.  The CVAs also take into account contractual factors designed to reduce the Company’s credit exposure to each counterparty, such as collateral and legal rights of offset.  CVAs are not recorded for interest rate swaps used as cash flow hedges when proven highly effective.

POLICY AND CONTRACT RESERVES

The reserves for life insurance and annuity contracts are computed in accordance with presently accepted actuarial standards, and are based on actuarial assumptions and methods (including use of published mortality tables and prescribed interest rates) which produce reserves at least as great as those required by law and/or contract provisions.






 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


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

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 amounts reported are 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 adjustments are determined to be required.

INCOME TAXES
 
 
The Company accounts for current and deferred income taxes and recognizes reserves for income tax contingencies in accordance with SSAP No. 101, Income Taxes, A Replacement of SSAP No. 10R and SSAP No. 10 (“SSAP No. 101”).  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 DTAs and deferred tax liabilities (“DTLs”) is recognized in the period that includes the enactment date.  Valuation allowances on DTAs are estimated based on the Company’s assessment of the realizability of such amounts.  Refer to Note 14 of the Company’s financial statements for further discussion of the Company’s income taxes.

INCOME AND EXPENSES

Life premiums are recognized as income over the premium paying period of the related policies.  Annuity considerations are recognized as revenue when received.  Expenses, such as commissions and other costs applicable to the acquisition of new business are charged to operations as incurred.

SEPARATE ACCOUNTS

The Company has established unitized Separate Accounts applicable to various classes of contracts providing for variable benefits.  Contracts for which funds are invested in the variable Separate Accounts include individual and group life and annuity contracts.

The Company has also established non-unitized separate accounts for certain contracts that include a MVA feature associated with fixed rates, including for amounts allocated to the fixed portion of certain combination fixed and variable deferred annuity contracts.  The assets of the non-unitized Separate Accounts are not legally insulated and can be used to satisfy claims resulting from the general account.  (See Note 12 for additional information.)

Net investment income, capital gains and losses, and changes in mutual fund asset values on the variable Separate Accounts are allocated to policyholders and therefore do not affect the operating results of the Company.  Assets held in the variable Separate Accounts are carried at fair value. 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 contracts for which funds are invested in variable Separate Accounts.






 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


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

The activity of the variable Separate Accounts is not reflected in the Company’s financial statements except for the following:
 
·
The fees that the Company receives, which are assessed periodically and recognized as revenue when assessed.

 
·
The activity related to the guaranteed minimum death benefit, guaranteed minimum accumulation benefit and guaranteed minimum withdrawal benefit, which is reflected in the Company’s financial statements.

 
·
Premiums and withdrawals with offsetting transfers to/from the variable Separate Accounts are reflected in the Statement of Operations.

 
·
Transfers from the variable Separate Accounts due and accrued, which include accrued expense allowances receivable from the variable Separate Accounts and the aggregate surplus (income) due and accrued from MVA contracts.

 
·
The dividends-received-deduction (“DRD”), which is included in the Company’s income tax expense, is calculated based upon the variable Separate Accounts’ assets held in connection with variable contracts.

ACCOUNTING PRONOUNCEMENTS

New and Adopted Accounting Pronouncements

Effective January 1, 2013, the NAIC adopted SSAP No. 104 Share-Based Payments (“SSAP No. 104”).  SSAP No. 104 provides statutory accounting principles for transactions in which an entity exchanges its equity instruments with employees in share-based payment transactions and adopts, with modification, GAAP guidance for stock options and stock purchase plans within GAAP Accounting Standards Codification Topic 718.  The adoption of the statement did not have a significant impact on the financial statements of the Company.

Effective January 1, 2013, the NAIC adopted SSAP No. 103, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities (“SSAP No. 103”).  SSAP No. 103 replaces SSAP No. 91R of the same name and establishes new conditions for when a transferred financial asset is accounted for as a sale in addition to removing the concept of a qualifying special-purpose entity. The adoption of the standard did not have a significant impact on the financial statements of the Company.











 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


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

Effective January 1, 2012, the NAIC adopted SSAP No. 101.  Under SSAP No. 101, DTAs are admitted based on a realization threshold limitation table.  The Company recorded the following changes in surplus as of January 1, 2012 a result of the adoption:

(In Thousands)
 
Reclassification of SSAP No. 10R
write-in within surplus
$      71,677
Change in non-admitted DTA as a
result of adoption
(49,877)
Cumulative effect of change in
accounting principle
$      21,800

Prior to the adoption of SSAP No. 101, the Company accounted for income taxes under SSAP No. 10R, Income Taxes – Revised, A Temporary Replacement of SSAP No. 10 (“SSAP No. 10R”), which provided for a three-year reversal period and 15% of adjusted surplus.  The application of SSAP No. 10R resulted in an increase of $71.7 million in the Company’s surplus at December 31, 2011.

Effective January 1, 2012, the NAIC revised the disclosure requirements of SSAP No. 100, Fair Value Measurements, to clarify the disclosures of the fair value of financial instruments. The changes in the disclosures have been reflected in Note 13.

Effective December 31, 2011, the NAIC adopted SSAP No. 5R, Liabilities, Contingencies and Impairments of Assets (“SSAP No. 5R”).   SSAP No. 5R requires entities to recognize, at the inception of a guarantee, a liability for the obligations it has undertaken in issuing the guarantee, even if the likelihood of having to make payments under the guarantee is remote.  Guarantees made to/or on behalf of a wholly-owned subsidiary, and inter-company and related party guarantees that are considered “unlimited”, are exempted from the initial liability recognition.  As such, the guidance did not have a significant impact upon adoption.  The additional disclosures required by SSAP No. 5R have been incorporated in Note 2.

Effective January 1, 2011, the NAIC adopted changes to SSAP No. 43R.  These changes included broadening the definition of loan-backed and structured securities (“LBSS”) and clarification of the requirement to bifurcate realized gains and losses between the AVR and the IMR.  Neither of the changes had a material impact on the Company's statutory net income or surplus.

Effective January 1, 2011, the NAIC adopted SSAP No. 35R, Guaranty Fund and Other Assessments (“SSAP No. 35R”).  SSAP No. 35R modifies the conditions required before recognizing liabilities for insurance-related assessments.  The liability is not recognized until the event obligating an entity to pay an imposed or probable assessment has occurred.  The adoption of SSAP No. 35R did not have a significant impact on the financial statements of the Company.






 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


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

Accounting Standards Not Yet Adopted

Effective January 1, 2014, the NAIC adopted SSAP No. 105, Working Capital Finance Investments (“SSAP No. 105”).  SSAP No. 105 amends SSAP No. 20, Nonadmitted Assets, to allow working capital finance investments as admitted assets to the extent they conform to the requirements of this statement. The Company currently does not have any working capital investments as of the effective date.

2.
RELATED PARTY TRANSACTIONS

The Company has significant transactions with affiliates and former affiliates.  Intercompany revenues and expenses recognized under these agreements may not necessarily be indicative of costs that would be incurred if the Company operated on a stand-alone basis and if these transactions were with unrelated parties.  Below is a summary of significant transactions with affiliates and former affiliates for the reporting period.

Investments in Subsidiaries

The Company directly or indirectly owned all of the outstanding shares or members interest of the following entities, which are recorded as investments in subsidiaries in the common stock balance of the Company’s statutory financial statements:

 
·
SLNY (owned as of December 31, 2013 and 2012)
 
·
ILAC (owned as of December 31, 2012 and distributed to Former Parent during 2013)
 
·
Clarendon Insurance Agency, Inc., (“Clarendon”) a registered broker-dealer (owned as of December 31, 2013 and 2012)
 
·
SLF Private Placement Investment Company I, LLC (carried at a zero equity value and owned as of December 31, 2013 and 2012)
 
·
DL Information Services Canada Inc., (“DL Canada”) (formed during 2013 and owned as of December 31, 2013)
 
·
DL Information Services Ireland Limited, (“DL Ireland”) (formed during 2013 and owned as of December 31, 2013)
 
·
SL Investment DELRE Holdings 2009-1, LLC, (the “LLC”) (owned as of December 31, 2013 and 2012)

In addition, SLNY Private Placement Investment Company I, LLC, which was owned by SLNY and carried at a zero equity value, was dissolved during the fourth quarter of 2012.




 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


2.
RELATED PARTY TRANSACTIONS (CONTINUED)

Summarized combined financial information of the Company’s subsidiaries, are as follows:

 
Years Ended December 31,
(In Thousands)
2013
 
2012
Assets
$    3,196,021
 
$    3,733,791
Liabilities
2,794,618
 
3,239,634
Total net assets
$      401,403
 
$      494,157
Total revenues
$      105,629
 
$      272,476
Operating expenses
84,442
 
216,718
Income tax expense
295
 
16,379
Net gain
$        20,892
 
$        39,379

The net asset is recorded in common stocks and other invested assets on the balance sheet.  The net gain is recorded in surplus through the change in unrealized capital gain (loss) in the statement of changes in capital stock and surplus.

The Company does not own shares of an upstream intermediate entity or ultimate parent, directly or indirectly, via a downstream subsidiary, controlled, or affiliated entity.

Reinsurance Related Agreements

As more fully described in Note 9, the Company is party to reinsurance transactions with affiliates.

On July 31, 2013, the Company consented to a Novation Agreement between its former affiliate, the U.S. Branch, and an affiliate, Sun Life Reinsurance (Barbados) No. 3 Corp. ("Barbco 3").  Pursuant to the Novation Agreement, Barbco 3 was substituted as reinsurer under the June 12, 2000 reinsurance agreement between the Company and the U.S. Branch, whereby the Company ceded to the U.S. Branch, on a yearly renewable term basis, certain risks under group flexible premium variable universal life policies.  The U.S. Branch transferred $241 million of invested assets and accrued interest and $33 million of cash to Barbco 3 to support the assigned liabilities. The Novation Agreement and transfers were effective upon the close of the Sale Transaction.

In December 2012, the Board of Directors of the Company approved the recapture of 100 percent of the risks under certain SPWL policies that were reinsured to its former affiliate, SLOC, pursuant to a December 31, 2003 reinsurance agreement.  The transaction was effective for the first quarter of 2013, and the Company recorded a decrease to surplus of approximately $34.7 million.

The Company has a reinsurance agreement with Barbco 3, an affiliate, to cede all of the risks associated with certain in-force corporate and bank-owned variable universal life and private placement variable universal life policies on a combination coinsurance and coinsurance with funds-withheld. (Refer to Note 9 for more detail.)

Capital Transactions

In December 2012, the Company’s Board of Directors approved the extraordinary distribution of all of the issued and outstanding shares of the Company’s previously wholly-owned subsidiary, ILAC, to the Former Parent.  The Company received regulatory approval and ILAC was distributed effective January 1, 2013.  The net impact to the Company's surplus was a decrease of $64.2 million.  The Company recorded the distribution as a return of gross paid in and contributed surplus.

 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


2.
RELATED PARTY TRANSACTIONS (CONTINUED)

The Company did not receive any capital contributions from the Parent or Former Parent during the years ended December 31, 2013, 2012 and 2011.  No dividends were paid during the years ended December 31, 2013 and 2012.  During the year ended December 31, 2011, the Company paid an extraordinary cash dividend of $300.0 million to the Former Parent.

Other Invested Assets

The Company also owned the membership interest of the LLC. During 2013, mortgages with a value of $11.8 million were transferred to the Company’s subsidiary, the LLC, and $54.5 million was transferred from the LLC.  The LLC distributed capital of $19.4 million to the Company.

Mortgages transferred into the LLC in 2012 were valued at approximately $41.1 million, representing both book and market values.

Debt and Surplus Note Transactions

The details of borrowed money due affiliates and former affiliates at December 31, 2013 were as follows (amounts in thousands):

Issue Date
Payees
Type
Rate
Maturity
Principal/
Carrying Value
 
Interest Expense
Year Ended
December 31, 2013
09/19/2006
Sun Life Financial Global Funding III, L.L.C.
Demand
Libor plus 0.35%
10/06/2013
$           -
 
$           496
 
Total borrowed money
     
$           -
 
496

The details of borrowed money due affiliates and former affiliates at December 31, 2012 were as follows (amounts in thousands):

Issue Date
Payees
Type
Rate
Maturity
   
Interest Expense
Year Ended
December 31, 2012
07/22/2002
Sun Life Assurance Company of Canada, U.S. Branch
Promissory
5.710%
06/30/2012
$               -
 
$               514
09/19/2006
Sun Life Financial Global Funding III, L.L.C.
Demand
Libor plus 0.35%
10/06/2013
100,000
 
836
 
Total borrowed money
     
$100,000
 
$           1,350

On June 26, 2013, Sun Life Financial Insurance and Annuity Company (Bermuda) Ltd, an affiliate now known as Delaware Life Insurance and Annuity Company (Bermuda) Ltd. (“DLIAC”), issued a floating rate revolving credit note payable to the Company, pursuant to which DLIAC can borrow up to $40 million from the Company.  The interest on outstanding principal is based on LIBOR plus 0.60%.  The interest will accrue monthly and be payable on the last day of the fiscal quarter starting on September 30, 2013.  The note will mature on June 30, 2015.  No balance was outstanding at December 31, 2013.


 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


2.
RELATED PARTY TRANSACTIONS (CONTINUED)

As of December 31, 2011, the Company had an $18.0 million outstanding promissory note that was originally issued to a former affiliate, Sun Life (Hungary) Group Financing Limited Company (“Sun Life (Hungary) LLC”), for which the Company paid interest semi-annually.  On June 2, 2011, Sun Life (Hungry) LLC sold the $18.0 million note to SLOC, a former affiliate.  With the exception of the change in lenders, this transaction did not have any impact on the terms of the promissory note.  Effective June 2, 2011, the Company began paying the related interest to SLOC. On June 29, 2012, the Company paid the $18.0 million of outstanding principal, plus $0.5 million in accrued interest to SLOC due to the maturity of the note.  Related to this note, the Company incurred interest expense of $0.5 million and $1.0 million for the years ended December 31, 2012 and 2011, respectively.

Surplus notes previously issued by the Company to Sun Life Financial (U.S.) Finance, Inc. (“Sun Life Finance”), a former affiliate, were transferred as part of the Sale Transaction. 
 
As of December 31, 2013 and 2012, the Company had $565.0 million of surplus notes outstanding.  During 2013, the Company entered into an agreement with Deutsche Bank Trust Company Americas (“DBTCA”), whereby the surplus notes are taken into custody by the bank on behalf of the holders of the surplus notes (the “Noteholders”).  DBTCA collects all surplus note payments and distributes such funds to the Noteholders.  The DBTCA agreement allows the Noteholders to transfer any part of the surplus notes they hold, subject to the consent of the Company and with proper notice given to DBTCA.  As of December 31, 2013, the Noteholders are as follows:

 
·
DLICM, LLC
 
·
DLICT, LLC
 
·
DLPR, LLC
 
·
EquiTrust Life Insurance Company
 
·
Guggenheim Life and Annuity Company
 
·
Heritage Life Insurance Company
 
·
Midland National Life Insurance Company
 
·
North American Company for Life and Health Insurance
 
·
Paragon Life Insurance Company of Indiana
 
·
Security Benefit Life Insurance Company

The details of outstanding surplus notes at December 31, 2013 were as follows (amounts in thousands):

                 
Interest
 
             
Principal/
 
Paid
 
             
Carrying
 
Year Ended
 
Issue Date
Type
Rate
Maturity
 
Face Amount
 
Value
 
December 31, 2013
 
12/15/1995
Surplus
6.150%
12/15/2027
 
$        150,000
 
$      150,000
 
$                   9,225
 
12/15/1995
Surplus
7.626%
12/15/2032
 
150,000
 
150,000
 
11,439
 
12/15/1995
Surplus
6.150%
12/15/2027
 
7,500
 
7,500
 
461
 
12/15/1995
Surplus
7.626%
12/15/2032
 
7,500
 
7,500
 
572
 
12/22/1997
Surplus
8.625%
11/06/2027
 
250,000
 
250,000
 
21,563
 
         
$        565,000
 
$      565,000
 
$                 43,260
 


 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

2.
RELATED PARTY TRANSACTIONS (CONTINUED)

The details of outstanding surplus notes due to a former affiliate, Sun Life Finance, at December 31, 2012 were as follows (amounts in thousands):

                 
Interest
 
             
Principal/
 
Paid
 
             
Carrying
 
Year Ended
 
Issue Date
Type
Rate
Maturity
 
Face Amount
 
Value
 
December 31, 2012
 
12/15/1995
Surplus
6.150%
12/15/2027
 
$        150,000
 
$      150,000
 
$                   9,225
 
12/15/1995
Surplus
7.626%
12/15/2032
 
150,000
 
150,000
 
10,991
 
12/15/1995
Surplus
6.150%
12/15/2027
 
7,500
 
7,500
 
461
 
12/15/1995
Surplus
7.626%
12/15/2032
 
7,500
 
7,500
 
483
 
12/22/1997
Surplus
8.625%
11/06/2027
 
250,000
 
250,000
 
21,563
 
         
$        565,000
 
$      565,000
 
$                 42,723
 

The surplus notes and accrued interest thereon, are subordinate to payments due to policyholders, claimant and beneficiary claims; as well as all other classes of creditors other than surplus note holders. After payment in full of certain obligations set forth in 18 Del. C. s. 5918, and prior to any payment to a shareholder in respect of such shareholder’s ownership interest in the Company, the holder of the surplus note shall be entitled to receive payment in full of all amounts due to the note holder.  Any redemption shall be subject to the prior written consent of the Commissioner.

During 2012, the Company applied for and received approval from the Department for certain modifications to two surplus notes payable to Sun Life Finance. The modifications extended the maturity dates on both surplus notes from December 15, 2015 to December 15, 2032, changed the interest rates from 6.125% per annum and 7.25% per annum to 7.626% per annum and modified the prepayment language in both surplus notes.  These changes were effective October 1, 2012.  The Company expensed $43.3 million, $42.7 million and $42.6 million for interest on these surplus notes for years ended December 31, 2013, 2012 and 2011, respectively.  Total interest paid through December 31, 2013 is approximately $727.0 million.  There have been no principal payments since original issuance of the above notes.

Each accrual and payment of interest on surplus notes may be made only with the prior approval from the Commissioner and only to the extent the Company has sufficient surplus earnings to make such payment.  The Company received approval for all payments and the related accrual in the amount of $4.3 million, as of December 31, 2013.

Institutional Investments Contracts

On September 12, 2006, the Company issued two floating rate funding agreements totaling $900.0 million to a former affiliate, Sun Life Financial Global Funding III, L.L.C. (“LLC III”), which matured on October 6, 2013.  On April 7, 2008, the Company issued a third floating rate funding agreement totaling $5.8 million to LLC III, which matured on December 1, 2011.  The Company paid $5.9 million to LLC III, including $0.01 million in interest due to the maturity of the third funding agreement.  Total interest credited for these three funding agreements was $3.0 million, $7.3 million and $5.9 million for the years ended December 31, 2013, 2012 and 2011, respectively.  On September 19, 2006, the Company also issued a $100.0 million floating rate demand note payable to LLC III which was paid during October 2013.  For interest on this demand note, the Company expensed $0.5 million, $0.8 million and $0.7 million for years ended December 31, 2013, 2012 and 2011, respectively. The Company entered into an interest rate swap agreement with LLC III with an aggregate notional amount of $900.0 million that effectively converted the floating rate payment obligations under the funding agreements to fixed rate obligations.



 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

2.
RELATED PARTY TRANSACTIONS (CONTINUED)

As part of the Sale Transaction, the Company transferred bonds and cash with a value of $1,024 million to an escrow account, which was used to settle the Company's obligations related to (1) the two floating rate funding agreements totaling $900 million issued to a former affiliate, LLC III due in October, 2013, (2) an interest rate swap with LLC III that effectively converted the floating rate payment obligations under the funding agreements to fixed rate obligations, and (3) a $100 million floating rate demand note issued to LLC III due in October 2013.  The Former Parent agreed to pay any shortage of funds in the escrow account to settle the funding agreements, the interest rate swap, and the demand note.  Excess funds in the escrow account after settlement of the funding agreements, interest rate swap, and the demand note totaling $12.1 million, were paid to the Former Parent.

The account values related to these funding agreements issued to LLC III were reported in the Company’s Statutory Statements of Admitted Assets, Liabilities, and Capital Stock and Surplus as a component of liability for deposit-type contracts.

On May 17, 2006, the Company issued a floating rate funding agreement of $900.0 million to Sun Life Financial Global Funding II, L.L.C. (“LLC II”), a former affiliate.  On April 7, 2008, the Company issued an additional floating rate funding agreement totaling $7.5 million to LLC II.  On July 1, 2011 and July 19, 2011, the Company paid $901.3 million and $7.5 million to LLC II due to the maturity of these two funding agreements.  The payments included $1.3 million of accrued interest. Total interest credited for these two funding agreements was $2.6 million for the year ended December 31, 2011.

The Company also issued a $100.0 million floating rate demand note payable to LLC II on May 24, 2006.    On July 19, 2011, the Company paid $100.0 million to LLC II, including $0.01 million in interest due to the maturity of the floating rate demand note.  For interest on this demand note, the Company expensed $0.3 million for the year ended December 31, 2011.

The Company had entered into an interest rate swap agreement with LLC II with an aggregate notional amount of $900.0 million that effectively converted the floating rate payment obligations under the funding agreement to fixed rate obligations.  This interest swap agreement expired on July 6, 2011 due to the maturity of the underlying floating rate funding agreement with LLC II.

Administrative Service Agreements and Other

The Company is party to various related party agreements.  Certain agreements with former affiliates were amended or terminated upon the close of the Sale Transaction described in Note 1.

For periods prior to August 1, 2013

From January 1, 2011 to July 31, 2013, the Company participated in a pension plan and other retirement plans sponsored by a former affiliate, Sun Life Financial (U.S.) Services Company, Inc. (“Sun Life Services”). Expenses under these plans were allocated to participating companies pursuant to approved inter-company agreements. The allocated expenses to the Company from Sun Life Services were $3.0 million, $18.0 million and $21.9 million for the period ended July 31, 2013 and the years ended December 31, 2012 and 2011, respectively.

On December 31, 2009 the Company transferred assets to Sun Life Services, which resulted in a sale-leaseback transaction.  At the time of the transfer, the Company established a liability, which represented the cost of certain of the assets transferred, and had been amortizing the liability over the remaining useful life of the assets on a straight-line basis.  During December, 2012, the value of the assets transferred were written down to zero, and the remaining liability was amortized into income.  The write-off resulted in an increase to surplus of approximately $8.6 million, pre-tax, as the leased assets had been previously non-admitted.  The Company has no remaining future minimum lease payments related to these assets.


 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

2.
RELATED PARTY TRANSACTIONS (CONTINUED)

Pursuant to an administrative services agreement between the Company and Sun Life Services, a former affiliate, Sun Life Services agreed to provide human resource services (e.g., recruiting and maintaining appropriately trained and qualified personnel and equipment necessary for the performance of actuarial, financial, legal, administrative, and other operational support functions) to the Company, and the Company agreed to reimburse Sun Life Services for the cost of such services, plus an arms-length based profit margin to be agreed upon by the parties.  Total expenses under this agreement were $38.7 million, $75.1 million and $91.1 million for the period ended July 31, 2013, and the years ended December 31, 2012 and 2011, respectively.  This agreement terminated in connection with the Sale Transaction.

The Company had an administrative services agreement with SLOC, a former affiliate, under which the Company provided various administrative services to SLOC upon request.  Pursuant to this agreement, the Company recorded reimbursements of $48.7 million, $129.6 million and $99.3 million for the period ended July 31, 2013, and the years ended December 31, 2012 and 2011, respectively.  This agreement terminated in connection with the Sale Transaction.

The Company had an administrative services agreement with SLOC, which provides that SLOC would furnish, as requested, certain services and facilities to the Company on a cost-reimbursement basis.  Expenses under this agreement amounted to approximately $12.2 million, $7.5 million, and $12.6 million for the period ended July 31, 2013, and the years ended December 31, 2012 and 2011, respectively.  This agreement terminated in connection with the Sale Transaction.

The Company had an administrative services agreement with Sun Life Information Services Canada, Inc. ("SLISC"), a former affiliate, under which SLISC provided administrative and support services to the Company in connection with the Company’s insurance and annuity business.  Expenses under this agreement amounted to approximately $10.6 million, $18.4 million and $19.3 million for the period ended July 31, 2013, and the years ended December 31, 2012 and 2011, respectively.  This agreement terminated in connection with the Sale Transaction.

The Company had service agreements with Sun Life Information Services Ireland Limited ("SLISIL"), a former affiliate, under which SLISIL provided various insurance related and information systems services to the Company.  Expenses under these agreements amounted to approximately $14.1 million, $25.3 million and $22.6 million for the period ended July 31, 2013, and the years ended December 31, 2012 and 2011, respectively.  These agreements terminated in connection with the Sale Transaction.

The Company had an administrative services agreement with SLC - U.S. Ops Holdings, a former affiliate, under which the Company provided administrative and investor services with respect to certain open-end management investment companies for which a former affiliate, Massachusetts Financial Services Company (“MFS”), served as the investment adviser, and which were offered to certain of the Company’s Separate Accounts established in connection with variable annuity contracts issued by the Company.  Amounts received under this agreement amounted to approximately $11.4 million, $14.2 million and $12.7 million for the period ended July 31, 2013, and the years ended December 31, 2012 and 2011, respectively.  This agreement terminated in connection with the Sale Transaction.



 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

2.
RELATED PARTY TRANSACTIONS (CONTINUED)

During 2012 and 2011, the Company paid $10.2 million and $35.9 million, respectively, in commission fees to Sun Life Financial Distributors, Inc. (“SLFD”), a former affiliate and broker dealer.

For period after August 1, 2013

 
The Company sponsors the Delaware Life Insurance Company 401(k) Savings Plan that qualifies under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”) and includes a retirement investment account feature that qualifies under Section 401(a) of the Internal Revenue Code (the “RIA”).  Income and expenses under the 401(k) Plan and the RIA are allocated to participating companies pursuant to approved intercompany agreements. The total expenses for the period August 1, 2013 to December 31, 2013 were $1.4 million, of which $0.1 million was allocated to its subsidiary, SLNY.

The Company has a management services agreement with its subsidiary, SLNY, whereby the Company furnishes certain investment, actuarial, and administrative services to SLNY on a cost-reimbursement basis.  The Company received reimbursements related to this agreement of $12.1 million, $30.0 million and $31.2 million for the years ended December 31, 2013, 2012 and 2011, respectively.

The Company has an administrative services agreement with a former affiliate, Sun Capital Advisers LLC (“SCA”), an investment adviser, under which the Company provides administrative services with respect to certain open-end investment management 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 variable contracts issued by the Company. Amounts received under this agreement amounted to approximately $4.1 million, $16.4 million and $16.6 million for the years ended December 31, 2013, 2012 and 2011.  The Company paid $8.5 million, $15.7 million and $17.9 million in investment management fees to SCA under a separate investment services agreement for the years ended December 31, 2013, 2012 and 2011, respectively.

The Company previously leased office space to its former affiliate, SLOC, under lease agreements with terms originally expiring on December 31, 2014. This lease was revised on January 1, 2013 in conjunction with the sale of the property to a former affiliate, the U.S. Branch.  Rent received by the Company under the leases amounted to approximately $12.6 million and $12.1 million for the years 2012 and 2011, respectively.  Rental income is reported as a component of net investment income.  (Refer to Note 17 for amount of lease commitments.)

In connection with the change in control disclosed in Note 1, the Company’s controlling persons agreed the Company would comply with the filing and other requirements contained in Section 5005(a) of the Delaware Insurance Code with respect to any transaction subject to Section 5005(a)(2) between (a) the Company, and (b) (I) Guggenheim Capital, LLC or a subsidiary thereof, or (II) Sammons Enterprises, Inc. or a subsidiary thereof.  The following are agreements between the Company and entities that are deemed affiliates of the Company for the purpose of filing and other requirements contained in Section 5005(a) of the Delaware Insurance Code.

 
1.
An investment management agreement between the Company and Guggenheim Partners Investment Management, LLC (“GPIM”), whereby GPIM provides investment management services for certain of the Company’s investments.  Expenses under this agreement amounted to approximately $6.7 million for the year ended December 31, 2013.



 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

 
2.   RELATED PARTY TRANSACTIONS (CONTINUED)

 
2.
A services agreement between the Company and Guggenheim Commercial Real Estate Finance, LLC (“GCREF”), whereby GCREF provides mortgage loan sourcing, origination and administration services to the Company.  There were no expenses related to this agreement for the year ended December 31, 2013.

 
3.
A services agreement between the Company and Guggenheim Insurance Services, LLC (“GIS”), whereby GIS provides certain personnel, facilities, systems and equipment in conjunction with the provision of accounting and general services, insurance services and other advisory services to the Company.  Expenses under this agreement amounted to approximately $25.5 million for the year ended December 31, 2013.

 
4.
A services agreement between the Company and se2, llc ("se2"), under which se2 provides annuity and life insurance policy servicing and third party administrator services to the Company. Expenses under this agreement amounted to approximately $0.1 million for the year ended December 31, 2013.

The Company has an administrative services agreement dated January 1, 2002 with DLIAC, an affiliate, pursuant to which the Company performs various administrative services on behalf of DLIAC.

The Company has an administrative services agreement dated December 1, 2008 with its subsidiary, Clarendon, pursuant to which the Company provides services and facilities in connection with Clarendon’s business of supporting the wholesale distribution of the Company’s variable insurance and annuity products.

The Company has an administrative and tax services agreement dated January 1, 2010 with Barbco 3, an affiliate, pursuant to which the Company provides administrative and tax services to Barbco 3 on a cost- reimbursement basis.

The Company has an assignment and assumption agreement with the Parent, pursuant to which the Parent assigns to the Company all of the Parent’s right, title and interest in and to, and the Company assumes the obligations of the Parent under, a transition services agreement dated as of August 2, 2013 between the Parent and SLC - U.S. Ops Holdings, Inc.
 
 
The Company has an assignment and assumption agreement with the Parent, pursuant to which the Parent assigns to the Company all of the Parent’s right, title and interest in and to, and the Company assumes the obligations of the Parent under, a purchaser transition services agreement dated as of August 2, 2013 between the Parent and SLC - U.S. Ops Holdings.

The Company has an administrative services agreement with its subsidiary, DL Ireland, pursuant to which DL Ireland provides administrative and support services to the Company and its U.S. affiliates.

The Company has an administrative services agreement with its subsidiary, DL Canada, pursuant to which DL Canada provides administrative and support services to the Company and its U.S. affiliates.

The Company has a principal underwriter’s agreement dated April 1, 2002 with Clarendon, a subsidiary, pursuant to which Clarendon serves as principal underwriter and distributor for all variable insurance products issued by the Company.

The Company had $0.6 million and $71.0 million due from related parties at December 31, 2013 and 2012, respectively, and had $1.7 million and $18.5 million due to related parties, recorded as a component of Other liabilities, at December 31, 2013


 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

2.
RELATED PARTY TRANSACTIONS (CONTINUED)

and 2012, respectively, under the terms of various management and service contracts which provide for cash settlements on a quarterly or more frequent basis.

Other Sale Related Transactions

During 2013, the Company sold its home office real estate property and three other properties (collectively, the “Property”) to the U.S. Branch, a former affiliate, for a total sale price of $88.0 million.  The Property was recorded as Properties held for sale as of December 31, 2012.  The sale price was equal to the fair market value of the Property, including personal property, fixtures, and equipment installed in or attached to the Property.  The sale of the Property resulted in a gain of $32.3 million.

During the second quarter of 2013, two of the Company's real estate subsidiaries, 7101 France Avenue, LLC and 7101 France Avenue Manager, LLC, were dissolved.  The conduit loan secured by the real estate owned by 7101 France Avenue, LLC was paid and the assets relating to the property were conveyed to the Company.

In connection with the Sale Transaction these assets were subsequently sold to the U.S. Branch, a former affiliate, at fair market value totaling $16.5 million and resulted in a pre-tax gain of $4.9 million.  In addition, one of the Company’s real estate subsidiaries, Sun MetroNorth, LLC, was sold to the U.S. Branch at fair market value totaling $4.9 million, resulting in a loss of $1.5 million.

Four additional real estate properties were also sold to the U.S. Branch, a former affiliate, totaling $44.5 million, resulting in a gain of $6.8 million including one property from the Company’s Separate Accounts for fair value of $0.6 million and a loss of $0.3 million.

The Company sold several mortgage loans to a former affiliate, SLOC, including the U.S. Branch, totaling $28.0 million, resulting in a gain of $0.7 million.  This amount included $7.0 million in mortgage loans from the Company’s Separate Accounts.  The Company also purchased mortgage loans from the U.S. Branch and other former and existing affiliates totaling $34.6 million.

On July 30, 2013, the Company sold a portfolio of externally-managed RMBS and CMBS to a former affiliate, SLOC, at fair market value, totaling $821 million (including $283 million purchased by the U.S. Branch, a former affiliate).  Realized gains of approximately $108 million were recognized upon the sale of the securities.

The Company, as successor to Keyport Life Insurance Company (“Keyport”), which merged with and into the Company at close of business on December 31, 2003, unconditionally guaranteed the full and punctual payment when due of any obligations of its previously wholly-owned subsidiary, ILAC, arising out of or in connection with any insurance or annuity contract (“Contract”) issued by ILAC on or after June 25, 1998. No Contracts were issued by ILAC after June 25, 1998.  In conjunction with the Sale Transaction and the Company’s distribution of ILAC to the Former Parent, this guarantee was terminated in 2013.

The Company, as successor to Keyport, unconditionally guarantees the full and punctual payment when due of any obligations of Keyport Benefit Life Insurance Company (“KBL”) arising out of or in connection with any Contract issued by KBL on or after June 25, 1998 and before December 31, 2002, the date that KBL merged with and into the Company’s wholly-owned subsidiary, SLNY. The purpose of this guaranty was to enhance the financial strength of KBL.  The liability of the Company under the guaranty is unlimited to any specific sum. The guaranty will not exceed contractual obligations to the policyholders of the contracts.  The cash surrender value of these policies at December 31, 2013 was approximately $324.5 million.  At December 31, 2013 and 2012, there was no liability accrued under this guaranty.


 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


2.
RELATED PARTY TRANSACTIONS (CONTINUED)

The Company guarantees on a subordinated basis all amounts payable by SLNY to holders of certain deferred combination fixed and variable annuity contracts (“MVA Contracts”) issued by SLNY which include the option to earn a guaranteed fixed return for specified periods (“Guarantee Period”). The Company unconditionally and irrevocably guarantees the full and punctual payment when due of all amounts payable by SLNY from a Guarantee Period to any holder. The guarantee is subject to no preconditions other than the failure by SLNY to pay when due any Guarantee Period interests. SLNY registered such Guarantee Period interests under the Securities Act of 1933 with the SEC.  Under the SEC’s rules, implementation of the guarantee permitted SLNY to stop filing periodic reports with the SEC pursuant to the Securities Exchange Act of 1934, and the purpose of the guarantee was to achieve that result.  The Company’s guarantee in this regard guarantees the payment of amounts payable by SLNY from a Guarantee Period but does not guarantee any other obligations of SLNY under the MVA Contracts.

The obligations under the guarantee are unsecured obligations of the Company and subordinate in right of payment to the prior payment in full of all other obligations of the Company, except for guarantees which by their terms are designated as ranking equally in right of payment with or subordinate to this guarantee.  The liability of the Company under the guaranty is unlimited to any specific sum.  The guaranty will not exceed contractual obligations to the policyholders of the MVA Contracts.  The total account value of these policies was approximately $10.9 million.  At December 31, 2013 and 2012, there is no liability accrued under this guaranty.

The Company guaranteed the full and timely payment of the obligations of SLFD, as tenant under a commercial office lease dated April 13, 2007.  Prior to December 31, 2011, SLFD provided written notice to the landlord of its intention to terminate the lease effective January 14, 2013 and paid $3.5 million in surrender considerations.  The maximum potential amount of future payments (undiscounted) that the guarantor could have been required to make under the guarantee was $0.  This guarantee terminated with the termination of the office lease.

The Company recorded tax benefits (expenses) from stock options of approximately $0.5 million, $(0.2) million and $1.0 million for the years ended December 31, 2013, 2012 and 2011, respectively. Employees of the Company’s former affiliates were participants in a restricted share unit (“RSU”) plan with the Company’s former indirect parent, SLF.

Under the RSU plan, participants were granted units that were equivalent to one common share of SLF stock and had a fair value of a common share of SLF stock on the date of grant.  RSUs earned 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, was the fair value of an equal number of common shares of SLF stock.  The Company incurred expenses of $7.0 million, $7.8 million and $5.7 million relating to RSUs for the years ended December 31, 2013, 2012 and 2011, respectively.




 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


 
3.  DEBT SECURITIES AND PREFERRED STOCKS

The statement value and fair value of the Company’s debt securities and preferred stocks were as follows:

   
December 31, 2013
(In Thousands)
 
Statement
Value
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Estimated Fair Value
Debt Securities:
               
U.S. Governments
$
623,251
$
1,302
$
(6,975)
$
617,578
All Other Governments
 
27,412
 
1,047
     
28,459
U.S. States, Territories and Possessions (Direct and Guaranteed)
 
6,236
 
86
 
-
 
6,322
U.S. Special Revenue and Special Assessment Obligations and all Non-Guaranteed Obligations of Agencies and Authorities of Governments and Their Political Subdivisions
 
96,525
 
2,893
 
(4,026)
 
95,392
Industrial and Miscellaneous (Unaffiliated)
 
3,813,093
 
131,022
 
(55,717)
 
3,888,398
Hybrid Securities
 
193,335
 
9,162
 
(4,853)
 
197,644
Total debt securities
$
4,759,852
$
145,512
$
(71,571)
$
4,833,793
Preferred Stocks
$
23,150
$
104
$
(1,558)
$
21,696

 
December 31, 2012
(In Thousands)
 
Statement
Value
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Estimated Fair Value
Foreign Government
$
3,211
$
441
$
-
$
3,652
U.S. State, Municipals and Political Subdivisions
 
1,058
 
22
 
(14)
 
1,066
U.S. Treasury & Agency
 
1,099,088
 
2,974
 
(954)
 
1,101,108
Residential Mortgage Backed Securities
 
672,085
 
12,385
 
(25)
 
684,445
Commercial Mortgage Backed Securities
 
616,847
 
38,538
 
(7,109)
 
648,276
Corporate
 
4,504,111
 
350,525
 
(25,611)
 
4,829,025
Asset Backed Securities
 
411,799
 
53,507
 
(1,439)
 
463,867
Total
$
7,308,199
$
458,392
$
(35,152)
$
7,731,439

The statement value and estimated fair value by maturity periods for debt securities, other than ABS and MBS 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; accordingly, the contractual maturities for those securities are not shown.



 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


3.
DEBT SECURITIES AND PREFERRED STOCKS (CONTINUED)

(In Thousands)
December 31, 2013
 
Statement
 
Estimated
 
Value
 
Fair Value
Due in one year or less
$      155,798
 
$      156,722
Due after one year through five years
1,259,283
 
1,294,484
Due after five years through ten years
1,044,241
 
1,041,703
Due after ten years
1,068,620
 
1,102,440
Total before asset and mortgage-backed securities
3,527,942
 
3,595,349
Asset and mortgage-backed securities
1,231,910
 
1,238,444
Total
$    4,759,852
 
$    4,833,793

Proceeds from sales and maturities of investments in debt securities during 2013, 2012 and 2011, were $4.1 billion, $2.2 billion, and $3.0 billion, including non-cash transactions of $82.0 million, $19.0 million, and $49.0 million, respectively; gross gains were $264.3 million, $56.8 million and $98.5 million, respectively; and gross losses were $23.4 million, $31.0 million and $26.0 million, respectively.

Debt securities included above with a statement value of approximately $4.2 million for both years ended December 31, 2013 and 2012 were on deposit with governmental authorities as required by law.

Investment grade debt securities were 96.3% and 93.6% of the Company’s total debt securities as of December 31, 2013 and 2012, respectively.

The fair values of publicly traded debt securities are determined using three primary pricing methods: third-party pricing services, non-binding broker quotes and pricing models.  Prices are first sought from third- party pricing services with the remaining unpriced securities priced using one of the other two methods.  For privately-placed fixed maturity securities, fair values are estimated using model prices or broker quotes.  A portion of privately-placed fixed maturity securities (typically SEC Rule 144A securities) are priced using market prices.

Structured securities, such as ABS, RMBS and CMBS, are priced using third-party pricing services, a fair value model, 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, RMBS and CMBS.  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. Exposure to any single issuer is less than 10% of net admitted assets.

The fair value of the Company’s preferred stocks is first based on quoted market prices.  Similar to fixed-maturity securities, the Company uses pricing services and broker quotes to price preferred stocks for which the quoted market price is not available.


 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

3.
DEBT SECURITIES AND PREFERRED STOCKS (CONTINUED)

Other-than-temporary-impairment

The Company recognizes and measures OTTI for ABS and MBS in accordance with SSAP No. 43R. In accordance with SSAP No. 43R, if the fair value of a structured security is less than its amortized cost basis at the balance sheet date, the Company assesses whether the impairment is an OTTI.  When an OTTI has occurred, the amount of OTTI recognized in earnings is the difference between the amortized cost basis of the security and the present value of its expected future cash flows discounted at the effective interest rate implicit in the security.

If the Company intends to sell the structured security, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis, an OTTI is considered to have occurred.  The amount of the OTTI recognized in earnings is the difference between the amortized cost basis and the fair value of the security.

If the Company does not intend to sell the structured security, or it is not more likely than not that it will be required to sell the security before recovery of its amortized cost basis, the Company performs cash flow based testing to determine if the present value of its expected future cash flows discounted at the effective interest rate implicit in the security is less than its amortized cost basis.

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.  Losses incurred on the respective portfolios are based on loss models using assumptions about key systematic risks such as unemployment rates and housing prices and loan specific information such as delinquency rates and loan-to-value ratios.

OTTI was recognized during 2013 on LBSS that the Company had intent to sell in conjunction with the Sale Transaction, as defined in Note 1.  Refer to details in Note 19.  The OTTI balances under SSAP No. 43R where the present value of expected cash flows are less than amortized cost as of December 31, 2013 are also detailed in Note 19.

If the fair value of a debt security, other than those subject to SSAP No. 43R, is less than its amortized cost basis at the balance sheet date, the Company assesses whether the impairment is an OTTI.  When an OTTI has occurred, the amount of OTTI recognized in earnings is the difference between the amortized cost basis of the security and its fair value.

If the Company intends to sell the debt security, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis, an OTTI is considered to have occurred.  If the Company does not intend to sell the debt security, or it is not more likely than not that it will be required to sell the security before recovery of its amortized cost basis, the Company employs a portfolio monitoring process to identify securities that are OTTI.

The Company has a Credit Committee comprised of investment and finance professionals which meets at least quarterly to review individual issues or issuers that may be of concern.  In determining whether a security is OTTI, the Credit Committee considers the factors described below.  The process involves a quarterly screening of all securities where fair value is less than the amortized cost basis.  Discrete credit events, such as a ratings downgrade, are also used to identify securities that may be OTTI.  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.  In making these evaluations, the Credit Committee exercises considerable judgment.  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 Company’s amortized cost will be recovered through timely collection of all contractually specified cash flows, but that changes in issuer-specific facts and circumstances require monitoring on a quarterly basis.  No OTTI charge is recorded in the Company’s Statements of Operations for unrealized loss on securities related to these issuers.

 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

3.
DEBT SECURITIES AND PREFERRED STOCKS (CONTINUED)

“Watch List”- Management has concluded that the Company’s amortized cost will be recovered through timely collection of all contractually specified cash flows, 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.  No OTTI charge is recorded in the Company’s Statements of Operations for unrealized loss on securities related to these issuers.

“Impaired List”- Management has concluded that the Company has the intent to sell the security, it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, or the amortized cost basis of the security is not expected to be recovered due to expected delays or shortfalls in the contractually specified cash flows.  For these investments, the amount of OTTI recognized in the Company’s Statements of Operations is the difference between the amortized cost basis of the security and its fair value or discounted cash flows.

Should it be determined that a security is other than temporarily impaired, the Company records a loss through an appropriate adjustment in carrying value.  As of December 31, 2013 and 2012, the Company incurred write-downs of debt securities totaling $38.6 million and $367.6 million, respectively, including those subject to SSAP No. 43R and those which the Company had the intent to sell in connection with the Sale Transaction defined in Note 1.  Of these amounts, no OTTI was related to sub-prime as of December 31, 2013, as compared to $68.4 million as of December 31, 2012.  For the year ended December 31, 2011, the Company incurred write-downs of debt securities totaling $111.4 million, of which $10.1 million was related to sub-prime.

There are inherent risks and uncertainties in management’s evaluation of securities for OTTI.  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 OTTI.


 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

 
3.   DEBT SECURITIES AND PREFERRED STOCKS (CONTINUED)

The gross unrealized losses and fair value of investments, which have been deemed temporarily impaired, aggregated by investment category, number of securities and length of time that securities have been in an unrealized loss position at December 31, 2013 are as follows (in thousands except # of securities):

 
Less than 12 months
 
12 months or more
 
Total
     
Fair
 
Unrealized
     
Fair
 
Unrealized
     
Fair
 
Unrealized
 
#
 
Value
 
Losses
 
#
 
Value
 
Losses
 
#
 
Value
 
Losses
Debt Securities:
                                 
U.S. Governments
6
 
$   147,222
 
$      (6,975)
 
              -
 
$               -
 
$                -
 
6
 
$   147,222
 
$     (6,975)
                                   
U.S. States, Territories and
1
 
139
 
-
 
-
 
-
 
-
 
1
 
139
 
-
Possessions (Direct and Guaranteed)
                                 
                                   
 
35
 
59,777
 
(4,025)
 
1
 
81
 
(1)
 
36
 
59,858
 
(4,026)
U.S. Special Revenue and Special Assessment
                                 
Obligations and all Non-Guaranteed Obligations
                                 
of Agencies and Authorities of Governments and
                                 
Their Political Subdivisions
                                 
                                   
Industrial and Miscellaneous (Unaffiliated)
174
 
1,226,159
 
(55,717)
 
4
 
8
 
-
 
178
 
1,226,167
 
(55,717)
                                   
Hybrid Securities
6
 
44,479
 
(3,589)
 
1
 
5,670
 
(1,264)
 
7
 
50,149
 
(4,853)
Total debt securities
222
 
$1,477,776
 
$    (70,306)
 
            6
 
$      5,759
 
$     (1,265)
 
228
 
$1,483,535
 
$    (71,571)
                                   
Preferred Stocks
2
 
$     20,441
 
$      (1,558)
 
-
 
$             -
 
$               -
 
2
 
$     20,441
 
$     (1,558)

The gross unrealized losses and fair value of investments, which have been deemed temporarily impaired, aggregated by investment category, number of securities and length of time that securities have been in an unrealized loss position at December 31, 2012 are as follows (in thousands except # of securities):

 
Less than 12 months
 
12 months or more
 
Total
     
Fair
 
Unrealized
     
Fair
 
Unrealized
     
Fair
 
Unrealized
 
#
 
Value
 
Losses
 
#
 
Value
 
Losses
 
#
 
Value
 
Losses
Asset Backed Securities
3
 
$      2,951
 
$             (36)
 
3
 
$        6 ,247
 
$        (1,403)
 
6
 
$      9,198
 
$     (1,439)
                                   
Commercial Mortgage Backed Securities
2
 
6,852
 
(63)
 
6
 
9,043
 
(7,046)
 
8
 
15,895
 
(7,109)
                                   
Corporate
52
 
220,145
 
(9,731)
 
18
 
116,941
 
(15,880)
 
70
 
337,086
 
(25,611)
                                   
Residential Mortgage Backed Securities
1
 
84
 
(1)
 
7
 
6,229
 
(24)
 
8
 
6,313
 
(25)
                                   
U.S. State, Municipals and Political Subdivisions
1
 
234
 
(14)
 
-
 
-
 
-
 
1
 
234
 
(14)
U.S. Treasury and Agency
3
 
208,831
 
(954)
 
-
 
-
 
-
 
3
 
208,831
 
(954)
Total
62
 
$   439,097
 
$    (10,799)
 
34
 
$   138,460
 
$    (24,353)
 
96
 
$   577,557
 
$    (35,152)

As summarized in the table below, the Company had indirect exposure to sub-prime loans with book adjusted carrying value of $1.5 million as of December 31, 2013.  This represented approximately two-tenths of a percent of the Company’s total invested assets. In terms of managing and mitigating sub-prime mortgage risk, the Company’s overall exposure to these investments was minimal, as shown below (in thousands):
       
Book/Adjusted
   
       
Carrying Value
   
       
(excluding
   
Type
 
Actual Cost
 
interest)
 
Fair Value
Residential mortgage backed securities
 
$          1,135
 
$          1,135
 
$          1,132
Collateralized debt obligations
 
404
 
404
 
400
   
$          1,539
 
$          1,539
 
$          1,532

 
 

 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

3.
DEBT SECURITIES AND PREFERRED STOCKS (CONTINUED)

As summarized in the table below, the Company had indirect exposure to residential sub-prime and Alt-A loans with book adjusted carrying values of $122.9 million and $81.9 million, respectively, as of December 31, 2012.  This represented approximately 2.0% of the Company’s total invested assets. Alt-A loans are generally residential loans made to borrowers with credit profiles that are stronger than sub-prime but weaker than prime. Of these investments 96.2 % were issued before 2007 and 65.0% have a NAIC 1 rating (in thousands).

Type
 
Actual Cost
 
Book Adjusted
Carrying Value
(excluding interest)
Fair Value
Sub-prime: Residential asset backed securities
 
 $      122,907
 
 $           122,873
 
 $        123,665
Alt-A loans: Residential asset backed securities
 
           81,893
 
                81,918
 
             81,974
   
 $      204,800
 
 $           204,791
 
 $        205,639
             
There were no credit impairments recorded in 2013 on LBSS held as of December 31, 2013 pursuant to SSAP No. 43R.

4.
MORTGAGE LOANS

The Company invests in commercial first mortgage loans throughout the United States.  Investments are diversified by property type and geographic area.  The Company monitors the condition of the mortgage loans in its portfolio.  In those cases where mortgages have been restructured, appropriate allowances for losses have been made.  In those cases where, in management’s judgment, the mortgage loans’ values are impaired, appropriate losses are recorded.




 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

4.
MORTGAGE LOANS (CONTINUED)

The following table shows the geographical distribution of the statement value of the mortgage loans portfolio for the years ended December 31:

(In Thousands)
2013
 
2012
Alabama
$          9,228
 
$        10,539
Alaska
5,111
 
5,286
Arizona
14,286
 
15,908
California
52,347
 
54,122
Colorado
22,198
 
11,412
District of Columbia
12,043
 
12,404
Florida
84,375
 
58,522
Georgia
20,220
 
22,376
Idaho
1,748
 
1,798
Illinois
35,545
 
35,002
Indiana
1,622
 
1,878
Iowa
-
 
64
Kansas
1,627
 
1,707
Kentucky
18,122
 
19,479
Louisiana
9,734
 
11,765
Maine
-
 
633
Maryland
13,562
 
12,476
Massachusetts
5,011
 
11,239
Michigan
8,363
 
8,610
Minnesota
17,138
 
12,529
Missouri
34,663
 
36,711
Mississippi
3,100
 
3,193
Montana
1,495
 
1,588
Nebraska
2,241
 
2,386
Nevada
-
 
7,779
New Jersey
7,232
 
16,040
New Mexico
5,274
 
8,045
New York
97,390
 
114,727
North Carolina
21,028
 
22,914
North Dakota
249
 
566
Ohio
40,080
 
42,028
Oklahoma
483
 
1,215
Oregon
14,265
 
17,966
Pennsylvania
34,515
 
39,167
Rhode Island
552
 
729
South Carolina
23,771
 
25,064
Tennessee
10,651
 
14,905
Texas
84,865
 
105,580
Utah
23,984
 
25,682
Virginia
3,371
 
3,721
Washington
11,925
 
20,793
West Virginia
3,663
 
3,867
Wisconsin
2,784
 
3,043
General allowance for loan loss
(11,552)
 
(10,846)
Total Mortgage Loans on Real Estate
$      748,309
 
$      814,612

 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

4.
MORTGAGE LOANS (CONTINUED)

The Company had no outstanding mortgage loan commitments on real estate as of December 31, 2013 and 2012.

The Company originated one mortgage loan with a total cost of $15.9 million during the year ended December 31, 2013 with a rate of 4.54% and originated ten commercial mortgage loans with a total cost of $14.1 million during the year ended December 31, 2012 with rates ranging from 3.9% to 7.5%.  During the years ended December 31, 2013 and 2012, the Company did not reduce interest rates on any outstanding mortgage loans.  Mortgage loans are collateralized by the related properties and generally are no more than 75% of the properties’ value at the time the original loan is made.

A loan is considered impaired when it is probable that the principal or interest is not collectible in accordance with the contractual terms of the loan.  The allowance for credit losses is estimated using the present value of expected cash flows discounted at the loan’s effective interest rate or the fair value of the collateral, if the loan is collateral dependent.  A specific allowance for loan loss is established for an impaired loan if the present value of expected cash flows discounted at the loan’s effective interest rate, or the fair value of the loan collateral, less cost to sell, is less than the recorded amount of the loan.  The specific allowance for loan loss was $4.2 million and $4.9 million at December 31, 2013 and 2012, respectively.  A general allowance for loan loss is established based on an assessment of past loss experience on groups of loans with similar characteristics and current economic conditions.  The general allowance for loan loss was $11.5 million and $10.8 million at December 31, 2013 and 2012, respectively.  While management believes that it uses the best information available to establish the allowances, future adjustments may become necessary if economic conditions differ from the assumptions used in calculating them. At December 31, 2013, the Company individually and collectively evaluated loans with a gross carrying value of $764.0 million and $747.8 million, respectively.  At December 31, 2012, the Company individually and collectively evaluated loans with a gross carrying value of $830.3 million and $813.3 million, respectively.

As of December 31, 2013 the Company held 14 restructured loans with a gross book value of $34.9 million.  Should the Company hold any troubled debt, the Company may modify the terms of a loan by adjusting the interest rate, extending the maturity date, or both.

Delinquency status is determined based upon the occurrence of a missed contract payment.  There were no loans past due greater than 90 days at December 31, 2013 and 2012.

The Company accrues interest income on impaired loans to the extent it is deemed collectible.  Otherwise, receipts on non-performing loans are not recognized as interest income until the loan is no longer impaired, is sold, or is otherwise made whole.  Any cash collected during the period where the loan is impaired is applied to lower its carrying value.







 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

4.
MORTGAGE LOANS (CONTINUED)

Other information is as follows:

Age Analysis of Mortgage Loans:

     
Residential
 
Commercial
       
 
Farm
 
Insured
 
All Other
 
Insured
 
All Other
 
Mezzanine
 
Total
(In Thousands)
                         
Current Year
                         
 
Recorded Investment (All)
                         
   
Current
$     -
 
$        -
 
$                  -
 
$        -
 
$755,805
 
$              -
 
$755,805
     
30 - 59 Days Past Due
-
 
-
 
-
 
-
 
8,231
 
-
 
8,231
     
60 - 89 Days Past Due
-
 
-
 
-
 
-
 
-
 
-
 
-
     
90 - 179 Days Past Due
-
 
-
 
-
 
-
 
-
 
-
 
-
     
180 + Days Past Due
-
 
-
 
-
 
-
 
-
 
-
 
-
                           
 
Accruing Interest 90-179 Days Past Due
                         
   
Recorded Investment
$     -
 
$        -
 
$                  -
 
$        -
 
$            -
 
$              -
 
$           -
   
Interest Accrued
-
 
-
 
-
 
-
 
-
 
-
 
-
                           
 
Accruing Interest 180+ Days Past Due
                         
   
Recorded Investment
$     -
 
$        -
 
$                  -
 
$        -
 
$            -
 
$              -
 
$           -
   
Interest Accrued
-
 
-
 
-
 
-
 
-
 
-
 
-
                           
 
Interest Reduced
                         
   
Recorded Investment
$     -
 
$        -
 
$                  -
 
$        -
 
$            -
 
$              -
 
$           -
   
Number of Loans
-
 
-
 
-
 
-
 
-
 
-
 
-
   
Percent Reduced
            0%
 
           0%
 
            0%
 
            0%
 
            0%
 
            0%
 
            0%
                           
Prior Year
                         
 
Recorded Investment
                         
   
Current
$     -
 
$        -
 
$                  -
 
$        -
 
$830,313
 
$              -
 
$830,313
     
30 - 59 Days Past Due
-
 
-
 
-
 
-
 
-
 
-
 
-
     
60 - 89 Days Past Due
-
 
-
 
-
 
-
 
-
 
-
 
-
     
90 - 179 Days Past Due
-
 
-
 
-
 
-
 
-
 
-
 
-
     
180 + Days Past Due
-
 
-
 
-
 
-
 
-
 
-
 
-
                           
 
Accruing Interest 90-179 Days Past Due
                         
   
Recorded Investment
$     -
 
$        -
 
$                  -
 
$        -
 
$            -
 
$              -
 
$           -
   
Interest Accrued
-
 
-
 
-
 
-
 
-
 
-
 
-
                           
 
Accruing Interest 180+ Days Past Due
                         
   
Recorded Investment
$     -
 
$        -
 
$                  -
 
$        -
 
$            -
 
$              -
 
$           -
   
Interest Accrued
-
 
-
 
-
 
-
 
-
 
-
 
-
                           
 
Interest Reduced
                         
   
Recorded Investment
$     -
 
$        -
 
$                  -
 
$        -
 
$            -
 
$              -
 
$           -
   
Number of Loans
-
 
-
 
-
 
-
 
-
 
-
 
-
   
Percent Reduced
            0%
 
            0%
 
            0%
 
            0%
 
            0%
 
            0%
 
            0%


 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

4.
MORTGAGE LOANS (CONTINUED)

Investment in Impaired Loans With or Without Allowance for Credit Losses:

     
Residential
 
Commercial
       
 
Farm
 
Insured
 
All Other
 
Insured
 
All Other
 
Mezzanine
 
Total
(In Thousands)
                         
Current Year
                         
 
With Allowance for Credit Losses
$     -
 
$        -
 
$                -
 
$        -
 
$  20,454
 
$              -
 
$  20,454
 
No Allowance for Credit Losses
$     -
 
$        -
 
$                -
 
$        -
 
$  34,918
 
$              -
 
$  34,918
                           
Prior Year
                         
 
With Allowance for Credit Losses
$     -
 
$        -
 
$                -
 
$        -
 
$  17,016
 
$              -
 
$  17,016
 
No Allowance for Credit Losses
$     -
 
$        -
 
$                -
 
$        -
 
$           -
 
$              -
 
$            -

Investment in Impaired Loans - Average Recorded Investment, Interest Income Recognized, Recorded Investment on Nonaccrual Status and Amount of Interest Income Recognized Using a Cash-Basis Method of Accounting:

     
Residential
 
Commercial
       
 
Farm
 
Insured
 
All Other
 
Insured
 
All Other
 
Mezzanine
 
Total
(In Thousands)
                         
Current Year
                         
 
Average Recorded Investment
$     -
 
$        -
 
$           -
 
$        -
 
$   2,517
 
$              -
 
$    2,517
 
Interest Income Recognized
-
 
-
 
-
 
-
 
204
 
-
 
204
 
Recorded Investments on
                         
 
Nonaccrual Status
-
 
-
 
-
 
-
 
20,454
 
-
 
20,454
 
Amount of Interest Income
                         
 
Recognized Using a Cash-
                         
 
Basis Method of Accounting
-
 
-
 
-
 
-
 
-
 
-
 
-
                           
Prior Year
                         
 
Average Recorded Investment
$     -
 
$        -
 
$           -
 
$        -
 
$   1,702
 
$              -
 
$    1,702
 
Interest Income Recognized
-
 
-
 
-
 
-
 
-
 
-
 
-
 
Recorded Investments on
                         
 
Nonaccrual Status
-
 
-
 
-
 
-
 
17,016
 
-
 
17,016
 
Amount of Interest Income
                         
 
Recognized Using a Cash-
                         
 
Basis Method of Accounting
-
 
-
 
-
 
-
 
-
 
-
 
-

Allowance for Credit Losses:

 
2013
 
2012
 
2011
(In Thousands)
         
Balance at beginning of period
$               15,701
 
$               34,498
 
$               30,145
Additions charged to operations
1,851
 
5,872
 
15,479
Direct write-downs charged against the allowances
(96)
 
(15,715)
 
(4,037)
Recoveries of amounts previously charged off
(1,729)
 
(8,954)
 
(7,089)
Balance at end of period
$               15,727
 
$              15,701
 
$               34,498

 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

4.
MORTGAGE LOANS (CONTINUED)

The credit quality indicator for the Company’s mortgage loans is an internal risk-rated measure based on the borrowers’ ability to pay and the value of the underlying collateral.  The internal risk rating is related to an increasing likelihood of loss, with a low quality rating representing the category in which a loss is first expected.  The following table shows the recorded investment of the Company’s mortgage loans, net of allowances for credit losses, disaggregated by credit quality indicator as of December 31, 2013 and 2012:

(In Thousands)
       
         
Internal Risk Rating
 
2013
 
2012
AAA
 
$                      -
 
$                     -
AA
 
26,964
 
25,920
A
 
25,763
 
10,478
BBB
 
131,846
 
199,344
BB and Lower
 
524,091
 
577,555
Impaired
 
55,372
 
17,016
Total
 
$          764,036
 
$         830,313
         
Total allowance for loan loss
 
(15,727)
 
(15,701)
Mortgage Loans on Real Estate
 
$          748,309
 
$         814,612

The following table provides an aging of past due commercial mortgage loans as of December 31, 2013 and 2012, based on the recorded investment net of allowances for credit losses.

(In Thousands)
       
         
   
2013
 
2012
Current
 
$          755,805
 
$           830,313
         
30-59 Days Past Due
 
8,231
 
-
60-89 Days Past Due
 
-
 
-
Greater Than 90 Days - Accruing
 
-
 
-
Greater Than 90 Days - Not Accruing
 
-
 
-
Total Past Due
 
$          8,231
 
$                      -
         
Total allowance for loan loss
 
(15,727)
 
(15,701)
Total Mortgage Loans on Real Estate
 
$          748,309
 
$           814,612


 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


5.
REAL ESTATE

The Company held four real estate properties for sale at the end of the statement period.  One of the properties was originally acquired by foreclosure from the Company’s mortgage portfolio and the remaining three were acquired through purchase. The properties are expected to be sold within the next statement period.

The Company sold five properties during 2013 that resulted in net realized gains of $44.3 million.  This amount is shown in the Company's Statement of Operations as part of net realized capital gains and losses.  All five properties were disposed of to a former related party in conjunction with the Sale Transaction defined in Note 1.

The Company sold five properties during 2012 including four properties previously impaired that resulted in total net realized gains of $3.4 million as compared to one property sold during 2011 for a net loss of $0.1 million.  These amounts are shown in the Company's Statement of Operations as part of net realized capital gains and losses.

The Company recognized four impairment losses on real estate as of December 31, 2012, as compared to no impairment losses recorded for 2013 or 2011.  All four properties were real estate moved to held for sale during 2012 and were impaired for $1.5 million based on estimated fair value less costs to sell.  The properties were sold during the year for a total realized gain of $0.7 million.  The impairments are shown in the Company's Statement of Operations as part of net realized capital gains and losses.

6.
INVESTMENT GAINS AND LOSSES

Realized capital gains and losses on debt securities, preferred stock, mortgages and interest rate swaps which relate to changes in levels of interest rates are charged or credited to the IMR, net of tax, and amortized into income over the remaining contractual life of the security sold.  Realized gains and losses from the remaining investments are reported, net of tax, on the Statement of Operations, but are not included in the computation of net gain from operations.

Changes in unrealized gains and losses from investments are reported as a component of Capital Stock and Surplus, net of deferred income taxes.






 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

6.
INVESTMENT GAINS AND LOSSES (CONTINUED)

 
Years Ended December 31,
 
2013
 
2012
 
2011
(In Thousands)
         
Realized gains (losses):
         
 
Debt securities
$     202,265
 
$     (341,475)
 
$       (38,604)
 
Preferred stocks
-
 
71
 
(111)
 
Common stocks
761
 
917
 
67
 
Common stocks of affiliates
50,283
 
-
 
(9)
 
Mortgage loans
246
 
(25,080)
 
(7,140)
 
Real estate
44,289
 
1,924
 
(77)
 
Cash, cash equivalents and short-terms
108
 
(1)
 
15
 
Other invested assets
(1,965)
 
476
 
(223)
 
Derivative instruments
(185,784)
 
(38,009)
 
(48,513)
Subtotal
110,203
 
(401,177)
 
(94,595)
Capital gains tax expense (benefit)
28,847
 
(2,216)
 
(1,288)
Net realized gains (losses)
81,356
 
(398,961)
 
(93,307)
(Gains) losses transferred to IMR (net of taxes)
31,017
 
(44,975)
 
(38,415)
Total
$     112,373
 
$     (443,936)
 
$     (131,722)
           

 
Years Ended December 31,
 
2013
 
2012
 
2011
(In Thousands)
         
Changes in net unrealized capital (losses)
         
gains, net of deferred income tax:
         
 
Debt securities
  $         (2,692)
 
$        162,954
 
$          19,089
 
Common stocks
-
 
(25)
 
(166)
 
Common stocks of affiliates
7,614
 
46,080
 
12,375
 
Mortgage loans
(17)
 
12,218
 
(2,829)
 
Derivative instruments
(237,782)
 
(61,068)
 
205,495
 
Other invested assets
(47)
 
(1,596)
 
(3,953)
Total
$       (232,924)
 
$        158,563
 
$        230,011
           

Deferred tax netted in unrealized capital (losses) gains above, except for common stock of affiliates and other affiliated invested assets, was ($129.5) million, $60.6 million and $117.2 million at December 31, 2013, 2012 and 2011, respectively.


 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


7.
NET INVESTMENT INCOME

Net investment income consisted of:

 
Years Ended December 31,
(In Thousands)
2013
 
2012
 
2011
           
Debt securities (unaffiliated)
$       260,539
 
$      357,153
 
$      420,578
Preferred stocks
1,342
 
1,336
 
1,139
Common stocks
13
 
-
 
-
Mortgage loans
48,116
 
56,621
 
63,059
Real estate
19,232
 
28,693
 
25,810
Contract loans
23,299
 
24,446
 
31,580
Cash, cash equivalents and short-terms
14,023
 
510
 
819
Derivative instruments
(616,216)
 
(394,532)
 
131,554
Other invested assets
9,854
 
5,660
 
8,818
Other investment income
3,141
 
554
 
3,446
Gross investment (loss) income
(236,657)
 
80,441
 
686,803
           
Interest expense on surplus notes
43,260
 
42,752
 
42,583
Investment expenses and other interest expense
         
 on borrowed money
38,744
 
37,076
 
38,863
Net investment (loss) income
$     (318,661)
 
$             613
 
$      605,357
           

The Company’s policy is to exclude investment income due and accrued with amounts that are over 90 days past due or where the collection of interest is uncertain.  The total amount of investment income due and accrued excluded from surplus for the years ended December 31, 2013, 2012 and 2011 was $4.0 thousand, $0.2 million, and $0.1 million, respectively.

8.
DERIVATIVES

The Company uses derivatives for hedging or replication purposes only.  Interest rate swaps are mainly employed for duration matching purposes.  Combination swaps, comprised of currency and equity returns in combination with interest rate swaps, were used to hedge the Company’s European Medium Term Note program, which matured in 2011.  Beginning in the second quarter of 2005 and continuing into 2006, the Company marketed guaranteed investment contracts to unrelated third parties and entered into funding agreements and interest rate swaps as part of this guaranteed investment program.  The interest rate swaps allowed the Company to lock U.S. dollar fixed rate payments for the life of the contracts.  The Company designated existing interest rate swaps as a cash flow hedge of variable cash payments to be made under the respective funding agreements.  To qualify for hedge accounting treatment, the swap had to be highly effective in mitigating the designated risk of the hedged item.  Effectiveness of the hedge was formally assessed and documented at the inception of each hedging relationship and quarterly throughout the life of the hedging relationship.



 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

8.
DERIVATIVES (CONTINUED)

Options are used to hedge equity exposure embedded in contracts issued by the Company and to hedge equity exposure embedded in fixed and variable annuity products.  Futures are used to hedge equity exposure included in the equity indexed annuities, as well as the guaranteed minimum death and living benefit features of the Company’s variable annuities. Currency forwards and swaps are used to hedge changes in foreign currency exchange rates.

Interest rate swaps as well as options, swaptions, and currency swaps are reported at fair value with the unrealized gain or loss reported as an adjustment to surplus.  All futures are marked to market and settled on a daily basis with the gain or loss reported as a component of investment income.  CVAs are necessary to properly reflect the component of fair value of derivative instruments that arises from default risk.  CVAs are based on a methodology that uses CDS spreads as a key input in determining an implied level of expected loss over the total life of the derivative contact. Where no observable CDS spreads are available, the counterparty or Company credit spreads derived from bond yields are used instead.  CVAs are intended to achieve a fair value of the underlying contracts and are normally based on publicly-available information. The CVAs also take into account contractual factors designed to reduce the Company’s credit exposure to each counterparty, such as collateral and legal rights of offset.

CVAs are not recorded for interest rate swaps used as cash flow hedges when proven highly effective.  The Company accounts for its interest rate swaps used as cash flow hedges in accordance with the guidance in SSAP No. 86, Accounting for Derivative Instruments and Hedging, Income Generation, and Replication (Synthetic Asset) Transactions, (“SSAP No. 86”).  In accordance with SSAP No. 86, derivatives that qualify for hedge accounting are recognized in a manner consistent with the hedged item.  The interest rate swaps employed by the Company were designated as cash flow hedges of specific funding agreements; and accordingly, if proven highly effective, the swap will be reported at amortized cost, consistent with the hedged funding agreement.  At initial designation, the fair values of the swaps were recorded into surplus with subsequent amortization into income through the maturity date of the funding agreements.  In the event that a swap is not proven highly effective, it will be recorded at fair value with unrealized gains/losses recorded to surplus. At December 31, 2012, all hedges were highly effective.

Market risk is the risk of loss due to market price changes of the derivative instrument or underlying security or index.  To mitigate this risk the Company matches the market sensitivity of the hedge with the market sensitivity of the underlying asset or liability being hedged.

Credit risk is the counterparty credit risk or risk of loss as a result of default or a decline in market value stemming from a credit downgrade of the counterparty to the derivative transaction.  The Company minimizes this risk by entering into derivatives only with counterparties that meet certain criteria, by utilizing standardized agreements, and by limiting counterparty concentrations.

All derivative transactions are covered under standardized contractual agreements with counterparties, all of which include credit-related contingent features.  Certain counterparty relationships also may include supplementary agreements with tailored terms, such as additional triggers for early terminations, acceptable practices related to cross-transaction netting, and minimum thresholds for determining collateral.







 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

8.
DERIVATIVES (CONTINUED)

Credit-related triggers include failure to pay or deliver on an obligation past certain grace periods, bankruptcy or the downgrade of credit ratings to below a stipulated level.  These triggers apply to both the Company and its counterparty.

At December 31, 2013 and 2012, the Company pledged $371.3 million and $185.2 million, respectively, in U.S. Treasury securities as collateral to counterparties.  At December 31, 2013 and 2012, counterparties pledged to the Company $86.8 million and $175.2 million, respectively, in collateral comprised of cash and U.S. Treasury securities.

Derivatives are carried in accordance with SSAP No. 86.  The Company’s underlying notional or principal amounts associated with open derivatives positions were as follows:

 
Outstanding at
 
December 31, 2013
 
(per SSAP No. 86)
               
(In Thousands)
Notional
 
Fair Value/
       
 
Principal
 
Statement
 
Amortized
 
Unrealized
 
Amounts
 
Value
 
Cost
 
Gain (Loss)
               
Non-hedging interest rate swaps
$    3,658,000
 
$     (270,235)
 
$                 -
 
$     (270,235)
Currency swaps
67,500
 
(8,553)
 
-
 
(8,553)
Payor swaptions
3,040,000
 
14,432
 
11,911
 
2,521
Receiver swaptions
75,000
 
412
 
2,126
 
(1,714)
Equity index options
2,361,498
 
122,790
 
94,785
 
28,005
Total
$    9,201,998
 
$     (141,154)
 
$     108,822
 
$     (249,976)
               

 
Outstanding at
 
December 31, 2012
 
(per SSAP No. 86)
               
(In Thousands)
Notional
 
Fair Value/
       
 
Principal
 
Statement
 
Amortized
 
Unrealized
 
Amounts
 
Value
 
Cost
 
Gain (Loss)
               
Non-hedging interest rate swaps
$    5,618,430
 
$      148,367
 
$                  -
 
$      148,367
Hedging interest rate swaps
900,000
 
(33,863)
 
(7,065)
 
(26,798)
Currency swaps
67,500
 
(9,149)
 
-
 
(9,149)
Payor swaptions
3,115,000
 
12,994
 
14,037
 
(1,043)
Equity index options
861,101
 
35,432
 
57,766
 
(22,334)
Total
$  10,562,031
 
$      153,781
 
$        64,738
 
$        89,043
               



 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


8.
DERIVATIVES (CONTINUED)

At December 31, 2013 and 2012, open futures contracts had a notional value of $3,803.8 million and $5,223.7 million and a fair value of $(6.2) million and $(50.2) million, respectively.  These amounts do not include the component of variation margin that has already been cash settled.

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 arising from this contingency is unlikely.

On July 31, 2013, the Company consented to a Novation Agreement between the U.S. Branch, a former affiliate, and Barbco 3.  Pursuant to the Novation Agreement, Barbco 3 was substituted as reinsurer under a June 12, 2000 reinsurance agreement between the Company and the U.S. Branch, whereby the Company ceded to the U.S. Branch, on a yearly renewable term basis, certain risks under group flexible premium variable universal life policies.  Refer to Note 2 for further details.

The Company manages a closed block of SPWL insurance policies, a retirement-oriented tax-advantaged life insurance product.  The Company discontinued sales of SPWLs in response to certain tax law changes in the 1980s.  The Company had SPWL policyholder balances of $1.3 billion and $1.4 billion as of December 31, 2013 and 2012, respectively.  On December 31, 2003, this entire block of business was reinsured on a funds withheld basis with SLOC, a former affiliate company.  As discussed in Note 2, in connection with the Sale Transaction, the Company recaptured 100% of the risks reinsured pursuant to this agreement.  The recapture occurred during the first quarter of 2013.

The Company  has a reinsurance agreement with Barbco 3, an affiliate, to cede all of the risks associated with certain in-force corporate and bank-owned variable universal life and private placement variable universal life policies on a combination coinsurance and coinsurance with funds-withheld.  This agreement also provided for the ceding of new business written after the effective date.

Effective January 1, 2010, the Company and Barbco 3 amended the agreement to include coverage of certain corporate and bank-owned variable universal life and private placement variable universal life insurance cases sold between December 31, 2009 and March 31, 2010, inclusive.  Reinsurance coverage continued for all cases sold prior to April 1, 2010.  However, cases sold on or after April 1, 2010 have not been reinsured.  This amendment also enabled the Company to discontinue reinsuring a portion of the covered business that was previously reinsured on a modified coinsurance basis, effective April 1, 2010.  The discontinuance of the business reinsured on a modified coinsurance basis did not have a material impact on the Company’s financial statements.

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




 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


9.
REINSURANCE (CONTINUED)

The Company has agreements with unrelated companies that provide for reinsurance of guaranteed minimum death benefits under certain variable annuity contracts.  These amounts are reinsured on a monthly renewable term basis.

The effects of reinsurance were as follows:

 
Years Ended December 31,
(In Thousands)
2013
 
2012
 
2011
           
Premiums and annuity considerations:
         
 
Direct
$        238,879
 
$       453,109
 
$     3,349,441
 
Recaptured amount from former affiliate - SPWL
1,331,908
 
-
 
-
 
Ceded - Affiliated (former affiliate effective August 2, 2013)
(18,449)
 
-
 
-
 
Ceded - Affiliated
20,104
 
(24,101)
 
(98,654)
 
Ceded - Non-Affiliated
(13,067)
 
(13,093)
 
(20,568)
Net premiums and annuity considerations
$     1,559,375
 
$       415,915
 
$     3,230,219
           
Insurance and other individual policy benefits and claims:
         
 
Direct
$        938,717
 
$       968,595
 
$        957,552
 
Assumed - Non-Affiliated
9,254
 
5,503
 
6,679
 
Recaptured amount from former affiliate - SPWL
(27,904)
 
-
 
-
 
Ceded - Affiliated (former affiliate effective August 2, 2013)
(19,825)
 
-
 
-
 
Ceded - Affiliated
(22,462)
 
(145,408)
 
(147,092)
 
Ceded - Non-Affiliated
(29,977)
 
(24,739)
 
(9,442)
Net policy benefits and claims
$        847,803
 
$       803,951
 
$        807,697
           







 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


10.
RESERVES FOR LIFE CONTRACTS AND DEPOSIT TYPE CONTRACTS

The reserves for life insurance and annuity contracts are computed in accordance with presently accepted actuarial standards, and are based on actuarial assumptions and methods (including use of published mortality tables and prescribed interest rates and methodologies) which produce reserves at least as great as those required by law and contract provisions.

Deduction of deferred fractional premiums upon death of the insured and return of any portion of the final premium for the period beyond the date of death are not applicable to the business of the Company.  Surrender values are not promised in excess of reserves legally computed.

For policies with annual extra premiums, additional reserves are held equal to one-half the extra premium.  Extra premiums on single premium policies are amortized over ten years.  Policies issued with premiums corresponding to ages higher than the true ages are valued at the rated-up ages.  Policies issued subject to
a lien are valued as if the full amount were payable without any deduction.  For interest sensitive policies, substandard mortality is reflected in the cost of insurance charges.

As of December 31, 2013 and 2012, the Company had $16.0 million and $18.7 million, respectively, of insurance in force (direct and assumed), for which gross premiums were less than the net premiums according to the standard of valuation required by the State of Delaware.  Reserves (direct and assumed) to cover the above insurance as of December 31, 2013 and 2012 totaled $2.6 million and $3.2 million, respectively.

The Tabular Interest has been determined by formula as described in the NAIC instructions, except for some business for which the Tabular Interest is determined from basic policy data for reserving.  The Tabular less Actual Reserve Released has been determined by formula as described in the NAIC instructions. The Tabular Cost has been determined by formula as described in the NAIC instructions, except for universal life products which use cost of insurance and some business which uses basic policy data for reserving.  The Tabular Interest on funds not involving life contingencies was determined from the interest credited to the deposits, except for certain guaranteed interest contracts for which Tabular Interest on funds is determined by formula as described in the instructions.  Other than normal updates of reserves, the only significant reserve changes as of December 31, 2013 and 2012 were the changes in additional reserves held due to asset adequacy analysis testing.  Direct asset adequacy reserves were $236.4 million at December 31, 2013 and 2012, respectively.






 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


11.
WITHDRAWAL CHARACTERISTICS OF ANNUITY RESERVES AND DEPOSIT LIABILITIES

The withdrawal characteristics of general account and separate account annuity reserves and deposits are as follows:

(In Thousands)
General
Account
 
Separate
Account with
Guarantees
 
Separate Account
Nonguaranteed
 
Total
12/31/2013
 
% of Total
 
                   
Subject to discretionary withdrawal:
                 
 
With fair value adjustment
$               -
 
$1,223,241
 
$                -
 
$1,223,241
 
5%
 
At book value less current surrender charge of 5% or more
1,746,504
 
-
 
-
 
1,746,504
 
7%
 
At fair value
-
 
-
 
18,451,703
 
18,451,703
 
76%
 
Total with adjustment or at fair value
$1,746,504
 
$1,223,241
 
$18,451,703
 
$21,421,448
 
88%
 
At book value without adjustment
                 
 
(minimal or no charge or adjustment)
$  2,127,038
 
$                -
 
$                -
 
    $        2,127,038
 
9%
Not subject to discretionary withdrawal
827,001
 
-
 
27,588
 
854,589
 
3%
Total (Gross: Direct +Assumed)
4,700,543
 
1,223,241
 
18,479,291
 
24,403,075
 
100%
Reinsurance ceded
30,022
 
-
 
-
 
30,022
   
Total (net)
$4,670,521
 
$1,223,241
 
$18,479,291
 
$24,373,053
   

(In Thousands)
General
Account
 
Separate
Account with
Guarantees
 
Separate Account
Nonguaranteed
 
Total
12/31/2012
 
 
% of Total
 
                   
Subject to discretionary withdrawal:
                 
 
With fair value adjustment
$               -
 
        $   1,644,686
 
$                -
 
  $   1,644,686
 
6%
 
At book value less current surrender charge of 5% or more
2,204,320
 
-
 
-
 
          2,204,320
 
9%
 
At fair value
-
 
-
 
18,324,602
 
        18,324,602
 
70%
 
Total with adjustment or at fair value
$2,204,320
 
    $   1,644,686
 
    $18,324,602
 
 $     22,173,608
 
85%
 
At book value without adjustment
                 
 
(minimal or no charge or adjustment)
$2,099,491
 
$                -
 
$                -
 
$2,099,491
 
8%
Not subject to discretionary withdrawal
1,786,178
 
-
 
27,031
 
           1,813,209
 
7%
Total (Gross: Direct +Assumed)
6,089,989
 
           1,644,686
 
18,351,633
 
         26,086,308
 
100%
Reinsurance ceded
32,494
 
-
 
-
 
              32,494
   
Total (net)
 
$6,057,495
 
    $      1,644,686
 
$18,351,633
 
 $   26,053,814
   





 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

12.
SEPARATE ACCOUNTS

The Company has established unitized Separate Accounts applicable to various classes of contracts providing for variable benefits.  Contracts for which funds are invested in unitized variable Separate Accounts include individual and group life and annuity contracts.  The assets (securities) in these unitized accounts are carried at fair value and the investment risk associated with such assets is retained by the contractholder.  These variable products provide minimum death benefits, and in certain annuity contracts, minimum accumulation or withdrawal benefits.  The minimum guaranteed benefit reserves associated with the unitized Separate Accounts are reported in Aggregate reserves for life contracts in the Company’s Statements of Admitted Assets, Liabilities, and Capital Stock and Surplus.

The Company has also established non-unitized Separate Accounts for certain contracts that include a MVA feature associated with fixed rates, including for amounts allocated to the fixed portion of certain combination fixed and variable deferred annuity contracts.  The assets in the variable deferred annuity Separate Account are carried at fair value. For some MVA Contracts, the assets in the fixed deferred annuity account are carried on a general account basis.

The Company earns separate account fees for providing administrative services and bearing the mortality risks related to variable contracts.  Net investment income, capital gains and losses, and changes in mutual fund asset values on variable Separate Accounts are allocated to policyholders and therefore are not reflected in the Statements of Operations of the general account.
 
 
For the current reporting year, the Company reported assets and liabilities from the following products into a Separate Account:

 
·
Sun Life (U.S.) Variable Life
 
·
Sun Life (U.S.) Variable Annuity
 
·
Sun Life (U.S.) Market Value Adjusted Annuity

A majority of the variable Separate Account assets are legally insulated from the Company’s general account whereas the non-unitized Separate Account assets are not legally insulated.  The legal insulation of the Separate Account assets prevents such assets from being generally available to satisfy claims resulting from the general account.  In accordance with the domiciliary state procedures for approving items within the Separate Account, the Separate Account classification of legally insulated, vs. not legally insulated, is supported by section 2932 of the Delaware Insurance Code.

The Company maintained separate account assets totaling $30,514.7 million and $31,948.7 million as of December 31, 2013 and 2012, respectively.  As of December 31, 2013 and 2012, the Company’s separate account assets included legally insulated assets of $28,916.1 million and $30,012.1 million, respectively.



 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


12.
SEPARATE ACCOUNTS (CONTINUED)

The assets legally insulated and non-legally insulated from the general account as of December 31, 2013 are attributed to the following products/transactions:

Product / Transactions
Legally Insulated
 
Non- Legally
 
Assets
 
Insulated Assets
       
(In millions)
     
Sun Life (U.S.) Variable Life
$          9,987.9
 
$                    -
Sun Life (U.S.) Variable Annuity
          18,928.2
 
-
Sun Life (U.S.) Market Value Adjusted Annuity
-
 
            1,598.6
Total
$        28,916.1
 
$          1,598.6

Separate account liabilities are determined in accordance with prescribed actuarial methodologies, which approximate the fair value of the related assets less applicable surrender charges.  The resulting surplus is recorded in the general account Statement of Operations as a component of Net Transfers (from) to Separate Accounts.  The variable Separate Accounts are non-guaranteed Separate Accounts, wherein the policyholder assumes substantially all the investment risks and rewards, and MVA Separate Accounts are guaranteed Separate Accounts, wherein the Company contractually guarantees either a minimum return or account value to the policyholder.  In accordance with the guarantees provided, if the investment proceeds are insufficient to cover the rate of return guaranteed for the product, the policyholder proceeds will be remitted by the general account.

The Company had $25,902.5 million and $25,687.6 million of non-guaranteed Separate Account reserves and $1,223.2 million and $1,644.7 million of guaranteed Separate Account reserves as of December 31, 2013 and 2012, respectively.

As of December 31, 2013 and 2012, the general account of the Company had a maximum guarantee for Separate Account liabilities of $20,132.6 million and $22,695.0 million, respectively.

To compensate the general account for the risk taken, the Separate Account paid risk charges of $238.7 million, $191.1 million and $182.3 million during the years ended December 31, 2013, 2012 and 2011, respectively.

For the years ended December 31, 2013, 2012 and 2011, the Company’s general account paid $115.6 million, $110.1 million and $88.4 million for Separate Account guarantees, respectively.

The Company does not engage in securities lending transactions within the Separate Account.



 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


12.
SEPARATE ACCOUNTS (CONTINUED)

An analysis of the separate account reserves as of December 31, 2013 is as follows:

(In Thousands)
Nonindexed
       
 
Guarantee
 
Nonguaranteed
   
 
Less than/
 
Separate
   
 
equal to 4%
 
Accounts
 
Total
Premiums, considerations
         
or deposits for year ended
         
12/31/2013
$            12,624
 
$         275,246
 
$         287,870
Reserves at 12/31/2013
         
For accounts with assets at:
         
Fair Value
296,456
 
25,902,465
 
26,198,921
Amortized Cost
926,785
 
-
 
926,785
Total Reserves
$       1,223,241
 
$    25,902,465
 
$    27,125,706
By withdrawal characteristics:
         
With FV adjustment
$      1,223,241
 
$                       -
 
$      1,223,241
At fair value
-
 
25,874,877
 
25,874,877
Subtotal
1,223,241
 
25,874,877
 
27,098,118
Not subject to discretionary
         
withdrawal
   
27,588
 
27,588
Total
$      1,223,241
 
$    25,902,465
 
$    27,125,706



 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

 
12.  SEPARATE ACCOUNTS (CONTINUED)

An analysis of the separate account reserves as of December 31, 2012 is as follows:

(In Thousands)
Nonindexed
       
 
Guarantee
 
Nonguaranteed
   
 
Less than/
 
Separate
   
 
equal to 4%
 
Accounts
 
Total
Premiums, considerations
         
or deposits for year ended
         
12/31/2012
$        (164,491)
 
$         635,210
 
$         470,719
Reserves at 12/31/2012
         
For accounts with assets at:
         
Fair Value
350,650
 
25,687,602
 
26,038,252
Amortized Cost
1,294,036
 
-
 
1,294,036
Total Reserves
$      1,644,686
 
$    25,687,602
 
$    27,332,288
By withdrawal characteristics:
         
With FV adjustment
$      1,644,686
 
$                       -
 
$      1,644,686
At fair value
-
 
25,660,571
 
25,660,571
Subtotal
1,644,686
 
25,660,571
 
27,305,257
Not subject to discretionary
         
withdrawal
   
27,031
 
27,031
Total
$      1,644,686
 
$    25,687,602
 
$    27,332,288

Below is the reconciliation of Net Transfers from Separate Accounts (from) to the Statement of Operations of the Separate Account Statement to the Statement of Operations of the Company:

 
Years Ended December 31,
(In Thousands)
2013
 
2012
 
2011
           
Transfers to Separate Accounts
$287,870
 
$470,719 
 
$2,734,402 
Transfers from Separate Accounts
(2,945,712)
 
(2,685,911)
 
(2,271,063)
Net Transfers (from) to Separate Accounts on the Statement of Operations
$(2,657,842)
 
$(2,215,192)
 
$463,339 



 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


13.
FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value is defined 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 minimize the use of unobservable inputs.

The Company has categorized its financial instruments into a three-level hierarchy based on the priority of the inputs to the valuation technique.  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.

Financial assets and liabilities recorded at fair value in the Company’s Statements of Admitted Assets, Liabilities, and Capital Stock and Surplus 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 exchange traded 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:

· Quoted prices for similar assets or liabilities in active markets,
· Quoted prices for identical or similar assets or liabilities in non-active markets,
· Inputs other than quoted market prices that are observable, and
 
· 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, certain ABS (including collateralized debt obligations, RMBS, CMBS), certain corporate debt, certain private equity investments and certain derivatives.




 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


13.
FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

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 opinions regarding the assumptions a market participant would use in pricing the asset or liability.  Generally, the types of assets and liabilities utilizing Level 3 valuations are certain ABS, RMBS, and CMBS, certain corporate debt, certain private equity investments, certain mutual fund holdings, and certain derivatives.

There were no significant changes made in valuation techniques during 2013 or 2012.

The Company’s assets and liabilities by classification measured at fair value as of December 31, 2013 were as follows:

(In Thousands)
             
Description for each class of asset or liability
Level 1
 
Level 2
 
Level 3
 
Total
Assets at fair value:
             
Debt securities - Unaffiliated (c)
       
 
   
 
Asset-backed securities
  $                  -
 
    $                    -
 
    $            1,637
 
$        1,637
 
Residential mortgage-backed securities
-
 
527
 
-
 
527
 
Commercial mortgage-backed securities
-
 
-
 
9,751
 
9,751
 
Industrial and miscellaneous
-
 
-
 
-
 
-
Derivative Assets (e)
             
 
Interest Rate contracts
904
 
50,473
 
-
 
51,377
 
Equity contracts
7,650
 
97,293
 
17,909
 
122,852
 
FX contracts
384
 
-
 
-
 
384
Separate Accounts assets (d)
21,817,296
 
5,663,362
 
585,422
 
28,066,080
Total assets at fair value
$  21,826,234
 
$  5,811,655
 
    $        614,719
 
$28,252,608
Liabilities at fair value:
             
Separate Accounts (d)
$               -
 
$   (23,791)
 
   $                    -
 
$   (23,791)
Derivative Liabilities (e)
             
 
Interest Rate contracts
(827)
 
(305,864)
 
-
 
(306,691)
 
Equity Contracts
(6,234)
 
-
 
-
 
(6,234)
 
FX contracts
(468)
 
(8,554)
 
-
 
(9,022)
Total liabilities at fair value
$        (7,529)
 
$ (338,209)
 
$                    -
 
$ (345,738)








 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


 
13.  FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

The Company’s assets and liabilities by classification measured at fair value as of December 31, 2012 were as follows:

(In Thousands)
             
Description for each class of asset or liability
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets at fair value:
             
Preferred stock - Unaffiliated (a)
             
 
Industrial and miscellaneous
$                    -
 
     $                  -
 
$                  -
 
$                     -
Common stock - Unaffiliated (b)
             
 
Industrial and miscellaneous
-
 
-
 
-
 
-
Debt securities - Unaffiliated (c)
             
 
Asset-backed securities
-
 
-
 
19,405
 
19,405
 
Residential mortgage-backed securities
-
 
37,869
 
6,486
 
44,355
 
Commercial mortgage-backed securities
-
 
13,718
     
13,718
 
Industrial and miscellaneous
-
 
-
 
-
 
-
Derivative Assets (e)
             
 
Interest Rate contracts
8
 
269,898
 
-
 
269,906
 
Equity contracts
36,780
 
4,563
     
41,343
 
FX contracts
839
 
337
 
-
 
1,176
Separate Accounts assets (d)
21,405,998
 
6,476,234
 
508,231
 
28,390,463
Total assets at fair value
$    21,443,625
 
$  6,802,619
 
$   534,122
 
$   28,780,366
Liabilities at fair value:
             
Separate Accounts (d)
$                    -
 
$      (58,247)
 
$                 -
 
$     (58,247)
Derivative Liabilities (e)
             
 
Interest Rate contracts
(3,353)
 
(108,873)
 
-
 
(112,226)
 
Equity Contracts
(51,763)
 
-
 
-
 
(51,763)
 
FX contracts
(1,849)
 
(9,149)
 
-
 
(10,998)
Total liabilities at fair value
$        (56,965)
 
$      (176,269)
 
$                 -
 
$      (233,234)


 
(a) Preferred stocks with NAIC designations between 4 and 6 are carried at the lower of amortized cost or fair value.  Where fair value is less than amortized cost, amounts are included in the table above.

(b) Common stocks are carried at fair value.

 
(c) Debt securities with NAIC designations of 6 are carried at the lower of amortized cost or fair value. Where fair value is less than amortized cost, amounts are included in the table above.

 
(d) Separate Account assets include invested assets carried at fair value, but exclude debt securities and preferred stocks where market risk is guaranteed by the Company and assets carried at amortized cost based on the respective NAIC rating, as well as $1,387.4 million and $2,186.6 million of investment income and receivables due at December 31, 2013 and 2012, respectively, which are included in the Separate Account assets on the Statement of Admitted Assets, Liabilities, and Capital Stock and Surplus.  Separate Account liabilities include derivative liabilities carried at fair value.

(e) The derivatives included in the leveling descriptions are carried at fair value.




 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


13.
FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

None of the Company’s assets measured at fair value transferred between Levels 1 and 2 during the years ended December 31, 2013 and December 31, 2012.

The following table is a reconciliation of the beginning and ending balances for assets and liabilities which were categorized as Level 3 for the twelve-month period ended December 31, 2013:

 
Beginning
Transfers Into
Transfers Out
Total gains
Total gains
Purchases
Issuances
Sales
Settlements
Ending
 
Balance at
Level 3
of Level 3
and (losses)
and (losses)
       
Balance at
 
1/1/2013
   
included in
included in
       
12/31/2013
(In Thousands)
     
Net Income
Surplus
         
Assets:
                   
Common stock
$         -
$        -
$         -
$         -
$        -
$       -
$       -
$       -
$         -
$        -
Debt securities - Unaffiliated
                   
 
Asset-backed securities
19,405
-
-
807
26
89
-
-
(18,690)
1,637
 
Residential mortgage-backed securities
6,486
-
-
(1,109)
-
-
-
(4,610)
(767)
-
 
Commercial mortgage-backed securities
-
10,790
-
(518)
(4,416)
-
-
-
3,895
9,751
 
Industrial and miscellaneous
-
-
-
-
-
-
-
-
-
-
Derivative Assets
-
-
(7,844)
-
3,930
21,823
-
-
-
17,909
Separate Accounts assets
508,231
75,447
(15,879)
(185)
30,808
82,737
-
(59,680)
(36,057)
585,422
Total Assets
$     534,122
$    86,237
$    (23,723)
$     (1,005)
$   30,348
$   104,649
$        -
$   (64,290)
$   (51,619)
$    614,719

The following table is a reconciliation of the beginning and ending balances for assets and liabilities which were categorized as Level 3 for the twelve-month period ended December 31, 2012:

 
Beginning
Transfers Into
Transfers Out
Total gains
Total gains
Purchases
Issuances
Sales
Settlements
Ending
 
Balance at
Level 3
of Level 3
and (losses)
and (losses)
       
Balance at
 
1/1/2012
   
included in
included in
       
12/31/2012
(In Thousands)
     
Net Income
Surplus
         
Assets:
                   
Common stock
$      3,824
$        -
$         -
$         670
$        16
$       -
$       -
$     (4,510)
$         -
$        -
Debt securities - Unaffiliated
                   
 
Asset-backed securities
23,157
16
(8,425)
(1,220)
7,018
-
-
(618)
(523)
19,405
 
Residential mortgage-backed securities
29,857
4,381
(27,719)
(4,885)
5,671
-
-
-
(819)
6,486
 
Industrial and miscellaneous
-
-
-
-
-
-
-
-
-
-
Derivative Assets
5,193
-
-
-
-
-
-
-
(5,193)
-
Separate Accounts assets
518,053
31,673
(4,931)
585
8,078
266,219
11,512
( 266,621)
(56,337)
508,231
Total Assets
$     580,084
$    36,070
$    (41,075)
$     (4,850)
$   20,783
$   266,219
$    11,512
$   (271,749)
$   (62,872)
$    534,122


The Company transfers assets into or out of Level 3 at the fair value as of the beginning of the reporting period.  Transfers made were the result of changes in the level of observability of inputs used to price the assets or changes in NAIC ratings.





 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


13.
FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

The table below presents the balances of Level 3 assets measured at fair value with their corresponding pricing sources as of December 31, 2013:

 
Valuation
 
Significant
 
Fair Value
 
Range
 
Weighted
 
Techniques
 
Unobservable
         
Average
     
Inputs
           
(In Thousands)
                 
Debt securities - Unaffiliated
                 
Asset-backed securities
Held at Cost
 
N/A
 
         $               1,548
 
N/A
 
N/A
 
Matrix Pricing
 
Spreads
 
89
 
N/A
 
N/A
Commercial mortgage-backed securities
Matrix Pricing
 
Discount Rates
 
9,751
 
3-34%
 
21%
Derivative Assets
                 
Separate Accounts assets
Matrix Pricing
 
Spreads
 
11,435
 
N/A
 
N/A
 
Market Pricing
 
Quoted Prices
 
110,715
 
87-123
 
$         102
Total Assets
       
$          133,538
       
                   

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments as of December 31, 2013:

(In Thousands)
Aggregate
 
Admitted
             
Not Practicable
Type of Financial Instrument
Fair Value
 
Assets
 
Level 1
 
Level 2
 
Level 3
 
(Carrying Value)
Cash, cash equivalents and
                     
 short-term investments
$     1,440,125
 
$1,440,125
 
$   374,434
 
$1,065,691
 
$
 
$              -
Debt securities
4,833,793
 
4,759,852
 
604,633
 
2,383,464
 
1,845,696
 
-
Preferred stocks
21,696
 
23,150
 
-
 
20,599
 
1,097
 
-
Mortgages loans on real estate
779,201
 
748,309
 
-
 
-
 
779,201
 
-
Derivatives – options and swaptions
137,634
 
137,634
 
7,587
 
112,138
 
17,909
 
-
Derivatives – swaps and forwards
35,629
 
35,629
 
-
 
35,629
 
-
 
-
Derivatives- futures
1,350
 
1,350
 
1,350
 
-
 
-
 
-
Contract loans
536,003
 
537,058
 
-
 
-
 
536,003
 
-
Other invested assets
184,991
 
183,199
 
-
 
19,098
 
165,893
 
-
Separate account assets
29,158,501
 
29,127,294
 
21,875,212
 
6,393,515
 
889,774
 
-
                       
Contractholder deposit funds and other
                     
policyholder liabilities
(185,647)
 
(184,482)
 
                              -
 
-
 
(185,647)
 
-
Derivatives – swaps and forwards
(314,418)
 
(314,418)
 
-
 
(314,418)
 
-
 
-
Derivatives- futures
(7,529)
 
(7,529)
 
(7,529)
 
-
 
-
 
-
Separate account liabilities
(32,595)
 
(32,595)
 
-
 
-
 
(32,595)
 
-
                       



 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

13.
FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

The following table presents the carrying amounts and estimated fair value of the Company’s financial instruments as of December 31, 2012:

(In Thousands)
                       
   
Aggregate
 
Admitted
             
Not Practicable
Type of Financial Instrument
 
Fair Value
 
Assets
 
Level 1
 
Level 2
 
Level 3
 
(Carrying Value)
                         
Cash, cash equivalents and
 
$   341,431
 
$   341,431
 
$  341,431
 
$              -
 
$              -
 
$                    -
 
short-term investments
                       
Debt securities
 
7,731,439
 
7,308,199
 
1,101,108
 
6,326,443
 
303,888
 
-
Preferred stocks
 
22,833
 
23,000
 
-
 
21,677
 
1,156
 
-
Mortgages loans on real estate
 
870,010
 
814,612
 
-
 
-
 
870,010
 
-
Derivatives – options and swaptions
 
48,426
 
48,426
 
30,869
 
17,557
 
-
 
-
Derivatives – swaps and forwards
 
257,241
 
257,241
 
-
 
257,241
 
-
 
-
Derivatives- futures
 
6,758
 
6,758
 
6,758
 
-
 
-
 
-
Contract loans
 
610,742
 
564,071
 
-
 
-
 
610,742
 
-
Other invested assets
 
33,668
 
30,569
 
-
 
20,542
 
13,126
 
-
Separate account assets
 
29,859,238
 
29,761,545
 
21,456,900
 
7,711,370
 
690,968
 
-
                         
Contractholder deposit funds and other
                       
policyholder liabilities
 
(1,088,797)
 
(1,128,331)
 
-
 
-
 
(1,088,797)
 
-
Long-term debt to affiliates
 
(100,000)
 
(100,000)
 
-
 
-
 
(100,000)
 
-
Derivatives – swaps and forwards
 
(151,886)
 
(125,088)
 
-
 
(151,886)
 
-
 
-
Derivatives- futures
 
(56,965)
 
(56,965)
 
(56,965)
 
-
 
-
 
-
Separate account liabilities
 
(91,958)
 
(91,958)
 
-
 
(58,247)
 
(33,711)
 
-

The methods and assumptions that the Company uses in determining the estimated fair value of its financial instruments are summarized below:

Cash, cash equivalents and short-term investments – The carrying value for cash, cash equivalents and short-term investments approximates fair value due to the short-term nature and liquidity of the balances.

Debt securities – The Company determines the fair value of its publicly-traded fixed maturity securities using three primary pricing methods: third-party pricing services, non-binding broker quotes and pricing models.  Prices are first sought from third-party pricing services with the remaining unpriced securities priced using one of the other two 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 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 ABS, RMBS and CMBS, are priced using third-party pricing services, a fair value model, 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, RMBS and CMBS.  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.


 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

13.
FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

For privately-placed fixed maturity securities, fair values are estimated using model prices or broker quotes. A portion of privately-placed fixed maturity securities (typically SEC Rule 144A securities) are priced using market prices.

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.

Common and Preferred Stocks – The fair value of the Company’s equity securities not accounted for under the equity method is first based on quoted market prices.  Similar to fixed-maturity securities, the Company uses pricing services and broker quotes to price the equity securities for which the quoted market price is not available.

Mortgage loans – The fair values of mortgage loans are estimated by discounting future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

Derivatives - The fair values of swaps are based on current settlement values, dealer quotes and market prices.  Fair values for options and futures are also based on dealer quotes, internal models and market prices.

Contract loans - The fair value of policy loans is determined by estimating future policy loan cash flows and discounting the cash flows at a current market interest rate.

Other invested assets - Other invested assets (excluding investments accounted for under the equity method) include low income housing tax credits (“LIHTC”), surplus debentures, collateral loans and equipment lease trusts.  The fair value of LIHTCs and equipment leases approximate their carrying values. The fair values of surplus debentures and collateral loans are based upon the same methods used for other private placements as described above.

Separate Accounts – The estimated fair values of assets and liabilities are valued with the same methodology described above.  The difference between Separate Account assets and liabilities reflected above and the total recognized in the Statements of Admitted Assets, Liabilities and Capital and Surplus represents amounts that are considered non-financial instruments.

Contractholder deposit funds - The fair values of the Company’s general account liabilities under investment-type contracts (insurance and annuity contracts that do not involve mortality or morbidity risks) are estimated using discounted cash flow analyses or surrender values.  Those contracts that are deemed to have short-term guarantees have a carrying amount equal to the estimated fair value.

Debt - The fair value of debt is based on future cash flows discounted at the stated interest rate, considering all appropriate terms of the related agreements.  Due to certain provisions included in such agreements, whereby the issuer of the notes has the ability to call each note at par, the fair value is equal to par value.  Debt includes borrowed money and surplus funds.



 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

14.                 FEDERAL INCOME TAXES

The application of SSAP No. 101 requires a company to evaluate the recoverability of DTAs and to establish a valuation allowance if necessary to reduce the DTA to an amount which is more likely than not to be realized.  Considerable judgment is required in determining whether a valuation allowance is necessary, and if so, the amount of such valuation allowance.  In connection with the Sale Transaction as defined in Note 1, the Company and its Former Parent will make an election under Treasury Regulation Section 1.1502-36(d) for the Former Parent to retain the Company’s tax attributes as of July 31, 2013 related to the Company’s net operating loss carryforward, capital loss carryforward and deferred acquisition cost.  The Sale Transaction closed on August 2, 2013 with an effective date of August 1, 2013 and the DTAs related to these items were transferred to the Former Parent as of July 31, 2013.  Therefore, since the valuation allowance recorded at December 31, 2012 was related specifically to these items and the fact that they were to be retained by the Former Parent, the valuation allowance was released on July 31, 2013.

The following table provides the components of the Company’s net DTAs and DTLs as of December 31, 2013 and 2012.

(In Thousands)
 
December 31, 2013
 
December 31, 2012
 
Change
Description
 
Ordinary
 
Capital
 
Total
 
Ordinary
 
Capital
 
Total
 
Ordinary
 
Capital
 
Total
                                     
Gross Deferred Tax Assets
 
$ 552,009
 
$    5,856
 
$ 557,865
 
$1,156,141
 
$   17,856
 
$1,173,997
 
$(604,132)
 
$       (12,000)
 
$(616,132)
Statutory Valuation Allowance Adjustments
 
-
 
-
 
-
 
(361,941)
 
(17,856)
 
(379,797)
 
361,941
 
17,856
 
379,797
Adjusted Gross Deferred Tax Assets
 
552,009
 
5,856
 
557,865
 
794,200
 
-
 
794,200
 
(242,191)
 
5,856
 
(236,335)
Deferred Tax Assets Nonadmitted
 
291,163
 
5,853
 
297,016
 
392,830
 
-
 
392,830
 
(101,667)
 
5,853
 
(95,814)
Subtotal Net Admitted Deferred Tax Assets
 
260,846
 
3
 
260,849
 
401,370
 
-
 
401,370
 
(140,524)
 
3
 
(140,521)
Deferred Tax Liabilities
 
76,609
 
3
 
76,612
 
240,172
 
-
 
240,172
 
(163,563)
 
3
 
(163,560)
Net Admitted Deferred Tax Assets /
                                   
 (Net Deferred Tax Liabilities)
 
$ 184,237
 
$           -
 
$ 184,237
 
$ 161,198
 
$             -
 
$   161,198
 
$   23,039
 
$                   -
 
$    23,039
 
 
The following table provides component amounts of the Company's net admitted DTA calculation by tax character.

     
December 31, 2013
 
December 31, 2012
 
Change
(In Thousands)
                                   
Description
 
Ordinary
 
Capital
 
Total
 
Ordinary
 
Capital
 
Total
 
Ordinary
 
Capital
 
Total
                                     
Admission Calculation Components
                                   
SSAP No. 101
                                   
 
(a) Admitted Pursuant to 11.a.
 
$           -
 
$           -
 
$            -
 
$            -
 
$            -
 
$           -
 
$            -
 
$            -
 
$            -
 
(b) Admitted Pursuant to 11.b.
                                   
 
  (lesser of 11.b.i. or 11.b.ii.)
 
184,237
 
-
 
184,237
 
161,198
 
-
 
161,198
 
23,039
 
-
 
23,039
   
(c) 11.b.i
     
-
 
-
 
234,926
 
-
 
-
 
459,248
 
-
 
-
 
-
   
(d) 11.b.ii
     
-
 
-
 
184,237
 
-
 
-
 
161,198
 
-
 
-
 
-
 
(e) Admitted Pursuant to 11.c.
 
76,609
 
3
 
76,612
 
240,172
 
-
 
240,172
 
(163,563)
 
3
 
(163,560)
 
(f) Total admitted under 11.a. - 11.c.
 
260,846
 
3
 
260,849
 
401,370
 
-
 
401,370
 
(140,524)
 
3
 
(140,521)
 
(g) Deferred Tax Liabilities
 
76,609
 
3
 
76,612
 
240,172
 
-
 
240,172
 
(163,563)
 
3
 
(163,560)
 
Net admitted Deferred Tax Assets
                                   
 
 Deferred Tax Liabilities
 
$ 184,237
 
$            -
 
$184,237
 
$161,198
 
$            -
 
$161,198
 
$  23,039
 
$            -
 
$  23,039

   
2013
 
2012
         
Ratio Percentage Used To Determine Recovery Period
       
And Threshold Limitation Amount
 
1175%
 
893%
         
Amount Of Adjusted Capital And Surplus Used To
       
Determine Recovery Period And Threshold Limitation
       
Above
 
$    1,226,182,653
 
$  1,074,655,679
         


 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

14.
FEDERAL INCOME TAXES (CONTINUED)

The following table provides the impact of tax planning strategies, if used in the Company's SSAP No. 101 calculation, on adjusted gross and net admitted DTAs.

 
December 31, 2013
 
December 31, 2012
 
Change
(In Thousands)
                     
Description
Ordinary
 
Capital
 
Ordinary
 
Capital
 
Ordinary
 
Capital
Impact of Tax Planning Strategies
                     
Determination of Adjusted Gross Deferred Tax Assets
                     
and Net Admitted Deferred Tax Assets, by Tax
                     
Character as a Percentage.
                     
Adjusted Gross Deferred Tax Assets
$        552,009
 
$         5,856
 
$        794,200
 
$                      -
 
$       (242,191)
 
$         5,856
Percentage of Adjusted Gross Deferred Tax Assets
                     
by Tax Character Attributable to the
                     
Impact of Tax Planning Strategies
0.00%
 
0.00%
 
0.00%
 
0.00%
 
0.00%
 
0.00%
Net Admitted Adjusted Gross Deferred Tax Assets
$        260,846
 
$                3
 
$         401,370
 
$                      -
 
$       (140,524)
 
$                   3
Percentage of Net Admitted Adjusted
                     
Gross Deferred Tax Assets by Tax Character Because
                     
of the Impact of Tax Planning Strategies
0.00%
 
0.00%
 
0.00%
 
0.00%
 
0.00%
 
0.00%


The Company did not utilize tax planning strategies in the calculation of its adjusted gross DTAs and net admitted DTAs.

The Company has no temporary difference for which a DTL has not been established.

The following tables provide the Company's significant components of income taxes incurred and the changes in DTAs and DTLs.

(In Thousands)
December 31, 2013
 
December 31, 2012
 
December 31, 2011
Current Income Tax
         
Federal tax benefit from operations
$                            (84,275)
 
$                             (84,977)
 
$                               (37,926)
Federal tax expense on prior period adjustment
-
 
-
 
-
Federal income tax on net capital gains
28,847
 
(2,216)
 
9,659
Utilization of capital loss carry-forwards
-
 
-
 
(10,948)
Federal tax (benefit) expense on stock options
(539)
 
184
 
(982)
Current income tax benefit
$                             (55,967)
 
$                            (87,009)
 
$                               (40,197)
           










 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


14.
FEDERAL INCOME TAXES (CONTINUED)

(In Thousands)
December 31, 2013
 
December 31, 2013
 
Change
Deferred Tax Assets:
         
           
Ordinary
         
Policyholder reserves
$                242,306
 
$                517,331
 
$       (275,025)
Investments
204,640
 
213,028
 
(8,388)
Deferred acquisition costs
2,753
 
119,385
 
(116,632)
Net operating loss carry-forward
59,040
 
242,556
 
(183,516)
Other (including items <5% of total ordinary tax assets)
43,270
 
63,841
 
(20,571)
Total ordinary Deferred Tax Assets
$                552,009
 
$             1,156,141
 
$       (604,132)
Statutory valuation allowance adjustment
                           -
 
                361,941
 
       (361,941)
Nonadmitted
291,163
 
392,830
 
(101,667)
Admitted ordinary Deferred Tax Assets
$                260,846
 
$                401,370
 
$       (140,524)
Capital:
         
Investments
-
 
-
 
-
Net capital loss carry-forward
5,856
 
17,856
 
(12,000)
Subtotal
$                    5,856
 
$                  17,856
 
$          (12,000)
Statutory valuation allowance adjustment
                           -
 
                  17,856
 
         (17,856)
Nonadmitted
5,853
 
-
 
5,853
Admitted capital Deferred Tax Assets
          $                           3
 
         $                           -
 
        $                    3
Admitted Deferred Tax Assets
$                 260,849
 
$                401,370
 
$       (140,521)
Deferred Tax Liabilities:
         
Ordinary
         
Investments
$                           -
 
$                135,748
 
$       (135,748)
Policyholder reserves
76,332
 
89,539
 
(13,207)
Other (including items <5% of total ordinary tax liabilities)
277
 
14,885
 
(14,608)
Subtotal
$                  76,609
 
$                240,172
 
$       (163,563)
Capital:
         
Investments
3
 
-
 
3
Subtotal
$                           3
 
$                            -
 
$                     3
Deferred Tax Liabilities
$                  76,612
 
$                240,172
 
$       (163,560)
Net admitted Deferred Tax Assets / Deferred Tax Liabilities
$                184,237
 
$                161,198
 
$          23,039




 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


14.
FEDERAL INCOME TAXES (CONTINUED)

The change in net deferred income taxes is comprised of the following:

(In Thousands)
           
Description
 
December 31, 2013
 
December 31, 2012
 
Change
Total Deferred Tax Assets
 
$        557,865
 
$       1,173,997
 
$         (616,132)
Total Deferred Tax Liabilities
 
76,612
 
240,172
 
(163,560)
Net Deferred Tax Assets / Deferred Tax Liabilities
 
$        481,253
 
$          933,825
 
$         (452,572)
Statutory valuation allowance
 
-
 
(379,797)
 
379,797
Net Deferred Tax Assets / Deferred Tax Liabilities
 
$        481,253
 
$          554,028
 
$           (72,775)
             
Tax effect of unrealized (gains)/losses
         
129,520
Change in net deferred income tax
         
$         (202,295)

The provision for federal income taxes incurred for the current year is different from that which would be obtained by applying the statutory federal income tax rate of 35% to income before income taxes.  The significant items causing this difference at December 31, 2013, 2012 and 2011 were as follows:

(In Thousands)
 
December 31, 2013
 
December 31, 2012
 
December 31, 2011
                                     
Description
 
Amount
 
Tax Effect @ 35%
 
Effective Tax Rate
 
Amount
 
Tax Effect @ 35%
 
Effective Tax Rate
 
Amount
 
Tax Effect @ 35%
 
Effective Tax Rate
Net gain from operations
 
$        486,232
 
$          170,182
 
28.5%
 
$              (41,797)
 
$       (14,629)
 
3.3%
 
$  (423,255)
 
$     (148,139)
 
28.6%
Pre-tax capital gains - Pre IMR
     
38,571
 
6.5%
     
(140,412)
 
31.7%
     
(33,108)
 
6.4%
Dividends Received Deduction
     
(14,000)
 
-2.3%
     
(14,000)
 
3.2%
     
(14,000)
 
2.7%
Tax Credits
     
(4,752)
 
-0.8%
     
(4,739)
 
1.1%
     
(4,281)
 
0.8%
Non-deductible expenses
     
496
 
0.1%
     
545
 
-0.1%
     
669
 
-0.1%
Change in tax contingency reserves
     
(2,271)
 
-0.4%
     
(1,860)
 
0.4%
     
1,676
 
-0.3%
Reversal of IMR
     
(20,514)
 
-3.4%
     
(4,743)
 
1.1%
     
(8,270)
 
1.6%
Change in non-admitted assets
     
(2,259)
 
-0.4%
     
4,763
 
-1.1%
     
1,605
 
-0.3%
Prior year adjustments
     
(572)
 
-0.1%
     
(2,455)
 
0.6%
     
(5,728)
 
1.1%
Retained Deferred Tax Asset
     
347,765
 
58.2%
     
-
 
0.0%
     
-
 
0.0%
Change in statutory valuation allowance
   
(379,797)
 
-63.7%
     
379,797
 
85.9%
     
-
 
0.0%
Other
     
13,479
 
2.3%
     
(1,509)
 
0.3%
     
-
 
0.0%
Total statutory income taxes
     
$         146,328
 
24.5%
     
$      200,758
 
-45.4%
     
$      (209,576)
 
40.5%
                                     
Federal income taxes incurred
     
$         (55,967)
 
-9.4%
     
$       (87,009)
 
19.6%
     
$       (40,197)
 
7.8%
Change in net deferred income taxes
     
       202,295
 
33.9%
   
 
      287,767
 
-65.0%
     
(169,379)
 
32.7%
Total statutory income taxes
     
$        146,328
 
24.5%
     
$      200,758
 
-45.4%
     
$     (209,576)
 
40.5%

At December 31, 2013, the Company had $168.8 million of net operating loss carryforwards, which will begin to expire, if not utilized, in 2028.  At December 31, 2013, the Company had $16.7 million of capital loss carryforwards which will expire if not utilized in 2018.  At December 31, 2013, the Company had $12.5 million of foreign tax credit carryforwards, which will begin to expire if not utilized, in 2020.  At December 31, 2013, the Company had $10.1 million of LIHTC carryforwards, which will begin to expire, if not utilized, in 2030.  At December 31, 2013, the Company had no minimum tax credit carryforwards.





 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


14.
FEDERAL INCOME TAXES (CONTINUED)

At December 31, 2013, the Company has no income taxes incurred in the current or preceding years that will be available for recoupment in the event of future net losses.

The Company has no deposits admitted under section 6603 of the Internal Revenue code.

A reconciliation of the beginning and ending balances of tax contingencies computed in accordance with SSAP No. 101 and SSAP No. 5R is as follows:

(In Thousands)
 
2013
 
2012
Balance, beginning of year
 
$         1,477
 
$            1,477
Gross increases related to tax positions in prior years
 
1,820
 
-
Gross decreases related to tax positions in prior years
 
-
 
-
Gross increases related to tax positions in current year
 
-
 
-
Settlements with Former Parent
 
(3,297)
 
-
Close of tax examinations/statutes of limitations
 
-
 
-
Balance, end of year
 
$                 -
 
$            1,477

The Company recognizes interest accrued related to unrecognized tax benefits (“UTB”) in income tax expense.  The Company had no accrued interest balance as of December 31, 2013.  The Company had an accrued interest balance of $6.3 million as of December 31, 2012. The Company recognized $0.5 million and $2.9 million in gross interest benefit related to UTB during the years ended December 31, 2013 and 2012, respectively.  The Company has not accrued any penalties related to UTB.

Tax years prior to 2003 are closed to examination and audit adjustments under the applicable statute of limitations.  The Company is subject to ongoing examinations for subsequent tax years as a member of the Former Parent’s consolidated federal income tax returns.  Tax years 2007, 2008 and 2009 for the consolidated return are in the initial stages of the appeals process.  The 2003 through 2006 tax years for the consolidated return are still in the appeals process with the Internal Revenue Service (the “IRS”).  Although the Company remains jointly and severally liable for consolidated tax liabilities, the Company is held harmless by the Former Parent in accordance with the Sale Transaction agreement and believes that the possibility of a tax liability for the pre-sale tax years is remote.  Additionally, the Company does not believe it has any uncertain tax positions for its federal income tax return that would be material to its financial condition, results of income, or cash flows.  Therefore, the Company did not record a liability for UTB at December 31, 2013.  As of December 31, 2013, there were no positions for which management believes it is reasonably possible that the total amounts of tax contingencies will significantly increase within 12 months of the reporting date.




 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


14.
FEDERAL INCOME TAXES (CONTINUED)

The Company will file a consolidated federal income tax return for the stub period January 1, 2013 to July 31, 2013 with the following affiliates and former affiliates:

Sun Life Assurance Company of Canada - U.S. Operations Holdings, Inc.
 
Professional Insurance Company
Sun Life Financial (U.S.) Holdings, Inc.
 
Massachusetts Financial Services Company
Sun Life Financial (Japan), Inc.
 
MFS Investment Management K.K.
Sun Life Financial (U.S.) Finance, Inc.
 
MFS Fund Distributors, Inc.
Sun Canada Financial Co.
 
MFS Service Center, Inc.
Sun Life Financial Distributors, Inc.
 
MFS Institutional Advisors, Inc.
Clarendon Insurance Agency, Inc.*
 
MFS Heritage Trust Company
Sun Life of Canada (U.S.) Holdings, Inc.
 
California Benefits Dental Plan
Sun Life of Canada (U.S.) Financial Services Holdings, Inc.
 
Sun Life Administrators (U.S.), Inc.
Independence Life and Annuity Company
 
Dental Holdings, Inc.
Sun Life Insurance and Annuity Company of New York*
 
Sun Life Financial (U.S.) Services Company, Inc.
Sun Life Financial (U.S.) Reinsurance Company
   

*As a result of the Sale Transaction described in Note 1, the Company and its affiliates exited the consolidated group mentioned above as of August 2, 2013.  The Company will file a separate consolidated federal income tax return for the period August 1, 2013 to December 31, 2013 with its subsidiary, SLNY, and will continue to do so in future tax years under Internal Revenue Code Section 1504 (c)(1).  Clarendon will file a stand-alone tax return through 2018 until it is allowed to join the new consolidated group in 2019 per Internal Revenue Code Section 1504 (c)(2)(A).

The method of allocation of the total consolidated federal income tax among the members of the consolidated tax group is subject to written agreements, approved by the Board of Directors.  Under these agreements, income tax amounts are allocated based upon the separately calculated liability of each consolidated member of the group with credit provided for losses that were utilized by other group members.  Following the Sale Transaction, the Company exited the Former Parent’s consolidated federal income tax return and is no longer a party to the tax allocation agreement with its former affiliates.  Final tax settlements were agreed to with the Former Parent and no future tax allocations are expected to occur with the Former Parent.

For periods after the Sale Transaction, a formal tax allocation agreement has not yet been implemented, but the methodology remains the same except that the members of the group have changed.  Allocation is based upon separate return calculations with current credit (benefit) given for losses and tax attributes that are utilized by the consolidated group.  Intercompany tax balances are settled on a quarterly basis and a final true up is made after the filing of the federal income tax return, as prescribed by the terms of the agreement.







 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


15.
CAPITAL STOCK AND SURPLUS AND DIVIDEND RESTRICTIONS

As of December 31, 2013 and 2012, the Company had 6,437 shares issued and outstanding with a par value of $1000 per share.

The Company’s ability to pay dividends is subject to certain statutory restrictions. The State of Delaware has 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 the prior approval of the Commissioner is limited to the greater of:  (i) 10% of its statutory surplus as of the preceding December 31; or (ii) the Company's statutory net gain from operations for the preceding calendar year.  Any dividends to be paid by an insurer, whether or not in excess of the aforementioned threshold, from a source other than statutory surplus would also require the prior approval of the Commissioner.  In connection with the change in control of the Company effective August 1, 2013, any portion of a dividend which would cause the Company’s total adjusted capital as of the most recent calendar quarter end to fall below three hundred percent of Company Action Level NAIC risk-based capital as of such calendar quarter end, after taking into account the payment of such dividend, requires the prior approval of the Department.

No dividends were paid to the Parent or Former Parent during 2013 or 2012.  Extraordinary dividends of $300 million were paid to the Former Parent during 2011.

As discussed in Note 2, there were two distributions from gross paid in and contributed surplus during 2013, to the Former Parent.

The Company recorded a restatement of gross paid-in and contributed surplus and unassigned funds under a quasi-reorganization pursuant to SSAP No. 72, Surplus and Quasi-reorganizations.  The restatement was recorded as of June 30, 2013 and did not change the Company’s total surplus. The quasi-reorganization was approved by the Department.

The impact of the quasi-reorganization was as follows:

(In Thousands)
       
   
Change in Year Surplus
 
Change in Gross Paid-in and
   
(Unassigned Funds)
 
Contributed Surplus
         
2013
 
$                       1,851,883
 
$                      (1,851,883)

*Reset of surplus effective June 30, 2013.  Unassigned surplus adjusted for the net impact of OTTI recorded on hybrid securities totaling $12,589,924.




 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


16.
RISK-BASED CAPITAL

Life and health insurance companies are subject to certain Risk-based Capital (“RBC”) requirements as specified by the NAIC.  The RBC requirements provide a method for measuring the minimum acceptable amount of adjusted capital that a life insurer should have, as determined under statutory accounting principles, taking into account the risk characteristics of its investments and products.  The Company has met the minimum RBC requirements at December 31, 2013 and 2012.

17.
COMMITMENTS AND CONTINGENT LIABILITIES

Contingent commitments

The Company had commitments for partnership investments of $3.7 million and $11.5 million as of December 31, 2013 and 2012, respectively.

Regulatory and industry 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.

The liquidation of Executive Life Insurance Company, along with other insolvencies reported by the National Organization of Life and Health Insurance Guaranty Associations, will result in retrospective premium-based guaranty fund assessments against the Company.  Based on the best information available, the Company has recorded an accrued liability of $4.1 million and $10.2 million for guaranty fund assessments as of December 31, 2013 and 2012, respectively.  The Company does not know the period over which the guaranty fund assessments are expected to be paid.

The Company has not established any asset for premium tax credits or policy surcharges as their recoveries are not estimable.

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 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.  On May 30, 2010, the IRS issued an Industry Director Directive which makes it clear that IRS interpretations prior to Revenue Ruling 2007-54 should be followed until new regulations are issued.






 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


17.
COMMITMENTS AND CONTINGENT LIABILITIES (CONTINUED)

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.  This issue was included in the 2012-2013 Priority Guidance Plan, issued on November 19, 2012, as one of the projects the IRS intended to work on in 2013.  The IRS did not reach any conclusion in 2013 and therefore included the issue again in the 2013-2014 Priority Guidance Plan issued on January 29, 2014.  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, 2013, 2012 and 2011, the Company’s financial statements reflect benefits of $13.4 million, $11.6 million and $13.8 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 condition, results of operations or cash flows of the Company.

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, officers and employees in accordance with the Company’s by-laws.  The Company believes any potential liability under these agreements is neither probable nor estimable.  Therefore, the Company has not recorded any associated liability.

Under the Stock Purchase Agreement (“SPA”) among SLF and its affiliates and the Parent, SLF is required to indemnify the Parent, the acquired companies, including the Company and SLNY, and their respective affiliates from and against (i) breach by SLF of customary representations, warranties and covenants of SLF set forth in the SPA and (ii) other specified matters, including losses arising from pending or threatened litigation as of the signing or closing of the Sale Transaction (August 2, 2013), certain excluded assets that were transferred from the acquired companies to SLF and its affiliates at or prior to closing of the Sale Transaction, including the group insurance business previously conducted by SLNY, certain environmental liability and certain liabilities arising under unclaimed property law.

Pledged or Restricted Assets

The following assets were restricted at December 31, 2013 and reported in the current financial statements:

 
·
Repurchase agreements posted collateral which were reported as bonds and preferred stocks.
 
·
Reverse repurchase agreements posted cash collateral which was reported as cash equivalents.
 
·
Certain bonds were on deposit with governmental authorities as required by law.
 
·
Certain cash deposits were held in a mortgage escrow account (see "Other restricted assets" below)
 
·
Derivative cash collateral received was reported as cash equivalents (see “Assets pledged as collateral not captured in other categories” below.)





 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


17.
COMMITMENTS AND CONTINGENT LIABILITIES (CONTINUED)

The following are restricted assets (including pledged assets):

 
Gross Restricted
                     
(In Thousands)
Current Year
     
Percentage
                   
Admitted Restricted to Total Admitted Assets
                   
     
Total Separate Account (S/A) Restricted Assets
       
Gross Restricted Total Assets
 
Total General Account (G/A)
G/A Supporting S/A Activity
 
Total From Prior Year
Increase/ (Decrease)
Total Current Year Admitted Restricted
Description of Assets
S/A Assets  Supporting G/A Activity
Total
                     
Subject to contractual obligation for which liability is not shown
$          -
$         -
$          -
$         -
$          -
$          -
$           -
$           -
0%
0%
Collateral held under security lending agreements
-
-
-
-
-
-
-
-
0%
0%
Subject to repurchase agreements
449,188
-
-
-
449,188
-
449,188
449,188
1%
1%
Subject to reverse repurchase agreements
499,591
-
-
-
499,591
-
499,591
499,591
1%
1%
Subject to dollar repurchase agreements
-
-
-
-
-
-
-
-
0%
0%
Subject to dollar reverse repurchase agreements
-
-
-
-
-
-
-
-
0%
0%
Placed under option contracts
-
-
-
-
-
-
-
-
0%
0%
Letter stock or securities restricted as to sale
-
-
-
-
-
-
-
-
0%
0%
On deposit with states
4,223
-
-
-
4,223
4,225
(2)
4,223
0%
0%
On deposit with other regulatory bodies
-
-
-
-
-
-
-
-
0%
0%
Pledged as collateral not captured in other categories
60,610
-
-
-
60,610
88,952
 
(28,342)
60,610
0%
0%
Other restricted assets
7,222
-
-
-
7,222
 
7,222
7,222
0%
0%
Total
$   1,020,834
$         -
$          -
$         -
$1,020,834
$    93,177
$    927,657
$   1,020,834
2%
2%

The following are assets pledged as collateral in other categories (contracts that share similar characteristics, such as reinsurance and derivatives, are reported in the aggregate).


 
Gross Restricted
                     
(In Thousands)
Current Year
     
Percentage
                   
Admitted Restricted to Total Admitted Assets
                   
     
Total Separate Account (S/A) Restricted Assets
       
Gross Restricted Total Assets
 
Total General Account (G/A)
G/A Supporting S/A Activity
 
Total From Prior Year
Increase/ (Decrease)
Total Current Year Admitted Restricted
Description of Assets
S/A Assets  Supporting G/A Activity
Total
                     
Derivative collateral
$       60,610
$         -
$          -
$         -
$    60,610
$    88,952
$    (28,342)
$       60,610
0%
0%
                     
Total
$       60,610
$         -
$          -
$         -
$    60,610
$    88,952
$    (28,342)
$       60,610
0%
0%



 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011


17.
COMMITMENTS AND CONTINGENT LIABILITIES (CONTINUED)

The following are Other restricted assets pledged as collateral in other categories (contracts that share similar characteristics, such as reinsurance and derivatives, are reported in the aggregate).

 
Gross Restricted
                     
(In Thousands)
Current Year
     
Percentage
                   
Admitted Restricted to Total Admitted Assets
                   
     
Total Separate Account (S/A) Restricted Assets
       
Gross Restricted Total Assets
 
Total General Account (G/A)
G/A Supporting S/A Activity
 
Total From Prior Year
Increase/ (Decrease)
Total Current Year Admitted Restricted
Description of Assets
S/A Assets  Supporting G/A Activity
Total
                     
Mortgage escrow
$       7,222
$         -
$          -
$         -
$    7,222
$           -
$       7,222
$       7,222
0%
0%
                     
Total
$       7,222
$         -
$          -
$         -
$    7,222
$           -
$       7,222
$       7,222
0%
0%

Lease Commitments

Effective August 1, 2013, the Company entered into a lease agreement for its home office.  Rental expenses for 2013 were $0.9 million.  Future minimum lease payments are $3.6 million.

From January 1, 2011 to July 31, 2013, the Company leased equipment under non-cancelable operating lease agreements.  Rental expenses, including allocated amounts, for 2013, 2012 and 2011 were approximately $2.5 million, $5.4 million and $5.7 million, respectively.

 
 
18.
SUBSEQUENT EVENTS

On March 26, 2014, the Company paid an ordinary dividend of $185.0 million to the Parent.

On April 1, 2014, the Company entered into a $500.0 million Revolving Credit Facility (the"Facility") with Bank of America Merrill Lynch.  Borrowings under the Facility may be used for general corporate purposes.  Borrowings bear interest at LIBOR + 125 basis points, with a commitment fee of 30 basis points for any unused portion of the Facility, and the Facility has a 180 day tenor.  The Facility is secured by certain securities held in an account established for this purpose, and borrowings are limited to a specified percentage of the value of the securities in this account.

Subsequent events were evaluated through the issuance of the audited statutory financial statements, which were made available on April 29, 2014.  No events were identified subsequent to the filing of the Company’s Annual Statement on March 1, 2014, other than those disclosed above.




 
 

 

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
(Wholly-Owned Subsidiary of Delaware Life Holdings, LLC)

NOTES TO STATUTORY FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2013 AND 2012 AND FOR THE YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

19.
SSAP No. 43R: OTHER THAN TEMPORARY IMPAIRMENTS
 
 
The following OTTI were recognized during the statement year on LBSS that the Company had either the intent to sell or the inability to hold until recovery.


   
(1)
 
(2)
 
(3)
   
Amortized Cost
 
OTTI Recognized in Loss
 
Fair Value
   
Basis Before OTTI
         
1 - (2a + 2b)
       
2(a)
 
2(b)
   
(In Thousands)
     
Interest
 
Non-Interest
   
                 
                 
a. Intent to sell
 
$        320,782
 
$              -
 
$              26,568
 
$  294,214
b. Inability or lack of intent to retain the investment in the
-
 
-
 
-
 
-
security for a period of time sufficient to recover the
             
amortized cost basis
               

 



 
 

 


 
Report of Independent Registered Public Accounting Firm
 
 

 
To the Board of Directors of Sun Life Assurance Company of Canada (U.S.) and the Participants of Sun Life Assurance Company of Canada (U.S.) Variable Account F - Regatta:

 
In our opinion, the accompanying statements of assets and liabilities and the related statements of operations and of changes in net assets present fairly, in all material respects, the financial position of AllianceBernstein VPS Balanced Wealth Strategy Portfolio (Class B) Sub-Account, AllianceBernstein VPS Dynamic Asset Allocation Portfolio Class B Sub-Account, AllianceBernstein VPS International Growth Portfolio (Class B) Sub-Account, AllianceBernstein VPS International Value Portfolio (Class B) Sub-Account, AllianceBernstein VPS Small/Mid Cap Value Fund (Class B) Sub-Account, BlackRock Global Allocation V.I. Fund (Class III) Sub-Account, Columbia Variable Portfolio - Marsico 21st Century Fund Class 1 Sub-Account, Columbia Variable Portfolio - Marsico 21st Century Fund Class 2 Sub-Account, Columbia Variable Portfolio - Marsico Growth Fund Class 1 Sub-Account, Columbia Variable Portfolio - Marsico Growth Fund Class 2 Sub-Account, Columbia Variable Portfolio - Marsico International Opportunities Fund Class 2 Sub-Account, Columbia Variable Portfolio - Small Cap Value Fund Class 2 Sub-Account, Fidelity VIP Balanced Portfolio (Service Class 2) Sub-Account, Fidelity VIP Contrafund Portfolio (Service Class 2) Sub-Account, Fidelity VIP Freedom 2010 Portfolio (Service Class 2) Sub-Account, Fidelity VIP Freedom 2015 Portfolio (Service Class 2) Sub-Account, Fidelity VIP Freedom 2020 Portfolio (Service Class 2) Sub-Account, Fidelity VIP Mid Cap Portfolio (Service Class 2) Sub-Account, First Eagle Overseas Variable Fund Sub-Account, Franklin Templeton VIP Founding Funds Allocation Fund (Class 2) Sub-Account, Franklin Templeton VIP Franklin Income Securities Fund (Class 2) Sub-Account, Franklin Templeton VIP Franklin Income Securities Fund Class 4 Sub-Account, Franklin Templeton VIP Franklin Mutual Shares Securities Fund Class 4 Sub-Account, Franklin Templeton VIP Franklin Small Cap Value Securities Fund (Class 2) Sub-Account, Franklin Templeton VIP Franklin Small Cap Value Securities Fund Class 4 Sub-Account, Franklin Templeton VIP Franklin Strategic Income Securities Fund (Class 2) Sub-Account, Franklin Templeton VIP Franklin Strategic Income Securities Fund Class 4 Sub-Account, Franklin Templeton VIP Mutual Shares Securities Fund (Class 2) Sub-Account, Franklin Templeton VIP Templeton Developing Markets Securities Fund (Class 2) Sub-Account, Franklin Templeton VIP Templeton Foreign Securities Fund (Class 2) Sub-Account, Franklin Templeton VIP Templeton Global Bond Securities Class 4 Sub-Account, Franklin Templeton VIP Templeton Growth Securities Fund (Class 2) Sub-Account, Huntington VA Balanced Fund Sub-Account, Huntington VA Dividend Capture Sub-Account, Huntington VA Growth Sub-Account, Huntington VA Income Equity Sub-Account, Huntington VA International Equity Sub-Account, Huntington VA Mid Corp America Fund Sub-Account, Huntington VA Mortgage Securities Sub-Account, Huntington VA Real Strategies Fund Sub-Account, Huntington VA Rotating Markets Sub-Account, Huntington VA Situs Fund Sub-Account, Invesco V.I. International Growth Fund II Sub-Account, Invesco V.I. American Value Fund (Series II) Sub-Account, Invesco V.I. Comstock Fund Series II Sub-Account, Invesco V.I. Equity and Income Fund II Sub-Account, JPMorgan Insurance Trust Core Bond Portfolio (Class 2) Sub-Account, JPMorgan Insurance Trust U.S. Equity Portfolio (Class 2) Sub-Account, Lazard Retirement Emerging Markets Equity Portfolio Service Class Sub-Account, Lord Abbett Series Fund - Growth Opportunities Portfolio VC Sub-Account, Lord Abbett Series Fund- Fundamental Equity Portfolio VC Sub-Account, MFS VIT I Growth Series Initial Class Sub-Account, MFS VIT I Growth Series Service Class Sub-Account, MFS VIT I Mid Cap Growth Series Initial Class Sub-Account, MFS VIT I Mid Cap Growth Series Service Class Sub-Account, MFS VIT I New Discovery Series Service Class Sub-Account, MFS VIT I Research Bond Series Service Class Sub-Account, MFS VIT I Research Series Service Class Sub-Account, MFS VIT I Value Series Initial Class Sub-Account, MFS VIT I Value Series Service Class Sub-Account, MFS VIT II Blended Research Core Equity Portfolio I Class Sub-Account, MFS VIT II Blended Research Core Equity Portfolio S Class Sub-Account, MFS VIT II Bond Portfolio I Class Sub-Account, MFS VIT II Bond Portfolio S Class Sub-Account, MFS VIT II Core Equity Portfolio I Class Sub-Account, MFS VIT II Core Equity Portfolio S Class Sub-Account, MFS VIT II Emerging Markets Equity Portfolio I Class Sub-Account, MFS VIT II Emerging Markets Equity Portfolio S Class Sub-Account, MFS VIT II Global Governments Portfolio I Class Sub-Account, MFS VIT II Global Governments Portfolio S Class Sub-Account, MFS VIT II Global Growth Portfolio I Class Sub-Account, MFS VIT II Global Growth Portfolio S Class Sub-Account, MFS VIT II Global Research Portfolio I Class Sub-Account, MFS VIT II Global Research Portfolio S Class Sub-Account, MFS VIT II Global Tactical Allocation Portfolio I Class Sub-Account, MFS VIT II Global Tactical Allocation Portfolio S Class Sub-Account, MFS VIT II Government Securities Portfolio I Class Sub-Account, MFS VIT II Government Securities Portfolio S Class Sub-Account, MFS VIT II High Yield Portfolio Initial Class Sub-Account, MFS VIT II High Yield Portfolio Service Class Sub-Account, MFS VIT II International Growth Portfolio I Class Sub-Account, MFS VIT II International Growth Portfolio S Class Sub-Account, MFS VIT II International Value Portfolio I Class Sub-Account, MFS VIT II International Value Portfolio S Class Sub-Account, MFS VIT II Massachusetts Investors Growth Stock Portfolio I Class Sub-Account, MFS VIT II Massachusetts Investors Growth Stock Portfolio S Class Sub-Account, MFS VIT II Money Market Portfolio Initial Class Sub-Account, MFS VIT II Money Market Portfolio Service Class Sub-Account, MFS VIT II New Discovery Portfolio I Class Sub-Account, MFS VIT II New Discovery Portfolio S Class Sub-Account, MFS VIT II Research International Portfolio I Class Sub-Account, MFS VIT II Research International Portfolio S Class Sub-Account, MFS VIT II Strategic Income Portfolio I Class Sub-Account, MFS VIT II Strategic Income Portfolio S Class Sub-Account, MFS VIT II Technology Portfolio I Class Sub-Account, MFS VIT II Technology Portfolio S Class Sub-Account, MFS VIT II Total Return Series I Class Sub-Account, MFS VIT II Total Return Series S Class Sub-Account, MFS VIT II Utilities Portfolio I Class Sub-Account, MFS VIT II Utilities Portfolio S Class Sub-Account, MFS VIT II Value Portfolio I Class Sub-Account, MFS VIT II Value Portfolio S Class Sub-Account, MFS VIT III Blended Research Small Cap Portfolio Service Class Sub-Account, MFS VIT III Conservative Allocation Portfolio Service Class Sub-Account, MFS VIT III Global Real Estate Portfolio Initial Class Sub-Account, MFS VIT III Global Real Estate Portfolio Service Class Sub-Account, MFS VIT III Growth Allocation Portfolio Service Class Sub-Account, MFS VIT III Inflation Adjusted Bond Portfolio Service Class Sub-Account, MFS VIT III Limited Maturity Portfolio Initial Class Sub-Account, MFS VIT III Limited Maturity Portfolio Service Class Sub-Account, MFS VIT III Mid Cap Value Portfolio Initial Class Sub-Account, MFS VIT III Mid Cap Value Portfolio Service Class Sub-Account, MFS VIT III Moderate Allocation Portfolio Service Class Sub-Account, MFS VIT III New Discovery Value Portfolio Service Class Sub-Account, Morgan Stanley UIF Growth Portfolio Class II Sub-Account, Morgan Stanley UIF Mid Cap Growth Portfolio Class II Sub-Account, Oppenheimer Capital Income Fund/VA (Service Shares)  Sub-Account, Oppenheimer Capital Appreciation Fund/VA (Service Shares) Sub-Account, Oppenheimer Global Fund/VA (Service Shares)  Sub-Account, Oppenheimer Main Street Small Cap Fund/VA (Service Shares) Sub-Account, Oppenheimer Main Street Small- & Mid-Cap Fund/VA (Service Shares) Sub-Account, PIMCO Equity Series Pathfinder Portfolio Advisor Class Sub-Account, PIMCO VIT All Asset Portfolio Admin Class Sub-Account, PIMCO VIT All Asset Portfolio Advisor Class Sub-Account, PIMCO VIT CommodityRealReturn Strategy Portfolio Advisor Class Sub-Account, PIMCO VIT CommodityRealReturnTM Strategy Portfolio Admin Class Sub-Account, PIMCO VIT Emerging Markets Bond Portfolio Admin Class Sub-Account, PIMCO VIT Emerging Markets Bond Portfolio Advisor Class Sub-Account, PIMCO VIT Global Multi-Asset Portfolio Advisor Class Sub-Account, PIMCO VIT Real Return Portfolio Admin Class Sub-Account, PIMCO VIT Total Return Portfolio Admin Class Sub-Account, Putnam VT Absolute Return 500 Fund Class IB Sub-Account, Putnam VT Equity Income Fund Class IB Sub-Account, Wanger Select Fund Sub-Account, Wanger USA Sub-Account, and Wells Fargo Advantage VT Total Return Bond Fund Class 2 Sub-Account at December 31, 2013, and the results of each of their operations, and the changes in each of their net assets for the year then ended, in conformity with accounting principles generally accepted in the United States of America.  These financial statements are the responsibility of the Sun Life Assurance Company of Canada (U.S.)’s management; our responsibility is to express an opinion on these financial statements based on our audit.  We conducted our audit of these financial statements 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.  An audit 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, and evaluating the overall financial statement presentation.  We believe that our audit, which included confirmation of securities at December 31, 2013 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion.


/s/ PricewaterhouseCoopers LLP




April 29, 2014
Hartford, CT

 
 

 


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 Extra II, Sun Life Financial Masters Choice, Sun Life Financial Masters Choice II, Sun Life Financial Masters Access, Sun Life Financial Masters Flex, Sun Life Financial Masters Flex II, Sun Life Financial Masters IV, Sun Life Financial Masters VII, Sun Life Financial Masters B Share, and Sun Life Financial Masters I Share 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 (Class B) Sub-Account, AllianceBernstein VPS Dynamic Asset Allocation Portfolio Class B Sub-Account, AllianceBernstein VPS International Growth Portfolio (Class B) Sub-Account, AllianceBernstein VPS International Value Portfolio (Class B) Sub-Account, AllianceBernstein VPS Small/Mid Cap Value Fund (Class B) Sub-Account, BlackRock Global Allocation V.I. Fund (Class III) Sub-Account, Columbia Variable Portfolio - Marsico 21st Century Fund Class 1 Sub-Account, Columbia Variable Portfolio - Marsico 21st Century Fund Class 2 Sub-Account, Columbia Variable Portfolio - Marsico Growth Fund Class 1 Sub-Account, Columbia Variable Portfolio - Marsico Growth Fund Class 2 Sub-Account, Columbia Variable Portfolio - Marsico International Opportunities Fund Class 2 Sub-Account, Columbia Variable Portfolio - Small Cap Value Fund Class 2 Sub-Account, Fidelity VIP Balanced Portfolio (Service Class 2) Sub-Account, Fidelity VIP Contrafund Portfolio (Service Class 2) Sub-Account, Fidelity VIP Freedom 2010 Portfolio (Service Class 2) Sub-Account, Fidelity VIP Freedom 2015 Portfolio (Service Class 2) Sub-Account, Fidelity VIP Freedom 2020 Portfolio (Service Class 2) Sub-Account, Fidelity VIP Mid Cap Portfolio (Service Class 2) Sub-Account, First Eagle Overseas Variable Fund Sub-Account, Franklin Templeton VIP Founding Funds Allocation Fund (Class 2) Sub-Account, Franklin Templeton VIP Franklin Income Securities Fund (Class 2) Sub-Account, Franklin Templeton VIP Franklin Income Securities Fund Class 4 Sub-Account, Franklin Templeton VIP Franklin Mutual Shares Securities Fund Class 4 Sub-Account, Franklin Templeton VIP Franklin Small Cap Value Securities Fund (Class 2) Sub-Account, Franklin Templeton VIP Franklin Small Cap Value Securities Fund Class 4 Sub-Account, Franklin Templeton VIP Franklin Strategic Income Securities Fund (Class 2) Sub-Account, Franklin Templeton VIP Franklin Strategic Income Securities Fund Class 4 Sub-Account, Franklin Templeton VIP Mutual Shares Securities Fund (Class 2) Sub-Account, Franklin Templeton VIP Templeton Developing Markets Securities Fund (Class 2) Sub-Account, Franklin Templeton VIP Templeton Foreign Securities Fund (Class 2) Sub-Account, Franklin Templeton VIP Templeton Global Bond Securities Class 4 Sub-Account, Franklin Templeton VIP Templeton Growth Securities Fund (Class 2) Sub-Account, Huntington VA Balanced Fund Sub-Account, Huntington VA Dividend Capture Sub-Account, Huntington VA Growth Sub-Account, Huntington VA Income Equity Sub-Account, Huntington VA International Equity Sub-Account, Huntington VA Macro 100 Sub-Account, Huntington VA Mid Corp America Fund Sub-Account, Huntington VA Mortgage Securities Sub-Account, Huntington VA New Economy Fund Sub-Account, Huntington VA Real Strategies Fund Sub-Account, Huntington VA Rotating Markets Sub-Account, Huntington VA Situs Fund Sub-Account, Invesco V.I. International Growth Fund II Sub-Account, Invesco Van Kampen V.I. American Value Fund (Series II) Sub-Account, Invesco Van Kampen V.I. Comstock Fund Series II Sub-Account, Invesco Van Kampen V.I. Equity and Income Fund II Sub-Account, JPMorgan Insurance Trust Core Bond Portfolio (Class 2) Sub-Account, JPMorgan Insurance Trust U.S. Equity Portfolio (Class 2) Sub-Account, Lazard Retirement Emerging Markets Equity Portfolio Service Class Sub-Account, Lord Abbett Series Fund - Growth Opportunities Portfolio VC Sub-Account, Lord Abbett Series Fund- Fundamental Equity Portfolio VC Sub-Account, MFS Growth Portfolio Initial Class Sub-Account, MFS Growth Portfolio Service Class Sub-Account, MFS VIT I Growth Series Initial Class Sub-Account, MFS VIT I Growth Series Service Class Sub-Account, MFS VIT I Mid Cap Growth Series Initial Class Sub-Account, MFS VIT I Mid Cap Growth Series Service Class Sub-Account, MFS VIT I New Discovery Series Service Class Sub-Account, MFS VIT I Research Bond Series Service Class Sub-Account, MFS VIT I Research Series Service Class Sub-Account, MFS VIT I Value Series Initial Class Sub-Account, MFS VIT I Value Series Service Class Sub-Account, MFS VIT II Blended Research Core Equity Portfolio I Class Sub-Account, MFS VIT II Blended Research Core Equity Portfolio S Class Sub-Account, MFS VIT II Bond Portfolio I Class Sub-Account, MFS VIT II Bond Portfolio S Class Sub-Account, MFS VIT II Core Equity Portfolio I Class Sub-Account, MFS VIT II Core Equity Portfolio S Class Sub-Account, MFS VIT II Emerging Markets Equity Portfolio I Class Sub-Account, MFS VIT II Emerging Markets Equity Portfolio S Class Sub-Account, MFS VIT II Global Governments Portfolio I Class Sub-Account, MFS VIT II Global Governments Portfolio S Class Sub-Account, MFS VIT II Global Growth Portfolio I Class Sub-Account, MFS VIT II Global Growth Portfolio S Class Sub-Account, MFS VIT II Global Research Portfolio I Class Sub-Account, MFS VIT II Global Research Portfolio S Class Sub-Account, MFS VIT II Global Tactical Allocation Portfolio I Class Sub-Account, MFS VIT II Global Tactical Allocation Portfolio S Class Sub-Account, MFS VIT II Government Securities Portfolio I Class Sub-Account, MFS VIT II Government Securities Portfolio S Class Sub-Account, MFS VIT II High Yield Portfolio Initial Class Sub-Account, MFS VIT II High Yield Portfolio Service Class Sub-Account, MFS VIT II International Growth Portfolio I Class Sub-Account, MFS VIT II International Growth Portfolio S Class Sub-Account, MFS VIT II International Value Portfolio I Class Sub-Account, MFS VIT II International Value Portfolio S Class Sub-Account, MFS VIT II Massachusetts Investors Growth Stock Portfolio I Class Sub-Account, MFS VIT II Massachusetts Investors Growth Stock Portfolio S Class Sub-Account, MFS VIT II Mid Cap Growth Portfolio I Class Sub-Account, MFS VIT II Mid Cap Growth Portfolio S Class Sub-Account, MFS VIT II Money Market Portfolio Initial Class Sub-Account, MFS VIT II Money Market Portfolio Service Class Sub-Account, MFS VIT II New Discovery Portfolio I Class Sub-Account, MFS VIT II New Discovery Portfolio S Class Sub-Account, MFS VIT II Research International Portfolio I Class Sub-Account, MFS VIT II Research International Portfolio S Class Sub-Account, MFS VIT II Strategic Income Portfolio I Class Sub-Account, MFS VIT II Strategic Income Portfolio S Class Sub-Account, MFS VIT II Technology Portfolio I Class Sub-Account, MFS VIT II Technology Portfolio S Class Sub-Account, MFS VIT II Total Return Portfolio I Class Sub-Account, MFS VIT II Total Return Portfolio S Class Sub-Account, MFS VIT II Utilities Portfolio I Class Sub-Account, MFS VIT II Utilities Portfolio S Class Sub-Account, MFS VIT II Value Portfolio I Class Sub-Account, MFS VIT II Value Portfolio S Class Sub-Account, MFS VIT III Blended Research Small Cap Portfolio Service Class Sub-Account, MFS VIT III Conservative Allocation Portfolio Service Class Sub-Account, MFS VIT III Global Real Estate Portfolio Initial Class Sub-Account, MFS VIT III Global Real Estate Portfolio Service Class Sub-Account, MFS VIT III Growth Allocation Portfolio Service Class Sub-Account, MFS VIT III Inflation Adjusted Bond Portfolio Service Class Sub-Account, MFS VIT III Limited Maturity Portfolio Initial Class Sub-Account, MFS VIT III Limited Maturity Portfolio Service Class Sub-Account, MFS VIT III Mid Cap Value Portfolio Initial Class Sub-Account, MFS VIT III Mid Cap Value Portfolio Service Class Sub-Account, MFS VIT III Moderate Allocation Portfolio Service Class Sub-Account, MFS VIT III New Discovery Value Portfolio Service Class Sub-Account, Morgan Stanley UIF Growth Portfolio Class II Sub-Account, Morgan Stanley UIF Mid Cap Growth Portfolio Class II Sub-Account, Oppenheimer Balanced Fund/VA (Service Shares) Sub-Account, Oppenheimer Capital Appreciation Fund/VA (Service Shares) Sub-Account, Oppenheimer Global Securities Fund/VA (Service Shares) Sub-Account, Oppenheimer Main Street Fund/VA (Service Shares) Sub-Account, Oppenheimer Main Street Small- & Mid-Cap Fund/VA (Service Shares) Sub-Account, PIMCO Equity Series Pathfinder Portfolio Advisor Class Sub-Account, PIMCO VIT All Asset Portfolio Admin Class Sub-Account, PIMCO VIT All Asset Portfolio Advisor Class Sub-Account, PIMCO VIT CommodityRealReturn Strategy Portfolio Advisor Class Sub-Account, PIMCO VIT CommodityRealReturnTM Strategy Portfolio Admin Class Sub-Account, PIMCO VIT Emerging Markets Bond Portfolio Admin Class Sub-Account, PIMCO VIT Emerging Markets Bond Portfolio Advisor Class Sub-Account, PIMCO VIT Global Multi-Asset Portfolio Advisor Class Sub-Account, PIMCO VIT Real Return Portfolio Admin Class Sub-Account, PIMCO VIT Total Return Portfolio Admin Class Sub-Account, Putnam VT Absolute Return 500 Fund Class IB Sub-Account, Putnam VT Equity Income Fund Class IB Sub-Account, SC AllianceBernstein International Value (Service Class) Sub-Account, SC BlackRock International Index Fund (Service Class) Sub-Account, SC BlackRock Large Cap Index Fund (Service Class) Sub-Account, SC Davis Venture Value Fund (Service Class) Sub-Account, SC Invesco Small Cap Growth Service Class Sub-Account, SC Lord Abbett Growth & Income Fund (Initial Class) Sub-Account, SC Lord Abbett Growth & Income Fund (Service Class) Sub-Account, SC PIMCO High Yield Fund (Service Class) Sub-Account, SC PIMCO Total Return (Service Class) Sub-Account, SC WMC Blue Chip Mid Cap Fund (Service Class) Sub-Account, SC WMC Large Cap Growth Fund (Service Class) Sub-Account, Sun Capital Investment Grade Bond Fund (Service Class) Sub-Account, Sun Capital Money Market Fund (Service Class) Sub-Account, Wanger Select Fund Sub-Account, Wanger USA Sub-Account, and Wells Fargo Advantage VT Total Return Bond Fund Class 2 Sub-Account of Sun Life of Canada (U.S.) Variable Account F (collectively the "Sub-Accounts"), as of December 31, 2012, and the related statements of operations and the statements of changes in net assets for each of the periods presented.  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, 2012, by correspondence with the mutual fund companies.  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, 2012, and the results of their operations and the changes in their net assets for each of the periods presented in conformity with accounting principles generally accepted in the United States of America.


/s/ Deloitte & Touche LLP

Boston, Massachusetts
April 24, 2013


 
 

 


 
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, 2013
       
Assets:
Shares
 
Cost
Value
Investments at fair value:
       
AllianceBernstein VPS Balanced Wealth Strategy
       
Portfolio (Class B) Sub-Account (AVB)
4,803,854
$
53,701,090
$           65,572,601
AllianceBernstein VPS Dynamic Asset Allocation
       
Portfolio Class B Sub-Account (AAA)
9,152,104
 
96,527,632
106,896,574
AllianceBernstein VPS International Growth
       
Portfolio (Class B) Sub-Account (AN4)
479,546
 
7,887,647
9,149,747
AllianceBernstein VPS International Value
       
Portfolio (Class B) Sub-Account (IVB)
4,248,189
 
50,993,251
63,128,091
AllianceBernstein VPS Small/Mid Cap Value
       
Portfolio (Class B) Sub-Account (AAU)
403,159
 
8,333,060
9,167,837
BlackRock Global Allocation V.I. Fund (Class III)
       
Sub-Account (9XX)
50,560,422
 
700,898,124
787,731,379
Columbia Variable Portfolio - Marsico 21st Century
       
Fund Class 1 Sub-Account (NMT)
2,806
 
31,224
47,121
Columbia Variable Portfolio - Marsico 21st Century
       
Fund Class 2 Sub-Account (MCC)
6,699,549
 
60,471,498
110,944,532
Columbia Variable Portfolio - Marsico Growth
       
Fund Class 1 Sub-Account (NNG)
1,185
 
21,296
35,578
Columbia Variable Portfolio - Marsico Growth
       
Fund Class 2 Sub-Account (CMG)
1,043,236
 
21,778,461
31,286,645
 Columbia Variable Portfolio - Marsico International
       
Opportunities Fund Class 2 Sub-Account (NMI)
525,281
 
7,557,507
9,749,224
Columbia Variable Portfolio - Small Cap Value
       
Fund Class 2 Sub-Account (CSC)
1,756
 
29,443
35,796
Fidelity VIP Balanced Portfolio (Service Class 2)
5,948,458
 
90,384,644
103,919,564
Fidelity VIP Contrafund Portfolio (Service Class 2)
7,181,567
 
152,227,717
242,521,514
Fidelity VIP Freedom 2010 Portfolio (Service Class
417,653
 
4,349,545
5,112,070
Fidelity VIP Freedom 2015 Portfolio (Service Class
2,088,460
 
21,491,130
25,834,253
Fidelity VIP Freedom 2020 Portfolio (Service Class
3,115,582
 
30,866,795
39,069,394
Fidelity VIP Mid Cap Portfolio (Service Class 2)
4,586,760
 
126,454,009
163,288,669
First Eagle Overseas Variable Fund Sub-Account
15,322,715
 
400,349,892
456,004,009
Franklin Templeton VIP Founding Funds
6,948,894
 
44,469,851
51,560,794
Franklin Templeton VIP Franklin Income Securities
7,394,366
 
106,606,910
118,827,462
Franklin Templeton VIP Franklin Income Securities
       
Fund Class 4 Sub-Account (AAZ)
183,076
 
2,753,779
2,995,129
Franklin Templeton VIP Franklin Mutual Shares
       
Securities Fund Class 4 Sub-Account (BBC)
9,476
 
163,985
205,905
Franklin Templeton VIP Franklin Small Cap Value
       
Securities Fund (Class 2) Sub-Account (FVS)
1,960,721
 
32,608,101
47,194,557










 
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, 2013
 

Assets (continued):
Shares
 
Cost
 
Value
Investments at fair value (continued):
         
Franklin Templeton VIP Franklin Small Cap Value
         
Securities Fund Class 4 Sub-Account (BBA)
35,529
$
602,392
$
865,842
Franklin Templeton VIP Franklin Strategic Income
         
Securities Fund (Class 2) Sub-Account (SIC)
2,615,195
 
32,583,951
 
32,166,899
Franklin Templeton VIP Franklin Strategic Income
         
Securities Fund Class 4 Sub-Account (BBB)
40,037
 
507,163
 
500,863
Franklin Templeton VIP Mutual Shares Securities
         
Fund (Class 2) Sub-Account (FMS)
11,163,604
 
153,623,016
 
241,468,756
Franklin Templeton VIP Templeton Developing
         
Markets Securities Fund (Class 2) Sub-Account
         
(TDM)
4,266,792
 
35,280,363
 
43,478,613
Franklin Templeton VIP Templeton Foreign
         
Securities Fund (Class 2) Sub-Account (FTI)
10,813,554
 
122,854,247
 
186,425,675
Franklin Templeton VIP Templeton Global Bond
         
Securities Class 4 Sub-Account (AAX)
436,218
 
8,406,400
 
8,275,057
Franklin Templeton VIP Templeton Growth
         
Securities Fund (Class 2) Sub-Account (FTG)
2,233,795
 
23,188,431
 
34,020,697
Huntington VA Balanced Fund Sub-Account (HBF)
932,864
 
12,217,708
 
14,981,788
Huntington VA Dividend Capture Sub-Account
367,197
 
3,578,084
 
4,608,325
Huntington VA Growth Sub-Account (HVG)
75,394
 
556,888
 
830,844
Huntington VA Income Equity Sub-Account (HVI)
81,733
 
654,024
 
932,571
Huntington VA International Equity Sub-Account
275,358
 
3,626,520
 
4,749,934
Huntington VA Mid Corp America Fund Sub-
70,326
 
1,205,906
 
1,606,941
Huntington VA Mortgage Securities Sub-Account
717,793
 
8,439,684
 
8,218,734
Huntington VA Real Strategies Fund Sub-Account
255,272
 
2,143,186
 
2,330,630
Huntington VA Rotating Markets Sub-Account
103,706
 
1,162,689
 
1,442,554
Huntington VA Situs Fund Sub-Account (HSS)
215,234
 
3,020,982
 
5,154,845
Invesco V.I. American Value Fund Series II Sub-
         
Account (VKC)
578,417
 
9,236,214
 
11,412,161
Invesco V.I. Comstock Fund Series II Sub-Account
         
(VLC)
2,244,239
 
30,296,022
 
39,678,147
Invesco V.I. Equity and Income Fund Series II Sub-
         
Account (VKU)
5,503,084
 
83,687,755
 
101,917,116
Invesco V.I. International Growth Fund II Sub-
         
Account (AI8)
36,278
 
1,135,838
 
1,265,384
JPMorgan Insurance Trust Core Bond Portfolio
         
(Class 2) Sub-Account (AAY)
2,154,827
 
24,370,675
 
23,724,644
JPMorgan Insurance Trust U.S. Equity Portfolio
         
(Class 2) Sub-Account (AAM)
221,535
 
4,393,230
 
5,212,710
Lazard Retirement Emerging Markets Equity
         
Portfolio Service Class Sub-Account (LRE)
2,792,157
 
58,719,719
 
60,059,305

 
 
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, 2013
 

Assets (continued):
Shares
 
Cost
Value
Investments at fair value (continued):
       
Lord Abbett Series Fund - Growth Opportunities
       
Portfolio VC Sub-Account (LA9)
2,681,000
$
38,381,617
$           40,885,254
Lord Abbett Series Fund- Fundamental Equity
       
Portfolio VC Sub-Account (LAV)
2,694,437
 
48,903,779
56,664,014
MFS VIT Total Return Series Initial Class Sub-
       
Account (GGC)
19,183,813
 
424,841,608
449,668,579
MFS VIT Total Return Series Service Class Sub-
       
Account (GGE)
25,181,936
 
549,881,625
582,206,351
MFS VIT I Growth Series Initial Class Sub-Account
       
(FFL)
3,850,923
 
109,023,814
150,455,551
MFS VIT I Growth Series Service Class Sub-
       
Account (TEG)
528,514
 
15,330,463
20,199,798
MFS VIT I Mid Cap Growth Series Initial Class
       
Sub-Account (FFJ)
2,756,334
 
17,961,891
24,807,007
MFS VIT I Mid Cap Growth Series Service Class
       
Sub-Account (FFK)
5,027,001
 
31,787,119
43,835,446
MFS VIT I New Discovery Series Service Class Sub-
       
Account (TND)
870,432
 
13,670,110
18,296,470
MFS VIT I Research Bond Series Service Class Sub-
       
Account (AAN)
60,302,844
 
800,027,383
779,112,747
MFS VIT I Research Series Service Class Sub-
       
Account (FFN)
7,637,169
 
164,400,038
217,582,952
MFS VIT I Value Series Initial Class Sub-Account
       
(FFO)
13,977,120
 
201,105,994
269,478,876
MFS VIT I Value Series Service Class Sub-Account
       
(FFP)
724,341
 
10,479,426
13,784,206
MFS VIT II Blended Research Core Equity
       
Portfolio I Class Sub-Account (MIT)
6,966,225
 
198,518,938
336,538,311
MFS VIT II Blended Research Core Equity
       
Portfolio S Class Sub-Account (MFL)
2,537,697
 
65,738,838
121,860,195
MFS VIT II Bond Portfolio I Class Sub-Account
       
(BDS)
6,485,769
 
72,857,027
75,105,209
MFS VIT II Bond Portfolio S Class Sub-Account
       
(MF7)
15,569,474
 
181,562,746
178,270,479
MFS VIT II Core Equity Portfolio I Class Sub-
       
Account (RGS)
5,346,471
 
82,218,792
114,895,658
MFS VIT II Core Equity Portfolio S Class Sub-
       
Account (RG1)
2,261,470
 
33,863,666
48,214,531
MFS VIT II Emerging Markets Equity Portfolio I
       
Class Sub-Account (EME)
2,099,904
 
30,402,081
30,490,613
MFS VIT II Emerging Markets Equity Portfolio S
2,089,316
 
31,094,439
29,856,319
MFS VIT II Global Governments Portfolio I Class
       
Sub-Account (GGS)
1,716,839
 
18,550,861
17,940,967
MFS VIT II Global Governments Portfolio S Class
       
Sub-Account (GG1)
246,359
 
2,620,492
2,532,572

 
 
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.))
 
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED) DECEMBER 31, 2013
 

Assets (continued):
Shares
 
Cost
Value
Investments at fair value (continued):
       
MFS VIT II Global Growth Portfolio I Class Sub-
       
Account (GGR)
2,657,109
$
34,889,691
$           57,473,270
MFS VIT II Global Growth Portfolio S Class Sub-
       
Account (GG2)
164,001
 
2,700,188
3,534,222
MFS VIT II Global Research Portfolio I Class Sub-
       
Account (RES)
4,874,932
 
79,325,110
121,142,070
MFS VIT II Global Research Portfolio S Class Sub-
       
Account (RE1)
403,889
 
6,809,139
9,984,130
MFS VIT II Global Tactical Allocation Portfolio I
       
Class Sub-Account (GTR)
4,343,255
 
63,865,524
70,360,730
MFS VIT II Global Tactical Allocation Portfolio S
       
Class Sub-Account (GT2)
58,350,959
 
828,937,298
933,031,830
MFS VIT II Government Securities Portfolio I
       
Class Sub-Account (GSS)
9,993,007
 
131,263,987
127,210,981
MFS VIT II Government Securities Portfolio S
       
Class Sub-Account (MFK)
24,927,322
 
329,672,643
314,832,079
MFS VIT II High Yield Portfolio I Class Sub-
       
Account (HYS)
13,742,663
 
77,340,048
86,303,922
MFS VIT II High Yield Portfolio Service Class Sub-
       
Account (MFC)
14,058,558
 
80,646,748
87,303,645
MFS VIT II International Growth Portfolio I Class
       
Sub-Account (IGS)
3,630,397
 
45,442,775
53,620,958
MFS VIT II International Growth Portfolio S Class
       
Sub-Account (IG1)
1,710,829
 
20,611,002
25,080,755
MFS VIT II International Value Portfolio I Class
       
Sub-Account (MII)
2,401,128
 
40,044,265
52,488,653
MFS VIT II International Value Portfolio S Class
       
Sub-Account (MI1)
7,322,463
 
101,016,279
158,018,763
MFS VIT II Massachusetts Investors Growth Stock
       
Portfolio I Class Sub-Account (MIS)
21,163,740
 
214,234,132
366,344,347
MFS VIT II Massachusetts Investors Growth Stock
       
Portfolio S Class Sub-Account (M1B)
2,917,913
 
29,941,350
50,158,927
MFS VIT II Money Market Portfolio I Class Sub-
       
Account (MMS)
76,293,115
 
76,293,115
76,293,115
MFS VIT II Money Market Portfolio Service Class
       
Sub-Account (MM1)
229,003,540
 
229,003,540
229,003,540
MFS VIT II New Discovery Portfolio I Class Sub-
       
Account (NWD)
3,065,621
 
44,552,703
71,183,721
MFS VIT II New Discovery Portfolio S Class Sub-
       
Account (M1A)
2,651,012
 
35,548,137
59,038,031
MFS VIT II Research International Portfolio I Class
       
Sub-Account (RIS)
2,132,406
 
32,388,860
34,310,406
MFS VIT II Research International Portfolio S Class
       
Sub-Account (RI1)
5,319,244
 
60,065,053
84,629,177

 
 
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, 2013
 

Assets (continued):
Shares
 
Cost
Value
Investments at fair value (continued):
       
MFS VIT II Strategic Income Portfolio I Class Sub-
       
Account (SIS)
3,747,686
$
36,007,874
$           37,514,335
MFS VIT II Strategic Income Portfolio S Class Sub-
       
Account (SI1)
727,680
 
6,986,686
7,225,862
MFS VIT II Technology Portfolio I Class Sub-
       
Account (TEC)
1,440,411
 
9,558,968
15,426,804
MFS VIT II Technology Portfolio S Class Sub-
       
Account (TE1)
143,843
 
951,179
1,488,775
MFS VIT II Utilities Portfolio I Class Sub-Account
       
(UTS)
6,017,669
 
134,271,935
158,866,468
MFS VIT II Utilities Portfolio S Class Sub-Account
       
(MFE)
4,078,253
 
89,780,637
106,401,617
MFS VIT II Value Portfolio I Class Sub-Account
       
(MVS)
7,463,998
 
107,895,189
127,261,166
MFS VIT II Value Portfolio S Class Sub-Account
       
(MV1)
11,304,335
 
142,177,172
190,704,131
MFS VIT III Blended Research Small Cap Portfolio
       
Service Class Sub-Account (VSC)
6,315,617
 
65,080,388
113,428,486
MFS VIT III Conservative Allocation Portfolio
       
Service Class Sub-Account (6XX)
72,185,328
 
825,168,704
838,071,660
MFS VIT III Global Real Estate Portfolio Initial
       
Class Sub-Account (SC3)
272,632
 
2,870,155
3,388,819
MFS VIT III Global Real Estate Portfolio Service
       
Class Sub-Account (SRE)
7,629,719
 
80,860,991
106,129,389
MFS VIT III Growth Allocation Portfolio Service
       
Class Sub-Account (8XX)
47,284,588
 
524,992,227
576,399,130
MFS VIT III Inflation Adjusted Bond Portfolio
       
Service Class Sub-Account (5XX)
23,087,225
 
253,412,291
229,948,759
MFS VIT III Limited Maturity Portfolio Initial
       
Class Sub-Account (SDC)
43,041,364
 
442,043,649
444,186,872
MFS VIT III Limited Maturity Portfolio Service
       
Class Sub-Account (S15)
20,868,597
 
214,598,166
214,946,545
MFS VIT III Mid Cap Value Portfolio Initial Class
       
Sub-Account (SGC)
5,029,707
 
43,586,735
50,548,552
MFS VIT III Mid Cap Value Portfolio Service Class
       
Sub-Account (S13)
3,600,460
 
33,004,749
35,968,593
MFS VIT III Moderate Allocation Portfolio Service
       
Class Sub-Account (7XX)
157,417,403
 
1,861,006,720
2,046,426,235
MFS VIT III New Discovery Value Portfolio
       
Service Class Sub-Account (2XX)
850,468
 
7,844,513
10,256,649
Morgan Stanley UIF Growth Portfolio Class II Sub-
       
Account (AAW)
69,867
 
1,851,968
2,123,254
Morgan Stanley UIF Mid Cap Growth Portfolio
       
Class II Sub-Account (VKM)
859,507
 
10,076,697
12,247,977
Oppenheimer Capital Appreciation Fund/VA
       
(Service Shares) Sub-Account (OCA)
421,765
 
16,139,879
24,196,678

 
 
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, 2013
 

Assets (continued):
Shares
Cost
Value
Investments at fair value (continued):
     
Oppenheimer Capital Income Fund/VA (Service
     
Shares) Sub-Account (OBV)
972,129
$              9,761,442
$           13,279,282
Oppenheimer Global Fund/VA (Service Shares)
     
Sub-Account (OGG)
782,289
22,877,088
31,659,251
Oppenheimer Main Street Fund/VA (Service
     
Shares) Sub-Account (OMG)
11,029,356
175,067,360
341,799,737
Oppenheimer Main Street Small Cap Fund/VA
     
(Service Shares) Sub-Account (OMS)
318,671
5,058,136
8,773,000
PIMCO Equity Series Pathfinder Portfolio Advisor
     
Class Sub-Account (AAQ)
3,033
35,058
37,848
PIMCO VIT All Asset Portfolio Admin Class Sub-
     
Account (PRA)
3,131,695
35,460,485
34,072,842
PIMCO VIT All Asset Portfolio Advisor Class Sub-
     
Account (AAP)
2,188,870
24,625,498
24,033,787
PIMCO VIT CommodityRealReturn Strategy
     
Portfolio Advisor Class Sub-Account (BBD)
128,545
932,418
777,700
PIMCO VIT CommodityRealReturnTM Strategy
     
Portfolio Admin Class Sub-Account (PCR)
9,594,646
72,540,281
57,375,986
PIMCO VIT Emerging Markets Bond Portfolio
     
Admin Class Sub-Account (PMB)
1,563,004
21,985,165
21,006,773
PIMCO VIT Emerging Markets Bond Portfolio
     
Advisor Class Sub-Account (BBE)
40,029
560,926
537,988
PIMCO VIT Global Multi-Asset Portfolio Advisor
     
Class Sub-Account (6TT)
69,797,071
869,291,766
794,290,664
PIMCO VIT Real Return Portfolio Admin Class
     
Sub-Account (PRR)
6,303,678
84,464,562
79,426,344
PIMCO VIT Total Return Portfolio Admin Class
     
Sub-Account (PTR)
27,545,706
306,647,748
302,451,847
Putnam VT Absolute Return 500 Fund Class IB
     
Sub-Account (AAR)
1,933,374
19,693,985
20,126,427
Putnam VT Equity Income Fund Class IB Sub-
     
Account (AAS)
510,000
9,113,083
10,403,998
Wanger Select Fund Sub-Account (WTF)
14,462
296,206
526,566
Wanger USA Sub-Account (USC)
1,969
62,463
80,974
Wells Fargo Advantage VT Total Return Bond
     
Fund Class 2 Sub-Account (AAL)
3,488,250
36,662,515
35,196,445
Total investments
 
14,959,565,669
17,108,651,072
Total assets
 
$         14,959,565,669
$       17,108,651,072
Liabilities:
     
Payable to Sponsor
   
$            7,526,675
Total liabilities
   
7,526,675
Net Assets
   
$       17,101,124,397

 
 
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, 2013
 

 
Total Units
 
Applicable to Owners
of Deferred Variable
Annuity Contracts
Value
 
Reserve for Variable
Annuities                          Total Value
Net Assets:
             

 
AVB
5,318,723
$              65,572,601
$
-
$            65,572,601
AAA
9,712,844
106,896,574
 
-
106,896,574
AN4
1,020,343
9,149,747
 
-
9,149,747
IVB
8,077,654
63,128,091
 
-
63,128,091
AAU
553,196
9,132,215
 
34,262
9,166,477
9XX
52,777,976
787,598,697
 
130,179
787,728,876
NMT
2,841
47,121
 
-
47,121
MCC
8,725,729
110,928,393
 
12,444
110,940,837
NNG
2,169
35,578
 
-
35,578
CMG
2,153,236
31,219,490
 
64,592
31,284,082
NMI
667,648
9,749,224
 
-
9,749,224
CSC
2,076
35,796
 
-
35,796
FVB
7,562,294
103,919,564
 
-
103,919,564
FL1
16,883,265
242,385,571
 
132,753
242,518,324
F10
366,195
5,112,070
 
-
5,112,070
F15
1,808,434
25,834,253
 
-
25,834,253
F20
2,727,741
39,069,394
 
-
39,069,394
FVM
10,268,467
163,280,675
 
4,644
163,285,319
SGI
33,340,140
455,969,744
 
32,972
456,002,716
S17
3,944,019
51,560,794
 
-
51,560,794
ISC
9,121,585
118,784,267
 
41,307
118,825,574
AAZ
232,968
2,995,129
 
-
2,995,129
BBC
13,774
205,905
 
-
205,905
FVS
1,567,440
47,194,557
 
-
47,194,557
BBA
50,422
865,842
 
-
865,842
SIC
2,335,970
32,166,899
 
-
32,166,899
BBB
43,918
500,863
 
-
500,863
FMS
11,763,564
241,452,151
 
13,725
241,465,876
TDM
2,977,837
43,476,465
 
1,303
43,477,768
FTI
8,445,001
186,337,137
 
73,283
186,410,420
AAX
749,817
8,275,057
 
-
8,275,057
FTG
1,577,153
34,020,697
 
-
34,020,697
HBF
988,273
14,981,788
 
-
14,981,788
HVD
341,476
4,608,325
 
-
4,608,325
HVG
78,457
830,844
 
-
830,844
HVI
81,411
932,571
 
-
932,571

 
 
        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, 2013
 

 
Total Units
 
Applicable to Owners
of Deferred Variable
Annuity Contracts
Value
 
Reserve for Variable
Annuities                          Total Value
Net Assets (continued):
             

 
HVE
473,837
$                4,749,934
$
-
$             4,749,934
HVC
116,539
1,606,941
 
-
1,606,941
HVS
737,944
8,218,734
 
-
8,218,734
HRS
308,937
2,330,630
 
-
2,330,630
HVR
131,266
1,442,554
 
-
1,442,554
HSS
340,400
5,154,845
 
-
5,154,845
VKC
705,458
11,412,161
 
-
11,412,161
VLC
2,946,646
39,678,147
 
-
39,678,147
VKU
6,967,224
101,917,116
 
-
101,917,116
AI8
93,459
1,265,384
 
-
1,265,384
AAY
2,366,142
23,724,644
 
-
23,724,644
AAM
325,342
5,212,710
 
-
5,212,710
LRE
5,760,595
60,055,961
 
3,280
60,059,241
LA9
2,007,338
40,865,049
 
18,667
40,883,716
LAV
2,786,160
56,657,015
 
6,864
56,663,879
GGC
41,621,978
446,163,198
 
3,222,529
449,385,727
GGE
54,392,986
581,870,011
 
328,296
582,198,307
FFL
7,603,903
149,272,732
 
775,800
150,048,532
TEG
957,977
20,190,309
 
9,167
20,199,476
FFJ
3,214,346
24,690,618
 
108,834
24,799,452
FFK
2,385,661
43,822,616
 
12,264
43,834,880
TND
1,244,536
18,290,313
 
6,157
18,296,470
AAN
75,771,098
778,980,851
 
117,083
779,097,934
FFN
16,264,441
217,563,246
 
20,127
217,583,373
FFO
19,546,304
269,345,699
 
123,266
269,468,965
FFP
1,001,872
13,784,206
 
-
13,784,206
MIT
13,963,398
333,467,831
 
1,610,927
335,078,758
MFL
5,813,652
121,795,292
 
57,172
121,852,464
BDS
3,586,004
74,378,944
 
458,168
74,837,112
MF7
10,687,410
178,253,999
 
16,190
178,270,189
RGS
5,928,013
114,288,838
 
390,490
114,679,328
RG1
3,243,424
48,214,531
 
-
48,214,531
EME
1,069,130
30,086,696
 
246,193
30,332,889

 
 
       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, 2013
 

 
Total Units
 
Applicable to Owners
of Deferred Variable
Annuity Contracts
Value
 
Reserve for Variable
Annuities                          Total Value
Net Assets (continued):
             

 
EM1
1,912,047
$               29,851,923
$             4,246
$            29,856,169
GGS
935,239
17,810,690
52,058
17,862,748
GG1
164,670
2,528,742
3,701
2,532,443
GGR
2,092,115
56,929,790
286,108
57,215,898
GG2
175,811
3,534,222
-
3,534,222
RES
5,432,212
119,762,597
821,179
120,583,776
RE1
571,136
9,984,130
-
9,984,130
GTR
2,653,641
69,275,648
599,517
69,875,165
GT2
78,489,983
932,995,341
35,846
933,031,187
GSS
6,645,894
126,663,150
411,431
127,074,581
MFK
24,621,249
314,490,317
295,119
314,785,436
HYS
3,573,022
85,254,012
412,174
85,666,186
MFC
4,518,884
87,221,251
65,877
87,287,128
IGS
2,560,681
53,329,894
184,312
53,514,206
IG1
1,744,997
25,072,706
7,773
25,080,479
MII
1,731,827
51,868,818
433,248
52,302,066
MI1
11,692,129
158,009,937
5,549
158,015,486
MIS
24,362,512
363,318,124
2,610,744
365,928,868
M1B
2,908,840
50,134,751
23,130
50,157,881
MMS
6,262,253
74,745,903
1,000,824
75,746,727
MM1
23,996,564
228,813,351
174,026
228,987,377
NWD
3,047,385
70,947,173
155,689
71,102,862
M1A
2,132,167
58,991,544
39,973
59,031,517
RIS
1,850,203
34,226,549
68,458
34,295,007
RI1
3,783,762
84,599,566
27,475
84,627,041
SIS
2,007,250
37,359,532
130,837
37,490,369
SI1
424,124
7,225,862
-
7,225,862
TEC
1,991,018
15,306,442
108,197
15,414,639
TE1
88,657
1,488,775
-
1,488,775
UTS
4,065,665
157,330,311
880,704
158,211,015
MFE
2,522,048
106,401,617
-
106,401,617
MVS
4,956,976
126,308,439
732,930
127,041,369
MV1
8,175,633
190,661,562
39,821
190,701,383
VSC
7,735,586
113,404,641
19,789
113,424,430
6XX
58,713,818
838,067,027
4,569
838,071,596

 
 
          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, 2013
 

 
Total Units
 
Applicable to Owners
of Deferred Variable
Annuity Contracts
Value
 
Reserve for Variable
Annuities                          Total Value
Net Assets (continued):
             

 
SC3
162,229
$                3,380,470
$             7,049
$             3,387,519
SRE
7,368,766
106,106,165
20,728
106,126,893
8XX
32,241,288
576,399,130
-
576,399,130
5XX
18,852,264
229,925,964
22,384
229,948,348
SDC
43,289,725
444,143,723
26,620
444,170,343
S15
21,172,711
214,928,733
17,235
214,945,968
SGC
3,123,825
50,529,045
14,657
50,543,702
S13
2,245,602
35,968,593
-
35,968,593
7XX
126,127,582
2,045,539,227
827,657
2,046,366,884
2XX
528,380
10,256,649
-
10,256,649
AAW
141,552
2,123,254
-
2,123,254
VKM
738,540
12,247,977
-
12,247,977
OCA
1,235,424
24,178,125
16,110
24,194,235
OBV
1,457,258
13,279,282
-
13,279,282
OGG
1,563,988
31,659,251
-
31,659,251
OMG
17,117,234
341,689,429
88,368
341,777,797
OMS
295,912
8,773,000
-
8,773,000
AAQ
2,964
37,848
-
37,848
PRA
2,482,202
34,072,842
-
34,072,842
AAP
2,162,181
24,033,787
-
24,033,787
BBD
98,183
777,700
-
777,700
PCR
6,478,457
57,371,031
4,766
57,375,797
PMB
807,165
20,976,499
29,174
21,005,673
BBE
50,359
537,988
-
537,988
6TT
72,498,400
794,240,220
49,507
794,289,727
PRR
5,155,938
79,426,344
-
79,426,344
PTR
19,151,407
302,238,512
196,521
302,435,033
AAR
1,907,591
20,126,427
-
20,126,427
AAS
635,744
10,403,998
-
10,403,998
WTF
28,431
526,566
-
526,566

 
 
        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, 2013
 

 
Total Units
 
Applicable to Owners
of Deferred Variable
Annuity Contracts
Value
 
Reserve for Variable
Annuities                          Total Value
Net Assets (continued):
             

 
USC
4,578
$                    80,974
$                 -
$                  80,974
AAL
3,349,146
35,196,445
-
35,196,445
Total net assets
 
$         17,082,095,379
$       19,029,018
$       17,101,124,397

 
 
        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, 2013
 

Income:
AVB
Sub-Account
AAA
Sub-Account
 
AN4
Sub-Account
       
Dividend income
$                  1,410,746
$                222,155
$
65,259
Expenses:
       
Mortality and expense risk charges
(907,839)
(1,084,992)
 
(134,389)
Distribution charges
(108,941)
(130,199)
 
(16,127)
Net investment income (loss)
393,966
(993,036)
 
(85,257)
Net realized and change in unrealized gains (losses):
       
Net realized gains (losses) on sale of investments
3,504,978
1,112,940
 
200,029
Realized gain distributions
-
306,421
 
-
Net realized gains (losses)
3,504,978
1,419,361
 
200,029
Net change in unrealized appreciation (depreciation)
4,527,560
6,934,531
 
873,062
Net realized and change in unrealized gains (losses)
8,032,538
8,353,892
 
1,073,091
Increase (decrease) in net assets from operations
$                 8,426,504
$             7,360,856
$
987,834

 
 
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, 2013
 

Income:
IVB
Sub-Account
AAU
Sub-Account
9XX
Sub-Account
     
Dividend income
$                  3,597,164
$                  28,320
$              7,991,884
Expenses:
     
Mortality and expense risk charges
(942,718)
(85,113)
(11,662,063)
Distribution charges
(113,126)
(10,214)
(1,399,448)
Net investment income (loss)
2,541,320
(67,007)
(5,069,627)
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
5,395,068
398,380
21,474,371
Realized gain distributions
-
386,935
31,944,665
Net realized gains (losses)
5,395,068
785,315
53,419,036
Net change in unrealized appreciation (depreciation)
3,944,056
773,419
45,174,332
Net realized and change in unrealized gains (losses)
9,339,124
1,558,734
98,593,368
Increase (decrease) in net assets from operations
$                 11,880,444
$              1,491,727
$             93,523,741

 
 
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, 2013
 

   
NMT
Sub-Account
MCC
Sub-Account
 
NNG
Sub-Account
Income:
         
Dividend income
$
205
$                265,608
$
78
Expenses:
         
Mortality and expense risk charges
 
(690)
(1,679,275)
 
(483)
Distribution charges
 
(83)
(201,513)
 
(58)
Net investment income (loss)
 
(568)
(1,615,180)
 
(463)
Net realized and change in unrealized gains (losses):
         
Net realized gains (losses) on sale of investments
 
1,079
11,052,755
 
169
Realized gain distributions
 
-
-
 
-
Net realized gains (losses)
 
1,079
11,052,755
 
169
Net change in unrealized appreciation (depreciation)
 
15,081
27,659,481
 
9,181
Net realized and change in unrealized gains (losses)
 
16,160
38,712,236
 
9,350
Increase (decrease) in net assets from operations
$
15,592
$            37,097,056
$
8,887

 
 
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, 2013
 

 
CMG
Sub-Account
NMI
Sub-Account
 
CSC
Sub-Account
Income:
       
Dividend income
$                     22,802
$                 40,308
$
169
Expenses:
       
Mortality and expense risk charges
(461,791)
(149,714)
 
(356)
Distribution charges
(55,415)
(17,966)
 
(43)
Net investment income (loss)
(494,404)
(127,372)
 
(230)
Net realized and change in unrealized gains (losses):
       
Net realized gains (losses) on sale of investments
4,996,418
601,280
 
(145)
Realized gain distributions
-
-
 
-
Net realized gains (losses)
4,996,418
601,280
 
(145)
Net change in unrealized appreciation (depreciation)
4,217,352
1,184,396
 
6,547
Net realized and change in unrealized gains (losses)
9,213,770
1,785,676
 
6,402
Increase (decrease) in net assets from operations
$                  8,719,366
$             1,658,304
$
6,172

 
 
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, 2013
 

Income:
FVB
Sub-Account
FL1
Sub-Account
 
F10
Sub-Account
       
Dividend income
$                   1,323,296
$             1,891,562
$
73,789
Expenses:
       
Mortality and expense risk charges
(1,426,691)
(3,513,566)
 
(86,167)
Distribution charges
(171,203)
(421,628)
 
(10,340)
Net investment income (loss)
(274,598)
(2,043,632)
 
(22,718)
Net realized and change in unrealized gains (losses):
       
Net realized gains (losses) on sale of investments
4,401,735
28,092,313
 
424,910
Realized gain distributions
4,420,130
66,241
 
65,611
Net realized gains (losses)
8,821,865
28,158,554
 
490,521
Net change in unrealized appreciation (depreciation)
6,966,114
33,762,988
 
112,744
Net realized and change in unrealized gains (losses)
15,787,979
61,921,542
 
603,265
Increase (decrease) in net assets from operations
$                  15,513,381
$           59,877,910
$
580,547

 
 
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, 2013
 

Income:
F15
Sub-Account
F20
Sub-Account
FVM
Sub-Account
     
Dividend income
$                383,036
$            581,095
$           417,938
Expenses:
     
Mortality and expense risk charges
(410,916)
(563,606)
(2,395,015)
Distribution charges
(49,310)
(67,633)
(287,402)
Net investment income (loss)
(77,190)
(50,144)
(2,264,479)
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
1,815,309
951,024
11,721,720
Realized gain distributions
406,816
518,452
20,218,007
Net realized gains (losses)
2,222,125
1,469,476
31,939,727
Net change in unrealized appreciation (depreciation)
988,561
3,502,768
16,712,825
Net realized and change in unrealized gains (losses)
3,210,686
4,972,244
48,652,552
Increase (decrease) in net assets from operations
$             3,133,496
$          4,922,100
$        46,388,073























 
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, 2013
 

Income:
SGI
Sub-Account
S17
Sub-Account
ISC
Sub-Account
     
Dividend income
$                  7,658,937
$             6,102,203
$             7,556,121
Expenses:
     
Mortality and expense risk charges
(6,823,216)
(749,515)
(1,760,502)
Distribution charges
(818,786)
(89,942)
(211,260)
Net investment income (loss)
16,935
5,262,746
5,584,359
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
24,257,957
2,791,816
5,529,571
Realized gain distributions
23,505,507
8,899,159
-
Net realized gains (losses)
47,763,464
11,690,975
5,529,571
Net change in unrealized appreciation (depreciation)
2,530,363
(7,049,113)
2,574,683
Net realized and change in unrealized gains (losses)
50,293,827
4,641,862
8,104,254
Increase (decrease) in net assets from operations
$                50,310,762
$             9,904,608
$            13,688,613

 
 
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, 2013
 

  Income:
AAZ
Sub-Account
 
BBC
Sub-Account
FVS
Sub-Account
       
Dividend income
$                   182,749
$
3,778
$              557,167
Expenses:
       
Mortality and expense risk charges
(41,458)
 
(2,595)
(662,586)
Distribution charges
(4,975)
 
(311)
(79,510)
Net investment income (loss)
136,316
 
872
(184,929)
Net realized and change in unrealized gains (losses):
       
Net realized gains (losses) on sale of investments
52,673
 
12,994
5,405,170
Realized gain distributions
-
 
-
719,042
Net realized gains (losses)
52,673
 
12,994
6,124,212
Net change in unrealized appreciation (depreciation)
127,949
 
27,815
6,850,201
Net realized and change in unrealized gains (losses)
180,622
 
40,809
12,974,413
Increase (decrease) in net assets from operations
$                   316,938
$
41,681
$           12,789,484

 
 
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, 2013
 

Income:
Dividend income
Expenses:
Mortality and expense risk charges Distribution charges
Net investment income (loss)
BBA
Sub-Account
SIC
Sub-Account
 
BBB
Sub-Account
$                      8,227
(10,333)
(1,240)
$            2,113,405
(508,015)
(60,962)
$
26,759
(5,577)
(669)
(3,346)
1,544,428
 
20,513
Net realized and change in unrealized gains (losses):
       
Net realized gains (losses) on sale of investments
40,473
212,807
 
1,492
Realized gain distributions
11,841
454,464
 
5,922
Net realized gains (losses)
52,314
667,271
 
7,414
Net change in unrealized appreciation (depreciation)
168,788
(1,698,773)
 
(18,972)
Net realized and change in unrealized gains (losses)
221,102
(1,031,502)
 
(11,558)
Increase (decrease) in net assets from operations
$                   217,756
$              512,926
$
8,955

 
 
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, 2013
 

Income:
FMS
Sub-Account
TDM
Sub-Account
FTI
Sub-Account
     
Dividend income
$                  4,984,439
$                801,274
$             4,569,597
Expenses:
     
Mortality and expense risk charges
(3,629,585)
(663,893)
(2,955,930)
Distribution charges
(435,550)
(79,667)
(354,712)
Net investment income (loss)
919,304
57,714
1,258,955
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
23,497,932
1,405,542
6,845,194
Realized gain distributions
-
-
-
Net realized gains (losses)
23,497,932
1,405,542
6,845,194
Net change in unrealized appreciation (depreciation)
32,157,285
(2,324,629)
27,659,331
Net realized and change in unrealized gains (losses)
55,655,217
(919,087)
34,504,525
Increase (decrease) in net assets from operations
$                 56,574,521
$              (861,373)
$            35,763,480

 
 
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, 2013
 

Income:
Dividend income
Expenses:
Mortality and expense risk charges Distribution charges
Net investment income (loss)
 
AAX
Sub-Account
FTG
Sub-Account
HBF
Sub-Account
$
304,513
(105,293)
(12,635)
$                888,946
(495,151)
(59,418)
$                289,207
(217,569)
(26,108)
 
186,585
334,377
45,530
Net realized and change in unrealized gains (losses):
       
Net realized gains (losses) on sale of investments
 
(33,644)
3,123,665
669,156
Realized gain distributions
 
81,419
-
136,094
Net realized gains (losses)
 
47,775
3,123,665
805,250
Net change in unrealized appreciation (depreciation)
 
(275,145)
4,866,395
1,142,166
Net realized and change in unrealized gains (losses)
 
(227,370)
7,990,060
1,947,416
Increase (decrease) in net assets from operations
$
(40,785)
$             8,324,437
$             1,992,946

 
 
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, 2013
 

   
HVD
Sub-Account
 
HVG
Sub-Account
 
HVI
Sub-Account
Income:
           
Dividend income
$
135,976
$
8,254
$
37,929
Expenses:
           
Mortality and expense risk charges
 
(65,566)
 
(11,874)
 
(14,254)
Distribution charges
 
(7,868)
 
(1,425)
 
(1,710)
Net investment income (loss)
 
62,542
 
(5,045)
 
21,965
Net realized and change in unrealized gains (losses):
           
Net realized gains (losses) on sale of investments
 
412,800
 
90,866
 
167,998
Realized gain distributions
 
-
 
-
 
-
Net realized gains (losses)
 
412,800
 
90,866
 
167,998
Net change in unrealized appreciation (depreciation)
 
303,727
 
152,446
 
15,756
Net realized and change in unrealized gains (losses)
 
716,527
 
243,312
 
183,754
Increase (decrease) in net assets from operations
$
779,069
$
238,267
$
205,719

 
 
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, 2013
 

Income:
Dividend income
Expenses:
Mortality and expense risk charges Distribution charges
Net investment income (loss)
HVE
Sub-Account
 
HVM
Sub-Account1
HVC
Sub-Account
$                     65,296
(70,763)
(8,492)
$
1,250
(300)
(36)
$                 12,446
(24,850)
(2,982)
(13,959)
 
914
(15,386)
Net realized and change in unrealized gains (losses):
       
Net realized gains (losses) on sale of investments
273,826
 
24,099
254,342
Realized gain distributions
-
 
-
94,467
Net realized gains (losses)
273,826
 
24,099
348,809
Net change in unrealized appreciation (depreciation)
680,035
 
(15,488)
118,520
Net realized and change in unrealized gains (losses)
953,861
 
8,611
467,329
Increase (decrease) in net assets from operations
$                   939,902
$
9,525
$              451,943


1 These sub-accounts were closed and merged into new sub-accounts during 2013 and therefore do not appear on the Statement of Assets and Liabilities as of December 31, 2013.  See note 1 for additional information around merged sub-accounts.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
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, 2013
 

Income:
Dividend income
Expenses:
Mortality and expense risk charges Distribution charges
Net investment income (loss)
HVS
Sub-Account
 
HRS
Sub-Account
 
HVR
Sub-Account
$                    213,557
(114,613)
(13,754)
$
23,417
(34,227)
(4,107)
$
10,487
(20,366)
(2,444)
85,190
 
(14,917)
 
(12,323)
Net realized and change in unrealized gains (losses):
         
Net realized gains (losses) on sale of investments
38,811
 
46,676
 
71,085
Realized gain distributions
-
 
65,384
 
133,952
Net realized gains (losses)
38,811
 
112,060
 
205,037
Net change in unrealized appreciation (depreciation)
(396,141)
 
79,805
 
98,362
Net realized and change in unrealized gains (losses)
(357,330)
 
191,865
 
303,399
Increase (decrease) in net assets from operations
$                   (272,140)
$
176,948
$
291,076

 
 
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, 2013
 

 
HSS
Sub-Account
 
VKC
Sub-Account
VLC
Sub-Account
Income:
       
Dividend income
$                     16,359
$
49,387
$                491,145
Expenses:
       
Mortality and expense risk charges
(72,782)
 
(127,991)
(498,091)
Distribution charges
(8,734)
 
(15,359)
(59,771)
Net investment income (loss)
(65,157)
 
(93,963)
(66,717)
Net realized and change in unrealized gains (losses):
       
Net realized gains (losses) on sale of investments
756,049
 
972,308
3,804,837
Realized gain distributions
-
 
-
-
Net realized gains (losses)
756,049
 
972,308
3,804,837
Net change in unrealized appreciation (depreciation)
703,423
 
1,439,732
5,653,647
Net realized and change in unrealized gains (losses)
1,459,472
 
2,412,040
9,458,484
Increase (decrease) in net assets from operations
$                  1,394,315
$          2,318,077
$             9,391,767

 
 
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, 2013
 

Income:
VKU
Sub-Account
 
AI8
Sub-Account
 
AAY
Sub-Account
         
Dividend income
$                   1,335,572
$
9,711
$
651,395
Expenses:
         
Mortality and expense risk charges
(1,147,923)
 
(12,149)
 
(237,303)
Distribution charges
(137,751)
 
(1,458)
 
(28,476)
Net investment income (loss)
49,898
 
(3,896)
 
385,616
Net realized and change in unrealized gains (losses):
         
Net realized gains (losses) on sale of investments
3,182,923
 
26,118
 
(212,419)
Realized gain distributions
-
 
-
 
-
Net realized gains (losses)
3,182,923
 
26,118
 
(212,419)
Net change in unrealized appreciation (depreciation)
12,250,499
 
120,964
 
(729,964)
Net realized and change in unrealized gains (losses)
15,433,422
 
147,082
 
(942,383)
Increase (decrease) in net assets from operations
$                 15,483,320
$
143,186
$
(556,767)

 
 
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, 2013
 

Income:
Dividend income
Expenses:
AAM
Sub-Account
LRE
Sub-Account
LA9
Sub-Account
$                      43,449
$                839,738
$                     -
Mortality and expense risk charges
(48,111)
(902,250)
(620,777)
Distribution charges
(5,773)
(108,270)
(74,493)
Net investment income (loss)
(10,435)
(170,782)
(695,270)
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
387,777
1,174,505
3,108,270
Realized gain distributions
-
349,467
6,435,540
Net realized gains (losses)
387,777
1,523,972
9,543,810
Net change in unrealized appreciation (depreciation)
790,127
(2,794,756)
3,142,969
Net realized and change in unrealized gains (losses)
1,177,904
(1,270,784)
12,686,779
Increase (decrease) in net assets from operations
$                   1,167,469
$            (1,441,566)
$            11,991,509

 
 
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, 2013
 

    Income:
LAV
Sub-Account
GGC
Sub-Account
GGE
Sub-Account
     
Dividend income
$                   125,520
$            7,855,655
$            9,583,380
Expenses:
     
Mortality and expense risk charges
(767,249)
(2,064,736)
(3,235,835)
Distribution charges
(92,070)
(247,768)
(388,300)
Net investment income (loss)
(733,799)
5,543,151
5,959,245
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
4,702,633
473,391
712,266
Realized gain distributions
6,746,292
-
-
Net realized gains (losses)
11,448,925
473,391
712,266
Net change in unrealized appreciation (depreciation)
3,570,808
24,826,971
32,324,726
Net realized and change in unrealized gains (losses)
15,019,733
25,300,362
33,036,992
Increase (decrease) in net assets from operations
$                14,285,934
$           30,843,513
$           38,996,237

 
 
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, 2013
 

Income:
Dividend income
Expenses:
FFL
Sub-Account
TEG
Sub-Account
FFJ
Sub-Account
$                     321,002
$                  22,711
$                     -
Mortality and expense risk charges
(1,739,879)
(268,591)
(286,217)
Distribution charges
(208,786)
(32,231)
(34,346)
Net investment income (loss)
(1,627,663)
(278,111)
(320,563)
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
3,646,597
1,010,545
782,442
Realized gain distributions
1,016,797
138,664
87,495
Net realized gains (losses)
4,663,394
1,149,209
869,937
Net change in unrealized appreciation (depreciation)
38,324,639
4,528,837
6,178,058
Net realized and change in unrealized gains (losses)
42,988,033
5,678,046
7,047,995
Increase (decrease) in net assets from operations
$                 41,360,370
$             5,399,935
$             6,727,432

 
 
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, 2013
 

Income:
FFK
Sub-Account
TND
Sub-Account
AAN
Sub-Account
     
Dividend income
$                         -
$                     -
$              9,005,967
Expenses:
     
Mortality and expense risk charges
(637,627)
(231,369)
(12,154,968)
Distribution charges
(76,515)
(27,764)
(1,458,596)
Net investment income (loss)
(714,142)
(259,133)
(4,607,597)
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
2,386,783
1,097,488
(3,228,931)
Realized gain distributions
170,918
134,784
3,632,207
Net realized gains (losses)
2,557,701
1,232,272
403,276
Net change in unrealized appreciation/(depreciation)
11,057,386
4,158,655
(20,956,209)
Net realized and change in unrealized gains (losses)
13,615,087
5,390,927
(20,552,933)
Increase (decrease) in net assets from operations
$                  12,900,945
$              5,131,794
$            (25,160,530)

 
 
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, 2013
 

  Income:
FFN
Sub-Account
FFO
Sub-Account
FFP
Sub-Account
     
Dividend income
$              636,143
$         3,063,366
$           135,540
Expenses:
     
Mortality and expense risk charges
(3,295,870)
(4,163,193)
(201,988)
Distribution charges
(395,504)
(499,583)
(24,239)
Net investment income (loss)
(3,055,231)
(1,599,410)
(90,687)
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
9,646,614
12,373,010
747,845
Realized gain distributions
531,548
792,411
41,591
Net realized gains (losses)
10,178,162
13,165,421
789,436
Net change in unrealized appreciation (depreciation)
50,650,097
66,721,787
3,223,454
Net realized and change in unrealized gains (losses)
60,828,259
79,887,208
4,012,890
Increase (decrease) in net assets from operations
$           57,773,028
$        78,287,798
$        3,922,203

 
 
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, 2013
 

Income:
MIT
Sub-Account
MFL
Sub-Account
BDS
Sub-Account
     
Dividend income
$                  6,313,504
$             2,132,357
$             3,461,142
Expenses:
     
Mortality and expense risk charges
(3,929,829)
(1,900,479)
(1,078,557)
Distribution charges
(471,580)
(228,058)
(129,427)
Net investment income (loss)
1,912,095
3,820
2,253,158
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
17,335,109
7,742,467
4,277,880
Realized gain distributions
-
-
1,400,649
Net realized gains (losses)
17,335,109
7,742,467
5,678,529
Net change in unrealized appreciation (depreciation)
72,996,931
28,108,779
(9,502,108)
Net realized and change in unrealized gains (losses)
90,332,040
35,851,246
(3,823,579)
Increase (decrease) in net assets from operations
$                 92,244,135
$            35,855,066
$             (1,570,421)

 


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, 2013
 

   Income:
MF7
Sub-Account
RGS
Sub-Account
RG1
Sub-Account
     
Dividend income
$                  7,127,491
$             1,048,861
$                343,149
Expenses:
     
Mortality and expense risk charges
(2,562,796)
(1,367,152)
(673,182)
Distribution charges
(307,535)
(164,058)
(80,782)
Net investment income (loss)
4,257,160
(482,349)
(410,815)
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
3,640,846
2,041,557
5,158,867
Realized gain distributions
3,040,503
-
-
Net realized gains (losses)
6,681,349
2,041,557
5,158,867
Net change in unrealized appreciation (depreciation)
(14,868,107)
28,241,500
7,646,574
Net realized and change in unrealized gains (losses)
(8,186,758)
30,283,057
12,805,441
Increase (decrease) in net assets from operations
$                 (3,929,598)
$           29,800,708
$            12,394,626

 
 
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, 2013
 

Income:
Dividend income
Expenses:
EME
Sub-Account
EM1
Sub-Account
GGS
Sub-Account
$                   503,327
$                449,805
$                    -
Mortality and expense risk charges
(413,603)
(468,888)
(253,940)
Distribution charges
(49,632)
(56,267)
(30,473)
Net investment income (loss)
40,092
(75,350)
(284,413)
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
(527,085)
(403,919)
(80,953)
Realized gain distributions
-
-
-
Net realized gains (losses)
(527,085)
(403,919)
(80,953)
Net change in unrealized appreciation (depreciation)
(1,848,972)
(1,718,244)
(1,078,169)
Net realized and change in unrealized gains (losses)
(2,376,057)
(2,122,163)
(1,159,122)
Increase (decrease) in net assets from operations
$                 (2,335,965)
$            (2,197,513)
$            (1,443,535)

 
 
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, 2013
 

Income:
Dividend income
Expenses:
GG1
Sub-Account
GGR
Sub-Account
 
GG2
Sub-Account
$                         -
$                374,758
$
  11,531
Mortality and expense risk charges
(40,029)
(704,211)
 
(44,329)
Distribution charges
(4,803)
(84,505)
 
(5,319)
Net investment income (loss)
(44,832)
(413,958)
 
(38,117)
Net realized and change in unrealized gains (losses):
       
Net realized gains (losses) on sale of investments
(1,685)
3,722,435
 
261,251
Realized gain distributions
-
-
 
-
Net realized gains (losses)
(1,685)
3,722,435
 
261,251
Net change in unrealized appreciation (depreciation)
(132,768)
6,723,086
 
316,209
Net realized and change in unrealized gains (losses)
(134,453)
10,445,521
 
577,460
Increase (decrease) in net assets from operations
$                   (179,285)
$            10,031,563
$
539,343

 
 
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, 2013
 

Income:
RES
Sub-Account
RE1
Sub-Account
GTR
Sub-Account
     
Dividend income
$                   1,810,262
$                 134,852
$              1,783,555
Expenses:
     
Mortality and expense risk charges
(1,448,781)
(153,146)
(875,725)
Distribution charges
(173,854)
(18,378)
(105,087)
Net investment income (loss)
187,627
(36,672)
802,743
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
4,922,451
1,810,878
(588,860)
Realized gain distributions
-
-
-
Net realized gains (losses)
4,922,451
1,810,878
(588,860)
Net change in unrealized appreciation (depreciation)
18,341,571
347,323
4,740,693
Net realized and change in unrealized gains (losses)
23,264,022
2,158,201
4,151,833
Increase (decrease) in net assets from operations
$                 23,451,649
$              2,121,529
$              4,954,576

 
 
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, 2013
 

  Income:
GT2
Sub-Account
GSS
Sub-Account
MFK
Sub-Account
     
Dividend income
$                 21,733,774
$             3,032,282
$             6,619,338
Expenses:
     
Mortality and expense risk charges
(13,362,245)
(1,773,949)
(5,087,955)
Distribution charges
(1,603,469)
(212,874)
(610,555)
Net investment income (loss)
6,768,060
1,045,459
920,828
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
12,472,843
1,151,486
876,794
Realized gain distributions
-
1,100,101
2,741,724
Net realized gains (losses)
12,472,843
2,251,587
3,618,518
Net change in unrealized appreciation (depreciation)
42,239,298
(8,996,997)
(20,265,338)
Net realized and change in unrealized gains (losses)
54,712,141
(6,745,410)
(16,646,820)
Increase (decrease) in net assets from operations
$                 61,480,201
$            (5,699,951)
$           (15,725,992)

 
 
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.))
 
STATEMENT OF OPERATIONS (CONTINUED) FOR THE YEAR-ENDED DECEMBER 31, 2013
 

    Income:
HYS
Sub-Account
MFC
Sub-Account
IGS
Sub-Account
     
Dividend income
$                 2,069,185
$             1,910,390
$              691,795
Expenses:
     
Mortality and expense risk charges
(1,113,627)
(1,398,913)
(673,608)
Distribution charges
(133,635)
(167,870)
(80,833)
Net investment income (loss)
821,923
343,607
(62,646)
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
3,911,722
7,614,753
(1,066,267)
Realized gain distributions
-
-
32,483
Net realized gains (losses)
3,911,722
7,614,753
(1,033,784)
Net change in unrealized appreciation (depreciation)
(474,695)
(4,066,467)
7,208,807
Net realized and change in unrealized gains (losses)
3,437,027
3,548,286
6,175,023
Increase (decrease) in net assets from operations
$                 4,258,950
$            3,891,893
$             6,112,377

 
 
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, 2013
 

Income:
IG1
Sub-Account
MII
Sub-Account
MI1
Sub-Account
     
Dividend income
$                    265,139
$                743,089
$             2,080,375
Expenses:
     
Mortality and expense risk charges
(348,068)
(623,199)
(2,325,215)
Distribution charges
(41,768)
(74,784)
(279,026)
Net investment income (loss)
(124,697)
45,106
(523,866)
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
521,542
339,627
3,608,736
Realized gain distributions
15,114
-
-
Net realized gains (losses)
536,656
339,627
3,608,736
Net change in unrealized appreciation (depreciation)
2,301,280
10,933,356
31,771,984
Net realized and change in unrealized gains (losses)
2,837,936
11,272,983
35,380,720
Increase (decrease) in net assets from operations
$                   2,713,239
$            11,318,089
$            34,856,854

 
 
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, 2013
 

  Income:
MIS
Sub-Account
M1B
Sub-Account
MMS
Sub-Account
     
Dividend income
$                  2,438,735
$                209,542
$                     -
Expenses:
     
Mortality and expense risk charges
(4,354,200)
(697,337)
(1,027,157)
Distribution charges
(522,504)
(83,680)
(123,259)
Net investment income (loss)
(2,437,969)
(571,475)
(1,150,416)
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
19,446,367
4,071,099
(2)
Realized gain distributions
-
-
-
Net realized gains (losses)
19,446,367
4,071,099
(2)
Net change in unrealized appreciation (depreciation)
69,853,794
8,105,929
-
Net realized and change in unrealized gains (losses)
89,300,161
12,177,028
(2)
Increase (decrease) in net assets from operations
$                 86,862,192
$            11,605,553
$             (1,150,418)

 
 
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, 2013
 

Income:
Dividend income
Expenses:
MM1
Sub-Account
NWD
Sub-Account
M1A
Sub-Account
$                         -
$               -
$                     -
Mortality and expense risk charges
(3,663,749)
(849,855)
(896,202)
Distribution charges
(439,650)
(101,983)
(107,544)
Net investment income (loss)
(4,103,399)
(951,838)
(1,003,746)
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
-
3,877,730
11,147,226
Realized gain distributions
-
1,016,237
928,949
Net realized gains (losses)
-
4,893,967
12,076,175
Net change in unrealized appreciation (depreciation)
-
17,538,848
8,229,830
Net realized and change in unrealized gains (losses)
-
22,432,815
20,306,005
Increase (decrease) in net assets from operations
$                  (4,103,399)
$            21,480,977
$             19,302,259

 
 
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, 2013
 

    Income:
RIS
Sub-Account
RI1
Sub-Account
SIS
Sub-Account
     
Dividend income
$             237,365
$          405,452
$         1,196,018
Expenses:
     
Mortality and expense risk charges
(429,207)
(1,291,231)
(507,293)
Distribution charges
(51,505)
(154,948)
(60,875)
Net investment income (loss)
(243,347)
(1,040,727)
627,850
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
(1,482,856)
1,320,729
1,250,604
Realized gain distributions
-
-
-
Net realized gains (losses)
(1,482,856)
1,320,729
1,250,604
Net change in unrealized appreciation (depreciation)
6,991,163
12,990,224
(1,919,246)
Net realized and change in unrealized gains (losses)
5,508,307
14,310,953
(668,642)
Increase (decrease) in net assets from operations
$           5,264,960
$       13,270,226
$           (40,792)























 
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, 2013
 

Income:
Dividend income
Expenses:
 
SI1
Sub-Account
TEC
Sub-Account
 
TE1
Sub-Account
$
  224,959
$               -
$
-
Mortality and expense risk charges
 
(107,935)
(176,822)
 
(18,822)
Distribution charges
 
(12,952)
(21,219)
 
(2,259)
Net investment income (loss)
 
104,072
(198,041)
 
(21,081)
Net realized and change in unrealized gains (losses):
         
Net realized gains (losses) on sale of investments
 
226,226
1,282,882
 
121,241
Realized gain distributions
 
-
12,970
 
1,349
Net realized gains (losses)
 
226,226
1,295,852
 
122,590
Net change in unrealized appreciation (depreciation)
 
(371,594)
2,896,879
 
283,096
Net realized and change in unrealized gains (losses)
 
(145,368)
4,192,731
 
405,686
Increase (decrease) in net assets from operations
$
(41,296)
$             3,994,690
$
384,605

 
 
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, 2013
 

Income:
TRS
Sub-Account1
MFJ
Sub-Account1
UTS
Sub-Account
     
Dividend income
$                 17,637,292
$            21,019,862
$             4,341,598
Expenses:
     
Mortality and expense risk charges
(3,493,090)
(5,601,171)
(2,001,786)
Distribution charges
(419,171)
(672,141)
(240,214)
Net investment income (loss)
13,725,031
14,746,550
2,099,598
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
17,198,483
63,027,628
6,317,816
Realized gain distributions
23,830,815
31,794,484
11,142,396
Net realized gains (losses)
41,029,298
94,822,112
17,460,212
Net change in unrealized appreciation (depreciation)
(13,975,103)
(56,716,209)
7,730,989
Net realized and change in unrealized gains (losses)
27,054,195
38,105,903
25,191,201
Increase (decrease) in net assets from operations
$                 40,779,226
$            52,852,453
$            27,290,799


1 These sub-accounts were closed and merged into new sub-accounts during 2013 and therefore do not appear on the Statement of Assets and Liabilities as of December 31, 2013.  See note 1 for additional information around merged sub-accounts.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
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, 2013
 

  Income:
MFE
Sub-Account
MVS
Sub-Account
MV1
Sub-Account
     
Dividend income
$                  2,745,796
$             3,390,605
$             4,905,941
Expenses:
     
Mortality and expense risk charges
(1,617,194)
(1,513,466)
(2,787,381)
Distribution charges
(194,063)
(181,616)
(334,486)
Net investment income (loss)
934,539
1,695,523
1,784,074
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
9,363,675
(2,152,632)
19,038,271
Realized gain distributions
7,763,225
6,790,862
10,770,642
Net realized gains (losses)
17,126,900
4,638,230
29,808,913
Net change in unrealized appreciation (depreciation)
134,374
27,681,501
22,124,563
Net realized and change in unrealized gains (losses)
17,261,274
32,319,731
51,933,476
Increase (decrease) in net assets from operations
$                 18,195,813
$            34,015,254
$            53,717,550

 
 
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, 2013
 

Income:
VSC
Sub-Account
6XX
Sub-Account
 
SC3
Sub-Account
       
Dividend income
$                   1,589,310
$            23,535,344
$
186,906
Expenses:
       
Mortality and expense risk charges
(1,677,558)
(12,790,399)
 
(59,037)
Distribution charges
(201,307)
(1,534,848)
 
(7,084)
Net investment income (loss)
(289,555)
9,210,097
 
120,785
Net realized and change in unrealized gains (losses):
       
Net realized gains (losses) on sale of investments
21,973,680
15,997,912
 
401,403
Realized gain distributions
7,178,688
62,238,490
 
-
Net realized gains (losses)
29,152,368
78,236,402
 
401,403
Net change in unrealized appreciation (depreciation)
10,972,117
(22,507,114)
 
(407,907)
Net realized and change in unrealized gains (losses)
40,124,485
55,729,288
 
(6,504)
Increase (decrease) in net assets from operations
$                 39,834,930
$            64,939,385
$
114,281

 
 
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, 2013
 

Income:
SRE
Sub-Account
8XX
Sub-Account
5XX
Sub-Account
     
Dividend income
$                  4,777,741
$            12,717,365
$                     -
Expenses:
     
Mortality and expense risk charges
(1,611,599)
(8,150,659)
(3,750,717)
Distribution charges
(193,392)
(978,079)
(450,086)
Net investment income (loss)
2,972,750
3,588,627
(4,200,803)
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
10,801,934
13,706,688
(1,276,096)
Realized gain distributions
-
48,415,241
15,125,595
Net realized gains (losses)
10,801,934
62,121,929
13,849,499
Net change in unrealized appreciation (depreciation)
(10,260,139)
36,174,597
(28,587,025)
Net realized and change in unrealized gains (losses)
541,795
98,296,526
(14,737,526)
Increase (decrease) in net assets from operations
$                  3,514,545
$           101,885,153
$           (18,938,329)

 
 
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, 2013
 

Income:
Dividend income
Expenses:
SDC
Sub-Account
S15
Sub-Account
SGC
Sub-Account
$                    590,140
$               -
$                587,375
Mortality and expense risk charges
(7,025,879)
(2,706,944)
(808,601)
Distribution charges
(843,106)
(324,833)
(97,032)
Net investment income (loss)
(7,278,845)
(3,031,777)
(318,258)
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
1,438,843
37,676
6,853,887
Realized gain distributions
1,269,604
535,688
7,742,047
Net realized gains (losses)
2,708,447
573,364
14,595,934
Net change in unrealized appreciation (depreciation)
(63,436)
442,787
1,115,772
Net realized and change in unrealized gains (losses)
2,645,011
1,016,151
15,711,706
Increase (decrease) in net assets from operations
$                 (4,633,834)
$            (2,015,626)
$            15,393,448

 
 
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.))
 
STATEMENT OF OPERATIONS (CONTINUED) FOR THE YEAR-ENDED DECEMBER 31, 2013
 

Income:
S13
Sub-Account
7XX
Sub-Account
2XX
Sub-Account
     
Dividend income
$                     319,871
$            45,832,487
$                 85,859
Expenses:
     
Mortality and expense risk charges
(495,987)
(28,398,612)
(145,437)
Distribution charges
(59,518)
(3,407,833)
(17,452)
Net investment income (loss)
(235,634)
14,026,042
(77,030)
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
872,572
34,657,759
15,457
Realized gain distributions
5,193,499
116,786,663
103,677
Net realized gains (losses)
6,066,071
151,444,422
119,134
Net change in unrealized appreciation (depreciation)
3,943,157
98,719,218
3,132,608
Net realized and change in unrealized gains (losses)
10,009,228
250,163,640
3,251,742
Increase (decrease) in net assets from operations
$                   9,773,594
$          264,189,682
$             3,174,712

 
 
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, 2013
 

   
AAW
Sub-Account
VKM
Sub-Account
OCA
Sub-Account
Income:
       
Dividend income
$
990
$                  27,572
$                 177,198
Expenses:
       
Mortality and expense risk charges
 
(14,033)
(187,995)
(363,608)
Distribution charges
 
(1,684)
(22,559)
(43,633)
Net investment income (loss)
 
(14,727)
(182,982)
(230,043)
Net realized and change in unrealized gains (losses):
       
Net realized gains (losses) on sale of investments
 
57,854
58,630
2,951,371
Realized gain distributions
 
18,132
260,609
-
Net realized gains (losses)
 
75,986
319,239
2,951,371
Net change in unrealized appreciation (depreciation)
 
307,518
3,562,829
2,995,880
Net realized and change in unrealized gains (losses)
 
383,504
3,882,068
5,947,251
Increase (decrease) in net assets from operations
$
368,777
$              3,699,086
$              5,717,208

 
 
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, 2013
 

Income:
OBV
Sub-Account
OGG
Sub-Account
OMG
Sub-Account
     
Dividend income
$                    278,306
$                 330,826
$              2,956,432
Expenses:
     
Mortality and expense risk charges
(197,051)
(434,298)
(5,367,660)
Distribution charges
(23,646)
(52,116)
(644,119)
Net investment income (loss)
57,609
(155,588)
(3,055,347)
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
533,505
3,471,686
20,980,509
Realized gain distributions
-
-
-
Net realized gains (losses)
533,505
3,471,686
20,980,509
Net change in unrealized appreciation (depreciation)
765,460
3,153,140
70,569,562
Net realized and change in unrealized gains (losses)
1,298,965
6,624,826
91,550,071
Increase (decrease) in net assets from operations
$                   1,356,574
$              6,469,238
$             88,494,724

 
 
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, 2013
 

Income:
OMS
Sub-Account
 
AAQ
Sub-Account
     
Dividend income
$                     61,663
$
774
Expenses:
     
Mortality and expense risk charges
(140,037)
 
(601)
Distribution charges
(16,804)
 
(72)
Net investment income (loss)
(95,178)
 
101
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
1,247,463
 
6,675
Realized gain distributions
106,460
 
-
Net realized gains (losses)
1,353,923
 
6,675
Net change in unrealized appreciation (depreciation)
1,581,252
 
(17)
Net realized and change in unrealized gains (losses)
2,935,175
 
6,658
Increase (decrease) in net assets from operations
$                 2,839,997
$
6,759

 
 
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, 2013
 

   Income:
PRA
Sub-Account
AAP
Sub-Account
BBD
Sub-Account
     
Dividend income
$                  1,682,071
$             1,121,686
$                 15,223
Expenses:
     
Mortality and expense risk charges
(528,259)
(355,682)
(12,466)
Distribution charges
(63,391)
(42,682)
(1,496)
Net investment income (loss)
1,090,421
723,322
1,261
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
78,500
407,230
(39,570)
Realized gain distributions
-
-
-
Net realized gains (losses)
78,500
407,230
(39,570)
Net change in unrealized appreciation (depreciation)
(1,886,560)
(1,586,952)
(117,940)
Net realized and change in unrealized gains (losses)
(1,808,060)
(1,179,722)
(157,510)
Increase (decrease) in net assets from operations
$                  (717,639)
$              (456,400)
$              (156,249)

 
 
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, 2013
 

  Income:
PCR
Sub-Account
PMB
Sub-Account
 
BBE
Sub-Account
       
Dividend income
$                  1,095,034
$              1,231,094
$
29,427
Expenses:
       
Mortality and expense risk charges
(940,054)
(373,438)
 
(8,585)
Distribution charges
(112,807)
(44,813)
 
(1,030)
Net investment income (loss)
42,173
812,843
 
19,812
Net realized and change in unrealized gains (losses):
       
Net realized gains (losses) on sale of investments
(4,878,613)
506,023
 
1,826
Realized gain distributions
-
180,293
 
4,557
Net realized gains (losses)
(4,878,613)
686,316
 
6,383
Net change in unrealized appreciation (depreciation)
(6,176,373)
(3,817,091)
 
(82,268)
Net realized and change in unrealized gains (losses)
(11,054,986)
(3,130,775)
 
(75,885)
Increase (decrease) in net assets from operations
$                (11,012,813)
$             (2,317,932)
$
(56,073)

 
 
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, 2013
 

  Income:
6TT
Sub-Account
PRR
Sub-Account
PTR
Sub-Account
     
Dividend income
$                29,899,051
$             1,458,194
$             7,048,275
Expenses:
     
Mortality and expense risk charges
(13,921,964)
(1,351,699)
(4,881,656)
Distribution charges
(1,670,636)
(162,204)
(585,799)
Net investment income (loss)
14,306,451
(55,709)
1,580,820
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
(11,835,045)
3,278,542
4,969,227
Realized gain distributions
-
634,372
2,656,503
Net realized gains (losses)
(11,835,045)
3,912,914
7,625,730
Net change in unrealized appreciation (depreciation)
(98,043,491)
(13,908,792)
(20,923,215)
Net realized and change in unrealized gains (losses)
(109,878,536)
(9,995,878)
(13,297,485)
Increase (decrease) in net assets from operations
$                (95,572,085)
$           (10,051,587)
$           (11,716,665)

 
 
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, 2013
 

Income:
Dividend income
Expenses:
 
AAR
Sub-Account
AAS
Sub-Account
 
WTF
Sub-Account
$
-
$                 84,969
$
1,515
Mortality and expense risk charges
 
(208,539)
(102,228)
 
(7,902)
Distribution charges
 
(25,025)
(12,267)
 
(948)
Net investment income (loss)
 
(233,564)
(29,526)
 
(7,335)
Net realized and change in unrealized gains (losses):
         
Net realized gains (losses) on sale of investments
 
110,957
467,110
 
96,881
Realized gain distributions
 
34,158
-
 
7,665
Net realized gains (losses)
 
145,115
467,110
 
104,546
Net change in unrealized appreciation (depreciation)
 
361,848
1,165,448
 
50,871
Net realized and change in unrealized gains (losses)
 
506,963
1,632,558
 
155,417
Increase (decrease) in net assets from operations
$
273,399
$             1,603,032
$
148,082

 
 
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, 2013
 

Income:
Dividend income
Expenses:
Mortality and expense risk charges Distribution charges
Net investment income (loss)
 
USC
Sub-Account
AAL
Sub-Account
$
101
(1,257)
(151)
$                383,703
(424,579)
(50,949)
 
(1,307)
(91,825)
Net realized and change in unrealized gains (losses):
     
Net realized gains (losses) on sale of investments
 
902
(138,076)
Realized gain distributions
 
6,393
999,590
Net realized gains (losses)
 
7,295
861,514
Net change in unrealized appreciation (depreciation)
 
14,123
(2,005,056)
Net realized and change in unrealized gains (losses)
 
21,418
(1,143,542)
Increase (decrease) in net assets from operations
$
20,111
$            (1,235,367)

 
 
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 CHANGES IN NET ASSETS
 
FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

Operations:
 
AVB Sub-Account
AAA Sub-Account
 
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
         
Net investment income (loss)
$
393,966
$           160,364
$            (993,036)
$              (709,017)(709,017)
Net realized gains (losses)
 
3,504,978
2,328,756
1,419,361
78,154
Net change in unrealized appreciation/(depreciation)
 
4,527,560
3,976,713
6,934,531
3,433,744
Increase (decrease) in net assets from operations
 
8,426,504
6,465,833
7,360,856
2,802,881
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
 
280,627
1,095,498
512,501
2,266,170
Transfers between Sub-Accounts (including the Fixed Account), net
 
5,654,349
916,445
48,271,325
11,647,367
Withdrawals, surrenders, annuitizations and contract charges
 
(7,799,890)
(6,925,266)
(3,503,370)
(1,029,572)
Net accumulation activity
 
(1,864,914)
(4,913,323)
45,280,456
12,883,965
Annuitization Activity:
         
Annuitizations
 
-
-
-
-
Annuity payments and contract charges
 
-
-
-
-
Transfers between Sub-Accounts, net
 
-
-
-
-
Adjustments to annuity reserves
 
-
-
-
-
Net annuitization activity
 
-
-
-
-
Net increase (decrease) from contract owner transactions
 
(1,864,914)
(4,913,323)
45,280,456
12,883,965
Total increase (decrease) in net assets
 
6,561,590
1,552,510
52,641,312
15,686,846
Net assets at beginning of year
59,011,011
57,458,501
54,255,262
38,568,416
Net assets at end of year
$             65,572,601
$         59,011,011
$         106,896,574
$         54,255,262

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

Operations:
 
AN4 Sub-Account
IVB Sub-Account
 
 
December 31,
2013
 
December 31,
2012
December 31,
2013
December 31,
2012
             
Net investment income (loss)
$
(85,257)
$
(21,311)
$            2,541,320
$
(229,566)
Net realized gains (losses)
 
200,029
 
163,001
5,395,068
 
2,349,872
Net change in unrealized appreciation/(depreciation)
 
873,062
 
1,063,094
3,944,056
 
6,161,231
Increase (decrease) in net assets from operations
 
987,834
 
1,204,784
11,880,444
 
8,281,537
Contract Owner Transactions:
             
Accumulation Activity:
             
Purchase payments received
 
48,786
 
88,873
772,533
 
661,307
Transfers between Sub-Accounts (including the Fixed Account), net
 
406,945
 
(721,977)
(4,727,904)
 
(971,184)
Withdrawals, surrenders, annuitizations and contract charges
 
(1,085,916)
 
(672,275)
(8,394,728)
 
(8,982,083)
Net accumulation activity
 
(630,185)
 
(1,305,379)
(12,350,099)
 
(9,291,960)
Annuitization Activity:
             
Annuitizations
 
-
 
-
-
 
-
Annuity payments and contract charges
 
-
 
-
-
 
-
Transfers between Sub-Accounts, net
 
-
 
-
-
 
-
Adjustments to annuity reserves
 
-
 
-
-
 
-
Net annuitization activity
 
-
 
-
-
 
-
Net increase (decrease) from contract owner transactions
 
(630,185)
 
(1,305,379)
(12,350,099)
 
(9,291,960)
Total increase (decrease) in net assets
 
357,649
 
(100,595)
(469,655)
 
(1,010,423)
Net assets at beginning of year
8,792,098
8,892,693
63,597,746
64,608,169
Net assets at end of year
$                9,149,747
$          8,792,098
$           63,128,091
$         63,597,746

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

   Operations:
AAU Sub-Account
9XX Sub-Account
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
       
Net investment income (loss)
$                          (67,007)
$                 (13,411)
$               (5,069,627)
$         (1,498,838)
Net realized gains (losses)
785,315
39,702
53,419,036
16,448,031
Net change in unrealized appreciation/(depreciation)
773,419
59,189
45,174,332
47,154,788
Increase (decrease) in net assets from operations
1,491,727
85,480
93,523,741
62,103,981
Contract Owner Transactions:
       
Accumulation Activity:
       
Purchase payments received
22,964
625
3,725,468
8,884,136
Transfers between Sub-Accounts (including the Fixed Account), net
6,706,751
1,499,336
(27,871,921)
5,318,879
Withdrawals, surrenders, annuitizations and contract charges
(641,772)
(86,103)
(70,390,862)
(44,803,619)
Net accumulation activity
6,087,943
1,413,858
(94,537,315)
(30,600,604)
Annuitization Activity:
       
Annuitizations
-
26,968
16,498
118,749
Annuity payments and contract charges
(1,392)
(888)
(11,188)
(9,634)
Transfers between Sub-Accounts, net
-
-
-
-
Adjustments to annuity reserves
(741)
(619)
(2,338)
(165)
Net annuitization activity
(2,133)
25,461
2,972
108,950
Net increase (decrease) from contract owner transactions
6,085,810
1,439,319
(94,534,343)
(30,491,654)
Total increase (decrease) in net assets
7,577,537
1,524,799
(1,010,602)
31,612,327
Net assets at beginning of year
1,588,940
64,141
788,739,478
757,127,151
Net assets at end of year
$                9,166,477
$          1,588,940
$         787,728,876
$        788,739,478

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

Operations:
 
NMT Sub-Account
MCC Sub-Account
 
December 31,
2013
 
December 31,
2012
December 31,
2013
December 31,
2012
           
Net investment income (loss)
$
(568)
$
(673)
$                (1,615,180)
$          (1,884,950)
Net realized gains (losses)
 
1,079
 
(488)
11,052,755
(1,095,310)
Net change in unrealized appreciation/(depreciation)
 
15,081
 
4,865
27,659,481
13,205,888
Increase (decrease) in net assets from operations
 
15,592
 
3,704
37,097,056
10,225,628
Contract Owner Transactions:
           
Accumulation Activity:
           
Purchase payments received
 
-
 
-
862,548
693,113
Transfers between Sub-Accounts (including the Fixed Account), net
 
(8,333)
 
719
(19,314,602)
(1,290,228)
Withdrawals, surrenders, annuitizations and contract charges
 
(1,396)
 
(1,354)
(14,444,048)
(13,447,533)
Net accumulation activity
 
(9,729)
 
(635)
(32,896,102)
(14,044,648)
Annuitization Activity:
           
Annuitizations
 
-
 
-
-
-
Annuity payments and contract charges
 
-
 
-
(3,322)
(2,837)
Transfers between Sub-Accounts, net
 
-
 
-
-
-
Adjustments to annuity reserves
 
-
 
-
(1,205)
(435)
Net annuitization activity
 
-
 
-
(4,527)
(3,272)
Net increase (decrease) from contract owner transactions
 
(9,729)
 
(635)
(32,900,629)
(14,047,920)
Total increase (decrease) in net assets
 
5,863
 
3,069
4,196,427
(3,822,292)
Net assets at beginning of year
 
41,258
 
38,189
106,744,410
110,566,702
Net assets at end of year
$
47,121
$
41,258
$          110,940,837
$         106,744,410

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

  Operations:
 
NNG Sub-Account
CMG Sub-Account
 
December 31,
2013
 
December 31,
2012
December 31,
2013
December 31,
2012
           
Net investment income (loss)
$
(463)
$
(269)
$             (494,404)
$           (382,553)
Net realized gains (losses)
 
169
 
76
4,996,418
2,869,542
Net change in unrealized appreciation/(depreciation)
 
9,181
 
2,694
4,217,352
452,696
Increase (decrease) in net assets from operations
 
8,887
 
2,501
8,719,366
2,939,685
Contract Owner Transactions:
           
Accumulation Activity:
           
Purchase payments received
 
-
 
-
214,326
253,248
Transfers between Sub-Accounts (including the Fixed Account), net
 
-
 
-
(1,191,199)
(204,611)
Withdrawals, surrenders, annuitizations and contract charges
 
(5)
 
(5)
(5,771,131)
(2,894,856)
Net accumulation activity
 
(5)
 
(5)
(6,748,004)
(2,846,219)
Annuitization Activity:
           
Annuitizations
 
-
 
-
-
55,672
Annuity payments and contract charges
 
-
 
-
(2,605)
(1,829)
Transfers between Sub-Accounts, net
 
-
 
-
-
-
Adjustments to annuity reserves
 
-
 
-
(1,377)
(1,186)
Net annuitization activity
 
-
 
-
(3,982)
52,657
Net increase (decrease) from contract owner transactions
 
(5)
 
(5)
(6,751,986)
(2,793,562)
Total increase (decrease) in net assets
 
8,882
 
2,496
1,967,380
146,123
Net assets at beginning of year
 
26,696
 
24,200
29,316,702
29,170,579
Net assets at end of year
$
35,578
$
26,696
$           31,284,082
$         29,316,702

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

   Operations:
NMI Sub-Account
 
CSC Sub-Account
December 31,
2013
December 31,
2012
 
December 31,
2013
 
December 31,
2012
           
Net investment income (loss)
$                 (127,372)
$            (85,297)
$
(230)
$
(210)
Net realized gains (losses)
601,280
583,433
 
(145)
 
512
Net change in unrealized appreciation/(depreciation)
1,184,396
1,121,912
 
6,547
 
1,043
Increase (decrease) in net assets from operations
1,658,304
1,620,048
 
6,172
 
1,345
Contract Owner Transactions:
           
Accumulation Activity:
           
Purchase payments received
63,275
17,220
 
-
 
-
Transfers between Sub-Accounts (including the Fixed Account), net
(725,803)
(1,139,859)
 
14,346
 
169
Withdrawals, surrenders, annuitizations and contract charges
(1,112,509)
(1,303,229)
 
(109)
 
(62)
Net accumulation activity
(1,775,037)
(2,425,868)
 
14,237
 
107
Annuitization Activity:
           
Annuitizations
-
-
 
-
 
-
Annuity payments and contract charges
-
-
 
-
 
-
Transfers between Sub-Accounts, net
-
-
 
-
 
-
Adjustments to annuity reserves
-
-
 
-
 
-
Net annuitization activity
-
-
 
-
 
-
Net increase (decrease) from contract owner transactions
(1,775,037)
(2,425,868)
 
14,237
 
107
Total increase (decrease) in net assets
(116,733)
(805,820)
 
20,409
 
1,452
Net assets at beginning of year
9,865,957
10,671,777
 
15,387
 
13,935
Net assets at end of year
$                9,749,224
$          9,865,957
$
35,796
$
15,387

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

   Operations:
 
FVB Sub-Account
FL1 Sub-Account
 
December 31,
2013
 
December 31,
2012
December 31,
2013
December 31,
2012
           
Net investment income (loss)
$
(274,598)
$
(104,102)
 $              (2,043,632)
$         (1,345,026)
Net realized gains (losses)
 
8,821,865
 
8,711,774
28,158,554
19,278,522
Net change in unrealized appreciation/(depreciation)
 
6,966,114
 
1,477,953
33,762,988
12,847,970
Increase (decrease) in net assets from operations
 
15,513,381
 
10,085,625
59,877,910
30,781,466
Contract Owner Transactions:
           
Accumulation Activity:
           
Purchase payments received
 
430,300
 
1,388,069
1,178,450
1,543,391
Transfers between Sub-Accounts (including the Fixed Account), net
 
9,484,749
 
7,592,175
(13,333,664)
(7,944,949)
Withdrawals, surrenders, annuitizations and contract charges
 
(9,421,104)
 
(7,836,356)
(31,792,860)
(18,921,164)
Net accumulation activity
 
493,945
 
1,143,888
(43,948,074)
(25,322,722)
Annuitization Activity:
           
Annuitizations
 
-
 
-
11,693
107,790
Annuity payments and contract charges
 
-
 
-
(9,992)
(7,423)
Transfers between Sub-Accounts, net
 
-
 
-
-
-
Adjustments to annuity reserves
 
-
 
-
(2,461)
(729)
Net annuitization activity
 
-
 
-
(760)
99,638
Net increase (decrease) from contract owner transactions
 
493,945
 
1,143,888
(43,948,834)
(25,223,084)
Total increase (decrease) in net assets
 
16,007,326
 
11,229,513
15,929,076
5,558,382
Net assets at beginning of year
87,912,238
76,682,725
226,589,248
221,030,866
Net assets at end of year
$             103,919,564
$         87,912,238
$          242,518,324
$        226,589,248

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

Operations:
Net investment income (loss)
F10 Sub-Account
F15 Sub-Account
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
 $                         (22,718)
$             (7,248)
 $                   (77,190)
$             11,698
Net realized gains (losses)
490,521
313,914
2,222,125
774,539
Net change in unrealized appreciation/(depreciation)
112,744
218,444
988,561
1,910,427
Increase (decrease) in net assets from operations
580,547
525,110
3,133,496
2,696,664
Contract Owner Transactions:
       
Accumulation Activity:
       
Purchase payments received
1,154
5,861
70,160
65,505
Transfers between Sub-Accounts (including the Fixed Account), net
60,937
625,962
(403,051)
(178,517)
Withdrawals, surrenders, annuitizations and contract charges
(1,218,438)
(871,987)
(5,131,965)
(2,650,609)
Net accumulation activity
(1,156,347)
(240,164)
(5,464,856)
(2,763,621)
Annuitization Activity:
       
Annuitizations
-
-
-
-
Annuity payments and contract charges
-
-
-
-
Transfers between Sub-Accounts, net
-
-
-
-
Adjustments to annuity reserves
-
-
-
-
Net annuitization activity
-
-
-
-
Net increase (decrease) from contract owner transactions
(1,156,347)
(240,164)
(5,464,856)
(2,763,621)
Total increase (decrease) in net assets
(575,800)
284,946
(2,331,360)
(66,957)
Net assets at beginning of year
5,687,870
5,402,924
28,165,613
28,232,570
Net assets at end of year
$                 5,112,070
$          5,687,870
$           25,834,253
$         28,165,613

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

   Operations:
F20 Sub-Account
 
FVM Sub-Account
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
         
Net investment income (loss)
$                  (50,144)
$
12,547
 $              (2,264,479)
$         (2,072,845)
Net realized gains (losses)
1,469,476
 
172,976
31,939,727
14,547,191
Net change in unrealized appreciation/(depreciation)
3,502,768
 
3,858,316
16,712,825
7,232,838
Increase (decrease) in net assets from operations
4,922,100
 
4,043,839
46,388,073
19,707,184
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
5,591
 
70,921
676,832
1,243,666
Transfers between Sub-Accounts (including the Fixed Account), net
650,396
 
556,370
(20,462,669)
(6,313,670)
Withdrawals, surrenders, annuitizations and contract charges
(3,508,953)
 
(4,755,446)
(17,978,689)
(17,761,432)
Net accumulation activity
(2,852,966)
 
(4,128,155)
(37,764,526)
(22,831,436)
Annuitization Activity:
         
Annuitizations
-
 
-
-
-
Annuity payments and contract charges
-
 
-
(2,640)
(2,122)
Transfers between Sub-Accounts, net
-
 
-
-
-
Adjustments to annuity reserves
-
 
-
(1,095)
(516)
Net annuitization activity
-
 
-
(3,735)
(2,638)
Net increase (decrease) from contract owner transactions
(2,852,966)
 
(4,128,155)
(37,768,261)
(22,834,074)
Total increase (decrease) in net assets
2,069,134
 
(84,316)
8,619,812
(3,126,890)
Net assets at beginning of year
37,000,260
37,084,576
154,665,507
157,792,397
Net assets at end of year
$              39,069,394
$         37,000,260
$          163,285,319
$        154,665,507

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

 
SGI Sub-Account
 
S17 Sub-Account
 
December 31,
2013
December 31,
2012
 
December 31,
2013
December 31,
2012
Operations:
           
Net investment income (loss)
$                     16,935
$           (4,319,473)
$
5,262,746
$
544,172
Net realized gains (losses)
47,763,464
37,846,544
 
11,690,975
 
1,764,062
Net change in unrealized appreciation/(depreciation)
2,530,363
24,657,705
 
(7,049,113)
 
3,954,939
Increase (decrease) in net assets from operations
50,310,762
58,184,776
 
9,904,608
 
6,263,173
Contract Owner Transactions:
           
Accumulation Activity:
           
Purchase payments received
2,188,137
3,967,604
 
515,811
 
90,390
Transfers between Sub-Accounts (including the Fixed Account), net
(12,547,953)
(21,913,842)
 
529,888
 
(1,031,956)
Withdrawals, surrenders, annuitizations and contract charges
(48,739,411)
(37,155,911)
 
(7,915,483)
 
(5,421,479)
Net accumulation activity
(59,099,227)
(55,102,149)
 
(6,869,784)
 
(6,363,045)
Annuitization Activity:
           
Annuitizations
27,554
-
 
-
 
-
Annuity payments and contract charges
(2,222)
(1,118)
 
-
 
-
Transfers between Sub-Accounts, net
-
-
 
-
 
-
Adjustments to annuity reserves
(473)
479
 
-
 
-
Net annuitization activity
24,859
(639)
 
-
 
-
Net increase (decrease) from contract owner transactions
(59,074,368)
(55,102,788)
 
(6,869,784)
 
(6,363,045)
Total increase (decrease) in net assets
(8,763,606)
3,081,988
 
3,034,824
 
(99,872)
Net assets at beginning of year
464,766,322
461,684,334
 
48,525,970
 
48,625,842
Net assets at end of year
$                456,002,716
$          464,766,322
$
51,560,794
$
48,525,970

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

     Operations:
ISC Sub-Account
 
AAZ Sub-Account
December 31,
2013
December 31,
2012
 
December 31,
2013
December 31,
2012
         
Net investment income (loss)
$                5,584,359
$          5,680,615
$
136,316
$            118,006
Net realized gains (losses)
5,529,571
3,434,871
 
52,673
13,653
Net change in unrealized appreciation/(depreciation)
2,574,683
3,034,072
 
127,949
89,355
Increase (decrease) in net assets from operations
13,688,613
12,149,558
 
316,938
221,014
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
909,479
924,145
 
460,614
478,553
Transfers between Sub-Accounts (including the Fixed Account), net
(1,165,202)
7,049,998
 
(155,367)
531,807
Withdrawals, surrenders, annuitizations and contract charges
(15,921,895)
(14,689,486)
 
(142,112)
(54,651)
Net accumulation activity
(16,177,618)
(6,715,343)
 
163,135
955,709
Annuitization Activity:
         
Annuitizations
12,250
-
 
-
-
Annuity payments and contract charges
(12,686)
(10,913)
 
-
-
Transfers between Sub-Accounts, net
-
-
 
-
-
Adjustments to annuity reserves
(819)
(774)
 
-
-
Net annuitization activity
(1,255)
(11,687)
 
-
-
Net increase (decrease) from contract owner transactions
(16,178,873)
(6,727,030)
 
163,135
955,709
Total increase (decrease) in net assets
(2,490,260)
5,422,528
 
480,073
1,176,723
Net assets at beginning of year
121,315,834
115,893,306
2,515,056
1,338,333
Net assets at end of year
$             118,825,574
$           121,315,834
$            2,995,129
$          2,515,056

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

Operations:
 
BBC Sub-Account
FVS Sub-Account
 
December 31,
2013
 
December 31,
2012
December 31,
2013
December 31,
2012
           
Net investment income (loss)
$
872
$
804
$            (184,929)
 $              (381,109)
Net realized gains (losses)
 
12,994
 
2,312
6,124,212
3,245,320
Net change in unrealized appreciation/(depreciation)
 
27,815
 
12,508
6,850,201
3,311,021
Increase (decrease) in net assets from operations
 
41,681
 
15,624
12,789,484
6,175,232
Contract Owner Transactions:
           
Accumulation Activity:
           
Purchase payments received
 
-
 
5,643
332,375
341,380
Transfers between Sub-Accounts (including the Fixed Account), net
 
21,432
 
21,608
879,628
(1,034,147)
Withdrawals, surrenders, annuitizations and contract charges
 
(3,083)
 
(2,338)
(6,181,974)
(5,075,549)
Net accumulation activity
 
18,349
 
24,913
(4,969,971)
(5,768,316)
Annuitization Activity:
           
Annuitizations
 
-
 
-
-
-
Annuity payments and contract charges
 
-
 
-
(1,914)
(2,165)
Transfers between Sub-Accounts, net
 
-
 
-
-
-
Adjustments to annuity reserves
 
-
 
-
2,206
(382)
Net annuitization activity
 
-
 
-
292
(2,547)
Net increase (decrease) from contract owner transactions
 
18,349
 
24,913
(4,969,679)
(5,770,863)
Total increase (decrease) in net assets
 
60,030
 
40,537
7,819,805
404,369
Net assets at beginning of year
 
145,875
 
105,338
39,374,752
38,970,383
Net assets at end of year
$
205,905
$
145,875
$          47,194,557
$         39,374,752

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

            Operations:
 
BBA Sub-Account
SIC Sub-Account
 
December 31,
2013
 
December 31,
2012
December 31,
2013
December 31,
2012
           
Net investment income (loss)
$
(3,346)
$
(5,296)
$            1,544,428
$          1,838,274
Net realized gains (losses)
 
52,314
 
9,699
667,271
726,859
Net change in unrealized appreciation/(depreciation)
 
168,788
 
90,727
(1,698,773)
1,047,542
Increase (decrease) in net assets from operations
 
217,756
 
95,130
512,926
3,612,675
Contract Owner Transactions:
           
Accumulation Activity:
           
Purchase payments received
 
566
 
27,938
582,705
434,002
Transfers between Sub-Accounts (including the Fixed Account), net
 
15,530
 
14,972
1,661,262
299,530
Withdrawals, surrenders, annuitizations and contract charges
 
(11,142)
 
(8,937)
(5,619,477)
(3,685,102)
Net accumulation activity
 
4,954
 
33,973
(3,375,510)
(2,951,570)
Annuitization Activity:
           
Annuitizations
 
-
 
-
-
-
Annuity payments and contract charges
 
-
 
-
-
-
Transfers between Sub-Accounts, net
 
-
 
-
-
-
Adjustments to annuity reserves
 
-
 
-
-
-
Net annuitization activity
 
-
 
-
-
-
Net increase (decrease) from contract owner transactions
 
4,954
 
33,973
(3,375,510)
(2,951,570)
Total increase (decrease) in net assets
 
222,710
 
129,103
(2,862,584)
661,105
Net assets at beginning of year
 
643,132
 
514,029
35,029,483
34,368,378
Net assets at end of year
$
865,842
$
643,132
$           32,166,899
$         35,029,483

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

   
BBB Sub-Account
FMS Sub-Account
 
December 31,
2013
 
December 31,
2012
December 31,
2013
December 31,
2012
Operations:
           
Net investment income (loss)
$
20,513
$
17,472
$             919,304
$           918,595
Net realized gains (losses)
 
7,414
 
1,157
23,497,932
(134,007)
Net change in unrealized appreciation/(depreciation)
 
(18,972)
 
12,152
32,157,285
28,175,340
Increase (decrease) in net assets from operations
 
8,955
 
30,781
56,574,521
28,959,928
Contract Owner Transactions:
           
Accumulation Activity:
           
Purchase payments received
 
10,976
 
18,503
1,126,867
1,371,719
Transfers between Sub-Accounts (including the Fixed Account), net
 
148,564
 
168,037
(20,153,341)
(13,412,692)
Withdrawals, surrenders, annuitizations and contract charges
 
(46,217)
 
(27,848)
(34,169,549)
(22,525,875)
Net accumulation activity
 
113,323
 
158,692
(53,196,023)
(34,566,848)
Annuitization Activity:
           
Annuitizations
 
-
 
-
13,496
-
Annuity payments and contract charges
 
-
 
-
(2,380)
(1,790)
Transfers between Sub-Accounts, net
 
-
 
-
-
-
Adjustments to annuity reserves
 
-
 
-
(704)
(309)
Net annuitization activity
 
-
 
-
10,412
(2,099)
Net increase (decrease) from contract owner transactions
 
113,323
 
158,692
(53,185,611)
(34,568,947)
Total increase (decrease) in net assets
 
122,278
 
189,473
3,388,910
(5,609,019)
Net assets at beginning of year
 
378,585
 
189,112
238,076,966
243,685,985
Net assets at end of year
$
500,863
$
378,585
$         241,465,876
$        238,076,966

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

 
TDM Sub-Account
FTI Sub-Account
December 31,
2013
 
December 31,
2012
December 31,
2013
December 31,
2012
Operations:
         
Net investment income (loss)
$                 57,714
$
(132,873)
$            1,258,955
$          2,838,518
Net realized gains (losses)
1,405,542
 
(401,357)
6,845,194
(20,030,110)
Net change in unrealized appreciation/(depreciation)
(2,324,629)
 
6,065,172
27,659,331
49,374,773
Increase (decrease) in net assets from operations
(861,373)
 
5,530,942
35,763,480
32,183,181
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
208,643
 
213,057
1,955,243
1,150,774
Transfers between Sub-Accounts (including the Fixed Account), net
5,422,377
 
(1,552,201)
(5,562,948)
(14,159,849)
Withdrawals, surrenders, annuitizations and contract charges
(5,845,266)
 
(6,123,403)
(37,981,647)
(34,194,721)
Net accumulation activity
(214,246)
 
(7,462,547)
(41,589,352)
(47,203,796)
Annuitization Activity:
         
Annuitizations
-
 
-
7,331
-
Annuity payments and contract charges
(777)
 
(769)
(20,786)
(12,852)
Transfers between Sub-Accounts, net
-
 
-
-
-
Adjustments to annuity reserves
(75)
 
(181)
(6,448)
(687)
Net annuitization activity
(852)
 
(950)
(19,903)
(13,539)
Net increase (decrease) from contract owner transactions
(215,098)
 
(7,463,497)
(41,609,255)
(47,217,335)
Total increase (decrease) in net assets
(1,076,471)
 
(1,932,555)
(5,845,775)
(15,034,154)
Net assets at beginning of year
44,554,239
46,486,794
192,256,195
207,290,349
Net assets at end of year
$            43,477,768
$         44,554,239
$          186,410,420
$        192,256,195

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

   
AAX Sub-Account
FTG Sub-Account
 
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
Operations:
         
Net investment income (loss)
$
186,585
$             86,668
$             334,377
$             95,226
Net realized gains (losses)
 
47,775
5,596
3,123,665
(1,423,057)
Net change in unrealized appreciation/(depreciation)
 
(275,145)
143,163
4,866,395
7,040,177
Increase (decrease) in net assets from operations
 
(40,785)
235,427
8,324,437
5,712,346
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
 
143,632
56,425
172,734
208,958
Transfers between Sub-Accounts (including the Fixed Account), net
 
5,233,980
3,908,582
(936,246)
(1,933,861)
Withdrawals, surrenders, annuitizations and contract charges
 
(1,186,992)
(385,811)
(5,192,098)
(3,140,133)
Net accumulation activity
 
4,190,620
3,579,196
(5,955,610)
(4,865,036)
Annuitization Activity:
         
Annuitizations
 
-
-
-
-
Annuity payments and contract charges
 
-
-
-
-
Transfers between Sub-Accounts, net
 
-
-
-
-
Adjustments to annuity reserves
 
-
-
-
-
Net annuitization activity
 
-
-
-
-
Net increase (decrease) from contract owner transactions
 
4,190,620
3,579,196
(5,955,610)
(4,865,036)
Total increase (decrease) in net assets
 
4,149,835
3,814,623
2,368,827
847,310
Net assets at beginning of year
4,125,222
310,599
31,651,870
30,804,560
Net assets at end of year
$             8,275,057
$          4,125,222
$           34,020,697
$         31,651,870

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

      Operations:
 
HBF Sub-Account
HVD Sub-Account
 
December 31,
2013
 
December 31,
2012
December 31,
2013
December 31,
2012
           
Net investment income (loss)
$
45,530
$
(12,988)
$                62,542
$            102,254
Net realized gains (losses)
 
805,250
 
324,765
412,800
242,670
Net change in unrealized appreciation/(depreciation)
 
1,142,166
 
957,410
303,727
74,135
Increase (decrease) in net assets from operations
 
1,992,946
 
1,269,187
779,069
419,059
Contract Owner Transactions:
           
Accumulation Activity:
           
Purchase payments received
 
110,372
 
459,734
1,016
89,217
Transfers between Sub-Accounts (including the Fixed Account), net
 
(1,963,694)
 
(20,732)
(46,852)
18,066
Withdrawals, surrenders, annuitizations and contract charges
 
(1,737,121)
 
(1,235,280)
(653,145)
(369,251)
Net accumulation activity
 
(3,590,443)
 
(796,278)
(698,981)
(261,968)
Annuitization Activity:
           
Annuitizations
 
-
 
-
-
-
Annuity payments and contract charges
 
-
 
-
-
-
Transfers between Sub-Accounts, net
 
-
 
-
-
-
Adjustments to annuity reserves
 
-
 
-
-
-
Net annuitization activity
 
-
 
-
-
-
Net increase (decrease) from contract owner transactions
 
(3,590,443)
 
(796,278)
(698,981)
(261,968)
Total increase (decrease) in net assets
 
(1,597,497)
 
472,909
80,088
157,091
Net assets at beginning of year
16,579,285
16,106,376
4,528,237
4,371,146
Net assets at end of year
$            14,981,788
$            16,579,285
$            4,608,325
$          4,528,237

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

   
HVG Sub-Account
 
HVI Sub-Account
 
December 31,
2013
 
December 31,
2012
 
December 31,
2013
December 31,
2012
Operations:
             
Net investment income (loss)
$
(5,045)
$
(9,824)
$
21,965
$             23,408
Net realized gains (losses)
 
90,866
 
21,596
 
167,998
60,960
Net change in unrealized appreciation/(depreciation)
 
152,446
 
58,070
 
15,756
12,330
Increase (decrease) in net assets from operations
 
238,267
 
69,842
 
205,719
96,698
Contract Owner Transactions:
             
Accumulation Activity:
             
Purchase payments received
 
640
 
445
 
5,880
8,161
Transfers between Sub-Accounts (including the Fixed Account), net
 
(156,820)
 
27,527
 
(75,743)
(47,871)
Withdrawals, surrenders, annuitizations and contract charges
 
(99,755)
 
(57,268)
 
(265,674)
(109,332)
Net accumulation activity
 
(255,935)
 
(29,296)
 
(335,537)
(149,042)
Annuitization Activity:
             
Annuitizations
 
-
 
-
 
-
-
Annuity payments and contract charges
 
-
 
-
 
-
-
Transfers between Sub-Accounts, net
 
-
 
-
 
-
-
Adjustments to annuity reserves
 
-
 
-
 
-
-
Net annuitization activity
 
-
 
-
 
-
-
Net increase (decrease) from contract owner transactions
 
(255,935)
 
(29,296)
 
(335,537)
(149,042)
Total increase (decrease) in net assets
 
(17,668)
 
40,546
 
(129,818)
(52,344)
Net assets at beginning of year
 
848,512
 
807,966
 
1,062,389
1,114,733
Net assets at end of year
$
830,844
$
848,512
$
932,571
$          1,062,389

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

Operations:
HVE Sub-Account
 
HVM Sub-Account
December 31,
2013
December 31,
2012
 
December 31,
2013
 
December 31,
2012
           
Net investment income (loss)
$                         (13,959)
$            (21,857)
$
914
$
(828)
Net realized gains (losses)
273,826
232,617
 
24,099
 
2,027
Net change in unrealized appreciation/(depreciation)
680,035
395,879
 
(15,488)
 
5,872
Increase (decrease) in net assets from operations
939,902
606,639
 
9,525
 
7,071
Contract Owner Transactions:
           
Accumulation Activity:
           
Purchase payments received
4,253
71,629
 
1
 
-
Transfers between Sub-Accounts (including the Fixed Account), net
(556,140)
(247,409)
 
(92,215)
 
(830)
Withdrawals, surrenders, annuitizations and contract charges
(610,508)
(435,297)
 
(232)
 
(864)
Net accumulation activity
(1,162,395)
(611,077)
 
(92,446)
 
(1,694)
Annuitization Activity:
           
Annuitizations
-
-
 
-
 
-
Annuity payments and contract charges
-
-
 
-
 
-
Transfers between Sub-Accounts, net
-
-
 
-
 
-
Adjustments to annuity reserves
-
-
 
-
 
-
Net annuitization activity
-
-
 
-
 
-
Net increase (decrease) from contract owner transactions
(1,162,395)
(611,077)
 
(92,446)
 
(1,694)
Total increase (decrease) in net assets
(222,493)
(4,438)
 
(82,921)
 
5,377
Net assets at beginning of year
4,972,427
4,976,865
 
82,921
 
77,544
Net assets at end of year
$                4,749,934
$          4,972,427
$
-
$
82,921

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

   Operations:
 
HVC Sub-Account
 
HVS Sub-Account
 
 
December 31,
2013
December 31,
2012
 
December 31,                       December 31,
2013                          2012
           
Net investment income (loss)
$
         (15,386)$
(21,700)
$
                85,190$
80,118
Net realized gains (losses)
 
348,809
194,871
 
38,811
76,492
Net change in unrealized appreciation/(depreciation)
 
118,520
(9,101)
 
(396,141)
1,729
Increase (decrease) in net assets from operations
 
451,943
164,070
 
(272,140)
158,339
Contract Owner Transactions:
           
Accumulation Activity:
           
Purchase payments received
 
1,204
2,998
 
100,764
317,187
Transfers between Sub-Accounts (including the Fixed Account), net
 
(227,480)
360,307
 
340,773
574,449
Withdrawals, surrenders, annuitizations and contract charges
 
(309,503)
(103,862)
 
(820,158)
(605,610)
Net accumulation activity
 
(535,779)
259,443
 
(378,621)
286,026
Annuitization Activity:
           
Annuitizations
 
-
-
 
-
-
Annuity payments and contract charges
 
-
-
 
-
-
Transfers between Sub-Accounts, net
 
-
-
 
-
-
Adjustments to annuity reserves
 
-
-
 
-
-
Net annuitization activity
 
-
-
 
-
-
Net increase (decrease) from contract owner transactions
 
(535,779)
259,443
 
(378,621)
286,026
Total increase (decrease) in net assets
 
(83,836)
423,513
 
(650,761)
444,365
Net assets at beginning of year
 
1,690,777
1,267,264
 
8,869,495
8,425,130
Net assets at end of year
$
       1,606,941$
1,690,777
$
           8,218,734$
8,869,495

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

     Operations:
HRS Sub-Account
 
HVR Sub-Account
December 31,
2013
December 31,
2012
 
December 31,
2013
 
December 31,
2012
           
Net investment income (loss)
$                (14,917)
$                  (34,248)
$
(12,323)
$
578
Net realized gains (losses)
112,060
81,842
 
205,037
 
54,717
Net change in unrealized appreciation/(depreciation)
79,805
32,670
 
98,362
 
23,426
Increase (decrease) in net assets from operations
176,948
80,264
 
291,076
 
78,721
Contract Owner Transactions:
           
Accumulation Activity:
           
Purchase payments received
-
43,134
 
-
 
14,203
Transfers between Sub-Accounts (including the Fixed Account), net
(89,970)
36,028
 
(150,388)
 
9,118
Withdrawals, surrenders, annuitizations and contract charges
(213,781)
(200,605)
 
(92,824)
 
(78,770)
Net accumulation activity
(303,751)
(121,443)
 
(243,212)
 
(55,449)
Annuitization Activity:
           
Annuitizations
-
-
 
-
 
-
Annuity payments and contract charges
-
-
 
-
 
-
Transfers between Sub-Accounts, net
-
-
 
-
 
-
Adjustments to annuity reserves
-
-
 
-
 
-
Net annuitization activity
-
-
 
-
 
-
Net increase (decrease) from contract owner transactions
(303,751)
(121,443)
 
(243,212)
 
(55,449)
Total increase (decrease) in net assets
(126,803)
(41,179)
 
47,864
 
23,272
Net assets at beginning of year
2,457,433
2,498,612
 
1,394,690
 
1,371,418
Net assets at end of year
$             2,330,630
$           2,457,433
$
1,442,554
$
1,394,690

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

     Operations:
 
HSS Sub-Account
 
VKC Sub-Account
 
December 31,
2013
December 31,
2012
December 31,
2013
 
December 31,
2012
             
Net investment income (loss)
$
(65,157)
$
(81,478)
$              (93,963)
$
(68,587)
Net realized gains (losses)
 
756,049
 
512,074
972,308
 
436,590
Net change in unrealized appreciation/(depreciation)
 
703,423
 
595,082
1,439,732
 
574,660
Increase (decrease) in net assets from operations
 
1,394,315
 
1,025,678
2,318,077
 
942,663
Contract Owner Transactions:
             
Accumulation Activity:
             
Purchase payments received
 
4,923
 
58,299
100,178
 
20,917
Transfers between Sub-Accounts (including the Fixed Account), net
 
(747,605)
 
(527,647)
3,770,324
 
(931,545)
Withdrawals, surrenders, annuitizations and contract charges
 
(599,769)
 
(469,273)
(896,380)
 
(403,655)
Net accumulation activity
 
(1,342,451)
 
(938,621)
2,974,122
 
(1,314,283)
Annuitization Activity:
             
Annuitizations
 
-
 
-
-
 
-
Annuity payments and contract charges
 
-
 
-
-
 
-
Transfers between Sub-Accounts, net
 
-
 
-
-
 
-
Adjustments to annuity reserves
 
-
 
-
-
 
-
Net annuitization activity
 
-
 
-
-
 
-
Net increase (decrease) from contract owner transactions
 
(1,342,451)
 
(938,621)
2,974,122
 
(1,314,283)
Total increase (decrease) in net assets
 
51,864
 
87,057
5,292,199
 
(371,620)
Net assets at beginning of year
 
5,102,981
 
5,015,924
6,119,962
 
6,491,582
Net assets at end of year
$
5,154,845
$
5,102,981
$           11,412,161
$
6,119,962

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

      Operations:
 
VLC Sub-Account
VKU Sub-Account
 
December 31,
2013
December 31,
2012
December 31,
2013
 
December 31,
2012
           
Net investment income (loss)
$
(66,717)
$            (36,999)
$                49,898
$
107,898
Net realized gains (losses)
 
3,804,837
2,503,503
3,182,923
 
1,079,546
Net change in unrealized appreciation/(depreciation)
 
5,653,647
1,327,601
12,250,499
 
4,359,262
Increase (decrease) in net assets from operations
 
9,391,767
3,794,105
15,483,320
 
5,546,706
Contract Owner Transactions:
           
Accumulation Activity:
           
Purchase payments received
 
212,078
34,134
441,064
 
1,050,375
Transfers between Sub-Accounts (including the Fixed Account), net
 
9,987,374
593,476
34,380,361
 
3,314,936
Withdrawals, surrenders, annuitizations and contract charges
 
(4,660,050)
(2,489,550)
(6,064,914)
 
(3,886,302)
Net accumulation activity
 
5,539,402
(1,861,940)
28,756,511
 
479,009
Annuitization Activity:
           
Annuitizations
 
-
-
-
 
-
Annuity payments and contract charges
 
-
-
-
 
-
Transfers between Sub-Accounts, net
 
-
-
-
 
-
Adjustments to annuity reserves
 
-
-
-
 
-
Net annuitization activity
 
-
-
-
 
-
Net increase (decrease) from contract owner transactions
 
5,539,402
(1,861,940)
28,756,511
 
479,009
Total increase (decrease) in net assets
 
14,931,169
1,932,165
44,239,831
 
6,025,715
Net assets at beginning of year
24,746,978
22,814,813
57,677,285
51,651,570
Net assets at end of year
$            39,678,147
$         24,746,978
$          101,917,116
$         57,677,285

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

 
AI8 Sub-Account
 
AAY Sub-Account
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
Operations:
         
Net investment income (loss)
$                        (3,896)
$
(227)
$             385,616
$             36,586
Net realized gains (losses)
26,118
 
(452)
(212,419)
15,221
Net change in unrealized appreciation/(depreciation)
120,964
 
8,834
(729,964)
78,384
Increase (decrease) in net assets from operations
143,186
 
8,155
(556,767)
130,191
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
1,077
 
-
381,213
222,715
Transfers between Sub-Accounts (including the Fixed Account), net
1,010,100
 
166,095
16,635,025
7,089,092
Withdrawals, surrenders, annuitizations and contract charges
(75,241)
 
(488)
(1,627,592)
(261,408)
Net accumulation activity
935,936
 
165,607
15,388,646
7,050,399
Annuitization Activity:
         
Annuitizations
-
 
-
-
-
Annuity payments and contract charges
-
 
-
-
-
Transfers between Sub-Accounts, net
-
 
-
-
-
Adjustments to annuity reserves
-
 
-
-
-
Net annuitization activity
-
 
-
-
-
Net increase (decrease) from contract owner transactions
935,936
 
165,607
15,388,646
7,050,399
Total increase (decrease) in net assets
1,079,122
 
173,762
14,831,879
7,180,590
Net assets at beginning of year
186,262
 
12,500
8,892,765
1,712,175
Net assets at end of year
$             1,265,384
$
186,262
$          23,724,644
$          8,892,765

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

   
AAM Sub-Account
LRE Sub-Account
 
December 31,
2013
 
December 31,
2012
December 31,
2013
December 31,
2012
Operations:
           
Net investment income (loss)
$
(10,435)
$
(5,121)
$             (170,782)
$                  (82,867)
Net realized gains (losses)
 
387,777
 
(29,916)
1,523,972
3,685,876
Net change in unrealized appreciation/(depreciation)
 
790,127
 
28,784
(2,794,756)
7,891,581
Increase (decrease) in net assets from operations
 
1,167,469
 
(6,253)
(1,441,566)
11,494,590
Contract Owner Transactions:
           
Accumulation Activity:
           
Purchase payments received
 
2,291
 
20,923
408,449
656,213
Transfers between Sub-Accounts (including the Fixed Account), net
 
3,092,397
 
1,173,504
6,086,415
(3,091,587)
Withdrawals, surrenders, annuitizations and contract charges
 
(249,047)
 
(42,114)
(6,327,205)
(4,993,488)
Net accumulation activity
 
2,845,641
 
1,152,313
167,659
(7,428,862)
Annuitization Activity:
           
Annuitizations
 
-
 
-
3,192
-
Annuity payments and contract charges
 
-
 
-
(98)
-
Transfers between Sub-Accounts, net
 
-
 
-
-
-
Adjustments to annuity reserves
 
-
 
-
(64)
-
Net annuitization activity
 
-
 
-
3,030
-
Net increase (decrease) from contract owner transactions
 
2,845,641
 
1,152,313
170,689
(7,428,862)
Total increase (decrease) in net assets
 
4,013,110
 
1,146,060
(1,270,877)
4,065,728
Net assets at beginning of year
 
1,199,600
 
53,540
61,330,118
57,264,390
Net assets at end of year
$
5,212,710
$
1,199,600
$           60,059,241
$          61,330,118

 
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.))
 
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

 
LA9 Sub-Account
 
LAV Sub-Account
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
Operations:
         
Net investment income (loss)
$              (695,270)
$
(732,126)
$                    (733,799)
$                 (541,978)
Net realized gains (losses)
9,543,810
 
1,755,137
11,448,925
3,080,059
Net change in unrealized appreciation/(depreciation)
3,142,969
 
4,035,361
3,570,808
1,488,505
Increase (decrease) in net assets from operations
11,991,509
 
5,058,372
14,285,934
4,026,586
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
274,864
 
486,447
559,561
193,071
Transfers between Sub-Accounts (including the Fixed Account), net
(4,519,247)
 
(811,356)
6,180,923
(3,146,582)
Withdrawals, surrenders, annuitizations and contract charges
(6,990,773)
 
(6,125,927)
(6,494,069)
(4,919,359)
Net accumulation activity
(11,235,156)
 
(6,450,836)
246,415
(7,872,870)
Annuitization Activity:
         
Annuitizations
-
 
-
6,204
-
Annuity payments and contract charges
(2,521)
 
(1,953)
(194)
-
Transfers between Sub-Accounts, net
-
 
-
-
-
Adjustments to annuity reserves
(424)
 
(36)
(135)
-
Net annuitization activity
(2,945)
 
(1,989)
5,875
-
Net increase (decrease) from contract owner transactions
(11,238,101)
 
(6,452,825)
252,290
(7,872,870)
Total increase (decrease) in net assets
753,408
 
(1,394,453)
14,538,224
(3,846,284)
Net assets at beginning of year
40,130,308
41,524,761
42,125,655
45,971,939
Net assets at end of year
$            40,883,716
   $          40,130,308
$            56,663,879
$          42,125,655

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

Operations:
Net investment income (loss)
Net realized gains (losses)
Net change in unrealized appreciation/(depreciation)
Increase (decrease) in net assets from operations
GGC Sub-Account
GGE Sub-Account
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
$                 5,543,151
473,391
24,826,971
$                    -
-
-
$                  5,959,245
712,266
32,324,726
$                   -
-
-
30,843,513
-
38,996,237
-
Contract Owner Transactions:
       
Accumulation Activity:
       
Purchase payments received
4,055,109
-
2,384,972
-
Transfers between Sub-Accounts (including the Fixed Account), net
438,485,162
-
579,019,905
-
Withdrawals, surrenders, annuitizations and contract charges
(23,518,597)
-
(38,196,053)
-
Net accumulation activity
419,021,674
-
543,208,824
-
Annuitization Activity:
       
Annuitizations
45,516
-
7,190
-
Annuity payments and contract charges
(242,124)
-
(5,900)
-
Transfers between Sub-Accounts, net
-
-
-
-
Adjustments to annuity reserves
(282,852)
-
(8,044)
-
Net annuitization activity
(479,460)
-
(6,754)
-
Net increase (decrease) from contract owner transactions
418,542,214
-
543,202,070
-
Total increase (decrease) in net assets
449,385,727
-
582,198,307
-
Net assets at beginning of year
-
-
-
-
Net assets at end of year
$           449,385,727
$                 -
$            582,198,307
$                 -

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

    Operations:
FFL Sub-Account
TEG Sub-Account
 
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
         
Net investment income (loss)
$                  (1,627,663)
$           (682,619)
$             (278,111)
$
(76,952)
Net realized gains (losses)
4,663,394
91,748
1,149,209
 
24,675
Net change in unrealized appreciation/(depreciation)
38,324,639
3,107,098
4,528,837
 
340,498
Increase (decrease) in net assets from operations
41,360,370
2,516,227
5,399,935
 
288,221
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
1,744,271
629,137
217,447
 
76,036
Transfers between Sub-Accounts (including the Fixed Account), net
(3,137,135)
128,736,650
9,933
 
17,865,395
Withdrawals, surrenders, annuitizations and contract charges
(16,127,423)
(5,199,469)
(2,775,072)
 
(878,631)
Net accumulation activity
(17,520,287)
124,166,318
(2,547,692)
 
17,062,800
Annuitization Activity:
         
Annuitizations
66,800
-
-
 
-
Annuity payments and contract charges
(102,743)
(31,134)
(2,677)
 
(789)
Transfers between Sub-Accounts, net
-
-
-
 
-
Adjustments to annuity reserves
(113,829)
(293,190)
403
 
(725)
Net annuitization activity
(149,772)
(324,324)
(2,274)
 
(1,514)
Net increase (decrease) from contract owner transactions
(17,670,059)
123,841,994
(2,549,966)
 
17,061,286
Total increase (decrease) in net assets
23,690,311
126,358,221
2,849,969
 
17,349,507
Net assets at beginning of year
126,358,221
-
17,349,507
 
-
Net assets at end of year
$           150,048,532
$         126,358,221
$           20,199,476
$         17,349,507

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

 
FFJ Sub-Account
 
FFK Sub-Account
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
Operations:
         
Net investment income (loss)
$              (320,563)
$
(104,586)
$                    (714,142)(714,142)
$                   (95,735)(95,735)
Net realized gains (losses)
869,937
 
15,144
2,557,701
20,828
Net change in unrealized appreciation/(depreciation)
6,178,058
 
667,058
11,057,386
990,941
Increase (decrease) in net assets from operations
6,727,432
 
577,616
12,900,945
916,034
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
330,641
 
56,872
580,124
103,139
Transfers between Sub-Accounts (including the Fixed Account), net
1,240,620
 
19,377,898
(5,140,623)
42,001,261
Withdrawals, surrenders, annuitizations and contract charges
(2,539,900)
 
(953,361)
(6,225,298)
(1,299,163)
Net accumulation activity
(968,639)
 
18,481,409
(10,785,797)
40,805,237
Annuitization Activity:
         
Annuitizations
-
 
-
-
-
Annuity payments and contract charges
(7,958)
 
(2,853)
(860)
(113)
Transfers between Sub-Accounts, net
-
 
-
-
-
Adjustments to annuity reserves
2,717
 
(10,272)
1,166
(1,732)
Net annuitization activity
(5,241)
 
(13,125)
306
(1,845)
Net increase (decrease) from contract owner transactions
(973,880)
 
18,468,284
(10,785,491)
40,803,392
Total increase (decrease) in net assets
5,753,552
 
19,045,900
2,115,454
41,719,426
Net assets at beginning of year
19,045,900
 
-
41,719,426
-
Net assets at end of year
$            24,799,452
$         19,045,900
$            43,834,880
$          41,719,426

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

    Operations:
TND Sub-Account
AAN Sub-Account
December 31,
2013
December 31,
2012
December 31,
2013
 
December 31,
2012
         
Net investment income (loss)
$              (259,133)
$            (14,385)
$           (4,607,597)
$
(893,330)
Net realized gains (losses)
1,232,272
3,655
403,276
 
123,281
Net change in unrealized appreciation/(depreciation)
4,158,655
467,705
(20,956,209)
 
26,624
Increase (decrease) in net assets from operations
5,131,794
456,975
(25,160,530)
 
(743,425)
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
135,207
383
3,700,543
 
1,092,689
Transfers between Sub-Accounts (including the Fixed Account), net
1,450,898
12,841,128
(31,958,072)
 
911,050,849
Withdrawals, surrenders, annuitizations and contract charges
(1,689,669)
(28,048)
(75,226,163)
 
(5,947,268)
Net accumulation activity
(103,564)
12,813,463
(103,483,692)
 
906,196,270
Annuitization Activity:
         
Annuitizations
-
-
19,845
 
-
Annuity payments and contract charges
(2,198)
-
(10,890)
 
-
Transfers between Sub-Accounts, net
-
-
-
 
-
Adjustments to annuity reserves
(87)
87
(11,010)
 
(3,803)
Net annuitization activity
(2,285)
87
(2,055)
 
(3,803)
Net increase (decrease) from contract owner transactions
(105,849)
12,813,550
(103,485,747)
 
906,192,467
Total increase (decrease) in net assets
5,025,945
13,270,525
(128,646,277)
 
905,449,042
Net assets at beginning of year
13,270,525
-
907,744,211
2,295,169
Net assets at end of year
$            18,296,470
$          13,270,525
$          779,097,934
$        907,744,211

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

Operations:
FFN Sub-Account
FFO Sub-Account
December 31,
2013
 
December 31,
2012
December 31,
2013
December 31,
2012
         
Net investment income (loss)
$           (3,055,231)
$
(239,748)
$              (1,599,410)(1,599,410)
$              (301,345)(301,345)
Net realized gains (losses)
10,178,162
 
14,507
13,165,421
27,168
Net change in unrealized appreciation/(depreciation)
50,650,097
 
2,532,817
66,721,787
1,651,095
Increase (decrease) in net assets from operations
57,773,028
 
2,307,576
78,287,798
1,376,918
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
793,739
 
76,609
2,296,650
105,536
Transfers between Sub-Accounts (including the Fixed Account), net
(28,772,638)
 
218,975,427
(30,926,410)
265,953,372
Withdrawals, surrenders, annuitizations and contract charges
(32,028,510)
 
(1,544,515)
(44,308,472)
(3,304,821)
Net accumulation activity
(60,007,409)
 
217,507,521
(72,938,232)
262,754,087
Annuitization Activity:
         
Annuitizations
5,602
 
-
21,536
-
Annuity payments and contract charges
(3,366)
 
-
(23,231)
-
Transfers between Sub-Accounts, net
-
 
-
-
-
Adjustments to annuity reserves
29
 
392
(6,110)
(3,801)
Net annuitization activity
2,265
 
392
(7,805)
(3,801)
Net increase (decrease) from contract owner transactions
(60,005,144)
 
217,507,913
(72,946,037)
262,750,286
Total increase (decrease) in net assets
(2,232,116)
 
219,815,489
5,341,761
264,127,204
Net assets at beginning of year
219,815,489
 
-
264,127,204
-
Net assets at end of year
$          217,583,373
$       219,815,489
$         269,468,965
$       264,127,204

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

Operations:
Net investment income (loss)
Net realized gains (losses)
Net change in unrealized appreciation/(depreciation)
Increase (decrease) in net assets from operations
FFP Sub-Account
MIT Sub-Account
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
$                      (90,687)
789,436
3,223,454
$             (14,136)
            1,463
          81,326
81,326
81,326
$               1,912,095
17,335,109
72,996,931
$                  724,118                      10,753,228                     26,950,875
3,223,454$              724,11810,753950,875
3,922,203
            68,653
            92,244,135
 38,428,221
Contract Owner Transactions:
       
Accumulation Activity:
       
Purchase payments received
26,539
-
5,316,240
5,457,367
Transfers between Sub-Accounts (including the Fixed Account), net
(1,651,129)
12,948,518
(6,600,010)
(8,394,173)
Withdrawals, surrenders, annuitizations and contract charges
(1,475,663)
(54,915)
(39,585,523)
(39,443,794)
Net accumulation activity
(3,100,253)
12,893,603
(40,869,293)
(42,380,600)
Annuitization Activity:
       
Annuitizations
-
-
161,246
119,926
Annuity payments and contract charges
-
-
(283,282)
(197,561)
Transfers between Sub-Accounts, net
-
-
-
-
Adjustments to annuity reserves
-
-
(442,851)
(163,485)
Net annuitization activity
-
-
(564,887)
(241,120)
Net increase (decrease) from contract owner transactions
(3,100,253)
12,893,603
(41,434,180)
(42,621,720)
Total increase (decrease) in net assets
821,950
12,962,256
50,809,955
(4,193,499)
Net assets at beginning of year
12,962,256
-
284,268,803
288,462,302
Net assets at end of year
$             13,784,206
$          12,962,256
$          335,078,758
$        284,268,803

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

  Operations:
MFL Sub-Account
BDS Sub-Account
 
December 31,
2013
 
December 31,
2012
December 31,
2013
December 31,
2012
           
Net investment income (loss)
$                   3,820
$
(478,813)
$            2,253,158
$
3,176,416
Net realized gains (losses)
7,742,467
 
2,321,826
5,678,529
 
2,413,929
Net change in unrealized appreciation/(depreciation)
28,108,779
 
14,941,342
(9,502,108)
 
2,936,535
Increase (decrease) in net assets from operations
35,855,066
 
16,784,355
(1,570,421)
 
8,526,880
Contract Owner Transactions:
           
Accumulation Activity:
           
Purchase payments received
1,289,681
 
938,588
1,978,498
 
2,128,341
Transfers between Sub-Accounts (including the Fixed Account), net
(13,944,829)
 
(6,987,864)
(5,617,288)
 
8,390,202
Withdrawals, surrenders, annuitizations and contract charges
(23,297,776)
 
(23,163,434)
(13,242,407)
 
(15,010,646)
Net accumulation activity
(35,952,924)
 
(29,212,710)
(16,881,197)
 
(4,492,103)
Annuitization Activity:
           
Annuitizations
-
 
-
22,711
 
208,063
Annuity payments and contract charges
(11,237)
 
(9,449)
(55,396)
 
(45,817)
Transfers between Sub-Accounts, net
-
 
-
-
 
-
Adjustments to annuity reserves
(4,132)
 
2,241
(29,292)
 
(27,947)
Net annuitization activity
(15,369)
 
(7,208)
(61,977)
 
134,299
Net increase (decrease) from contract owner transactions
(35,968,293)
 
(29,219,918)
(16,943,174)
 
(4,357,804)
Total increase (decrease) in net assets
(113,227)
 
(12,435,563)
(18,513,595)
 
4,169,076
Net assets at beginning of year
121,965,691
134,401,254
93,350,707
89,181,631
Net assets at end of year
$            121,852,464
$         121,965,691
$           74,837,112
$             93,350,707

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

    Operations:
MF7 Sub-Account
 
RGS Sub-Account
December 31,
2013
December 31,
2012
 
December 31,
2013
 
December 31,
2012
           
Net investment income (loss)
$             4,257,160
$           4,839,509
$
(482,349)
$
(658,583)
Net realized gains (losses)
6,681,349
4,526,470
 
2,041,557
 
(1,263,863)
Net change in unrealized appreciation/(depreciation)
(14,868,107)
4,655,088
 
28,241,500
 
15,285,372
Increase (decrease) in net assets from operations
(3,929,598)
14,021,067
 
29,800,708
 
13,362,926
Contract Owner Transactions:
           
Accumulation Activity:
           
Purchase payments received
2,504,743
1,939,743
 
1,591,894
 
1,302,502
Transfers between Sub-Accounts (including the Fixed Account), net
36,582,821
15,905,275
 
(60,943)
 
(1,829,140)
Withdrawals, surrenders, annuitizations and contract charges
(23,420,069)
(18,908,003)
 
(12,167,271)
 
(11,602,665)
Net accumulation activity
15,667,495
(1,062,985)
 
(10,636,320)
 
(12,129,303)
Annuitization Activity:
           
Annuitizations
17,306
-
 
93,787
 
14,154
Annuity payments and contract charges
(975)
-
 
(38,347)
 
(36,823)
Transfers between Sub-Accounts, net
-
-
 
-
 
-
Adjustments to annuity reserves
(290)
1,506
 
(60,270)
 
(21,056)
Net annuitization activity
16,041
1,506
 
(4,830)
 
(43,725)
Net increase (decrease) from contract owner transactions
15,683,536
(1,061,479)
 
(10,641,150)
 
(12,173,028)
Total increase (decrease) in net assets
11,753,938
12,959,588
 
19,159,558
 
1,189,898
Net assets at beginning of year
166,516,251
153,556,663
95,519,770
94,329,872
Net assets at end of year
$           178,270,189
$         166,516,251
$          114,679,328
$             95,519,770

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

 
RG1 Sub-Account
EME Sub-Account
December 31,
2013
December 31,
2012
December 31,
2013
 
December 31,
2012
Operations:
         
Net investment income (loss)
$                    (410,815)(410,815)
$           (434,763)
$                40,092
$
(127,699)
Net realized gains (losses)
5,158,867
2,251,343
(527,085)
 
(1,718,908)
Net change in unrealized appreciation/(depreciation)
7,646,574
3,223,664
(1,848,972)
 
7,697,619
Increase (decrease) in net assets from operations
12,394,626
5,040,244
(2,335,965)
 
5,851,012
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
212,965
254,528
563,376
 
1,143,986
Transfers between Sub-Accounts (including the Fixed Account), net
2,397,162
2,250,802
99,743
 
(1,460,871)
Withdrawals, surrenders, annuitizations and contract charges
(6,586,203)
(3,311,160)
(3,548,785)
 
(6,568,985)
Net accumulation activity
(3,976,076)
(805,830)
(2,885,666)
 
(6,885,870)
Annuitization Activity:
         
Annuitizations
-
-
-
 
-
Annuity payments and contract charges
-
(946)
(31,330)
 
(31,717)
Transfers between Sub-Accounts, net
-
-
-
 
-
Adjustments to annuity reserves
-
4,808
10,634
 
(28,819)
Net annuitization activity
-
3,862
(20,696)
 
(60,536)
Net increase (decrease) from contract owner transactions
(3,976,076)
(801,968)
(2,906,362)
 
(6,946,406)
Total increase (decrease) in net assets
8,418,550
4,238,276
(5,242,327)
 
(1,095,394)
Net assets at beginning of year
39,795,981
35,557,705
35,575,216
36,670,610
Net assets at end of year
$            48,214,531
$         39,795,981
$           30,332,889
$         35,575,216

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

   
EM1 Sub-Account
GGS Sub-Account
 
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
Operations:
         
Net investment income (loss)
$
(75,350)
$           (268,268)
$                  (284,413)(284,413)
$            362,383
Net realized gains (losses)
 
(403,919)
1,270,656
(80,953)
209,765
Net change in unrealized appreciation/(depreciation)
 
(1,718,244)
4,216,161
(1,078,169)
(750,677)
Increase (decrease) in net assets from operations
 
(2,197,513)
5,218,549
(1,443,535)
(178,529)
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
 
222,142
261,734
152,210
745,359
Transfers between Sub-Accounts (including the Fixed Account), net
 
1,574,359
(952,508)
(393,493)
306,264
Withdrawals, surrenders, annuitizations and contract charges
 
(3,294,550)
(3,439,632)
(3,468,883)
(3,837,779)
Net accumulation activity
 
(1,498,049)
(4,130,406)
(3,710,166)
(2,786,156)
Annuitization Activity:
         
Annuitizations
 
-
7,355
-
-
Annuity payments and contract charges
 
(1,495)
(1,387)
(8,919)
(11,137)
Transfers between Sub-Accounts, net
 
-
-
-
-
Adjustments to annuity reserves
 
(63)
(87)
(4,196)
(2,625)
Net annuitization activity
 
(1,558)
5,881
(13,115)
(13,762)
Net increase (decrease) from contract owner transactions
 
(1,499,607)
(4,124,525)
(3,723,281)
(2,799,918)
Total increase (decrease) in net assets
 
(3,697,120)
1,094,024
(5,166,816)
(2,978,447)
Net assets at beginning of year
33,553,289
32,459,265
23,029,564
26,008,011
Net assets at end of year
$            29,856,169
$         33,553,289
$           17,862,748
$         23,029,564

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

Operations:
 
GG1 Sub-Account
 
GGR Sub-Account
 
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
           
Net investment income (loss)
$
(44,832)
$
22,216
$             (413,958)
$                (388,037)(388,037)
Net realized gains (losses)
 
(1,685)
 
49,262
3,722,435
3,139,130
Net change in unrealized appreciation/(depreciation)
 
(132,768)
 
(98,526)
6,723,086
6,472,790
Increase (decrease) in net assets from operations
 
(179,285)
 
(27,048)
10,031,563
9,223,883
Contract Owner Transactions:
           
Accumulation Activity:
           
Purchase payments received
 
58,656
 
102,155
630,015
527,793
Transfers between Sub-Accounts (including the Fixed Account), net
 
830,643
 
155,703
(592,792)
(1,074,426)
Withdrawals, surrenders, annuitizations and contract charges
 
(422,512)
 
(585,378)
(7,257,020)
(7,788,260)
Net accumulation activity
 
466,787
 
(327,520)
(7,219,797)
(8,334,893)
Annuitization Activity:
           
Annuitizations
 
-
 
6,929
-
9,751
Annuity payments and contract charges
 
(1,305)
 
(1,305)
(47,952)
(43,633)
Transfers between Sub-Accounts, net
 
-
 
-
-
-
Adjustments to annuity reserves
 
(55)
 
1,467
(65,472)
(33,135)
Net annuitization activity
 
(1,360)
 
7,091
(113,424)
(67,017)
Net increase (decrease) from contract owner transactions
 
465,427
 
(320,429)
(7,333,221)
(8,401,910)
Total increase (decrease) in net assets
 
286,142
 
(347,477)
2,698,342
821,973
Net assets at beginning of year
 
2,246,301
 
2,593,778
54,517,556
53,695,583
Net assets at end of year
$
2,532,443
$
2,246,301
$           57,215,898
$          54,517,556

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

   Operations:
GG2 Sub-Account
RES Sub-Account
December 31,
2013
 
December 31,
2012
December 31,
2013
December 31,
2012
         
Net investment income (loss)
$                  (38,117)
$
(37,730)
$              187,627
$            187,767
Net realized gains (losses)
261,251
 
167,709
4,922,451
3,065,876
Net change in unrealized appreciation/(depreciation)
316,209
 
382,139
18,341,571
12,958,955
Increase (decrease) in net assets from operations
539,343
 
512,118
23,451,649
16,212,598
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
6,333
 
16,775
1,510,340
1,739,929
Transfers between Sub-Accounts (including the Fixed Account), net
641,780
 
240,866
(1,709,255)
(3,416,966)
Withdrawals, surrenders, annuitizations and contract charges
(729,752)
 
(703,840)
(14,497,901)
(14,773,965)
Net accumulation activity
(81,639)
 
(446,199)
(14,696,816)
(16,451,002)
Annuitization Activity:
         
Annuitizations
-
 
-
49,280
19,288
Annuity payments and contract charges
(1,611)
 
(1,942)
(99,733)
(81,373)
Transfers between Sub-Accounts, net
-
 
-
-
-
Adjustments to annuity reserves
1,930
 
(348)
(131,797)
(58,875)
Net annuitization activity
319
 
(2,290)
(182,250)
(120,960)
Net increase (decrease) from contract owner transactions
(81,320)
 
(448,489)
(14,879,066)
(16,571,962)
Total increase (decrease) in net assets
458,023
 
63,629
8,572,583
(359,364)
Net assets at beginning of year
3,076,199
3,012,570
112,011,193
112,370,557
Net assets at end of year
$                3,534,222
$         3,076,199
$          120,583,776
$        112,011,193

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

Operations:
 
RE1 Sub-Account
GTR Sub-Account
 
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
         
Net investment income (loss)
$
(36,672)
$             (35,744)
$              802,743
$            344,156
Net realized gains (losses)
 
1,810,878
637,091
(588,860)
(1,630,286)
Net change in unrealized appreciation/(depreciation)
 
347,323
1,136,523
4,740,693
6,799,075
Increase (decrease) in net assets from operations
 
2,121,529
1,737,870
4,954,576
5,512,945
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
 
136,540
179,492
1,074,033
1,168,062
Transfers between Sub-Accounts (including the Fixed Account), net
 
(924,725)
(473,121)
1,914,349
(1,538,827)
Withdrawals, surrenders, annuitizations and contract charges
 
(3,043,547)
(2,062,213)
(7,222,344)
(9,650,002)
Net accumulation activity
 
(3,831,732)
(2,355,842)
(4,233,962)
(10,020,767)
Annuitization Activity:
         
Annuitizations
 
-
-
43,867
123,704
Annuity payments and contract charges
 
-
(629)
(85,285)
(78,785)
Transfers between Sub-Accounts, net
 
-
-
-
-
Adjustments to annuity reserves
 
101
1,196
(40,462)
(53,435)
Net annuitization activity
 
101
567
(81,880)
(8,516)
Net increase (decrease) from contract owner transactions
 
(3,831,631)
(2,355,275)
(4,315,842)
(10,029,283)
Total increase (decrease) in net assets
 
(1,710,102)
(617,405)
638,734
(4,516,338)
Net assets at beginning of year
 
11,694,232
12,311,637
69,236,431
73,752,769
Net assets at end of year
$
9,984,130
$          11,694,232
$           69,875,165
$          69,236,431

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

    Operations:
GT2 Sub-Account
GSS Sub-Account
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
       
Net investment income (loss)
$                6,768,060
$           1,620,924
$            1,045,459
$          2,716,415
Net realized gains (losses)
12,472,843
3,995,407
2,251,587
4,063,049
Net change in unrealized appreciation/(depreciation)
42,239,298
60,288,697
(8,996,997)
(5,047,711)
Increase (decrease) in net assets from operations
61,480,201
65,905,028
(5,699,951)
1,731,753
Contract Owner Transactions:
       
Accumulation Activity:
       
Purchase payments received
4,199,831
16,377,113
2,606,706
2,493,731
Transfers between Sub-Accounts (including the Fixed Account), net
(26,115,642)
21,149,616
(2,641,385)
6,322,531
Withdrawals, surrenders, annuitizations and contract charges
(39,696,997)
(38,720,043)
(20,354,250)
(20,155,299)
Net accumulation activity
(61,612,808)
(1,193,314)
(20,388,929)
(11,339,037)
Annuitization Activity:
       
Annuitizations
37,286
-
21,553
50,666
Annuity payments and contract charges
(2,091)
(3,552)
(133,742)
(116,723)
Transfers between Sub-Accounts, net
-
-
-
-
Adjustments to annuity reserves
(643)
1,559
9,699
12,293
Net annuitization activity
34,552
(1,993)
(102,490)
(53,764)
Net increase (decrease) from contract owner transactions
(61,578,256)
(1,195,307)
(20,491,419)
(11,392,801)
Total increase (decrease) in net assets
(98,055)
64,709,721
(26,191,370)
(9,661,048)
Net assets at beginning of year
933,129,242
868,419,521
153,265,951
162,926,999
Net assets at end of year
$            933,031,187
$        933,129,242
$          127,074,581
$        153,265,951

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

       Operations:
 
MFK Sub-Account
 
HYS Sub-Account
 
December 31,
2013
December 31,
2012
 
December 31,
2013
December 31,
2012
           
Net investment income (loss)
$
920,828
$          4,409,257
$
821,923
$          4,841,916
Net realized gains (losses)
 
3,618,518
7,984,898
 
3,911,722
1,689,107
Net change in unrealized appreciation/(depreciation)
 
(20,265,338)
(10,113,595)
 
(474,695)
4,744,262
Increase (decrease) in net assets from operations
 
(15,725,992)
2,280,560
 
4,258,950
11,275,285
Contract Owner Transactions:
           
Accumulation Activity:
           
Purchase payments received
 
2,900,919
4,535,442
 
1,440,310
1,098,363
Transfers between Sub-Accounts (including the Fixed Account), net
 
15,604,388
23,684,097
 
(168,982)
3,283,516
Withdrawals, surrenders, annuitizations and contract charges
 
(53,316,760)
(44,549,024)
 
(11,688,137)
(10,592,675)
Net accumulation activity
 
(34,811,453)
(16,329,485)
 
(10,416,809)
(6,210,796)
Annuitization Activity:
           
Annuitizations
 
61,383
12,099
 
-
-
Annuity payments and contract charges
 
(32,868)
(25,746)
 
(102,862)
(72,202)
Transfers between Sub-Accounts, net
 
-
-
 
-
-
Adjustments to annuity reserves
 
(5,463)
(4,071)
 
(57,377)
(107,809)
Net annuitization activity
 
23,052
(17,718)
 
(160,239)
(180,011)
Net increase (decrease) from contract owner transactions
 
(34,788,401)
(16,347,203)
 
(10,577,048)
(6,390,807)
Total increase (decrease) in net assets
 
(50,514,393)
(14,066,643)
 
(6,318,098)
4,884,478
Net assets at beginning of year
365,299,829
379,366,472
91,984,284
87,099,806
Net assets at end of year
$            314,785,436
$       365,299,829
$          85,666,186
$         91,984,284

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

Operations:
MFC Sub-Account
IGS Sub-Account
 
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
         
Net investment income (loss)
$                 343,607
$          3,248,707
$                     (62,646)(62,646)
$
(235,787)
Net realized gains (losses)
7,614,753
3,279,450
(1,033,784)
 
(3,684,701)
Net change in unrealized appreciation/(depreciation)
(4,066,467)
1,975,511
7,208,807
 
12,733,313
Increase (decrease) in net assets from operations
3,891,893
8,503,668
6,112,377
 
8,812,825
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
1,324,907
1,024,667
764,962
 
655,630
Transfers between Sub-Accounts (including the Fixed Account), net
(1,602,285)
28,922,125
578,939
 
(2,625,767)
Withdrawals, surrenders, annuitizations and contract charges
(15,249,192)
(12,506,280)
(5,651,379)
 
(6,101,708)
Net accumulation activity
(15,526,570)
17,440,512
(4,307,478)
 
(8,071,845)
Annuitization Activity:
         
Annuitizations
2,622
7,108
-
 
-
Annuity payments and contract charges
(12,054)
(10,422)
(23,333)
 
(19,924)
Transfers between Sub-Accounts, net
-
-
-
 
-
Adjustments to annuity reserves
(3,104)
(2,313)
(4,211)
 
(18,523)
Net annuitization activity
(12,536)
(5,627)
(27,544)
 
(38,447)
Net increase (decrease) from contract owner transactions
(15,539,106)
17,434,885
(4,335,022)
 
(8,110,292)
Total increase (decrease) in net assets
(11,647,213)
25,938,553
1,777,355
 
702,533
Net assets at beginning of year
98,934,341
72,995,788
51,736,851
51,034,318
Net assets at end of year
$              87,287,128
$         98,934,341
$           53,514,206
$         51,736,851

 
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.))
 
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

 
IG1 Sub-Account
 
MII Sub-Account
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
Operations:
         
Net investment income (loss)
$                (124,697)
$
(211,089)
$              45,106
$             51,291
Net realized gains (losses)
536,656
 
(260,949)
339,627
(1,350,849)
Net change in unrealized appreciation/(depreciation)
2,301,280
 
4,499,986
10,933,356
7,517,261
Increase (decrease) in net assets from operations
2,713,239
 
4,027,948
11,318,089
6,217,703
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
156,789
 
200,706
723,840
517,765
Transfers between Sub-Accounts (including the Fixed Account), net
935,054
 
(2,315,832)
827,409
(2,345,517)
Withdrawals, surrenders, annuitizations and contract charges
(1,888,881)
 
(2,904,766)
(5,437,842)
(5,627,709)
Net accumulation activity
(797,038)
 
(5,019,892)
(3,886,593)
(7,455,461)
Annuitization Activity:
         
Annuitizations
-
 
10,729
11,890
68,946
Annuity payments and contract charges
(2,514)
 
(2,101)
(50,504)
(37,210)
Transfers between Sub-Accounts, net
-
 
-
-
-
Adjustments to annuity reserves
(142)
 
656
(45,557)
(16,993)
Net annuitization activity
(2,656)
 
9,284
(84,171)
14,743
Net increase (decrease) from contract owner transactions
(799,694)
 
(5,010,608)
(3,970,764)
(7,440,718)
Total increase (decrease) in net assets
1,913,545
 
(982,660)
7,347,325
(1,223,015)
Net assets at beginning of year
23,166,934
24,149,594
44,954,741
46,177,756
Net assets at end of year
$             25,080,479
$           23,166,934
$           52,302,066
$         44,954,741

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

Operations:
 
MI1 Sub-Account
 
MIS Sub-Account
 
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
           
Net investment income (loss)
$
(523,866)
$
(473,284)
$                (2,437,969)(2,437,969)
$          (3,337,912)
Net realized gains (losses)
 
3,608,736
 
(4,710,450)
19,446,367
12,387,867
Net change in unrealized appreciation/(depreciation)
 
31,771,984
 
25,903,129
69,853,794
38,925,130
Increase (decrease) in net assets from operations
 
34,856,854
 
20,719,395
86,862,192
47,975,085
Contract Owner Transactions:
           
Accumulation Activity:
           
Purchase payments received
 
713,741
 
1,014,979
4,713,214
4,379,014
Transfers between Sub-Accounts (including the Fixed Account), net
 
(5,806,409)
 
(11,063,652)
(7,478,553)
(10,252,388)
Withdrawals, surrenders, annuitizations and contract charges
 
(18,691,502)
 
(21,877,058)
(41,202,988)
(39,384,323)
Net accumulation activity
 
(23,784,170)
 
(31,925,731)
(43,968,327)
(45,257,697)
Annuitization Activity:
           
Annuitizations
 
-
 
-
124,380
113,570
Annuity payments and contract charges
 
(3,404)
 
(2,812)
(418,221)
(324,891)
Transfers between Sub-Accounts, net
 
-
 
-
-
-
Adjustments to annuity reserves
 
(965)
 
(597)
(131,292)
(57,229)
Net annuitization activity
 
(4,369)
 
(3,409)
(425,133)
(268,550)
Net increase (decrease) from contract owner transactions
 
(23,788,539)
 
(31,929,140)
(44,393,460)
(45,526,247)
Total increase (decrease) in net assets
 
11,068,315
 
(11,209,745)
42,468,732
2,448,838
Net assets at beginning of year
146,947,171
158,156,916
323,460,136
321,011,298
Net assets at end of year
$             158,015,486
$           146,947,171
$          365,928,868
$         323,460,136

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

Operations:
 
M1B Sub-Account
MMS Sub-Account
 
December 31,
2013
 
December 31,
2012
December 31,
2013
December 31,
2012
           
Net investment income (loss)
$
(571,475)
$
(739,859)
$                (1,150,416)(1,150,416)
$            (1,228,458)(1,228,458)
Net realized gains (losses)
 
4,071,099
 
2,118,772
(2)
(5)
Net change in unrealized appreciation/(depreciation)
 
8,105,929
 
5,437,176
-
-
Increase (decrease) in net assets from operations
 
11,605,553
 
6,816,089
(1,150,418)
(1,228,463)
Contract Owner Transactions:
           
Accumulation Activity:
           
Purchase payments received
 
917,878
 
560,402
4,542,162
4,732,035
Transfers between Sub-Accounts (including the Fixed Account), net
 
13,792
 
(1,561,034)
20,927,888
18,627,542
Withdrawals, surrenders, annuitizations and contract charges
 
(7,637,697)
 
(8,993,045)
(34,171,888)
(32,339,624)
Net accumulation activity
 
(6,706,027)
 
(9,993,677)
(8,701,838)
(8,980,047)
Annuitization Activity:
           
Annuitizations
 
7,199
 
17,529
16,892
73,240
Annuity payments and contract charges
 
(6,083)
 
(8,151)
(146,698)
(178,051)
Transfers between Sub-Accounts, net
 
-
 
-
-
-
Adjustments to annuity reserves
 
(240)
 
713
(5,924)
24,572
Net annuitization activity
 
876
 
10,091
(135,730)
(80,239)
Net increase (decrease) from contract owner transactions
 
(6,705,151)
 
(9,983,586)
(8,837,568)
(9,060,286)
Total increase (decrease) in net assets
 
4,900,402
 
(3,167,497)
(9,987,986)
(10,288,749)
Net assets at beginning of year
45,257,479
48,424,976
85,734,713
96,023,462
Net assets at end of year
$              50,157,881
$        45,257,479
$           75,746,727
$         85,734,713

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

    Operations:
MM1 Sub-Account
NWD Sub-Account
December 31,
2013
December 31,
2012
December 31,
2013
 
December 31,
2012
         
Net investment income (loss)
$              (4,103,399)
$         (2,147,580)
$                  (951,838)(951,838)
$
(858,375)
Net realized gains (losses)
-
(11)
4,893,967
 
6,917,795
Net change in unrealized appreciation/(depreciation)
-
-
17,538,848
 
4,289,234
Increase (decrease) in net assets from operations
(4,103,399)
(2,147,591)
21,480,977
 
10,348,654
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
3,930,920
1,535,197
1,072,789
 
627,004
Transfers between Sub-Accounts (including the Fixed Account), net
91,526,435
207,630,983
(1,523,283)
 
(1,393,001)
Withdrawals, surrenders, annuitizations and contract charges
(136,063,036)
(56,892,418)
(7,557,454)
 
(6,566,641)
Net accumulation activity
(40,605,681)
152,273,762
(8,007,948)
 
(7,332,638)
Annuitization Activity:
         
Annuitizations
16,785
-
-
 
3,520
Annuity payments and contract charges
(47,137)
(15,080)
(24,800)
 
(17,311)
Transfers between Sub-Accounts, net
-
-
-
 
-
Adjustments to annuity reserves
(6,571)
(506)
(8,161)
 
(25,205)
Net annuitization activity
(36,923)
(15,586)
(32,961)
 
(38,996)
Net increase (decrease) from contract owner transactions
(40,642,604)
152,258,176
(8,040,909)
 
(7,371,634)
Total increase (decrease) in net assets
(44,746,003)
150,110,585
13,440,068
 
2,977,020
Net assets at beginning of year
273,733,380
123,622,795
57,662,794
54,685,774
Net assets at end of year
$             228,987,377
$        273,733,380
$           71,102,862
$         57,662,794

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

    Operations:
M1A Sub-Account
RIS Sub-Account
 
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
         
Net investment income (loss)
$                     (1,003,746)(1,003,746)
$         (1,049,944)
$               (1,049,944)(243,347)
$
217,222
Net realized gains (losses)
12,076,175
9,737,638
(1,482,856)
 
(2,942,732)
Net change in unrealized appreciation/(depreciation)
8,229,830
2,319,685
6,991,163
 
7,225,766
Increase (decrease) in net assets from operations
19,302,259
11,007,379
5,264,960
 
4,500,256
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
865,242
374,172
677,456
 
280,570
Transfers between Sub-Accounts (including the Fixed Account), net
(8,306,209)
(2,514,774)
(539,347)
 
(1,255,259)
Withdrawals, surrenders, annuitizations and contract charges
(11,070,244)
(10,929,796)
(3,305,483)
 
(3,789,336)
Net accumulation activity
(18,511,211)
(13,070,398)
(3,167,374)
 
(4,764,025)
Annuitization Activity:
         
Annuitizations
-
10,730
-
 
3,135
Annuity payments and contract charges
(10,535)
(7,817)
(15,942)
 
(14,485)
Transfers between Sub-Accounts, net
-
-
-
 
-
Adjustments to annuity reserves
(3,100)
3,820
(12,732)
 
(4,893)
Net annuitization activity
(13,635)
6,733
(28,674)
 
(16,243)
Net increase (decrease) from contract owner transactions
(18,524,846)
(13,063,665)
(3,196,048)
 
(4,780,268)
Total increase (decrease) in net assets
777,413
(2,056,286)
2,068,912
 
(280,012)
Net assets at beginning of year
58,254,104
60,310,390
32,226,095
32,506,107
Net assets at end of year
$              59,031,517
$         58,254,104
$           34,295,007
$         32,226,095

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

Operations:
RI1 Sub-Account
SIS Sub-Account
December 31,
2013
 
December 31,
2012
December 31,
2013
December 31,
2012
         
Net investment income (loss)
$                      (1,040,727)(1,040,727)
$
197,689
$              627,850
$           1,539,325
Net realized gains (losses)
1,320,729
 
(9,502,774)
1,250,604
108,198
Net change in unrealized appreciation/(depreciation)
12,990,224
 
21,674,933
(1,919,246)
1,668,943
Increase (decrease) in net assets from operations
13,270,226
 
12,369,848
(40,792)
3,316,466
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
542,667
 
499,659
1,258,055
330,194
Transfers between Sub-Accounts (including the Fixed Account), net
(64,474)
 
(5,159,934)
957,248
4,669,484
Withdrawals, surrenders, annuitizations and contract charges
(14,072,893)
 
(12,988,326)
(6,187,419)
(3,698,418)
Net accumulation activity
(13,594,700)
 
(17,648,601)
(3,972,116)
1,301,260
Annuitization Activity:
         
Annuitizations
-
 
-
38,430
-
Annuity payments and contract charges
(3,439)
 
(2,979)
(32,570)
(22,849)
Transfers between Sub-Accounts, net
-
 
-
-
-
Adjustments to annuity reserves
(165)
 
(194)
(24,547)
10,683
Net annuitization activity
(3,604)
 
(3,173)
(18,687)
(12,166)
Net increase (decrease) from contract owner transactions
(13,598,304)
 
(17,651,774)
(3,990,803)
1,289,094
Total increase (decrease) in net assets
(328,078)
 
(5,281,926)
(4,031,595)
4,605,560
Net assets at beginning of year
84,955,119
90,237,045
41,521,964
36,916,404
Net assets at end of year
$              84,627,041
$        84,955,119
$           37,490,369
$         41,521,964

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

     Operations:
SI1 Sub-Account
   
TEC Sub-Account
December 31,
2013
December 31,
2012
 
December 31,
2013
December 31,
2012
           
Net investment income (loss)
$                 104,072
$
327,429
$
(198,041)
$           (217,483)
Net realized gains (losses)
226,226
 
245,828
 
1,295,852
1,356,958
Net change in unrealized appreciation/(depreciation)
(371,594)
 
198,331
 
2,896,879
632,920
Increase (decrease) in net assets from operations
(41,296)
 
771,588
 
3,994,690
1,772,395
Contract Owner Transactions:
           
Accumulation Activity:
           
Purchase payments received
241,203
 
214,845
 
260,471
99,616
Transfers between Sub-Accounts (including the Fixed Account), net
168,880
 
105,624
 
(360,891)
(291,391)
Withdrawals, surrenders, annuitizations and contract charges
(1,624,557)
 
(2,628,428)
 
(1,474,980)
(3,181,285)
Net accumulation activity
(1,214,474)
 
(2,307,959)
 
(1,575,400)
(3,373,060)
Annuitization Activity:
           
Annuitizations
-
 
-
 
-
32,912
Annuity payments and contract charges
-
 
(4,190)
 
(7,256)
(5,869)
Transfers between Sub-Accounts, net
-
 
-
 
-
-
Adjustments to annuity reserves
-
 
2,633
 
(3,800)
(2,058)
Net annuitization activity
-
 
(1,557)
 
(11,056)
24,985
Net increase (decrease) from contract owner transactions
(1,214,474)
 
(2,309,516)
 
(1,586,456)
(3,348,075)
Total increase (decrease) in net assets
(1,255,770)
 
(1,537,928)
 
2,408,234
(1,575,680)
Net assets at beginning of year
8,481,632
10,019,560
13,006,405
14,582,085
Net assets at end of year
$                7,225,862
$          8,481,632
$           15,414,639
$         13,006,405
0
 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

Operations:
 
TE1 Sub-Account
   
TRS Sub-Account
 
December 31,
2013
December 31,
2012
 
December 31,
2013
December 31,
2012
             
Net investment income (loss)
$
(21,081)
$
(23,232)
$
13,725,031
$            5,255,220
Net realized gains (losses)
 
122,590
 
157,964
 
41,029,298
704,223
Net change in unrealized appreciation/(depreciation)
 
283,096
 
35,911
 
(13,975,103)
36,245,628
Increase (decrease) in net assets from operations
 
384,605
 
170,643
 
40,779,226
42,205,071
Contract Owner Transactions:
             
Accumulation Activity:
             
Purchase payments received
 
511
 
1,428
 
3,886,507
7,322,003
Transfers between Sub-Accounts (including the Fixed Account), net
 
47,692
 
(134,005)
 
(439,764,269)
(5,232,714)
Withdrawals, surrenders, annuitizations and contract charges
 
(177,971)
 
(260,429)
 
(42,124,017)
(55,407,936)
Net accumulation activity
 
(129,768)
 
(393,006)
 
(478,001,779)
(53,318,647)
Annuitization Activity:
             
Annuitizations
 
-
 
-
 
80,041
64,923
Annuity payments and contract charges
 
-
 
-
 
(519,730)
(573,580)
Transfers between Sub-Accounts, net
 
-
 
-
 
-
-
Adjustments to annuity reserves
 
-
 
-
 
1,595,657
110,968
Net annuitization activity
 
-
 
-
 
1,155,968
(397,689)
Net increase (decrease) from contract owner transactions
 
(129,768)
 
(393,006)
 
(476,845,811)
(53,716,336)
Total increase (decrease) in net assets
 
254,837
 
(222,363)
 
(436,066,585)
(11,511,265)
Net assets at beginning of year
 
1,233,938
 
1,456,301
 
436,066,585
447,577,850
Net assets at end of year
$
1,488,775
$
1,233,938
$
-
$          436,066,585
0
 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

       Operations:
MFJ Sub-Account
UTS Sub-Account
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
       
Net investment income (loss)
$              14,746,550
$          3,945,695
$            2,099,598
$          4,851,925
Net realized gains (losses)
94,822,112
(12,545,748)
17,460,212
7,434,570
Net change in unrealized appreciation/(depreciation)
(56,716,209)
64,307,994
7,730,989
5,787,625
Increase (decrease) in net assets from operations
52,852,453
55,707,941
27,290,799
18,074,120
Contract Owner Transactions:
       
Accumulation Activity:
       
Purchase payments received
4,521,972
8,698,826
2,282,370
1,708,778
Transfers between Sub-Accounts (including the Fixed Account), net
(586,212,861)
(8,629,773)
(2,965,729)
(3,373,323)
Withdrawals, surrenders, annuitizations and contract charges
(66,285,662)
(103,735,161)
(19,147,325)
(19,045,467)
Net accumulation activity
(647,976,551)
(103,666,108)
(19,830,684)
(20,710,012)
Annuitization Activity:
       
Annuitizations
-
-
98,810
5,919
Annuity payments and contract charges
(12,889)
(17,331)
(130,962)
(136,270)
Transfers between Sub-Accounts, net
-
-
-
-
Adjustments to annuity reserves
30,788
18,867
(137,498)
(52,561)
Net annuitization activity
17,899
1,536
(169,650)
(182,912)
Net increase (decrease) from contract owner transactions
(647,958,652)
(103,664,572)
(20,000,334)
(20,892,924)
Total increase (decrease) in net assets
(595,106,199)
(47,956,631)
7,290,465
(2,818,804)
Net assets at beginning of year
595,106,199
643,062,830
150,920,550
153,739,354
Net assets at end of year
$                      -
$        595,106,199
$          158,211,015
$        150,920,550
0
 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

Operations:
MFE Sub-Account
MVS Sub-Account
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
       
Net investment income (loss)
$                  934,539
$          3,082,459
$            1,695,523
$            400,722
Net realized gains (losses)
17,126,900
8,074,786
4,638,230
213,559
Net change in unrealized appreciation/(depreciation)
134,374
1,609,239
27,681,501
14,048,886
Increase (decrease) in net assets from operations
18,195,813
12,766,484
34,015,254
14,663,167
Contract Owner Transactions:
       
Accumulation Activity:
       
Purchase payments received
711,484
840,363
2,127,230
1,486,164
Transfers between Sub-Accounts (including the Fixed Account), net
(3,839,007)
(8,798,770)
(99,699)
(3,023,732)
Withdrawals, surrenders, annuitizations and contract charges
(14,772,822)
(15,354,252)
(13,568,870)
(13,828,350)
Net accumulation activity
(17,900,345)
(23,312,659)
(11,541,339)
(15,365,918)
Annuitization Activity:
       
Annuitizations
-
-
-
120,682
Annuity payments and contract charges
-
(1,416)
(120,318)
(100,812)
Transfers between Sub-Accounts, net
-
-
-
-
Adjustments to annuity reserves
-
4,589
(107,428)
(20,322)
Net annuitization activity
-
3,173
(227,746)
(452)
Net increase (decrease) from contract owner transactions
(17,900,345)
(23,309,486)
(11,769,085)
(15,366,370)
Total increase (decrease) in net assets
295,468
(10,543,002)
22,246,169
(703,203)
Net assets at beginning of year
106,106,149
116,649,151
104,795,200
105,498,403
Net assets at end of year
$             106,401,617
$        106,106,149
$          127,041,369
$        104,795,200
0
 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

         Operations:
MV1 Sub-Account
VSC Sub-Account
December 31,
2013
 
December 31,
2012
December 31,
2013
December 31,
2012
         
Net investment income (loss)
$                1,784,074
$
(181,308)
$                  (289,555)(289,555)
$         (1,474,778)
Net realized gains (losses)
29,808,913
 
10,596,913
29,152,368
10,808,246
Net change in unrealized appreciation/(depreciation)
22,124,563
 
14,931,597
10,972,117
4,089,558
Increase (decrease) in net assets from operations
53,717,550
 
25,347,202
39,834,930
13,423,026
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
2,289,105
 
2,228,676
734,515
970,686
Transfers between Sub-Accounts (including the Fixed Account), net
(15,575,815)
 
(13,907,649)
(21,200,117)
(2,874,683)
Withdrawals, surrenders, annuitizations and contract charges
(27,874,995)
 
(25,352,722)
(13,437,733)
(13,712,796)
Net accumulation activity
(41,161,705)
 
(37,031,695)
(33,903,335)
(15,616,793)
Annuitization Activity:
         
Annuitizations
9,230
 
22,629
-
6,732
Annuity payments and contract charges
(3,068)
 
(2,150)
(3,940)
(3,015)
Transfers between Sub-Accounts, net
-
 
-
-
-
Adjustments to annuity reserves
(1,205)
 
3,987
(1,534)
(683)
Net annuitization activity
4,957
 
24,466
(5,474)
3,034
Net increase (decrease) from contract owner transactions
(41,156,748)
 
(37,007,229)
(33,908,809)
(15,613,759)
Total increase (decrease) in net assets
12,560,802
 
(11,660,027)
5,926,121
(2,190,733)
Net assets at beginning of year
178,140,581
189,800,608
107,498,309
109,689,042
Net assets at end of year
$             190,701,383
$        178,140,581
$          113,424,430
$        107,498,309
0
 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

Operations:
6XX Sub-Account
SC3 Sub-Account
December 31,
2013
December 31,
2012
December 31,
2013
 
December 31,
2012
         
Net investment income (loss)
$                9,210,097
$          8,872,104
$             120,785
$
(32,326)
Net realized gains (losses)
78,236,402
43,744,093
401,403
 
536,780
Net change in unrealized appreciation/(depreciation)
(22,507,114)
8,326,104
(407,907)
 
452,299
Increase (decrease) in net assets from operations
64,939,385
60,942,301
114,281
 
956,753
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
4,574,860
13,074,614
80,546
 
58,749
Transfers between Sub-Accounts (including the Fixed Account), net
(61,824,886)
4,170,734
95,933
 
(416,581)
Withdrawals, surrenders, annuitizations and contract charges
(75,530,205)
(60,530,978)
(633,126)
 
(818,781)
Net accumulation activity
(132,780,231)
(43,285,630)
(456,647)
 
(1,176,613)
Annuitization Activity:
         
Annuitizations
5,195
-
6,860
 
-
Annuity payments and contract charges
(835)
-
(2,179)
 
(1,358)
Transfers between Sub-Accounts, net
-
-
-
 
-
Adjustments to annuity reserves
(64)
122
(117)
 
(307)
Net annuitization activity
4,296
122
4,564
 
(1,665)
Net increase (decrease) from contract owner transactions
(132,775,935)
(43,285,508)
(452,083)
 
(1,178,278)
Total increase (decrease) in net assets
(67,836,550)
17,656,793
(337,802)
 
(221,525)
Net assets at beginning of year
905,908,146
888,251,353
3,725,321
3,946,846
Net assets at end of year
$            838,071,596
$        905,908,146
$            3,387,519
$          3,725,321
0
 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

      Operations:
SRE Sub-Account
8XX Sub-Account
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
       
Net investment income (loss)
$             2,972,750
$         (1,110,315)
$            3,588,627
$          3,471,535
Net realized gains (losses)
10,801,934
9,679,214
62,121,929
35,713,055
Net change in unrealized appreciation/(depreciation)
(10,260,139)
18,021,333
36,174,597
13,110,635
Increase (decrease) in net assets from operations
3,514,545
26,590,232
101,885,153
52,295,225
Contract Owner Transactions:
       
Accumulation Activity:
       
Purchase payments received
806,742
762,911
1,415,819
2,191,043
Transfers between Sub-Accounts (including the Fixed Account), net
12,466,244
(15,898,478)
10,946,408
(14,538,498)
Withdrawals, surrenders, annuitizations and contract charges
(15,681,131)
(15,421,872)
(55,420,113)
(29,204,307)
Net accumulation activity
(2,408,145)
(30,557,439)
(43,057,886)
(41,551,762)
Annuitization Activity:
       
Annuitizations
-
-
-
-
Annuity payments and contract charges
(3,555)
(3,262)
-
-
Transfers between Sub-Accounts, net
-
-
-
-
Adjustments to annuity reserves
(193)
(592)
-
-
Net annuitization activity
(3,748)
(3,854)
-
-
Net increase (decrease) from contract owner transactions
(2,411,893)
(30,561,293)
(43,057,886)
(41,551,762)
Total increase (decrease) in net assets
1,102,652
(3,971,061)
58,827,267
10,743,463
Net assets at beginning of year
105,024,241
108,995,302
517,571,863
506,828,400
Net assets at end of year
$           106,126,893
$        105,024,241
$          576,399,130
$        517,571,863
0
 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

       Operations:
5XX Sub-Account
SDC Sub-Account
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
       
Net investment income (loss)
$                 (4,200,803)(4,200,803)
$         (2,389,019)
$               (7,278,845)(7,278,845)
$         (2,919,570)
Net realized gains (losses)
13,849,499
23,715,865
2,708,447
1,588,974
Net change in unrealized appreciation/(depreciation)
(28,587,025)
(5,847,739)
(63,436)
3,600,483
Increase (decrease) in net assets from operations
(18,938,329)
15,479,107
(4,633,834)
2,269,887
Contract Owner Transactions:
       
Accumulation Activity:
       
Purchase payments received
1,252,833
4,853,334
4,686,573
3,131,843
Transfers between Sub-Accounts (including the Fixed Account), net
(10,762,845)
22,072,952
53,288,516
30,148,770
Withdrawals, surrenders, annuitizations and contract charges
(25,326,255)
(20,941,347)
(77,402,394)
(83,392,384)
Net accumulation activity
(34,836,267)
5,984,939
(19,427,305)
(50,111,771)
Annuitization Activity:
       
Annuitizations
24,153
-
3,052
-
Annuity payments and contract charges
(1,413)
-
(32,342)
(24,716)
Transfers between Sub-Accounts, net
-
-
-
-
Adjustments to annuity reserves
(411)
-
(9,220)
(474)
Net annuitization activity
22,329
-
(38,510)
(25,190)
Net increase (decrease) from contract owner transactions
(34,813,938)
5,984,939
(19,465,815)
(50,136,961)
Total increase (decrease) in net assets
(53,752,267)
21,464,046
(24,099,649)
(47,867,074)
Net assets at beginning of year
283,700,615
262,236,569
468,269,992
516,137,066
Net assets at end of year
$           229,948,348
$        283,700,615
$          444,170,343
$        468,269,992
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 
                                                                              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.))
 
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

      Operations:
S15 Sub-Account
SGC Sub-Account
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
       
Net investment income (loss)
$                (3,031,777)(3,031,777)
$         (1,338,779)
$                  (318,258)(318,258)
$           (377,239)
Net realized gains (losses)
573,364
201,797
14,595,934
12,168,299
Net change in unrealized appreciation/(depreciation)
442,787
1,698,969
1,115,772
(4,712,364)
Increase (decrease) in net assets from operations
(2,015,626)
561,987
15,393,448
7,078,696
Contract Owner Transactions:
       
Accumulation Activity:
       
Purchase payments received
1,673,192
2,218,768
431,433
224,078
Transfers between Sub-Accounts (including the Fixed Account), net
66,526,967
13,435,024
(5,600,419)
(1,589,474)
Withdrawals, surrenders, annuitizations and contract charges
(20,349,838)
(26,092,578)
(9,731,945)
(8,230,330)
Net accumulation activity
47,850,321
(10,438,786)
(14,900,931)
(9,595,726)
Annuitization Activity:
       
Annuitizations
5,038
14,456
-
-
Annuity payments and contract charges
(1,428)
(488)
(4,784)
(4,148)
Transfers between Sub-Accounts, net
-
-
-
-
Adjustments to annuity reserves
(254)
(323)
(1,239)
(254)
Net annuitization activity
3,356
13,645
(6,023)
(4,402)
Net increase (decrease) from contract owner transactions
47,853,677
(10,425,141)
(14,906,954)
(9,600,128)
Total increase (decrease) in net assets
45,838,051
(9,863,154)
486,494
(2,521,432)
Net assets at beginning of year
169,107,917
178,971,071
50,057,208
52,578,640
Net assets at end of year
$          214,945,968
$        169,107,917
$           50,543,702
$         50,057,208




















 
                                                   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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

      Operations:
S13 Sub-Account
7XX Sub-Account
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
       
Net investment income (loss)
$                    (235,634)(235,634)
$           (255,299)
$           14,026,042
$         12,449,509
Net realized gains (losses)
6,066,071
4,425,940
151,444,422
71,750,284
Net change in unrealized appreciation/(depreciation)
3,943,157
(294,555)
98,719,218
63,221,700
Increase (decrease) in net assets from operations
9,773,594
3,876,086
264,189,682
147,421,493
Contract Owner Transactions:
       
Accumulation Activity:
       
Purchase payments received
214,976
183,852
11,293,250
16,604,207
Transfers between Sub-Accounts (including the Fixed Account), net
109,679
(347,218)
75,837,635
44,588,438
Withdrawals, surrenders, annuitizations and contract charges
(3,480,364)
(2,225,564)
(152,302,503)
(83,307,213)
Net accumulation activity
(3,155,709)
(2,388,930)
(65,171,618)
(22,114,568)
Annuitization Activity:
       
Annuitizations
-
-
5,302
1,235,977
Annuity payments and contract charges
-
-
(271,291)
(255,727)
Transfers between Sub-Accounts, net
-
-
-
-
Adjustments to annuity reserves
-
-
(23,625)
(35,726)
Net annuitization activity
-
-
(289,614)
944,524
Net increase (decrease) from contract owner transactions
(3,155,709)
(2,388,930)
(65,461,232)
(21,170,044)
Total increase (decrease) in net assets
6,617,885
1,487,156
198,728,450
126,251,449
Net assets at beginning of year
29,350,708
27,863,552
1,847,638,432
1,721,386,983
Net assets at end of year
$            35,968,593
$         29,350,708
$        2,046,366,884
$        1,847,638,432


 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

 
2XX Sub-Account
AAW Sub-Account
December 31,
2013
December 31,
2012
December 31,
2013
 
December 31,
2012
Operations:
         
Net investment income (loss)
$                 (77,030)
$           (185,585)
$                    (14,727)(14,727)
$
(13,240)
Net realized gains (losses)
119,134
(64,720)
75,986
 
9,851
Net change in unrealized appreciation/(depreciation)
3,132,608
1,112,237
307,518
 
(35,564)
Increase (decrease) in net assets from operations
3,174,712
861,932
368,777
 
(38,953)
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
73,538
31,715
549
 
12,614
Transfers between Sub-Accounts (including the Fixed Account), net
(3,134,607)
(361,206)
1,299,353
 
697,935
Withdrawals, surrenders, annuitizations and contract charges
(807,653)
(557,499)
(229,577)
 
(10,993)
Net accumulation activity
(3,868,722)
(886,990)
1,070,325
 
699,556
Annuitization Activity:
         
Annuitizations
-
-
-
 
-
Annuity payments and contract charges
-
-
-
 
-
Transfers between Sub-Accounts, net
-
-
-
 
-
Adjustments to annuity reserves
-
-
-
 
-
Net annuitization activity
-
-
-
 
-
Net increase (decrease) from contract owner transactions
(3,868,722)
(886,990)
1,070,325
 
699,556
Total increase (decrease) in net assets
(694,010)
(25,058)
1,439,102
 
660,603
Net assets at beginning of year
10,950,659
10,975,717
684,152
 
23,549
Net assets at end of year
$             10,256,649
$         10,950,659
$            2,123,254
$
684,152

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

Operations:
VKM Sub-Account
OCA Sub-Account
December 31,
2013
 
December 31,
2012
December 31,
2013
December 31,
2012
         
Net investment income (loss)
$              (182,982)
$
(254,173)
$                   (230,043)(230,043)
$                (320,961)(320,961)
Net realized gains (losses)
319,239
 
1,920,986
2,951,371
981,476
Net change in unrealized appreciation/(depreciation)
3,562,829
 
(727,362)
2,995,880
2,114,075
Increase (decrease) in net assets from operations
3,699,086
 
939,451
5,717,208
2,774,590
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
84,301
 
77,884
404,078
279,110
Transfers between Sub-Accounts (including the Fixed Account), net
(3,783,617)
 
(1,341,940)
(1,378,773)
(405,209)
Withdrawals, surrenders, annuitizations and contract charges
(1,087,077)
 
(963,785)
(3,416,313)
(3,171,788)
Net accumulation activity
(4,786,393)
 
(2,227,841)
(4,391,008)
(3,297,887)
Annuitization Activity:
         
Annuitizations
-
 
-
14,533
-
Annuity payments and contract charges
-
 
-
(3,982)
(2,334)
Transfers between Sub-Accounts, net
-
 
-
-
-
Adjustments to annuity reserves
-
 
-
(654)
(279)
Net annuitization activity
-
 
-
9,897
(2,613)
Net increase (decrease) from contract owner transactions
(4,786,393)
 
(2,227,841)
(4,381,111)
(3,300,500)
Total increase (decrease) in net assets
(1,087,307)
 
(1,288,390)
1,336,097
(525,910)
Net assets at beginning of year
13,335,284
14,623,674
22,858,138
23,384,048
Net assets at end of year
$            12,247,977
$             13,335,284
$            24,194,235
$         22,858,138

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

     Operations:
OBV Sub-Account
OGG Sub-Account
December 31,
2013
December 31,
2012
December 31,
2013
 
December 31,
2012
         
Net investment income (loss)
$                 57,609
$                  (65,310)(65,310)
$             (155,588)
$
69,948
Net realized gains (losses)
533,505
526,188
3,471,686
 
1,126,964
Net change in unrealized appreciation/(depreciation)
765,460
778,369
3,153,140
 
3,792,966
Increase (decrease) in net assets from operations
1,356,574
1,239,247
6,469,238
 
4,989,878
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
28,709
39,638
263,788
 
202,517
Transfers between Sub-Accounts (including the Fixed Account), net
191,712
49,428
2,162,521
 
(3,270,755)
Withdrawals, surrenders, annuitizations and contract charges
(1,081,525)
(1,021,214)
(4,247,523)
 
(3,490,912)
Net accumulation activity
(861,104)
(932,148)
(1,821,214)
 
(6,559,150)
Annuitization Activity:
         
Annuitizations
-
-
-
 
-
Annuity payments and contract charges
-
-
-
 
-
Transfers between Sub-Accounts, net
-
-
-
 
-
Adjustments to annuity reserves
-
-
-
 
-
Net annuitization activity
-
-
-
 
-
Net increase (decrease) from contract owner transactions
(861,104)
(932,148)
(1,821,214)
 
(6,559,150)
Total increase (decrease) in net assets
495,470
307,099
4,648,024
 
(1,569,272)
Net assets at beginning of year
12,783,812
12,476,713
27,011,227
28,580,499
Net assets at end of year
$            13,279,282
$          12,783,812
$           31,659,251
$         27,011,227

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

     Operations:
OMG Sub-Account
 
OMS Sub-Account
December 31,
2013
December 31,
2012
 
December 31,
2013
 
December 31,
2012
           
Net investment income (loss)
$                 (3,055,347)(3,055,347)
$          (3,986,662)
$
(95,178)
$
(125,432)
Net realized gains (losses)
20,980,509
(11,151,689)
 
1,353,923
 
328,299
Net change in unrealized appreciation/(depreciation)
70,569,562
67,240,199
 
1,581,252
 
1,062,698
Increase (decrease) in net assets from operations
88,494,724
52,101,848
 
2,839,997
 
1,265,565
Contract Owner Transactions:
           
Accumulation Activity:
           
Purchase payments received
2,766,677
2,252,800
 
141,982
 
71,275
Transfers between Sub-Accounts (including the Fixed Account), net
(36,204,056)
(26,058,571)
 
(627,329)
 
83,432
Withdrawals, surrenders, annuitizations and contract charges
(59,795,993)
(58,808,713)
 
(1,837,509)
 
(1,484,354)
Net accumulation activity
(93,233,372)
(82,614,484)
 
(2,322,856)
 
(1,329,647)
Annuitization Activity:
           
Annuitizations
-
-
 
-
 
-
Annuity payments and contract charges
(25,619)
(16,626)
 
-
 
-
Transfers between Sub-Accounts, net
-
-
 
-
 
-
Adjustments to annuity reserves
(9,827)
(1,646)
 
-
 
-
Net annuitization activity
(35,446)
(18,272)
 
-
 
-
Net increase (decrease) from contract owner transactions
(93,268,818)
(82,632,756)
 
(2,322,856)
 
(1,329,647)
Total increase (decrease) in net assets
(4,774,094)
(30,530,908)
 
517,141
 
(64,082)
Net assets at beginning of year
346,551,891
377,082,799
 
8,255,859
 
8,319,941
Net assets at end of year
$           341,777,797
$         346,551,891
$
8,773,000
$
8,255,859

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

      Operations:
 
AAQ Sub-Account
 
PRA Sub-Account
 
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
           
Net investment income (loss)
$
101
$
(742)
$            1,090,421
$            659,110
Net realized gains (losses)
 
6,675
 
2,498
78,500
83,983
Net change in unrealized appreciation/(depreciation)
 
(17)
 
2,820
(1,886,560)
735,402
Increase (decrease) in net assets from operations
 
6,759
 
4,576
(717,639)
1,478,495
Contract Owner Transactions:
           
Accumulation Activity:
           
Purchase payments received
 
-
 
-
6,088
80,271
Transfers between Sub-Accounts (including the Fixed Account), net
 
25,025
 
16,707
16,151,142
18,080,756
Withdrawals, surrenders, annuitizations and contract charges
 
(32,692)
 
(53,940)
(4,683,311)
(1,814,264)
Net accumulation activity
 
(7,667)
 
(37,233)
11,473,919
16,346,763
Annuitization Activity:
           
Annuitizations
 
-
 
-
-
-
Annuity payments and contract charges
 
-
 
-
-
-
Transfers between Sub-Accounts, net
 
-
 
-
-
-
Adjustments to annuity reserves
 
-
 
-
-
-
Net annuitization activity
 
-
 
-
-
-
Net increase (decrease) from contract owner transactions
 
(7,667)
 
(37,233)
11,473,919
16,346,763
Total increase (decrease) in net assets
 
(908)
 
(32,657)
10,756,280
17,825,258
Net assets at beginning of year
 
38,756
 
71,413
23,316,562
5,491,304
Net assets at end of year
$
37,848
$
38,756
$           34,072,842
$         23,316,562

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

 
AAP Sub-Account
 
BBD Sub-Account
December 31,
2013
December 31,
2012
 
December 31,
2013
December 31,
2012
Operations:
         
Net investment income (loss)
$              723,322
$            626,077
$
1,261
$             10,262
Net realized gains (losses)
407,230
74,987
 
(39,570)
27,108
Net change in unrealized appreciation/(depreciation)
(1,586,952)
1,122,079
 
(117,940)
(13,712)
Increase (decrease) in net assets from operations
(456,400)
1,823,143
 
(156,249)
23,658
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
515,970
2,795,809
 
7,582
134,888
Transfers between Sub-Accounts (including the Fixed Account), net
3,226,093
10,488,208
 
(211,169)
471,343
Withdrawals, surrenders, annuitizations and contract charges
(1,496,160)
(493,201)
 
(26,091)
(35,269)
Net accumulation activity
2,245,903
12,790,816
 
(229,678)
570,962
Annuitization Activity:
         
Annuitizations
-
-
 
-
-
Annuity payments and contract charges
-
-
 
-
-
Transfers between Sub-Accounts, net
-
-
 
-
-
Adjustments to annuity reserves
-
-
 
-
-
Net annuitization activity
-
-
 
-
-
Net increase (decrease) from contract owner transactions
2,245,903
12,790,816
 
(229,678)
570,962
Total increase (decrease) in net assets
1,789,503
14,613,959
 
(385,927)
594,620
Net assets at beginning of year
22,244,284
7,630,325
 
1,163,627
569,007
Net assets at end of year
$           24,033,787
$         22,244,284
$
777,700
$          1,163,627

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

 
PCR Sub-Account
 
PMB Sub-Account
December 31,
2013
December 31,
2012
 
December 31,
2013
December 31,
2012
Operations:
         
Net investment income (loss)
$                 42,173
$            809,225
$
812,843
$            850,220
Net realized gains (losses)
(4,878,613)
111,786
 
686,316
834,393
Net change in unrealized appreciation/(depreciation)
(6,176,373)
2,537,488
 
(3,817,091)
2,189,273
Increase (decrease) in net assets from operations
(11,012,813)
3,458,499
 
(2,317,932)
3,873,886
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
598,032
530,897
 
150,152
264,758
Transfers between Sub-Accounts (including the Fixed Account), net
6,106,964
(745,817)
 
(840,958)
1,389,321
Withdrawals, surrenders, annuitizations and contract charges
(7,989,670)
(7,545,253)
 
(3,008,870)
(3,558,512)
Net accumulation activity
(1,284,674)
(7,760,173)
 
(3,699,676)
(1,904,433)
Annuitization Activity:
         
Annuitizations
-
6,154
 
3,097
28,539
Annuity payments and contract charges
(252)
(212)
 
(1,403)
(990)
Transfers between Sub-Accounts, net
-
-
 
-
-
Adjustments to annuity reserves
(50)
(139)
 
(405)
(695)
Net annuitization activity
(302)
5,803
 
1,289
26,854
Net increase (decrease) from contract owner transactions
(1,284,976)
(7,754,370)
 
(3,698,387)
(1,877,579)
Total increase (decrease) in net assets
(12,297,789)
(4,295,871)
 
(6,016,319)
1,996,307
Net assets at beginning of year
69,673,586
73,969,457
27,021,992
25,025,685
Net assets at end of year
$             57,375,797
$          69,673,586
$           21,005,673
$          27,021,992

 
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.))
 
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

Operations:
 
BBE Sub-Account
 
6TT Sub-Account
 
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
           
Net investment income (loss)
$
19,812
$
18,838
$            14,306,451
$          16,944,862
Net realized gains (losses)
 
6,383
 
5,212
(11,835,045)
8,999,839
Net change in unrealized appreciation/(depreciation)
 
(82,268)
 
59,320
(98,043,491)
47,177,902
Increase (decrease) in net assets from operations
 
(56,073)
 
83,370
(95,572,085)
73,122,603
Contract Owner Transactions:
           
Accumulation Activity:
           
Purchase payments received
 
7,824
 
76,737
4,261,801
18,593,428
Transfers between Sub-Accounts (including the Fixed Account), net
 
(32,664)
 
91,961
(158,602,158)
8,859,462
Withdrawals, surrenders, annuitizations and contract charges
 
(28,336)
 
(22,704)
(53,513,843)
(47,515,135)
Net accumulation activity
 
(53,176)
 
145,994
(207,854,200)
(20,062,245)
Annuitization Activity:
           
Annuitizations
 
-
 
-
5,087
574,530
Annuity payments and contract charges
 
-
 
-
(444,163)
(74,414)
Transfers between Sub-Accounts, net
 
-
 
-
-
-
Adjustments to annuity reserves
 
-
 
-
1,207
(2,144)
Net annuitization activity
 
-
 
-
(437,869)
497,972
Net increase (decrease) from contract owner transactions
 
(53,176)
 
145,994
(208,292,069)
(19,564,273)
Total increase (decrease) in net assets
 
(109,249)
 
229,364
(303,864,154)
53,558,330
Net assets at beginning of year
 
647,237
 
417,873
1,098,153,881
1,044,595,551
Net assets at end of year
$
537,988
$
647,237
$           794,289,727
$       1,098,153,881

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

 
PRR Sub-Account
PTR Sub-Account
December 31,
2013
December 31,
2012
December 31,
2013
December 31,
2012
Operations:
       
Net investment income (loss)
$                (55,709)
$                (653,769)
$            1,580,820
$           3,044,990
Net realized gains (losses)
3,912,914
10,075,065
7,625,730
15,393,324
Net change in unrealized appreciation/(depreciation)
(13,908,792)
(2,506,472)
(20,923,215)
8,075,070
Increase (decrease) in net assets from operations
(10,051,587)
6,914,824
(11,716,665)
26,513,384
Contract Owner Transactions:
       
Accumulation Activity:
       
Purchase payments received
1,187,387
977,223
2,761,104
2,622,979
Transfers between Sub-Accounts (including the Fixed Account), net
3,950,347
3,772,927
20,721,647
3,335,807
Withdrawals, surrenders, annuitizations and contract charges
(12,935,857)
(17,859,344)
(47,535,524)
(60,556,668)
Net accumulation activity
(7,798,123)
(13,109,194)
(24,052,773)
(54,597,882)
Annuitization Activity:
       
Annuitizations
-
-
129,872
-
Annuity payments and contract charges
-
-
(15,952)
(15,381)
Transfers between Sub-Accounts, net
-
-
-
-
Adjustments to annuity reserves
-
-
(176)
(3,810)
Net annuitization activity
-
-
113,744
(19,191)
Net increase (decrease) from contract owner transactions
(7,798,123)
(13,109,194)
(23,939,029)
(54,617,073)
Total increase (decrease) in net assets
(17,849,710)
(6,194,370)
(35,655,694)
(28,103,689)
Net assets at beginning of year
97,276,054
103,470,424
338,090,727
366,194,416
Net assets at end of year
$            79,426,344
$          97,276,054
$          302,435,033
$         338,090,727

 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

 
AAR Sub-Account
AAS Sub-Account
December 31,
2013
 
December 31,
2012
December 31,
2013
December 31,
2012
Operations:
         
Net investment income (loss)
$                     (233,564)
$
(77,420)
$              (29,526)
$                   (5,492)
Net realized gains (losses)
145,115
 
55,909
467,110
58,369
Net change in unrealized appreciation/(depreciation)
361,848
 
57,168
1,165,448
123,803
Increase (decrease) in net assets from operations
273,399
 
35,657
1,603,032
176,680
Contract Owner Transactions:
         
Accumulation Activity:
         
Purchase payments received
648
 
364,961
36,765
2,420
Transfers between Sub-Accounts (including the Fixed Account), net
13,217,237
 
4,672,735
6,704,601
2,416,160
Withdrawals, surrenders, annuitizations and contract charges
(442,190)
 
(232,463)
(612,855)
(180,704)
Net accumulation activity
12,775,695
 
4,805,233
6,128,511
2,237,876
Annuitization Activity:
         
Annuitizations
-
 
-
-
-
Annuity payments and contract charges
-
 
-
-
-
Transfers between Sub-Accounts, net
-
 
-
-
-
Adjustments to annuity reserves
-
 
-
-
-
Net annuitization activity
-
 
-
-
-
Net increase (decrease) from contract owner transactions
12,775,695
 
4,805,233
6,128,511
2,237,876
Total increase (decrease) in net assets
13,049,094
 
4,840,890
7,731,543
2,414,556
Net assets at beginning of year
7,077,333
 
2,236,443
2,672,455
257,899
Net assets at end of year
$            20,126,427
$
7,077,333
$           10,403,998
$           2,672,455
 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

Operations:
 
WTF Sub-Account
   
USC Sub-Account
 
 
December 31,                       December 31,
2013                             2012
 
December 31,                       December 31,
2013                           2012
           
Net investment income (loss)
$
           (7,335)$
(8,176)
$
           (1,307)$
(990)
Net realized gains (losses)
 
104,546
139,588
 
7,295
3,172
Net change in unrealized appreciation/(depreciation)
 
50,871
(23,362)
 
14,123
7,905
Increase (decrease) in net assets from operations
 
148,082
108,050
 
20,111
10,087
Contract Owner Transactions:
           
Accumulation Activity:
           
Purchase payments received
 
2,737
-
 
-
-
Transfers between Sub-Accounts (including the Fixed Account), net
 
(50,763)
(112,089)
 
(3,762)
(1,646)
Withdrawals, surrenders, annuitizations and contract charges
 
(98,603)
(147,038)
 
(345)
(313)
Net accumulation activity
 
(146,629)
(259,127)
 
(4,107)
(1,959)
Annuitization Activity:
           
Annuitizations
 
-
-
 
-
-
Annuity payments and contract charges
 
-
-
 
-
-
Transfers between Sub-Accounts, net
 
-
-
 
-
-
Adjustments to annuity reserves
 
-
-
 
-
-
Net annuitization activity
 
-
-
 
-
-
Net increase (decrease) from contract owner transactions
 
(146,629)
(259,127)
 
(4,107)
(1,959)
Total increase (decrease) in net assets
 
1,453
(151,077)
 
16,004
8,128
Net assets at beginning of year
 
525,113
676,190
 
64,970
56,842
Net assets at end of year
$
         526,566$
525,113
$
           80,974$
64,970
 
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 CHANGES IN NET ASSETS (CONTINUED) FOR THE YEARS-ENDED DECEMBER 31, 2013 AND 2012
 

        Operations:
        Net investment income (loss)
        Net realized gains (losses)
       Net change in unrealized appreciation/(depreciation)
       Increase (decrease) in net assets from operations
AAL Sub-Account
December 31,
2013
December 31,
2012
$                     (91,825)
861,514
(2,005,056)
$                (39,935)
462,887
447,062
(1,235,367)
870,014
Contract Owner Transactions:
   
Accumulation Activity:
   
Purchase payments received
185,513
1,104,424
Transfers between Sub-Accounts (including the Fixed Account), net
12,735,427
11,229,642
Withdrawals, surrenders, annuitizations and contract charges
(2,637,461)
(1,640,526)
Net accumulation activity
10,283,479
10,693,540
Annuitization Activity:
   
Annuitizations
-
-
Annuity payments and contract charges
-
-
Transfers between Sub-Accounts, net
-
-
Adjustments to annuity reserves
-
-
Net annuitization activity
-
-
Net increase (decrease) from contract owner transactions
10,283,479
10,693,540
Total increase (decrease) in net assets
9,048,112
11,563,554
Net assets at beginning of year
26,148,333
14,584,779
Net assets at end of year
$            35,196,445
$         26,148,333
 
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, 2013

 
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 Access contracts, Regatta Choice contracts, Regatta Choice II contracts, Regatta Classic contracts, Regatta Extra contracts, Regatta Flex II contracts, Regatta Flex 4 contracts, Regatta Gold contracts, Regatta Platinum contracts, Sun Life Financial Masters Access contracts, Sun Life Financial Masters Choice contracts, Sun Life Financial Masters Choice II contracts, Sun Life Financial Masters Extra contracts, Sun Life Financial Masters Extra II contracts, Sun Life Financial Masters Flex contracts, Sun Life Financial Masters Flex II contracts, Sun Life Financial Masters I Share 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 (collectively the “Funds”), or series thereof, registered under the Investment Company Act of 1940, as amended.  The contract owners of the Variable Account direct the deposits into the Sub-Accounts of the Variable Account.

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.

On December 17, 2012, Sun Life Financial Inc., the Sponsor’s indirect parent company, announced the execution of a definitive agreement to sell its domestic U.S. annuity business and certain life insurance businesses to Delaware Life Holdings, LLC, a Delaware limited liability company (“the Sale Transaction”).  As part of the Sale Transaction, Delaware Life Holdings, LLC would acquire all of the issued and outstanding shares of stock of the Sponsor.  After receiving all required regulatory approvals, the Sale Transaction closed on August 2, 2013 with an effective date of August 1, 2013.

A summary of the name changes related to Sub-Accounts held by the contract owners of the Variable Account during the current year, is as follows:

Sub-Account
Previous Name
Effective Date
VKC
Invesco Van Kampen V.I. American Value Fund Series II
April 29, 2013
VLC
Invesco Van Kampen V.I. Comstock Fund Series II
April 29, 2013
VKU
Invesco Van Kampen V.I. Equity and Income Fund Series II
April 29, 2013
OBV
Oppenheimer Balanced Fund/VA (Service Shares)
April 29, 2013
OMS
Oppenheimer Main Street Small- & Mid-Cap Fund/VA (Service Shares)
April 30, 2013
OGG
Oppenheimer Global Securities Fund/VA (Service Shares)
April 30, 2013


The following Sub-Accounts merged with new or existing Sub-Accounts during the current year:

Closed Sub-Account
New Sub-Account
Effective Date
MFJ
GGE
August 16, 2013
TRS
GGC
August 16, 2013
HVM
HVD
March 28, 2013







SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA)
 
(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

1. BUSINESS AND ORGANIZATION (CONTINUED)

The commencement date related to Sub-Accounts held by the contract owners of the Variable Account (if commenced within the past five years) is as follows:

Sub-Account
Effective Date
GGC, GGE
August 16, 2013
FFN, FFO, FFP, TND
December 10, 2012
FFL, TEG,FFJ, FFK
August, 20, 2012
AAM, AAN, AAP, AAQ, AAR, AAS, AAU, AAW, AAX, AAY, AAZ, AI8, BBB, BBA, BBC, BBD, BBE
October 31, 2011
AAA, AAL
May 2, 2011
6TT
August 17, 2009
HBF
May 4, 2009

A summary of Sub-Accounts held by the contract owners of the Variable Account, with commencement dates earlier than the past five years, but for which the first activity occurred within the last five years, is as follows:

Sub-Account
Year of First Activity
SBI
2010
   


 
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 carried at fair value and are valued at their closing net asset value as determined by the respective mutual fund, which in turn value their investments at fair value, as of December 31, 2013.  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.

Units
The number of units credited is determined by dividing the dollar amount allocated to a Sub-Account by the unit value for that Sub-Account for the period during which the purchase payment was received.  The unit value for each Sub-Account is established at $10.00 for the first period of that Sub-Account and is subsequently measured based on the performance of the investments and the contract charges selected by the contract holder, as discussed in note 5.

Purchase Payments
Upon issuance of new Contracts, the initial purchase payment is credited to the contract in the form of units.  All subsequent purchase payments are applied using the unit values for the period during which the purchase payment is received.

Transfers
Transfers between Sub-Accounts requested by contract owners 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.




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)

Withdrawals
At any time during the accumulation phase (the period before the first annuity payment), the contract owner may elect to receive a cash withdrawal payment under the contract.  If the contract owner requests a full withdrawal, the contract owner will receive the value of their account at the end of period, less the contract maintenance charge for the current contract year and any applicable withdrawal charge.

If the contract owner requests a partial withdrawal, the contract owner will receive the amount requested less any applicable withdrawal charge and the account value will be reduced by the amount requested.  Any requests for partial withdrawals that would result in the value of the contract owner’s account being reduced to an amount less than the contract maintenance charge for the current contract year is treated as a request for a full withdrawal.

Annuitization
On the annuity commencement date, the contract's accumulation account is canceled and its adjusted value is applied to provide an annuity. The adjusted value will be equal to the value of the accumulation account for the period that ends immediately before the annuity commencement date, reduced by any applicable premium taxes or similar taxes and a proportionate amount of the contract maintenance charge.

Annuity Payments
The amount of the first variable annuity payment is determined in accordance with the annuity payment rates found in the contract.  The number of units to be credited in respect of a particular Sub-Account is determined by dividing that portion of the first variable annuity payment attributable to that Sub-Account by the annuity unit value of that Sub-Account for the period that ends immediately before the annuity commencement date. The number of units of each Sub-Account credited to the contract then remains fixed, unless an exchange of units is made. The dollar amount of each variable annuity payment after the first may increase, decrease or remain constant, depending on the investment performance of the Sub-Accounts.

Federal Income Taxes
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.  In the event of a change in applicable tax law, the Sponsor will review this policy and if necessary a provision may be made in future years.

Accounting for Uncertain Tax Provisions
The 2003 through 2013 tax years generally remain subject to examination by U.S. federal and most state tax authorities. Although the Sponsor remains jointly and severally liable for consolidated tax liabilities, the Sponsor is held harmless by its former parent in accordance with the Sale Transaction and believes that the possibility of a tax liability for the pre-sale tax years is remote. Additionally, management evaluates whether or not there are uncertain tax positions that require financial statement recognition and has determined that no reserves for uncertain tax positions are required as of December 31, 2013.

Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amounts of income and expenses during the period. The most significant estimates are fair value measurements of investments and the calculation of the reserve for variable annuities.  Actual results could vary from the amounts derived from management's estimates.

Subsequent events
Management has evaluated events subsequent to December 31, 2013 noting there are no subsequent events requiring accounting adjustments or disclosure.






 
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 January 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-01, “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities”.  This ASU clarifies the scope of offsetting disclosure requirements in ASU 2011-11, “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities”.  Under ASU 2013-01, the disclosure requirements would apply to derivative instruments accounted for in accordance with ASC 815 “Derivatives and Hedging”, including bifurcated embedded derivatives, repurchase agreements and reverse repurchase agreements, and securities borrowing and securities lending arrangements that are either offset on the balance sheet or subject to an enforceable master netting arrangement or similar agreement.  Entities with other types of financial assets and financial liabilities subject to a master netting arrangement or similar agreement also are affected because these amendments make them no longer subject to the disclosure requirements in ASU No. 2011-11.

Effective January 1, 2013, companies are required to disclose (a) gross amounts of recognized assets and liabilities; (b) gross amounts offset in the statement of financial position; (c) net amounts of assets and liabilities presented in the statement of financial position; (d) gross amounts subject to an enforceable master netting agreement not offset in the statements of financial position; and (e) net amounts after deducting (d) from (c). The disclosure should be presented in tabular format (unless another format is more appropriate) separately for assets and liabilities. The intent of the new disclosure is to enable users of financial statements to understand the effect of those arrangements on its financial position and to allow investors to better compare financial statements prepared under GAAP with financial statements prepared under International Financial Reporting Standards (“IFRS”).  The Variable Account adopted ASU 2013-01 on January 1, 2013 and the adoption did not have a significant impact on the Variable Account’s financial statements.

In October 2012, FASB issued ASU 2012-04, “Technical Corrections and Improvements”.  The amendments in this update cover a wide range of Topics in the Codification. The technical corrections (Section A) are divided into three main categories: (1) Source literature amendments – amendments to carry forward the original intent of certain pre-Codification authoritative literature that was inadvertently altered during the Codification process, (2) Guidance clarification and reference corrections – changes in wording and references to avoid misapplication or misinterpretation of guidance, and (3) Relocated guidance – moving guidance from one part of the Codification to another to correct instances in which the scope of pre-Codification guidance may have been unintentionally narrowed or broadened during the Codification process. The purpose of Section B of ASU 2012-04 is to conform the use of the term “fair value” throughout the Codification “to fully reflect the fair value measurement and disclosure requirements” of Accounting Standards Codification (“ASC”) Topic 820 “Fair Value Measurement”. These provisions are effective upon issuance, except for amendments that are subject to transition guidance discussed below. The Variable Account adopted the provisions of ASU 2012-04 on October 1, 2012.  The adoption did not impact the Variable Account’s financial statements or disclosures.

On January 1, 2013, the Variable Account adopted the amendments to ASU 2012-04 that are subject to transition guidance.  The adoption did not impact the Variable Account’s financial statements or disclosures.

In May 2011, FASB  issued ASU 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in GAAP and IFRS,” which change the wording used to describe many of the requirements in GAAP for measuring fair value and for disclosing information about fair value measurements.  Some of the amendments clarify the FASB’s intent about the application of existing fair value measurement requirements, while other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements.  Many of the requirements in this update are not meant to result in a change in application of the requirements of Topic 820, but to improve upon an entity’s consistency in application across jurisdictions to ensure that GAAP and IFRS fair value measurement and disclosure requirements are described in the same way.  The amendments in ASU 2011-04 are effective, on a retrospective basis, for fiscal years and interim periods within those fiscal years beginning after December 15, 2011.  On January 1, 2012, the Variable Account adopted the provisions of ASU 2011-04. The adoption did not impact the Variable Account’s financial statements or disclosures.









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)

Accounting Pronouncements Not Yet Adopted
In June 2013, FASB issued ASU No. 2013-08, “Financial Services — Investment Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements,” Which amends the criteria an entity would need to meet to qualify as an investment company under ASC 946.  The amendments clarify the characteristics of an investment company and provide comprehensive guidance for assessing whether an entity is an investment company.  ASU 2013-08 also requires entities to disclose their status as an investment company and investment companies to measure noncontrolling ownership interests in other investment companies at fair value rather than using the equity method of accounting.  The amendments in ASU 2013-08 are effective for an entity’s interim and annual reporting periods in fiscal years that begin after December 15, 2013. Earlier application is prohibited.  The Variable Account will adopt ASU 2013-08 and does not expect its requirements to have a significant impact on the Variable Account’s financial statements.

3. FAIR VALUE MEASUREMENTS

 
The Sub-Accounts’ investments are carried at fair value.  Fair value is an exit price, representing the amount that would be received from a sale of an asset or paid to transfer a liability in an orderly transaction between market participants.  As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.  As a basis for considering such assumptions, Topic 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value (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. Topic 820 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.

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.

As of December 31, 2013, the inputs used to price the Funds are observable and represent Level 1 assets under the Topic 820 hierarchy levels. There were no Level 2 or 3 investments in the Variable Account during the year ended December 31, 2013. As of December 31, 2013, the Level 1 assets held by the Variable Account was $17,109 million.  There were no transfers between levels during the period.

4. RELATED PARTY TRANSACTIONS

As of December 31, 2013, Massachusetts Financial Services Company (“MFS”), an affiliate of the Sponsor prior to the Sale Transaction, is the investment advisor to certain Funds and charges a management fee at an annual rate ranging from 0.40% to 1.05% of the Funds’ average daily net assets.

MFS does not charge a management fee for Sub-Accounts 6XX, 7XX, and 8XX.

For additional related party transactions, see Notes 5 and 6.

 
5. CONTRACT CHARGES

Mortality and expense risk charges
Charges for mortality and expense risks, the optional death benefit riders and optional living benefit riders 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.  These charges are reflected in the Statement of Operations.

 

 

 
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA)
 
(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

 
5. CONTRACT CHARGES (CONTINUED)

The deductions are calculated at different levels based upon the elections made by the contract holder and are transferred periodically to the Sponsor. At December 31, 2013, 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%
-
-
-
-
-
-
-
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%
-
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
1.25%
1.30%
1.35%
1.45%
1.50%
1.55%
1.60%
1.65%
Sun Life Financial Masters VII
1.00%
1.05%
1.20%
1.25%
1.30%
1.35%
1.40%
1.50%
Sun Life Financial Masters Extra II
1.40%
1.80%
-
-
-
-
-
-
Sun Life Financial Masters Choice II
1.05%
1.45%
-
-
-
-
-
-
Sun Life Financial Masters Flex II
1.30%
1.70%
-
-
-
-
-
-
Sun Life Financial Masters I Share
0.50%
-
-
-
-
-
-
-


Distribution and administrative expense 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, Sun Life Financial Masters VII, Sun Life Financial Masters Extra, Sun Life Financial Masters Extra II, Sun Life Financial Masters Choice and Sun Life Financial Masters Choice II, and 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 IV, Sun Life Financial Masters Access, Sun Life Financial Masters Flex and Sun Life Financial Masters Flex II. There are no distribution charges associated with the other contracts listed in note 1.

Additionally, for Regatta, 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, Sun Life Financial Masters VII, Sun Life Financial Masters Extra II, Sun Life Financial Masters Flex II, Sun Life Financial Masters I Share, and Sun Life Financial Masters Choice II 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 administration fee (“Account Fee”).  Distribution and administrative expense charges are reflected in the Statement of Operations.





SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA)
 
(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

 
5. CONTRACT CHARGES (CONTINUED)
Administration charges (“Account Fee”)
Each year on the account anniversary date, an Account Fee equal to the lesser of $30 or 2% of the participant’s account value in the case of Regatta, Regatta Gold and Regatta Platinum, $35 in the case of Regatta Extra contracts, and $50 in the case of Regatta Choice, 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, Sun Life Financial Masters VII, Sun Life Financial Masters Extra II, Sun Life Financial Masters Flex II, Sun Life Financial Masters I Share, and Sun Life Financial Masters Choice II 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.

Surrender charges
The Sponsor does not deduct a sales charge from the purchase payments. However, a surrender charge (contingent deferred sales charge) of up to 6% of certain amounts withdrawn will be deducted to cover certain expenses relating to the sale of Regatta, Regatta Gold, Regatta Flex 4, and Regatta Platinum contracts; 8% for Regatta Extra, Regatta Choice II, Regatta Flex II, Sun Life Financial Masters Choice, Sun Life Financial Masters Choice II, Sun Life Financial Masters Flex, Sun Life Financial Masters Flex II, Sun Life Financial Masters Extra, Sun Life Financial Masters Extra II, Sun Life Financial Masters IV, and Sun Life Financial Masters VII; and for 7% for Regatta Choice if the contract holder requests a full withdrawal prior to reaching the pay-out phase.

Optional living benefit rider charges (“Benefit Fee”)

 
Single Life Quarterly Charge
 
Joint Life Quarterly Charge
 
Single Life Annual Charge
 
Joint Life Annual Charge
Secured Returns
0.1000%
 
N/A
 
0.40%
 
N/A
Secured Returns 2
0.1250%
 
N/A
 
0.50%
 
N/A
Secured Returns for Life
0.1250%
 
N/A
 
0.50%
 
N/A
Secured Returns for Life Plus
0.1250%
 
N/A
 
0.50%
 
N/A
Income on Demand
0.1625%
 
0.2125%
 
0.65%
 
0.85%
Income on Demand II
0.1625%
 
0.2125%
 
0.65%
 
0.85%
Retirement Asset Protector
0.1875%
 
N/A
 
0.75%
 
N/A
Retirement Income Escalator
0.1875%
 
0.2375%
 
0.75%
 
0.95%
Sun Income Advisor
0.2250%
 
0.2750%
 
0.90%
 
1.10%
Income on Demand II Plus
0.2375%
 
0.2875%
 
0.95%
 
1.15%
Income on Demand II Escalator
0.2375%
 
0.2875%
 
0.95%
 
1.15%
Retirement Income Escalator II
0.2375%
 
0.2875%
 
0.95%
 
1.15%
Sun Income Riser
0.2750%
 
0.3250%
 
1.10%
 
1.30%
Income on Demand III Escalator
0.2750%
 
0.3250%
 
1.10%
 
1.30%
Sun Income Riser III
0.2750%
 
0.3000%
 
1.10%
 
1.20%
Sun Income Maximizer
0.2750%
 
0.3000%
 
1.10%
 
1.20%
Sun Income Maximizer Plus
0.3125%
 
0.3625%
 
1.25%
 
1.45%

Sun Income Advisor was only available on Sun Life Financial Masters I Share contracts.

Sun Income Maximizer, Sun Income Maximizer Plus, and Sun Income Riser III were available on Sun Life Financial Masters Choice II contracts, Sun Life Financial Masters Extra II contracts, and Sun Life Financial Masters Flex II contracts.  The remaining optional living benefits above were available on Sun Life Financial Masters Extra, Sun Life Financial Masters Choice, Sun Life Financial Masters Flex, and Sun Life Financial Masters Access contracts. Secured Returns for Life and Secured Returns for Life Plus were the only optional living benefits available on Sun Life Financial Masters IV 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.))

 
5. CONTRACT CHARGES (CONTINUED)

Optional living benefit rider charges (“Benefit Fee”) (Continued)
Secured Returns, Secured Returns 2, Secured Returns for Life, Secured Returns for Life Plus, Income on Demand, and Retirement Asset Protector were the only optional living benefits available on Regatta Flex II and Regatta Choice II contracts.

Premium Taxes
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 at the annuity commencement date.  However, the Sponsor reserves the right to deduct such taxes when incurred.

6. 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 for contracts with annuity commencement dates prior to January 1, 1987 are calculated using the 1971 Individual Annuitant Mortality Table. Annuity reserves for contracts with annuity commencement dates on or between January 1, 1987 and December 31, 1998 are calculated using the 1983 Individual Annuitant Mortality Table. Annuity reserves for contracts with annuity commencement dates on or after January 1, 1999 are calculated using the 2000 Individual Annuitant Mortality Table. All annuity reserves are calculated using an assumed interest rate of at least 3% or 4% per year.   The Individual Annuitant Mortality Tables utilized are subject to change in conjunction with changes in the tables currently adopted by the National Association of Insurance Commissioners. The mortality risk is fully borne by the Sponsor and may result in additional amounts being transferred into the variable annuity account by the Sponsor to cover greater longevity of annuities than expected.  Required adjustments to the reserves are accomplished by transfers to or from the Sponsor.


 
7. INVESTMENT PURCHASES AND SALES

The cost of purchases and proceeds from sales of investments for the year ended December 31, 2013 were as follows:

 
Purchases
 
Sales
AVB
$
12,827,261
 
$
14,298,209
AAA
 
55,164,447
   
10,570,606
AN4
 
1,451,849
   
2,167,291
IVB
 
4,849,027
   
14,657,806
AAU
 
9,270,366
   
2,863,887
9XX
 
68,929,535
   
136,586,502
NMT
 
205
   
10,502
MCC
 
3,683,122
   
38,197,726
NNG
 
77
   
545
CMG
 
5,376,263
   
12,621,276
NMI
 
553,148
   
2,455,557
CSC
 
16,840
   
2,833
FVB
 
27,527,993
   
22,888,516
FL1
 
15,708,159
   
61,631,923
F10
 
1,166,436
   
2,279,890
F15
 
2,727,148
   
7,862,378
F20
 
3,255,707
   
5,640,365
FVM
 
27,704,917
   
47,518,555
SGI
 
52,449,243
   
88,000,696
S17
 
18,191,082
   
10,898,961
ISC
 
20,021,685
   
30,615,380
AAZ
 
1,298,018
   
998,567

 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA)
(A Separate Account of Sun Life Assurance Company of Canada (U.S.))


 
7. INVESTMENT PURCHASES AND SALES (CONTINUED)

 
Purchases
 
Sales
BBC
 
$             77,495
   
$             58,274
FVS
 
10,677,779
   
15,115,551
BBA
 
155,055
   
141,606
SIC
 
8,626,601
   
10,003,219
BBB
 
236,039
   
96,281
FMS
 
9,575,255
   
61,840,858
TDM
 
8,355,491
   
8,512,800
FTI
 
11,617,832
   
51,961,684
AAX
 
7,349,032
   
2,890,408
FTG
 
3,920,067
   
9,541,300
HBF
 
554,709
   
3,963,528
HVD
 
550,531
   
1,186,970
HVG
 
24,611
   
285,591
HVI
 
47,062
   
360,634
HVE
 
72,321
   
1,248,675
HVM
 
1,252
   
92,784
HVC
 
121,972
   
578,670
HVS
 
1,148,589
   
1,442,020
HRS
 
239,094
   
492,378
HVR
 
149,659
   
271,242
HSS
 
346,994
   
1,754,602
VKC
 
6,566,135
   
3,685,976
VLC
 
16,625,663
   
11,152,978
VKU
 
42,757,372
   
13,950,963
AI8
 
1,239,326
   
307,286
AAY
 
22,264,244
   
6,489,982
AAM
 
6,653,283
   
3,818,077
LRE
 
16,738,566
   
16,389,128
LA9
 
9,375,059
   
14,872,466
LAV
 
21,075,173
   
14,810,255
GGC
 
452,640,738
   
28,272,521
GGE
 
596,865,328
   
47,695,969
FFL
 
4,132,439
   
22,299,535
TEG
 
3,872,890
   
6,562,706
FFJ
 
2,874,776
   
4,084,441
FFK
 
2,709,508
   
14,039,389
TND
 
5,367,043
   
5,597,154
AAN
 
86,189,231
   
190,639,358
FFN
 
3,824,189
   
66,353,045
FFO
 
6,866,616
   
80,613,542
FFP
 
1,539,127
   
4,688,476










 
 
Purchases
 
Sales
MIT
 
$      11,950,645
   
$         51,029,879
MFL
 
3,410,434
   
39,370,775
BDS
 
10,045,139
   
23,305,214
MF7
 
70,058,419
   
47,076,930
RGS
 
5,461,506
   
16,524,735
RG1
 
10,169,356
   
14,556,247
EME
 
3,648,981
   
6,525,885
EM1
 
6,878,206
   
8,453,100
GGS
 
1,428,045
   
5,431,543
GG1
 
1,508,551
   
1,087,901
GGR
 
1,684,577
   
9,366,284
GG2
 
892,045
   
1,013,412
RES
 
3,466,340
   
18,025,982
RE1
 
540,711
   
4,409,115
GTR
 
6,333,860
   
9,806,497
GT2
 
56,775,140
   
111,584,693
GSS
 
15,577,977
   
33,933,535
MFK
 
58,921,527
   
90,041,913
HYS
 
10,435,527
   
20,133,275
MFC
 
16,558,792
   
31,751,187
IGS
 
3,245,298
   
7,606,272
IG1
 
3,267,274
   
4,176,409
MII
 
3,308,195
   
7,188,296
MI1
 
8,272,605
   
32,584,045
MIS
 
7,983,435
   
54,683,572
M1B
 
4,579,220
   
11,855,606
MMS
 
36,794,012
   
46,776,072
MM1
 
123,272,662
   
168,012,094
NWD
 
5,390,651
   
13,359,000
M1A
 
3,207,316
   
21,803,859
RIS
 
1,735,690
   
5,162,353
RI1
 
6,058,570
   
20,697,436
SIS
 
6,578,611
   
9,917,017
SI1
 
1,044,691
   
2,155,093
TEC
 
1,465,322
   
3,233,049
TE1
 
257,501
   
407,001
TRS
 
47,059,991
   
487,945,613
MFJ
 
67,099,816
   
668,548,222
UTS
 
19,182,513
   
25,803,355
MFE
 
21,289,962
   
30,492,543
MVS
 
15,777,614
   
18,952,886
MV1
 
26,900,704
   
55,501,531
VSC
 
13,559,931
   
40,578,073
6XX
 
118,668,838
   
179,996,122
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA)
(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

7.  INVESTMENT PURCHASES AND SALES (CONTINUED)







SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA)
(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

 
 
7.  INVESTMENT PURCHASES AND SALES (CONTINUED)

   
Purchases
 
Sales
 
SC3
 
$            534,286
   
$            865,467
 
SRE
 
20,939,969
   
20,378,919
 
8XX
 
89,326,800
   
80,380,818
 
5XX
 
51,833,995
   
75,722,730
 
SDC
 
66,360,079
   
91,825,915
 
S15
 
75,409,363
   
30,051,521
 
SGC
 
10,757,851
   
18,239,777
 
S13
 
13,411,765
   
11,609,609
 
7XX
 
281,381,315
   
216,006,215
 
2XX
 
1,705,311
   
5,547,386
 
AAW
 
1,899,717
   
825,987
 
VKM
 
1,926,987
   
6,635,753
 
OCA
 
2,219,037
   
6,829,537
 
OBV
 
740,439
   
1,543,934
 
OGG
 
5,774,477
   
7,751,279
 
OMG
 
4,462,632
   
100,776,970
 
OMS
 
678,872
   
2,990,446
 
AAQ
 
35,021
   
42,587
 
PRA
 
26,228,475
   
13,664,135
 
AAP
 
12,966,503
   
9,997,278
 
BBD
 
182,392
   
410,809
 
PCR
 
15,268,590
   
16,511,343
 
PMB
 
5,952,898
   
8,657,744
 
BBE
 
108,388
   
137,195
 
6TT
 
109,033,965
   
303,020,790
 
PRR
 
18,206,329
   
25,425,789
 
PTR
 
53,179,582
   
72,881,112
 
AAR
 
16,511,749
   
3,935,460
 
AAS
 
8,966,672
   
2,867,687
 
WTF
 
12,791
   
159,090
 
USC
 
6,801
   
5,822
 
AAL
 
20,482,564
   
9,291,320
 
           
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             


 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA)
(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

 
8. CHANGES IN UNITS OUTSTANDING

The changes in units outstanding for the year ended December 31, 2013 were as follows:

 
Units
 
Units
 
Net Increase
 
Issued
Redeemed
(Decrease)
AVB
16,206,274
 
16,362,846
 
 (156,572)
AAA
31,031,902
 
26,747,887
 
4,284,015
AN4
3,712,763
 
3,785,690
 
 (72,927)
IVB
34,821,246
 
36,566,478
 
 (1,745,232)
AAU
1,820,451
 
1,395,198
 
425,253
9XX
157,422,251
 
164,162,866
 
 (6,740,615)
NMT
9,000
 
9,643
 
 (643)
MCC
38,526,878
 
41,525,631
 
 (2,998,753)
NNG
-
 
1
 
 (1)
CMG
8,162,105
 
8,695,519
 
 (533,414)
NMI
2,366,718
 
2,500,576
 
 (133,858)
CSC
6,125
 
5,233
 
892
FVB
23,346,276
 
23,291,353
 
54,923
FL1
67,633,505
 
71,071,605
 
 (3,438,100)
F10
613,363
 
700,437
 
 (87,074)
F15
3,457,531
 
3,862,470
 
 (404,939)
F20
3,218,178
 
3,432,183
 
 (214,005)
FVM
41,408,446
 
44,136,900
 
 (2,728,454)
SGI
125,360,233
 
129,880,443
 
 (4,520,210)
S17
5,624,555
 
6,198,440
 
 (573,885)
ISC
32,001,923
 
33,319,094
 
 (1,317,171)
AAZ
805,114
 
791,636
 
13,478
BBC
57,556
 
56,091
 
1,465
FVS
5,243,864
 
5,427,441
 
 (183,577)
BBA
142,700
 
142,469
 
231
SIC
6,265,851
 
6,503,328
 
 (237,477)
BBB
86,071
 
76,060
 
10,011
FMS
46,972,145
 
49,857,471
 
 (2,885,326)
TDM
11,400,458
 
11,396,543
 
3,915
FTI
35,594,000
 
37,661,458
 
 (2,067,458)
AAX
2,020,448
 
1,643,229
 
377,219
FTG
4,976,026
 
5,290,607
 
 (314,581)
HBF
4,238,593
 
4,490,329
 
 (251,736)
HVD
1,432,514
 
1,487,591
 
 (55,077)
HVG
355,590
 
382,709
 
 (27,119)
HVI
373,289
 
405,067
 
 (31,778)
HVE
2,088,685
 
2,214,737
 
 (126,052)
HVM
8,354
 
17,162
 
 (8,808)
HVC
514,627
 
557,840
 
(43,213)
HVS
3,011,347
 
3,044,739
 
(33,392)
HRS
1,314,719
 
1,355,458
 
 (40,739)
HVR
543,968
 
568,131
 
 (24,163)
HSS
1,464,607
 
1,562,059
 
 (97,452)
           

 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA)
(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

 
8. CHANGES IN UNITS OUTSTANDING (CONTINUED)

 
Units
 
Units
 
Net Increase
 
Issued
Redeemed
(Decrease)
VKC
2,128,465
 
1,920,560
 
207,905
VLC
11,235,704
 
10,744,869
 
490,835
VKU
25,271,681
 
23,147,066
 
2,124,615
AI8
333,430
 
256,011
 
77,419
AAY
8,248,827
 
6,741,479
 
1,507,348
AAM
1,183,909
 
959,283
 
224,626
LRE
22,175,040
 
22,127,909
 
47,131
LA9
7,616,067
 
8,264,088
 
(648,021)
LAV
9,339,051
 
9,316,978
 
22,073
GGC
46,821,068
 
5,199,090
 
41,621,978
GGE
85,903,027
 
31,510,041
 
54,392,986
FFL
4,972,931
 
6,084,209
 
(1,111,278)
TEG
2,248,857
 
2,358,747
 
(109,890)
FFJ
1,452,196
 
1,593,134
 
(140,938)
FFK
8,358,337
 
9,015,313
 
(656,976)
TND
4,231,588
 
4,240,769
 
(9,181)
AAN
311,726,000
 
321,709,873
 
(9,983,873)
FFN
69,899,647
 
74,967,551
 
(5,067,904)
FFO
82,535,417
 
88,581,260
 
(6,045,843)
FFP
3,804,746
 
4,059,555
 
(254,809)
MIT
8,136,254
 
10,109,870
 
(1,973,616)
MFL
21,877,856
 
23,798,138
 
(1,920,282)
BDS
1,272,442
 
2,078,480
 
(806,038)
MF7
38,433,531
 
37,497,383
 
936,148
RGS
1,343,258
 
1,979,174
 
(635,916)
RG1
10,458,645
 
10,752,144
 
(293,499)
EME
575,337
 
676,771
 
(101,434)
EM1
6,334,416
 
6,403,700
 
(69,284)
GGS
716,687
 
903,098
 
(186,411)
GG1
387,747
 
359,645
 
28,102
GGR
366,231
 
640,067
 
(273,836)
GG2
150,926
 
154,969
 
(4,043)
RES
898,987
 
1,651,257
 
(752,270)
RE1
1,817,126
 
2,050,008
 
(232,882)
GTR
736,933
 
899,930
 
(162,997)
GT2
212,963,845
 
218,322,131
 
(5,358,286)
GSS
9,541,648
 
10,573,868
 
(1,032,220)
MFK
96,975,741
 
99,670,649
 
(2,694,908)
HYS
3,466,677
 
3,895,562
 
(428,885)
MFC
13,732,605
 
14,536,104
 
(803,499)
IGS
3,403,212
 
3,626,434
 
(223,222)
IG1
5,768,990
 
5,819,199
 
(50,209)
MII
515,354
 
664,031
 
(148,677)
MI1
48,028,377
 
50,001,284
 
(1,972,907)
MIS
14,841,855
 
18,253,907
 
(3,412,052)
M1B
6,091,203
 
6,548,140
 
(456,937)
MMS
4,024,795
 
4,748,420
 
(723,625)


SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA)
(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

 
8. CHANGES IN UNITS OUTSTANDING (CONTINUED)

 
Units
 
Units
 
Net Increase
 
Issued
Redeemed
 (Decrease)
MM1
91,633,383
 
95,881,898
 
(4,248,515)
NWD
3,171,097
 
3,587,308
 
 (416,211)
M1A
7,615,052
 
8,369,642
 
 (754,590)
RIS
784,794
 
974,814
 
 (190,020)
RI1
14,225,258
 
14,886,526
 
 (661,268)
SIS
832,654
 
1,047,132
 
(214,478)
SI1
260,036
 
330,426
 
 (70,390)
TEC
636,211
 
882,405
 
 (246,194)
TE1
60,604
 
69,769
 
 (9,165)
TRS
1,188,040
 
18,728,915
 
 (17,540,875)
MFJ
17,316,353
 
55,691,751
 
 (38,375,398)
UTS
626,628
 
1,158,467
 
 (531,839)
MFE
7,685,190
 
8,129,986
 
 (444,796)
MVS
1,565,321
 
2,085,733
 
 (520,412)
MV1
28,276,635
 
30,263,636
 
 (1,987,001)
VSC
33,693,553
 
36,437,660
 
 (2,744,107)
6XX
96,741,218
 
106,428,535
 
 (9,687,317)
SC3
456,466
 
481,408
 
 (24,942)
SRE
27,759,852
 
27,899,139
 
 (139,287)
8XX
33,332,953
 
35,925,703
 
 (2,592,750)
5XX
79,541,530
 
82,368,717
 
(2,827,187)
SDC
174,555,748
 
176,444,212
 
 (1,888,464)
S15
77,321,181
 
72,623,992
 
 4,697,189
SGC
11,368,888
 
12,408,181
 
 (1,039,293)
S13
9,112,472
 
9,331,301
 
 (218,829)
7XX
171,656,143
 
175,979,637
 
 (4,323,494)
2XX
1,934,412
 
2,180,824
 
 (246,412)
AAW
443,031
 
367,806
 
75,225
VKM
2,277,066
 
2,625,380
 
 (348,314)
OCA
3,734,639
 
3,992,015
 
 (257,376)
OBV
3,924,351
 
4,023,933
 
 (99,582)
OGG
4,633,914
 
4,738,992
 
 (105,078)
OMG
74,198,491
 
79,502,199
 
 (5,303,708)
OMS
590,989
 
680,247
 
 (89,258)
AAQ
15,809
 
16,382
 
 (573)
PRA
8,788,538
 
7,979,184
 
809,354
AAP
8,164,092
 
7,972,720
 
191,372
BBD
277,654
 
302,870
 
(25,216)
PCR
23,701,019
 
23,823,517
 
 (122,498)
PMB
2,377,047
 
2,524,490
 
 (147,443)
BBE
127,756
 
132,780
 
(5,024)
6TT
249,201,235
 
267,555,033
 
 (18,353,798)
PRR
18,931,817
 
19,421,774
 
(489,957)
PTR
72,249,318
 
73,755,791
 
(1,506,473)
AAR
6,246,699
 
5,026,218
 
1,220,481
AAS
2,000,473
 
1,577,452
 
423,021




 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA)
(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

 
8. CHANGES IN UNITS OUTSTANDING (CONTINUED)
 
Units
 
Units
 
Net Increase
 
Issued
Redeemed
(Decrease)
WTF
124,745
 
133,857
 
 (9,112)
USC
11,328
 
11,570
 
 (242)
AAL
13,085,916
 
12,125,924
 
959,992
           
           











The changes in units outstanding for the year ended December 31, 2012 were as follows:


 
Units
 
Units
 
Net Increase
 
Issued
Redeemed
(Decrease)
AVB
15,592,472
 
16,064,364
 
 (471,892)
AAA
19,583,734
 
18,256,381
 
1,327,353
AN4
3,983,725
 
4,142,905
 
 (159,180)
IVB
42,687,698
 
44,072,343
 
 (1,384,645)
AAU
387,454
 
265,626
 
121,828
9XX
172,160,403
 
174,419,805
 
 (2,259,402)
NMT
10,060
 
10,109
 
 (49)
MCC
46,913,010
 
48,458,421
 
 (1,545,411)
CMG
9,025,181
 
9,286,597
 
 (261,416)
NMI
2,898,418
 
3,104,129
 
 (205,711)
CSC
3,317
 
3,305
 
12
FVB
22,025,245
 
21,914,514
 
110,731
FL1
77,787,376
 
80,120,973
 
 (2,333,597)
F10
783,434
 
802,266
 
 (18,832)
F15
3,587,810
 
3,814,347
 
 (226,537)
F20
3,577,849
 
3,916,299
 
 (338,450)
FVM
49,870,512
 
51,811,217
 
 (1,940,705)
SGI
142,342,959
 
146,966,329
 
 (4,623,370)
S17
6,225,354
 
6,843,318
 
 (617,964)
ISC
36,302,728
 
36,916,253
 
 (613,525)
AAZ
795,708
 
705,581
 
90,127
BBC
48,404
 
46,085
 
2,319
FVS
5,763,893
 
6,029,970
 
 (266,077)
BBA
142,277
 
138,787
 
3,490
SIC
6,676,952
 
6,904,022
 
 (227,070)
BBB
76,325
 
61,213
 
15,112
FMS
56,853,312
 
59,052,536
 
 (2,199,224)
TDM
11,929,569
 
12,407,183
 
 (477,614)
FTI
45,121,507
 
47,773,318
 
 (2,651,811)
AAX
962,204
 
621,326
 
340,878








SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA)
(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

8. CHANGES IN UNITS OUTSTANDING (CONTINUED)

 
Units
 
Units
 
Net Increase
 
Issued
Redeemed
(Decrease)
FTG
5,792,795
6,092,958
 (300,163)
HBF
5,052,938
5,112,241
 (59,303)
HVD
1,564,115
1,587,516
 (23,401)
HVG
404,683
408,452
 (3,769)
HVI
469,316
485,532
 (16,216)
HVE
2,455,549
2,529,339
 (73,790)
HVM
35,137
35,293
 (156)
HVC
637,949
613,209
24,740
HVS
3,138,757
3,113,351
25,406
HVN
57,084
121,497
 (64,413)
HRS
1,400,255
1,415,636
 (15,381)
HVR
593,764
599,213
 (5,449)
HSS
1,811,390
1,893,112
 (81,722)
AI8
30,525
15,707
14,818
VKC
1,704,571
1,815,101
(110,530)
VLC
9,345,244
9,536,689
(191,445)
VKU
18,157,664
18,110,948
46,716
AAY
2,582,147
1,894,145
688,002
AAM
441,254
345,722
95,532
LRE
21,844,946
22,534,524
(689,578)
LA9
9,390,963
9,815,435
(424,472)
LAV
8,996,511
9,513,101
(516,590)
EGS
3,065,677
13,052,491
(9,986,814)
MFF
985,624
1,762,279
(776,655)
FFL
12,192,965
3,477,784
8,715,181
TEG
2,123,073
1,055,206
1,067,867
FFJ
4,301,124
945,840
3,355,284
FFK
6,087,724
3,045,087
3,042,637
TND
2,355,098
1,101,381
1,253,717
AAN
169,209,204
83,682,614
85,526,590
FFN
41,856,770
20,524,425
21,332,345
FFO
50,496,065
24,903,918
25,592,147
FFP
2,372,727
1,116,046
1,256,681
MIT
9,696,180
12,239,718
(2,543,538)
MFL
28,515,828
30,413,992
(1,898,164)
BDS
1,730,405
1,947,538
(217,133)
MF7
32,599,969
32,654,957
(54,988)
RGS
1,429,256
2,319,058
(889,802)
RG1
10,320,428
10,369,298
(48,870)
EME
589,509
837,201
(247,692)
EM1
6,634,357
6,882,559
(248,202)
GGS
792,099
926,786
(134,687)
GG1
150,171
169,256
(19,085)
GGR
388,000
795,917
(407,917)





SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA)
(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

8. CHANGES IN UNITS OUTSTANDING (CONTINUED)

 
Units
 
Units
 
Net Increase
 
Issued
Redeemed
(Decrease)
GG2
123,603
149,467
(25,864)
RES
1,007,906
1,990,347
(982,441)
RE1
2,443,600
2,609,452
(165,852)
GTR
710,061
1,115,387
(405,326)
GT2
229,471,608
229,421,838
49,770
GSS
9,813,285
10,360,770
(547,485)
MFK
101,683,318
102,892,409
(1,209,091)
HYS
3,855,029
4,124,189
(269,160)
MFC
13,858,125
12,840,157
1,017,968
IGS
3,832,016
4,301,193
(469,177)
IG1
6,198,403
6,586,433
(388,030)
MII
559,539
899,637
(340,098)
MI1
58,142,312
61,203,340
(3,061,028)
MIS
17,252,686
21,392,817
(4,140,131)
M1B
7,250,573
8,016,052
(765,479)
MCS
708,555
4,670,323
(3,961,768)
MC1
917,618
2,139,049
(1,221,431)
MMS
3,790,633
4,502,198
(711,565)
MM1
68,227,501
52,584,471
15,643,030
NWD
3,882,872
4,357,010
 (474,138)
M1A
10,278,584
10,954,035
 (675,451)
RIS
802,727
1,140,479
 (337,752)
RI1
17,199,513
18,134,148
 (934,635)
SIS
927,958
855,092
72,866
SI1
264,557
406,548
 (141,991)
TEC
778,129
1,367,073
 (588,944)
TE1
70,150
102,928
 (32,778)
TRS
2,617,585
4,852,985
 (2,235,400)
MFJ
36,454,855
43,405,980
 (6,951,125)
UTS
731,441
1,406,170
 (674,729)
MFE
9,512,428
10,197,840
 (685,412)
MVS
1,718,494
2,573,137
 (854,643)
MV1
34,889,148
37,096,284
 (2,207,136)
VSC
43,032,381
44,577,089
 (1,544,708)
6XX
107,900,010
111,229,311
 (3,329,301)
SC3
528,524
594,384
 (65,860)
SRE
31,571,420
33,993,022
 (2,421,602)
8XX
34,094,592
36,966,097
 (2,871,505)
5XX
84,942,506
84,443,122
499,384
SDC
186,084,455
190,943,995
 (4,859,540)
S15
64,463,735
65,490,651
 (1,026,916)
SGC
14,518,135
15,354,808
 (836,673)
S13
9,736,495
9,941,173
 (204,678)
7XX
174,022,473
175,603,298
 (1,580,825)
2XX
2,344,351
2,407,121
 (62,770)
       
       

 

 
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA)
(A Separate Account of Sun Life Assurance Company of Canada (U.S.))

8. CHANGES IN UNITS OUTSTANDING (CONTINUED)

 
Units
 
Units
 
Net Increase
 
Issued
Redeemed
(Decrease)
AAW
374,939
311,170
63,769
VKM
3,488,948
3,672,438
 (183,490)
OBV
4,305,086
4,423,089
 (118,003)
OCA
4,215,666
4,429,029
 (213,363)
OGG
5,060,419
5,497,078
 (436,659)
OMG
92,885,776
98,417,120
 (5,531,344)
OMS
735,805
799,014
 (63,209)
AAQ
15,465
 
18,988
 
 (3,523)
PRA
3,832,740
 
2,607,775
 
1,224,965
AAP
6,009,910
 
4,802,962
 
1,206,948
BBD
318,003
 
257,105
 
60,898
PCR
23,751,861
 
24,417,627
 
 (665,766)
PMB
2,541,789
 
2,607,958
 
 (66,169)
BBE
143,953
 
130,046
 
13,907
6TT
270,436,842
 
272,102,673
 
 (1,665,831)
PRR
19,969,283
 
20,744,606
 
 (775,323)
PTR
78,613,301
 
82,075,944
 
 (3,462,643)
AAR
2,316,832
 
1,852,551
 
464,281
AAS
688,660
 
500,008
 
188,652
3XX
896,600
 
1,254,997
 
 (358,397)
SBI
2,136,546
 
2,629,051
 
 (492,505)
SSA
9,159,343
 
11,791,979
 
 (2,632,636)
SVV
70,667,285
 
96,335,398
 
 (25,668,113)
1XX
2,223,284
 
3,083,726
 
 (860,442)
SLC
84,497,136
 
116,650,638
 
 (32,153,502)
S12
3,723,852
 
5,224,296
 
 (1,500,444)
S14
5,455,929
 
7,782,901
 
 (2,326,972)
4XX
166,107,665
 
219,931,861
 
 (53,824,196)
S16
8,405,287
 
11,595,410
 
 (3,190,123)
LGF
1,486,911
 
2,150,696
 
 (663,785)
IGB
40,938,741
 
54,392,031
 
 (13,453,290)
CMM
35,081,785
 
49,974,120
 
 (14,892,335)
WTF
169,104
 
187,808
 
 (18,704)
USC
11,798
 
11,942
 
 (144)
AAL
8,739,710
 
7,742,700
 
997,010


 
9. TAX DIVERSIFICATION REQUIREMENTS

Under the provisions of Section 817(h) of the Code, a variable annuity contract, other than a pension plan contract, 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 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.



SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA)
 (A Separate Account of Sun Life Assurance Company of Canada (U.S.))
 
10. FINANCIAL HIGHLIGHTS
 

The summary of units outstanding, unit value (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 years ended December 31,
   
 
Units
Unit Value
lowest to highest4
Net
Assets
Investment Income
Ratio1
Expense Ratio
lowest to highest2
Total
Return3
 
AVB
5,318,723
$      11.8701
to
$ 12.9459
$       65,572,601
2.26%
  0.65% to
2.25%
13.66%
to
15.52%
2013
2012
5,475,295
10.5211
to
11.2069
59,011,011
1.91
0.65
to
2.10
10.98
to
12.63
2011
5,947,187
9.4799
to
9.9498
57,458,501
2.18
0.65
to
2.10
(5.09)
to
(3.69)
2010
5,293,494
9.9167
to
10.2048
53,564,306
2.43
1.35
to
2.35
1.14
to
8.81
2009
4,507,053
9.2498
to
9.3787
42,044,269
0.81
1.35
to
2.10
21.13
to
22.06
AAA
                       
2013
9,712,844
10.7227
to
11.2896
106,896,574
0.29
0.65
to
2.55
9.08
to
11.21
2012
5,428,829
9.9060
to
10.1521
54,255,262
0.13
0.65
to
2.10
5.73
to
7.30
2011
4,101,476
9.3695
to
9.4614
38,568,416
-
0.65
to
2.10
(6.30)
to
(5.39)
AN4
                       
2013
1,020,343
8.7145
to
9.1370
9,149,747
0.73
1.35
to
2.15
10.89
to
11.79
2012
1,093,270
7.8010
to
8.1732
8,792,098
1.46
1.35
to
2.30
12.57
to
13.67
2011
1,252,450
6.9298
to
8.6713
8,892,693
2.71
0.65
to
2.30
(17.97)
to
(16.59)
2010
1,092,105
8.4482
to
8.6813
9,392,167
1.83
1.35
to
2.30
1.70
to
11.09
2009
1,011,403
7.6787
to
7.8147
7,854,209
3.28
1.35
to
2.30
36.03
to
37.36
IVB
                       
2013
8,077,654
7.5012
to
7.9827
63,128,091
5.72
1.30
to
2.35
19.85
to
21.13
2012
9,822,886
6.2590
to
6.5900
63,597,746
1.34
1.30
to
2.35
11.50
to
12.70
2011
11,207,531
5.6135
to
5.8472
64,608,169
3.88
1.30
to
2.35
(21.33)
to
(20.48)
2010
11,190,095
7.1355
to
7.3535
81,416,221
2.68
1.30
to
2.35
1.85
to
2.94
2009
11,674,305
7.0059
to
7.1432
82,821,276
1.06
1.30
to
2.35
31.20
to
32.61
AAU
                       
2013
553,196
16.2876
to
16.9226
9,166,477
0.51
0.65
to
2.30
34.47
to
36.74
2012
127,943
12.1521
to
12.2638
1,588,940
0.33
1.35
to
2.05
16.03
to
16.86
2011
6,115
10.4824
to
10.4943
64,141
-
1.35
to
1.75
4.82
to
4.94
9XX
                       
2013
52,777,976
12.2973
to
15.1505
787,728,876
1.01
0.65
to
2.35
11.73
to
13.67
2012
59,518,591
10.8182
to
13.4228
788,739,478
1.47
0.65
to
2.55
7.15
to
9.25
2011
61,777,993
9.9024
to
12.3742
757,127,151
2.53
0.65
to
2.35
(5.90)
to
(4.27)
2010
47,908,911
12.7432
to
13.0170
619,370,616
1.27
1.35
to
2.30
1.20
to
8.28
2009
34,904,179
11.8467
to
12.0216
417,990,165
3.19
1.35
to
2.55
17.83
to
19.28

 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA) (A Separate Account of Sun Life Assurance Company of Canada (U.S.))
 
10. FINANCIAL HIGHLIGHTS (CONTINUED)
 
   
At December 31,
   
For the years ended December 31,
 
 
Units
Unit Value
lowest to highest4
Net
Assets
Investment
Income
Ratio1
Expense Ratio
lowest to highest2
Total
Return3
 
NMT
2,841
3,484
$16.5871
11.8408
 
$           47,121
41,258
0.45%
-
1.65%
1.65
 
40.08%
9.54
 
2013
2012
2011
3,533
10.8100
 
38,189
-
1.65
 
(13.38)
 
2010
3,338
12.4799
 
41,663
-
1.65
 
15.48
 
2009
4,383
10.8073
 
47,363
0.10
1.65
 
24.97
 
MCC
                 
2013
8,725,729
12.1253              to
15.2766
110,940,837
0.24
0.65          to
2.35
38.66           to
41.08
2012
11,724,482
8.7443              to
10.8285
106,744,410
-
0.65          to
2.35
8.50           to
10.40
2011
13,269,893
8.0594              to
9.8089
110,566,702
-
0.65          to
2.35
(14.18)to
(12.68)
2010
14,342,386
9.3906              to
9.7833
138,265,475
-
1.30          to
2.35
2.84           to
15.60
2009
16,190,984
8.2105              to
8.4629
135,548,553
-
1.30          to
2.35
23.82           to
25.15
NNG
                 
2013
2,169
16.3665              to
16.5136
35,578
0.25
1.65          to
1.75
33.27           to
33.40
2012
2,170
12.2809              to
12.3786
26,696
0.74
1.65          to
1.75
10.26           to
10.38
2011
2,170
11.1378              to
11.2150
24,200
0.09
1.65          to
1.75
 (4.34)     to
(4.24)
2010
11,218
11.5747              to
11.7119
130,018
0.12
1.65          to
1.85
19.30           to
19.54
2009
11,706
9.7021              to
9.7495
113,666
0.65
1.75          to
1.85
24.32           to
24.45
CMG
                 
2013
2,153,236
13.9292              to
16.0160
31,284,082
0.07
0.65          to
2.25
32.27           to
34.43
2012
2,686,650
10.4998              to
11.9139
29,316,702
0.48
0.65          to
2.30
9.33           to
11.18
2011
2,948,066
9.6039              to
10.7156
29,170,579
0.09
0.65          to
2.30
(5.06)           to
(3.46)
2010
2,712,649
10.1161              to
10.4978
28,087,424
0.05
1.35          to
2.30
0.68           to
19.63
2009
2,630,402
8.5261              to
8.7754
22,841,383
0.26
1.35          to
2.35
23.36           to
24.62
NMI
                 
2013
667,648
10.6265              to
15.1870
9,749,224
0.41
1.30          to
2.10
17.87           to
18.83
2012
801,506
8.8906              to
12.7869
9,865,957
0.91
1.30          to
2.10
15.14           to
16.08
2011
1,007,217
7.7217              to
11.0208
10,671,777
0.82
1.30          to
2.10
(17.94)to
(17.27)
2010
1,076,458
9.4101              to
13.3287
13,809,157
0.69
1.30          to
2.30
0.50           to
12.25
2009
1,170,771
8.4513              to
11.8797
13,421,698
1.86
1.30          to
2.35
34.70           to
36.15
CSC
                 
2013
2,076
16.9066              to
17.3660
35,796
0.72
1.55          to
1.85
31.56           to
31.96
2012
1,184
12.8507              to
13.0562
15,387
0.29
1.65          to
1.85
9.19           to
9.41
2011
1,172
11.7697              to
11.9334
13,935
0.90
1.65          to
1.85
(7.86)           to
(7.68)
2010
1,022
12.7743              to
12.9257
13,175
1.03
1.65          to
1.85
24.13           to
24.38
2009
954
10.3922
 
9,933
0.93
1.65
 
            22.93
 

 
 

 


SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA) (A Separate Account of Sun Life Assurance Company of Canada (U.S.))
 
10. FINANCIAL HIGHLIGHTS (CONTINUED)
 
   
At December 31,
   
For the years ended December 31,
   
 
Units
Unit Value
lowest to highest4
Net
Assets
Investment
Income
Ratio1
Expense Ratio
lowest to highest2
Total
Return3
 
FVB
                     
2013
7,562,294
$      13.1149
to
$ 14.0597
$      103,919,564
1.36%
1.30% to
  2.30%
16.54%
to
17.73%
2012
7,507,371
11.3885
to
11.9421
87,912,238
1.53
1.30          to
2.10
12.40
to
13.32
2011
7,396,640
10.1324
to
10.5126
76,682,725
1.64
0.65          to
2.10
(5.84)
to
(4.45)
2010
5,329,715
10.6772
to
11.0801
58,332,583
1.60
1.35          to
2.30
1.23
to
16.17
2009
4,620,075
9.2805
to
9.5381
43,671,580
2.27
1.35          to
2.30
35.14
to
36.46
FL1
                     
2013
16,883,265
13.7669
to
15.9081
242,518,324
0.80
0.65          to
2.35
27.88
to
30.10
2012
20,321,365
10.7657
to
12.2274
226,589,248
1.09
0.65          to
2.35
13.40
to
15.38
2011
22,654,962
9.4938
to
10.5974
221,030,866
0.80
0.65          to
2.35
(5.06)
to
(3.41)
2010
22,219,731
10.0146
to
10.3056
226,649,086
1.05
1.30          to
2.30
1.40
to
15.41
2009
21,371,208
8.7663
to
8.9297
189,572,250
1.53
1.30          to
2.30
32.35
to
33.71
F10
                     
2013
366,195
13.5628
to
14.4357
5,112,070
1.35
1.35          to
2.10
10.82
to
11.67
2012
453,269
12.1048
to
12.9273
5,687,870
1.64
1.35          to
2.25
9.06
to
10.07
2011
472,101
11.0993
to
11.7448
5,402,924
1.69
1.35          to
2.25
(2.66)
to
(1.77)
2010
586,368
11.4029
to
11.9562
6,869,231
1.73
1.35          to
2.25
10.01
to
11.03
2009
790,396
10.3649
to
10.7688
8,368,031
3.25
1.35          to
2.25
21.17
to
22.28
F15
                     
2013
1,808,434
13.6168
to
14.7369
25,834,253
1.41
1.30          to
2.25
11.54
to
12.62
2012
2,213,373
12.2083
to
13.0854
28,165,613
1.74
1.30          to
2.25
9.37
to
10.44
2011
2,439,910
11.1620
to
11.8482
28,232,570
1.76
1.30          to
2.25
(2.75)
to
(1.81)
2010
2,690,154
11.4777
to
12.0663
31,790,466
2.02
1.30          to
2.25
0.70
to
11.32
2009
2,555,558
10.4105
to
10.8391
27,230,849
4.12
1.30          to
2.25
22.21
to
23.40
F20
                     
2013
2,727,741
13.2873
to
14.7210
39,069,394
1.52
0.65          to
2.30
12.98
to
14.88
2012
2,941,746
11.9896
to
12.8982
37,000,260
1.71
1.30          to
2.30
10.46
to
11.59
2011
3,280,196
10.8545
to
11.5582
37,084,576
1.83
1.30          to
2.30
(3.51)
to
(2.52)
2010
3,591,134
11.2492
to
11.8574
41,774,592
2.00
1.30          to
2.30
0.77
to
12.84
2009
4,011,350
9.9637
to
10.5078
41,446,559
3.24
1.30          to
2.55
25.27
to
26.88
FVM
                     
2013
10,268,467
14.6966
to
16.3096
163,285,319
0.26
0.65          to
2.35
32.68
to
34.99
2012
12,996,921
10.8875
to
12.1619
154,665,507
0.38
0.65          to
2.35
11.86
to
13.81
2011
14,937,626
9.5660
to
10.7565
157,792,397
0.02
0.65          to
2.35
(12.94)
to
(11.43)
2010
14,828,391
11.7343
to
12.2246
178,592,880
0.12
1.30          to
2.35
(0.13)
to
26.90
2009
15,498,708
9.3461
to
9.6332
147,656,427
0.48
1.30          to
2.35
36.47
to
37.94

 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA) (A Separate Account of Sun Life Assurance Company of Canada (U.S.))
 
10. FINANCIAL HIGHLIGHTS (CONTINUED)
 
   
At December 31,
   
For the years ended December 31,
   
 
Units
Unit Value
lowest to highest4
Net
Assets
Investment
Income
Ratio1
Expense Ratio
lowest to highest2
Total
Return3
 
SGI
                     
2013
33,340,140
$      12.6902
to
$ 14.0011
$      456,002,716
1.66%
0.65%      to
2.55%
10.36%
to
12.51%
2012
37,860,350
11.2791
to
12.5261
464,766,322
0.74
0.65          to
2.55
11.89
to
14.08
2011
42,483,720
9.8870
to
11.0258
461,684,334
1.22
0.65          to
2.35
(8.49)
to
(6.90)
2010
39,232,419
11.4936
to
11.9272
462,402,911
1.98
1.35          to
2.30
1.72
to
17.56
2009
33,258,686
9.8573
to
10.1455
334,386,149
0.68
1.35          to
2.35
17.43
to
18.63
S17
                     
2013
3,944,019
12.3896
to
13.3034
51,560,794
12.11
1.35          to
2.55
20.62
to
22.10
2012
4,517,904
10.5024
to
10.8955
48,525,970
2.78
1.35          to
2.10
12.90
to
13.77
2011
5,135,868
9.3025
to
9.5769
48,625,842
0.02
1.35          to
2.10
(3.61)
to
(2.87)
2010
5,771,387
9.5951
to
9.8597
56,433,177
2.06
1.35          to
2.30
7.72
to
8.77
2009
6,700,721
8.9075
to
9.0651
60,404,458
2.81
1.35          to
2.30
27.26
to
28.49
ISC
                     
2013
9,121,585
12.4364
to
13.3321
118,825,574
6.33
0.65          to
2.30
11.32
to
13.20
2012
10,438,756
11.1716
to
11.8550
121,315,834
6.45
1.30          to
2.30
10.05
to
11.18
2011
11,052,281
10.1516
to
10.6628
115,893,306
5.67
0.65          to
2.30
0.03
to
1.72
2010
10,453,432
10.1481
to
10.5514
108,775,441
6.60
1.30          to
2.30
1.33
to
11.21
2009
8,744,128
9.1653
to
9.4879
82,084,273
7.92
1.30          to
2.50
32.21
to
33.83
AAZ
                     
2013
232,968
12.6890
to
13.1224
2,995,129
6.25
0.65          to
2.10
11.46
to
13.11
2012
219,490
11.3840
to
11.6010
2,515,056
6.87
0.65          to
2.10
10.18
to
11.83
2011
129,363
10.3317
to
10.3537
1,338,333
-
1.35          to
2.10
3.32
to
3.54
BBC
                     
2013
13,774
14.7698
to
15.0120
205,905
2.06
1.35          to
2.05
25.43
to
26.32
2012
12,309
11.7754
to
11.8836
145,875
2.21
1.35          to
2.05
11.85
to
12.65
2011
9,990
10.5283
to
10.5493
105,338
-
1.35          to
2.05
5.28
to
5.49
FVS
                     
2013
1,567,440
17.3937
to
31.5174
47,194,557
1.28
0.65          to
2.55
32.77
to
35.35
2012
1,751,017
12.8507
to
23.4505
39,374,752
0.76
0.65          to
2.50
15.41
to
17.61
2011
2,017,094
10.9261
to
20.0806
38,970,383
0.68
0.65          to
2.50
(6.16)
to
(4.38)
2010
2,184,543
14.4922
to
21.1502
44,583,047
0.79
1.30          to
2.50
1.78
to
26.56
2009
2,176,095
11.5328
to
16.7205
35,186,583
1.64
1.30          to
2.50
25.93
to
27.48
BBA
                     
2013
50,422
16.9760
to
17.5351
865,842
1.12
0.65          to
2.05
33.33
to
35.24
2012
50,191
12.7319
to
12.8489
643,132
0.69
1.35          to
2.05
15.83
to
16.66
2011
46,701
10.9918
to
11.0137
514,029
-
-          to
-
9.92
to
10.14

 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA) (A Separate Account of Sun Life Assurance Company of Canada (U.S.))
 
10. FINANCIAL HIGHLIGHTS (CONTINUED)
 
   
At December 31,
   
For the years ended December 31,
   
 
Units
Unit Value
lowest to highest4
Net
Assets
Investment
Income
Ratio1
Expense Ratio
lowest to highest2
Total
Return3
 
SIC
                     
2013
2,335,970
$      11.7372
to
$ 14.1815
$       32,166,899
6.13%
0.65% to
2.30%
0.94%
to
2.64%
2012
2,573,447
11.4349
to
13.9072
35,029,483
6.96
0.65          to
2.30
10.15
to
12.02
2011
2,800,517
10.2082
to
12.4669
34,368,378
5.95
0.65          to
2.30
0.22
to
1.91
2010
2,596,931
11.8722
to
12.3200
31,584,484
4.50
1.35          to
2.30
0.71
to
9.42
2009
1,891,057
10.9558
to
11.2596
21,088,738
7.24
1.35          to
2.30
22.86
to
24.05
BBB
                     
2013
43,918
11.2034
to
11.5725
500,863
5.70
0.65          to
2.05
1.05
to
2.50
2012
33,907
11.0868
to
11.1887
378,585
7.29
1.35          to
2.05
10.35
to
11.14
2011
18,795
10.0473
to
10.0673
189,112
-
1.35          to
2.05
0.47
to
0.67
FMS
                     
2013
11,763,564
14.9879
to
21.3191
241,465,876
2.06
0.65          to
2.55
24.99
to
27.43
2012
14,648,890
11.7619
to
16.8490
238,076,966
2.06
0.65          to
2.55
11.32
to
13.50
2011
16,848,114
10.3632
to
14.9512
243,685,985
2.29
0.65          to
2.35
(3.36)
to
(1.68)
2010
18,142,945
11.7357
to
15.3150
269,667,669
1.61
1.30          to
2.35
1.10
to
9.75
2009
18,322,036
10.7695
to
13.9615
248,924,483
2.27
1.30          to
2.35
23.09
to
24.41
TDM
                     
2013
2,977,837
13.8777
to
15.0823
43,477,768
1.85
1.30          to
2.30
(3.20)
to
(2.21)
2012
2,973,922
14.3367
to
15.4232
44,554,239
1.44
1.30          to
2.30
10.55
to
11.68
2011
3,451,536
12.9690
to
13.8097
46,486,794
0.95
1.30          to
2.30
(17.79)
to
(16.95)
2010
3,730,450
15.7752
to
16.6280
60,725,526
1.67
1.30          to
2.30
14.88
to
16.06
2009
4,245,202
13.7314
to
14.3272
59,780,455
4.87
1.30          to
2.30
68.62
to
70.35
FTI
                     
2013
8,445,001
17.0938
to
23.0962
186,410,420
2.43
1.30          to
2.55
19.84
to
21.37
2012
10,512,459
14.1988
to
19.0405
192,256,195
3.17
1.30          to
2.55
15.20
to
16.69
2011
13,164,270
12.2681
to
16.3841
207,290,349
1.65
1.30          to
2.55
(12.91)
to
(11.79)
2010
15,268,978
14.0221
to
18.6504
273,652,493
1.99
1.30          to
2.55
5.64
to
7.00
2009
17,578,876
13.2120
to
17.5014
295,586,812
3.56
1.30          to
2.55
33.55
to
35.26
AAX
                     
2013
749,817
10.8224
to
11.3105
8,275,057
4.41
0.65          to
2.55
(1.05)
to
0.88
2012
372,598
10.9809
to
11.2124
4,125,222
5.80
0.65          to
2.25
12.37
to
14.22
2011
31,720
9.7779
to
9.8168
310,599
-
0.65          to
2.05
(2.22)
to
(1.83)
FTG
                     
2013
1,577,153
15.4863
to
22.7083
34,020,697
2.71
1.30          to
2.30
27.81
to
29.12
2012
1,891,734
12.0793
to
17.5958
31,651,870
2.01
1.30          to
2.30
18.27
to
19.49
2011
2,191,897
10.1820
to
14.7339
30,804,560
1.33
1.30          to
2.30
(9.11)
to
(8.18)
2010
2,323,981
11.1685
to
16.0551
35,600,674
1.34
1.30          to
2.30
0.74
to
6.00
2009
2,338,559
10.6117
to
15.1541
33,875,343
3.23
1.30          to
2.30
28.09
to
29.40

 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA) (A Separate Account of Sun Life Assurance Company of Canada (U.S.))
 
10. FINANCIAL HIGHLIGHTS (CONTINUED)
 
   
At December 31,
   
For the years ended December 31,
   
 
Units
Unit Value
lowest to highest4
Net
Assets
Investment
Income
Ratio1
Expense Ratio
lowest to highest2
Total
Return3
 
HBF
                     
2013
988,273
$      14.7503
to
$ 15.2845
$       14,981,788
1.82%
  1.35%    to
   2.10%
12.73%
to
13.59%
2012
1,240,009
13.0852
to
13.4560
16,579,285
1.47
1.35          to
2.10
7.20
to
8.02
2011
1,299,312
12.2069
to
12.4569
16,106,376
1.08
1.35          to
2.10
(0.45)
to
0.31
2010
773,084
12.2622
to
12.4184
9,572,118
0.12
1.35          to
2.10
0.75
to
8.95
2009
259,790
11.3416
to
11.3988
2,957,383
0.05
1.35          to
2.10
13.42
to
13.99
HVD
                     
2013
341,476
13.0440
to
13.6600
4,608,325
2.90
1.35          to
2.10
17.44
to
18.34
2012
396,553
11.1065
to
11.5427
4,528,237
3.84
1.35          to
2.10
9.11
to
9.95
2011
419,954
10.1789
to
10.4978
4,371,146
3.86
1.35          to
2.10
4.83
to
5.63
2010
381,299
9.7101
to
9.9383
3,761,330
4.58
1.35          to
2.10
0.95
to
13.57
2009
300,219
8.6154
to
8.7509
2,613,269
-
1.35          to
2.10
22.48
to
23.42
HVG
                     
2013
78,457
10.3462
to
10.7016
830,844
0.96
1.35          to
1.90
31.20
to
31.94
2012
105,576
7.8856
to
8.1111
848,512
0.36
1.35          to
1.90
8.34
to
8.95
2011
109,345
7.2785
to
7.4448
807,966
0.15
1.35          to
1.90
(4.89)
to
(4.36)
2010
105,400
7.6526
to
7.7839
815,820
0.17
1.35          to
1.90
7.78
to
8.38
2009
64,711
7.1003
to
7.1818
462,965
-
1.35          to
1.90
13.76
to
14.40
HVI
                     
2013
81,411
11.0666
to
11.5892
932,571
3.73
1.35          to
2.10
21.21
to
22.14
2012
113,189
9.1301
to
9.4886
1,062,389
3.72
1.35          to
2.10
8.39
to
9.23
2011
129,405
8.4231
to
8.6870
1,114,733
2.81
1.35          to
2.10
4.82
to
5.62
2010
135,007
8.0357
to
8.2246
1,103,265
2.88
1.35          to
2.10
9.45
to
10.28
2009
122,312
7.3422
to
7.4577
908,107
-
1.35          to
2.10
19.06
to
19.97
HVE
                     
2013
473,837
9.7224
to
10.1815
4,749,934
1.34
1.35          to
2.10
20.33
to
21.25
2012
599,889
8.0800
to
8.3974
4,972,427
1.19
1.35          to
2.10
11.63
to
12.49
2011
673,679
7.2383
to
7.4651
4,976,865
1.22
1.35          to
2.10
(13.41)
to
(12.74)
2010
579,008
8.3591
to
8.5555
4,914,149
1.41
1.35          to
2.10
1.46
to
7.71
2009
373,724
7.8201
to
7.9431
2,952,460
0.05
1.35          to
2.10
30.66
to
31.67
HVM
                     
2013
-
-
to
-
-
1.45
1.35          to
1.90
11.48
to
11.63
2012
8,808
9.2715
to
9.5366
82,921
0.60
1.35          to
1.90
8.50
to
9.11
2011
8,964
8.5450
to
8.7402
77,544
0.70
1.35          to
1.90
(3.20)
to
(2.66)
2010
5,537
8.8274
to
8.9788
49,237
0.89
1.35          to
1.90
11.95
to
12.58
2009
4,757
7.8852
to
7.9757
37,661
-
1.35          to
1.90
19.55
to
20.22

 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA) (A Separate Account of Sun Life Assurance Company of Canada (U.S.))
 
10. FINANCIAL HIGHLIGHTS (CONTINUED)
 
   
At December 31,
   
For the years ended December 31,
   
 
Units
Unit Value
lowest to highest4
Net
Assets
Investment
Income
Ratio1
Expense Ratio
lowest to highest2
Total
Return3
 
HVC
                   
2013
116,539
$      13.3851
to
$ 14.0172
$        1,606,941
  0.74%
  1.35%    to
2.10%
29.56%
to 30.55%
2012
159,752
10.3312
to
10.7368
1,690,777
0.27
1.35          to
2.10
12.17
to      13.03
2011
135,012
9.2104
to
9.4989
1,267,264
0.46
1.35          to
2.10
(4.81)
to      (4.08)
2010
131,381
9.6756
to
9.9030
1,289,234
0.67
1.35          to
2.10
1.60
to      21.15
2009
131,703
8.0479
to
8.1744
1,070,309
-
1.35          to
2.10
31.41
to      32.42
HVS
                   
2013
737,944
10.7284
to
11.2348
8,218,734
2.50
1.35          to
2.10
(3.75)
to      (3.02)
2012
771,336
11.1469
to
11.5843
8,869,495
2.42
1.35          to
2.10
1.17
to       1.95
2011
745,930
11.0178
to
11.3626
8,425,130
2.35
1.35          to
2.10
3.09
to       3.88
2010
462,023
10.6873
to
10.9382
5,028,611
2.59
1.35          to
2.10
0.44
to       3.47
2009
89,657
10.4080
to
10.5713
943,853
-
1.35          to
2.10
3.25
to       4.04
HVN
                   
2012
-
-
to
-
-
 -
1.35          to
2.10
18.65
to      18.95
2011
64,413
6.1068
to
6.2982
401,560
 -
1.35          to
2.10
(14.56)
to     (13.90)
2010
53,652
7.1473
to
7.3153
389,238
0.10
1.35          to
2.10
13.53
to      14.40
2009
52,212
6.2954
to
6.3944
332,142
-
1.35          to
2.10
31.82
to      32.83
HRS
                   
2013
308,937
7.3255
to
7.6491
2,330,630
0.98
1.35          to
2.10
6.81
to       7.63
2012
349,676
6.8582
to
7.1067
2,457,433
0.23
1.35          to
2.10
2.13
to       2.92
2011
365,057
6.7150
to
6.9052
2,498,612
0.16
1.35          to
2.10
(11.53)
to     (10.85)
2010
288,049
7.5898
to
7.7455
2,215,321
0.26
1.35          to
2.10
3.59
to      20.50
2009
134,661
6.3466
to
6.4276
861,819
-
1.35          to
2.10
31.91
to      32.92
HVR
                   
2013
131,266
10.6411
to
11.1435
1,442,554
0.73
1.35          to
2.10
21.82
to      22.76
2012
155,429
8.7348
to
9.0777
1,394,690
1.64
1.35          to
2.10
4.68
to       5.49
2011
160,878
8.3441
to
8.6054
1,371,418
0.34
1.35          to
2.10
4.60
to       5.40
2010
150,620
7.9771
to
8.1645
1,220,000
1.32
1.35          to
2.10
1.12
to       5.89
2009
75,433
7.5908
to
7.7102
578,764
-
1.35          to
2.10
30.58
to      31.58
HSS
                   
2013
340,400
14.6333
to
15.3243
5,154,845
0.31
1.35          to
2.10
29.15
to      30.14
2012
437,852
11.3304
to
11.7752
5,102,981
-
1.35          to
2.10
20.04
to      20.96
2011
519,574
9.4389
to
9.7346
5,015,924
0.02
1.35          to
2.10
(2.99)
to      (2.25)
2010
463,805
9.7297
to
9.9582
4,587,826
0.47
1.35          to
2.10
2.10
to      27.86
2009
320,168
7.6677
to
7.7883
2,481,257
-
1.35          to
2.10
30.16
to      31.16
VKC
                   
2013
705,458
15.7463
to
16.4608
11,412,161
0.57
1.35          to
2.10
31.12
to      32.12
2012
497,553
12.0090
to
12.7466
6,119,962
0.58
0.65          to
2.10
14.60
to      16.31
2011
608,083
10.4786
to
10.9591
6,491,582
0.58
0.65          to
2.10
(1.29)
to       0.17
2010
541,345
10.6152
to
10.8455
5,813,854
0.85
1.35          to
2.10
1.68
to      20.53
2009
286,134
8.8743
to
8.9980
2,559,424
1.10
1.35          to
2.10
36.24
to      37.28
                     

 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA) (A Separate Account of Sun Life Assurance Company of Canada (U.S.))
 
10. FINANCIAL HIGHLIGHTS (CONTINUED)
 
   
At December 31,
   
For the years ended December 31,
 
 
Units
Unit Value
lowest to highest4
Net
Assets
Investment
Income
Ratio1
Expense Ratio
lowest to highest2
Total
Return3
VLC
                   
2013
2,946,646
$      12.6409
to
$ 16.8341
$       39,678,147
1.48%
  0.65%    to
2.55%
32.20%
to 34.77%
2012
2,455,811
9.5623
to
10.3003
24,746,978
1.55
1.30          to
2.55
15.88
to      17.37
2011
2,647,256
8.3548
to
8.7759
22,814,813
1.37
1.30          to
2.30
(4.36)
to      (3.38)
2010
2,754,884
8.7353
to
9.0827
24,645,773
0.13
1.30          to
2.30
1.41
to      14.19
2009
2,424,233
7.7727
to
7.9538
19,071,269
4.34
1.30          to
2.10
25.71
to      26.74
VKU
                   
2013
6,967,224
14.0805
to
14.8512
101,917,116
1.68
0.65          to
2.25
22.08
to      24.07
2012
4,842,609
11.6196
to
12.0545
57,677,285
1.81
0.65          to
2.10
10.02
to      11.65
2011
4,795,893
10.4145
to
10.8734
51,651,570
1.59
0.65          to
2.10
(3.37)
to      (1.94)
2010
2,638,485
10.9300
to
11.1670
29,230,936
1.96
1.35          to
2.10
1.34
to      10.52
2009
2,012,655
9.8917
to
10.1041
20,224,707
2.67
1.35          to
2.50
19.43
to      20.83
AI8
                   
2013
93,459
13.3271
to
13.6249
1,265,384
1.18
1.35          to
2.30
15.99
to      17.12
2012
16,040
11.5883
to
11.6337
186,262
1.24
1.35          to
1.65
13.34
to      13.69
2011
1,222
10.2183
to
10.2328
12,500
-
1.35          to
1.85
2.18
to       2.33
AAY
                   
2013
2,366,142
9.9032
to
10.2415
23,724,644
3.93
0.65          to
2.10
(3.80)
to      (2.38)
2012
858,794
10.2340
to
10.4910
8,892,765
2.33
0.65          to
2.55
2.37
to       4.38
2011
170,792
10.0109
to
10.0506
1,712,175
-
0.65          to
2.05
0.11
to       0.51
AAM
                   
2013
325,342
15.7548
to
16.2927
5,212,710
1.08
0.65          to
2.10
33.05
to      35.01
2012
100,716
11.8494
to
11.9582
1,199,600
0.88
1.35          to
2.05
14.86
to      15.69
2011
5,184
10.3278
to
10.3366
53,540
-
1.35          to
1.65
3.28
to       3.37
LRE
                   
2013
5,760,595
9.8474
to
10.6476
60,059,241
1.38
0.65          to
2.35
(3.56)
to      (1.89)
2012
5,713,464
10.0366
to
10.9237
61,330,118
1.54
0.65          to
2.35
19.17
to      21.25
2011
6,403,042
8.2773
to
9.0510
57,264,390
2.04
0.65          to
2.35
(19.92)
to     (18.53)
2010
5,546,175
10.8727
to
11.1887
61,493,993
1.38
1.35          to
2.35
2.09
to      21.04
2009
4,250,860
9.0745
to
9.2522
39,060,057
3.64
1.30          to
2.35
65.86
to      67.64

 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA) (A Separate Account of Sun Life Assurance Company of Canada (U.S.))
 
10. FINANCIAL HIGHLIGHTS (CONTINUED)
 
   
At December 31,
   
For the years ended December 31,
   
 
Units
Unit Value
lowest to highest4
Net
Assets
Investment
Income
Ratio1
Expense Ratio
lowest to highest2
Total
Return3
 
LA9
                     
2013
2,007,338
$      18.6553
to
$ 22.9112
$       40,883,716
  -%
1.30%    to
2.55%
33.58%
to 35.30%
2012
2,655,359
13.9651
to
16.9340
40,130,308
-
1.30          to
2.55
11.18
to
12.61
2011
3,079,831
10.2431
to
15.0377
41,524,761
-
0.65          to
2.55
(12.34)
to
(10.63)
2010
3,343,836
14.3291
to
16.9372
50,950,452
-
1.30          to
2.55
0.79
to
21.33
2009
4,131,400
11.9616
to
13.9599
52,098,239
-
1.30          to
2.55
41.84
to
43.66
LAV
                     
2013
2,786,160
15.4793
to
21.0606
56,663,879
0.25
0.65          to
2.30
32.64
to
34.88
2012
2,764,087
14.4039
to
15.7255
42,125,655
0.52
1.30          to
2.30
8.03
to
9.14
2011
3,280,677
13.3338
to
14.4163
45,971,939
0.19
1.30          to
2.30
(6.68)
to
(5.73)
2010
3,240,001
14.2886
to
15.3001
48,288,792
0.32
1.30          to
2.30
1.37
to
17.48
2009
3,386,297
12.2869
to
13.0302
43,116,785
0.19
1.30          to
2.35
23.08
to
24.34
EGS
                     
2012
-
-
to
-
-
0.05
1.00          to
1.85
13.19
to
13.81
2011
9,986,814
5.7827
to
24.9499
125,072,423
0.17
1.00          to
1.85
(2.29)
to
(1.45)
2010
11,164,178
5.9152
to
25.4132
142,268,348
0.09
1.00          to
1.85
13.67
to
14.66
2009
12,612,013
5.2011
to
22.2504
140,984,437
0.28
1.00          to
1.85
35.19
to
36.36
MFF
                     
2012
-
 -
to
-
-
-
1.00          to
2.25
12.71
to
13.62
2011
776,655
9.9684
to
19.4686
9,830,029
-
1.00          to
2.25
(2.92)
to
(0.10)
2010
922,817
11.2140
to
19.8409
12,234,367
-
1.00          to
2.25
12.91
to
14.35
2009
1,079,900
9.8917
to
17.3864
12,532,342
-
1.00          to
2.30
34.29
to
36.08
GGC
                     
2013
41,621,978
10.7007
to
10.7298
449,385,727
1.77
1.15          to
1.85
7.01
to
7.30
GGE
                     
2013
54,392,986
10.6609
to
10.7384
582,198,307
1.66
0.65          to
2.55
6.61
to
7.38
FFL
                     
2013
7,603,903
8.9609
to
38.9941
150,048,532
0.23
1.00          to
1.85
34.32
to
35.48
2012
8,715,181
6.6678
to
28.8924
126,358,221
-
1.00          to
1.85
1.81
to
2.14
TEG
                     
2013
957,977
15.2725
to
30.3796
20,199,476
0.12
0.65          to
2.25
33.43
to
35.61
2012
1,067,867
11.4290
to
22.5272
17,349,507
-
1.15          to
2.25
1.57
to
1.99
FFJ
                     
2013
3,214,346
7.0908
to
8.0117
24,799,452
-
1.15          to
1.85
35.17
to
36.16
2012
3,355,284
5.2403
to
5.8842
19,045,900
-
1.15          to
1.85
2.92
to
3.19

 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA) (A Separate Account of Sun Life Assurance Company of Canada (U.S.))
 
10. FINANCIAL HIGHLIGHTS (CONTINUED)
 
   
At December 31,
   
For the years ended December 31,
   
 
Units
Unit Value
lowest to highest4
Net
Assets
Investment
Income
Ratio1
Expense Ratio
lowest to highest2
Total
Return3
 
FFK
                     
2013
2,385,661
$       9.7733
to
$ 22.4833
$       43,834,880
           -%
1.15%      to
2.35%
33.99%
 to 35.64%
2012
3,042,637
7.2567
to
16.5842
41,719,426
-
1.15          to
2.50
2.77
to
4.26
TND
                     
2013
1,244,536
14.6197
to
14.8611
18,296,470
-
0.65          to
2.10
38.25
to
40.30
2012
1,253,717
10.5720
to
10.5924
13,270,525
-
0.65          to
2.30
5.72
to
5.92
AAN
                     
2013
75,771,098
9.6804
to
10.5094
779,097,934
1.07
0.65          to
2.55
(3.81)
to
(1.93)
2012
85,754,971
10.0069
to
10.7163
907,744,211
0.19
0.65          to
2.55
0.07
to
6.36
2011
228,381
10.0346
to
10.0560
2,295,169
-
1.35          to
2.10
0.35
to
0.56
FFN
                     
2013
16,264,441
13.3085
to
13.5283
217,583,373
0.29
0.65          to
2.10
29.23
to
31.14
2012
21,332,345
10.2959
to
10.3158
219,815,489
         -
0.65          to
2.30
2.96
to
3.16
FFO
                     
2013
19,546,304
13.6487
to
13.8438
269,468,965
1.14
1.30          to
2.55
32.42
to
34.12
2012
25,592,147
10.3068
to
10.3219
264,127,204
-
1.30          to
2.55
3.07
to
3.22
FFP
                     
2013
1,001,872
13.6854
to
13.8022
13,784,206
0.99
1.35          to
2.10
32.75
to
33.77
2012
1,256,681
10.3091
to
10.3182
12,962,256
-
1.35          to
2.10
3.09
to
3.18
MIT
                     
2013
13,963,398
13.5787
to
49.6504
335,078,758
2.04
1.15          to
1.85
33.88
to
34.85
2012
15,937,014
10.1375
to
36.9102
284,268,803
1.68
1.15          to
1.85
13.23
to
14.06
2011
18,480,552
8.9485
to
32.4419
288,462,302
1.86
1.00          to
1.85
0.09
to
0.96
2010
21,182,508
8.9359
to
32.2588
329,127,899
1.82
1.00          to
1.85
14.31
to
15.30
2009
24,500,355
7.8132
to
28.0862
330,454,824
2.37
1.00          to
1.85
22.94
to
24.01
MFL
                     
2013
5,813,652
15.9698
to
24.1277
121,852,464
1.74
1.00          to
2.55
32.59
to
34.70
2012
7,733,934
11.9588
to
17.9491
121,965,691
1.37
1.00          to
2.55
12.15
to
13.95
2011
9,632,098
10.5865
to
15.7844
134,401,254
1.56
1.00          to
2.55
(0.85)
to
0.72
2010
12,022,072
10.6014
to
15.7028
168,194,841
1.56
1.00          to
2.55
13.16
to
14.96
2009
14,889,009
9.3019
to
13.6875
182,378,997
2.11
1.00          to
2.55
21.81
to
23.75

 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA) (A Separate Account of Sun Life Assurance Company of Canada (U.S.))
 
10. FINANCIAL HIGHLIGHTS (CONTINUED)
 
   
At December 31,
   
For the years ended December 31,
   
 
Units
Unit Value
lowest to highest4
Net
Assets
Investment
Income
Ratio1
Expense Ratio
lowest to highest2
Total
Return3
 
BDS
                     
2013
3,586,004
$      19.0130
to
$ 21.8027
$       74,837,112
4.08%
1.15%    to
1.85%
(2.12%)
to
(1.41%)
2012
4,392,042
19.3030
to
22.1141
93,350,707
4.92
1.15          to
1.85
9.24
to
10.04
2011
4,609,175
17.6516
to
20.0962
89,181,631
4.84
1.15          to
1.85
4.66
to
5.42
2010
5,106,265
16.8481
to
19.0628
93,795,374
4.34
1.15          to
1.85
8.81
to
9.60
2009
5,384,987
15.4686
to
17.3936
90,448,318
6.48
1.15          to
1.85
25.59
to
26.50
MF7
                     
2013
10,687,410
11.3759
to
18.0972
178,270,189
4.08
0.65          to
2.50
(3.00)
to
(1.16)
2012
9,751,262
11.5089
to
18.4014
166,516,251
4.64
0.65          to
2.55
8.16
to
10.28
2011
9,806,250
10.4364
to
16.7714
153,556,663
4.83
0.65          to
2.50
3.65
to
5.61
2010
9,260,297
11.9321
to
15.9598
138,789,021
3.96
1.15          to
2.50
0.52
to
9.40
2009
6,662,054
10.9792
to
14.5888
91,904,165
5.40
1.15          to
2.50
24.47
to
26.19
RGS
                     
2013
5,928,013
15.4053
to
24.4424
114,679,328
0.99
1.15          to
1.85
32.13
to
33.09
2012
6,563,929
11.6470
to
18.3649
95,519,770
0.78
1.15          to
1.85
14.30
to
15.13
2011
7,453,731
10.1798
to
15.9514
94,329,872
0.95
1.00          to
1.85
(2.77)
to
(1.93)
2010
8,499,280
10.4589
to
16.2874
109,875,527
1.15
1.00          to
1.85
15.05
to
16.04
2009
9,599,790
9.0816
to
14.0549
107,176,009
1.82
1.00          to
1.85
30.28
to
31.41
RG1
                     
2013
3,243,424
13.7856
to
25.4526
48,214,531
0.77
0.65          to
2.25
31.26
to
33.41
2012
3,536,923
10.4710
to
19.1846
39,795,981
0.54
0.65          to
2.30
13.55
to
15.48
2011
3,585,793
9.1984
to
16.7056
35,557,705
0.74
0.65          to
2.35
(3.57)
to
(1.89)
2010
3,339,426
9.5576
to
17.1228
34,696,477
0.93
1.10          to
2.30
1.72
to
15.66
2009
3,557,338
8.3649
to
14.8193
32,497,716
1.44
1.10          to
2.30
29.39
to
30.98
EME
                     
2013
1,069,130
25.0134
to
30.8705
30,332,889
1.55
1.00          to
1.85
(6.96)
to
(6.16)
2012
1,170,564
26.8859
to
33.0133
35,575,216
1.10
1.00          to
1.85
16.77
to
17.79
2011
1,418,256
23.0239
to
28.1271
36,670,610
0.53
1.00          to
1.85
(20.04)
to
(19.34)
2010
1,624,680
28.7931
to
34.9969
52,175,479
0.71
1.00          to
1.85
21.46
to
22.51
2009
1,777,211
23.7055
to
28.6673
46,576,034
2.42
1.00          to
1.85
65.46
to
66.90

 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA) (A Separate Account of Sun Life Assurance Company of Canada (U.S.))
 
10. FINANCIAL HIGHLIGHTS (CONTINUED)
 
   
At December 31,
   
For the years ended December 31,
   
 
Units
Unit Value
lowest to highest4
Net
Assets
Investment
Income
Ratio1
Expense Ratio
lowest to highest2
Total
Return3
 
EM1
                     
2013
1,912,047
$       9.4376
to
$ 34.9436
$       29,856,169
1.43%
0.65%    to
2.55%
(7.81%)
to
(6.02%)
2012
1,981,331
10.0417
to
37.3877
33,553,289
0.89
0.65          to
2.50
15.62
to
17.83
2011
2,229,533
8.5224
to
31.9085
32,459,265
0.35
0.65          to
2.50
(20.75)
to
(19.25)
2010
1,775,371
16.1794
to
39.7356
33,610,615
0.56
1.15          to
2.50
2.77
to
22.05
2009
1,346,721
13.4397
to
32.5736
22,378,471
1.63
1.15          to
2.50
63.92
to
66.19
GGS
                     
2013
935,239
15.6124
to
22.9637
17,862,748
-
1.00          to
1.85
(7.01)
to
(6.21)
2012
1,121,650
16.7896
to
24.5777
23,029,564
2.90
1.00          to
1.85
(1.23)
to
(0.37)
2011
1,256,337
16.9987
to
24.7647
26,008,011
2.26
1.00          to
1.85
4.10
to
5.00
2010
1,388,803
16.3289
to
23.6760
27,603,523
0.00
1.00          to
1.85
2.68
to
3.57
2009
1,514,184
15.9031
to
22.9489
29,279,024
11.75
1.00          to
1.85
2.14
to
3.02
GG1
                     
2013
164,670
13.7755
to
16.4557
2,532,443
-
1.15          to
2.05
(7.37)
to
(6.52)
2012
136,568
14.8332
to
17.6563
2,246,301
2.50
1.15          to
2.05
(1.73)
to
(0.83)
2011
155,653
15.0563
to
17.8579
2,593,778
1.96
1.15          to
2.05
3.58
to
4.53
2010
191,576
14.4984
to
17.1353
3,072,039
0.00
1.15          to
2.05
2.24
to
3.18
2009
226,268
14.1448
to
16.6581
3,542,610
13.42
1.15          to
2.05
1.65
to
2.58
GGR
                     
2013
2,092,115
12.7440
to
40.1105
57,215,898
0.67
1.15          to
1.85
19.01
to
19.88
2012
2,365,951
10.7025
to
33.5420
54,517,556
0.72
1.15          to
1.85
17.50
to
18.35
2011
2,773,868
9.1041
to
28.4107
53,695,583
0.68
1.15          to
1.85
(8.11)
to
(7.45)
2010
3,303,954
9.9029
to
30.7722
68,407,784
0.80
1.00          to
1.85
9.74
to
10.69
2009
3,839,286
9.0195
to
27.9081
71,866,959
1.19
1.00          to
1.85
37.23
to
38.42
GG2
                     
2013
175,811
17.9370
to
26.0623
3,534,222
0.38
1.15          to
2.55
17.86
to
19.55
2012
179,854
15.1109
to
21.8117
3,076,199
0.47
1.15          to
2.10
16.97
to
18.11
2011
205,718
12.8853
to
18.4763
3,012,570
0.36
1.15          to
2.10
(8.62)
to
(7.74)
2010
250,738
14.0654
to
20.0359
4,004,065
0.57
1.15          to
2.10
9.19
to
10.25
2009
340,286
12.8483
to
18.1818
4,912,210
0.74
1.15          to
2.10
36.50
to
37.83
 


 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA) (A Separate Account of Sun Life Assurance Company of Canada (U.S.))
 
10. FINANCIAL HIGHLIGHTS (CONTINUED)
 
   
At December 31,
   
For the years ended December 31,
   
 
Units
Unit Value
lowest to highest4
Net
Assets
Investment
Income
Ratio1
Expense Ratio
lowest to highest2
Total
Return3
 
RES
                     
2013
5,432,212
$       9.9571
to
$ 33.9097
$      120,583,776
1.56%
1.15%    to
1.85%
21.71%
to 22.59%
2012
6,184,482
8.1769
to
27.7289
112,011,193
1.58
1.15          to
1.85
14.64
to
15.48
2011
7,166,923
7.1290
to
24.0719
112,370,557
1.19
1.15          to
1.85
(8.45)
to
(7.79)
2010
8,120,608
7.7831
to
26.1691
138,046,224
1.40
1.15          to
1.85
10.58
to
11.38
2009
9,405,855
7.0348
to
23.5528
143,755,857
1.68
1.15          to
1.85
29.99
to
30.94
RE1
                     
2013
571,136
14.0599
to
22.3523
9,984,130
1.25
1.10          to
2.25
20.90
to
22.32
2012
804,018
11.5821
to
18.2921
11,694,232
1.31
1.15          to
2.25
13.94
to
15.23
2011
969,870
10.1236
to
15.8830
12,311,637
0.87
1.10          to
2.25
(9.09)
to
(8.02)
2010
1,162,208
11.0907
to
17.2860
16,215,376
1.16
1.10          to
2.25
9.89
to
11.18
2009
1,371,905
10.0513
to
15.5629
17,259,114
1.46
1.10          to
2.25
29.06
to
30.57
GTR
                     
2013
2,653,641
17.6120
to
34.6579
69,875,165
2.55
1.15          to
1.85
6.82
to
7.60
2012
2,816,638
16.4786
to
32.2897
69,236,431
1.92
1.15          to
1.85
7.52
to
8.31
2011
3,221,964
15.3179
to
29.8872
73,752,769
0.96
1.15          to
1.85
(0.33)
to
0.40
2010
3,630,317
15.3603
to
29.8429
83,182,897
0.80
1.15          to
1.85
3.58
to
4.33
2009
4,057,331
14.8223
to
28.6751
89,385,980
8.00
1.15          to
1.85
13.03
to
13.85
GT2
                     
2013
78,489,983
11.3913
to
21.0923
933,031,187
2.33
0.65          to
2.55
5.77
to
7.84
2012
83,848,269
10.8365
to
19.6683
933,129,242
1.79
0.65          to
2.35
6.68
to
8.55
2011
83,798,499
10.0846
to
18.2205
868,419,521
1.02
0.65          to
2.10
(0.83)
to
0.63
2010
35,771,466
10.2960
to
18.2065
374,030,587
0.33
1.15          to
2.10
0.47
to
4.10
2009
699,643
15.3452
to
17.4988
11,164,168
7.75
1.15          to
2.05
12.42
to
13.46
GSS
                     
2013
6,645,894
14.9236
to
24.4099
127,074,581
2.17
1.15          to
1.85
(4.40)
to
(3.70)
2012
7,678,114
15.5939
to
25.4107
153,265,951
3.16
1.15          to
1.85
0.62
to
1.36
2011
8,225,599
15.4818
to
25.1330
162,926,999
3.72
1.15          to
1.85
5.42
to
6.18
2010
9,796,211
14.6711
to
23.7279
182,422,116
3.64
1.15          to
1.85
2.81
to
3.56
2009
11,173,460
14.2550
to
22.9687
201,831,819
4.99
1.15          to
1.85
2.56
to
3.31
MFK
                     
2013
24,621,249
10.1838
to
14.4102
314,785,436
1.93
0.65          to
2.55
(5.37)
to
(3.53)
2012
27,316,157
10.5561
to
15.0126
365,299,829
2.86
0.65          to
2.55
(0.35)
to
1.60
2011
28,525,248
10.3897
to
15.0863
379,366,472
3.56
0.65          to
2.55
4.39
to
6.42
2010
31,563,214
11.3128
to
14.2266
398,410,866
3.43
1.00          to
2.55
0.13
to
3.45
2009
30,492,655
11.1096
to
13.7522
374,547,282
3.88
1.00          to
2.55
1.57
to
3.19

 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA) (A Separate Account of Sun Life Assurance Company of Canada (U.S.))
 
10. FINANCIAL HIGHLIGHTS (CONTINUED)
 
   
At December 31,
   
For the years ended December 31,
   
 
Units
Unit Value
lowest to highest4
Net
Assets
Investment
Income
Ratio1
Expense Ratio
lowest to highest2
Total
Return3
 
HYS
                     
2013
3,573,022
$      17.9306
to
$ 36.2344
$       85,666,186
2.34%
1.00%    to
1.85%
4.46%
to
5.36%
2012
4,001,907
17.1657
to
34.5236
91,984,284
6.85
1.00          to
1.85
12.77
to
13.75
2011
4,271,067
15.2218
to
30.4675
87,099,806
8.60
1.00          to
1.85
2.21
to
3.10
2010
4,992,117
14.8922
to
29.6663
99,394,800
9.47
1.00          to
1.85
13.40
to
14.38
2009
5,804,644
13.1329
to
26.0372
100,842,945
10.05
1.00          to
1.85
47.58
to
48.86
MFC
                     
2013
4,518,884
10.6096
to
21.3599
87,287,128
2.08
0.65          to
2.55
3.39
to
5.41
2012
5,322,383
10.2150
to
20.3768
98,934,341
6.17
0.65          to
2.55
2.15
to
13.21
2011
4,304,415
13.1833
to
18.0081
72,995,788
8.28
1.00          to
2.55
1.22
to
2.83
2010
5,362,310
12.9647
to
17.5485
89,107,908
9.35
1.00          to
2.55
12.44
to
14.22
2009
6,543,484
11.4778
to
15.3945
95,852,231
9.78
1.00          to
2.55
45.89
to
48.21
IGS
                     
2013
2,560,681
17.2816
to
24.7827
53,514,206
1.32
1.00          to
1.85
11.81
to
12.78
2012
2,783,903
15.4481
to
22.0049
51,736,851
1.00
1.00          to
1.85
17.67
to
18.69
2011
3,253,080
13.1219
to
18.5655
51,034,318
1.09
1.00          to
1.85
(12.54)
to
(11.78)
2010
3,754,249
14.9958
to
21.0746
66,861,752
0.90
1.00          to
1.85
13.03
to
14.01
2009
4,435,831
13.2602
to
18.5107
69,156,837
1.15
1.00          to
1.85
35.51
to
36.68
IG1
                     
2013
1,744,997
11.8682
to
28.1895
25,080,479
1.11
0.65          to
2.10
11.29
to
12.94
2012
1,795,206
10.5378
to
25.0992
23,166,934
0.75
0.65          to
2.30
16.78
to
18.76
2011
2,183,236
9.0238
to
21.2527
24,149,594
0.90
0.65          to
2.30
(13.15)
to
(11.69)
2010
2,080,737
10.3907
to
24.1998
27,188,090
0.68
1.00          to
2.30
1.39
to
13.72
2009
2,056,727
9.2587
to
21.3236
24,793,740
0.75
1.00          to
2.30
34.52
to
36.31
MII
                     
2013
1,731,827
22.7506
to
37.0357
52,302,066
1.51
1.15          to
1.85
25.54
to
26.45
2012
1,880,504
18.1128
to
29.2883
44,954,741
1.55
1.15          to
1.85
14.07
to
14.90
2011
2,220,602
15.8711
to
25.5126
46,177,756
1.21
1.15          to
1.85
(3.34)
to
(2.64)
2010
2,607,501
16.4109
to
26.2685
55,418,037
1.64
1.00          to
1.85
7.09
to
8.02
2009
2,987,921
15.3166
to
24.4127
59,014,660
3.33
1.00          to
1.85
23.05
to
24.12
MI1
                     
2013
11,692,129
12.7038
to
32.8942
158,015,486
1.35
0.65          to
2.35
24.64
to
26.80
2012
13,665,036
10.1927
to
26.0852
146,947,171
1.40
0.65          to
2.35
13.19
to
15.17
2011
16,726,064
9.0046
to
22.7753
158,156,916
1.03
0.65          to
2.35
(4.08)
to
(2.41)
2010
19,684,586
9.3878
to
23.4684
192,674,447
1.41
1.15          to
2.35
0.83
to
7.53
2009
20,061,375
8.8376
to
21.8362
184,184,694
3.25
1.15          to
2.35
22.17
to
23.67

 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA) (A Separate Account of Sun Life Assurance Company of Canada (U.S.))
 
10. FINANCIAL HIGHLIGHTS (CONTINUED)
 
   
At December 31,
   
For the years ended December 31,
   
 
Units
Unit Value
lowest to highest4
Net
Assets
Investment
Income
Ratio1
Expense Ratio
lowest to highest2
Total
Return3
 
MIS
                   
2013
24,362,512
$       9.6327
to
$ 18.0749
$      365,928,868
0.71%
1.00%    to
1.85%
27.98%
to 29.09%
2012
27,774,564
7.5228
to
14.0213
323,460,136
0.41
1.00          to
1.85
15.07
to      16.07
2011
31,914,695
6.5343
to
12.0968
321,011,298
0.57
1.00          to
1.85
(1.07)
to      (0.21)
2010
37,078,363
6.6013
to
12.1391
374,470,706
0.31
1.00          to
1.85
11.06
to      12.02
2009
43,349,933
5.9408
to
10.8514
392,101,061
0.81
1.00          to
1.85
3.56
to      38.74
M1B
                   
2013
2,908,840
14.1592
to
22.7001
50,157,881
0.45
1.00          to
2.50
26.88
to      28.83
2012
3,365,777
11.0856
to
17.6557
45,257,479
0.12
1.00          to
2.55
13.86
to      15.68
2011
4,131,256
9.6664
to
15.2936
48,424,976
0.28
1.00          to
2.55
(1.99)
to      (0.43)
2010
5,348,263
9.7925
to
15.3914
63,674,137
0.10
1.00          to
2.55
9.95
to      11.70
2009
6,755,552
8.8427
to
13.8072
72,529,820
0.56
1.00          to
2.55
36.22
to      38.38
MCS
                   
2012
-
-
to
-
-
-
1.15          to
1.85
11.24
to      11.75
2011
3,961,768
4.5726
to
5.1023
19,567,887
-
1.15          to
1.85
(7.73)
to      (7.06)
2010
4,670,921
4.9504
to
5.5689
24,915,455
-
1.00          to
1.85
26.86
to      27.96
2009
4,857,853
3.8983
to
4.3522
20,289,951
0.07
1.00          to
1.85
39.68
to      40.89
MC1
                   
2012
-
-
to
-
-
-
1.15          to
2.50
10.53
to      11.50
2011
1,221,431
6.3459
to
14.4067
10,728,029
-
1.15          to
2.50
(8.62)
to      (7.36)
2010
1,566,303
6.8986
to
15.5588
15,073,695
-
1.15          to
2.50
25.67
to      27.40
2009
2,023,237
5.4533
to
12.2184
15,620,576
-
1.15          to
2.50
38.38
to      40.29
MMS
                   
2013
6,262,253
9.8057
to
13.4938
75,746,727
-
1.15          to
1.85
(1.85)
to      (1.14)
2012
6,985,878
9.9804
to
13.6827
85,734,713
-
1.15          to
1.85
(1.86)
to      (1.14)
2011
7,697,443
10.1591
to
13.8753
96,023,462
-
1.15          to
1.85
(1.85)
to      (1.13)
2010
9,022,060
10.3396
to
14.0690
113,721,713
-
1.15          to
1.85
(1.85)
to      (1.14)
2009
11,201,129
10.5238
to
14.2660
142,977,635
-
1.15          to
1.85
(1.85)
to      (1.14)
MM1
                   
2013
23,996,564
8.7127
to
10.3292
228,987,377
-
0.65          to
2.55
(2.55)
to      (0.65)
2012
28,245,079
8.9407
to
10.4335
273,733,380
-
0.65          to
2.55
(2.56)
to      (0.08)
2011
12,602,049
9.1760
to
10.5394
123,622,795
-
1.00          to
2.55
(2.54)
to      (1.00)
2010
15,867,217
9.4155
to
10.6456
158,401,447
-
1.00          to
2.55
(2.55)
to      (1.00)
2009
17,825,138
9.6619
to
10.7531
180,844,310
-
1.00          to
2.55
(2.55)
to      (1.00)
NWD
                   
2013
3,047,385
16.2186
to
33.0888
71,102,862
-
1.00          to
1.85
38.83
to      40.03
2012
3,463,596
11.6471
to
23.6629
57,662,794
-
1.00          to
1.85
18.97
to      20.00
2011
3,937,734
9.7602
to
19.7461
54,685,774
-
1.00          to
1.85
(12.03)
to     (11.27)
2010
4,376,779
11.0608
to
22.2840
69,127,087
-
1.00          to
1.85
34.06
to      35.22
2009
5,216,357
8.2255
to
16.5026
60,742,092
-
1.00          to
1.85
59.95
to      61.33
M1A
                   
2013
2,132,167
19.0015
to
32.2292
59,031,517
-
1.00          to
2.55
37.48
to      39.66
2012
2,886,757
13.7510
to
23.1232
58,254,104
-
1.00          to
2.55
17.78
to      19.66
2011
3,562,208
11.6151
to
19.3627
60,310,390
-
1.00          to
2.55
(12.83)
to     (11.44)
2010
4,156,401
13.2567
to
21.9094
80,056,321
-
1.00          to
2.55
32.75
to      34.85
2009
5,942,046
9.9357
to
16.2796
85,989,049
-
1.00          to
2.55
58.57
to      61.09
                     

 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA) (A Separate Account of Sun Life Assurance Company of Canada (U.S.))
 
10. FINANCIAL HIGHLIGHTS (CONTINUED)
 
   
At December 31,
   
For the years ended December 31,
   
 
Units
Unit Value
lowest to highest4
Net
Assets
Investment
Income
Ratio1
Expense Ratio
lowest to highest2
Total
Return3
 
RIS
                     
2013
1,850,203
$      14.5705
to
$ 27.0563
$       34,295,007
0.72%
1.15%    to
1.85%
16.81%
to
17.66%
2012
2,040,223
12.4675
to
22.9961
32,226,095
2.15
1.15          to
1.85
14.43
to
15.26
2011
2,377,975
10.8900
to
19.9511
32,506,107
1.99
1.15          to
1.85
(12.53)
to
(11.90)
2010
2,727,635
12.4438
to
22.6449
42,251,199
1.39
1.15          to
1.85
8.58
to
9.37
2009
3,126,123
11.4543
to
20.7048
44,296,413
3.19
1.15          to
1.85
28.51
to
29.45
RI1
                     
2013
3,783,762
16.6767
to
24.2405
84,627,041
0.48
1.15          to
2.55
15.75
to
17.41
2012
4,445,030
10.6668
to
20.6568
84,955,119
1.94
0.65          to
2.55
13.31
to
15.53
2011
5,379,665
12.5734
to
17.9807
90,237,045
1.71
1.15          to
2.55
(13.33)
to
(12.08)
2010
5,914,182
14.4251
to
20.4619
113,396,073
1.16
1.15          to
2.55
0.36
to
9.07
2009
6,716,956
13.3402
to
18.7700
118,436,542
3.05
1.15          to
2.55
27.17
to
29.00
SIS
                     
2013
2,007,250
17.3367
to
19.5978
37,490,369
3.02
1.15          to
1.85
(0.41)
to
0.31
2012
2,221,728
17.3996
to
19.5370
41,521,964
5.37
1.15          to
1.85
8.37
to
9.16
2011
2,148,862
16.0481
to
17.8981
36,916,404
5.73
1.15          to
1.85
2.74
to
3.48
2010
2,344,628
15.6123
to
17.2956
39,058,974
5.39
1.15          to
1.85
8.23
to
9.01
2009
2,519,695
14.4181
to
15.8656
38,612,559
10.27
1.15          to
1.85
25.32
to
26.23
SI1
                     
2013
424,124
15.7791
to
18.0225
7,225,862
2.91
1.15          to
2.10
(1.04)
to
(0.08)
2012
494,514
15.6190
to
18.0370
8,481,632
5.10
1.15          to
2.30
7.74
to
9.02
2011
636,505
14.4966
to
16.5451
10,019,560
5.49
1.15          to
2.30
1.91
to
3.11
2010
683,470
14.2245
to
16.0462
10,489,949
5.17
1.15          to
2.30
7.52
to
8.78
2009
785,460
13.2301
to
14.7509
11,155,167
10.70
1.15          to
2.30
24.32
to
25.78
TEC
                     
2013
1,991,018
7.0989
to
8.3588
15,414,639
      -
1.15          to
1.85
32.68
to
33.65
2012
2,237,212
5.3448
to
6.2552
13,006,405
      -
1.15          to
1.85
12.46
to
13.29
2011
2,826,156
4.7476
to
5.5223
14,582,085
      -
1.15          to
1.85
(0.70)
to
0.02
2010
160,111
10.4740
to
23.5955
1,776,216
      -
1.15          to
1.85
18.00
to
18.84
2009
187,530
8.8766
to
19.8656
1,773,079
      -
1.15          to
1.85
73.17
to
74.41
TE1
                     
2013
88,657
15.4047
to
35.3976
1,488,775
      -
1.15          to
1.85
32.23
to
33.17
2012
97,822
11.6499
to
26.5938
1,233,938
      -
1.15          to
1.85
12.14
to
12.94
2011
130,600
10.3887
to
23.5580
1,456,301
      -
1.15          to
1.85
(0.81)
to
(0.11)
2010
160,111
10.4740
to
23.5955
1,776,216
      -
1.15          to
1.85
18.00
to
18.84
2009
187,530
8.8766
to
19.8656
1,773,079
      -
1.15          to
1.85
73.17
to
74.41

 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA) (A Separate Account of Sun Life Assurance Company of Canada (U.S.))
 
10. FINANCIAL HIGHLIGHTS (CONTINUED)
 
   
At December 31,
   
For the years ended December 31,
   
 
Units
Unit Value
lowest to highest4
Net
Assets
Investment
Income
Ratio1
Expense Ratio
lowest to highest2
Total
Return3
 
TRS
-
$          -
to
$        -
$              -
3.92%
 1.15%  to
1.85%
9.13%
to
9.62%
2013
2012
17,540,875
14.4819
to
37.7417
436,066,585
2.59
1.15
to
1.85
9.27
to
10.07
2011
19,776,275
13.2398
to
34.3749
447,577,850
2.66
1.15
to
1.85
0.04
to
0.77
2010
22,491,979
13.2205
to
34.1964
506,544,820
2.81
1.15
to
1.85
7.93
to
8.72
2009
25,748,066
12.2364
to
31.5325
535,058,547
3.94
1.15
to
1.85
15.91
to
16.75
MFJ
                       
2013
-
-
to
-
-
3.51
0.65
to
2.55
8.50
to
9.82
2012
38,375,398
11.5397
to
16.5688
595,106,199
2.31
0.65
to
2.55
8.17
to
10.29
2011
45,326,523
10.4630
to
15.1069
643,062,830
2.38
0.65
to
2.55
(0.93)
to
1.00
2010
51,225,040
11.6925
to
15.0409
724,908,318
2.57
1.00
to
2.55
1.01
to
8.59
2009
56,778,902
10.8771
to
13.8787
743,138,623
3.49
1.00
to
2.55
14.80
to
16.63
UTS
                       
2013
4,065,665
22.3402
to
72.3830
158,211,015
2.75
1.15
to
1.85
18.38
to
19.24
2012
4,597,504
18.8620
to
60.8539
150,920,550
4.62
1.15
to
1.85
12.03
to
12.85
2011
5,272,233
16.8280
to
54.0596
153,739,354
3.42
1.15
to
1.85
5.14
to
5.91
2010
6,010,069
15.9966
to
51.1708
165,648,150
3.28
1.15
to
1.85
11.80
to
12.61
2009
7,070,735
14.3014
to
45.5539
173,124,755
5.05
1.15
to
1.85
30.91
to
31.86
MFE
                       
2013
2,522,048
26.2756
to
47.2413
106,401,617
2.53
1.00
to
2.30
17.53
to
19.09
2012
2,966,844
12.6267
to
39.7482
106,106,149
4.40
0.65
to
2.35
11.23
to
13.18
2011
3,652,256
11.1565
to
35.3163
116,649,151
3.23
0.65
to
2.35
4.33
to
6.15
2010
3,706,532
18.9809
to
33.4566
111,476,038
3.08
1.00
to
2.35
0.98
to
12.47
2009
3,827,620
17.0227
to
29.8078
101,639,771
4.55
1.00
to
2.35
29.97
to
31.77
MVS
                       
2013
4,956,976
19.7881
to
28.7356
127,041,369
2.90
1.15
to
1.85
33.35
to
34.32
2012
5,477,388
14.8015
to
21.3937
104,795,200
1.84
1.15
to
1.85
14.06
to
14.89
2011
6,332,031
12.9442
to
18.6211
105,498,403
1.62
1.15
to
1.85
(1.85)
to
(1.13)
2010
7,251,195
13.1542
to
18.8348
122,377,852
1.43
1.15
to
1.85
9.45
to
10.24
2009
8,202,606
11.9883
to
17.0851
125,753,509
1.84
1.15
to
1.85
18.26
to
19.12
MV1
                       
2013
8,175,633
16.4495
to
25.7119
190,701,383
2.62
0.65
to
2.50
32.09
to
34.60
2012
10,162,634
12.2213
to
19.2092
178,140,581
1.58
0.65
to
2.50
13.06
to
15.21
2011
12,369,770
10.6076
to
16.7661
189,800,608
1.36
0.65
to
2.50
(2.78)
to
(0.93)
2010
14,050,600
12.4122
to
17.0183
219,524,012
1.21
1.00
to
2.50
1.46
to
10.11
2009
15,232,380
11.3930
to
15.4866
216,431,676
1.61
1.00
to
2.50
17.29
to
19.10

 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA) (A Separate Account of Sun Life Assurance Company of Canada (U.S.))
 
10. FINANCIAL HIGHLIGHTS (CONTINUED)
 
   
At December 31,
   
For the years ended December 31,
 
 
Units
Unit Value
lowest to highest4
Net
Assets
Investment
Income
Ratio1
Expense Ratio
lowest to highest2
Total
Return3
VSC
                   
2013
7,735,586
$      13.9780
to
$ 17.3375
$      113,424,430
1.43%
0.65%    to
2.35%
41.92%
to 44.39%
2012
10,479,693
9.7321
to
12.0077
107,498,309
0.35
0.65          to
2.55
11.46
to      13.65
2011
12,024,401
8.8182
to
10.5658
109,689,042
0.23
0.65          to
2.35
(7.32)
to      (5.71)
2010
12,976,175
9.5147
to
9.9126
126,734,777
0.12
1.30          to
2.35
1.49
to      22.46
2009
15,857,749
7.8530
to
8.0945
126,954,591
0.06
1.30          to
2.35
33.29
to      34.72
6XX
                   
2013
58,713,818
12.0067
to
14.4817
838,071,596
2.70
0.65          to
2.55
6.72
to       8.80
2012
68,401,135
11.0351
to
13.4043
905,908,146
2.64
0.65          to
2.55
5.93
to       8.01
2011
71,730,436
10.2172
to
12.4992
888,251,353
1.27
0.65          to
2.55
(1.93)
to      (0.02)
2010
56,794,830
12.3121
to
12.5907
710,247,154
1.32
1.35          to
2.35
0.66
to       8.16
2009
29,850,497
11.4993
to
11.6404
346,182,096
0.04
1.35          to
2.35
16.42
to      17.61
SC3
                   
2013
162,229
17.2957
to
22.0560
3,387,519
5.26
1.35          to
2.55
2.31
to       3.57
2012
187,171
16.9055
to
21.3719
3,725,321
1.04
1.35          to
2.55
26.70
to      28.27
2011
253,031
13.3426
to
16.7212
3,946,846
6.77
1.35          to
2.55
(9.94)
to      (8.84)
2010
320,946
14.8160
to
18.4073
5,520,469
11.07
1.35          to
2.55
12.34
to      13.73
2009
423,229
13.1880
to
16.2432
6,441,422
3.54
1.35          to
2.55
26.77
to      28.33
SRE
                   
2013
7,368,766
12.3309
to
14.9157
106,126,893
4.54
0.65          to
2.55
2.09
to       4.08
2012
7,508,053
11.8471
to
14.4322
105,024,241
0.70
0.65          to
2.55
26.25
to      28.72
2011
9,929,655
9.2038
to
11.2921
108,995,302
6.03
0.65          to
2.55
(10.09)
to      (8.34)
2010
10,929,593
11.3996
to
12.4068
132,272,111
10.38
1.30          to
2.55
2.60
to      13.45
2009
12,079,423
10.1769
to
10.9415
129,349,823
3.06
1.30          to
2.55
26.51
to      28.14
8XX
                   
2013
32,241,288
13.6785
to
18.1674
576,399,130
2.32
0.65          to
2.30
19.57
to      21.59
2012
34,834,038
11.2501
to
15.0481
517,571,863
2.34
0.65          to
2.30
9.80
to      11.66
2011
37,705,543
10.0750
to
13.5723
506,828,400
1.57
0.65          to
2.30
(6.11)
to      (4.53)
2010
38,504,662
14.0152
to
14.3163
547,564,582
1.34
1.35          to
2.30
1.11
to      12.08
2009
33,055,520
12.6336
to
12.7730
420,654,948
0.03
1.35          to
2.25
23.90
to      25.04
5XX
                   
2013
18,852,264
10.7616
to
12.3808
229,948,348
-
0.65          to
2.35
(7.51)
to      (5.90)
2012
21,679,451
11.4363
to
13.2504
283,700,615
0.79
0.65          to
2.35
4.88
to       6.72
2011
21,180,067
10.7163
to
12.5047
262,236,569
2.01
0.65          to
2.30
9.16
to      10.99
2010
13,213,863
11.0947
to
11.3458
148,879,348
0.99
1.35          to
2.35
0.33
to       3.49
2009
6,788,906
10.8299
to
10.9627
74,125,443
1.73
1.35          to
2.35
5.81
to       6.89

 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA) (A Separate Account of Sun Life Assurance Company of Canada (U.S.))
 
10. FINANCIAL HIGHLIGHTS (CONTINUED)
 
SDC
 
At December 31,
   
For the years ended December 31,
   
Units
Unit Value
lowest to highest4
Net
Assets
Investment
Income
Ratio1
Expense Ratio
lowest to highest2
Total
Return3
 
                     
2013
43,289,725
$       9.7617
to
$ 10.5126
$      444,170,343
0.13%
1.30%    to
2.55%
(1.86%)
to
(0.60%)
2012
45,178,189
9.9464
to
10.5758
468,269,992
1.15
1.30          to
2.55
(0.38)
to
0.91
2011
50,037,729
9.9840
to
10.4806
516,137,066
1.18
1.30          to
2.55
(2.03)
to
(0.78)
2010
61,117,799
10.1910
to
10.5627
638,001,577
1.51
1.30          to
2.55
(0.20)
to
1.08
2009
64,647,414
10.2112
to
10.4496
670,446,089
1.95
1.30          to
2.55
1.13
to
2.43
S15
                     
2013
21,172,711
9.8761
to
10.3242
214,945,968
-
0.65          to
2.10
(1.63)
to
(0.17)
2012
16,475,522
10.0204
to
10.4153
169,107,917
0.92
0.65          to
2.10
(0.15)
to
1.34
2011
17,502,438
9.8879
to
10.3509
178,971,071
0.93
0.65          to
2.10
(1.92)
to
(0.48)
2010
13,481,729
10.2516
to
10.4739
139,938,767
1.22
1.35          to
2.10
0.01
to
0.78
2009
9,776,996
10.2503
to
10.3929
101,017,700
1.78
1.35          to
2.10
1.35
to
2.12
SGC
                     
2013
3,123,825
15.4055
to
16.5907
50,543,702
1.14
1.30          to
2.55
33.42
to
35.13
2012
4,163,118
11.5464
to
12.2773
50,057,208
1.03
1.30          to
2.55
13.40
to
14.86
2011
4,999,791
10.1822
to
10.6890
52,578,640
1.02
1.30          to
2.55
(0.14)
to
1.14
2010
6,122,866
10.1961
to
10.5682
63,936,768
-
1.30          to
2.55
19.02
to
20.54
2009
7,455,297
8.5669
to
8.7673
64,864,952
1.22
1.30          to
2.55
22.48
to
24.05
S13
                     
2013
2,245,602
15.5745
to
17.3463
35,968,593
0.96
0.65          to
2.10
33.66
to
35.64
2012
2,464,431
11.6525
to
12.7888
29,350,708
0.82
0.65          to
2.10
13.57
to
15.26
2011
2,669,109
10.2605
to
11.0959
27,863,552
0.85
0.65          to
2.10
0.19
to
1.67
2010
2,387,778
10.2409
to
10.4631
24,767,620
-
1.35          to
2.10
1.52
to
19.98
2009
2,035,236
8.6010
to
8.7209
17,646,515
1.35
1.35          to
2.10
22.75
to
23.69
7XX
                     
2013
126,127,582
12.8664
to
16.4701
2,046,366,884
2.37
0.65          to
2.35
13.77
to
15.75
2012
130,451,076
11.1157
to
14.3300
1,847,638,432
2.34
0.65          to
2.35
7.79
to
9.67
2011
132,031,901
10.1353
to
13.1593
1,721,386,983
1.19
0.65          to
2.35
(4.11)
to
(2.45)
2010
100,466,095
13.2989
to
13.5846
1,355,951,680
0.99
1.35          to
2.30
0.96
to
10.31
2009
43,431,451
12.1726
to
12.3144
532,922,757
0.03
1.35          to
2.30
20.80
to
21.98
2XX
                     
2013
528,380
15.8667
to
19.7365
10,256,649
0.87
0.65          to
2.30
36.47
to
38.77
2012
774,792
11.4339
to
14.3234
10,950,659
-
0.65          to
2.10
7.29
to
8.88
2011
837,562
10.5009
to
13.2484
10,975,717
0.43
0.65          to
2.10
(8.46)
to
(7.11)
2010
809,572
14.1248
to
14.3637
11,548,624
-
1.35          to
2.10
1.08
to
19.70
2009
525,999
11.8545
to
12.0001
6,287,736
0.46
1.35          to
2.35
27.01
to
28.31

 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA) (A Separate Account of Sun Life Assurance Company of Canada (U.S.))
 
10. FINANCIAL HIGHLIGHTS (CONTINUED)
 
   
At December 31,
   
For the years ended December 31,
   
 
Units
Unit Value
lowest to highest4
Net
Assets
Investment
Income
Ratio1
Expense Ratio
lowest to highest2
Total
Return3
 
AAW
                     
2013
141,552
$      14.8423
to
$ 15.1032
$        2,123,254
0.10%
1.35%    to
2.10%
44.62%
to 45.73%
2012
66,327
10.2694
to
10.3639
684,152
-
1.35          to
2.05
11.70
to
12.51
2011
2,558
9.2014
to
9.2119
23,549
-
1.35          to
1.75
(7.99)
to
(7.88)
VKM
                     
2013
738,540
16.1944
to
16.9294
12,247,977
0.22
1.35          to
2.10
34.60
to
35.63
2012
1,086,854
12.0317
to
12.4822
13,335,284
-
1.35          to
2.10
6.20
to
7.02
2011
1,270,344
11.2415
to
11.6637
14,623,674
0.23
1.35          to
2.30
(9.31)
to
(8.43)
2010
1,156,849
12.4665
to
12.7369
14,589,309
-
1.35          to
2.10
0.48
to
30.49
2009
926,271
9.6270
to
9.7612
8,989,304
-
1.35          to
2.10
54.06
to
55.24
OCA
                     
2013
1,235,424
15.0291
to
20.7651
24,194,235
0.75
0.65          to
2.35
26.39
to
28.59
2012
1,492,800
11.8246
to
16.2632
22,858,138
0.40
0.65          to
2.55
10.89
to
13.06
2011
1,706,163
10.5815
to
14.4868
23,384,048
0.11
0.65          to
2.55
(3.88)
to
(2.01)
2010
1,870,731
10.9252
to
14.8892
26,312,656
-
1.30          to
2.55
0.50
to
7.73
2009
2,138,568
10.0820
to
13.8285
27,945,879
0.01
1.30          to
2.55
40.48
to
42.28
OBV
                     
2013
1,457,258
8.8469
to
9.3527
13,279,282
2.13
1.30          to
2.10
10.46
to
11.37
2012
1,556,840
8.0088
to
8.3981
12,783,812
1.20
1.30          to
2.10
9.74
to
10.64
2011
1,674,843
7.2981
to
7.5719
12,476,713
2.09
1.35          to
2.10
(1.72)
to
(0.97)
2010
1,744,434
7.4258
to
7.6460
13,178,352
1.20
1.35          to
2.10
10.31
to
11.16
2009
1,891,259
6.7316
to
6.8786
12,895,821
0.00
1.35          to
2.10
19.05
to
19.96
OGG
                     
2013
1,563,988
14.6968
to
21.0555
31,659,251
1.15
0.65          to
2.25
24.14
to
26.17
2012
1,669,066
11.6489
to
16.7986
27,011,227
1.95
0.65          to
2.30
18.16
to
20.16
2011
2,105,725
9.6945
to
14.0727
28,580,499
1.05
0.65          to
2.30
(10.63)
to
(9.12)
2010
2,177,497
14.4679
to
15.5868
32,916,492
1.21
1.30          to
2.30
0.50
to
14.20
2009
2,283,843
12.7984
to
13.6487
30,325,737
1.94
1.30          to
2.30
36.15
to
37.54
OMG
                     
2013
17,117,234
16.1184
to
21.1921
341,777,797
0.86
1.30          to
2.55
28.09
to
29.73
2012
22,420,942
12.5260
to
16.3438
346,551,891
0.65
1.30          to
2.55
13.62
to
15.09
2011
27,952,286
10.9734
to
14.2086
377,082,799
0.60
1.30          to
2.55
(2.85)
to
(1.61)
2010
34,219,506
11.2437
to
14.4482
470,911,158
0.93
1.30          to
2.55
12.87
to
14.32
2009
40,927,550
9.9155
to
12.6447
494,644,467
1.66
1.30          to
2.55
24.73
to
26.33
OMS
                     
2013
295,912
22.4228
to
31.3754
8,773,000
0.70
1.30          to
2.25
37.46
to
38.80
2012
385,170
16.2044
to
22.6169
8,255,859
0.32
1.30          to
2.30
14.95
to
16.13
2011
448,379
13.7877
to
19.4849
8,319,941
0.42
1.30          to
2.30
(4.62)
to
(3.65)
2010
596,815
14.3827
to
20.2332
11,503,067
0.41
1.30          to
2.30
20.23
to
21.46
2009
678,635
11.9020
to
16.6671
10,851,459
0.65
1.30          to
2.30
33.73
to
35.10

 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA) (A Separate Account of Sun Life Assurance Company of Canada (U.S.))
 
10. FINANCIAL HIGHLIGHTS (CONTINUED)
 
   
At December 31,
   
For the years ended December 31,
   
 
Units
Unit Value
lowest to highest4
Net
Assets
Investment
Income
Ratio1
Expense Ratio
lowest to highest2
Total
Return3
 
AAQ
                     
2013
2,964
$      12.6629
to
$ 12.8855
$           37,848
1.74%
   1.35%    to
2.10%
16.69%
to
17.59%
2012
3,537
10.9583
to
10.9583
38,756
0.47
1.35          to
1.35
8.28
to
8.28
2011
7,060
10.1102
to
10.1202
71,413
     -
1.35          to
1.70
1.10
to
1.20
PRA
                     
2013
2,482,202
13.0602
to
14.1349
34,072,842
4.90
1.35          to
2.30
(2.03)
to
(1.08)
2012
1,672,848
13.0886
to
14.2893
23,316,562
6.80
1.35          to
2.55
12.00
to
13.39
2011
447,883
11.8723
to
12.6023
5,491,304
6.94
1.35          to
2.30
(0.38)
to
0.58
2010
457,711
11.9181
to
12.5294
5,600,897
7.57
1.35          to
2.30
10.49
to
11.57
2009
380,342
10.7865
to
11.2306
4,188,531
7.02
1.35          to
2.30
18.78
to
19.93
AAP
                     
2013
2,162,181
10.9857
to
11.3609
24,033,787
4.55
0.65          to
2.10
(1.99)
to
(0.54)
2012
1,970,809
11.2091
to
11.4228
22,244,284
5.61
0.65          to
2.10
12.38
to
14.06
2011
763,861
9.9739
to
10.0150
7,630,325
6.79
0.65          to
2.10
(0.26)
to
0.15
BBD
                     
2013
98,183
7.8180
to
8.0757
777,700
1.66
0.65          to
2.05
(16.46)
to
(15.27)
2012
123,399
9.3588
to
9.5310
1,163,627
2.52
0.65          to
2.05
2.96
to
4.44
2011
62,501
9.0900
to
9.1261
569,007
6.68
0.65          to
2.05
(9.10)
to
(8.74)
PCR
                     
2013
6,478,457
8.3575
to
9.0834
57,375,797
1.73
0.65          to
2.35
(16.71)
to
(15.25)
2012
6,600,955
10.0337
to
10.8339
69,673,586
2.78
0.65          to
2.35
2.90
to
4.70
2011
7,266,721
9.7508
to
10.4158
73,969,457
14.31
0.65          to
2.35
(9.73)
to
(8.16)
2010
6,649,829
10.8013
to
11.4155
74,448,884
15.26
1.30          to
2.35
4.75
to
22.91
2009
6,636,017
8.8825
to
9.2879
60,651,115
6.19
1.30          to
2.35
38.20
to
39.69
PMB
                     
2013
807,165
11.0524
to
27.6386
21,005,673
5.00
0.65          to
2.55
(9.34)
to
(7.57)
2012
954,608
11.9580
to
30.1155
27,021,992
4.93
0.65          to
2.30
15.18
to
17.13
2011
1,020,777
10.2089
to
25.8937
25,025,685
5.32
0.65          to
2.30
3.89
to
5.64
2010
1,018,985
15.5140
to
24.6843
24,113,288
4.90
1.30          to
2.30
(0.27)
to
10.71
2009
763,094
14.1130
to
22.3073
16,175,720
5.93
1.30          to
2.30
27.59
to
28.89

 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA) (A Separate Account of Sun Life Assurance Company of Canada (U.S.))
 
10. FINANCIAL HIGHLIGHTS (CONTINUED)
 
   
At December 31,
   
For the years ended December 31,
   
 
Units
Unit Value
lowest to highest4
Net
Assets
Investment
Income
Ratio1
Expense Ratio
lowest to highest2
Total
Return3
 
BBE
                     
2013
50,359
$      10.5545
to
$ 10.7402
$          537,988
4.90%
  1.35%     to
2.10%
(9.01%)
to
(8.32%)
2012
55,383
11.6001
to
11.7144
647,237
4.86
1.35          to
2.10
15.30
to
16.19
2011
41,476
10.0609
to
10.0824
417,873
0.68
1.35          to
2.10
0.61
to
0.82
6TT
                     
2013
72,498,400
9.8283
to
11.0842
794,289,727
3.11
0.65          to
2.25
(9.98)
to
(8.51)
2012
90,852,198
10.7422
to
12.2009
1,098,153,881
3.19
0.65          to
2.25
6.31
to
8.06
2011
92,518,029
9.9407
to
11.3711
1,044,595,551
1.81
0.65          to
2.25
(4.00)
to
(2.44)
2010
52,768,623
11.5909
to
11.7375
616,967,109
4.55
1.35          to
2.25
1.27
to
9.84
2009
2,068,926
10.6560
to
10.6863
22,080,454
1.16
1.35          to
2.10
6.56
to
6.86
PRR
                     
2013
5,155,938
13.0181
to
16.0778
79,426,344
1.64
1.30          to
2.35
(11.35)
to
(10.40)
2012
5,645,895
14.6029
to
17.9528
97,276,054
1.08
1.30          to
2.35
6.19
to
7.34
2011
6,421,218
13.6738
to
16.7335
103,470,424
2.14
1.30          to
2.35
9.06
to
10.23
2010
8,101,705
12.4675
to
15.1880
118,890,037
1.45
1.30          to
2.35
5.57
to
6.71
2009
8,961,667
11.6153
to
14.2408
123,731,443
3.07
1.30          to
2.35
15.61
to
16.86
PTR
                     
2013
19,151,407
13.4254
to
16.4258
302,435,033
2.20
1.30          to
2.55
(4.46)
to
(3.24)
2012
20,657,880
14.0524
to
16.9837
338,090,727
2.57
1.30          to
2.55
6.79
to
8.17
2011
24,120,523
13.1584
to
15.7088
366,194,416
2.61
1.30          to
2.55
0.98
to
2.27
2010
28,187,212
13.0311
to
15.3681
420,201,410
2.41
1.30          to
2.55
5.36
to
6.71
2009
29,012,388
12.3681
to
14.4089
406,911,559
5.19
1.30          to
2.55
11.16
to
12.59
AAR
                     
2013
1,907,591
10.4357
to
10.7922
20,126,427
          -
0.65          to
2.10
1.90
to
3.40
2012
687,110
10.2416
to
10.3425
7,077,333
-
1.35          to
2.10
2.17
to
2.95
2011
222,829
10.0243
to
10.0457
2,236,443
-
1.35          to
2.10
0.24
to
0.46
AAS
                     
2013
635,744
16.0356
to
16.4901
10,403,998
1.27
1.35          to
2.55
29.04
to
30.63
2012
212,723
12.4677
to
12.6236
2,672,455
1.41
1.35          to
2.30
16.55
to
17.69
2011
24,071
10.7052
to
10.7266
257,899
-
1.35          to
2.05
7.05
to
7.27
3XX
                     
2012
-
-
to
-
-
6.91
1.35          to
2.10
8.59
to
9.37
2011
358,397
9.7487
to
9.9895
3,542,567
2.32
1.35          to
2.10
(18.21)
to
(17.59)
2010
242,013
11.9196
to
12.1212
2,915,660
0.01
1.35          to
2.10
2.33
to
3.11
2009
135,214
11.6483
to
11.7554
1,584,405
4.28
1.35          to
2.10
26.54
to
27.51

 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA) (A Separate Account of Sun Life Assurance Company of Canada (U.S.))
 
10. FINANCIAL HIGHLIGHTS (CONTINUED)
 
   
At December 31,
   
For the years ended December 31,
   
 
Units
Unit Value
lowest to highest4
Net
Assets
Investment
Income
Ratio1
Expense Ratio
lowest to highest2
Total
Return3
 
SBI
-
$          -
to
$        -
$              -
5.92%
  0.65% to
   2.30%
11.03%
to
12.79%
2012
2011
492,505
8.5574
to
8.7044
4,250,461
0.02
0.65
to
     2.25
(14.66)
to
(13.26)
2010
107
10.0305
to
10.0305
1,073
-
1.65
to
-
0.30
to
-
SSA
                       
2012
-
-
to
-
-
3.25
0.65
to
2.30
10.93
to
12.69
2011
2,632,636
9.3802
to
10.9384
26,193,175
0.72
0.65
to
2.30
(1.15)
to
0.52
2010
1,555,115
9.4891
to
10.7582
15,434,805
-
1.30
to
2.30
1.39
to
14.94
2009
1,251,695
8.3399
to
9.3596
10,849,906
0.97
1.30
to
2.30
18.07
to
19.28
SVV
                       
2012
-
-
to
-
-
1.24
0.65
to
2.30
8.14
to
9.86
2011
25,668,113
8.2963
to
10.3275
219,794,746
0.65
0.65
to
2.30
(6.22)
to
(4.64)
2010
27,094,644
8.8470
to
9.1989
245,751,191
0.24
1.30
to
2.30
1.24
to
11.21
2009
26,677,319
8.0247
to
8.2714
218,376,327
0.18
1.30
to
2.35
25.99
to
27.34
1XX
                       
2012
-
-
to
-
-
-
0.01
to
0.02
11.71
to
13.48
2011
860,442
11.0483
to
14.1528
12,044,289
-
0.65
to
2.25
(3.42)
to
(1.84)
2010
690,018
14.2309
to
14.5204
9,947,413
-
1.35
to
2.25
1.09
to
24.16
2009
505,244
11.5527
to
11.6946
5,885,588
-
1.35
to
2.35
28.30
to
29.61
SLC
                       
2012
-
-
to
-
-
1.58
1.30
to
2.55
8.18
to
9.49
2011
32,153,502
8.6350
to
9.0649
286,911,643
0.63
1.30
to
2.55
(8.54)
to
(7.37)
2010
37,839,785
9.4413
to
9.7860
365,984,873
-
1.30
to
2.55
14.20
to
15.66
2009
44,880,071
8.2672
to
8.4607
376,858,237
0.68
1.30
to
2.55
14.84
to
16.31
S12
                       
2012
-
-
to
-
-
1.14
1.35
to
2.10
8.36
to
9.14
2011
1,500,444
8.6961
to
8.9528
13,280,139
0.41
1.35
to
2.10
(8.36)
to
(7.66)
2010
1,310,468
9.4899
to
9.6958
12,595,699
-
1.35
to
2.10
1.96
to
15.36
2009
1,035,946
8.2892
to
8.4047
8,658,196
0.53
1.35
to
2.10
14.94
to
15.82
S14
                       
2012
-
-
to
-
-
6.20
0.65
to
2.35
10.57
to
12.38
2011
2,326,972
10.3769
to
12.5235
28,641,325
7.11
0.65
to
2.35
1.58
to
3.35
2010
2,507,888
11.8365
to
12.1976
30,197,858
7.11
1.30
to
2.35
0.56
to
10.96
2009
2,122,320
10.7816
to
10.9924
23,125,087
8.28
1.30
to
2.35
27.37
to
28.74
4XX
                       
2012
-
-
to
-
-
2.91
0.65
to
2.55
5.28
to
7.21
2011
53,824,196
10.0220
to
12.2353
651,823,271
2.46
0.65
to
2.25
1.03
to
2.68
2010
37,284,808
11.7482
to
12.0005
444,483,583
1.98
1.35
to
2.30
0.47
to
5.83
2009
19,960,844
11.2092
to
11.3398
225,495,970
2.17
1.35
to
2.30
6.13
to
7.16

 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA) (A Separate Account of Sun Life Assurance Company of Canada (U.S.))
 
10. FINANCIAL HIGHLIGHTS (CONTINUED)
 
   
At December 31,
     
For the years ended December 31,
   
 
Units
Unit Value
lowest to highest4
 
Net
Assets
Investment
Income
Ratio1
Expense Ratio
lowest to highest2
Total
Return3
 
S16
                       
2012
-
$          -
to
$        -
$
-
0.08%
  1.35%     to
2.35%
14.74%
to
15.84%
2011
3,190,123
10.1503
to
10.5521
 
33,258,401
-
1.35          to
2.35
(10.19)
to
(9.27)
2010
3,345,323
11.3017
to
11.6302
 
38,555,488
-
1.35          to
2.35
1.63
to
21.13
2009
4,026,257
9.4258
to
9.6104
 
38,434,290
0.03
1.30          to
2.35
26.90
to
28.27
LGF
                       
2012
-
-
to
-
 
-
     -
0.01          to
0.02
9.67
to
10.46
2011
663,785
8.1864
to
8.5485
 
5,569,702
0.07
1.35          to
2.10
(6.79)
to
(6.08)
2010
569,042
8.7830
to
9.1019
 
5,093,897
0.05
1.35          to
2.10
0.85
to
17.59
2009
455,382
7.5264
to
7.7405
 
3,477,756
0.23
1.35          to
2.10
34.20
to
35.23
IGB
                       
2012
-
-
to
-
 
-
2.16
0.65          to
2.55
3.39
to
5.29
2011
13,453,290
10.4456
to
12.6212
 
166,269,297
3.37
0.65          to
2.35
4.28
to
6.09
2010
10,165,312
11.1662
to
11.9811
 
119,314,751
3.25
1.30          to
2.35
0.18
to
6.11
2009
5,428,936
10.6366
to
11.2972
 
60,077,481
4.11
1.30          to
2.35
17.79
to
19.05
CMM
                       
2012
-
-
to
-
 
-
     -
0.65          to
2.30
(2.16)
to
(0.61)
2011
14,892,335
9.2761
to
10.3511
 
150,078,153
     -
0.65          to
2.30
(2.29)
to
(0.65)
2010
11,093,798
9.4938
to
10.4923
 
113,075,492
-
1.30          to
2.30
(2.30)
to
(0.07)
2009
10,657,224
9.7534
to
10.6359
 
110,636,803
0.01
1.30          to
2.10
(2.09)
to
(1.29)

 
 

 

SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F (REGATTA) (A Separate Account of Sun Life Assurance Company of Canada (U.S.))
 
10. FINANCIAL HIGHLIGHTS (CONTINUED)
 
   
At December 31,
   
For the years ended December 31,
   
 
Units
Unit Value
lowest to highest4
Net
Assets
Investment
Income
Ratio1
Expense Ratio
lowest to highest2
Total
Return3
 
WTF
                     
2013
28,431
$      17.9073
to
$ 19.0638
$          526,566
0.29%
1.35% to
2.05%
31.82%
to 32.76%
2012
37,543
13.5845
to
14.3593
525,113
0.37
1.35          to
2.05
16.02
to
16.85
2011
56,247
11.7091
to
12.2887
676,190
2.12
1.35          to
2.05
(19.37)
to
(18.79)
2010
62,686
14.3506
to
15.1320
930,311
0.57
1.35          to
2.25
23.72
to
24.86
2009
93,745
11.5992
to
12.1194
1,117,650
-
1.35          to
2.25
62.45
to
63.94
USC
                     
2013
4,578
17.4222
to
18.0578
80,974
0.14
1.65          to
2.05
31.01
to
31.55
2012
4,820
13.2981
to
13.7272
64,970
0.32
1.65          to
2.05
17.54
to
18.03
2011
4,964
11.3133
to
11.6306
56,842
-
1.65          to
2.05
(5.47)
to
(5.08)
2010
4,696
11.9677
to
12.2534
56,768
-
1.65          to
2.05
20.83
to
21.32
2009
5,209
9.9049
to
10.1001
52,040
-
1.65          to
2.05
39.31
to
39.88
AAL
                     
2013
3,349,146
10.2303
to
10.7712
35,196,445
1.25
0.65          to
2.55
(4.92)
to
(3.07)
2012
2,389,154
10.8060
to
11.1121
26,148,333
1.41
0.65          to
2.30
3.64
to
5.40
2011
1,392,144
10.4297
to
10.5425
14,584,779
1.53
0.65          to
2.25
4.30
to
5.43

 
 
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, and distribution 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, including changes in the value of the underlying fund, and expenses assessed through the reduction of units. 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.
 
4 The unit values are not a direct calculation of net assets over the number of units allocated to the Sub-Account.
 

 

 

 

 

 

 

 



 
 

 

PART C
OTHER INFORMATION

Item 24. FINANCIAL STATEMENTS AND EXHIBITS

 
(a)
The following Financial Statements are included in the Registration Statement:
 
 
A.
Condensed Financial Information - Accumulation Unit Values (Part A)
 
 
B.
Financial Statements of the Depositor (Part B)
 
 
1.
Independent Auditors’ Report;
 
2.
Statutory-Basis Statements of Admitted Assets, Liabilities, and Capital Stock and Surplus as of December 31, 2013 and 2012;
 
3.
Statutory-Basis Statements of Operations for the Years Ended December 31, 2013, 2012 and 2011;
 
4.
Statutory-Basis Statements of Changes in Capital Stock and Surplus for the Years Ended December 31, 2013, 2012 and 2011;
 
5.
Statutory-Basis Statements of Cash Flows for the Years Ended December 31, 2013, 2012 and 2011; and
 
6.
Notes to Statutory-Basis Financial Statements.
 
   
C.
Financial Statements of the Registrant (Part B)
 
   
1.
Report of Independent Registered Public Accounting Firm;
   
2.
Statement of Assets and Liabilities, December 31, 2013;
   
3.
Statement of Operations, Year Ended December 31, 2013;
   
4.
Statements of Changes in Net Assets, Years Ended December 31, 2013 and December 31, 2012; and
   
5.
Notes to Financial Statements.
 
 
(b)
The following Exhibits are incorporated in the Registration Statement by reference unless otherwise indicated:
 
 
(1)
Resolution of Board of Directors of the Depositor dated December 3, 1985 authorizing the establishment of the Registrant (Incorporated herein by reference to the Registration Statement on Form N-4, File No. 333-37907, filed on October 14, 1997);
     
 
(2)
Not Applicable;
     
 
(3)(a)
Distribution Agreement between the depositor, Massachusetts Financial Services Company and Clarendon Insurance Agency, Inc. (Incorporated herein by reference to Pre-Effective Amendment No. 1 to the Registration Statement on Form N-4, File No. 333-37907, filed on January 16, 1998);
     
 
(3)(b)(i)
Principal Underwriter’s Agreement by and between Sun Life Assurance Company of Canada (U.S.) and Clarendon Insurance Agency, Inc. (Incorporated herein by reference to Post-Effective Amendment No. 16 to the Registration Statement on Form N-4, File No. 333-83364, filed on or about April 27, 2009);
     
 
(3)(b)(ii)
Amendment No. 1 to Principal Underwriter’s Agreement by and between Sun Life Assurance Company of Canada (U.S.) and Clarendon Insurance Agency, Inc. (Incorporated herein by reference to Post-Effective Amendment No. 16 to the Registration Statement on Form N-4, File No. 333-83364, filed on or about April 27, 2009);
     
 
(3)(b)(iii)
Amendment No. 2 to Principal Underwriter’s Agreement by and between Sun Life Assurance Company of Canada (U.S.) and Clarendon Insurance Agency, Inc. (Incorporated herein by reference to Post-Effective Amendment No. 12 to the Registration Statement of Sun Life of Canada (U.S.) Variable Account I on Form N-6, File No. 333-100829, filed on April 30, 2009);
     
 
(3)(b)(iv)
Amendment No. 3 to Principal Underwriter’s Agreement by and between Sun Life Assurance Company of Canada (U.S.) and Clarendon Insurance Agency, Inc. (Incorporated herein by reference to Post-Effective Amendment No. 12 to the Registration Statement of Sun Life of Canada (U.S.) Variable Account I on Form N-6, File No. 333-100829, filed on April 30, 2009);
     
 
(3)(c)(i)
Sales Operations and General Agent Agreement (Incorporated herein by reference to Pre-Effective Amendment No. 1 to the Registration Statement on Form N-4, File No. 333-37907, filed on January 16, 1998);
     
 
(3)(c)(ii)
Broker-Dealer Supervisory and Service Agreement (Incorporated herein by reference to Pre-Effective Amendment No. 1 to the Registration Statement on Form N-4, File No. 333-37907, filed on January 16, 1998);
     
 
(3)(c)(iii)
General Agent Agreement (Incorporated herein by reference to Pre-Effective Amendment No. 1 to the Registration Statement on Form N-4, File No. 333-37907, filed on January 16, 1998);
     
 
(4)(a)(i)
Flexible Payment Combination Fixed/Variable Group Annuity Contract (MFS Regatta Gold) (Incorporated herein by reference to Post-Effective Amendment No. 5 to the Registration Statement on Form N-4, File No. 033-41628, filed on April 28, 1998);
     
 
(4)(a)(ii)
Flexible Payment Combination Fixed/Variable Group Annuity Contract (MFS Regatta Platinum) (Incorporated herein by reference to Post-Effective Amendment No. 9 to the Registration Statement on Form N-4, File No. 033-41628, filed on March 2, 1998);
     
 
(4)(b)(i)
Certificate to be issued in connection with Contract filed as Exhibit 4(a)(i) (Incorporated herein by reference to Post-Effective Amendment No. 5 to the Registration Statement on Form N-4, File No 033-41628, filed on April 28, 1998);
     
 
(4)(b)(ii)
Certificate (MFS Regatta Platinum) to be issued in connection with Contract filed as Exhibit 4(a)(ii) (Incorporated herein by reference to Post-Effective Amendment No. 9 to the Registration Statement on Form N-4, File No. 033-41628, filed on March 2, 1998);
     
 
(5)(a)(i)
Application to be used with the annuity contract filed as Exhibit 4(a)(i) (Incorporated herein by reference to Post-Effective Amendment No. 7 to the Registration Statement on Form N-4, File No. 033-41628, filed on April 28, 1998);
     
 
(5)(a)(ii)
Application to be used with the annuity contract filed as Exhibit 4(a)(ii) (Incorporated herein by reference to Post-Effective Amendment No. 9 to the Registration Statement on Form N-4, File No. 033-41628, filed on March 2, 1998);
     
 
(5)(b)(i)
Application to be used with the Certificate filed as Exhibit 4(b)(i) (Incorporated herein be reference to Post-Effective Amendment No. 7 to the Registration Statement on Form N-4, File No. 033-41628, filed on April 28, 1998);
     
 
(5)(b)(ii)
Application to be used with the Certificate filed as Exhibit 4(b)(ii) (Incorporated herein by reference to Post-Effective Amendment No. 9 to the Registration Statement on Form N-4, File 033-41628, filed on March 2, 1998);
     
 
(6)(a)
Certificate of Incorporation of the Depositor (Incorporated herein by reference to Depositor's Form 10-K, File No. 333-82824, filed on March 29, 2004);
     
 
(6)(b)
By-Laws of the Depositor, as amended March 19, 2004 (Incorporated herein by reference to Depositor's Form 10-K, File No. 333-82824, filed on March 29, 2004);
     
 
(7)
Not Applicable;
     
 
(8)(a)
Participation Agreement by and between The Alger American Fund, Sun Life Assurance Company of Canada, and Fred Alger and Company, Incorporated (Incorporated herein by reference to Post Effective Amendment No. 13 to the Registration Statement on Form N-4, File No. 033-41628, filed April 23, 1999);
     
 
(8)(b)
Participation Agreement dated February 17, 1998 by and between Goldman Sachs Variable, Insurance Trust, Goldman Sachs & Co. and Sun Life Assurance Company of Canada (Incorporated herein by reference to Post-Effective Amendment No. 13 to the Registration Statement on Form N-4, File No. 033-41628, filed April 23, 1999);
     
 
(8)(c)
Participation Agreement dated April 24, 2009, by and among  Sun Life Assurance Company of Canada (U.S.), Sun Life Insurance and Annuity Company of New York, JPMorgan Insurance Trust, JPMorgan Investment Advisors Inc., J. P. Morgan Investment Management Inc., and, JPMorgan Funds Management, Inc. (Incorporated herein by reference to Pre-Effective Amendment No. 1 the Registration Statement on Form N-4, File No. 333-173301, filed on June 8, 2011);
     
 
(8)(d)
Amended and Restated Participation Agreement dated September 1, 2004 by and among Sun Life Assurance Company of Canada (U.S.), Variable Insurance Products Funds, and Fidelity Distributors Corporation. (Incorporated herein by reference to Post-Effective Amendment No. 8 to the Registration Statement of on Form N-4, File No. 333-83516, filed on April 26, 2005);
     
 
(8)(e)
Participation Agreement dated May 1, 2001 by and among Sun Life Assurance Company of Canada (U.S.), the Depositor, Alliance Capital Management L.P., and Alliance Fund Distributors, Inc. (Incorporated herein by reference to Post-Effective Amendment No. 7 to the Registration Statement on Form N-4, File No. 333-82957, filed July 27, 2001);
     
 
(8)(f)
Participation Agreement dated February 17, 1998 by and among Sun Life Assurance Company of Canada, AIM Variable Insurance Funds, Inc., AIM Distributors, Inc., and Clarendon Insurance Agency, Inc. (Incorporated herein by reference to Post-Effective Amendment No. 1 to the Registration Statement on Form N-4, File No. 333-82957, filed February 3, 2000);
     
 
(8)(g)
Participation Agreement, dated December 10, 2012, by and among MFS Variable Insurance Trusts I, II and III, Sun Life Assurance Company of Canada (U.S.), Sun Life Insurance and Annuity Company of New York, and Massachusetts Financial Services Company (Incorporated herein by reference to Post-Effective Amendment No. 24 to the Registration Statement of Sun Life of Canada (U.S.) Variable Account G on Form N-6, File No. 333-65048, filed on December 10, 2012);
     
 
(9)
Opinion of Counsel as to the legality of the securities being registered and Consent to its use ;*
     
 
(10)(a)
Consents of Independent Auditors;*
     
 
(10)(b)
Representation of Counsel Pursuant to Rule 485(b);*
     
 
(11)
Not Applicable;
     
 
(12)
Not Applicable;
     
 
(13)
Schedule for Computation of Performance Quotations (Incorporated herein by reference to Post-Effective Amendment No. 10 to the Registration Statement of the Registrant on Form N-4, File No. 033-41628, filed on April 29, 1998);
     
 
(14)(a)
Powers of Attorney (Incorporated herein by reference to Post-Effective Amendment No. 36 to the Registration Statement on Form N-4, File No. 033-41628, filed on August 19, 2013); Powers of Attorney for Homer J. Holland and Richard E. Kipper;*
     
 
(14)(b)
Resolution of the Board of Directors of the depositor dated August 2, 2013, authorizing the use of powers of attorney for Officer signatures (Incorporated by reference to Post-Effective Amendment No. 48 to the Registration Statement on Form N-4, File No. 333-83516, filed on August 19, 2013);
     
 
(15)
Organizational Chart (Incorporated by reference to Post-Effective Amendment No. 49 to the Registration Statement on Form N-4, File No. 333-83516, filed on May 1, 2014).

* Filed herewith.

Item 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR

Name and Principal
Business Address
Positions and Offices
With Depositor
   
Dennis A. Cullen
811 Turnberry Lane
Northbrook, IL 60062
Director
   
Homer J. Holland
c/o Holland Partners, Inc.
P.O. Box 832
Carefree, AZ 85377-0832
Director
   
Richard E. Kipper
P.O. Box 529
Woody Creek, CO 81656
Director
   
David E. Sams, Jr.
Sun Life Assurance Company of Canada (U.S.)
96 Worcester Street
Wellesley Hills, MA  02481
Chief Executive Officer and Director
   
Andrew F. Kenney
Sun Life Assurance Company of Canada (U.S.)
96 Worcester Street
Wellesley Hills, MA 02481
Chief Investment Officer
   
James D. Purvis
Sun Life Assurance Company of Canada (U.S.)
96 Worcester Street
Wellesley Hills, MA 02481
Chief Operating Officer
   
Daniel J. Towriss
Sun Life Assurance Company of Canada (U.S.)
96 Worcester Street
Wellesley Hills, MA 02481
President, Chief Actuary, Chief Risk Officer and
Director
   
Kenneth A. McCullum
Sun Life Assurance Company of Canada (U.S.)
96 Worcester Street
Wellesley Hills, MA 02481
Executive Vice President, Business Development
and In Force Management
   
Michael S. Bloom
Sun Life Assurance Company of Canada (U.S.)
96 Worcester Street
Wellesley Hills, MA 02481
Vice President and General Counsel and
Secretary
   
Robert S. Sabatino
Sun Life Assurance Company of Canada (U.S.)
96 Worcester Street
Wellesley Hills, MA 02481
Vice President, Information Technology and Operations
   
Michelle Wilcon
Sun Life Assurance Company of Canada (U.S.)
96 Worcester Street
Wellesley Hills, MA 02481
Vice President, Human Resources and Internal
Communications

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

No person is directly or indirectly controlled by the Registrant. The Registrant is a separate account of Sun Life Assurance Company of Canada (U.S.), which is controlled by Delaware Life Holdings, LLC.

The organization chart of Delaware Life Holdings, LLC is incorporated by reference to Post-Effective Amendment No. 49 to the Registration Statement on Form N-4, File No. 333-83516, filed May 1, 2014.

None of the companies listed in such Exhibit 15 is a subsidiary of the Registrant, therefore the only financial statements being filed are those of Sun Life Assurance Company of Canada (U.S.).

Item 27. NUMBER OF CONTRACT OWNERS

As of March 31, 2014, there were 11,559 qualified and 20,714 non-qualified contract owners.

Item 28. INDEMNIFICATION

Pursuant to Section 145 of the Delaware Corporation Law, Article 8 of the By-laws of Sun Life Assurance Company of Canada (U.S.), as amended March 19, 2004 (a copy of which as filed as Exhibit 3.2 to Depositor’s Form 10-K, File No. 333-82824, filed on March 29, 2004), provides for the indemnification of directors, officers and employees of Sun Life Assurance Company of Canada (U.S.). Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of Sun Life Assurance Company of Canada (U.S.) pursuant to the certificate of incorporation, by-laws, or otherwise, Sun Life (U.S.) has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by Sun Life (U.S.) of expenses incurred or paid by a director, officer, controlling person of Sun Life (U.S.) in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, Sun Life (U.S.) will submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Act, unless in the opinion of their counsel the matter has been settled by controlling precedent, and will be governed by the final adjudication of such issue.

Item 29. PRINCIPAL UNDERWRITERS

(a) Clarendon Insurance Agency, Inc., a wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.), acts as general distributor for the Registrant, Sun Life of Canada (U.S.) Variable Accounts C, D, E, G, I and L, Keyport Variable Account A, KMA Variable Account, Keyport Variable Account I, KBL Variable Account A, KBL Variable Annuity Account and Sun Life (N.Y.) Variable Accounts A, B, C and D.

(b)
Name and Principal
Position and Offices
 
Business Address*
with Underwriter
     
 
Kenneth A. McCullum
President and Director
 
Michael K. Moran
Financial Operations Principal and Treasurer and Director
 
Michael S. Bloom
Secretary and Director
 
Thomas Seitz
Vice President, Distribution
 
Kathleen T. Baron
Chief Compliance Officer
 
Wayne P. Farmer
Tax Officer
 
Maryellen Percuoco
Clerk and Assistant Secretary

*The principal business address of all directors and officers of the principal underwriter is 96 Worcester Street, Wellesley Hills, Massachusetts 02481.

(c) Inapplicable.

Item 30. LOCATION OF ACCOUNTS AND RECORDS

Accounts, books and other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940 and the Rules promulgated thereunder are maintained by Sun Life Assurance Company of Canada (U.S.), in whole or in part, at its executive office at 96 Worcester Street, Wellesley Hills, Massachusetts 02481, or at the offices of Clarendon Insurance Agency, Inc. at 96 Worcester Street, Wellesley Hills, Massachusetts 02481.

Item 31. MANAGEMENT SERVICES

Not Applicable.

Item 32. UNDERTAKINGS

The Registrant hereby undertakes:

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


 
 

 


SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements of Securities Act Rule 485(b) for effectiveness of this Post-Effective Amendment to the Registration Statement and has caused this Post-Effective Amendment to the Registration Statement to be signed on its behalf, in the Town of Wellesley Hills, and Commonwealth of Massachusetts on this 1st day of May, 2014.

 
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
 
(Registrant)
 
 
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
 
(Depositor)
 
 
By: /s/ Daniel J. Towriss *
 
Daniel J. Towriss
 
President

*By:
/s/ Kenneth N. Crowley
 
Kenneth N. Crowley
 
Senior Counsel

As required by the Securities Act of 1933, this Post-Effective Amendment to the Registration Statement has been signed below by the following persons in the capacities with the Depositor, Sun Life Assurance Company of Canada (U.S.), and on the dates indicated.

SIGNATURE
TITLE
DATE
     
     
/s/ David E. Sams, Jr.*
Chief Executive Officer and Director
May 1, 2014
David E. Sams, Jr.
(Principal Executive Officer)
 
     
     
/s/ Michael K. Moran*
Vice President and Controller
May 1, 2014
Michael K. Moran
(Principal Financial Officer and Principal Accounting Officer)
 
     
     
*By: /s/ Kenneth N. Crowley
Attorney-in-Fact for:
May 1, 2014
        Kenneth N. Crowley
Dennis A. Cullen, Director
 
 
Homer J. Holland, Director
 
 
Richard E. Kipper, Director
 
 
Daniel J. Towriss, Director
 

*Kenneth N. Crowley has signed this document on the indicated date on behalf of the above Directors for the Depositor pursuant to powers of attorney duly executed by such persons and a resolution of the Board of Directors authorizing use of powers of attorney for Officer signatures. Resolution of the Board of Directors is incorporated herein by reference to Post-Effective Amendment No. 48 to the Registration Statement on Form N-4, File No. 333-83516, filed on or about August 19, 2013. Powers of attorney are incorporated herein by reference to Post-Effective Amendment No. 36 to the Registration Statement on Form N-4, File No. 033-41628, filed on August 19, 2013. Powers of attorney for Messrs. Holland and Kipper are included herein as Exhibit (14)(a).


 
 

 


Exhibits



(9)
Opinion of Counsel as to the legality of the securities being registered and Consent to its use
   
(10)(a)
Consents of Independent Auditors
   
(10)(b)
Representation of Counsel pursuant to Rule 485(b)
   
(14)(a)
Powers of Attorney for Messrs. Holland and Kipper