NYLIAC Variable Annuity Separate Account-III

Financial Statements

1

NYLIAC Variable Annuity Separate Account-III

Statement of Assets and Liabilities

As of December 31, 2021

	MainStay VP Balanced— Service Class		MainStay VP Bond— Initial Class		MainStay VP Bond— Service Class		MainStay VP Candriam Emerging Markets Equity— Initial Class		MainStay VP Candriam Emerging Markets Equity— Service Class		MainStay VP CBRE Global Infrastructure— Service Class		MainStay VP Conservative Allocation— Service Class
ASSETS:
Investment at net asset value	$	130,655,613	$	32,133,552	$	131,168,571	$	10,817,527	$	36,619,447	$	5,430,478	$	243,298,357
Dividends due and accrued	—		—		—		—		—		—		—
Net receivable from (payable to) New York Life Insurance and Annuity Corporation	171,872		(8,260)		(10,295)		(326)		1,342		2,917		(21,693)
Net receivable from (payable to) the Fund shares sold or purchased	(166,781)		9,524		15,322		745		115		(2,713)		31,275
LIABILITIES:
Liability to New York Life Insurance and Annuity Corporation for:
Mortality and expense risk charges	4,914		1,144		4,902		375		1,352		201		9,250
Administrative charges	177		120		125		44		105		3		332
Total net assets	$	130,655,613	$	32,133,552	$	131,168,571	$	10,817,527	$	36,619,447	$	5,430,478	$	243,298,357
Total shares outstanding	7,844,028		2,227,351		9,206,556		969,730		3,281,430		735,867		19,056,218
Net asset value per share (NAV)	$	16.66	$	14.43	$	14.25	$	11.16	$	11.16	$	7.38	$	12.77
Total units outstanding	6,938,152		1,396,494		10,835,012		986,843		3,364,834		676,392		14,677,326
Variable accumulation unit value (lowest to highest)	$14.14 to $25.17		$15.97 to $25.02		$10.78 to $15.19		$10.51 to $10.99		$10.25 to $16.19		$7.00 to $8.92		$12.69 to $19.80
Identified cost of investment	$	114,418,289	$	32,304,951	$	134,052,448	$	8,589,636	$	28,469,706	$	5,329,156	$	217,438,749

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

2

NYLIAC Variable Annuity Separate Account-III

Statement of Assets and Liabilities (Continued)

As of December 31, 2021

	MainStay VP Epoch U.S. Equity Yield— Initial Class		MainStay VP Epoch U.S. Equity Yield— Service Class		MainStay VP Equity Allocation— Service Class		MainStay VP Fidelity Institutional AM® Utilities— Initial Class		MainStay VP Fidelity Institutional AM® Utilities— Service Class		MainStay VP Floating Rate— Service Class		MainStay VP Growth Allocation— Service Class
ASSETS:
Investment at net asset value	$	102,041,004	$	175,224,820	$	183,938,592	$	755,695	$	308,945,150	$	157,492,019	$	356,951,821
Dividends due and accrued	—		—		—		—		—		—		—
Net receivable from (payable to) New York Life Insurance and Annuity Corporation	(23,864)		(14,166)		(229,225)		—		84,105		12,945		41,945
Net receivable from (payable to) the Fund shares sold or purchased	27,870		21,116		236,405		31		(71,990)		(6,789)		(27,869)
LIABILITIES:
Liability to New York Life Insurance and Annuity Corporation for:
Mortality and expense risk charges	3,622		6,551		6,919		29		11,516		5,974		13,495
Administrative charges	384		399		261		2		599		182		581
Total net assets	$	102,041,004	$	175,224,820	$	183,938,592	$	755,695	$	308,945,150	$	157,492,019	$	356,951,821
Total shares outstanding	5,622,435		9,808,988		12,942,029		55,666		22,866,363		17,767,602		26,513,149
Net asset value per share (NAV)	$	18.15	$	17.86	$	14.21	$	13.58	$	13.51	$	8.86	$	13.46
Total units outstanding	3,293,789		6,560,766		8,338,220		37,351		16,858,688		12,414,509		16,716,716
Variable accumulation unit value (lowest to highest)	$27.92 to $38.05		$14.93 to $33.65		$16.24 to $31.71		$19.55 to $20.44		$13.62 to $20.04		$11.19 to $14.13		$15.04 to $26.94
Identified cost of investment	$	81,969,935	$	142,206,460	$	146,872,064	$	641,213	$	269,382,050	$	157,894,801	$	303,338,562

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

3

NYLIAC Variable Annuity Separate Account-III

Statement of Assets and Liabilities (Continued)

As of December 31, 2021

	MainStay VP Income Builder— Initial Class		MainStay VP Income Builder— Service Class		MainStay VP IQ Hedge Multi- Strategy— Service Class		MainStay VP Janus Henderson Balanced— Initial Class		MainStay VP Janus Henderson Balanced— Service Class		MainStay VP MacKay Convertible— Initial Class		MainStay VP MacKay Convertible— Service Class
ASSETS:
Investment at net asset value	$	54,051,585	$	147,238,513	$	57,488,150	$	172,802,542	$	380,769,822	$	79,067,773	$	327,902,849
Dividends due and accrued	—		—		—		—		—		—		—
Net receivable from (payable to) New York Life Insurance and Annuity Corporation	(9,134)		72,830		(39,474)		(15,670)		1,102,445		136		336,591
Net receivable from (payable to) the Fund shares sold or purchased	11,229		(67,235)		41,713		22,415		(1,088,085)		2,968		(324,114)
LIABILITIES:
Liability to New York Life Insurance and Annuity Corporation for:
Mortality and expense risk charges	1,876		5,485		2,220		6,043		14,006		2,802		12,165
Administrative charges	219		110		19		702		354		303		312
Total net assets	$	54,051,585	$	147,238,513	$	57,488,150	$	172,802,542	$	380,769,822	$	79,067,772	$	327,902,849
Total shares outstanding	2,965,728		8,154,006		6,432,744		10,141,589		22,528,626		4,233,521		17,743,181
Net asset value per share (NAV)	$	18.23	$	18.06	$	8.94	$	17.04	$	16.90	$	18.68	$	18.48
Total units outstanding	1,364,372		8,610,152		6,453,719		6,984,550		18,913,339		1,402,521		13,190,537
Variable accumulation unit value (lowest to highest)	$18.87 to $44.37		$11.19 to $26.82		$8.05 to $10.09		$23.72 to $24.92		$11.94 to $24.31		$34.25 to $65.60		$18.65 to $41.02
Identified cost of investment	$	49,195,004	$	135,876,422	$	54,534,058	$	122,754,224	$	314,116,336	$	56,906,991	$	260,764,526

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

4

NYLIAC Variable Annuity Separate Account-III

Statement of Assets and Liabilities (Continued)

As of December 31, 2021

	MainStay VP MacKay Government— Initial Class		MainStay VP MacKay Government— Service Class		MainStay VP MacKay High Yield Corporate Bond— Initial Class		MainStay VP MacKay High Yield Corporate Bond— Service Class		MainStay VP MacKay International Equity— Initial Class		MainStay VP MacKay International Equity— Service Class		MainStay VP MacKay S&P 500 Index— Initial Class
ASSETS:
Investment at net asset value	$	20,289,356	$	67,743,443	$	134,388,227	$	749,789,140	$	21,666,257	$	91,845,233	$	224,120,078
Dividends due and accrued	—		—		—		—		—		—		—
Net receivable from (payable to) New York Life Insurance and Annuity Corporation	(171)		(1,347)		(2,419)		313,800		(1,176)		(26,664)		(77,093)
Net receivable from (payable to) the Fund shares sold or purchased	972		3,966		7,676		(284,857)		2,031		30,265		85,825
LIABILITIES:
Liability to New York Life Insurance and Annuity Corporation for:
Mortality and expense risk charges	728		2,544		4,741		28,279		778		3,414		7,826
Administrative charges	73		75		515		664		77		187		906
Total net assets	$	20,289,356	$	67,743,443	$	134,388,228	$	749,789,140	$	21,666,257	$	91,845,233	$	224,120,078
Total shares outstanding	1,866,323		6,292,643		13,517,902		76,727,535		1,204,819		5,175,662		2,496,753
Net asset value per share (NAV)	$	10.87	$	10.77	$	9.94	$	9.77	$	17.98	$	17.75	$	89.76
Total units outstanding	1,069,430		6,235,905		2,936,595		45,249,081		569,214		3,849,436		2,799,216
Variable accumulation unit value (lowest to highest)	$13.23 to $20.69		$9.90 to $12.70		$30.76 to $51.16		$12.88 to $27.32		$26.27 to $44.48		$16.43 to $31.94		$33.89 to $95.22
Identified cost of investment	$	20,654,186	$	69,369,364	$	132,475,325	$	744,390,445	$	18,257,075	$	78,928,714	$	91,957,113

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

5

NYLIAC Variable Annuity Separate Account-III

Statement of Assets and Liabilities (Continued)

As of December 31, 2021

	MainStay VP MacKay S&P 500 Index— Service Class		MainStay VP MacKay Strategic Bond— Service Class		MainStay VP Moderate Allocation— Service Class		MainStay VP Natural Resources— Initial Class		MainStay VP PIMCO Real Return— Service Class		MainStay VP Small Cap Growth— Initial Class		MainStay VP Small Cap Growth— Service Class
ASSETS:
Investment at net asset value	$	545,511,138	$	179,599,430	$	336,568,871	$	92,201,035	$	108,751,388	$	48,745,959	$	46,525,396
Dividends due and accrued	—		—		—		—		—		—		—
Net receivable from (payable to) New York Life Insurance and Annuity Corporation	881,014		(27,377)		13,265		7,949		(2,704)		(1,033)		(2,395)
Net receivable from (payable to) the Fund shares sold or purchased	(860,188)		34,352		(76)		(4,303)		6,840		2,972		4,188
LIABILITIES:
Liability to New York Life Insurance and Annuity Corporation for:
Mortality and expense risk charges	20,215		6,904		12,665		3,412		4,069		1,756		1,703
Administrative charges	611		71		524		234		67		183		90
Total net assets	$	545,511,138	$	179,599,430	$	336,568,871	$	92,201,035	$	108,751,388	$	48,745,959	$	46,525,396
Total shares outstanding	6,138,015		17,678,501		26,461,689		10,324,401		10,989,540		2,780,637		2,750,947
Net asset value per share (NAV)	$	88.87	$	10.16	$	12.72	$	8.93	$	9.90	$	17.53	$	16.91
Total units outstanding	18,749,137		15,229,487		17,960,666		10,521,712		9,416,246		1,765,880		1,878,540
Variable accumulation unit value (lowest to highest)	$13.29 to $49.40		$10.91 to $12.65		$13.87 to $23.00		$7.99 to $13.27		$10.77 to $12.08		$26.54 to $27.88		$20.50 to $28.85
Identified cost of investment	$	348,808,970	$	175,590,368	$	295,730,885	$	69,402,540	$	98,862,898	$	35,421,318	$	40,139,695

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

6

NYLIAC Variable Annuity Separate Account-III

Statement of Assets and Liabilities (Continued)

As of December 31, 2021

	MainStay VP T. Rowe Price Equity Income— Initial Class		MainStay VP T. Rowe Price Equity Income— Service Class		MainStay VP U.S. Government Money Market— Initial Class		MainStay VP Wellington Growth— Initial Class		MainStay VP Wellington Growth— Service Class		MainStay VP Wellington Mid Cap— Initial Class		MainStay VP Wellington Mid Cap— Service Class
ASSETS:
Investment at net asset value	$	43,595,212	$	82,965,816	$	138,100,574	$	104,427,270	$	26,859,952	$	44,799,420	$	175,493,451
Dividends due and accrued	—		—		—		—		—		—		—
Net receivable from (payable to) New York Life Insurance and Annuity Corporation	(15,806)		(6,160)		(33,516)		(109,983)		24		378		78,076
Net receivable from (payable to) the Fund shares sold or purchased	17,525		9,523		39,026		114,049		1,078		1,393		(71,258)
LIABILITIES:
Liability to New York Life Insurance and Annuity Corporation for:
Mortality and expense risk charges	1,558		3,166		5,342		3,616		1,027		1,605		6,510
Administrative charges	161		197		168		450		75		166		308
Total net assets	$	43,595,212	$	82,965,816	$	138,100,574	$	104,427,270	$	26,859,952	$	44,799,420	$	175,493,451
Total shares outstanding	3,129,884		5,980,941		138,086,764		2,604,905		681,965		2,742,290		10,966,559
Net asset value per share (NAV)	$	13.93	$	13.87	$	1.00	$	40.09	$	39.39	$	16.34	$	16.00
Total units outstanding	1,775,996		3,644,084		61,269,285		1,819,155		694,337		940,298		6,326,822
Variable accumulation unit value (lowest to highest)	$23.57 to $24.64		$16.28 to $24.16		$0.85 to $9.71		$20.77 to $62.82		$22.46 to $41.64		$47.61 to $52.80		$15.80 to $50.08
Identified cost of investment	$	38,354,678	$	72,672,243	$	138,100,539	$	78,032,453	$	20,264,874	$	37,139,964	$	143,114,794

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

7

NYLIAC Variable Annuity Separate Account-III

Statement of Assets and Liabilities (Continued)

As of December 31, 2021

	MainStay VP Wellington Small Cap— Initial Class		MainStay VP Wellington Small Cap— Service Class		MainStay VP Wellington U.S. Equity— Initial Class		MainStay VP Wellington U.S. Equity— Service Class		MainStay VP Winslow Large Cap Growth— Initial Class		MainStay VP Winslow Large Cap Growth— Service Class		American Funds IS Asset Allocation Fund— Class 4
ASSETS:
Investment at net asset value	$	22,586,374	$	93,299,423	$	90,696,583	$	77,998,610	$	63,517,468	$	300,506,825	$	113,697,091
Dividends due and accrued	—		—		—		—		—		—		—
Net receivable from (payable to) New York Life Insurance and Annuity Corporation	81		80,458		(89,068)		(2,016)		65,912		234,128		121,491
Net receivable from (payable to) the Fund shares sold or purchased	813		(76,777)		92,601		5,026		(63,414)		(222,534)		(117,343)
LIABILITIES:
Liability to New York Life Insurance and Annuity Corporation for:
Mortality and expense risk charges	810		3,482		3,160		2,886		2,248		11,308		4,092
Administrative charges	84		199		373		124		250		286		56
Total net assets	$	22,586,374	$	93,299,423	$	90,696,583	$	77,998,610	$	63,517,468	$	300,506,825	$	113,697,091
Total shares outstanding	1,638,748		6,836,525		2,636,927		2,304,338		1,675,078		8,530,243		3,980,991
Net asset value per share (NAV)	$	13.78	$	13.65	$	34.39	$	33.85	$	37.92	$	35.23	$	28.56
Total units outstanding	1,760,815		5,814,556		1,195,118		2,565,072		1,039,729		8,002,923		8,170,218
Variable accumulation unit value (lowest to highest)	$12.69 to $12.84		$14.92 to $16.27		$30.24 to $89.21		$20.52 to $47.81		$32.56 to $70.64		$27.70 to $60.81		$11.76 to $14.28
Identified cost of investment	$	17,980,425	$	73,478,772	$	65,264,960	$	62,297,973	$	41,711,545	$	223,434,154	$	101,053,288

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

8

NYLIAC Variable Annuity Separate Account-III

Statement of Assets and Liabilities (Continued)

As of December 31, 2021

	American Funds IS Global Small Capitalization Fund— Class 4		American Funds IS Growth Fund— Class 4		American Funds IS New World Fund®— Class 4		American Funds IS Washington Mutual Investors Fund— Class 4		BlackRock® Global Allocation V.I. Fund— Class III		BlackRock® High Yield V.I. Fund— Class III		BNY Mellon IP Technology Growth Portfolio— Initial Shares
ASSETS:
Investment at net asset value	$	15,330,062	$	67,588,185	$	56,763,109	$	83,831,897	$	121,689,758	$	89,682,793	$	28,033,493
Dividends due and accrued	—		—		—		—		—		327,750		—
Net receivable from (payable to) New York Life Insurance and Annuity Corporation	1,477		350,424		(102,319)		18,605		210,039		195,133		(35,437)
Net receivable from (payable to) the Fund shares sold or purchased	(913)		(347,959)		104,419		(15,572)		(205,390)		(519,570)		36,562
LIABILITIES:
Liability to New York Life Insurance and Annuity Corporation for:
Mortality and expense risk charges	558		2,434		2,078		3,006		4,581		3,286		1,026
Administrative charges	6		31		22		27		68		27		99
Total net assets	$	15,330,062	$	67,588,185	$	56,763,109	$	83,831,897	$	121,689,758	$	89,682,793	$	28,033,493
Total shares outstanding	465,111		545,991		1,817,001		4,733,591		8,462,431		11,772,733		787,679
Net asset value per share (NAV)	$	32.96	$	123.79	$	31.24	$	17.71	$	14.38	$	7.59	$	35.59
Total units outstanding	809,554		2,912,954		3,339,052		5,470,671		8,001,873		6,765,610		471,470
Variable accumulation unit value (lowest to highest)	$17.05 to $19.66		$22.80 to $23.33		$15.10 to $18.15		$15.05 to $15.40		$11.02 to $17.37		$12.67 to $13.50		$57.45 to $87.55
Identified cost of investment	$	12,763,887	$	56,566,227	$	44,544,020	$	62,716,636	$	126,113,902	$	86,603,290	$	20,501,015

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

9

NYLIAC Variable Annuity Separate Account-III

Statement of Assets and Liabilities (Continued)

As of December 31, 2021

	BNY Mellon IP Technology Growth Portfolio— Service Shares		ClearBridge Variable Appreciation Portfolio— Class II		Columbia Variable Portfolio— Commodity Strategy Fund— Class 2		Columbia Variable Portfolio— Emerging Markets Bond Fund— Class 2		Columbia Variable Portfolio— Small Cap Value Fund— Class 2		Delaware VIP® Small Cap Value Series— Service Class		DWS Alternative Asset Allocation VIP— Class B
ASSETS:
Investment at net asset value	$	183,132,133	$	19,902,987	$	1,547,245	$	42,780,855	$	46,651,525	$	16,388,933	$	73,789,788
Dividends due and accrued	—		—		—		—		—		—		—
Net receivable from (payable to) New York Life Insurance and Annuity Corporation	168,007		56,531		—		1,645		34,158		85,230		(7,445)
Net receivable from (payable to) the Fund shares sold or purchased	(160,939)		(55,817)		59		(87)		(32,316)		(84,623)		10,129
LIABILITIES:
Liability to New York Life Insurance and Annuity Corporation for:
Mortality and expense risk charges	6,853		708		58		1,547		1,766		597		2,669
Administrative charges	215		6		1		11		76		10		15
Total net assets	$	183,132,133	$	19,902,987	$	1,547,245	$	42,780,855	$	46,651,525	$	16,388,933	$	73,789,788
Total shares outstanding	5,648,739		327,783		273,849		4,570,604		2,266,838		362,106		4,883,507
Net asset value per share (NAV)	$	32.42	$	60.72	$	5.65	$	9.36	$	20.58	$	45.26	$	15.11
Total units outstanding	4,158,211		1,056,152		149,124		3,659,008		1,842,608		1,197,461		5,981,479
Variable accumulation unit value (lowest to highest)	$31.88 to $75.41		$18.46 to $18.94		$9.31 to $11.82		$11.38 to $12.29		$17.36 to $34.22		$13.47 to $13.78		$12.04 to $12.43
Identified cost of investment	$	142,876,838	$	15,465,851	$	1,275,136	$	43,115,785	$	39,071,448	$	13,736,240	$	62,154,536

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

10

NYLIAC Variable Annuity Separate Account-III

Statement of Assets and Liabilities (Continued)

As of December 31, 2021

	Fidelity® VIP Bond Index Portfolio— Service Class 2		Fidelity® VIP ContrafundSM Portfolio— Initial Class		Fidelity® VIP ContrafundSM Portfolio— Service Class 2		Fidelity® VIP Emerging Markets Portfolio— Service Class 2		Fidelity® VIP Equity-Income PortfolioSM— Initial Class		Fidelity® VIP Equity-Income PortfolioSM— Service Class 2		Fidelity® VIP FundsManager® 60% Portfolio— Investor Class
ASSETS:
Investment at net asset value	$	55,134,391	$	165,184,814	$	447,433,182	$	13,658,449	$	51,832,930	$	150,100,720	$	760,454,208
Dividends due and accrued	—		—		—		—		—		—		—
Net receivable from (payable to) New York Life Insurance and Annuity Corporation	673		(13,125)		164,062		8,842		(25,617)		5,433		380,000
Net receivable from (payable to) the Fund shares sold or purchased	1,337		19,586		(146,540)		(8,342)		27,642		369		(340,435)
LIABILITIES:
Liability to New York Life Insurance and Annuity Corporation for:
Mortality and expense risk charges	1,994		5,793		16,911		490		1,821		5,586		24,990
Administrative charges	16		668		611		10		204		216		14,575
Total net assets	$	55,134,391	$	165,184,814	$	447,433,182	$	13,658,449	$	51,832,930	$	150,100,720	$	760,454,208
Total shares outstanding	5,021,347		3,039,279		8,520,914		1,085,727		1,982,139		5,939,878		61,326,952
Net asset value per share (NAV)	$	10.98	$	54.35	$	52.51	$	12.58	$	26.15	$	25.27	$	12.40
Total units outstanding	5,720,337		1,766,755		12,495,295		1,045,365		1,123,804		6,246,886		56,956,132
Variable accumulation unit value (lowest to highest)	$9.59 to $9.66		$51.46 to $105.64		$23.16 to $64.12		$12.87 to $13.13		$30.78 to $50.87		$17.10 to $34.89		$13.35 to $13.60
Identified cost of investment	$	56,987,755	$	105,045,187	$	311,208,125	$	14,597,354	$	43,764,752	$	130,494,106	$	635,888,405

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

11

NYLIAC Variable Annuity Separate Account-III

Statement of Assets and Liabilities (Continued)

As of December 31, 2021

	Fidelity® VIP FundsManager® 60% Portfolio— Service Class		Fidelity® VIP Government Money Market Portfolio— Investor Class		Fidelity® VIP Growth Opportunities Portfolio— Service Class 2		Fidelity® VIP Health Care Portfolio— Service Class 2		Fidelity® VIP International Index Portfolio— Service Class 2		Fidelity® VIP Mid Cap Portfolio— Service Class 2		Franklin Templeton Aggressive Model Portfolio— Class II
ASSETS:
Investment at net asset value	$	25,836,500	$	—	$	223,338,743	$	58,062,173	$	8,434,849	$	146,174,733	$	52,647,712
Dividends due and accrued	—		—		—		—		—		—		—
Net receivable from (payable to) New York Life Insurance and Annuity Corporation	(8,730)		—		347,664		105,881		92,726		27,510		334,929
Net receivable from (payable to) the Fund shares sold or purchased	9,669		—		(339,302)		(103,727)		(92,429)		(21,818)		(333,068)
LIABILITIES:
Liability to New York Life Insurance and Annuity Corporation for:
Mortality and expense risk charges	934		—		8,205		2,116		294		5,385		1,849
Administrative charges	5		—		157		38		3		307		12
Total net assets	$	25,836,500	$	—	$	223,338,743	$	58,062,173	$	8,434,849	$	146,174,733	$	52,647,712
Total shares outstanding	2,083,589		—		2,877,335		1,455,557		739,251		3,710,960		3,608,479
Net asset value per share (NAV)	$	12.40	$	—	$	77.62	$	39.89	$	11.41	$	39.39	$	14.59
Total units outstanding	1,956,960		—		5,660,673		3,629,935		705,679		4,473,668		3,575,308
Variable accumulation unit value (lowest to highest)	$11.56 to $13.61		$	—	$35.85 to $42.96		$15.82 to $16.06		$11.20 to $12.37		$17.66 to $55.09		$12.33 to $15.21
Identified cost of investment	$	23,612,909	$	—	$	178,467,273	$	54,103,152	$	8,118,448	$	123,108,823	$	49,673,563

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

12

NYLIAC Variable Annuity Separate Account-III

Statement of Assets and Liabilities (Continued)

As of December 31, 2021

	Franklin Templeton Conservative Model Portfolio— Class II		Franklin Templeton Moderate Model Portfolio— Class II		Franklin Templeton Moderately Aggressive Model Portfolio— Class II		Franklin Templeton Moderately Conservative Model Portfolio— Class II		Invesco V.I. International Growth Fund— Series II Shares		Invesco V.I. Main Street Small Cap Fund®— Series II Shares		Janus Henderson Enterprise Portfolio— Service Shares
ASSETS:
Investment at net asset value	$	46,070,017	$	264,265,322	$	198,180,918	$	110,090,943	$	35,598,235	$	6,650,194	$	40,321,530
Dividends due and accrued	—		—		—		—		—		—		—
Net receivable from (payable to) New York Life Insurance and Annuity Corporation	220,446		895,985		389,345		32,455		(123,068)		(9,039)		41,360
Net receivable from (payable to) the Fund shares sold or purchased	(218,785)		(886,732)		(382,387)		(28,505)		124,418		9,278		(39,893)
LIABILITIES:
Liability to New York Life Insurance and Annuity Corporation for:
Mortality and expense risk charges	1,646		9,220		6,931		3,932		1,338		235		1,444
Administrative charges	15		33		27		18		12		4		23
Total net assets	$	46,070,017	$	264,265,322	$	198,180,918	$	110,090,943	$	35,598,235	$	6,650,194	$	40,321,530
Total shares outstanding	4,250,002		20,956,806		14,712,763		9,290,375		874,220		215,705		435,956
Net asset value per share (NAV)	$	10.84	$	12.61	$	13.47	$	11.85	$	40.72	$	30.83	$	92.49
Total units outstanding	4,095,971		20,408,750		14,415,466		8,976,314		2,554,532		359,531		2,235,970
Variable accumulation unit value (lowest to highest)	$10.49 to $11.31		$11.40 to $13.05		$11.72 to $13.95		$11.01 to $12.32		$12.91 to $14.95		$18.36 to $18.53		$17.72 to $18.13
Identified cost of investment	$	46,813,485	$	255,766,014	$	190,110,526	$	108,671,182	$	32,632,868	$	6,726,721	$	34,595,882

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

13

NYLIAC Variable Annuity Separate Account-III

Statement of Assets and Liabilities (Continued)

As of December 31, 2021

	Janus Henderson Global Research Portfolio— Institutional Shares		Janus Henderson Global Research Portfolio— Service Shares		MFS® International Intrinsic Value Portfolio— Service Class		MFS® Investors Trust Series— Initial Class		MFS® Investors Trust Series— Service Class		MFS® Mid Cap Value Portfolio— Service Class		MFS® Research Series— Initial Class
ASSETS:
Investment at net asset value	$	57,935,067	$	40,910,813	$	45,939,783	$	9,976,393	$	72,584,182	$	22,933,081	$	10,572,941
Dividends due and accrued	—		—		—		—		—		—		—
Net receivable from (payable to) New York Life Insurance and Annuity Corporation	(25,925)		(3,924)		40,790		(19,030)		(483)		93,009		(25,282)
Net receivable from (payable to) the Fund shares sold or purchased	28,170		5,509		(39,133)		19,423		3,189		(92,137)		25,695
LIABILITIES:
Liability to New York Life Insurance and Annuity Corporation for:
Mortality and expense risk charges	1,998		1,513		1,644		355		2,674		857		370
Administrative charges	247		72		13		38		32		15		43
Total net assets	$	57,935,067	$	40,910,813	$	45,939,783	$	9,976,393	$	72,584,182	$	22,933,081	$	10,572,941
Total shares outstanding	812,782		590,258		1,242,959		223,086		1,650,766		2,094,345		273,981
Net asset value per share (NAV)	$	71.28	$	69.31	$	36.96	$	44.72	$	43.97	$	10.95	$	38.59
Total units outstanding	1,413,591		1,545,077		2,837,512		264,558		2,943,291		1,309,980		248,908
Variable accumulation unit value (lowest to highest)	$16.88 to $44.71		$17.75 to $33.53		$15.87 to $16.28		$32.21 to $51.61		$20.79 to $46.75		$13.47 to $17.61		$28.92 to $48.01
Identified cost of investment	$	31,577,571	$	29,318,345	$	37,617,308	$	6,468,252	$	51,368,019	$	19,724,949	$	7,725,600

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

14

NYLIAC Variable Annuity Separate Account-III

Statement of Assets and Liabilities (Continued)

As of December 31, 2021

	MFS® Research Series— Service Class		Morgan Stanley VIF U.S. Real Estate Portfolio— Class II		Neuberger Berman AMT Mid Cap Growth Portfolio— Class I		Neuberger Berman AMT Mid Cap Growth Portfolio— Class S		PIMCO VIT Income Portfolio— Advisor Class		PIMCO VIT International Bond Portfolio (U.S. Dollar- Hedged)— Advisor Class		PIMCO VIT Low Duration Portfolio— Advisor Class
ASSETS:
Investment at net asset value	$	53,717,002	$	24,273,110	$	1,935,732	$	94,865,879	$	15,562,487	$	90,123,541	$	31,859,355
Dividends due and accrued	—		—		—		—		—		(2)		1
Net receivable from (payable to) New York Life Insurance and Annuity Corporation	(4,207)		78,944		306		36,060		15,925		15,478		26,451
Net receivable from (payable to) the Fund shares sold or purchased	6,218		(78,010)		(227)		(32,383)		(15,356)		(12,028)		(25,261)
LIABILITIES:
Liability to New York Life Insurance and Annuity Corporation for:
Mortality and expense risk charges	1,977		911		74		3,559		563		3,420		1,180
Administrative charges	34		23		5		118		6		28		11
Total net assets	$	53,717,002	$	24,273,110	$	1,935,732	$	94,865,879	$	15,562,487	$	90,123,541	$	31,859,355
Total shares outstanding	1,416,588		1,040,871		47,985		2,633,700		1,426,442		8,383,585		3,114,306
Net asset value per share (NAV)	$	37.92	$	23.32	$	40.34	$	36.02	$	10.91	$	10.75	$	10.23
Total units outstanding	2,035,096		1,804,467		36,918		2,857,767		1,391,267		7,971,094		3,185,528
Variable accumulation unit value (lowest to highest)	$21.42 to $52.70		$12.16 to $14.70		$49.48 to $70.64		$21.45 to $62.50		$11.11 to $11.21		$10.94 to $11.94		$9.79 to $10.10
Identified cost of investment	$	40,434,012	$	19,717,439	$	1,295,392	$	78,865,055	$	15,534,101	$	92,480,965	$	32,032,707

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

15

NYLIAC Variable Annuity Separate Account-III

Statement of Assets and Liabilities (Continued)

As of December 31, 2021

	PIMCO VIT Total Return Portfolio— Advisor Class
ASSETS:
Investment at net asset value	$	170,445,836
Dividends due and accrued	(4)
Net receivable from (payable to) New York Life Insurance and Annuity Corporation	53,741
Net receivable from (payable to) the Fund shares sold or purchased	(47,396)
LIABILITIES:
Liability to New York Life Insurance and Annuity Corporation for:
Mortality and expense risk charges	6,292
Administrative charges	49
Total net assets	$	170,445,836
Total shares outstanding	15,840,691
Net asset value per share (NAV)	$	10.76
Total units outstanding	15,140,313
Variable accumulation unit value (lowest to highest)	$11.02 to $11.46
Identified cost of investment	$	176,275,583

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

16

NYLIAC Variable Annuity Separate Account-III

Statement of Operations

For the year ended December 31, 2021

	MainStay VP Balanced— Service Class		MainStay VP Bond— Initial Class		MainStay VP Bond— Service Class		MainStay VP Candriam Emerging Markets Equity— Initial Class		MainStay VP Candriam Emerging Markets Equity— Service Class		MainStay VP CBRE Global Infrastructure— Service Class		MainStay VP Conservative Allocation— Service Class
INVESTMENT INCOME (LOSS):
Dividend income	$	1,401,488	$	581,462	$	2,103,509	$	126,502	$	329,981	$	—	$	4,001,671
Mortality and expense risk charges	(1,653,119)		(437,090)		(1,858,740)		(153,257)		(557,152)		(61,850)		(3,391,253)
Administrative charges	(159,681)		(58,481)		(212,566)		(22,340)		(80,535)		(5,169)		(286,358)
Net investment income (loss)	(411,312)		85,891		32,203		(49,095)		(307,706)		(67,019)		324,060
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments	18,900,857		3,923,958		24,306,172		1,500,133		8,167,077		1,106,563		38,561,405
Cost of investments sold	(16,741,734)		(3,873,034)		(23,490,452)		(1,171,580)		(5,838,893)		(1,299,024)		(35,054,149)
Net realized gain (loss) on investments	2,159,123		50,924		815,720		328,553		2,328,184		(192,461)		3,507,256
Realized gain distribution received	2,291,640		994,436		4,122,893		—		—		—		2,946,675
Change in unrealized appreciation (depreciation) on investments	12,441,816		(2,109,262)		(9,289,539)		(608,587)		(3,094,885)		822,436		5,652,774
Net gain (loss) on investments	16,892,579		(1,063,902)		(4,350,926)		(280,034)		(766,701)		629,975		12,106,705
Net increase (decrease) in net assets resulting from operations	$	16,481,267	$	(978,011)	$	(4,318,723)	$	(329,129)	$	(1,074,407)	$	562,956	$	12,430,765

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

17

NYLIAC Variable Annuity Separate Account-III

Statement of Operations (Continued)

For the year ended December 31, 2021

	MainStay VP Epoch U.S. Equity Yield— Initial Class		MainStay VP Epoch U.S. Equity Yield— Service Class		MainStay VP Equity Allocation— Service Class		MainStay VP Fidelity Institutional AM® Utilities— Initial Class		MainStay VP Fidelity Institutional AM® Utilities— Service Class		MainStay VP Floating Rate— Service Class		MainStay VP Growth Allocation— Service Class
INVESTMENT INCOME (LOSS):
Dividend income	$	2,331,724	$	3,685,831	$	3,044,726	$	15,770	$	5,396,408	$	4,474,861	$	7,936,276
Mortality and expense risk charges	(1,282,730)		(2,315,220)		(2,544,588)		(11,177)		(4,076,846)		(2,152,828)		(5,071,179)
Administrative charges	(166,855)		(265,604)		(379,603)		(1,532)		(480,474)		(227,247)		(774,220)
Net investment income (loss)	882,139		1,105,007		120,535		3,061		839,088		2,094,786		2,090,877
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments	12,028,182		28,071,061		34,781,855		266,166		50,310,170		25,357,223		74,398,119
Cost of investments sold	(8,737,419)		(25,349,569)		(28,628,050)		(229,967)		(47,364,535)		(25,772,511)		(67,791,298)
Net realized gain (loss) on investments	3,290,763		2,721,492		6,153,805		36,199		2,945,635		(415,288)		6,606,821
Realized gain distribution received	—		—		5,959,775		30,374		11,857,549		—		4,339,246
Change in unrealized appreciation (depreciation) on investments	14,623,766		27,833,620		18,312,029		43,342		26,497,114		1,171,688		34,838,331
Net gain (loss) on investments	17,914,529		30,555,112		30,425,609		109,915		41,300,298		756,400		45,784,398
Net increase (decrease) in net assets resulting from operations	$	18,796,668	$	31,660,119	$	30,546,144	$	112,976	$	42,139,386	$	2,851,186	$	47,875,275

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

18

NYLIAC Variable Annuity Separate Account-III

Statement of Operations (Continued)

For the year ended December 31, 2021

	MainStay VP Income Builder— Initial Class		MainStay VP Income Builder— Service Class		MainStay VP IQ Hedge Multi- Strategy— Service Class		MainStay VP Janus Henderson Balanced— Initial Class		MainStay VP Janus Henderson Balanced— Service Class		MainStay VP MacKay Convertible— Initial Class		MainStay VP MacKay Convertible— Service Class
INVESTMENT INCOME (LOSS):
Dividend income	$	1,550,892	$	3,694,910	$	—	$	2,174,341	$	3,857,000	$	921,172	$	2,813,942
Mortality and expense risk charges	(686,409)		(1,910,171)		(844,962)		(2,141,161)		(4,589,850)		(1,036,992)		(4,261,561)
Administrative charges	(94,223)		(128,923)		(123,453)		(310,134)		(360,178)		(138,165)		(346,270)
Net investment income (loss)	770,260		1,655,816		(968,415)		(276,954)		(1,093,028)		(253,985)		(1,793,889)
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments	5,807,502		22,260,078		7,819,703		19,460,302		51,653,988		10,104,908		45,172,194
Cost of investments sold	(4,642,379)		(20,069,684)		(7,248,886)		(12,058,571)		(39,511,003)		(6,554,505)		(31,015,028)
Net realized gain (loss) on investments	1,165,123		2,190,394		570,817		7,401,731		12,142,985		3,550,403		14,157,166
Realized gain distribution received	1,206,510		3,213,428		—		5,409,984		11,309,717		3,832,357		15,734,954
Change in unrealized appreciation (depreciation) on investments	1,476,703		4,344,892		(1,047,109)		11,920,768		26,383,595		(1,196,521)		(6,374,180)
Net gain (loss) on investments	3,848,336		9,748,714		(476,292)		24,732,483		49,836,297		6,186,239		23,517,940
Net increase (decrease) in net assets resulting from operations	$	4,618,596	$	11,404,530	$	(1,444,707)	$	24,455,529	$	48,743,269	$	5,932,254	$	21,724,051

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

19

NYLIAC Variable Annuity Separate Account-III

Statement of Operations (Continued)

For the year ended December 31, 2021

	MainStay VP MacKay Government— Initial Class		MainStay VP MacKay Government— Service Class		MainStay VP MacKay High Yield Corporate Bond— Initial Class		MainStay VP MacKay High Yield Corporate Bond— Service Class		MainStay VP MacKay International Equity— Initial Class		MainStay VP MacKay International Equity— Service Class		MainStay VP MacKay S&P 500 Index— Initial Class
INVESTMENT INCOME (LOSS):
Dividend income	$	332,086	$	919,049	$	6,553,709	$	34,637,063	$	26,101	$	—	$	2,514,478
Mortality and expense risk charges	(284,014)		(999,483)		(1,786,407)		(10,218,192)		(290,482)		(1,265,686)		(2,651,056)
Administrative charges	(40,357)		(114,994)		(227,444)		(1,047,194)		(35,250)		(152,808)		(360,706)
Net investment income (loss)	7,715		(195,428)		4,539,858		23,371,677		(299,631)		(1,418,494)		(497,284)
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments	3,210,893		19,727,291		15,721,063		87,771,133		2,787,577		14,695,953		22,302,299
Cost of investments sold	(3,362,768)		(19,617,172)		(15,466,882)		(87,972,209)		(1,639,209)		(10,666,939)		(8,299,279)
Net realized gain (loss) on investments	(151,875)		110,119		254,181		(201,076)		1,148,368		4,029,014		14,003,020
Realized gain distribution received	—		—		—		—		2,810,739		11,937,210		2,144,209
Change in unrealized appreciation (depreciation) on investments	(510,738)		(2,341,455)		656,316		3,062,458		(1,454,273)		(5,407,429)		33,503,587
Net gain (loss) on investments	(662,613)		(2,231,336)		910,497		2,861,382		2,504,834		10,558,795		49,650,816
Net increase (decrease) in net assets resulting from operations	$	(654,898)	$	(2,426,764)	$	5,450,355	$	26,233,059	$	2,205,203	$	9,140,301	$	49,153,532

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

20

NYLIAC Variable Annuity Separate Account-III

Statement of Operations (Continued)

For the year ended December 31, 2021

	MainStay VP MacKay S&P 500 Index— Service Class		MainStay VP MacKay Strategic Bond— Service Class		MainStay VP Moderate Allocation— Service Class		MainStay VP Natural Resources— Initial Class		MainStay VP PIMCO Real Return— Service Class		MainStay VP Small Cap Growth— Initial Class		MainStay VP Small Cap Growth— Service Class
INVESTMENT INCOME (LOSS):
Dividend income	$	5,074,641	$	4,130,625	$	3,167,545	$	1,044,658	$	339,999	$	—	$	—
Mortality and expense risk charges	(6,544,881)		(2,620,436)		(4,658,203)		(1,147,700)		(1,474,588)		(668,302)		(631,534)
Administrative charges	(659,063)		(351,712)		(503,100)		(148,101)		(175,929)		(100,056)		(59,668)
Net investment income (loss)	(2,129,303)		1,158,477		(1,993,758)		(251,143)		(1,310,518)		(768,358)		(691,202)
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments	77,452,816		27,609,249		50,001,598		22,617,322		33,377,828		7,659,171		10,826,407
Cost of investments sold	(43,015,151)		(26,894,001)		(46,436,845)		(22,019,462)		(30,955,554)		(4,296,967)		(7,891,542)
Net realized gain (loss) on investments	34,437,665		715,248		3,564,753		597,860		2,422,274		3,362,204		2,934,865
Realized gain distribution received	5,119,798		—		8,810,294		—		—		6,263,071		6,019,383
Change in unrealized appreciation (depreciation) on investments	74,568,876		(1,669,813)		20,032,497		25,165,862		2,535,090		(4,547,058)		(4,607,768)
Net gain (loss) on investments	114,126,339		(954,565)		32,407,544		25,763,722		4,957,364		5,078,217		4,346,480
Net increase (decrease) in net assets resulting from operations	$	111,997,036	$	203,912	$	30,413,786	$	25,512,579	$	3,646,846	$	4,309,859	$	3,655,278

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

21

NYLIAC Variable Annuity Separate Account-III

Statement of Operations (Continued)

For the year ended December 31, 2021

	MainStay VP T. Rowe Price Equity Income— Initial Class		MainStay VP T. Rowe Price Equity Income— Service Class		MainStay VP U.S. Government Money Market— Initial Class		MainStay VP Wellington Growth— Initial Class		MainStay VP Wellington Growth— Service Class		MainStay VP Wellington Mid Cap— Initial Class		MainStay VP Wellington Mid Cap— Service Class
INVESTMENT INCOME (LOSS):
Dividend income	$	1,057,074	$	1,853,463	$	14,619	$	333,425	$	25,331	$	262,643	$	680,212
Mortality and expense risk charges	(562,961)		(1,180,091)		(2,072,854)		(1,295,186)		(379,629)		(585,669)		(2,389,886)
Administrative charges	(69,708)		(137,731)		(276,891)		(192,394)		(46,417)		(76,164)		(258,942)
Net investment income (loss)	424,405		535,641		(2,335,126)		(1,154,155)		(400,715)		(399,190)		(1,968,616)
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments	5,897,147		18,701,536		127,314,675		12,708,888		5,369,071		6,021,569		32,081,816
Cost of investments sold	(4,851,311)		(17,847,594)		(127,314,022)		(7,423,971)		(3,359,100)		(5,543,798)		(29,480,769)
Net realized gain (loss) on investments	1,045,836		853,942		653		5,284,917		2,009,971		477,771		2,601,047
Realized gain distribution received	644,408		1,248,100		—		14,829,877		3,898,580		824,915		3,328,256
Change in unrealized appreciation (depreciation) on investments	6,931,665		15,047,540		(653)		(1,960,304)		(1,056,516)		6,486,102		24,975,604
Net gain (loss) on investments	8,621,909		17,149,582		—		18,154,490		4,852,035		7,788,788		30,904,907
Net increase (decrease) in net assets resulting from operations	$	9,046,314	$	17,685,223	$	(2,335,126)	$	17,000,335	$	4,451,320	$	7,389,598	$	28,936,291

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

22

NYLIAC Variable Annuity Separate Account-III

Statement of Operations (Continued)

For the year ended December 31, 2021

	MainStay VP Wellington Small Cap— Initial Class		MainStay VP Wellington Small Cap— Service Class		MainStay VP Wellington U.S. Equity— Initial Class		MainStay VP Wellington U.S. Equity— Service Class		MainStay VP Winslow Large Cap Growth— Initial Class		MainStay VP Winslow Large Cap Growth— Service Class		American Funds IS Asset Allocation Fund— Class 4
INVESTMENT INCOME (LOSS):
Dividend income	$	90,560	$	177,598	$	739,287	$	484,300	$	—	$	—	$	1,341,958
Mortality and expense risk charges	(301,451)		(1,307,289)		(1,088,926)		(987,543)		(777,882)		(3,849,215)		(1,120,010)
Administrative charges	(40,219)		(138,914)		(148,733)		(102,281)		(106,489)		(355,168)		(73,401)
Net investment income (loss)	(251,110)		(1,268,605)		(498,372)		(605,524)		(884,371)		(4,204,383)		148,547
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments	3,516,648		21,285,146		11,629,531		12,390,103		9,354,034		49,392,796		10,585,320
Cost of investments sold	(2,964,180)		(18,167,722)		(5,145,530)		(10,544,526)		(5,648,208)		(32,184,658)		(8,794,297)
Net realized gain (loss) on investments	552,468		3,117,424		6,484,001		1,845,577		3,705,826		17,208,138		1,791,023
Realized gain distribution received	—		—		4,048,059		3,510,057		4,313,428		21,754,193		2,690,436
Change in unrealized appreciation (depreciation) on investments	3,088,355		12,415,425		10,336,718		12,313,563		5,148,668		21,542,772		5,363,061
Net gain (loss) on investments	3,640,823		15,532,849		20,868,778		17,669,197		13,167,922		60,505,103		9,844,520
Net increase (decrease) in net assets resulting from operations	$	3,389,713	$	14,264,244	$	20,370,406	$	17,063,673	$	12,283,551	$	56,300,720	$	9,993,067

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

23

NYLIAC Variable Annuity Separate Account-III

Statement of Operations (Continued)

For the year ended December 31, 2021

	American Funds IS Global Small Capitalization Fund— Class 4		American Funds IS Growth Fund— Class 4		American Funds IS New World Fund®— Class 4		American Funds IS Washington Mutual Investors Fund— Class 4		BlackRock® Global Allocation V.I. Fund— Class III		BlackRock® High Yield V.I. Fund— Class III		BNY Mellon IP Technology Growth Portfolio— Initial Shares
INVESTMENT INCOME (LOSS):
Dividend income	$	—	$	30,952	$	366,694	$	971,125	$	954,752	$	3,343,773	$	—
Mortality and expense risk charges	(191,029)		(721,218)		(760,225)		(974,932)		(1,588,435)		(1,060,563)		(383,432)
Administrative charges	(12,340)		(60,113)		(86,630)		(106,578)		(190,989)		(130,871)		(46,576)
Net investment income (loss)	(203,369)		(750,379)		(480,161)		(110,385)		(824,672)		2,152,339		(430,008)
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments	2,764,813		10,504,584		8,666,000		13,396,632		21,639,624		9,105,824		6,903,176
Cost of investments sold	(1,988,795)		(6,478,912)		(6,211,923)		(10,802,273)		(18,741,432)		(8,629,735)		(4,212,919)
Net realized gain (loss) on investments	776,018		4,025,672		2,454,077		2,594,359		2,898,192		476,089		2,690,257
Realized gain distribution received	318,711		6,748,352		1,847,436		—		20,031,995		253,092		3,801,021
Change in unrealized appreciation (depreciation) on investments	(326,419)		(430,022)		(2,030,093)		14,155,861		(16,960,471)		(144,895)		(3,075,972)
Net gain (loss) on investments	768,310		10,344,002		2,271,420		16,750,220		5,969,716		584,286		3,415,306
Net increase (decrease) in net assets resulting from operations	$	564,941	$	9,593,623	$	1,791,259	$	16,639,835	$	5,145,044	$	2,736,625	$	2,985,298

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

24

NYLIAC Variable Annuity Separate Account-III

Statement of Operations (Continued)

For the year ended December 31, 2021

	BNY Mellon IP Technology Growth Portfolio— Service Shares		ClearBridge Variable Appreciation Portfolio— Class II		Columbia Variable Portfolio— Commodity Strategy Fund— Class 2		Columbia Variable Portfolio— Emerging Markets Bond Fund— Class 2		Columbia Variable Portfolio— Small Cap Value Fund— Class 2		Delaware VIP® Small Cap Value Series— Service Class		DWS Alternative Asset Allocation VIP— Class B
INVESTMENT INCOME (LOSS):
Dividend income	$	—	$	73,226	$	—	$	1,548,831	$	232,382	$	56,686	$	1,243,645
Mortality and expense risk charges	(2,447,342)		(235,457)		(21,534)		(555,257)		(605,697)		(157,060)		(970,953)
Administrative charges	(204,746)		(28,702)		(1,144)		(76,529)		(56,746)		(14,782)		(119,840)
Net investment income (loss)	(2,652,088)		(190,933)		(22,678)		917,045		(430,061)		(115,156)		152,852
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments	35,824,766		2,801,037		365,327		3,425,689		17,130,026		4,689,442		9,275,703
Cost of investments sold	(24,326,651)		(2,184,622)		(378,029)		(3,378,476)		(14,635,973)		(3,498,824)		(8,273,827)
Net realized gain (loss) on investments	11,498,115		616,415		(12,702)		47,213		2,494,053		1,190,618		1,001,876
Realized gain distribution received	24,755,801		706,350		—		—		—		—		—
Change in unrealized appreciation (depreciation) on investments	(15,572,023)		2,355,326		442,955		(2,595,966)		7,014,436		1,587,136		6,301,400
Net gain (loss) on investments	20,681,893		3,678,091		430,253		(2,548,753)		9,508,489		2,777,754		7,303,276
Net increase (decrease) in net assets resulting from operations	$	18,029,805	$	3,487,158	$	407,575	$	(1,631,708)	$	9,078,428	$	2,662,598	$	7,456,128

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

25

NYLIAC Variable Annuity Separate Account-III

Statement of Operations (Continued)

For the year ended December 31, 2021

	Fidelity® VIP Bond Index Portfolio— Service Class 2		Fidelity® VIP ContrafundSM Portfolio— Initial Class		Fidelity® VIP ContrafundSM Portfolio— Service Class 2		Fidelity® VIP Emerging Markets Portfolio— Service Class 2		Fidelity® VIP Equity-Income PortfolioSM— Initial Class		Fidelity® VIP Equity-Income PortfolioSM— Service Class 2		Fidelity® VIP FundsManager® 60% Portfolio— Investor Class
INVESTMENT INCOME (LOSS):
Dividend income	$	429,084	$	96,949	$	117,596	$	267,276	$	944,228	$	2,347,370	$	7,655,182
Mortality and expense risk charges	(730,102)		(1,961,491)		(5,837,759)		(159,666)		(648,226)		(1,880,490)		(7,550,880)
Administrative charges	(84,857)		(260,735)		(659,100)		(14,437)		(85,664)		(182,925)		(4,403,919)
Net investment income (loss)	(385,875)		(2,125,277)		(6,379,263)		93,173		210,338		283,955		(4,299,617)
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments	12,638,665		17,344,307		81,040,800		3,088,761		7,288,648		23,702,491		1,987,244
Cost of investments sold	(13,040,965)		(7,021,339)		(51,019,211)		(2,454,324)		(6,082,127)		(19,816,262)		(1,557,998)
Net realized gain (loss) on investments	(402,300)		10,322,968		30,021,589		634,437		1,206,521		3,886,229		429,246
Realized gain distribution received	—		19,172,182		53,087,197		1,382,308		5,528,792		16,106,349		9,213,440
Change in unrealized appreciation (depreciation) on investments	(1,253,510)		8,143,219		19,882,855		(2,886,213)		3,415,774		7,377,426		53,426,711
Net gain (loss) on investments	(1,655,810)		37,638,369		102,991,641		(869,468)		10,151,087		27,370,004		63,069,397
Net increase (decrease) in net assets resulting from operations	$	(2,041,685)	$	35,513,092	$	96,612,378	$	(776,295)	$	10,361,425	$	27,653,959	$	58,769,780

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

26

NYLIAC Variable Annuity Separate Account-III

Statement of Operations (Continued)

For the year ended December 31, 2021

	Fidelity® VIP FundsManager® 60% Portfolio— Service Class		Fidelity® VIP Government Money Market Portfolio— Investor Class		Fidelity® VIP Growth Opportunities Portfolio— Service Class 2		Fidelity® VIP Health Care Portfolio— Service Class 2		Fidelity® VIP International Index Portfolio— Service Class 2		Fidelity® VIP Mid Cap Portfolio— Service Class 2		Franklin Templeton Aggressive Model Portfolio— Class II
INVESTMENT INCOME (LOSS):
Dividend income	$	240,203	$	4	$	—	$	22,286	$	189,359	$	502,721	$	733,456
Mortality and expense risk charges	(230,105)		(510)		(2,776,829)		(632,176)		(71,217)		(1,880,777)		(434,764)
Administrative charges	(17,191)		(297)		(262,075)		(44,255)		(5,465)		(205,913)		(14,742)
Net investment income (loss)	(7,093)		(803)		(3,038,904)		(654,145)		112,677		(1,583,969)		283,950
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments	3,060,816		415,004		40,074,346		8,368,418		794,135		26,577,450		4,610,239
Cost of investments sold	(2,670,195)		(415,004)		(21,160,393)		(7,231,139)		(656,196)		(20,847,682)		(3,688,934)
Net realized gain (loss) on investments	390,621		—		18,913,953		1,137,279		137,939		5,729,768		921,305
Realized gain distribution received	213,726		—		17,389,941		2,577,472		17,328		22,783,757		2,183,528
Change in unrealized appreciation (depreciation) on investments	1,009,600		—		(15,961,526)		965,564		(104,941)		1,854,666		1,694,773
Net gain (loss) on investments	1,613,947		—		20,342,368		4,680,315		50,326		30,368,191		4,799,606
Net increase (decrease) in net assets resulting from operations	$	1,606,854	$	(803)	$	17,303,464	$	4,026,170	$	163,003	$	28,784,222	$	5,083,556

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

27

NYLIAC Variable Annuity Separate Account-III

Statement of Operations (Continued)

For the year ended December 31, 2021

	Franklin Templeton Conservative Model Portfolio— Class II		Franklin Templeton Moderate Model Portfolio— Class II		Franklin Templeton Moderately Aggressive Model Portfolio— Class II		Franklin Templeton Moderately Conservative Model Portfolio— Class II		Invesco V.I. International Growth Fund— Series II Shares		Invesco V.I. Main Street Small Cap Fund®— Series II Shares		Janus Henderson Enterprise Portfolio— Service Shares
INVESTMENT INCOME (LOSS):
Dividend income	$	829,626	$	4,222,779	$	3,114,520	$	1,866,544	$	377,969	$	10,134	$	81,150
Mortality and expense risk charges	(440,586)		(2,150,597)		(1,570,338)		(1,011,579)		(486,761)		(58,110)		(457,759)
Administrative charges	(28,661)		(206,163)		(140,570)		(68,990)		(56,678)		(4,189)		(42,919)
Net investment income (loss)	360,379		1,866,019		1,403,612		785,975		(165,470)		(52,165)		(419,528)
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments	8,103,314		11,127,404		6,751,243		8,820,121		5,463,133		2,736,759		5,388,243
Cost of investments sold	(7,711,164)		(9,474,737)		(5,635,593)		(7,870,073)		(4,463,239)		(2,550,611)		(4,350,669)
Net realized gain (loss) on investments	392,150		1,652,667		1,115,650		950,048		999,894		186,148		1,037,574
Realized gain distribution received	1,472,257		8,085,007		6,630,376		3,829,091		2,435,115		354,354		3,061,141
Change in unrealized appreciation (depreciation) on investments	(1,148,778)		4,844,260		4,655,896		(129,358)		(1,852,357)		(140,435)		1,038,187
Net gain (loss) on investments	715,629		14,581,934		12,401,922		4,649,781		1,582,652		400,067		5,136,902
Net increase (decrease) in net assets resulting from operations	$	1,076,008	$	16,447,953	$	13,805,534	$	5,435,756	$	1,417,182	$	347,902	$	4,717,374

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

28

NYLIAC Variable Annuity Separate Account-III

Statement of Operations (Continued)

For the year ended December 31, 2021

	Janus Henderson Global Research Portfolio— Institutional Shares		Janus Henderson Global Research Portfolio— Service Shares		MFS® International Intrinsic Value Portfolio— Service Class		MFS® Investors Trust Series— Initial Class		MFS® Investors Trust Series— Service Class		MFS® Mid Cap Value Portfolio— Service Class		MFS® Research Series— Initial Class
INVESTMENT INCOME (LOSS):
Dividend income	$	294,314	$	143,348	$	58,408	$	60,507	$	305,222	$	132,088	$	54,683
Mortality and expense risk charges	(716,531)		(537,663)		(521,016)		(126,137)		(979,843)		(232,566)		(132,009)
Administrative charges	(106,796)		(48,903)		(54,025)		(16,945)		(108,904)		(15,161)		(18,208)
Net investment income (loss)	(529,013)		(443,218)		(516,633)		(82,575)		(783,525)		(115,639)		(95,534)
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments	6,717,611		8,164,252		4,570,674		1,575,280		17,668,328		6,724,774		1,999,763
Cost of investments sold	(2,780,651)		(5,141,572)		(3,449,125)		(1,036,767)		(12,264,844)		(5,562,432)		(1,492,508)
Net realized gain (loss) on investments	3,936,960		3,022,680		1,121,549		538,513		5,403,484		1,162,342		507,255
Realized gain distribution received	2,663,221		1,895,260		1,132,551		304,240		2,336,357		126,890		572,858
Change in unrealized appreciation (depreciation) on investments	2,543,689		1,402,360		1,695,684		1,381,383		8,980,287		2,633,225		1,168,329
Net gain (loss) on investments	9,143,870		6,320,300		3,949,784		2,224,136		16,720,128		3,922,457		2,248,442
Net increase (decrease) in net assets resulting from operations	$	8,614,857	$	5,877,082	$	3,433,151	$	2,141,561	$	15,936,603	$	3,806,818	$	2,152,908

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

29

NYLIAC Variable Annuity Separate Account-III

Statement of Operations (Continued)

For the year ended December 31, 2021

	MFS® Research Series— Service Class		Morgan Stanley VIF U.S. Real Estate Portfolio— Class II		Neuberger Berman AMT Mid Cap Growth Portfolio— Class I		Neuberger Berman AMT Mid Cap Growth Portfolio— Class S		PIMCO VIT Income Portfolio— Advisor Class		PIMCO VIT International Bond Portfolio (U.S. Dollar- Hedged)— Advisor Class		PIMCO VIT Low Duration Portfolio— Advisor Class
INVESTMENT INCOME (LOSS):
Dividend income	$	172,937	$	374,086	$	—	$	—	$	274,999	$	1,346,688	$	136,348
Mortality and expense risk charges	(706,178)		(277,531)		(27,689)		(1,315,817)		(131,284)		(1,261,071)		(438,503)
Administrative charges	(78,795)		(23,504)		(2,963)		(125,532)		(13,485)		(155,382)		(42,596)
Net investment income (loss)	(612,036)		73,051		(30,652)		(1,441,349)		130,230		(69,765)		(344,751)
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments	10,333,924		5,912,765		205,665		23,100,357		2,319,759		11,476,187		10,208,854
Cost of investments sold	(7,877,487)		(6,233,979)		(128,833)		(14,458,304)		(2,262,199)		(11,431,385)		(10,099,036)
Net realized gain (loss) on investments	2,456,437		(321,214)		76,832		8,642,053		57,560		44,802		109,818
Realized gain distribution received	2,984,849		—		209,404		11,130,297		—		797,464		—
Change in unrealized appreciation (depreciation) on investments	5,871,363		6,654,806		(49,681)		(8,604,427)		(164,894)		(4,066,471)		(578,008)
Net gain (loss) on investments	11,312,649		6,333,592		236,555		11,167,923		(107,334)		(3,224,205)		(468,190)
Net increase (decrease) in net assets resulting from operations	$	10,700,613	$	6,406,643	$	205,903	$	9,726,574	$	22,896	$	(3,293,970)	$	(812,941)

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

30

NYLIAC Variable Annuity Separate Account-III

Statement of Operations (Continued)

For the year ended December 31, 2021

	PIMCO VIT Total Return Portfolio— Advisor Class
INVESTMENT INCOME (LOSS):
Dividend income	$	2,964,662
Mortality and expense risk charges	(2,344,713)
Administrative charges	(286,959)
Net investment income (loss)	332,990
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments	39,530,531
Cost of investments sold	(38,680,184)
Net realized gain (loss) on investments	850,347
Realized gain distribution received	7,351,766
Change in unrealized appreciation (depreciation) on investments	(13,524,855)
Net gain (loss) on investments	(5,322,742)
Net increase (decrease) in net assets resulting from operations	$	(4,989,752)

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

31

NYLIAC Variable Annuity Separate Account-III

Statement of Changes in Net Assets

For the years ended December 31, 2021

and December 31, 2020

	MainStay VP Balanced— Service Class				MainStay VP Bond— Initial Class				MainStay VP Bond— Service Class				MainStay VP Candriam Emerging Markets Equity— Initial Class
INCREASE (DECREASE) IN NET ASSETS:	2021		2020		2021		2020		2021		2020		2021		2020
Operations:
Net investment income (loss)	$	(411,312)	$	238,083	$	85,891	$	199,975	$	32,203	$	530,220	$	(49,095)	$	182,622
Net realized gain (loss) on investments	2,159,123		(1,538,070)		50,924		34,702		815,720		986,092		328,553		(63,187)
Realized gain distribution received	2,291,640		3,839,304		994,436		82,637		4,122,893		311,668		—		—
Change in unrealized appreciation/(depreciation) on investments	12,441,816		2,518,534		(2,109,262)		1,891,643		(9,289,539)		5,145,575		(608,587)		2,173,068
Net increase (decrease) in net assets resulting from operations	16,481,267		5,057,851		(978,011)		2,208,957		(4,318,723)		6,973,555		(329,129)		2,292,503
Contributions and (withdrawals):
Payments received from policyowners	8,872,391		3,967,633		212,106		370,736		5,920,867		9,717,380		114,206		111,774
Policyowners' surrenders	(12,499,653)		(11,242,671)		(1,959,908)		(2,827,061)		(15,018,282)		(13,515,015)		(782,043)		(925,555)
Policyowners' annuity and death benefits	(1,732,665)		(944,139)		(704,404)		(861,903)		(1,332,281)		(894,691)		(136,270)		(121,074)
Net transfers from (to) Fixed Account	3,881,852		3,228,717		(429,455)		(685,220)		2,737,491		11,813,963		(139,662)		(223,744)
Transfers between Investment Divisions	8,722,355		(4,624,348)		597,725		698,877		3,360,303		12,388,343		(80,287)		(766,164)
Net contributions and (withdrawals)	7,244,280		(9,614,808)		(2,283,936)		(3,304,571)		(4,331,902)		19,509,980		(1,024,056)		(1,924,763)
Increase (decrease) in net assets	23,725,547		(4,556,957)		(3,261,947)		(1,095,614)		(8,650,625)		26,483,535		(1,353,185)		367,740
NET ASSETS:
Beginning of period	106,930,066		111,487,023		35,395,499		36,491,113		139,819,196		113,335,661		12,170,712		11,802,972
End of period	$	130,655,613	$	106,930,066	$	32,133,552	$	35,395,499	$	131,168,571	$	139,819,196	$	10,817,527	$	12,170,712

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

32

NYLIAC Variable Annuity Separate Account-III

Statement of Changes in Net Assets (Continued)

For the years ended December 31, 2021

and December 31, 2020

	MainStay VP Candriam Emerging Markets Equity— Service Class				MainStay VP CBRE Global Infrastructure— Service Class				MainStay VP Conservative Allocation— Service Class				MainStay VP Epoch U.S. Equity Yield— Initial Class
INCREASE (DECREASE) IN NET ASSETS:	2021		2020		2021		2020		2021		2020		2021		2020
Operations:
Net investment income (loss)	$	(307,706)	$	506,045	$	(67,019)	$	180,481	$	324,060	$	648,271	$	882,139	$	1,086,612
Net realized gain (loss) on investments	2,328,184		111,762		(192,461)		(640,870)		3,507,256		(1,220,511)		3,290,763		2,810,488
Realized gain distribution received	—		—		—		—		2,946,675		3,667,571		—		3,088,301
Change in unrealized appreciation/(depreciation) on investments	(3,094,885)		7,455,439		822,436		(171,667)		5,652,774		14,991,193		14,623,766		(9,496,944)
Net increase (decrease) in net assets resulting from operations	(1,074,407)		8,073,246		562,956		(632,056)		12,430,765		18,086,524		18,796,668		(2,511,543)
Contributions and (withdrawals):
Payments received from policyowners	697,696		670,344		646,144		210,436		7,921,530		8,247,602		615,014		713,736
Policyowners' surrenders	(5,494,125)		(5,322,179)		(366,741)		(338,631)		(27,014,766)		(28,504,269)		(6,688,618)		(7,185,052)
Policyowners' annuity and death benefits	(316,648)		(172,356)		(43,119)		(27,953)		(3,929,303)		(2,979,378)		(2,085,518)		(1,756,721)
Net transfers from (to) Fixed Account	(239,053)		(419,170)		392,432		113,853		3,580,028		2,877,978		(1,089,828)		(1,005,630)
Transfers between Investment Divisions	(291,905)		(4,099,958)		538,813		(31,186)		7,432,338		(840,146)		(867,467)		(1,187,259)
Net contributions and (withdrawals)	(5,644,035)		(9,343,319)		1,167,529		(73,481)		(12,010,173)		(21,198,213)		(10,116,417)		(10,420,926)
Increase (decrease) in net assets	(6,718,442)		(1,270,073)		1,730,485		(705,537)		420,592		(3,111,689)		8,680,251		(12,932,469)
NET ASSETS:
Beginning of period	43,337,889		44,607,962		3,699,993		4,405,530		242,877,765		245,989,454		93,360,753		106,293,222
End of period	$	36,619,447	$	43,337,889	$	5,430,478	$	3,699,993	$	243,298,357	$	242,877,765	$	102,041,004	$	93,360,753

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

33

NYLIAC Variable Annuity Separate Account-III

Statement of Changes in Net Assets (Continued)

For the years ended December 31, 2021

and December 31, 2020

	MainStay VP Epoch U.S. Equity Yield— Service Class				MainStay VP Equity Allocation— Service Class				MainStay VP Fidelity Institutional AM® Utilities— Initial Class				MainStay VP Fidelity Institutional AM® Utilities— Service Class
INCREASE (DECREASE) IN NET ASSETS:	2021		2020		2021		2020		2021		2020		2021		2020
Operations:
Net investment income (loss)	$	1,105,007	$	1,434,566	$	120,535	$	656,033	$	3,061	$	7,802	$	839,088	$	2,106,830
Net realized gain (loss) on investments	2,721,492		(1,181,769)		6,153,805		(197,937)		36,199		6,396		2,945,635		(279,231)
Realized gain distribution received	—		5,433,177		5,959,775		8,254,565		30,374		47,887		11,857,549		17,235,574
Change in unrealized appreciation/(depreciation) on investments	27,833,620		(9,677,861)		18,312,029		12,394,021		43,342		(91,939)		26,497,114		(30,580,925)
Net increase (decrease) in net assets resulting from operations	31,660,119		(3,991,887)		30,546,144		21,106,682		112,976		(29,854)		42,139,386		(11,517,752)
Contributions and (withdrawals):
Payments received from policyowners	4,971,085		5,198,767		3,942,845		4,709,625		—		—		6,808,532		8,304,673
Policyowners' surrenders	(18,416,806)		(16,353,108)		(17,952,169)		(15,492,674)		(156,144)		(47,744)		(32,619,016)		(35,116,030)
Policyowners' annuity and death benefits	(1,797,633)		(1,227,276)		(1,487,341)		(1,099,295)		(95,153)		(2,508)		(3,954,311)		(3,420,029)
Net transfers from (to) Fixed Account	1,400,732		455,039		313,767		(2,372,949)		774		(2,416)		966,071		(136,885)
Transfers between Investment Divisions	(2,496,231)		(599,337)		(12,473,055)		(8,342,185)		7,618		(40,428)		(5,385,221)		(19,708,842)
Net contributions and (withdrawals)	(16,338,853)		(12,525,915)		(27,655,953)		(22,597,478)		(242,905)		(93,096)		(34,183,945)		(50,077,113)
Increase (decrease) in net assets	15,321,266		(16,517,802)		2,890,191		(1,490,796)		(129,929)		(122,950)		7,955,441		(61,594,865)
NET ASSETS:
Beginning of period	159,903,554		176,421,356		181,048,401		182,539,197		885,624		1,008,574		300,989,709		362,584,574
End of period	$	175,224,820	$	159,903,554	$	183,938,592	$	181,048,401	$	755,695	$	885,624	$	308,945,150	$	300,989,709

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

34

NYLIAC Variable Annuity Separate Account-III

Statement of Changes in Net Assets (Continued)

For the years ended December 31, 2021

and December 31, 2020

	MainStay VP Floating Rate— Service Class				MainStay VP Growth Allocation— Service Class				MainStay VP Income Builder— Initial Class				MainStay VP Income Builder— Service Class
INCREASE (DECREASE) IN NET ASSETS:	2021		2020		2021		2020		2021		2020		2021		2020
Operations:
Net investment income (loss)	$	2,094,786	$	3,016,987	$	2,090,877	$	3,419,633	$	770,260	$	534,299	$	1,655,816	$	941,872
Net realized gain (loss) on investments	(415,288)		(4,126,496)		6,606,821		(7,951,606)		1,165,123		1,066,346		2,190,394		(817,292)
Realized gain distribution received	—		—		4,339,246		12,064,149		1,206,510		1,900,728		3,213,428		4,584,892
Change in unrealized appreciation/(depreciation) on investments	1,171,688		123,678		34,838,331		26,936,839		1,476,703		(369,107)		4,344,892		2,598,649
Net increase (decrease) in net assets resulting from operations	2,851,186		(985,831)		47,875,275		34,469,015		4,618,596		3,132,266		11,404,530		7,308,121
Contributions and (withdrawals):
Payments received from policyowners	8,045,578		8,005,223		7,860,601		7,907,375		379,860		440,261		13,997,931		8,310,529
Policyowners' surrenders	(18,930,175)		(18,630,720)		(46,478,086)		(43,066,509)		(3,291,914)		(3,302,525)		(16,525,719)		(11,096,451)
Policyowners' annuity and death benefits	(2,339,796)		(2,059,111)		(3,755,463)		(2,792,463)		(1,078,977)		(1,476,508)		(1,645,113)		(1,222,361)
Net transfers from (to) Fixed Account	2,532,095		(1,012,305)		377,457		(5,759,288)		(606,425)		(1,105,930)		6,144,423		7,021,202
Transfers between Investment Divisions	15,158,446		(8,785,941)		(17,801,001)		(22,376,810)		694,706		708,032		2,328,245		(1,782,950)
Net contributions and (withdrawals)	4,466,148		(22,482,854)		(59,796,492)		(66,087,695)		(3,902,750)		(4,736,670)		4,299,767		1,229,969
Increase (decrease) in net assets	7,317,334		(23,468,685)		(11,921,217)		(31,618,680)		715,846		(1,604,404)		15,704,297		8,538,090
NET ASSETS:
Beginning of period	150,174,685		173,643,370		368,873,038		400,491,718		53,335,739		54,940,143		131,534,216		122,996,126
End of period	$	157,492,019	$	150,174,685	$	356,951,821	$	368,873,038	$	54,051,585	$	53,335,739	$	147,238,513	$	131,534,216

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

35

NYLIAC Variable Annuity Separate Account-III

Statement of Changes in Net Assets (Continued)

For the years ended December 31, 2021

and December 31, 2020

	MainStay VP IQ Hedge Multi- Strategy— Service Class				MainStay VP Janus Henderson Balanced— Initial Class				MainStay VP Janus Henderson Balanced— Service Class				MainStay VP MacKay Convertible— Initial Class
INCREASE (DECREASE) IN NET ASSETS:	2021		2020		2021		2020		2021		2020		2021		2020
Operations:
Net investment income (loss)	$	(968,415)	$	90,269	$	(276,954)	$	563,755	$	(1,093,028)	$	432,544	$	(253,985)	$	(480,180)
Net realized gain (loss) on investments	570,817		203,484		7,401,731		6,527,282		12,142,985		6,122,016		3,550,403		1,918,868
Realized gain distribution received	—		—		5,409,984		5,438,418		11,309,717		9,652,760		3,832,357		727,623
Change in unrealized appreciation/(depreciation) on investments	(1,047,109)		1,354,352		11,920,768		5,952,065		26,383,595		15,810,171		(1,196,521)		18,495,191
Net increase (decrease) in net assets resulting from operations	(1,444,707)		1,648,105		24,455,529		18,481,520		48,743,269		32,017,491		5,932,254		20,661,502
Contributions and (withdrawals):
Payments received from policyowners	1,226,056		930,079		1,198,824		1,290,359		48,263,532		26,023,995		745,369		698,267
Policyowners' surrenders	(6,086,835)		(5,350,506)		(12,309,164)		(12,111,406)		(36,202,629)		(28,674,964)		(5,988,069)		(5,596,132)
Policyowners' annuity and death benefits	(840,480)		(545,553)		(3,439,923)		(3,511,783)		(3,986,255)		(3,826,682)		(1,297,064)		(1,504,318)
Net transfers from (to) Fixed Account	(88,310)		(510,456)		(1,063,291)		(2,389,465)		21,022,529		17,530,883		(595,397)		(1,150,894)
Transfers between Investment Divisions	3,693,517		(1,924,998)		(683,614)		(2,883,181)		2,574,155		(5,715,810)		(45,438)		1,616,592
Net contributions and (withdrawals)	(2,096,052)		(7,401,434)		(16,297,168)		(19,605,476)		31,671,332		5,337,422		(7,180,599)		(5,936,485)
Increase (decrease) in net assets	(3,540,759)		(5,753,329)		8,158,361		(1,123,956)		80,414,601		37,354,913		(1,248,345)		14,725,017
NET ASSETS:
Beginning of period	61,028,909		66,782,238		164,644,181		165,768,137		300,355,221		263,000,308		80,316,117		65,591,100
End of period	$	57,488,150	$	61,028,909	$	172,802,542	$	164,644,181	$	380,769,822	$	300,355,221	$	79,067,772	$	80,316,117

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

36

NYLIAC Variable Annuity Separate Account-III

Statement of Changes in Net Assets (Continued)

For the years ended December 31, 2021

and December 31, 2020

	MainStay VP MacKay Convertible— Service Class				MainStay VP MacKay Government— Initial Class				MainStay VP MacKay Government— Service Class				MainStay VP MacKay High Yield Corporate Bond— Initial Class
INCREASE (DECREASE) IN NET ASSETS:	2021		2020		2021		2020		2021		2020		2021		2020
Operations:
Net investment income (loss)	$	(1,793,889)	$	(2,322,284)	$	7,715	$	(18,516)	$	(195,428)	$	(127,793)	$	4,539,858	$	5,934,714
Net realized gain (loss) on investments	14,157,166		5,173,143		(151,875)		(171,211)		110,119		1,109,048		254,181		(1,324,040)
Realized gain distribution received	15,734,954		2,589,791		—		—		—		—		—		—
Change in unrealized appreciation/(depreciation) on investments	(6,374,180)		65,428,140		(510,738)		981,673		(2,341,455)		1,093,297		656,316		(123,131)
Net increase (decrease) in net assets resulting from operations	21,724,051		70,868,790		(654,898)		791,946		(2,426,764)		2,074,552		5,450,355		4,487,543
Contributions and (withdrawals):
Payments received from policyowners	29,641,047		20,434,564		179,995		382,432		2,409,420		5,143,878		1,236,082		2,374,008
Policyowners' surrenders	(31,894,280)		(25,544,497)		(1,426,808)		(1,869,611)		(7,068,872)		(7,940,993)		(9,645,374)		(13,347,370)
Policyowners' annuity and death benefits	(3,844,634)		(2,967,903)		(481,342)		(639,154)		(961,694)		(720,547)		(3,796,845)		(6,170,560)
Net transfers from (to) Fixed Account	18,516,083		12,628,410		(130,382)		(327,099)		312,457		6,985,057		(1,411,572)		(3,515,732)
Transfers between Investment Divisions	6,664,966		(11,495,509)		(169,121)		994,155		(4,048,514)		13,785,984		1,440,358		(1,508,144)
Net contributions and (withdrawals)	19,083,182		(6,944,935)		(2,027,658)		(1,459,277)		(9,357,203)		17,253,379		(12,177,351)		(22,167,798)
Increase (decrease) in net assets	40,807,233		63,923,855		(2,682,556)		(667,331)		(11,783,967)		19,327,931		(6,726,996)		(17,680,255)
NET ASSETS:
Beginning of period	287,095,616		223,171,761		22,971,912		23,639,243		79,527,410		60,199,479		141,115,224		158,795,479
End of period	$	327,902,849	$	287,095,616	$	20,289,356	$	22,971,912	$	67,743,443	$	79,527,410	$	134,388,228	$	141,115,224

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

37

NYLIAC Variable Annuity Separate Account-III

Statement of Changes in Net Assets (Continued)

For the years ended December 31, 2021

and December 31, 2020

	MainStay VP MacKay High Yield Corporate Bond— Service Class				MainStay VP MacKay International Equity— Initial Class				MainStay VP MacKay International Equity— Service Class				MainStay VP MacKay S&P 500 Index— Initial Class
INCREASE (DECREASE) IN NET ASSETS:	2021		2020		2021		2020		2021		2020		2021		2020
Operations:
Net investment income (loss)	$	23,371,677	$	27,634,548	$	(299,631)	$	(144,392)	$	(1,418,494)	$	(868,640)	$	(497,284)	$	(63,585)
Net realized gain (loss) on investments	(201,076)		(9,011,458)		1,148,368		685,441		4,029,014		3,553,895		14,003,020		14,085,775
Realized gain distribution received	—		—		2,810,739		1,035,739		11,937,210		4,538,705		2,144,209		1,360,835
Change in unrealized appreciation/(depreciation) on investments	3,062,458		2,449,611		(1,454,273)		1,648,959		(5,407,429)		7,148,748		33,503,587		11,589,875
Net increase (decrease) in net assets resulting from operations	26,233,059		21,072,701		2,205,203		3,225,747		9,140,301		14,372,708		49,153,532		26,972,900
Contributions and (withdrawals):
Payments received from policyowners	50,223,260		51,263,090		138,751		106,410		2,539,914		3,289,798		1,307,079		1,402,287
Policyowners' surrenders	(76,539,341)		(75,479,165)		(1,457,493)		(1,664,144)		(9,583,570)		(9,778,245)		(12,158,884)		(11,761,278)
Policyowners' annuity and death benefits	(10,212,779)		(7,871,283)		(318,438)		(261,660)		(750,967)		(544,639)		(3,501,623)		(3,159,784)
Net transfers from (to) Fixed Account	22,582,203		22,943,031		(481,572)		(439,410)		455,871		1,538,270		(1,522,093)		(3,620,633)
Transfers between Investment Divisions	23,825,008		(9,724,814)		184,442		(1,109,497)		(815,588)		(8,466,502)		(1,750,305)		(1,517,661)
Net contributions and (withdrawals)	9,878,351		(18,869,141)		(1,934,310)		(3,368,301)		(8,154,340)		(13,961,318)		(17,625,826)		(18,657,069)
Increase (decrease) in net assets	36,111,410		2,203,560		270,893		(142,554)		985,961		411,390		31,527,706		8,315,831
NET ASSETS:
Beginning of period	713,677,730		711,474,170		21,395,364		21,537,918		90,859,272		90,447,882		192,592,372		184,276,541
End of period	$	749,789,140	$	713,677,730	$	21,666,257	$	21,395,364	$	91,845,233	$	90,859,272	$	224,120,078	$	192,592,372

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

38

NYLIAC Variable Annuity Separate Account-III

Statement of Changes in Net Assets (Continued)

For the years ended December 31, 2021

and December 31, 2020

	MainStay VP MacKay S&P 500 Index— Service Class				MainStay VP MacKay Strategic Bond— Service Class				MainStay VP Moderate Allocation— Service Class				MainStay VP Natural Resources— Initial Class
INCREASE (DECREASE) IN NET ASSETS:	2021		2020		2021		2020		2021		2020		2021		2020
Operations:
Net investment income (loss)	$	(2,129,303)	$	(998,030)	$	1,158,477	$	1,470,200	$	(1,993,758)	$	2,184,861	$	(251,143)	$	679,045
Net realized gain (loss) on investments	34,437,665		28,764,073		715,248		(1,557,175)		3,564,753		(4,095,156)		597,860		(9,595,311)
Realized gain distribution received	5,119,798		2,909,557		—		—		8,810,294		8,575,878		—		—
Change in unrealized appreciation/(depreciation) on investments	74,568,876		29,080,179		(1,669,813)		6,688,775		20,032,497		21,475,224		25,165,862		12,752,924
Net increase (decrease) in net assets resulting from operations	111,997,036		59,755,779		203,912		6,601,800		30,413,786		28,140,807		25,512,579		3,836,658
Contributions and (withdrawals):
Payments received from policyowners	56,525,343		32,334,327		4,590,588		4,421,458		11,980,943		11,277,642		3,492,898		2,190,137
Policyowners' surrenders	(41,108,003)		(30,083,524)		(19,194,570)		(19,063,134)		(32,755,993)		(32,250,513)		(9,085,345)		(8,082,691)
Policyowners' annuity and death benefits	(4,400,041)		(3,890,087)		(3,025,141)		(2,107,091)		(3,920,937)		(3,753,878)		(703,212)		(596,591)
Net transfers from (to) Fixed Account	15,367,631		22,404,864		1,000,797		(969,945)		2,944,813		2,786,044		343,951		63,034
Transfers between Investment Divisions	(10,029,738)		(24,724,007)		7,607,471		(2,731,760)		(5,683,818)		(16,860,961)		(1,336,285)		(1,916,293)
Net contributions and (withdrawals)	16,355,192		(3,958,427)		(9,020,855)		(20,450,472)		(27,434,992)		(38,801,666)		(7,287,993)		(8,342,404)
Increase (decrease) in net assets	128,352,228		55,797,352		(8,816,943)		(13,848,672)		2,978,794		(10,660,859)		18,224,586		(4,505,746)
NET ASSETS:
Beginning of period	417,158,910		361,361,558		188,416,373		202,265,045		333,590,077		344,250,936		73,976,449		78,482,195
End of period	$	545,511,138	$	417,158,910	$	179,599,430	$	188,416,373	$	336,568,871	$	333,590,077	$	92,201,035	$	73,976,449

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

39

NYLIAC Variable Annuity Separate Account-III

Statement of Changes in Net Assets (Continued)

For the years ended December 31, 2021

and December 31, 2020

	MainStay VP PIMCO Real Return— Service Class				MainStay VP Small Cap Growth— Initial Class				MainStay VP Small Cap Growth— Service Class				MainStay VP T. Rowe Price Equity Income— Initial Class
INCREASE (DECREASE) IN NET ASSETS:	2021		2020		2021		2020		2021		2020		2021		2020
Operations:
Net investment income (loss)	$	(1,310,518)	$	428,153	$	(768,358)	$	(636,952)	$	(691,202)	$	(509,500)	$	424,405	$	730,428
Net realized gain (loss) on investments	2,422,274		(309,131)		3,362,204		2,200,347		2,934,865		366,717		1,045,836		198,834
Realized gain distribution received	—		—		6,263,071		1,265,063		6,019,383		1,069,916		644,408		2,715,069
Change in unrealized appreciation/(depreciation) on investments	2,535,090		8,378,374		(4,547,058)		11,652,922		(4,607,768)		10,940,829		6,931,665		(4,467,853)
Net increase (decrease) in net assets resulting from operations	3,646,846		8,497,396		4,309,859		14,481,380		3,655,278		11,867,962		9,046,314		(823,522)
Contributions and (withdrawals):
Payments received from policyowners	6,005,663		6,727,503		423,453		438,301		2,715,342		1,833,911		173,585		171,341
Policyowners' surrenders	(10,691,654)		(10,786,177)		(4,553,066)		(4,233,300)		(4,549,476)		(3,105,297)		(3,142,273)		(3,286,415)
Policyowners' annuity and death benefits	(1,331,864)		(594,591)		(647,337)		(304,496)		(668,165)		(460,487)		(931,338)		(785,992)
Net transfers from (to) Fixed Account	5,277,446		7,801,205		(277,357)		(393,535)		1,408,491		766,610		(211,461)		(474,224)
Transfers between Investment Divisions	(10,664,025)		23,528,289		(1,415,922)		(3,018,520)		790,227		(2,969,207)		(1,017,651)		(587,419)
Net contributions and (withdrawals)	(11,404,434)		26,676,229		(6,470,229)		(7,511,550)		(303,581)		(3,934,470)		(5,129,138)		(4,962,709)
Increase (decrease) in net assets	(7,757,588)		35,173,625		(2,160,370)		6,969,830		3,351,697		7,933,492		3,917,176		(5,786,231)
NET ASSETS:
Beginning of period	116,508,976		81,335,351		50,906,329		43,936,499		43,173,699		35,240,207		39,678,036		45,464,267
End of period	$	108,751,388	$	116,508,976	$	48,745,959	$	50,906,329	$	46,525,396	$	43,173,699	$	43,595,212	$	39,678,036

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

40

NYLIAC Variable Annuity Separate Account-III

Statement of Changes in Net Assets (Continued)

For the years ended December 31, 2021

and December 31, 2020

	MainStay VP T. Rowe Price Equity Income— Service Class				MainStay VP U.S. Government Money Market— Initial Class				MainStay VP Wellington Growth— Initial Class				MainStay VP Wellington Growth— Service Class
INCREASE (DECREASE) IN NET ASSETS:	2021		2020		2021		2020		2021		2020		2021		2020
Operations:
Net investment income (loss)	$	535,641	$	1,216,360	$	(2,335,126)	$	(2,032,834)	$	(1,154,155)	$	(744,831)	$	(400,715)	$	(315,672)
Net realized gain (loss) on investments	853,942		(2,326,131)		653		1,593		5,284,917		3,804,856		2,009,971		1,064,230
Realized gain distribution received	1,248,100		5,707,186		—		—		14,829,877		8,137,175		3,898,580		2,330,448
Change in unrealized appreciation/(depreciation) on investments	15,047,540		(6,816,225)		(653)		72		(1,960,304)		12,167,499		(1,056,516)		3,502,200
Net increase (decrease) in net assets resulting from operations	17,685,223		(2,218,810)		(2,335,126)		(2,031,169)		17,000,335		23,364,699		4,451,320		6,581,206
Contributions and (withdrawals):
Payments received from policyowners	790,265		932,207		23,480,423		12,806,886		836,823		913,209		323,619		238,212
Policyowners' surrenders	(11,028,000)		(9,410,718)		(43,857,042)		(43,804,262)		(7,736,108)		(5,789,635)		(3,303,147)		(3,102,776)
Policyowners' annuity and death benefits	(1,069,911)		(959,953)		(1,121,226)		(1,134,119)		(1,840,442)		(1,697,661)		(428,165)		(145,070)
Net transfers from (to) Fixed Account	(236,349)		(998,232)		(3,315,916)		(402,778)		(1,327,847)		(1,531,649)		(190,465)		(120,907)
Transfers between Investment Divisions	(5,080,939)		(1,194,854)		(22,653,760)		139,143,667		(758,772)		(1,438,947)		(992,150)		(2,026,569)
Net contributions and (withdrawals)	(16,624,934)		(11,631,550)		(47,467,521)		106,609,394		(10,826,346)		(9,544,683)		(4,590,308)		(5,157,110)
Increase (decrease) in net assets	1,060,289		(13,850,360)		(49,802,647)		104,578,225		6,173,989		13,820,016		(138,988)		1,424,096
NET ASSETS:
Beginning of period	81,905,527		95,755,887		187,903,221		83,324,996		98,253,281		84,433,265		26,998,940		25,574,844
End of period	$	82,965,816	$	81,905,527	$	138,100,574	$	187,903,221	$	104,427,270	$	98,253,281	$	26,859,952	$	26,998,940

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

41

NYLIAC Variable Annuity Separate Account-III

Statement of Changes in Net Assets (Continued)

For the years ended December 31, 2021

and December 31, 2020

	MainStay VP Wellington Mid Cap— Initial Class				MainStay VP Wellington Mid Cap— Service Class				MainStay VP Wellington Small Cap— Initial Class				MainStay VP Wellington Small Cap— Service Class
INCREASE (DECREASE) IN NET ASSETS:	2021		2020		2021		2020		2021		2020		2021		2020
Operations:
Net investment income (loss)	$	(399,190)	$	(204,694)	$	(1,968,616)	$	(1,187,847)	$	(251,110)	$	(248,595)	$	(1,268,605)	$	(1,218,743)
Net realized gain (loss) on investments	477,771		(1,669,388)		2,601,047		(4,821,220)		552,468		(777,617)		3,117,424		(4,391,382)
Realized gain distribution received	824,915		2,501,346		3,328,256		10,483,309		—		—		—		—
Change in unrealized appreciation/(depreciation) on investments	6,486,102		2,394,773		24,975,604		10,832,408		3,088,355		2,533,282		12,415,425		12,753,308
Net increase (decrease) in net assets resulting from operations	7,389,598		3,022,037		28,936,291		15,306,650		3,389,713		1,507,070		14,264,244		7,143,183
Contributions and (withdrawals):
Payments received from policyowners	264,505		366,435		5,557,716		7,379,037		161,277		471,171		4,076,116		2,537,796
Policyowners' surrenders	(3,315,808)		(3,181,213)		(16,291,807)		(13,105,393)		(2,071,981)		(1,563,393)		(11,134,333)		(9,845,888)
Policyowners' annuity and death benefits	(573,546)		(638,277)		(1,626,755)		(1,035,370)		(160,250)		(289,557)		(608,450)		(539,975)
Net transfers from (to) Fixed Account	(322,511)		(511,092)		1,133,077		7,221,283		(200,927)		(349,770)		671,537		(41,268)
Transfers between Investment Divisions	(429,329)		(2,093,714)		(10,898,421)		(11,120,823)		362,602		(1,012,920)		(4,236,057)		(4,232,230)
Net contributions and (withdrawals)	(4,376,689)		(6,057,861)		(22,126,190)		(10,661,266)		(1,909,279)		(2,744,469)		(11,231,187)		(12,121,565)
Increase (decrease) in net assets	3,012,909		(3,035,824)		6,810,101		4,645,384		1,480,434		(1,237,399)		3,033,057		(4,978,382)
NET ASSETS:
Beginning of period	41,786,511		44,822,335		168,683,350		164,037,966		21,105,940		22,343,339		90,266,366		95,244,748
End of period	$	44,799,420	$	41,786,511	$	175,493,451	$	168,683,350	$	22,586,374	$	21,105,940	$	93,299,423	$	90,266,366

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

42

NYLIAC Variable Annuity Separate Account-III

Statement of Changes in Net Assets (Continued)

For the years ended December 31, 2021

and December 31, 2020

	MainStay VP Wellington U.S. Equity— Initial Class				MainStay VP Wellington U.S. Equity— Service Class				MainStay VP Winslow Large Cap Growth— Initial Class				MainStay VP Winslow Large Cap Growth— Service Class
INCREASE (DECREASE) IN NET ASSETS:	2021		2020		2021		2020		2021		2020		2021		2020
Operations:
Net investment income (loss)	$	(498,372)	$	69,636	$	(605,524)	$	(125,546)	$	(884,371)	$	(746,151)	$	(4,204,383)	$	(3,227,888)
Net realized gain (loss) on investments	6,484,001		4,665,773		1,845,577		71,442		3,705,826		2,170,841		17,208,138		10,604,401
Realized gain distribution received	4,048,059		5,511,648		3,510,057		4,702,074		4,313,428		3,512,124		21,754,193		15,734,746
Change in unrealized appreciation/(depreciation) on investments	10,336,718		(744,536)		12,313,563		3,241,465		5,148,668		10,562,205		21,542,772		40,959,571
Net increase (decrease) in net assets resulting from operations	20,370,406		9,502,521		17,063,673		7,889,435		12,283,551		15,499,019		56,300,720		64,070,830
Contributions and (withdrawals):
Payments received from policyowners	395,886		556,381		3,135,274		2,453,718		520,255		461,886		25,035,968		21,440,524
Policyowners' surrenders	(6,698,430)		(5,431,726)		(6,020,956)		(4,612,024)		(4,956,945)		(3,727,918)		(28,590,957)		(21,085,480)
Policyowners' annuity and death benefits	(2,133,375)		(1,457,808)		(636,720)		(615,240)		(988,911)		(703,179)		(3,040,547)		(1,971,504)
Net transfers from (to) Fixed Account	(660,392)		(772,009)		896,210		547,605		(340,323)		(954,329)		14,007,819		10,231,117
Transfers between Investment Divisions	(794,959)		(1,496,740)		(3,134,031)		(5,100,158)		(758,866)		(627,345)		(14,807,765)		(11,541,904)
Net contributions and (withdrawals)	(9,891,270)		(8,601,902)		(5,760,223)		(7,326,099)		(6,524,790)		(5,550,885)		(7,395,482)		(2,927,247)
Increase (decrease) in net assets	10,479,136		900,619		11,303,450		563,336		5,758,761		9,948,134		48,905,238		61,143,583
NET ASSETS:
Beginning of period	80,217,447		79,316,828		66,695,160		66,131,824		57,758,707		47,810,573		251,601,587		190,458,004
End of period	$	90,696,583	$	80,217,447	$	77,998,610	$	66,695,160	$	63,517,468	$	57,758,707	$	300,506,825	$	251,601,587

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

43

NYLIAC Variable Annuity Separate Account-III

Statement of Changes in Net Assets (Continued)

For the years ended December 31, 2021

and December 31, 2020

	American Funds IS Asset Allocation Fund— Class 4				American Funds IS Global Small Capitalization Fund— Class 4				American Funds IS Growth Fund— Class 4				American Funds IS New World Fund®— Class 4
INCREASE (DECREASE) IN NET ASSETS:	2021		2020		2021		2020		2021		2020		2021		2020
Operations:
Net investment income (loss)	$	148,547	$	74,199	$	(203,369)	$	(129,859)	$	(750,379)	$	(323,612)	$	(480,161)	$	(714,748)
Net realized gain (loss) on investments	1,791,023		299,971		776,018		54,783		4,025,672		1,256,058		2,454,077		1,706,255
Realized gain distribution received	2,690,436		218,276		318,711		620,915		6,748,352		567,472		1,847,436		552,031
Change in unrealized appreciation/(depreciation) on investments	5,363,061		5,670,744		(326,419)		2,129,111		(430,022)		10,366,720		(2,030,093)		9,509,388
Net increase (decrease) in net assets resulting from operations	9,993,067		6,263,190		564,941		2,674,950		9,593,623		11,866,638		1,791,259		11,052,926
Contributions and (withdrawals):
Payments received from policyowners	27,983,233		9,573,980		1,629,042		1,176,616		14,421,210		5,795,104		3,165,255		3,824,758
Policyowners' surrenders	(6,515,641)		(3,299,034)		(1,029,801)		(565,080)		(4,334,864)		(2,544,902)		(4,250,852)		(3,406,068)
Policyowners' annuity and death benefits	(1,386,747)		(925,940)		(32,546)		(56,834)		(847,813)		(148,813)		(487,628)		(298,741)
Net transfers from (to) Fixed Account	10,201,328		8,075,866		1,585,769		533,642		6,958,157		2,789,389		1,157,346		5,043,771
Transfers between Investment Divisions	9,577,076		5,678,555		353,391		(1,449,957)		3,887		5,668,055		(675,261)		(5,964,204)
Net contributions and (withdrawals)	39,859,249		19,103,427		2,505,855		(361,613)		16,200,577		11,558,833		(1,091,140)		(800,484)
Increase (decrease) in net assets	49,852,316		25,366,617		3,070,796		2,313,337		25,794,200		23,425,471		700,119		10,252,442
NET ASSETS:
Beginning of period	63,844,775		38,478,158		12,259,266		9,945,929		41,793,985		18,368,514		56,062,990		45,810,548
End of period	$	113,697,091	$	63,844,775	$	15,330,062	$	12,259,266	$	67,588,185	$	41,793,985	$	56,763,109	$	56,062,990

Not all investment divisions are available under all policies.    

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

44

NYLIAC Variable Annuity Separate Account-III

Statement of Changes in Net Assets (Continued)

For the years ended December 31, 2021

and December 31, 2020

	American Funds IS Washington Mutual Investors Fund— Class 4				BlackRock® Global Allocation V.I. Fund— Class III				BlackRock® High Yield V.I. Fund— Class III				BNY Mellon IP Technology Growth Portfolio— Initial Shares
INCREASE (DECREASE) IN NET ASSETS:	2021		2020		2021		2020		2021		2020		2021		2020
Operations:
Net investment income (loss)	$	(110,385)	$	111,025	$	(824,672)	$	(416,297)	$	2,152,339	$	1,923,683	$	(430,008)	$	(291,014)
Net realized gain (loss) on investments	2,594,359		(828,855)		2,898,192		(501,971)		476,089		(381,342)		2,690,257		2,352,450
Realized gain distribution received	—		643,891		20,031,995		6,099,566		253,092		—		3,801,021		2,331,728
Change in unrealized appreciation/(depreciation) on investments	14,155,861		6,064,536		(16,960,471)		11,890,777		(144,895)		1,704,031		(3,075,972)		7,940,293
Net increase (decrease) in net assets resulting from operations	16,639,835		5,990,597		5,145,044		17,072,075		2,736,625		3,246,372		2,985,298		12,333,457
Contributions and (withdrawals):
Payments received from policyowners	7,417,623		8,238,049		17,155,480		4,067,143		12,587,816		8,083,417		306,695		236,658
Policyowners' surrenders	(4,736,249)		(2,885,969)		(15,153,969)		(15,196,445)		(6,389,092)		(4,636,823)		(2,135,586)		(1,941,980)
Policyowners' annuity and death benefits	(359,141)		(413,930)		(1,929,013)		(1,042,657)		(752,893)		(329,984)		(266,075)		(291,197)
Net transfers from (to) Fixed Account	5,240,846		9,399,266		5,929,964		1,829,763		8,439,106		5,861,895		(144,154)		(406,679)
Transfers between Investment Divisions	(3,102,228)		(144,776)		2,449,062		(8,865,051)		7,125,506		2,682,367		(1,543,553)		(461,429)
Net contributions and (withdrawals)	4,460,851		14,192,640		8,451,524		(19,207,247)		21,010,443		11,660,872		(3,782,673)		(2,864,627)
Increase (decrease) in net assets	21,100,686		20,183,237		13,596,568		(2,135,172)		23,747,068		14,907,244		(797,375)		9,468,830
NET ASSETS:
Beginning of period	62,731,211		42,547,974		108,093,190		110,228,362		65,935,725		51,028,481		28,830,868		19,362,038
End of period	$	83,831,897	$	62,731,211	$	121,689,758	$	108,093,190	$	89,682,793	$	65,935,725	$	28,033,493	$	28,830,868

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

45

NYLIAC Variable Annuity Separate Account-III

Statement of Changes in Net Assets (Continued)

For the years ended December 31, 2021

and December 31, 2020

	BNY Mellon IP Technology Growth Portfolio— Service Shares				ClearBridge Variable Appreciation Portfolio— Class II				Columbia Variable Portfolio— Commodity Strategy Fund— Class 2				Columbia Variable Portfolio— Emerging Markets Bond Fund— Class 2
INCREASE (DECREASE) IN NET ASSETS:	2021		2020		2021		2020		2021		2020		2021		2020
Operations:
Net investment income (loss)	$	(2,652,088)	$	(1,868,503)	$	(190,933)	$	(79,938)	$	(22,678)	$	264,749	$	917,045	$	674,776
Net realized gain (loss) on investments	11,498,115		12,452,518		616,415		50,114		(12,702)		(188,564)		47,213		(477,772)
Realized gain distribution received	24,755,801		12,829,693		706,350		442,764		—		—		—		—
Change in unrealized appreciation/(depreciation) on investments	(15,572,023)		45,377,968		2,355,326		1,473,275		442,955		(117,682)		(2,595,966)		2,176,249
Net increase (decrease) in net assets resulting from operations	18,029,805		68,791,676		3,487,158		1,886,215		407,575		(41,497)		(1,631,708)		2,373,253
Contributions and (withdrawals):
Payments received from policyowners	17,777,729		10,676,048		1,491,681		1,675,103		14,005		67,923		1,487,235		3,377,663
Policyowners' surrenders	(17,222,251)		(13,624,263)		(1,075,266)		(698,474)		(112,541)		(97,266)		(2,755,681)		(2,528,871)
Policyowners' annuity and death benefits	(2,095,897)		(834,197)		(107,562)		(59,894)		(374)		—		(361,803)		(345,526)
Net transfers from (to) Fixed Account	8,919,915		5,320,863		1,587,446		2,682,392		54,108		122,565		1,063,360		6,641,339
Transfers between Investment Divisions	(5,196,790)		(10,088,534)		(1,007,427)		(1,444,067)		(217,681)		(113,424)		3,513,242		(2,410,084)
Net contributions and (withdrawals)	2,182,706		(8,550,083)		888,872		2,155,060		(262,483)		(20,202)		2,946,353		4,734,521
Increase (decrease) in net assets	20,212,511		60,241,593		4,376,030		4,041,275		145,092		(61,699)		1,314,645		7,107,774
NET ASSETS:
Beginning of period	162,919,622		102,678,029		15,526,957		11,485,682		1,402,153		1,463,852		41,466,210		34,358,436
End of period	$	183,132,133	$	162,919,622	$	19,902,987	$	15,526,957	$	1,547,245	$	1,402,153	$	42,780,855	$	41,466,210

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

46

NYLIAC Variable Annuity Separate Account-III

Statement of Changes in Net Assets (Continued)

For the years ended December 31, 2021

and December 31, 2020

	Columbia Variable Portfolio— Small Cap Value Fund— Class 2				Delaware VIP® Small Cap Value Series— Service Class				DWS Alternative Asset Allocation VIP— Class B				Fidelity® VIP Bond Index Portfolio— Service Class 2
INCREASE (DECREASE) IN NET ASSETS:	2021		2020		2021		2020		2021		2020		2021		2020 (a)
Operations:
Net investment income (loss)	$	(430,061)	$	(340,909)	$	(115,156)	$	(24,497)	$	152,852	$	526,948	$	(385,875)	$	408,908
Net realized gain (loss) on investments	2,494,053		(3,112,826)		1,190,618		(357,273)		1,001,876		(271,688)		(402,300)		(7,247)
Realized gain distribution received	—		1,275,793		—		273,552		—		—		—		141,099
Change in unrealized appreciation/(depreciation) on investments	7,014,436		4,521,968		1,587,136		886,359		6,301,400		3,413,954		(1,253,510)		(599,854)
Net increase (decrease) in net assets resulting from operations	9,078,428		2,344,026		2,662,598		778,141		7,456,128		3,669,214		(2,041,685)		(57,094)
Contributions and (withdrawals):
Payments received from policyowners	2,784,502		891,908		1,940,878		1,645,395		1,523,441		5,528,617		4,709,987		624,900
Policyowners' surrenders	(5,241,532)		(3,865,543)		(807,168)		(338,144)		(4,428,401)		(3,503,968)		(4,275,802)		(486,359)
Policyowners' annuity and death benefits	(399,412)		(305,812)		(21,875)		(441)		(686,966)		(286,447)		(575,691)		(71,560)
Net transfers from (to) Fixed Account	973,939		166,666		1,255,678		736,173		1,124,214		12,326,451		3,255,290		904,001
Transfers between Investment Divisions	4,988,899		(505,691)		4,176,227		478,661		(3,531,298)		(425,825)		(435,099)		53,583,503
Net contributions and (withdrawals)	3,106,396		(3,618,472)		6,543,740		2,521,644		(5,999,010)		13,638,828		2,678,685		54,554,485
Increase (decrease) in net assets	12,184,824		(1,274,446)		9,206,338		3,299,785		1,457,118		17,308,042		637,000		54,497,391
NET ASSETS:
Beginning of period	34,466,701		35,741,147		7,182,595		3,882,810		72,332,670		55,024,628		54,497,391		—
End of period	$	46,651,525	$	34,466,701	$	16,388,933	$	7,182,595	$	73,789,788	$	72,332,670	$	55,134,391	$	54,497,391

(a) For the period November 23, 2020 (commencement of Investment Division) through December 31, 2020

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

47

NYLIAC Variable Annuity Separate Account-III

Statement of Changes in Net Assets (Continued)

For the years ended December 31, 2021

and December 31, 2020

	Fidelity® VIP ContrafundSM Portfolio— Initial Class				Fidelity® VIP ContrafundSM Portfolio— Service Class 2				Fidelity® VIP Emerging Markets Portfolio— Service Class 2				Fidelity® VIP Equity-Income PortfolioSM— Initial Class
INCREASE (DECREASE) IN NET ASSETS:	2021		2020		2021		2020		2021		2020		2021		2020
Operations:
Net investment income (loss)	$	(2,125,277)	$	(1,579,682)	$	(6,379,263)	$	(5,407,112)	$	93,173	$	(43,964)	$	210,338	$	140,176
Net realized gain (loss) on investments	10,322,968		8,551,009		30,021,589		18,052,704		634,437		110,528		1,206,521		(69,568)
Realized gain distribution received	19,172,182		695,998		53,087,197		1,993,369		1,382,308		606,009		5,528,792		2,076,233
Change in unrealized appreciation/(depreciation) on investments	8,143,219		25,589,742		19,882,855		75,560,228		(2,886,213)		1,448,132		3,415,774		(396,863)
Net increase (decrease) in net assets resulting from operations	35,513,092		33,257,067		96,612,378		90,199,189		(776,295)		2,120,705		10,361,425		1,749,978
Contributions and (withdrawals):
Payments received from policyowners	837,173		970,759		21,695,672		16,423,262		2,163,163		1,381,912		339,014		358,412
Policyowners' surrenders	(9,705,743)		(11,443,616)		(46,323,122)		(38,132,380)		(688,379)		(365,416)		(3,778,085)		(2,991,862)
Policyowners' annuity and death benefits	(2,818,736)		(2,430,819)		(4,110,982)		(3,361,118)		(96,164)		(15,524)		(1,152,241)		(835,346)
Net transfers from (to) Fixed Account	(1,080,643)		(2,408,572)		8,970,481		5,391,839		1,542,434		1,131,844		(557,271)		(1,052,207)
Transfers between Investment Divisions	(1,359,214)		(4,072,581)		(23,019,184)		(42,792,852)		2,811,483		(114,437)		(238,357)		(787,403)
Net contributions and (withdrawals)	(14,127,163)		(19,384,829)		(42,787,135)		(62,471,249)		5,732,537		2,018,379		(5,386,940)		(5,308,406)
Increase (decrease) in net assets	21,385,929		13,872,238		53,825,243		27,727,940		4,956,242		4,139,084		4,974,485		(3,558,428)
NET ASSETS:
Beginning of period	143,798,885		129,926,647		393,607,939		365,879,999		8,702,207		4,563,123		46,858,445		50,416,873
End of period	$	165,184,814	$	143,798,885	$	447,433,182	$	393,607,939	$	13,658,449	$	8,702,207	$	51,832,930	$	46,858,445

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

48

NYLIAC Variable Annuity Separate Account-III

Statement of Changes in Net Assets (Continued)

For the years ended December 31, 2021

and December 31, 2020

	Fidelity® VIP Equity-Income PortfolioSM— Service Class 2				Fidelity® VIP FundsManager® 60% Portfolio— Investor Class				Fidelity® VIP FundsManager® 60% Portfolio— Service Class				Fidelity® VIP Government Money Market Portfolio— Investor Class
INCREASE (DECREASE) IN NET ASSETS:	2021		2020		2021		2020		2021		2020		2021		2020
Operations:
Net investment income (loss)	$	283,955	$	141,978	$	(4,299,617)	$	(2,749,091)	$	(7,093)	$	(16,422)	$	(803)	$	(838)
Net realized gain (loss) on investments	3,886,229		(1,352,628)		429,246		130,061		390,621		55,196		—		—
Realized gain distribution received	16,106,349		4,989,801		9,213,440		6,748,581		213,726		110,389		—		—
Change in unrealized appreciation/(depreciation) on investments	7,377,426		2,550,231		53,426,711		58,621,544		1,009,600		1,010,621		—		—
Net increase (decrease) in net assets resulting from operations	27,653,959		6,329,382		58,769,780		62,751,095		1,606,854		1,159,784		(803)		(838)
Contributions and (withdrawals):
Payments received from policyowners	8,773,954		7,661,984		210,072,689		186,328,304		9,956,567		2,098,502		415,000		790,829
Policyowners' surrenders	(12,198,663)		(9,477,553)		(4,564,133)		(2,206,455)		(1,204,534)		(244,029)		—		—
Policyowners' annuity and death benefits	(1,603,432)		(893,515)		(1,655,068)		(341,127)		(114,385)		(70,751)		—		—
Net transfers from (to) Fixed Account	3,097,967		7,792,347		—		—		3,402,051		1,086,578		—		—
Transfers between Investment Divisions	895,484		(3,425,869)		414,197		789,991		2,226,761		1,940,645		(414,197)		(789,991)
Net contributions and (withdrawals)	(1,034,690)		1,657,394		204,267,685		184,570,713		14,266,460		4,810,945		803		838
Increase (decrease) in net assets	26,619,269		7,986,776		263,037,465		247,321,808		15,873,314		5,970,729		—		—
NET ASSETS:
Beginning of period	123,481,451		115,494,675		497,416,743		250,094,935		9,963,186		3,992,457		—		—
End of period	$	150,100,720	$	123,481,451	$	760,454,208	$	497,416,743	$	25,836,500	$	9,963,186	$	—	$	—

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

49

NYLIAC Variable Annuity Separate Account-III

Statement of Changes in Net Assets (Continued)

For the years ended December 31, 2021

and December 31, 2020

	Fidelity® VIP Growth Opportunities Portfolio— Service Class 2				Fidelity® VIP Health Care Portfolio— Service Class 2				Fidelity® VIP International Index Portfolio— Service Class 2				Fidelity® VIP Mid Cap Portfolio— Service Class 2
INCREASE (DECREASE) IN NET ASSETS:	2021		2020		2021		2020		2021		2020		2021		2020
Operations:
Net investment income (loss)	$	(3,038,904)	$	(1,799,336)	$	(654,145)	$	(139,599)	$	112,677	$	8,298	$	(1,583,969)	$	(1,270,488)
Net realized gain (loss) on investments	18,913,953		14,555,341		1,137,279		1,201,393		137,939		(55,862)		5,729,768		(3,256,181)
Realized gain distribution received	17,389,941		6,387,016		2,577,472		545,736		17,328		290		22,783,757		—
Change in unrealized appreciation/(depreciation) on investments	(15,961,526)		45,961,406		965,564		2,485,049		(104,941)		385,407		1,854,666		22,271,538
Net increase (decrease) in net assets resulting from operations	17,303,464		65,104,427		4,026,170		4,092,579		163,003		338,133		28,784,222		17,744,869
Contributions and (withdrawals):
Payments received from policyowners	34,696,713		20,917,035		10,630,468		5,582,193		4,220,425		793,901		6,649,453		4,312,177
Policyowners' surrenders	(17,344,888)		(10,112,970)		(3,830,140)		(1,338,634)		(235,875)		(79,345)		(13,919,668)		(13,140,844)
Policyowners' annuity and death benefits	(2,228,213)		(726,573)		(852,917)		(184,984)		(31,768)		(42,321)		(1,235,771)		(1,121,026)
Net transfers from (to) Fixed Account	20,051,744		10,957,074		7,509,107		4,884,058		775,936		600,282		2,176,323		879,076
Transfers between Investment Divisions	(647,230)		(2,511,702)		9,654,917		13,276,691		753,775		153,707		(3,868,548)		(9,890,643)
Net contributions and (withdrawals)	34,528,126		18,522,864		23,111,435		22,219,324		5,482,493		1,426,224		(10,198,211)		(18,961,260)
Increase (decrease) in net assets	51,831,590		83,627,291		27,137,605		26,311,903		5,645,496		1,764,357		18,586,011		(1,216,391)
NET ASSETS:
Beginning of period	171,507,153		87,879,862		30,924,568		4,612,665		2,789,353		1,024,996		127,588,722		128,805,113
End of period	$	223,338,743	$	171,507,153	$	58,062,173	$	30,924,568	$	8,434,849	$	2,789,353	$	146,174,733	$	127,588,722

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

50

NYLIAC Variable Annuity Separate Account-III

Statement of Changes in Net Assets (Continued)

For the years ended December 31, 2021

and December 31, 2020

	Franklin Templeton Aggressive Model Portfolio— Class II				Franklin Templeton Conservative Model Portfolio— Class II				Franklin Templeton Moderate Model Portfolio— Class II				Franklin Templeton Moderately Aggressive Model Portfolio— Class II
INCREASE (DECREASE) IN NET ASSETS:	2021		2020 (b)		2021		2020 (b)		2021		2020 (b)		2021		2020 (b)
Operations:
Net investment income (loss)	$	283,950	$	63,730	$	360,379	$	172,311	$	1,866,019	$	371,792	$	1,403,612	$	254,092
Net realized gain (loss) on investments	921,305		184,680		392,150		39,608		1,652,667		529,709		1,115,650		323,166
Realized gain distribution received	2,183,528		147,134		1,472,257		80,668		8,085,007		461,605		6,630,376		355,381
Change in unrealized appreciation/(depreciation) on investments	1,694,773		1,279,376		(1,148,778)		405,310		4,844,260		3,655,048		4,655,896		3,414,496
Net increase (decrease) in net assets resulting from operations	5,083,556		1,674,920		1,076,008		697,897		16,447,953		5,018,154		13,805,534		4,347,135
Contributions and (withdrawals):
Payments received from policyowners	20,428,463		4,548,096		6,051,270		2,264,268		75,132,714		26,461,543		66,353,438		18,174,118
Policyowners' surrenders	(1,317,307)		(400,859)		(2,626,380)		(757,810)		(8,275,976)		(1,549,331)		(5,227,291)		(833,026)
Policyowners' annuity and death benefits	(45,302)		—		(16,211)		—		(1,408,758)		—		(515,094)		—
Net transfers from (to) Fixed Account	8,300,976		4,341,498		11,692,096		3,546,595		90,088,330		28,286,019		54,851,578		18,817,398
Transfers between Investment Divisions	3,661,764		6,371,907		8,476,119		15,666,165		17,167,429		16,897,245		16,807,184		11,599,944
Net contributions and (withdrawals)	31,028,594		14,860,642		23,576,894		20,719,218		172,703,739		70,095,476		132,269,815		47,758,434
Increase (decrease) in net assets	36,112,150		16,535,562		24,652,902		21,417,115		189,151,692		75,113,630		146,075,349		52,105,569
NET ASSETS:
Beginning of period	16,535,562		—		21,417,115		—		75,113,630		—		52,105,569		—
End of period	$	52,647,712	$	16,535,562	$	46,070,017	$	21,417,115	$	264,265,322	$	75,113,630	$	198,180,918	$	52,105,569

(b) For the period May 1, 2020 (commencement of Investment Division) through December 31, 2020.

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

51

NYLIAC Variable Annuity Separate Account-III

Statement of Changes in Net Assets (Continued)

For the years ended December 31, 2021

and December 31, 2020

	Franklin Templeton Moderately Conservative Model Portfolio— Class II				Invesco V.I. International Growth Fund— Series II Shares				Invesco V.I. Main Street Small Cap Fund®— Series II Shares				Janus Henderson Enterprise Portfolio— Service Shares
INCREASE (DECREASE) IN NET ASSETS:	2021		2020 (b)		2021		2020		2021		2020 (b)		2021		2020
Operations:
Net investment income (loss)	$	785,975	$	242,302	$	(165,470)	$	163,650	$	(52,165)	$	(940)	$	(419,528)	$	(319,420)
Net realized gain (loss) on investments	950,048		78,564		999,894		335,164		186,148		2,004		1,037,574		(154,472)
Realized gain distribution received	3,829,091		163,632		2,435,115		731,856		354,354		2,743		3,061,141		1,680,001
Change in unrealized appreciation/(depreciation) on investments	(129,358)		1,549,118		(1,852,357)		2,628,881		(140,435)		63,907		1,038,187		3,150,204
Net increase (decrease) in net assets resulting from operations	5,435,756		2,033,616		1,417,182		3,859,551		347,902		67,714		4,717,374		4,356,313
Contributions and (withdrawals):
Payments received from policyowners	25,134,589		11,165,998		1,553,367		1,921,193		2,661,208		132,951		6,092,069		4,323,475
Policyowners' surrenders	(4,824,269)		(865,144)		(3,150,161)		(2,593,297)		(251,079)		(845)		(2,935,845)		(1,513,731)
Policyowners' annuity and death benefits	(875,106)		—		(321,497)		(228,862)		(37,681)		—		(141,931)		(144,621)
Net transfers from (to) Fixed Account	36,857,945		12,946,746		519,535		196,090		957,235		21,451		4,215,669		3,895,552
Transfers between Investment Divisions	7,020,048		16,060,764		(30,225)		(2,764,860)		2,509,522		241,816		(1,087,901)		(1,100,555)
Net contributions and (withdrawals)	63,313,207		39,308,364		(1,428,981)		(3,469,736)		5,839,205		395,373		6,142,061		5,460,120
Increase (decrease) in net assets	68,748,963		41,341,980		(11,799)		389,815		6,187,107		463,087		10,859,435		9,816,433
NET ASSETS:
Beginning of period	41,341,980		—		35,610,034		35,220,219		463,087		—		29,462,095		19,645,662
End of period	$	110,090,943	$	41,341,980	$	35,598,235	$	35,610,034	$	6,650,194	$	463,087	$	40,321,530	$	29,462,095

(b) For the period May 1, 2020 (commencement of Investment Division) through December 31, 2020.

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

52

NYLIAC Variable Annuity Separate Account-III

Statement of Changes in Net Assets (Continued)

For the years ended December 31, 2021

and December 31, 2020

	Janus Henderson Global Research Portfolio— Institutional Shares				Janus Henderson Global Research Portfolio— Service Shares				MFS® International Intrinsic Value Portfolio— Service Class				MFS® Investors Trust Series— Initial Class
INCREASE (DECREASE) IN NET ASSETS:	2021		2020		2021		2020		2021		2020		2021		2020
Operations:
Net investment income (loss)	$	(529,013)	$	(356,600)	$	(443,218)	$	(324,140)	$	(516,633)	$	(183,266)	$	(82,575)	$	(70,601)
Net realized gain (loss) on investments	3,936,960		3,630,673		3,022,680		2,009,612		1,121,549		415,896		538,513		228,156
Realized gain distribution received	2,663,221		2,577,015		1,895,260		1,883,138		1,132,551		622,172		304,240		246,787
Change in unrealized appreciation/(depreciation) on investments	2,543,689		2,518,833		1,402,360		2,234,263		1,695,684		4,941,281		1,381,383		549,014
Net increase (decrease) in net assets resulting from operations	8,614,857		8,369,921		5,877,082		5,802,873		3,433,151		5,796,083		2,141,561		953,356
Contributions and (withdrawals):
Payments received from policyowners	422,991		368,937		2,592,316		1,551,128		3,895,735		3,576,420		80,967		103,571
Policyowners' surrenders	(4,286,553)		(4,018,279)		(4,978,235)		(3,870,874)		(2,684,722)		(1,685,027)		(680,485)		(420,474)
Policyowners' annuity and death benefits	(879,505)		(661,140)		(372,796)		(166,586)		(417,804)		(89,632)		(332,338)		(41,720)
Net transfers from (to) Fixed Account	(207,562)		(664,534)		364,447		808,845		3,438,825		6,214,376		(159,397)		(148,414)
Transfers between Investment Divisions	(641,079)		(888,173)		(636,559)		(1,913,273)		3,373,008		(2,400,066)		(162,823)		(90,492)
Net contributions and (withdrawals)	(5,591,708)		(5,863,189)		(3,030,827)		(3,590,760)		7,605,042		5,616,071		(1,254,076)		(597,529)
Increase (decrease) in net assets	3,023,149		2,506,732		2,846,255		2,212,113		11,038,193		11,412,154		887,485		355,827
NET ASSETS:
Beginning of period	54,911,918		52,405,186		38,064,558		35,852,445		34,901,590		23,489,436		9,088,908		8,733,081
End of period	$	57,935,067	$	54,911,918	$	40,910,813	$	38,064,558	$	45,939,783	$	34,901,590	$	9,976,393	$	9,088,908

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

53

NYLIAC Variable Annuity Separate Account-III

Statement of Changes in Net Assets (Continued)

For the years ended December 31, 2021

and December 31, 2020

	MFS® Investors Trust Series— Service Class				MFS® Mid Cap Value Portfolio— Service Class				MFS® Research Series— Initial Class				MFS® Research Series— Service Class
INCREASE (DECREASE) IN NET ASSETS:	2021		2020		2021		2020 (b)		2021		2020		2020		2021
Operations:
Net investment income (loss)	$	(783,525)	$	(684,253)	$	(115,639)	$	(17,595)	$	(95,534)	$	(68,737)	$	(612,036)	$	(423,075)
Net realized gain (loss) on investments	5,403,484		1,809,628		1,162,342		21,476		507,255		462,265		2,456,437		(370,219)
Realized gain distribution received	2,336,357		1,987,833		126,890		10,844		572,858		365,038		2,984,849		1,842,745
Change in unrealized appreciation/(depreciation) on investments	8,980,287		4,870,552		2,633,225		574,907		1,168,329		533,663		5,871,363		5,469,605
Net increase (decrease) in net assets resulting from operations	15,936,603		7,983,760		3,806,818		589,632		2,152,908		1,292,229		10,700,613		6,519,056
Contributions and (withdrawals):
Payments received from policyowners	1,785,374		3,731,175		2,051,841		117,793		80,323		143,597		2,133,602		4,104,841
Policyowners' surrenders	(5,685,038)		(3,856,669)		(2,050,088)		(147,150)		(1,297,658)		(831,508)		(4,416,953)		(3,429,466)
Policyowners' annuity and death benefits	(661,962)		(410,976)		(32,224)		(4,093)		(236,105)		(211,467)		(333,276)		(207,396)
Net transfers from (to) Fixed Account	951,116		6,250,348		680,142		125,524		(87,933)		(192,686)		977,517		6,753,505
Transfers between Investment Divisions	(9,092,993)		(5,969,322)		6,615,732		11,179,154		(46,913)		(177,350)		(5,340,365)		(3,794,674)
Net contributions and (withdrawals)	(12,703,503)		(255,444)		7,265,403		11,271,228		(1,588,286)		(1,269,414)		(6,979,475)		3,426,810
Increase (decrease) in net assets	3,233,100		7,728,316		11,072,221		11,860,860		564,622		22,815		3,721,138		9,945,866
NET ASSETS:
Beginning of period	69,351,082		61,622,766		11,860,860		—		10,008,319		9,985,504		49,995,864		40,049,998
End of period	$	72,584,182	$	69,351,082	$	22,933,081	$	11,860,860	$	10,572,941	$	10,008,319	$	53,717,002	$	49,995,864

(b) For the period May 1, 2020 (commencement of Investment Division) through December 31, 2020.        

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

54

NYLIAC Variable Annuity Separate Account-III

Statement of Changes in Net Assets (Continued)

For the years ended December 31, 2021

and December 31, 2020

	Morgan Stanley VIF U.S. Real Estate Portfolio— Class II				Neuberger Berman AMT Mid Cap Growth Portfolio— Class I				Neuberger Berman AMT Mid Cap Growth Portfolio— Class S				PIMCO VIT Income Portfolio— Advisor Class
INCREASE (DECREASE) IN NET ASSETS:	2021		2020		2021		2020		2021		2020		2021		2020 (b)
Operations:
Net investment income (loss)	$	73,051	$	179,178	$	(30,652)	$	(24,524)	$	(1,441,349)	$	(1,176,413)	$	130,230	$	53,551
Net realized gain (loss) on investments	(321,214)		(1,505,309)		76,832		67,788		8,642,053		6,092,453		57,560		8,862
Realized gain distribution received	—		489,696		209,404		77,008		11,130,297		4,000,867		—		5,760
Change in unrealized appreciation/(depreciation) on investments	6,654,806		(2,900,182)		(49,681)		417,946		(8,604,427)		16,166,118		(164,894)		193,280
Net increase (decrease) in net assets resulting from operations	6,406,643		(3,736,617)		205,903		538,218		9,726,574		25,083,025		22,896		261,453
Contributions and (withdrawals):
Payments received from policyowners	1,565,294		876,275		20,001		—		7,340,284		5,174,375		3,805,351		706,615
Policyowners' surrenders	(2,448,754)		(1,958,118)		(139,075)		(165,079)		(10,216,922)		(8,013,031)		(659,848)		(233,856)
Policyowners' annuity and death benefits	(172,367)		(212,579)		(24,571)		(10,628)		(1,600,045)		(579,655)		—		—
Net transfers from (to) Fixed Account	571,976		710,967		967		1,035		3,059,501		1,594,614		2,412,985		500,161
Transfers between Investment Divisions	675,252		548,080		(5,845)		(21,412)		(1,652,475)		(12,001,951)		5,689,613		3,057,117
Net contributions and (withdrawals)	191,401		(35,375)		(148,523)		(196,084)		(3,069,657)		(13,825,648)		11,248,101		4,030,037
Increase (decrease) in net assets	6,598,044		(3,771,992)		57,380		342,134		6,656,917		11,257,377		11,270,997		4,291,490
NET ASSETS:
Beginning of period	17,675,066		21,447,058		1,878,352		1,536,218		88,208,962		76,951,585		4,291,490		—
End of period	$	24,273,110	$	17,675,066	$	1,935,732	$	1,878,352	$	94,865,879	$	88,208,962	$	15,562,487	$	4,291,490

(b) For the period May 1, 2020 (commencement of Investment Division) through December 31, 2020.    

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

55

NYLIAC Variable Annuity Separate Account-III

Statement of Changes in Net Assets (Continued)

For the years ended December 31, 2021

and December 31, 2020

	PIMCO VIT International Bond Portfolio (U.S. Dollar-Hedged)— Advisor Class				PIMCO VIT Low Duration Portfolio— Advisor Class				PIMCO VIT Total Return Portfolio— Advisor Class
INCREASE (DECREASE) IN NET ASSETS:	2021		2020		2021		2020		2021		2020
Operations:
Net investment income (loss)	$	(69,765)	$	3,641,960	$	(344,751)	$	(125,660)	$	332,990	$	610,795
Net realized gain (loss) on investments	44,802		267,084		109,818		62,598		850,347		1,149,946
Realized gain distribution received	797,464		—		—		—		7,351,766		1,561,942
Change in unrealized appreciation/(depreciation) on investments	(4,066,471)		(815,536)		(578,008)		389,105		(13,524,855)		5,613,360
Net increase (decrease) in net assets resulting from operations	(3,293,970)		3,093,508		(812,941)		326,043		(4,989,752)		8,936,043
Contributions and (withdrawals):
Payments received from policyowners	2,854,085		2,880,425		2,066,970		1,542,685		11,505,528		13,600,838
Policyowners' surrenders	(8,702,881)		(7,234,442)		(3,108,428)		(3,564,021)		(14,105,728)		(11,418,027)
Policyowners' annuity and death benefits	(1,132,536)		(952,732)		(274,398)		(128,394)		(1,967,649)		(1,232,828)
Net transfers from (to) Fixed Account	2,266,691		3,419,845		1,904,628		2,379,055		9,850,369		14,034,145
Transfers between Investment Divisions	7,264,177		(794,766)		287,076		10,084,082		(8,810,636)		36,911,933
Net contributions and (withdrawals)	2,549,536		(2,681,670)		875,848		10,313,407		(3,528,116)		51,896,061
Increase (decrease) in net assets	(744,434)		411,838		62,907		10,639,450		(8,517,868)		60,832,104
NET ASSETS:
Beginning of period	90,867,975		90,456,137		31,796,448		21,156,998		178,963,704		118,131,600
End of period	$	90,123,541	$	90,867,975	$	31,859,355	$	31,796,448	$	170,445,836	$	178,963,704

Not all investment divisions are available under all policies.

The notes to the financial statements are an integral part of, and should be read in conjunction with, the financial statements.

56

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements

NOTE 1—Organization and Significant Accounting Policies:

NYLIAC Variable Annuity Separate Account-III (the “Separate Account”) was established on November 30, 1994, under Delaware law by New York Life Insurance and Annuity Corporation (“NYLIAC”), a wholly-owned subsidiary of New York Life Insurance Company (“NYLIC”). The Separate Account funds Series I policies (New York Life Variable Annuity, New York Life Flexible Premium Variable Annuity, New York Life Plus Variable Annuity and New York Life Flexible Premium Variable Annuity II), Series II policies (New York Life Access Variable Annuity), Series III policies (New York Life Premium Plus Variable Annuity), Series IV policies (New York Life Essentials Variable Annuity and New York Life Plus II Variable Annuity), Series V policies (New York Life Select Variable Annuity), Series VI policies (New York Life Premium Plus II Variable Annuity), Series VII policies (New York Life Complete Access Variable Annuity), Series VIII policies (New York Life Premier Variable Annuity), Series IX policies (New York Life Premier Plus Variable Annuity), Series X policies (New York Life Income Plus Variable Annuity), Series XI policies (New York Life Premier Variable Annuity II), Series XII policies (New York Life Premier Plus Variable Annuity II), Series XIII policies (New York Life Complete Access Variable Annuity II), Series XIV policies (New York Life Flexible Premium Variable Annuity III), Series XV policies (New York Life Income Plus Variable Annuity II), Series XVI policies (New York Life Premier Variable Annuity - FP Series), Series XVII policies (New York Life Premier Variable Annuity - P Series) and Series XVIII policies (New York Life IndexFlex Variable Annuity and New York Life IndexFlex Variable Annuity - FP Series). Effective December 4, 2006, sales of the New York Life Variable Annuity and New York Life Plus Variable Annuity were discontinued. Sales of the Series II policies formerly known as MainStay Access Variable Annuity were discontinued effective October 14, 2002. Effective January 1, 2009, sales of all Series III, IV, V and VI policies formerly known as MainStay Variable Annuities were discontinued. Effective July 27, 2009, sales of Series V policies known as New York Life Select Variable Annuity were discontinued. Effective August 16, 2010, sales of all the remaining Series II, Series III, Series IV and Series VI policies were discontinued. Effective July 16, 2012 sales of the New York Life Flexible Premium Variable Annuity were discontinued. Effective February 12, 2016, sales of the Series X policies (New York Life Income Plus Variable Annuity) and Series XV policies (New York Life Income Plus II Variable Annuity) were discontinued. Effective May 1, 2016, sales of the Series VII policies (New York Life Complete Access Variable Annuity), the remaining Series I policies (New York Life Flexible Premium Variable Annuity II), Series VIII policies (New York Life Premier Variable Annuity) and Series IX policies (New York Life Premier Plus Variable Annuity) were discontinued. Effective May 1, 2020, sales of the Series XIII policies (New York Life Complete Access Variable Annuity II) were discontinued.

NYLIAC established the Separate Account to receive and invest premium payments under Non-Qualified Deferred and Tax-Qualified Deferred Flexible Premium Variable Annuity Policies issued by NYLIAC. The Non-Qualified policies are designed to establish retirement benefits to provide individuals with supplemental retirement income. The Qualified policies are designed to establish retirement benefits for individuals who participate in tax-qualified pension, profit sharing or annuity plans. The policies are distributed by NYLIFE Distributors LLC and sold by registered representatives of NYLIFE Securities LLC, as well as certain banking and financial institutions that have entered into selling agreements with NYLIAC and registered representatives of unaffiliated broker-dealers. NYLIFE Securities LLC and NYLIFE Distributors LLC are both indirect, wholly-owned subsidiaries of NYLIC. The Separate Account is registered under the Investment Company Act of 1940, as amended, as a unit investment trust that follows the accounting and reporting guidance under ASC 946.

The assets of the Separate Account are invested in shares of eligible portfolios of the MainStay VP Funds Trust, the AIM Variable Insurance Funds, the American Funds Insurance Series, the BlackRock® Variable Series Funds, Inc., the BlackRock® Variable Series Funds II, Inc., the BNY Mellon Investment Portfolios, the Columbia Funds Variable Insurance Trust, the Columbia Funds Variable Series Trust II, the Delaware VIP® Trust, the Deutsche DWS Variable Series II, the Fidelity Variable Insurance Products Fund, the Janus Aspen Series, the Legg Mason Partners Variable Equity Trust, the MFS® Variable Insurance Trust, the MFS® Variable Insurance Trust II, the MFS® Variable Insurance Trust III, the Morgan Stanley Variable Insurance Fund, Inc., the Neuberger Berman Advisers Management Trust and the PIMCO Variable Insurance Trust, (collectively “Funds”). These assets are clearly identified and distinguished from the other assets and liabilities of NYLIAC. These assets are the property of NYLIAC; however, the portion of the assets attributable to the policies will not be charged with liabilities arising out of any other business NYLIAC may conduct. The Fixed Account and the Dollar Cost Averaging (DCA) Advantage Accounts represent a portion of the general account assets of NYLIAC and are not included in this report. NYLIAC’s Fixed Account and the DCA Advantage Accounts may be charged with liabilities arising out of other business NYLIAC may conduct.

The MainStay VP U.S. Government Money Market, MainStay VP Natural Resources—Initial Class and Fidelity® VIP Government Money Market Portfolio—Investor Classoffer one class of shares under this Separate Account which are presented within the initial class section. MainStay VP Balanced—Service Class, MainStay VP CBRE Global Infrastructure—Service Class, MainStay VP Conservative Allocation—Service Class, MainStay VP Equity Allocation—Service Class, MainStay VP Floating Rate—Service Class, MainStay VP Growth Allocation—Service Class, MainStay VP IQ Hedge Multi-Strategy—Service Class, MainStay VP MacKay Strategic Bond—Service Class, MainStay VP Moderate Allocation—Service Class, MainStay VP PIMCO Real Return Portfolio—Service Class, American Funds IS Asset Allocation—Class 4, American Funds IS Global Small Capitalization Fund—Class 4, American Funds IS

57

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 1—Organization and Significant Accounting Policies (Continued):

Growth Fund—Class 4, American Funds IS New World Fund®—Class 4, American Funds IS Washington Mutual Investors Fund—Class 4, BlackRock® Global Allocation V.I. Fund—Class III, BlackRock® High Yield V.I. Fund—Class III, ClearBridge Variable Appreciation Portfolio—Class II, Columbia Variable Portfolio—Commodity Strategy Fund—Class 2, Columbia Variable Portfolio—Emerging Markets Bond Fund—Class 2,Columbia Variable Portfolio—Small Cap Value Fund—Class 2, Delaware VIP® Small Cap Value Series—Service Class, DWS Alternative Asset Allocation VIP—Class B, Fidelity® VIP Bond Index Portfolio—Service Class 2, Fidelity® VIP Emerging Markets Portfolio—Service Class 2, Fidelity® VIP Growth Opportunities Portfolio—Service Class 2, Fidelity® VIP Health Care Portfolio—Service Class 2, Fidelity® VIP International Index Portfolio—Service Class 2,Fidelity® VIP Mid Cap—Service Class 2, Franklin Templeton Aggressive Model Portfolio—Class II, Franklin Templeton Conservative Model Portfolio—Class II, Franklin Templeton Moderate Model Portfolio—Class II, Franklin Templeton Moderately Aggressive Model Portfolio—Class II, Franklin Templeton Moderately Conservative Model Portfolio—Class II, Invesco V.I. International Growth Fund—Series II Shares, Invesco V.I. Main Street Small Cap Fund®—Series II Shares, Janus Henderson Enterprise Portfolio—Service Shares, MFS® International Intrinsic Value Portfolio—Service Class, MFS® Mid Cap Value Portfolio—Service Class, Morgan Stanley VIF U.S. Real Estate Portfolio—Class II, PIMCO VIT Income Portfolio—Advisor Class, PIMCO VIT International Bond Portfolio (U.S. Dollar-Hedged)—Advisor Class, PIMCO VIT Low Duration—Advisor Class, and PIMCO VIT Total Return Portfolio—Advisor Class offer one class of shares under this Separate Account which are presented within the service class section.

The following Investment Divisions, with their respective Fund portfolios, are available in this Separate Account:

MainStay VP Balanced—Service Class

MainStay VP Bond—Initial Class

MainStay VP Bond—Service Class

MainStay VP Candriam Emerging Markets Equity—Initial Class (formerly MainStay VP Emerging Markets Equity—Initial Class)

MainStay VP Candriam Emerging Markets Equity—Service Class (formerly MainStay VP Emerging Markets Equity—Service Class)

MainStay VP CBRE Global Infrastructure—Service Class

MainStay VP Conservative Allocation—Service Class

MainStay VP Epoch U.S. Equity Yield—Initial Class

MainStay VP Epoch U.S. Equity Yield—Service Class

MainStay VP Equity Allocation—Service Class (formerly MainStay VP Growth Allocation—Service Class)

MainStay VP Fidelity Institutional AM® Utilities—Initial Class

MainStay VP Fidelity Institutional AM® Utilities—Service Class

MainStay VP Floating Rate—Service Class

MainStay VP Growth Allocation—Service Class (formerly MainStay VP Moderate Growth Allocation—Service Class)

MainStay VP Income Builder—Initial Class

MainStay VP Income Builder—Service Class

MainStay VP IQ Hedge Multi-Strategy—Service Class

MainStay VP Janus Henderson Balanced—Initial Class

MainStay VP Janus Henderson Balanced—Service Class

MainStay VP MacKay Convertible—Initial Class

MainStay VP MacKay Convertible—Service Class

MainStay VP MacKay Government—Initial Class

MainStay VP MacKay Government—Service Class

MainStay VP MacKay High Yield Corporate Bond—Initial Class

MainStay VP MacKay High Yield Corporate Bond—Service Class

MainStay VP MacKay International Equity—Initial Class

MainStay VP MacKay International Equity—Service Class

MainStay VP MacKay S&P 500 Index—Initial Class

MainStay VP MacKay S&P 500 Index—Service Class

MainStay VP MacKay Strategic Bond—Service Class (formerly MainStay VP MacKay Unconstrained Bond—Service Class)

MainStay VP Moderate Allocation—Service Class

MainStay VP Natural Resources—Initial Class (formerly MainStay VP Mellon Natural Resources—Initial Class)

58

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 1—Organization and Significant Accounting Policies (Continued):

MainStay VP PIMCO Real Return—Service Class

MainStay VP Small Cap Growth—Initial Class

MainStay VP Small Cap Growth—Service Class

MainStay VP T. Rowe Price Equity Income—Initial Class

MainStay VP T. Rowe Price Equity Income—Service Class

MainStay VP U.S. Government Money Market—Initial Class

MainStay VP Wellington Growth—Initial Class (formerly MainStay VP MacKay Growth—Initial Class)

MainStay VP Wellington Growth—Service Class (formerly MainStay VP MacKay Growth—Service Class)

MainStay VP Wellington Mid Cap—Initial Class (formerly MainStay VP MacKay Mid Cap Core—Initial Class)

MainStay VP Wellington Mid Cap—Service Class (formerly MainStay VP MacKay Mid Cap Core—Service Class)

MainStay VP Wellington Small Cap—Initial Class (formerly MainStay VP MacKay Small Cap Core—Initial Class)

MainStay VP Wellington Small Cap—Service Class (formerly MainStay VP MacKay Small Cap Core—Service Class)

MainStay VP Wellington U.S. Equity—Initial Class(formerly MainStay VP MacKay Common Stock—Initial Class)

MainStay VP Wellington U.S. Equity—Service Class(formerly MainStay VP MacKay Common Stock—Service Class)

MainStay VP Winslow Large Cap Growth—Initial Class

MainStay VP Winslow Large Cap Growth—Service Class

American Funds IS Asset Allocation Fund—Class 4

American Funds IS Global Small Capitalization Fund—Class 4

American Funds IS Growth Fund—Class 4

American Funds IS New World Fund®—Class 4

American Funds IS Washington Mutual Investors Fund—Class 4 (formerly American Funds IS Blue Chip Income and Growth Fund—Class 4)

BlackRock® Global Allocation V.I. Fund—Class III

BlackRock® High Yield V.I. Fund—Class III

BNY Mellon IP Technology Growth Portfolio—Initial Shares

BNY Mellon IP Technology Growth Portfolio—Service Shares

ClearBridge Variable Appreciation Portfolio—Class II

Columbia Variable Portfolio—Commodity Strategy Fund—Class 2

Columbia Variable Portfolio—Emerging Markets Bond Fund—Class 2

Columbia Variable Portfolio—Small Cap Value Fund—Class 2

Delaware VIP® Small Cap Value Series—Service Class

DWS Alternative Asset Allocation VIP—Class B

Fidelity® VIP Bond Index Portfolio—Service Class 2

Fidelity® VIP ContrafundSM Portfolio—Initial Class

Fidelity® VIP ContrafundSM Portfolio—Service Class 2

Fidelity® VIP Emerging Markets Portfolio—Service Class 2

Fidelity® VIP Equity-Income PortfolioSM—Initial Class

Fidelity® VIP Equity-Income PortfolioSM—Service Class 2

Fidelity® VIP FundsManager® 60% Portfolio—Investor Class

Fidelity® VIP FundsManager® 60% Portfolio—Service Class

Fidelity® VIP Government Money Market Portfolio—Investor Class

Fidelity® VIP Growth Opportunities Portfolio—Service Class 2

Fidelity® VIP Health Care Portfolio—Service Class 2

Fidelity® VIP International Index Portfolio—Service Class 2

Fidelity® VIP Mid Cap Portfolio—Service Class 2

Franklin Templeton Aggressive Model Portfolio—Class II (formerly Legg Mason/QS Aggressive Model Portfolio—Class II)

Franklin Templeton Conservative Model Portfolio—Class II (formerly Legg Mason/QS Conservative Model Portfolio—Class II)

59

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 1—Organization and Significant Accounting Policies (Continued):

Franklin Templeton Moderate Model Portfolio—Class II (formerly Legg Mason/QS Moderate Model Portfolio—Class II)

Franklin Templeton Moderately Aggressive Model Portfolio—Class II (formerly Legg Mason/QS Moderately Aggressive Model Portfolio—

   Class II)

Franklin Templeton Moderately Conservative Model Portfolio—Class II (formerly Legg Mason/QS Moderately Conservative Model Portfolio—

   Class II)

Invesco V.I. International Growth Fund—Series II Shares

Invesco V.I. Main Street Small Cap Fund®—Series II Shares (formerly Invesco Oppenheimer V.I. Main Street Small Cap Fund®—Series II

   Shares)

Janus Henderson Enterprise Portfolio—Service Shares

Janus Henderson Global Research Portfolio—Institutional Shares

Janus Henderson Global Research Portfolio—Service Shares

MFS® International Intrinsic Value Portfolio—Service Class

MFS® Investors Trust Series—Initial Class

MFS® Investors Trust Series—Service Class

MFS® Mid Cap Value Portfolio—Service Class

MFS® Research Series—Initial Class

MFS® Research Series—Service Class

Morgan Stanley VIF U.S. Real Estate Portfolio—Class II

Neuberger Berman AMT Mid Cap Growth Portfolio—Class I

Neuberger Berman AMT Mid Cap Growth Portfolio—Class S

PIMCO VIT Income Portfolio—Advisor Class

PIMCO VIT International Bond Portfolio (U.S. Dollar-Hedged)—Advisor Class

PIMCO VIT Low Duration Portfolio—Advisor Class

PIMCO VIT Total Return Portfolio—Advisor Class

__________________________________________________________

Not all investment options are available under all policies.

New investments in the MainStay VP Candriam Emerging Markets Equity, MainStay VP T. Rowe Price Equity Income, MainStay VP Wellington Growth and Columbia Variable Portfolio—Commodity Strategy Fund Investment Divisions are restricted to those policies already invested in these Investment Divisions.

For Series I policies known as New York Life Flexible Premium Variable Annuity II and Series VII, VIII, IX, X, XI, XII, XIII, XIV, XV and XVI policies, initial premium payments are allocated to the Investment Divisions, Fixed Account (where available) and/or DCA Advantage Accounts (where available) within two business days after receipt. For Series I, III, IV, V, VI, VII, VIII, IX, X, XI, XII, XIII, XIV, XV and XVI policies, subsequent premium payments for flexible premium policies are generally allocated to the Investment Divisions, one year Fixed Account (where available), three year Fixed Account (where available), and/or DCA Advantage Accounts (where available) at the close of the business day they are received. For Series II policies, known as New York Life Access Variable Annuity, subsequent premium payments are not permitted for policies purchased prior to November 15, 2004. For Series II policies, known as New York Life Access Variable Annuity, subsequent premium payments are not permitted. In those states where NYLIAC offers a single premium version of the Series III, VI, VIII and IX policies, only one premium payment is allowed. In those states where NYLIAC offers a modified premium version of the Series IV and V policies, subsequent premium payments are allowed only during the first policy year. For Series XVII and XVIII policies known as the New York Life Premier Variable Annuity - P Series, New York Life IndexFlex Variable Annuity and New York Life IndexFlex Variable Annuity - FP Series, initial premium payments are allocated to the Investment Division within two business days after receipt. Subsequent initial premium payments must be received within 90 days after the Policy Date and will be allocated to your policy at the close of the Business Day on which they are received.

In addition, for Series I, II, III, VI, VII, VIII, IX, XI, XII, XIII, XIV and XVI policies, the policyowner has the option to transfer amounts between the Investment Divisions of the Separate Account and the Fixed Account of NYLIAC subject to certain restrictions. For Series IV policies, the policyowner has the option to transfer amounts between the Investment Divisions of the Separate Account and the one-

60

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 1—Organization and Significant Accounting Policies (Continued):

year Fixed Account of NYLIAC subject to certain restrictions. For Series XVIII policies, the policyowner has the option to transfer amounts between the Investment Divisions of the Separate Account, from one or more Investment Divisions to the Index-linked Account

or the Fixed Account of NYLIAC, subject to certain restrictions. On the accompanying Statement of Changes in Net Assets, all references to the Fixed Account include the Fixed Account and the DCA Advantage Accounts.

No Federal income tax is payable on investment income or capital gains of the Separate Account under current Federal income tax law.

Security Valuation—The investments are valued at the net asset value (“NAV”) of shares of the respective Fund portfolios.

Security Transactions—Realized gains and losses from security transactions are reported on the identified cost basis. Security transactions are accounted for as of the date the securities are purchased or sold (trade date).

Distributions Received—Dividend income and capital gain distributions are recorded on the ex-dividend date and reinvested in the corresponding Fund portfolio.

The authoritative guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance also establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement.

The levels of the fair value hierarchy are based on the inputs to the valuation as follows:

Level 1—Fair Value is based on unadjusted quoted prices for identical assets or liabilities in an active market. Active markets are defined as a market in which many transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar instruments, quoted prices in markets that are not active, and inputs to model-derived valuations that are directly observable or can be corroborated by observable market data for substantially the full term of the asset.

Level 3—Instruments whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions in pricing the asset or liability.

Investments in the mutual funds represent open-end mutual funds in which the valuation is based on the aggregate NAV of the shares held at the valuation date, which represents fair value, and are classified as level 1.

The amounts shown as net receivable from (payable to) NYLIAC on the Statement of Assets and Liabilities reflect transactions that occurred on the last business day of the reporting period. These amounts will be deposited to or withdrawn from the separate account in accordance with the policyowners’ instructions on the first business day subsequent to the close of the period presented. The amounts shown as net receivable from (payable to) the Fund for shares sold or purchased represent unsettled trades.

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

Each Investment Division of the Separate Account indirectly bears exposure to the market, credit and liquidity risks of the Fund portfolio in which it invests. These financial statements should be read in conjunction with the financial statements and footnotes of the Fund portfolios.

61

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 2—Purchases and Sales (in 000’s):

The cost of purchases and proceeds from sales of investments for the year ended December 31, 2021 were as follows:

	Purchases		Sales
MainStay VP Balanced—Service Class	$	28,025	$	18,901
MainStay VP Bond—Initial Class	2,720		3,924
MainStay VP Bond—Service Class	24,129		24,306
MainStay VP Candriam Emerging Markets Equity—Initial Class	427		1,500
MainStay VP Candriam Emerging Markets Equity—Service Class	2,215		8,167
MainStay VP CBRE Global Infrastructure—Service Class	2,207		1,107
MainStay VP Conservative Allocation—Service Class	29,822		38,561
MainStay VP Epoch U.S. Equity Yield—Initial Class	2,794		12,028
MainStay VP Epoch U.S. Equity Yield—Service Class	12,837		28,071
MainStay VP Equity Allocation—Service Class	13,206		34,782
MainStay VP Fidelity Institutional AM® Utilities—Initial Class	57		266
MainStay VP Fidelity Institutional AM® Utilities—Service Class	28,823		50,310
MainStay VP Floating Rate—Service Class	31,979		25,357
MainStay VP Growth Allocation—Service Class	21,032		74,398
MainStay VP Income Builder—Initial Class	3,882		5,808
MainStay VP Income Builder—Service Class	31,429		22,260
MainStay VP IQ Hedge Multi-Strategy—Service Class	4,755		7,820
MainStay VP Janus Henderson Balanced—Initial Class	8,296		19,460
MainStay VP Janus Henderson Balanced—Service Class	93,542		51,654
MainStay VP MacKay Convertible—Initial Class	6,503		10,105
MainStay VP MacKay Convertible—Service Class	78,196		45,172
MainStay VP MacKay Government—Initial Class	1,191		3,211
MainStay VP MacKay Government—Service Class	10,175		19,727
MainStay VP MacKay High Yield Corporate Bond—Initial Class	8,084		15,721
MainStay VP MacKay High Yield Corporate Bond—Service Class	121,021		87,771
MainStay VP MacKay International Equity—Initial Class	3,364		2,788
MainStay VP MacKay International Equity—Service Class	17,060		14,696
MainStay VP MacKay S&P 500 Index—Initial Class	6,323		22,302
MainStay VP MacKay S&P 500 Index—Service Class	96,799		77,453
MainStay VP MacKay Strategic Bond—Service Class	19,747		27,609
MainStay VP Moderate Allocation—Service Class	29,383		50,002
MainStay VP Natural Resources—Initial Class	15,078		22,617
MainStay VP PIMCO Real Return—Service Class	20,663		33,378
MainStay VP Small Cap Growth—Initial Class	6,684		7,659
MainStay VP Small Cap Growth—Service Class	15,851		10,826
MainStay VP T. Rowe Price Equity Income—Initial Class	1,837		5,897
MainStay VP T. Rowe Price Equity Income—Service Class	3,860		18,702
MainStay VP U.S. Government Money Market—Initial Class	77,512		127,315
MainStay VP Wellington Growth—Initial Class	15,558		12,709
MainStay VP Wellington Growth—Service Class	4,277		5,369

62

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 2—Purchases and Sales (in 000’s) (Continued):

	Purchases		Sales
MainStay VP Wellington Mid Cap—Initial Class	$	2,071	$	6,022
MainStay VP Wellington Mid Cap—Service Class	11,315		32,082
MainStay VP Wellington Small Cap—Initial Class	1,356		3,517
MainStay VP Wellington Small Cap—Service Class	8,785		21,285
MainStay VP Wellington U.S. Equity—Initial Class	5,288		11,630
MainStay VP Wellington U.S. Equity—Service Class	9,534		12,390
MainStay VP Winslow Large Cap Growth—Initial Class	6,258		9,354
MainStay VP Winslow Large Cap Growth—Service Class	59,547		49,393
American Funds IS Asset Allocation Fund—Class 4	53,284		10,585
American Funds IS Global Small Capitalization Fund—Class 4	5,386		2,765
American Funds IS Growth Fund—Class 4	32,703		10,505
American Funds IS New World Fund®—Class 4	8,942		8,666
American Funds IS Washington Mutual Investors Fund—Class 4	17,747		13,397
BlackRock® Global Allocation V.I. Fund—Class III	49,298		21,640
BlackRock® High Yield V.I. Fund—Class III	32,458		9,106
BNY Mellon IP Technology Growth Portfolio—Initial Shares	6,492		6,903
BNY Mellon IP Technology Growth Portfolio—Service Shares	60,111		35,825
ClearBridge Variable Appreciation Portfolio—Class II	4,205		2,801
Columbia Variable Portfolio—Commodity Strategy Fund—Class 2	80		365
Columbia Variable Portfolio—Emerging Markets Bond Fund—Class 2	7,289		3,426
Columbia Variable Portfolio—Small Cap Value Fund—Class 2	19,806		17,130
Delaware VIP® Small Cap Value Series—Service Class	11,118		4,689
DWS Alternative Asset Allocation VIP—Class B	3,430		9,276
Fidelity® VIP Bond Index Portfolio—Service Class 2	14,931		12,639
Fidelity® VIP ContrafundSM Portfolio—Initial Class	20,264		17,344
Fidelity® VIP ContrafundSM Portfolio—Service Class 2	84,962		81,041
Fidelity® VIP Emerging Markets Portfolio—Service Class 2	10,297		3,089
Fidelity® VIP Equity-Income PortfolioSM—Initial Class	7,641		7,289
Fidelity® VIP Equity-Income PortfolioSM—Service Class 2	39,058		23,702
Fidelity® VIP FundsManager® 60% Portfolio—Investor Class	211,169		1,987
Fidelity® VIP FundsManager® 60% Portfolio—Service Class	17,534		3,061
Fidelity® VIP Government Money Market Portfolio—Investor Class	415		415
Fidelity® VIP Growth Opportunities Portfolio—Service Class 2	88,954		40,074
Fidelity® VIP Health Care Portfolio—Service Class 2	33,403		8,368
Fidelity® VIP International Index Portfolio—Service Class 2	6,407		794
Fidelity® VIP Mid Cap Portfolio—Service Class 2	37,579		26,577
Franklin Templeton Aggressive Model Portfolio—Class II	38,106		4,610
Franklin Templeton Conservative Model Portfolio—Class II	33,513		8,103
Franklin Templeton Moderate Model Portfolio—Class II	193,782		11,127
Franklin Templeton Moderately Aggressive Model Portfolio—Class II	147,055		6,751
Franklin Templeton Moderately Conservative Model Portfolio—Class II	76,748		8,820

63

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 2—Purchases and Sales (in 000’s) (Continued):

	Purchases		Sales
Invesco V.I. International Growth Fund—Series II Shares	$	6,304	$	5,463
Invesco V.I. Main Street Small Cap Fund®—Series II Shares	8,878		2,737
Janus Henderson Enterprise Portfolio—Service Shares	14,172		5,388
Janus Henderson Global Research Portfolio—Institutional Shares	3,260		6,718
Janus Henderson Global Research Portfolio—Service Shares	6,585		8,164
MFS® International Intrinsic Value Portfolio—Service Class	12,792		4,571
MFS® Investors Trust Series—Initial Class	543		1,575
MFS® Investors Trust Series—Service Class	6,518		17,668
MFS® Mid Cap Value Portfolio—Service Class	14,001		6,725
MFS® Research Series—Initial Class	889		2,000
MFS® Research Series—Service Class	5,727		10,334
Morgan Stanley VIF U.S. Real Estate Portfolio—Class II	6,177		5,913
Neuberger Berman AMT Mid Cap Growth Portfolio—Class I	236		206
Neuberger Berman AMT Mid Cap Growth Portfolio—Class S	29,720		23,100
PIMCO VIT Income Portfolio—Advisor Class	13,698		2,320
PIMCO VIT International Bond Portfolio (U.S. Dollar-Hedged)—Advisor Class	14,753		11,476
PIMCO VIT Low Duration Portfolio—Advisor Class	10,740		10,209
PIMCO VIT Total Return Portfolio—Advisor Class	43,687		39,531
Total	$	2,578,344	$	1,782,350

Not all investment divisions are available under all policies.

64

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 3—Expenses and Related Party Transactions:

New York Life Investment Management LLC (“New York Life Investments”) provides investment advisory services to the MainStay VP Funds Trust, for a fee. New York Life Investments retains several sub-advisors, including Brown Advisory LLC ("Brown Advisory"), Candriam Belgium S.A. (“Candriam Belgium”), CBRE Clarion Securities ("CBRE Clarion"), Epoch Investment Partners, Inc. (“Epoch”), FIAM LLC ("FIAM"), IndexIQ Advisors LLC ("IndexIQ Advisors"), Janus Capital Management LLC (“Janus Capital”), MacKay Shields LLC (“MacKay”), Newton Investment Management North America, LLC ("NIMNA"), New York Life Investors LLC (“NYLI”), Pacific Investment Management Company LLC (“PIMCO”), Segall Bryant & Hamill, LLC ("SBH"), T. Rowe Price Associates, Inc. (“T. Rowe Price”), Wellington Management Company LLP ("Wellington") and Winslow Capital Management, LLC (“Winslow Capital”) to provide investment advisory services to certain portfolios of the MainStay VP Funds Trust.

New York Life Investments, MacKay, IndexIQ Advisors and NYLI are all indirect, wholly-owned subsidiaries of NYLIC. Brown Advisory is a wholly-owned subsidiary of Brown Advisory Management, LLC. Candriam Belgium is a part of Candriam Investors Group. CBRE Clarion is the listed securities investment management arm of CBRE Global Investors. Epoch is an indirect, wholly-owned subsidiary of Toronto Dominion Bank. FIAM is an indirectly held wholly-owned subsidiary of FMR LLC. Janus Capital is a wholly-owned subsidiary of Janus Henderson Group, Plc, doing business as Janus Henderson Investors. NIMNA is an indirect subsidiary of the Bank of New York Mellon Corporation. PIMCO is a majority owned subsidiary of Allianz Asset Management of America L.P. SBH, T. Rowe Price and Wellington are independent investment advisory firms. Winslow Capital is a wholly-owned subsidiary of Nuveen, LLC.

NYLIAC deducts a surrender charge on certain partial withdrawals and surrenders of Series I, III, IV, V, VI, VIII, IX , X, XI, XII, XIV, XV, XVI, XVII and XVIII policies. Policies in Series II, VII and XIII are not subject to surrender charges on partial withdrawals and surrenders. For New York Life Variable Annuity and New York Life Plus Variable Annuity policies which are part of Series I, the percentage of the surrender charge varies, depending upon the length of time a premium payment is in the policy before it is withdrawn. This charge is 7% during the first three payment years and declines 1% per year for each additional payment year, until the sixth payment year, after which no charge is made. For New York Life Flexible Premium Variable Annuity and New York Life Flexible Premium Variable Annuity II policies, which are also part of Series I, this charge is 7% for the first three policy years and declines to 1% per year for each additional policy year, until the ninth policy year, after which no charge is made.

For New York Life Premium Plus Variable Annuity policies, which are part of Series III and New York Life Premium Plus II Variable Annuity policies, which are part of Series VI, the percentage of the surrender charge varies; depending upon the length of time a premium payment is in the policy before it is withdrawn. This charge is 8% during the first three payment years (8% during the first four payment years for policies sold by registered representatives of broker-dealers that have selling agreements with NYLIFE Distributors and NYLIAC or banks) and declines 1% per year for each additional payment year, until the eighth payment year, after which no charge is made. In those states where NYLIAC offered a single premium version of the New York Life Premium Plus Variable Annuity and New York Life Premium Plus II Variable Annuity, the surrender charge was lower.

For the New York Life Essentials Variable Annuity and New York Life Plus II Variable Annuity policies, which are part of Series IV, the percentage of the surrender charge varies; depending upon the length of time a premium payment is in the policy before it is withdrawn. This charge is 7% during the first three payment years, 6% during the fourth and fifth payment years and declines 1% per year for each additional payment year, until the seventh payment year, after which no charge is made.

For New York Life Select Variable Annuity policies, which are part of Series V, the percentage of the surrender charge varies, depending upon the length of time a premium payment is in the policy before it is withdrawn. This charge is 8% during the first two payment years and declines to 7% for the third payment year, after which no charge is made.

For New York Life Premier Variable Annuity policies, which are part of Series VIII, the percentage of the surrender charge varies, depending upon the length of time a premium payment is in the policy before it is withdrawn. This charge is 8% during the first payment year and declines by 1% per year for each additional payment year, until the seventh payment year, after which no charge is made.

For New York Life Premier Plus Variable Annuity policies, which are part of Series IX, the percentage of the surrender charge varies, depending upon the length of time a premium payment is in the policy before it is withdrawn. This charge is 8% during the first two payment years and declines by 1% per year for each additional payment year, until the eighth payment year, after which no charge is made.

For New York Life Income Plus Variable Annuity policies with the Income Benefit Rider, which are part of Series X, the percentage of the surrender charge varies; depending upon the length of time a premium payment is in the policy before it is withdrawn. This charge is 8% during the first payment year and declines by 1% per year for each additional payment year, until the seventh payment year, after which no charge is made.

For New York Life Income Plus Variable Annuity policies with the Guaranteed Future Income Benefit Rider, which are also part of Series X, the product becomes a single premium product where surrender charges are based on the Policy Year. This charge is 8%

65

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 3—Expenses and Related Party Transactions (Continued):

during the first Policy Year and declines by 1% per year for each Policy Year, until the seventh Policy Year, after which no charge is made.

For New York Life Premier Variable Annuity II policies, which are part of Series XI, the percentage of the surrender charge varies, depending upon the length of time a premium payment is in the policy before it is withdrawn. For policies applied for before May 1, 2019, this charge is 8% during the first payment year and declines by 1% per year for each additional payment year, until the seventh payment year, after which no charge is made. For policies applied for on or after May 1, 2019, this charge is 7% during the first two payment years and declines by 1% per year for each additional payment year, until the seventh payment year, after which no charge is made.

For New York Life Premier Plus Variable Annuity II policies, which are part of Series XII, the percentage of the surrender charge varies, depending upon the length of time a premium payment is in the policy before it is withdrawn. This charge is 8% during the first two payment years and declines by 1% per year for each additional payment year, until the eighth payment year, after which no charge is made.

For New York Life Flexible Premium Variable Annuity III policies, which are part of Series XIV, the percentage of surrender charge is based on the Policy Year. This charge is 7% for the first three Policy Years and declines to 1% per year for each additional Policy Year, until the ninth Policy Year, after which no charge is made.

For New York Life Income Plus Variable Annuity II policies with the Guaranteed Future Income Benefit Rider, which are part of Series XV, the product is a single premium product where surrender charges are based on the Policy Year. This charge is 8% during the first Policy Year and declines by 1% per year for each additional Policy Year, until the seventh Policy Year, after which no charge is made.

For New York Life Premier Variable Annuity - FP Series policies, which are part of Series XVI, the percentage of the surrender charge varies, depending upon the length of time a premium payment is in the policy before it is withdrawn. This charge is 8% during the first payment year and declines by 1% per year for each additional payment year, until the seventh payment year, after which no charge is made.

For New York Life Premier Variable Annuity - P Series policies, which are part of Series XVII, the charge is assessed as a percentage of the amount withdrawn or surrendered during the first seven Policy Years following the Policy Date. This charge is 7% during the first two Policy Years and declines by 1% per year for each additional Policy Year, until the seventh Policy Year, after which no charge is made.

For New York Life IndexFlex Variable Annuity and New York Life IndexFlex Variable Annuity - FP Series policies, which are part of Series XVIII, the charge is assessed as a percentage of the amount withdrawn or surrendered during the first seven Policy Years, first six Policy Years or first five Policy Years following the Policy Date, depending on the surrender charge period chosen when the policy is issued. For the seven year surrender charge period, the charge is 8% during the first two Policy Years and declines by 1% per year for each additional Policy Year, until the seventh Policy Year, after which no charge is made. For the six year surrender charge period, the charge is 8% during the first two Policy Years and declines by 1% per year for each additional Policy Year, until the sixth Policy Year, after which no charge is made. For the five year surrender charge period, the charge is 8% during the first two Policy Years and declines by 1% per year for each additional Policy Year, until the fifth Policy Year, after which no charge is made.

All surrender charges are recorded with policyowners’ surrenders in the accompanying Statement of Changes in Net Assets. Surrender charges are paid to NYLIAC.

NYLIAC also deducts an annual policy service charge from the policy’s accumulation value on each policy anniversary date and upon surrender, if on the policy anniversary and/or date of surrender the accumulation value is less than $20,000 for Series I policies, $50,000 for Series II, IV, VII and XIV policies and $100,000 for Series III, V, VI, VIII, IX, XI, XII, XIII and XVI policies. For New York Life Variable Annuity and New York Life Plus Variable Annuity policies which are part of Series I, this charge is the lesser of $30 or 2% of the accumulation value per policy. For New York Life Flexible Premium Variable Annuity and New York Life Flexible Premium Variable Annuity II, which are also part of Series I, this charge is $30 per policy. For Series II, VII and XIII policies, this charge is $40 per policy (may be lower in some states). For Series III, IV, VI, VIII, IX, XI, XII, XIV and XVI policies, this charge is $30 per policy. For Series V policies, this charge is $50 per policy. For Series X and XV policies, the charge is $30 per policy and is waived either upon (a) registration with delivery of all available materials that we normally mail, (b) the Variable Account Annuity Commencement Date, or (c) the Income Benefit (for Series X policies)/GFIB Payment Commencement Date (whichever comes first). These charges are shown as a reduction to payments received from policyowners in the accompanying Statement of Changes in Net Assets.

Additionally, NYLIAC reserves the right to charge Series I, II, III, IV, V, VI, VII, VIII, IX, X, XI, XII, XIII, XIV, XV, XVI and XVIII policies $30 for each transfer in excess of 12 in any one policy year, subject to certain restrictions.

66

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 3—Expenses and Related Party Transactions (Continued):

The Separate Account is charged for administrative services provided and the mortality and expense risks assumed by NYLIAC. For Series I, II, III, IV, V, VI, VII, VIII, IX, X, XI, XII, XIII, XIV and XV policies, these charges are made daily at an annual rate of 1.40%, 1.55%, 1.60%, 1.45%, 1.85%, 1.75%, 1.65%, 1.35%, 1.65%, 1.35%, 1.30% during the surrender charge period for the initial premium and 1.10% after the surrender charge period for the initial premium for policies applied for before May 1, 2016 and 1.20% during the surrender charge period for the initial premium and 1.00% after the surrender charge period for the initial premium for policies applied for on or after May 1, 2016, 1.60% during the surrender charge period for the initial premium and 1.40% after the surrender charge period for the initial premium for policies applied for before May 1, 2016 and 1.50% during the surrender charge period for the initial premium and 1.30% after the surrender charge period for the initial premium for policies applied for on or after May 1, 2016, 1.60%, 1.35% during the surrender charge period for the initial premium and 1.15% after the surrender charge period for the initial premium for policies applied for before May 1, 2016 and 1.30% during the surrender charge period for the initial premium and 1.10% after the surrender charge period for the initial premium for policies applied for on or after May 1, 2016 and 1.35%, for Series XVI policies, the charge is 1.20% during the surrender charge period for the initial premium and 1.00% after the surrender charge period for the initial premium, for New York Life Premier Variable Annuity - FP Series, for Series XVII policies, the charge is 1.20% during the surrender charge period and 1.00% after the surrender charge period, for New York Life Premier Variable Annuity - P Series, for Series XVIII policies, the charge is 1.20% for the seven year surrender charge period, 1.25% for the six year surrender charge period and 1.30% for the five year surrender charge period, for New York Life IndexFlex Variable Annuity and New York Life IndexFlex Variable Annuity - FP Series, respectively, of the daily average variable accumulation value of each Investment Division, and is the same rate for each of the five periods presented in the Financial Highlights section. These charges are disclosed in the accompanying Statement of Operations.

In addition, New York Life Income Plus Variable Annuity and New York Life Income Plus Variable Annuity II policies, which are part of Series X and Series XV, are subject to a Guaranteed Future Income Benefit Charge if the Guaranteed Future Income Benefit Rider is chosen. This charge is an annualized percentage of the average daily Unfunded Income Benefit Base (as defined in the New York Life Income Plus Variable Annuity and New York Life Income Plus Variable Annuity II prospectuses) each policy quarter, deducted from the variable accumulation unit value on a quarterly basis. On an annual basis, the charge equals 1.00% (0.25% quarterly) of the Unfunded Income Benefit Base.

Separate Account policyowners may pay certain Fund portfolio company operating expenses during the time they own their policy, which are reflected in the daily computation of NAVs for the Funds. NYLIAC may receive payment or compensation from the Funds resulting from certain of these operating expenses in connection with the administration, distribution and other services it provides to the Funds, some of whom may be affiliates of NYLIAC. Management Fees (which may include administration and/or advisory fees) range from 0.00% to 1.00%, distribution (12b-1) fees range from 0.00% to 0.30%, and other expenses range from 0.00% to 0.77%. These ranges are shown as a percentage of average net assets as of December 31, 2020, and approximate the ranges as of December 31, 2021.

NOTE 4—Distribution of Net Income:

The Separate Account does not expect to declare dividends to policyowners from accumulated net investment income and realized gains. The income and gains are distributed to policyowners as part of withdrawals of amounts (in the form of surrenders, death benefits, transfers, or annuity payments) in excess of the net premium payments.

67

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 5—Changes in Units Outstanding (in 000’s):

The changes in units outstanding for the years ended December 31, 2021 and 2020 were as follows:

	2021			2020
	Units Issued	Units Redeemed	Net Increase (Decrease)	Units Issued	Units Redeemed	Net Increase (Decrease)
MainStay VP Balanced—Service Class	1,584	(920)	664	927	(1,352)	(425)
MainStay VP Bond—Initial Class	55	(156)	(101)	98	(245)	(147)
MainStay VP Bond—Service Class	1,631	(1,869)	(238)	4,012	(2,195)	1,817
MainStay VP Candriam Emerging Markets Equity—Initial Class	30	(116)	(86)	17	(234)	(217)
MainStay VP Candriam Emerging Markets Equity—Service Class	177	(654)	(477)	75	(1,116)	(1,041)
MainStay VP CBRE Global Infrastructure—Service Class	291	(145)	146	214	(233)	(19)
MainStay VP Conservative Allocation—Service Class	1,632	(2,100)	(468)	1,987	(3,155)	(1,168)
MainStay VP Epoch U.S. Equity Yield—Initial Class	22	(380)	(358)	37	(485)	(448)
MainStay VP Epoch U.S. Equity Yield—Service Class	565	(1,062)	(497)	841	(1,164)	(323)
MainStay VP Equity Allocation—Service Class	246	(1,501)	(1,255)	798	(2,013)	(1,215)
MainStay VP Fidelity Institutional AM® Utilities—Initial Class	1	(14)	(13)	2	(8)	(6)
MainStay VP Fidelity Institutional AM® Utilities—Service Class	860	(2,821)	(1,961)	1,497	(4,656)	(3,159)
MainStay VP Floating Rate—Service Class	2,348	(1,860)	488	2,091	(3,928)	(1,837)
MainStay VP Growth Allocation—Service Class	547	(3,277)	(2,730)	779	(4,528)	(3,749)
MainStay VP Income Builder—Initial Class	37	(140)	(103)	59	(210)	(151)
MainStay VP Income Builder—Service Class	1,778	(1,125)	653	1,914	(1,452)	462
MainStay VP IQ Hedge Multi-Strategy—Service Class	573	(856)	(283)	466	(1,413)	(947)
MainStay VP Janus Henderson Balanced—Initial Class	39	(754)	(715)	72	(1,110)	(1,038)
MainStay VP Janus Henderson Balanced—Service Class	4,892	(2,389)	2,503	3,637	(2,963)	674
MainStay VP MacKay Convertible—Initial Class	37	(168)	(131)	110	(266)	(156)
MainStay VP MacKay Convertible—Service Class	2,931	(1,554)	1,377	2,676	(2,525)	151
MainStay VP MacKay Government—Initial Class	48	(160)	(112)	155	(232)	(77)
MainStay VP MacKay Government—Service Class	912	(1,755)	(843)	5,587	(3,894)	1,693
MainStay VP MacKay High Yield Corporate Bond—Initial Class	41	(319)	(278)	94	(650)	(556)
MainStay VP MacKay High Yield Corporate Bond—Service Class	6,646	(4,444)	2,202	8,062	(7,321)	741
MainStay VP MacKay International Equity—Initial Class	16	(72)	(56)	11	(140)	(129)
MainStay VP MacKay International Equity—Service Class	288	(601)	(313)	461	(1,127)	(666)
MainStay VP MacKay S&P 500 Index—Initial Class	33	(289)	(256)	99	(464)	(365)
MainStay VP MacKay S&P 500 Index—Service Class	4,440	(2,663)	1,777	4,358	(3,528)	830
MainStay VP MacKay Strategic Bond—Service Class	1,442	(2,175)	(733)	1,583	(3,454)	(1,871)
MainStay VP Moderate Allocation—Service Class	1,170	(2,464)	(1,294)	1,507	(3,695)	(2,188)
MainStay VP Natural Resources—Initial Class	1,634	(2,797)	(1,163)	1,332	(2,833)	(1,501)
MainStay VP PIMCO Real Return—Service Class	1,845	(2,989)	(1,144)	4,322	(1,904)	2,418
MainStay VP Small Cap Growth—Initial Class	19	(259)	(240)	26	(417)	(391)
MainStay VP Small Cap Growth—Service Class	434	(421)	13	339	(562)	(223)
MainStay VP T. Rowe Price Equity Income—Initial Class	9	(233)	(224)	36	(317)	(281)
MainStay VP T. Rowe Price Equity Income—Service Class	45	(844)	(799)	259	(946)	(687)
MainStay VP U.S. Government Money Market—Initial Class	26,073	(52,058)	(25,985)	92,732	(56,122)	36,610
MainStay VP Wellington Growth—Initial Class	10	(215)	(205)	18	(280)	(262)
MainStay VP Wellington Growth—Service Class	12	(139)	(127)	13	(204)	(191)
MainStay VP Wellington Mid Cap—Initial Class	23	(120)	(97)	27	(211)	(184)
MainStay VP Wellington Mid Cap—Service Class	408	(1,129)	(721)	1,476	(1,313)	163
MainStay VP Wellington Small Cap—Initial Class	108	(261)	(153)	123	(411)	(288)

68

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 5—Changes in Units Outstanding (in 000’s) (Continued):

	2021			2020
	Units Issued	Units Redeemed	Net Increase (Decrease)	Units Issued	Units Redeemed	Net Increase (Decrease)
MainStay VP Wellington Small Cap—Service Class	577	(1,292)	(715)	780	(1,719)	(939)
MainStay VP Wellington U.S. Equity—Initial Class	14	(154)	(140)	9	(188)	(179)
MainStay VP Wellington U.S. Equity—Service Class	261	(391)	(130)	314	(550)	(236)
MainStay VP Winslow Large Cap Growth—Initial Class	41	(173)	(132)	84	(226)	(142)
MainStay VP Winslow Large Cap Growth—Service Class	1,397	(1,199)	198	2,248	(1,852)	396
American Funds IS Asset Allocation Fund—Class 4	3,824	(749)	3,075	2,486	(790)	1,696
American Funds IS Global Small Capitalization Fund—Class 4	265	(140)	125	214	(245)	(31)
American Funds IS Growth Fund—Class 4	1,231	(482)	749	1,267	(527)	740
American Funds IS New World Fund®—Class 4	406	(491)	(85)	800	(815)	(15)
American Funds IS Washington Mutual Investors Fund—Class 4	1,240	(923)	317	2,126	(715)	1,411
BlackRock® Global Allocation V.I. Fund—Class III	2,105	(1,311)	794	661	(2,152)	(1,491)
BlackRock® High Yield V.I. Fund—Class III	2,255	(676)	1,579	1,819	(889)	930
BNY Mellon IP Technology Growth Portfolio—Initial Shares	49	(118)	(69)	97	(164)	(67)
BNY Mellon IP Technology Growth Portfolio—Service Shares	1,035	(749)	286	1,394	(1,363)	31
ClearBridge Variable Appreciation Portfolio—Class II	206	(154)	52	401	(236)	165
Columbia Variable Portfolio—Commodity Strategy Fund—Class 2	8	(35)	(27)	70	(76)	(6)
Columbia Variable Portfolio—Emerging Markets Bond Fund—Class 2	518	(275)	243	1,087	(667)	420
Columbia Variable Portfolio—Small Cap Value Fund—Class 2	892	(720)	172	451	(544)	(93)
Delaware VIP® Small Cap Value Series—Service Class	872	(368)	504	534	(203)	331
DWS Alternative Asset Allocation VIP—Class B	200	(722)	(522)	2,032	(673)	1,359
Fidelity® VIP Bond Index Portfolio—Service Class 2	1,535	(1,270)	265	5,597	(142)	5,455
Fidelity® VIP ContrafundSM Portfolio—Initial Class	14	(193)	(179)	25	(356)	(331)
Fidelity® VIP ContrafundSM Portfolio—Service Class 2	1,447	(2,259)	(812)	1,702	(3,687)	(1,985)
Fidelity® VIP Emerging Markets Portfolio—Service Class 2	621	(217)	404	367	(160)	207
Fidelity® VIP Equity-Income PortfolioSM—Initial Class	35	(162)	(127)	26	(200)	(174)
Fidelity® VIP Equity-Income PortfolioSM—Service Class 2	1,080	(997)	83	1,491	(989)	502
Fidelity® VIP FundsManager® 60% Portfolio—Investor Class	15,996	(107)	15,889	17,817	(73)	17,744
Fidelity® VIP FundsManager® 60% Portfolio—Service Class	1,368	(226)	1,142	564	(120)	444
Fidelity® VIP Government Money Market Portfolio—Investor Class	42	(42)	—	79	(79)	—
Fidelity® VIP Growth Opportunities Portfolio—Service Class 2	1,890	(979)	911	2,429	(1,687)	742
Fidelity® VIP Health Care Portfolio—Service Class 2	2,028	(524)	1,504	2,464	(717)	1,747
Fidelity® VIP International Index Portfolio—Service Class 2	528	(62)	466	224	(80)	144
Fidelity® VIP Mid Cap Portfolio—Service Class 2	745	(800)	(55)	746	(1,284)	(538)
Franklin Templeton Aggressive Model Portfolio—Class II	2,611	(320)	2,291	1,465	(181)	1,284
Franklin Templeton Conservative Model Portfolio—Class II	2,841	(706)	2,135	2,072	(111)	1,961
Franklin Templeton Moderate Model Portfolio—Class II	14,891	(871)	14,020	7,010	(621)	6,389
Franklin Templeton Moderately Aggressive Model Portfolio—Class II	10,674	(490)	10,184	4,519	(288)	4,231
Franklin Templeton Moderately Conservative Model Portfolio—Class II	6,075	(714)	5,361	3,758	(143)	3,615
Invesco V.I. International Growth Fund—Series II Shares	264	(379)	(115)	355	(659)	(304)
Invesco V.I. Main Street Small Cap Fund®—Series II Shares	483	(153)	330	31	(1)	30
Janus Henderson Enterprise Portfolio—Service Shares	663	(308)	355	1,071	(665)	406
Janus Henderson Global Research Portfolio—Institutional Shares	10	(161)	(151)	27	(235)	(208)
Janus Henderson Global Research Portfolio—Service Shares	224	(299)	(75)	223	(343)	(120)
MFS® International Intrinsic Value Portfolio—Service Class	774	(282)	492	854	(382)	472

69

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 5—Changes in Units Outstanding (in 000’s) (Continued):

	2021			2020
	Units Issued	Units Redeemed	Net Increase (Decrease)	Units Issued	Units Redeemed	Net Increase (Decrease)
MFS® Investors Trust Series—Initial Class	6	(43)	(37)	13	(37)	(24)
MFS® Investors Trust Series—Service Class	180	(729)	(549)	693	(574)	119
MFS® Mid Cap Value Portfolio—Service Class	850	(412)	438	896	(24)	872
MFS® Research Series—Initial Class	7	(48)	(41)	11	(54)	(43)
MFS® Research Series—Service Class	116	(386)	(270)	769	(489)	280
Morgan Stanley VIF U.S. Real Estate Portfolio—Class II	511	(491)	20	601	(558)	43
Neuberger Berman AMT Mid Cap Growth Portfolio—Class I	1	(4)	(3)	—	(5)	(5)
Neuberger Berman AMT Mid Cap Growth Portfolio—Class S	675	(624)	51	712	(1,103)	(391)
PIMCO VIT Income Portfolio—Advisor Class	1,207	(202)	1,005	415	(29)	386
PIMCO VIT International Bond Portfolio (U.S. Dollar-Hedged)—Advisor Class	1,168	(939)	229	1,321	(1,569)	(248)
PIMCO VIT Low Duration Portfolio—Advisor Class	1,066	(986)	80	1,891	(883)	1,008
PIMCO VIT Total Return Portfolio—Advisor Class	3,067	(3,404)	(337)	6,876	(2,333)	4,543

Not all investment divisions are available under all policies.

70

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 6—Financial Highlights:

The following table presents financial highlights for each Investment Division as of December 31, 2021, 2020, 2019, 2018 and 2017:

		Net Assets (in 000's)	Units Outstanding (in 000's)	Variable Accumulation Unit Value (Lowest to Highest)	Total Return1 (Lowest to Highest)	Investment Income Ratio2
MainStay VP Balanced—Service Class	2021	$130,656	6,938	$14.14 to $25.17	14.9% to 15.6%	1.2	%
	2020	106,930	6,274	12.28 to 21.80	5.7% to 6.3%	1.8	%
	2019	111,487	6,699	11.59 to 20.53	14.3% to 15.1%	1.7	%
	2018	105,451	7,013	10.11 to 17.87	(9.3%) to (8.7%)	1.4	%
	2017	131,532	7,725	11.12 to 19.60	7.7% to 8.4%	1.1	%
MainStay VP Bond—Initial Class	2021	$32,134	1,396	$15.97 to $25.02	(3.2%) to (2.7%)	1.7	%
	2020	35,395	1,497	16.49 to 25.73	6.0% to 6.4%	2.0	%
	2019	36,491	1,644	15.57 to 24.17	7.1% to 7.6%	2.7	%
	2018	38,703	1,879	14.53 to 22.47	(2.8%) to (2.4%)	2.8	%
	2017	45,537	2,156	14.96 to 23.02	2.0% to 2.4%	2.4	%
MainStay VP Bond—Service Class	2021	$131,169	10,835	$10.78 to $15.19	(3.4%) to (2.8%)	1.6	%
	2020	139,819	11,073	11.12 to 15.66	5.7% to 6.4%	2.0	%
	2019	113,336	9,256	10.49 to 14.75	6.9% to 7.6%	2.7	%
	2018	92,030	7,672	9.78 to 13.74	(3.1%) to (2.4%)	2.6	%
	2017	102,029	8,043	10.05 to 14.11	1.7% to 2.4%	2.2	%
MainStay VP Candriam Emerging Markets Equity—Initial Class	2021	$10,818	987	$10.51 to $10.99	(3.8%) to (3.4%)	1.1	%
	2020	12,171	1,073	10.92 to 11.37	23.4% to 24.0%	3.2	%
	2019	11,803	1,290	8.85 to 9.17	17.9% to 18.4%	1.4	%
	2018	11,908	1,540	7.51 to 7.74	(22.0%) to (21.7%)	1.4	%
	2017	18,540	1,879	9.63 to 9.89	40.5% to 41.1%	1.2	%
MainStay VP Candriam Emerging Markets Equity—Service Class	2021	$36,619	3,365	$10.25 to $16.19	(4.0%) to (3.4%)	0.8	%
	2020	43,338	3,842	10.68 to 16.76	23.1% to 23.9%	2.9	%
	2019	44,608	4,883	8.68 to 13.52	17.6% to 18.4%	1.1	%
	2018	45,533	5,904	7.38 to 11.43	(22.2%) to (21.7%)	1.1	%
	2017	70,068	7,109	9.49 to 14.59	40.2% to 41.1%	1.0	%
MainStay VP CBRE Global Infrastructure—Service Class	2021	$5,430	676	$7.00 to $8.92	13.0% to 13.6%	0.0	%
	2020	3,700	530	6.20 to 7.85	(14.5%) to (14.1%)	6.8	%
	2019	4,406	549	7.25 to 9.14	3.2% to 3.8%	0.0	%
	2018	4,541	594	7.02 to 8.80	(29.1%) to (28.7%)	0.0	%
	2017	7,183	684	9.91 to 12.35	5.8% to 6.4%	0.0	%

71

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 6—Financial Highlights (Continued):

		Net Assets (in 000's)	Units Outstanding (in 000's)	Variable Accumulation Unit Value (Lowest to Highest)	Total Return1 (Lowest to Highest)	Investment Income Ratio2
MainStay VP Conservative Allocation—Service Class	2021	$243,298	14,677	$12.69 to $19.80	4.9% to 5.6%	1.7	%
	2020	242,878	15,145	12.07 to 18.79	8.0% to 8.7%	1.8	%
	2019	245,989	16,313	11.15 to 17.32	12.4% to 13.2%	2.5	%
	2018	244,737	17,909	9.89 to 15.33	(8.4%) to (7.8%)	2.1	%
	2017	301,087	19,772	10.77 to 16.67	8.5% to 9.2%	1.8	%
MainStay VP Epoch U.S. Equity Yield—Initial Class	2021	$102,041	3,294	$27.92 to $38.05	20.6% to 21.2%	2.4	%
	2020	93,361	3,652	23.08 to 31.54	(1.8%) to (1.4%)	2.7	%
	2019	106,293	4,100	23.45 to 32.12	21.9% to 22.5%	3.1	%
	2018	99,479	4,701	19.19 to 26.35	(7.0%) to (6.6%)	2.1	%
	2017	122,979	5,430	20.57 to 28.32	16.5% to 17.0%	1.3	%
MainStay VP Epoch U.S. Equity Yield—Service Class	2021	$175,225	6,561	$14.93 to $33.65	20.3% to 21.1%	2.2	%
	2020	159,904	7,058	12.38 to 27.83	(2.1%) to (1.4%)	2.5	%
	2019	176,421	7,381	12.61 to 28.29	21.6% to 22.4%	2.9	%
	2018	166,534	8,276	10.34 to 23.16	(7.2%) to (6.6%)	1.8	%
	2017	210,536	9,541	11.12 to 24.85	16.2% to 17.0%	1.1	%
MainStay VP Equity Allocation—Service Class	2021	$183,939	8,338	$16.24 to $31.71	17.7% to 18.4%	1.7	%
	2020	181,048	9,593	13.77 to 26.81	12.6% to 13.4%	2.0	%
	2019	182,539	10,808	12.20 to 23.69	22.0% to 22.8%	2.6	%
	2018	166,916	11,938	9.97 to 19.32	(14.6%) to (14.0%)	1.3	%
	2017	201,728	12,050	11.65 to 22.51	20.1% to 20.9%	0.8	%
MainStay VP Fidelity Institutional AM® Utilities—Initial Class	2021	$756	37	$19.55 to $20.44	15.1% to 15.6%	2.0	%
	2020	886	50	16.99 to 17.68	(2.2%) to (1.8%)	2.5	%
	2019	1,009	56	17.37 to 18.00	21.0% to 21.5%	2.5	%
	2018	990	67	14.36 to 14.81	(1.1%) to (0.6%)	1.2	%
	2017	1,095	74	14.51 to 14.90	12.6% to 13.1%	3.9	%
MainStay VP Fidelity Institutional AM® Utilities—Service Class	2021	$308,945	16,859	$13.62 to $20.04	14.8% to 15.6%	1.8	%
	2020	300,990	18,820	11.83 to 17.37	(2.4%) to (1.8%)	2.3	%
	2019	362,585	21,979	12.10 to 17.72	20.7% to 21.5%	2.2	%
	2018	350,906	25,515	10.00 to 14.61	(1.3%) to (0.7%)	0.9	%
	2017	409,896	29,123	10.10 to 14.72	12.4% to 13.1%	3.8	%

72

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 6—Financial Highlights (Continued):

		Net Assets (in 000's)	Units Outstanding (in 000's)	Variable Accumulation Unit Value (Lowest to Highest)	Total Return1 (Lowest to Highest)	Investment Income Ratio2
MainStay VP Floating Rate—Service Class	2021	$157,492	12,415	$11.19 to $14.13	1.6% to 2.2%	2.9	%
	2020	150,175	11,927	10.99 to 13.85	0.3% to 1.0%	3.6	%
	2019	173,643	13,764	10.93 to 13.74	6.2% to 6.9%	4.7	%
	2018	193,057	16,204	10.26 to 12.88	(2.2%) to (1.6%)	4.5	%
	2017	191,162	15,417	10.46 to 13.11	1.8% to 2.5%	4.0	%
MainStay VP Growth Allocation—Service Class	2021	$356,952	16,717	$15.04 to $26.94	13.6% to 14.3%	2.2	%
	2020	368,873	19,447	13.21 to 23.60	10.6% to 11.3%	2.6	%
	2019	400,492	23,196	11.91 to 21.23	18.9% to 19.7%	2.9	%
	2018	396,579	27,033	9.99 to 17.77	(12.6%) to (12.0%)	1.7	%
	2017	492,066	28,754	11.41 to 20.23	16.2% to 16.9%	1.2	%
MainStay VP Income Builder—Initial Class	2021	$54,052	1,364	$18.87 to $44.37	8.5% to 9.0%	2.9	%
	2020	53,336	1,467	17.35 to 40.71	6.0% to 6.5%	2.5	%
	2019	54,940	1,618	16.33 to 38.24	15.9% to 16.4%	4.8	%
	2018	52,883	1,829	14.05 to 32.84	(7.0%) to (6.5%)	2.8	%
	2017	63,743	2,063	15.07 to 35.14	10.5% to 11.0%	3.7	%
MainStay VP Income Builder—Service Class	2021	$147,239	8,610	$11.19 to $26.82	8.2% to 8.9%	2.7	%
	2020	131,534	7,957	12.53 to 24.69	5.7% to 6.4%	2.3	%
	2019	122,996	7,495	11.82 to 23.25	15.6% to 16.4%	4.6	%
	2018	102,162	6,850	10.20 to 20.03	(7.2%) to (6.6%)	2.5	%
	2017	119,987	7,128	10.96 to 21.50	10.2% to 10.9%	3.4	%
MainStay VP IQ Hedge Multi-Strategy—Service Class	2021	$57,488	6,454	$8.05 to $10.09	(2.5%) to (2.0%)	0.0	%
	2020	61,029	6,737	8.26 to 10.30	3.3% to 3.9%	1.8	%
	2019	66,782	7,684	8.00 to 9.91	6.4% to 6.9%	1.4	%
	2018	68,479	8,450	7.52 to 9.27	(1.9%) to (1.8%)	0.6	%
MainStay VP Janus Henderson Balanced—Initial Class	2021	$172,803	6,985	$23.72 to $24.92	15.2% to 15.8%	1.3	%
	2020	164,644	7,700	20.59 to 21.52	12.2% to 12.8%	1.8	%
	2019	165,768	8,738	18.35 to 19.08	20.7% to 21.3%	1.8	%
	2018	156,530	10,001	15.20 to 15.73	(1.4%) to (0.9%)	1.8	%
	2017	182,288	11,529	15.42 to 15.88	16.2% to 16.8%	1.7	%

73

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 6—Financial Highlights (Continued):

		Net Assets (in 000's)	Units Outstanding (in 000's)	Variable Accumulation Unit Value (Lowest to Highest)	Total Return1 (Lowest to Highest)	Investment Income Ratio2
MainStay VP Janus Henderson Balanced—Service Class	2021	$380,770	18,913	$11.94 to $24.31	14.9% to 15.7%	1.1	%
	2020	300,355	16,410	15.46 to 21.05	11.9% to 12.7%	1.7	%
	2019	263,000	15,736	13.77 to 18.71	20.4% to 21.2%	1.6	%
	2018	212,498	14,928	11.41 to 15.47	(1.7%) to (1.0%)	1.6	%
	2017	210,090	14,184	11.58 to 15.65	15.9% to 16.6%	1.6	%
MainStay VP MacKay Convertible—Initial Class	2021	$79,068	1,403	$34.25 to $65.60	7.2% to 7.7%	1.2	%
	2020	80,316	1,534	31.85 to 60.89	33.6% to 34.2%	0.7	%
	2019	65,591	1,690	23.79 to 45.39	20.2% to 20.8%	1.4	%
	2018	60,695	1,909	19.74 to 37.59	(4.1%) to (3.6%)	1.6	%
	2017	71,170	2,167	20.53 to 39.01	9.9% to 10.4%	1.7	%
MainStay VP MacKay Convertible—Service Class	2021	$327,903	13,191	$18.65 to $41.02	7.0% to 7.7%	0.9	%
	2020	287,096	11,814	17.39 to 38.17	33.2% to 34.1%	0.5	%
	2019	223,172	11,663	13.02 to 28.53	19.9% to 20.7%	1.2	%
	2018	178,074	10,357	10.83 to 23.68	(4.3%) to (3.7%)	1.4	%
	2017	183,988	9,423	11.29 to 24.64	9.7% to 10.4%	1.5	%
MainStay VP MacKay Government—Initial Class	2021	$20,289	1,069	$13.23 to $20.69	(3.3%) to (2.9%)	1.5	%
	2020	22,972	1,181	13.68 to 21.30	3.0% to 3.5%	1.4	%
	2019	23,639	1,258	13.28 to 20.58	3.5% to 4.0%	2.0	%
	2018	25,376	1,410	12.83 to 19.79	(1.9%) to (1.5%)	2.5	%
	2017	28,900	1,580	13.08 to 20.09	0.2% to 0.7%	2.6	%
MainStay VP MacKay Government—Service Class	2021	$67,743	6,236	$9.90 to $12.70	(3.5%) to (2.9%)	1.3	%
	2020	79,527	7,079	10.24 to 13.11	2.8% to 3.5%	1.4	%
	2019	60,199	5,386	9.93 to 12.70	3.2% to 3.9%	1.9	%
	2018	50,946	4,579	9.60 to 12.24	(2.1%) to (1.5%)	2.3	%
	2017	54,886	4,747	9.78 to 12.46	(0.0%) to 0.6%	2.3	%
MainStay VP MacKay High Yield Corporate Bond—Initial Class	2021	$134,388	2,937	$30.76 to $51.16	3.6% to 4.0%	4.7	%
	2020	141,115	3,215	29.62 to 49.17	3.5% to 3.9%	5.7	%
	2019	158,795	3,771	28.55 to 47.31	11.1% to 11.6%	5.5	%
	2018	162,512	4,320	25.63 to 42.37	(3.3%) to (2.8%)	5.7	%
	2017	197,007	5,104	26.43 to 43.61	4.9% to 5.4%	5.8	%

74

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 6—Financial Highlights (Continued):

		Net Assets (in 000's)	Units Outstanding (in 000's)	Variable Accumulation Unit Value (Lowest to Highest)	Total Return1 (Lowest to Highest)	Investment Income Ratio2
MainStay VP MacKay High Yield Corporate Bond—Service Class	2021	$749,789	45,249	$12.88 to $27.32	3.3% to 4.0%	4.7	%
	2020	713,678	43,047	12.44 to 26.33	3.2% to 3.9%	5.7	%
	2019	711,474	42,306	12.02 to 25.39	10.9% to 11.6%	5.5	%
	2018	660,186	41,350	10.82 to 22.80	(3.5%) to (2.9%)	5.7	%
	2017	749,677	43,285	11.18 to 23.53	4.6% to 5.3%	5.8	%
MainStay VP MacKay International Equity—Initial Class	2021	$21,666	569	$26.27 to $44.48	10.2% to 10.7%	0.1	%
	2020	21,395	625	23.78 to 40.19	18.6% to 19.2%	0.7	%
	2019	21,538	754	20.00 to 33.73	22.5% to 23.1%	0.4	%
	2018	20,188	870	16.28 to 27.40	(13.2%) to (12.8%)	1.1	%
	2017	25,824	967	18.71 to 31.42	30.2% to 30.8%	0.6	%
MainStay VP MacKay International Equity—Service Class	2021	$91,845	3,849	$16.43 to $31.94	9.9% to 10.6%	0.0	%
	2020	90,859	4,162	14.91 to 28.93	18.3% to 19.1%	0.5	%
	2019	90,448	4,828	12.57 to 24.34	22.2% to 23.0%	0.2	%
	2018	81,917	5,168	10.26 to 19.83	(13.4%) to (12.8%)	0.9	%
	2017	110,235	5,879	11.82 to 22.79	29.9% to 30.7%	0.3	%
MainStay VP MacKay S&P 500 Index—Initial Class	2021	$224,120	2,799	$33.89 to $95.22	26.2% to 26.8%	1.2	%
	2020	192,592	3,055	26.79 to 75.12	16.1% to 16.6%	1.4	%
	2019	184,277	3,420	23.02 to 64.42	28.8% to 29.4%	1.7	%
	2018	159,507	3,883	17.82 to 49.78	(6.3%) to (5.9%)	1.4	%
	2017	191,943	4,425	18.97 to 52.87	19.3% to 19.8%	1.4	%
MainStay VP MacKay S&P 500 Index—Service Class	2021	$545,511	18,749	$13.29 to $49.40	25.9% to 26.7%	1.0	%
	2020	417,159	16,972	17.77 to 39.07	15.8% to 16.5%	1.3	%
	2019	361,362	16,142	15.31 to 33.59	28.5% to 29.4%	1.6	%
	2018	264,280	14,019	11.88 to 26.02	(6.5%) to (5.9%)	1.3	%
	2017	283,672	12,917	12.68 to 27.70	19.0% to 19.7%	1.3	%
MainStay VP MacKay Strategic Bond—Service Class	2021	$179,599	15,229	$10.91 to $12.65	(0.1%) to 0.5%	2.2	%
	2020	188,416	15,962	10.90 to 12.61	4.0% to 4.6%	2.4	%
	2019	202,265	17,833	10.46 to 12.07	4.9% to 5.5%	3.3	%
	2018	208,120	19,256	9.95 to 11.46	(3.2%) to (2.6%)	3.1	%
	2017	232,384	20,753	10.26 to 11.79	2.7% to 3.3%	2.9	%

75

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 6—Financial Highlights (Continued):

		Net Assets (in 000's)	Units Outstanding (in 000's)	Variable Accumulation Unit Value (Lowest to Highest)	Total Return1 (Lowest to Highest)	Investment Income Ratio2
MainStay VP Moderate Allocation—Service Class	2021	$336,569	17,961	$13.87 to $23.00	9.1% to 9.8%	0.9	%
	2020	333,590	19,255	12.68 to 20.99	9.3% to 10.0%	2.2	%
	2019	344,251	21,443	11.58 to 19.11	15.8% to 16.6%	2.8	%
	2018	338,586	24,094	9.97 to 16.42	(10.3%) to (9.7%)	2.0	%
	2017	399,747	24,824	11.09 to 18.21	12.6% to 13.3%	1.5	%
MainStay VP Natural Resources—Initial Class	2021	$92,201	10,522	$7.99 to $13.27	35.5% to 36.4%	1.2	%
	2020	73,976	11,685	5.89 to 9.74	4.9% to 5.6%	2.6	%
	2019	78,482	13,186	5.62 to 9.24	14.5% to 15.2%	0.7	%
	2018	77,077	14,982	4.91 to 8.03	(29.9%) to (29.5%)	0.0	%
	2017	126,356	17,407	7.00 to 11.40	(2.5%) to (1.9%)	0.0	%
MainStay VP PIMCO Real Return—Service Class	2021	$108,751	9,416	$10.77 to $12.08	3.3% to 3.9%	0.3	%
	2020	116,509	10,560	10.43 to 11.64	9.6% to 10.2%	2.0	%
	2019	81,335	8,142	9.50 to 10.58	6.8% to 7.3%	3.0	%
	2018	66,449	7,214	8.87 to 9.88	(4.5%) to (4.0%)	1.3	%
	2017	71,704	7,512	9.25 to 10.30	1.4% to 2.0%	1.4	%
MainStay VP Small Cap Growth—Initial Class	2021	$48,746	1,766	$26.54 to $27.88	8.3% to 8.8%	0.0	%
	2020	50,906	2,006	24.50 to 25.62	37.9% to 38.6%	0.0	%
	2019	43,936	2,397	17.77 to 18.48	23.3% to 23.9%	0.0	%
	2018	41,905	2,831	14.41 to 14.92	(10.6%) to (10.1%)	0.0	%
	2017	55,779	3,384	16.11 to 16.59	20.6% to 21.2%	0.0	%
MainStay VP Small Cap Growth—Service Class	2021	$46,525	1,879	$20.50 to $28.85	8.0% to 8.7%	0.0	%
	2020	43,174	1,866	18.93 to 26.58	37.6% to 38.5%	0.0	%
	2019	35,240	2,089	13.73 to 19.22	23.0% to 23.8%	0.0	%
	2018	30,407	2,199	11.14 to 15.55	(10.8%) to (10.2%)	0.0	%
	2017	33,845	2,166	12.45 to 17.34	20.3% to 21.1%	0.0	%
MainStay VP T. Rowe Price Equity Income—Initial Class	2021	$43,595	1,776	$23.57 to $24.64	23.2% to 23.7%	2.5	%
	2020	39,678	2,000	19.13 to 19.91	(0.9%) to (0.4%)	3.5	%
	2019	45,464	2,281	19.30 to 20.00	24.0% to 24.6%	2.3	%
	2018	42,554	2,659	15.56 to 16.05	(11.1%) to (10.7%)	2.0	%
	2017	55,718	3,109	17.50 to 17.96	14.1% to 14.6%	2.1	%

76

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 6—Financial Highlights (Continued):

		Net Assets (in 000's)	Units Outstanding (in 000's)	Variable Accumulation Unit Value (Lowest to Highest)	Total Return1 (Lowest to Highest)	Investment Income Ratio2
MainStay VP T. Rowe Price Equity Income—Service Class	2021	$82,966	3,644	$16.28 to $24.16	22.9% to 23.7%	2.2	%
	2020	81,906	4,443	13.21 to 19.56	(1.1%) to (0.5%)	3.2	%
	2019	95,756	5,130	13.33 to 19.69	23.7% to 24.5%	1.9	%
	2018	96,683	6,459	10.75 to 15.83	(11.3%) to (10.7%)	1.7	%
	2017	134,037	7,934	12.08 to 17.75	13.8% to 14.5%	1.9	%
MainStay VP U.S. Government Money Market—Initial Class	2021	$138,101	61,269	$0.85 to $9.71	(1.8%) to (1.2%)	0.0	%
	2020	187,903	87,254	0.87 to 9.82	(1.6%) to (1.0%)	0.1	%
	2019	83,325	50,644	0.90 to 9.92	0.0% to 0.6%	1.8	%
	2018	113,331	64,529	0.89 to 9.86	(0.5%) to 0.2%	1.4	%
	2017	100,810	68,572	0.89 to 9.85	(1.4%) to (0.8%)	0.4	%
MainStay VP Wellington Growth—Initial Class	2021	$104,427	1,819	$20.77 to $62.82	17.6% to 18.1%	0.3	%
	2020	98,253	2,024	17.63 to 53.20	29.9% to 30.5%	0.6	%
	2019	84,433	2,286	13.54 to 40.78	27.6% to 28.2%	0.5	%
	2018	74,664	2,617	10.58 to 31.81	(6.0%) to (5.6%)	0.6	%
	2017	88,291	2,948	11.23 to 33.69	28.0% to 28.6%	0.3	%
MainStay VP Wellington Growth—Service Class	2021	$26,860	694	$22.46 to $41.64	17.3% to 18.0%	0.1	%
	2020	26,999	821	19.11 to 35.33	29.6% to 30.4%	0.3	%
	2019	25,575	1,012	14.71 to 27.14	27.3% to 28.1%	0.3	%
	2018	23,956	1,212	11.53 to 21.21	(6.2%) to (5.6%)	0.4	%
	2017	30,408	1,446	12.26 to 22.51	27.7% to 28.5%	0.0	%
MainStay VP Wellington Mid Cap—Initial Class	2021	$44,799	940	$47.61 to $52.80	17.8% to 18.3%	0.6	%
	2020	41,787	1,037	40.24 to 44.82	9.2% to 9.7%	1.0	%
	2019	44,822	1,221	36.67 to 41.03	20.6% to 21.2%	1.1	%
	2018	42,380	1,398	30.26 to 34.01	(13.6%) to (13.2%)	0.9	%
	2017	58,211	1,665	34.87 to 39.37	17.0% to 17.5%	1.0	%
MainStay VP Wellington Mid Cap—Service Class	2021	$175,493	6,327	$15.80 to $50.08	17.5% to 18.3%	0.4	%
	2020	168,683	7,048	13.41 to 42.42	9.0% to 9.7%	0.7	%
	2019	164,038	6,885	12.27 to 38.76	20.3% to 21.1%	0.9	%
	2018	138,293	6,106	10.18 to 32.07	(13.8%) to (13.3%)	0.7	%
	2017	177,186	6,098	11.78 to 37.04	16.7% to 17.4%	0.8	%

77

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 6—Financial Highlights (Continued):

		Net Assets (in 000's)	Units Outstanding (in 000's)	Variable Accumulation Unit Value (Lowest to Highest)	Total Return1 (Lowest to Highest)	Investment Income Ratio2
MainStay VP Wellington Small Cap—Initial Class	2021	$22,586	1,761	$12.69 to $12.84	15.9% to 16.4%	0.4	%
	2020	21,106	1,914	10.95 to 11.03	8.2% to 8.7%	0.1	%
	2019	22,343	2,202	10.12 to 10.15	1.2% to 1.5%	0.2	%
MainStay VP Wellington Small Cap—Service Class	2021	$93,299	5,815	$14.92 to $16.27	15.6% to 16.3%	0.2	%
	2020	90,266	6,530	12.91 to 13.99	7.9% to 8.6%	0.0	%
	2019	95,245	7,469	11.96 to 12.87	15.4% to 16.1%	0.1	%
	2018	40,471	3,675	10.37 to 11.09	(16.9%) to (16.3%)	0.0	%
	2017	53,191	4,032	12.47 to 13.25	11.6% to 12.3%	0.0	%
MainStay VP Wellington U.S. Equity—Initial Class	2021	$90,697	1,195	$30.24 to $89.21	26.4% to 27.0%	0.9	%
	2020	80,217	1,335	23.86 to 70.25	13.4% to 13.9%	1.6	%
	2019	79,317	1,514	20.98 to 61.65	23.9% to 24.5%	1.5	%
	2018	71,852	1,715	16.89 to 49.54	(7.6%) to (7.2%)	1.5	%
	2017	87,965	1,963	18.23 to 53.36	20.6% to 21.1%	1.3	%
MainStay VP Wellington U.S. Equity—Service Class	2021	$77,999	2,565	$20.52 to $47.81	26.1% to 26.9%	0.7	%
	2020	66,695	2,695	16.23 to 37.74	13.2% to 13.9%	1.3	%
	2019	66,132	2,931	14.31 to 33.21	23.6% to 29.8%	1.2	%
	2018	59,371	3,110	11.55 to 26.75	(7.8%) to (7.2%)	1.4	%
	2017	67,304	3,044	12.49 to 28.88	20.3% to 21.1%	1.2	%
MainStay VP Winslow Large Cap Growth—Initial Class	2021	$63,517	1,040	$32.56 to $70.64	22.2% to 22.8%	0.0	%
	2020	57,759	1,172	26.57 to 57.53	34.6% to 35.3%	0.0	%
	2019	47,811	1,314	19.69 to 42.54	31.2% to 31.8%	0.0	%
	2018	40,215	1,473	14.97 to 32.28	1.7% to 2.1%	0.0	%
	2017	42,383	1,570	14.69 to 31.61	30.0% to 30.6%	0.0	%
MainStay VP Winslow Large Cap Growth—Service Class	2021	$300,507	8,003	$27.70 to $60.81	21.9% to 22.7%	0.0	%
	2020	251,602	7,805	22.66 to 49.73	34.3% to 35.2%	0.0	%
	2019	190,458	7,409	16.83 to 36.91	30.9% to 31.7%	0.0	%
	2018	150,851	7,176	12.83 to 28.12	1.4% to 2.1%	0.0	%
	2017	145,740	6,452	12.62 to 27.65	29.6% to 30.5%	0.0	%

78

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 6—Financial Highlights (Continued):

		Net Assets (in 000's)	Units Outstanding (in 000's)	Variable Accumulation Unit Value (Lowest to Highest)	Total Return1 (Lowest to Highest)	Investment Income Ratio2
American Funds IS Asset Allocation Fund—Class 4	2021	$113,697	8,170	$11.76 to $14.28	12.9% to 13.5%	1.6	%
	2020	63,845	5,095	12.40 to 12.59	10.2% to 10.8%	1.6	%
	2019	38,478	3,399	11.25 to 11.36	18.8% to 19.5%	2.2	%
	2018	11,797	1,243	9.47 to 9.51	(5.3%) to (4.9%)	2.2	%
American Funds IS Global Small Capitalization Fund—Class 4	2021	$15,330	810	$17.05 to $19.66	4.6% to 5.2%	0.0	%
	2020	12,259	685	16.30 to 18.70	27.1% to 27.8%	0.1	%
	2019	9,946	716	12.82 to 14.62	29.0% to 29.7%	0.0	%
	2018	7,057	667	9.94 to 11.28	(12.4%) to (11.9%)	0.0	%
	2017	6,353	537	11.34 to 12.80	23.5% to 24.1%	0.4	%
American Funds IS Growth Fund—Class 4	2021	$67,588	2,913	$22.80 to $23.33	19.6% to 20.2%	0.1	%
	2020	41,794	2,164	19.07 to 19.40	49.1% to 49.9%	0.2	%
	2019	18,369	1,424	12.79 to 12.94	28.2% to 28.9%	0.6	%
	2018	8,900	888	9.98 to 10.04	(2.2%) to (1.7%)	0.4	%
	2017	374	37	10.21 to 10.22	2.1% to 2.2%	0.1	%
American Funds IS New World Fund®—Class 4	2021	$56,763	3,339	$15.10 to $18.15	2.8% to 3.4%	0.7	%
	2020	56,063	3,424	14.69 to 17.59	21.2% to 21.8%	0.0	%
	2019	45,811	3,439	12.12 to 14.46	26.6% to 27.3%	0.8	%
	2018	30,881	2,997	9.58 to 11.38	(15.7%) to (15.3%)	0.7	%
	2017	32,095	2,695	11.37 to 13.45	26.8% to 27.5%	0.9	%
American Funds IS Washington Mutual Investors Fund—Class 4	2021	$83,832	5,471	$15.05 to $15.40	25.3% to 26.0%	1.3	%
	2020	62,731	5,154	12.01 to 12.22	6.6% to 7.2%	1.7	%
	2019	42,548	3,743	11.27 to 11.40	18.9% to 19.6%	2.3	%
	2018	15,665	1,646	9.48 to 9.54	(10.5%) to (10.0%)	3.3	%
	2017	551	52	10.59 to 10.60	5.9% to 6.0%	1.1	%
BlackRock® Global Allocation V.I. Fund—Class III	2021	$121,690	8,002	$11.02 to $17.37	4.6% to 5.1%	0.8	%
	2020	108,093	7,208	13.36 to 16.54	18.6% to 19.3%	1.2	%
	2019	110,228	8,699	11.25 to 13.89	15.7% to 16.4%	1.2	%
	2018	109,132	9,950	9.70 to 11.96	(9.2%) to (8.7%)	0.8	%
	2017	127,302	10,518	10.67 to 13.11	11.7% to 12.4%	1.3	%

79

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 6—Financial Highlights (Continued):

		Net Assets (in 000's)	Units Outstanding (in 000's)	Variable Accumulation Unit Value (Lowest to Highest)	Total Return1 (Lowest to Highest)	Investment Income Ratio2
BlackRock® High Yield V.I. Fund—Class III	2021	$89,683	6,766	$12.67 to $13.50	3.4% to 4.0%	4.2	%
	2020	65,936	5,187	12.25 to 12.98	5.2% to 5.8%	5.0	%
	2019	51,028	4,257	11.64 to 12.28	12.9% to 13.5%	5.1	%
	2018	35,396	3,358	10.30 to 10.82	(4.6%) to (4.1%)	5.2	%
	2017	34,874	3,180	10.77 to 11.27	5.2% to 5.8%	4.9	%
BNY Mellon IP Technology Growth Portfolio—Initial Shares	2021	$28,033	471	$57.45 to $87.55	10.9% to 11.4%	0.0	%
	2020	28,831	540	51.69 to 78.98	66.8% to 67.6%	0.2	%
	2019	19,362	607	30.91 to 47.34	23.5% to 24.1%	0.0	%
	2018	17,480	678	24.97 to 38.33	(2.8%) to (2.4%)	0.0	%
	2017	17,753	672	25.62 to 39.44	40.0% to 40.7%	0.0	%
BNY Mellon IP Technology Growth Portfolio—Service Shares	2021	$183,132	4,158	$31.88 to $75.41	10.6% to 11.3%	0.0	%
	2020	162,920	3,872	28.76 to 67.89	66.5% to 67.6%	0.1	%
	2019	102,678	3,841	17.23 to 40.60	23.2% to 24.0%	0.0	%
	2018	87,256	3,758	13.95 to 32.80	(3.1%) to (2.5%)	0.0	%
	2017	88,682	3,307	14.36 to 33.70	39.8% to 40.7%	0.0	%
ClearBridge Variable Appreciation Portfolio—Class II	2021	$19,903	1,056	$18.46 to $18.94	21.2% to 21.9%	0.4	%
	2020	15,527	1,004	15.23 to 15.54	12.5% to 13.1%	0.9	%
	2019	11,486	839	13.54 to 13.74	27.3% to 28.0%	1.7	%
	2018	3,150	294	10.64 to 10.74	(3.7%) to (3.2%)	2.3	%
	2017	270	24	11.05 to 11.09	10.5% to 10.9%	1.5	%
Columbia Variable Portfolio—Commodity Strategy Fund—Class 2	2021	$1,547	149	$9.31 to $11.82	29.7% to 30.4%	0.0	%
	2020	1,402	176	7.18 to 9.06	(3.3%) to (2.7%)	22.0	%
	2019	1,464	182	7.42 to 9.32	5.9% to 6.5%	0.9	%
	2018	1,531	205	7.00 to 8.75	(15.7%) to (15.2%)	0.0	%
	2017	1,767	201	8.30 to 10.32	(0.1%) to 0.5%	5.7	%
Columbia Variable Portfolio—Emerging Markets Bond Fund—Class 2	2021	$42,781	3,659	$11.38 to $12.29	(4.1%) to (3.6%)	3.7	%
	2020	41,466	3,416	11.87 to 12.77	5.3% to 5.9%	3.3	%
	2019	34,358	2,996	11.28 to 11.54	10.1% to 10.7%	4.8	%
	2018	17,268	1,666	10.24 to 10.42	(9.0%) to (8.5%)	4.3	%
	2017	12,446	1,097	11.25 to 11.39	9.8% to 10.4%	4.4	%

80

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 6—Financial Highlights (Continued):

		Net Assets (in 000's)	Units Outstanding (in 000's)	Variable Accumulation Unit Value (Lowest to Highest)	Total Return1 (Lowest to Highest)	Investment Income Ratio2
Columbia Variable Portfolio—Small Cap Value Fund—Class 2	2021	$46,652	1,843	$17.36 to $34.22	26.4% to 27.3%	0.5	%
	2020	34,467	1,671	13.69 to 26.92	6.6% to 7.3%	0.3	%
	2019	35,741	1,764	12.81 to 25.13	18.8% to 19.5%	0.3	%
	2018	33,762	1,933	10.76 to 21.05	(19.7%) to (19.2%)	0.2	%
	2017	46,780	2,081	13.36 to 26.08	11.9% to 12.6%	0.3	%
Delaware VIP® Small Cap Value Series—Service Class	2021	$16,389	1,197	$13.47 to $13.78	31.7% to 32.4%	0.5	%
	2020	7,183	693	10.23 to 10.41	(3.9%) to (3.3%)	0.9	%
	2019	3,883	362	10.64 to 10.77	25.5% to 26.2%	0.6	%
	2018	1,503	177	8.48 to 8.53	(18.4%) to (17.9%)	0.4	%
	2017	70	7	10.39 to 10.40	3.9% to 4.0%	0.0	%
DWS Alternative Asset Allocation VIP—Class B	2021	$73,790	5,981	$12.04 to $12.43	10.4% to 11.0%	1.7	%
	2020	72,333	6,503	10.91 to 11.19	3.5% to 4.1%	2.3	%
	2019	55,025	5,144	10.54 to 10.76	12.4% to 13.0%	3.0	%
	2018	24,785	2,615	9.38 to 9.52	(10.9%) to (10.4%)	1.4	%
	2017	11,867	1,120	10.53 to 10.63	5.2% to 5.7%	1.6	%
Fidelity® VIP Bond Index Portfolio—Service Class 2	2021	$55,134	5,720	$9.59 to $9.66	(3.9%) to (3.4%)	0.8	%
	2020	54,497	5,455	9.99 to 9.99	(0.1%) to (0.1%)	0.9	%
Fidelity® VIP ContrafundSM Portfolio—Initial Class	2021	$165,185	1,767	$51.46 to $105.64	25.5% to 26.1%	0.1	%
	2020	143,799	1,946	40.91 to 83.80	28.2% to 28.8%	0.2	%
	2019	129,927	2,277	31.84 to 65.09	29.2% to 29.7%	0.4	%
	2018	115,517	2,644	24.59 to 50.17	(8.1%) to (7.7%)	0.7	%
	2017	141,710	3,003	26.69 to 54.34	19.6% to 20.2%	1.0	%
Fidelity® VIP ContrafundSM Portfolio—Service Class 2	2021	$447,433	12,495	$23.16 to $64.12	25.2% to 26.0%	0.0	%
	2020	393,608	13,307	18.46 to 51.02	27.8% to 28.7%	0.1	%
	2019	365,880	15,292	14.40 to 39.75	28.9% to 29.7%	0.2	%
	2018	321,912	16,606	11.15 to 30.72	(8.4%) to (7.8%)	0.4	%
	2017	384,115	16,906	12.14 to 33.39	19.4% to 20.1%	0.8	%
Fidelity® VIP Emerging Markets Portfolio—Service Class 2	2021	$13,658	1,045	$12.87 to $13.13	(4.1%) to (3.6%)	2.2	%
	2020	8,702	641	13.42 to 13.62	28.6% to 29.3%	0.7	%
	2019	4,563	434	10.44 to 10.53	27.0% to 27.7%	1.7	%
	2018	1,555	189	8.22 to 8.25	(17.8%) to (17.5%)	1.0	%

81

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 6—Financial Highlights (Continued):

		Net Assets (in 000's)	Units Outstanding (in 000's)	Variable Accumulation Unit Value (Lowest to Highest)	Total Return1 (Lowest to Highest)	Investment Income Ratio2
Fidelity® VIP Equity-Income PortfolioSM—Initial Class	2021	$51,833	1,124	$30.78 to $50.87	22.6% to 23.2%	1.9	%
	2020	46,858	1,251	25.11 to 41.31	0.3% to 5.2%	1.8	%
	2019	50,417	1,425	23.97 to 39.26	25.1% to 25.7%	2.0	%
	2018	45,408	1,619	19.16 to 31.24	(10.0%) to (9.6%)	2.2	%
	2017	57,049	1,845	21.29 to 34.55	10.8% to 11.3%	1.7	%
Fidelity® VIP Equity-Income PortfolioSM—Service Class 2	2021	$150,101	6,247	$17.10 to $34.89	22.3% to 23.1%	1.7	%
	2020	123,481	6,164	13.95 to 28.39	4.5% to 5.2%	1.7	%
	2019	115,495	5,662	13.31 to 27.05	24.8% to 25.6%	1.8	%
	2018	88,941	4,972	10.64 to 21.58	(10.2%) to (9.6%)	2.1	%
	2017	104,417	4,913	11.82 to 23.93	10.6% to 11.3%	1.5	%
Fidelity® VIP FundsManager® 60% Portfolio—Investor Class	2021	$760,454	56,956	$13.35 to $13.60	10.2% to 11.0%	1.2	%
	2020	497,417	41,067	12.11 to 12.11	13.0% to 13.0%	1.1	%
	2019	250,095	23,323	10.72 to 10.72	7.2% to 7.2%	2.0	%
Fidelity® VIP FundsManager® 60% Portfolio—Service Class	2021	$25,837	1,957	$11.56 to $13.61	10.4% to 11.0%	1.4	%
	2020	9,963	815	12.15 to 12.26	13.1% to 13.8%	1.2	%
	2019	3,992	371	10.74 to 10.78	7.4% to 7.8%	1.8	%
Fidelity® VIP Government Money Market Portfolio—Investor Class	2021	$—	—	$—	—	—
	2020	—	—	—	—	—
	2019	—	—	—	—	—
Fidelity® VIP Growth Opportunities Portfolio—Service Class 2	2021	$223,339	5,661	$35.85 to $42.96	9.7% to 10.3%	0.0	%
	2020	171,507	4,750	32.62 to 38.99	65.3% to 66.2%	0.0	%
	2019	87,880	4,008	19.70 to 23.49	38.1% to 38.8%	0.0	%
	2018	42,044	2,630	14.25 to 16.95	10.3% to 10.9%	0.1	%
	2017	24,121	1,647	12.90 to 15.31	31.9% to 32.6%	0.1	%
Fidelity® VIP Health Care Portfolio—Service Class 2	2021	$58,062	3,630	$15.82 to $16.06	9.5% to 10.1%	0.0	%
	2020	30,925	2,126	14.45 to 14.58	19.2% to 19.8%	0.6	%
	2019	4,613	379	12.12 to 12.17	21.2% to 21.7%	0.3	%
Fidelity® VIP International Index Portfolio—Service Class 2	2021	$8,435	706	$11.20 to $12.37	5.6% to 6.2%	3.3	%
	2020	2,789	240	11.54 to 11.65	8.4% to 9.0%	1.9	%
	2019	1,025	96	10.64 to 10.68	6.4% to 6.8%	3.9	%

82

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 6—Financial Highlights (Continued):

		Net Assets (in 000's)	Units Outstanding (in 000's)	Variable Accumulation Unit Value (Lowest to Highest)	Total Return1 (Lowest to Highest)	Investment Income Ratio2
Fidelity® VIP Mid Cap Portfolio—Service Class 2	2021	$146,175	4,474	$17.66 to $55.09	23.0% to 23.8%	0.4	%
	2020	127,589	4,529	14.32 to 44.60	15.7% to 16.5%	0.4	%
	2019	128,805	5,067	12.34 to 38.39	20.9% to 21.7%	0.7	%
	2018	120,951	5,445	10.18 to 31.63	(16.3%) to (15.8%)	0.4	%
	2017	164,267	5,786	12.14 to 37.65	18.3% to 19.1%	0.5	%
Franklin Templeton Aggressive Model Portfolio—Class II	2021	$52,648	3,575	$12.33 to $15.21	17.4% to 18.1%	2.1	%
	2020	16,536	1,284	12.84 to 12.88	28.4% to 28.8%	1.8	%
Franklin Templeton Conservative Model Portfolio—Class II	2021	$46,070	4,096	$10.49 to $11.31	2.9% to 3.5%	2.4	%
	2020	21,417	1,961	10.90 to 10.94	9.0% to 9.4%	2.5	%
Franklin Templeton Moderate Model Portfolio—Class II	2021	$264,265	20,409	$11.40 to $13.05	10.4% to 11.0%	2.4	%
	2020	75,114	6,389	11.72 to 11.76	17.2% to 17.6%	1.8	%
Franklin Templeton Moderately Aggressive Model Portfolio—Class II	2021	$198,181	14,415	$11.72 to $13.95	12.6% to 13.2%	2.4	%
	2020	52,106	4,231	12.28 to 12.32	22.8% to 23.2%	1.8	%
Franklin Templeton Moderately Conservative Model Portfolio—Class II	2021	$110,091	8,976	$11.01 to $12.32	7.1% to 7.7%	2.3	%
	2020	41,342	3,615	11.41 to 11.45	14.1% to 14.5%	2.1	%
Invesco V.I. International Growth Fund—Series II Shares	2021	$35,598	2,555	$12.91 to $14.95	3.8% to 4.3%	1.1	%
	2020	35,610	2,670	12.42 to 14.35	11.8% to 12.4%	2.1	%
	2019	35,220	2,974	11.10 to 12.79	26.0% to 26.7%	1.3	%
	2018	33,147	3,550	8.79 to 10.11	(16.7%) to (16.2%)	1.9	%
	2017	36,136	3,259	10.54 to 12.08	20.6% to 21.3%	1.3	%
Invesco V.I. Main Street Small Cap Fund®—Series II Shares	2021	$6,650	360	$18.36 to $18.53	20.1% to 20.8%	0.2	%
	2020	463	30	15.30 to 15.34	53.0% to 53.4%	0.4	%
Janus Henderson Enterprise Portfolio—Service Shares	2021	$40,322	2,236	$17.72 to $18.13	14.5% to 15.2%	0.2	%
	2020	29,462	1,881	15.48 to 15.74	17.1% to 17.8%	0.0	%
	2019	19,646	1,475	13.21 to 20.83	27.2% to 33.5%	0.1	%
	2018	5,640	565	9.95 to 10.01	(2.4%) to (1.9%)	0.1	%
	2017	229	22	10.19 to 10.20	1.9% to 2.0%	0.0	%

83

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 6—Financial Highlights (Continued):

		Net Assets (in 000's)	Units Outstanding (in 000's)	Variable Accumulation Unit Value (Lowest to Highest)	Total Return1 (Lowest to Highest)	Investment Income Ratio2
Janus Henderson Global Research Portfolio—Institutional Shares	2021	$57,935	1,414	$16.88 to $44.71	15.9% to 16.4%	0.5	%
	2020	54,912	1,565	14.53 to 38.40	17.9% to 18.4%	0.7	%
	2019	52,405	1,773	12.29 to 32.43	26.7% to 27.2%	1.0	%
	2018	46,614	2,024	9.68 to 25.49	(8.6%) to (8.2%)	1.1	%
	2017	57,339	2,283	10.56 to 27.75	24.7% to 25.3%	0.8	%
Janus Henderson Global Research Portfolio—Service Shares	2021	$40,911	1,545	$17.75 to $33.53	15.6% to 16.4%	0.4	%
	2020	38,065	1,620	15.31 to 28.87	17.6% to 18.3%	0.6	%
	2019	35,852	1,740	12.99 to 24.44	26.4% to 27.2%	0.9	%
	2018	30,362	1,809	10.26 to 19.26	(8.8%) to (8.2%)	1.0	%
	2017	36,427	1,923	11.22 to 21.02	24.4% to 25.2%	0.7	%
MFS® International Intrinsic Value Portfolio—Service Class	2021	$45,940	2,838	$15.87 to $16.28	8.4% to 9.0%	0.1	%
	2020	34,902	2,346	14.64 to 14.94	18.1% to 18.8%	0.8	%
	2019	23,489	1,874	12.40 to 12.58	23.5% to 24.2%	1.6	%
	2018	9,318	922	10.04 to 10.13	(11.3%) to (10.8%)	1.0	%
	2017	2,250	198	11.32 to 11.36	13.2% to 13.6%	0.8	%
MFS® Investors Trust Series—Initial Class	2021	$9,976	265	$32.21 to $51.61	24.5% to 25.1%	0.6	%
	2020	9,089	302	25.81 to 41.46	11.8% to 12.3%	0.6	%
	2019	8,733	326	23.03 to 37.09	29.2% to 29.8%	0.7	%
	2018	7,081	342	17.79 to 28.71	(7.2%) to (6.8%)	0.6	%
	2017	8,605	387	19.13 to 30.95	21.1% to 21.6%	0.7	%
MFS® Investors Trust Series—Service Class	2021	$72,584	2,943	$20.79 to $46.75	24.2% to 25.0%	0.4	%
	2020	69,351	3,492	16.70 to 37.50	11.5% to 12.2%	0.4	%
	2019	61,623	3,373	14.94 to 33.49	28.8% to 29.7%	0.5	%
	2018	40,011	2,685	11.56 to 25.89	(7.4%) to (6.8%)	0.5	%
	2017	35,483	2,019	12.46 to 27.86	20.8% to 21.6%	0.6	%
MFS® Mid Cap Value Portfolio—Service Class	2021	$22,933	1,310	$13.47 to $17.61	28.3% to 29.0%	0.8	%
	2020	11,861	872	10.48 to 13.64	4.8% to 36.4%	0.1	%
MFS® Research Series—Initial Class	2021	$10,573	249	$28.92 to $48.01	22.8% to 23.1%	0.5	%
	2020	10,008	290	23.54 to 39.03	14.7% to 15.0%	0.7	%
	2019	9,986	333	20.52 to 33.96	30.8% to 31.1%	0.8	%
	2018	8,693	380	15.68 to 25.92	(5.9%) to (5.7%)	0.7	%
	2017	10,283	427	16.67 to 27.50	21.4% to 21.7%	1.3	%

84

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 6—Financial Highlights (Continued):

		Net Assets (in 000's)	Units Outstanding (in 000's)	Variable Accumulation Unit Value (Lowest to Highest)	Total Return1 (Lowest to Highest)	Investment Income Ratio2
MFS® Research Series—Service Class	2021	$53,717	2,035	$21.42 to $52.70	22.2% to 23.0%	0.3	%
	2020	49,996	2,305	17.48 to 42.92	14.2% to 14.9%	0.6	%
	2019	40,050	2,025	15.27 to 37.42	30.2% to 31.0%	0.6	%
	2018	19,556	1,087	11.70 to 28.62	(6.4%) to (5.8%)	0.5	%
	2017	16,038	665	12.47 to 30.43	20.8% to 21.6%	1.1	%
Morgan Stanley VIF U.S. Real Estate Portfolio—Class II	2021	$24,273	1,804	$12.16 to $14.70	37.0% to 37.8%	1.8	%
	2020	17,675	1,784	8.85 to 10.69	(18.5%) to (18.1%)	2.6	%
	2019	21,447	1,741	10.84 to 13.07	16.6% to 17.3%	1.6	%
	2018	18,762	1,762	9.27 to 11.16	(9.6%) to (9.1%)	2.5	%
	2017	25,927	2,184	10.23 to 12.29	1.1% to 1.6%	1.3	%
Neuberger Berman AMT Mid Cap Growth Portfolio—Class I	2021	$1,936	37	$49.48 to $70.64	10.9% to 11.4%	0.0	%
	2020	1,878	40	44.41 to 63.43	37.4% to 38.0%	0.0	%
	2019	1,536	45	32.17 to 45.97	30.3% to 30.9%	0.0	%
	2018	1,235	48	24.58 to 35.14	(8.1%) to (7.7%)	0.0	%
	2017	1,501	54	26.63 to 38.10	23.0% to 23.6%	0.0	%
Neuberger Berman AMT Mid Cap Growth Portfolio—Class S	2021	$94,866	2,858	$21.45 to $62.50	10.7% to 11.4%	0.0	%
	2020	88,209	2,807	19.33 to 56.25	37.2% to 38.0%	0.0	%
	2019	76,952	3,198	14.06 to 40.85	30.1% to 30.9%	0.0	%
	2018	59,200	3,122	10.78 to 31.29	(8.3%) to (7.7%)	0.0	%
	2017	68,239	3,111	11.73 to 33.97	22.3% to 23.1%	0.0	%
PIMCO VIT Income Portfolio—Advisor Class	2021	$15,562	1,391	$11.11 to $11.21	0.1% to 0.7%	2.7	%
	2020	4,291	386	11.10 to 11.14	11.0% to 11.4%	2.8	%
PIMCO VIT International Bond Portfolio (U.S. Dollar-Hedged)—Advisor Class	2021	$90,124	7,971	$10.94 to $11.94	(3.8%) to (3.2%)	1.5	%
	2020	90,868	7,742	11.35 to 12.35	3.6% to 4.2%	5.7	%
	2019	90,456	7,990	10.94 to 11.87	5.0% to 5.6%	1.7	%
	2018	82,235	7,635	10.40 to 11.26	0.2% to 0.8%	1.2	%
	2017	81,154	7,543	10.36 to 11.19	0.9% to 1.4%	5.0	%

85

NYLIAC Variable Annuity Separate Account-III

Notes to Financial Statements (Continued)

NOTE 6—Financial Highlights (Continued):

		Net Assets (in 000's)	Units Outstanding (in 000's)	Variable Accumulation Unit Value (Lowest to Highest)	Total Return1 (Lowest to Highest)	Investment Income Ratio2
PIMCO VIT Low Duration Portfolio—Advisor Class	2021	$31,859	3,186	$9.79 to $10.10	(2.7%) to (2.2%)	0.4	%
	2020	31,796	3,106	10.06 to 10.32	1.1% to 1.7%	1.0	%
	2019	21,157	2,098	9.95 to 10.15	2.1% to 2.7%	2.7	%
	2018	20,579	2,093	9.75 to 9.89	(1.5%) to (1.0%)	1.8	%
	2017	19,944	2,005	9.89 to 9.99	(0.5%) to 0.0%	1.2	%
PIMCO VIT Total Return Portfolio—Advisor Class	2021	$170,446	15,140	$11.02 to $11.46	(3.1%) to (2.5%)	1.7	%
	2020	178,964	15,477	11.35 to 11.78	6.7% to 7.2%	2.0	%
	2019	118,132	10,934	10.63 to 11.00	6.4% to 7.0%	2.9	%
	2018	87,333	8,623	9.98 to 10.30	(2.4%) to (1.8%)	2.4	%
	2017	79,494	7,681	10.20 to 10.50	3.0% to 3.6%	1.9	%

Not all Investment Divisions are available under all policies.

Charges and fees levied by NYLIAC are disclosed in Note 3.

Expenses as a percent of average variable accumulation value are 1.00% to 1.85%, excluding expenses of the underlying funds, surrender charges, policy service charges and charges for transferring funds between investment divisions.

________________

1Total returns are not annualized for periods less than a year. These amounts represent the total return for the periods indicated, including changes in the value of the underlying Fund, and expenses assessed through the reduction of unit values. These ratios do not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the variable account. The total returns are calculated for each period indicated or from the effective date through the end of the reporting period.

2     These amounts represent the dividends excluding distributions of capital gains, received by an Investment Division from the underlying Fund, net of management fees assessed by the Fund manager, divided by the average investment at net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against contract owner accounts either through reductions in the unit values or the redemption of units. The recognition of investment income by the Investment Division is affected by the timing of the declaration of dividends by the underlying Fund in which the Investment Division invests. Annualized percentages are shown for the Investment Income Ratio for all Investment Divisions in all periods.

86

Report of Independent Registered Public Accounting Firm

TotheBoard of Directors ofNew York Life Insurance and Annuity Corporationand thePolicyownersofNYLIAC Variable Annuity Separate Account-III

Opinions on the Financial Statements

We have audited the accompanying statements of assets and liabilities of each of the investment divisions of NYLIAC Variable Annuity Separate Account-III indicated in the table below as of December 31, 2021, and the related statements of operations and of changes in net assets for each of the periods indicated in the table below, including the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the investment divisions of NYLIAC Variable Annuity Separate Account-III as of December 31, 2021, and the results of each of their operations and the changes in each of their net assets for the periods indicated in the table below, in conformity with accounting principles generally accepted in the United States of America.

MainStay VP Balanced—Service Class (1)	MainStay VP Small Cap Growth—Initial Class (1)	Fidelity® VIP Emerging Markets Portfolio—Service Class 2 (1)
MainStay VP Bond—Initial Class (1)	MainStay VP Small Cap Growth—Service Class (1)	Fidelity® VIP Equity-Income PortfolioSM—Initial Class (1)
MainStay VP Bond—Service Class (1)	MainStay VP T. Rowe Price Equity Income—Initial Class (1)	Fidelity® VIP Equity-Income PortfolioSM—Service Class 2 (1)
MainStay VP Candriam Emerging Markets Equity—Initial Class (1)	MainStay VP T. Rowe Price Equity Income—Service Class (1)	Fidelity® VIP FundsManager® 60% Portfolio—Investor Class (1)
MainStay VP Candriam Emerging Markets Equity—Service Class (1)	MainStay VP U.S. Government Money Market—Initial Class (1)	Fidelity® VIP FundsManager® 60% Portfolio—Service Class (1)
MainStay VP CBRE Global Infrastructure—Service Class (1)	MainStay VP Wellington Growth—Initial Class (1)	Fidelity® VIP Government Money Market Portfolio—Investor Class (1)
MainStay VP Conservative Allocation—Service Class (1)	MainStay VP Wellington Growth—Service Class (1)	Fidelity® VIP Growth Opportunities Portfolio—Service Class 2 (1)
MainStay VP Epoch U.S. Equity Yield—Initial Class (1)	MainStay VP Wellington Mid Cap—Initial Class (1)	Fidelity® VIP Health Care Portfolio—Service Class 2 (1)
MainStay VP Epoch U.S. Equity Yield—Service Class (1)	MainStay VP Wellington Mid Cap—Service Class (1)	Fidelity® VIP International Index Portfolio—Service Class 2 (1)
MainStay VP Equity Allocation—Service Class (1)	MainStay VP Wellington Small Cap—Initial Class (1)	Fidelity® VIP Mid Cap Portfolio—Service Class 2 (1)
MainStay VP Fidelity Institutional AM® Utilities—Initial Class (1)	MainStay VP Wellington Small Cap—Service Class (1)	Franklin Templeton Aggressive Model Portfolio—Class II (3)
MainStay VP Fidelity Institutional AM® Utilities—Service Class (1)	MainStay VP Wellington U.S. Equity—Initial Class (1)	Franklin Templeton Conservative Model Portfolio—Class II (3)
MainStay VP Floating Rate—Service Class (1)	MainStay VP Wellington U.S. Equity—Service Class (1)	Franklin Templeton Moderate Model Portfolio—Class II (3)
MainStay VP Growth Allocation—Service Class (1)	MainStay VP Winslow Large Cap Growth—Initial Class (1)	Franklin Templeton Moderately Aggressive Model Portfolio—Class II (3)
MainStay VP Income Builder—Initial Class (1)	MainStay VP Winslow Large Cap Growth—Service Class (1)	Franklin Templeton Moderately Conservative Model Portfolio—Class II (3)
MainStay VP Income Builder—Service Class (1)	American Funds IS Asset Allocation Fund—Class 4 (1)	Invesco V.I. International Growth Fund—Series II Shares (1)
MainStay VP IQ Hedge Multi-Strategy—Service Class (1)	American Funds IS Global Small Capitalization Fund—Class 4 (1)	Invesco V.I. Main Street Small Cap Fund®—Series II Shares (3)
MainStay VP Janus Henderson Balanced—Initial Class (1)	American Funds IS Growth Fund— Class 4 (1)	Janus Henderson Enterprise Portfolio—Service Shares (1)

87

Report of Independent Registered Public Accounting Firm (Continued)

MainStay VP Janus Henderson Balanced—Service Class (1)	American Funds IS New World Fund®—Class 4 (1)	Janus Henderson Global Research Portfolio—Institutional Shares (1)
MainStay VP MacKay Convertible—Initial Class (1)	American Funds IS Washington Mutual Investors Fund—Class 4 (1)	Janus Henderson Global Research Portfolio—Service Shares (1)
MainStay VP MacKay Convertible—Service Class (1)	BlackRock® Global Allocation V.I. Fund—Class III (1)	MFS® International Intrinsic Value Portfolio—Service Class (1)
MainStay VP MacKay Government—Initial Class (1)	BlackRock® High Yield V.I. Fund— Class III (1)	MFS® Investors Trust Series—Initial Class (1)
MainStay VP MacKay Government—Service Class (1)	BNY Mellon IP Technology Growth Portfolio—Initial Shares (1)	MFS® Investors Trust Series—Service Class (1)
MainStay VP MacKay High Yield Corporate Bond—Initial Class (1)	BNY Mellon IP Technology Growth Portfolio—Service Shares (1)	MFS® Mid Cap Value Portfolio—Service Class (3)
MainStay VP MacKay High Yield Corporate Bond—Service Class (1)	ClearBridge Variable Appreciation Portfolio—Class II (1)	MFS® Research Series—Initial Class (1)
MainStay VP MacKay International Equity—Initial Class (1)	Columbia Variable Portfolio—Commodity Strategy Fund—Class 2 (1)	MFS® Research Series—Service Class (1)
MainStay VP MacKay International Equity—Service Class (1)	Columbia Variable Portfolio—Emerging Markets Bond Fund—Class 2 (1)	Morgan Stanley VIF U.S. Real Estate Portfolio—Class II (1)
MainStay VP MacKay S&P 500 Index—Initial Class (1)	Columbia Variable Portfolio—Small Cap Value Fund—Class 2 (1)	Neuberger Berman AMT Mid Cap Growth Portfolio—Class I (1)
MainStay VP MacKay S&P 500 Index—Service Class (1)	Delaware VIP® Small Cap Value Series—Service Class (1)	Neuberger Berman AMT Mid Cap Growth Portfolio—Class S (1)
MainStay VP MacKay Strategic Bond—Service Class (1)	DWS Alternative Asset Allocation VIP—Class B (1)	PIMCO VIT Income Portfolio—Advisor Class (3)
MainStay VP Moderate Allocation—Service Class (1)	Fidelity® VIP Bond Index Portfolio—Service Class 2 (2)	PIMCO VIT International Bond Portfolio (U.S. Dollar-Hedged)—Advisor Class (1)
MainStay VP Natural Resources—Initial Class (1)	Fidelity® VIP ContrafundSM Portfolio—Initial Class (1)	PIMCO VIT Low Duration Portfolio—Advisor Class (1)
MainStay VP PIMCO Real Return—Service Class (1)	Fidelity ® VIP ContrafundSM Portfolio—Service Class 2 (1)	PIMCO VIT Total Return Portfolio—Advisor Class (1)
(1) Statement of operations for the year ended December 31, 2021 and statement of changes in net assets for the years ended December 31, 2021 and 2020
(2)Statement of operations for the year ended December 31, 2021, and statement of changes in net assets for the year ended December 31, 2021 and the period November 23, 2020 (commencement of operations) through December 31, 2020
(3) Statement of operations for the year ended December 31, 2021, and statement of changes in net assets for the year ended December 31, 2021 and the period May 1, 2020 (commencement of operations) through December 31, 2020

Basis for Opinions

These financial statements are the responsibility of the New York Life Insurance and Annuity Corporation management. Our responsibility is to express an opinion on the financial statements of each of the investment divisions of NYLIAC Variable Annuity Separate Account-IIIbased on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to each of the investment divisions of NYLIAC Variable Annuity Separate Account-IIIin accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

88

Report of Independent Registered Public Accounting Firm (Continued)

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of investments owned as of December 31, 2021 by correspondence with the transfer agents of the investee mutual funds. We believe that our audits provide a reasonable basis for our opinions.

/s/ PricewaterhouseCoopers LLP

New York, New York

April 5, 2022

We have served as the auditor of one or more of the investment divisions of NYLIAC Variable Annuity Separate Account-IIIsince 1995.

89

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

(A wholly-owned subsidiary of

New York Life Insurance Company)

FINANCIAL STATEMENTS

AND SUPPLEMENTAL SCHEDULES

(STATUTORY BASIS)

December 31, 2021, 2020 and 2019

Table of Contents

	Page Number
Report of Independent Auditors	1
Statutory Statements of Financial Position	3
Statutory Statements of Operations	4
Statutory Statements of Changes in Capital and Surplus	5
Statutory Statements of Cash Flows	6
Notes to Statutory Financial Statements
Note 1 - Nature of Operations	8
Note 2 - Basis of Presentation	8
Note 3 - Significant Accounting Policies	9
Note 4 - Business Risks and Uncertainties	15
Note 5 - Recent Accounting Pronouncements	16
Note 6 - Investments	18
Note 7 - Derivative Instruments and Risk Management	29
Note 8 - Separate Accounts	34
Note 9 - Fair Value Measurements	36
Note 10 - Investment Income and Capital Gains and Losses	45
Note 11 - Related Party Transactions	48
Note 12 - Insurance Liabilities	51
Note 13 - Reinsurance	58
Note 14 - Benefit Plans	59
Note 15 - Commitments and Contingencies	60
Note 16 - Income Taxes	62
Note 17 - Capital and Surplus	66
Note 18 - Dividends to Stockholder	66
Note 19 - Written Premiums	66
Note 20 - Loan-Backed and Structured Security Impairments	67
Note 21 - Subsequent Events	69
Glossary of Terms	70
Supplemental Schedules and Interrogatories
Schedule 1 - Supplemental Schedule of Selected Financial Data	72
Schedule 2 - Summary Investment Schedule	76
Schedule 3 - Investment Risks Interrogatories	78
Schedule 4 - Reinsurance Contracts	84

Report of Independent Auditors

To the Board of Directors of New York Life Insurance and Annuity Corporation:

Opinions

We have audited the accompanying statutory financial statements of New York Life Insurance and Annuity Corporation (the “Company”), which comprise the statutory statements of financial position as of December 31, 2021 and 2020, and the related statutory statements of operations, of changes in capital and surplus, and of cash flows for each of the three years ended December 31, 2021, including the related notes (collectively referred to as the “financial statements”).

Unmodified Opinion on Statutory Basis of Accounting

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and December 31, 2020, and the results of its operations and its cash flows for the years then ended, in accordance with the accounting practices prescribed or permitted by the Delaware State Insurance Department described in Note 2.

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 section of our report, the accompanying financial statements 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, 2021 and 2020, or the results of its operations or its cash flows for the years then ended.

Basis for Opinions

We conducted our audit in accordance with auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. 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 2 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 State Insurance Department, 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 2 and accounting principles generally accepted in the United States of America are material.

Emphasis of Matter

As disclosed in Note 11 to the financial statements, the Company has entered into significant related party transactions with New York Life Insurance Company and its affiliates. Our opinion is not modified with respect to this matter.

PricewaterhouseCoopers LLP, 300 Madison Avenue, New York, New York 10017-6204

T: (646) 471 3000, www.pwc.com/us

1

Responsibilities of Management 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 State Insurance Department. 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.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date the financial statements are available to be issued.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with US GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with US GAAS, we:

• Exercise professional judgment and maintain professional skepticism throughout the audit.

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

• Obtain an understanding of internal control relevant to the audit 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, no such opinion is expressed.

• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

New York, New York

March 10, 2022

2

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

(A wholly-owned subsidiary of New York Life Insurance Company)

STATUTORY STATEMENTS OF FINANCIAL POSITION

	December 31,
	2021		2020
	(in millions)
Assets
Bonds	$	90,767	$	89,887
Common and preferred stocks	1,635		1,294
Mortgage loans	14,315		14,955
Policy loans	857		890
Other invested assets	3,237		2,460
Cash, cash equivalents and short-term investments	1,763		2,799
Derivatives	581		515
Total cash and invested assets	113,155		112,800
Investment income due and accrued	715		731
Interest in annuity contracts	9,875		9,537
Other assets	902		496
Separate accounts assets	58,484		50,961
Total assets	$	183,131	$	174,525
Liabilities, capital and surplus
Liabilities:
Policy reserves	$	99,972	$	99,955
Deposit funds	1,482		1,524
Policy claims	1,062		326
Separate accounts transfers due and accrued	(1,219)		(1,037)
Obligations under structured settlement agreements	9,875		9,537
Amounts payable under security lending agreements	675		675
Other liabilities	1,194		1,404
Interest maintenance reserve	12		130
Asset valuation reserve	1,874		1,603
Separate accounts liabilities	58,470		50,960
Total liabilities	173,397		165,077
Capital and Surplus:
Capital stock - par value $10,000 (20,000 shares authorized, 2,500 issued and outstanding)	25		25
Gross paid in and contributed surplus	4,458		4,458
Unassigned surplus	5,251		4,965
Total capital and surplus	9,734		9,448
Total liabilities, capital and surplus	$	183,131	$	174,525

See accompanying notes to financial statements.

3

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

(A wholly-owned subsidiary of New York Life Insurance Company)

STATUTORY STATEMENTS OF OPERATIONS

	Years Ended December 31,
	2021		2020		2019
	(in millions)
Income
Premiums	$	14,012	$	12,657	$	13,344
Net investment income	4,261		4,140		4,300
Other income	1,073		977		969
Total income	19,346		17,774		18,613
Benefits and expenses
Benefit payments:
Death benefits	2,343		929		745
Annuity benefits	3,430		3,247		3,145
Surrender benefits	9,054		8,126		8,494
Other benefits	87		115		91
Total benefit payments	14,914		12,417		12,475
Additions to policy reserves	418		2,803		3,075
Net transfers to separate accounts	1,909		710		698
Operating expenses	1,432		1,382		1,487
Total benefits and expenses	18,673		17,312		17,735
Gain from operations before federal and foreign income taxes	673		462		878
Federal and foreign income taxes	187		102		227
Net gain from operations	486		360		651
Net realized capital losses, after taxes and transfers to interest maintenance reserve	(157)		(177)		(20)
Net income	$	329	$	183	$	631

See accompanying notes to financial statements.

4

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

(A wholly-owned subsidiary of New York Life Insurance Company)

STATUTORY STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS

	Years Ended December 31,
	2021		2020		2019
	(in millions)
Capital and surplus, beginning of year	$	9,448	$	9,355	$	8,586
Net increase/(decrease) due to:
Net income	329		183		631
Change in net unrealized capital gains on investments	589		206		386
Change in nonadmitted assets	(7)		2		(93)
Change in asset valuation reserve	(271)		(43)		(348)
Change in reserve valuation basis	536		(16)		—
Change in net deferred income tax	106		162		109
Dividends to Parent	(942)		(932)		—
Prior period corrections	(77)		—		89
Additional paid in surplus	—		530		—
Other adjustments, net	23		1		(5)
Net increase	286		93		769
Capital and surplus, end of year	$	9,734	$	9,448	$	9,355

See accompanying notes to financial statements.

5

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

(A wholly-owned subsidiary of New York Life Insurance Company)

STATUTORY STATEMENTS OF CASH FLOWS

	Years Ended December 31,
	2021		2020		2019
	(in millions)
Cash flows from operating activities:
Premiums received	$	13,623	$	12,665	$	13,351
Net investment income received	4,237		3,849		4,374
Other	1,080		974		954
Total received	18,940		17,488		18,679
Benefits and other payments	14,154		12,281		12,418
Net transfers to separate accounts	2,020		764		766
Operating expenses	1,356		1,298		1,725
Federal income taxes	285		65		136
Total paid	17,815		14,408		15,045
Net cash from operating activities	1,125		3,080		3,634
Cash flows used in investing activities:
Proceeds from investments sold	8,403		5,035		2,329
Proceeds from investments matured or repaid	12,844		9,733		12,174
Cost of investments acquired	(22,397)		(15,553)		(18,668)
Net change in policy loans	34		17		(17)
Net cash used in investing activities	(1,116)		(768)		(4,182)
Cash flows (used in) from financing and miscellaneous activities:
Dividends to New York Life	(942)		(932)		—
Other miscellaneous uses	(103)		(17)		93
Net cash (used in) from financing and miscellaneous activities	(1,045)		(949)		93
Net increase (decrease) in cash, cash equivalents and short-term investments	(1,036)		1,363		(455)
Cash, cash equivalents and short-term investments, beginning of year	2,799		1,436		1,891
Cash, cash equivalents and short-term investments, end of year	$	1,763	$	2,799	$	1,436

See accompanying notes to financial statements.

6

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

(A wholly-owned subsidiary of New York Life Insurance Company)

STATUTORY STATEMENTS OF CASH FLOWS (supplemental)

	Years Ended December 31,
	2021		2020		2019
	(in millions)
Non-cash activities during the year not included in the Statutory Statements of Cash Flows:
Bonds to be announced commitments - purchased/sold	$	1,535	$	10	$	133
Exchange/conversion of bonds to bonds	$	1,348	$	471	$	498
Dividend to New York Life paid in bonds	$	402	$	—	$	—
Capitalized interest on bonds and mortgage loans	$	119	$	125	$	132
Low-income housing tax credit future commitments	$	80	$	4	$	2
Depreciation/amortization on fixed assets	$	73	$	77	$	81
Transfer of mortgage loans to other invested assets	$	72	$	40	$	—
Transfer of bond investment to other invested assets	$	66	$	72	$	—
Other invested assets stock distribution	$	16	$	—	$	—
Exchange of bonds to stocks	$	3	$	19	$	7
Contribution from New York Life in bonds	$	—	$	530	$	—
Other	$	5	$	9	$	13

See accompanying notes to financial statements.

7

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

December 31, 2021, 2020 and 2019

NOTE 1 - NATURE OF OPERATIONS

New York Life Insurance and Annuity Corporation (“the Company”), domiciled in the State of Delaware, is a direct, wholly-owned subsidiary of New York Life Insurance Company (“New York Life”). The Company’s primary business operations are its life and annuity business and its investment management activities. The Company offers a wide variety of interest sensitive and variable life insurance and annuity products to a large cross section of the insurance market. The Company markets its products in all 50 states of the United States of America and the District of Columbia, primarily through New York Life’s career agency force, with certain products also marketed through independent brokers, brokerage general agents and banks.

NOTE 2 - BASIS OF PRESENTATION

The accompanying financial statements have been prepared using accounting practices prescribed or permitted by the Delaware State Insurance Department (“DSID”) or “statutory accounting practices”), which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America (“U.S. GAAP”).

The DSID recognizes only statutory accounting practices prescribed or permitted by the State of Delaware for determining and reporting the financial position and results of operations of an insurance company and for determining its solvency under the Delaware State 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 practices by the State of Delaware. Prescribed statutory accounting practices include state laws and regulations. Permitted statutory accounting practices encompass accounting practices that are not prescribed; such practices differ from state to state, may differ from company to company within a state, and may change in the future. The Company has no permitted practices.

Prior Period Corrections

In 2021, the Company corrected its assumption of the duration in which bank owned life insurance policies paid premiums under the Universal Life Commissioners Reserve Valuation Methodology. As a result, the Company recorded prior period corrections decreasing surplus by $77 million in 2021.

In 2019, the Company evaluated its reserves for the fixed deferred annuity product with guaranteed income benefits dating back to 2014. As a result of the evaluation, the Company reduced its reserves and recorded a prior period correction to increase surplus by $64 million after-tax in 2019.

In 2019, the Company determined it had understated its federal income tax benefits related to income on certain investments in tax exempt municipal bonds. As a result, the Company recorded a prior period correction increasing surplus by $25 million in 2019, reflecting the impact for the years 2014-2018.

8

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements. Management is also required to disclose contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results may differ from those estimates.

Bonds

Bonds are stated at amortized cost using the interest method. Bonds in or near default (rated NAIC 6) are stated at the lower of amortized cost or fair value. Refer to Note 9 - Fair Value Measurements for a discussion of the valuation approach and methods for bonds.

Under NAIC SAP, certain Securities Valuation Office ("SVO")-Identfied Investments which include certain SVO approved exchange traded funds ("ETFs") and mutual funds are eligible for classification as bonds as identified in the NAIC’s SVO Purposes and Procedure Manual. SVO-Identified bond ETFs are stated at fair value and reported as bonds.The interest method for loan-backed and structured securities, which are included in bonds, uses current assumptions of projected cash flows. Amortization of premium or accretion of discount from the purchase of these securities considers the estimated timing and amount of cash flows of the underlying loans, including prepayment assumptions based on data obtained from external sources or internal estimates. Projected future cash flows are updated monthly, and the amortized cost and effective yield of the securities are adjusted as necessary to reflect historical prepayment experience and changes in estimated future prepayments. For high credit quality loan-backed and structured securities (those rated AA or above at the date of acquisition), the adjustments to amortized cost are recorded as a charge or credit to net investment income in accordance with the retrospective method. For loan-backed and structured securities that are not of high credit quality (those rated below AA at date of acquisition), certain floating rate securities and securities with the potential for a loss of a portion of the original investment due to contractual prepayments (e.g., interest only securities), the effective yield is adjusted prospectively for any changes in estimated cash flows.

All acquisitions of securities are recorded in the financial statements on a trade date basis except for the acquisitions of private placement bonds, which are recorded on the funding date.

Preferred Stocks

Redeemable preferred stocks in “good standing” (NAIC designation of 1 to 3) are valued at amortized cost. Redeemable preferred stocks “not in good standing” (NAIC designation of 4 to 6) are valued at the lower of amortized cost or fair value. Perpetual preferred stock and mandatory convertible preferred stock are valued at fair value, not to exceed any currently effective call price. Refer to Note 9 - Fair Value Measurements for a discussion of the valuation approach and methods for preferred stocks.

Common Stocks

Common stocks include the Company’s investments in unaffiliated stocks, which includes investments in shares of SEC registered investment funds as well as regulated foreign open-end investment funds, which are carried at fair value. Unrealized gains and losses are reflected in surplus, net of deferred taxes. Refer to Note 9 - Fair Value Measurements for a discussion of the valuation approach and methods for common stocks.

9

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (continued)

Other than Temporary Impairments

The cost basis of bonds and equity securities is adjusted for impairments in value that are deemed to be other than temporary. An other-than-temporary loss is recognized in net income when it is anticipated that the amortized cost will not be recovered. Factors considered in evaluating whether a decline in value is other than temporary include: (1) whether the decline is substantial; (2) the duration that the fair value has been less than cost; (3) the financial condition and near-term prospects of the issuer; and (4) the Company’s ability and intent to retain the investment for a period of time sufficient to allow for an anticipated recovery in value.

When a bond (other than loan-backed and structured securities), preferred stock or common stock is deemed other-than-temporarily impaired, the difference between the investment's amortized cost and its fair value is recognized as a realized loss and reported in net income if the loss is credit related, or deferred in the interest maintenance reserve ("IMR") if interest related for bonds.

For loan-backed and structured securities, the entire difference between the security’s amortized cost and its fair value is recognized in net income only when the Company (1) has the intent to sell the security or (2) it does not have the intent and ability to hold the security to recovery. If neither of these two conditions exists, a realized loss is recognized in net income for the difference between the amortized cost basis of the security and the net present value of projected future cash flows expected to be collected. The net present value is calculated by discounting the Company’s best estimate of projected future cash flows at the effective interest rate implicit in the loan-backed or structured security prior to impairment.

The determination of cash flow estimates in the net present value calculation is subjective and methodologies will vary, depending on the type of security. The Company considers all information relevant to the collectability of the security, including past events, current conditions, and reasonably supportable assumptions and forecasts in developing the estimate of cash flows expected to be collected. This information generally includes, but may not be limited to, the remaining payment terms of the security, estimated prepayment speeds, defaults, recoveries upon liquidation of the underlying collateral securing the notes, the financial condition of the issuer(s), credit enhancements and other third-party guarantees. In addition, other information, such as industry analyst reports and forecasts, sector credit ratings, the financial condition of the bond insurer for insured fixed income securities and other market data relevant to the collectability may also be considered, as well as the expected timing of the receipt of insured payments, if any. The estimated fair value of the collateral may be used to estimate recovery value if the Company determines that the security is dependent on the liquidation of the collateral for recovery.

The new cost basis of an impaired security is not adjusted for subsequent increases in estimated fair value. In periods subsequent to the recognition of an other-than-temporary impairment ("OTTI"), the impaired bond security is accounted for as if it had been purchased on the measurement date of the impairment. Accordingly, the discount (or reduced premium) based on the new cost basis may be accreted (or amortized) into net investment income in future periods based on prospective changes in cash flow estimates, to reflect adjustments to the effective yield.

Mortgage Loans

Mortgage loans on real estate are carried at unpaid principal balances, net of discounts, premiums, deferred origination fees related to points, and specific valuation allowances, and are collateralized. Specific valuation allowances are established for the excess carrying value of the mortgage loan over the estimated fair value of the collateral as an unrealized loss in surplus when it is probable that based on current information and events, the Company will be unable to collect amounts due under the contractual terms of the loan agreement. Fair value of the collateral is estimated by performing an internal or external current appraisal. If impairment is deemed to be other-than-temporary, which can include a loan modification that qualifies as a troubled debt restructuring (“TDR”), a direct write-down is recognized as a realized loss reported in net income, and a new cost basis for the individual mortgage loan, which is equal to the fair value of the collateral, less costs to obtain and sell, is established. Refer to Note 9 - Fair Value Measurements for a discussion of the valuation approach and methods for mortgage loans.

10

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (continued)

The Company accrues interest income on mortgage loans to the extent it is deemed collectible. The Company places loans on non-accrual status, and ceases to recognize interest income when management determines that the collection of interest and repayment of principal is not probable. Any accrued but uncollected interest is reversed out of interest income once a loan is put on non-accrual status. Interest payments received on mortgage loans where interest payments have been deemed uncollectible are recognized on a cash basis and recorded as interest income.If a determination is made that the principal will not be collected, the interest payment received is used to reduce the principal balance. If a mortgage loan has any investment income due and accrued that is 90 days past due and collectible, the investment income will continue to accrue but all accrued interest related to the mortgage loan is reported as a nonadmitted asset, until such time that it has been paid or is deemed uncollectible.

Policy Loans

Policy loans are stated at the aggregate balance due. The excess of the unpaid balance of a policy loan that exceeds the cash surrender value is nonadmitted.

Other Invested Assets

Investments in limited partnerships and limited liability companies, including equity investments in affiliated entities organized as limited liability companies, which have admissible audits are carried at the underlying audited equity of the investee. The Company nonadmits the entire investment when an admissible audit is not performed. The financial statements of equity method investees are usually not received in time for the Company to apply the equity method at each reporting period. Therefore, the equity pick-up on these investments has been recorded on a one to three-month lag.

The cost basis of limited partnerships and limited liability companies is adjusted for impairments in value deemed to be other-than-temporary, with the difference between cost and carrying value, which approximates fair value, recognized as a realized loss reported in net income. The new cost basis of an impaired limited partnership or limited liability company is not adjusted for subsequent increases in the underlying audited equity of the investee.

Dividends and distributions from limited partnerships and limited liability companies, other than those deemed a return of capital, are recorded in net investment income. Undistributed earnings are included in unrealized gains and losses and are reflected in surplus, net of deferred taxes.

Low-Income Housing Tax Credit (“LIHTC”) investments, which are included in other invested assets, are recorded at proportional amortized cost and include remaining unfunded commitments. The carrying value of the investment is amortized into income in proportion to the actual and projected future amounts of tax credits and deductible losses. The amortization is recorded through net investment income.

Real estate includes properties that are directly-owned and real estate property investments that are directly and wholly-owned through a limited liability company and meet certain criteria. Real estate held for the production of income is stated at cost less accumulated depreciation and encumbrances. Real estate held for sale is stated at the lower of cost less accumulated depreciation or fair value, less encumbrances and estimated costs to sell. If there is an indication that the carrying amount of the real estate may not be recoverable, then it must be tested for impairment. If the carrying amount of a real estate investment exceeds its undiscounted cash flows, an OTTI is recorded as a realized loss in net income, calculated as the difference between the carrying amount of the real estate investment and the fair value of the real estate investment. Depreciation of real estate held for the production of income is calculated using the straight-line method over the estimated lives of the assets, generally 40 years. Costs of permanent improvements are depreciated over their estimated useful life, or the remaining estimated life of the real estate.

11

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (continued)

Derivative Instruments

Derivative instruments that qualify and are designated for hedge accounting are valued in a manner consistent with the items being hedged. Periodic payments and receipts on these derivatives are recorded on an accrual basis within net investment income for hedges of fixed income securities, other income for hedges of liabilities. Net realized gains and losses are recognized upon termination or maturity of these contracts in a manner consistent with the hedged item and when subject to the IMR, are transferred to the IMR, net of taxes.

To qualify for hedge accounting, the hedge relationship is designated and formally documented at inception, which means any time prior to the first quarterly hedge effectiveness assessment date, by detailing the particular risk, management objective and strategy for the hedge. This includes the item and risk that is being hedged, the derivative that is being used, as well as how effectiveness is being assessed. A derivative must be highly effective in accomplishing the objective of offsetting either changes in fair value or cash flows for the risk being hedged. The hedging relationship is considered highly effective if the changes in fair value or cash flows of the hedging instrument are within 80% to 125% of the inverse changes in the fair value or cash flows of the hedged item. The Company formally assesses effectiveness of its hedging relationships both at the hedge inception and on a quarterly basis over the life of the hedge relationship in accordance with its risk management policy. The Company assesses hedge effectiveness qualitatively on a quarterly basis if (1) the initial quantitative prospective assessment demonstrates that the relationship is expected to be highly effective and (2) at inception, the Company is able to reasonably support an expectation of high effectiveness on a qualitative basis in subsequent periods. The Company continually assesses the credit standing of the derivative counterparty and, if the counterparty is deemed to be no longer creditworthy, the hedge relationship will no longer be considered effective.

The Company discontinues hedge accounting prospectively if: (1) it is determined that the derivative is no longer effective in offsetting changes in the fair value or cash flows of a hedged item; (2) the derivative expired or is sold, terminated, or exercised; (3) it is probable that the forecasted transaction will not occur, or (4) management determines that designation of the derivative as a hedge instrument is no longer appropriate.

Derivative instruments that do not qualify or are not designated for hedge accounting are carried at fair value and changes in fair value are recorded in surplus as unrealized gains and losses, net of deferred taxes. Periodic payments and receipts on these derivatives are recorded on an accrual basis within net investment income for hedges of fixed income securities and other income for hedges of liabilities. Upon termination or maturity the gains or losses on these contracts are recognized in net realized capital gains and losses, net of taxes. Realized gains or losses on terminated or matured derivatives, which are subject to the IMR, are transferred to the IMR, net of taxes.

The Company also uses derivatives as part of replication transactions. Replication transactions refer to derivative transactions entered into in conjunction with other investments in order to reproduce the investment characteristics of otherwise permissible investments. The accounting for derivatives used in replication transactions depends upon how the underlying cash instrument is accounted for, as well as how the replicated asset would be accounted for if acquired directly; alternatively, the Company can elect to carry the derivative at fair value. The Company uses bonds as the referenced cash instrument in its current replication transactions, and therefore, the derivatives are carried at amortized cost. The Company accrues investment income for the replicated synthetic asset throughout the life of the replication transaction. Realized gains or losses at maturity of the replication transaction, which are subject to the IMR, are transferred to the IMR, net of tax.

Cash, Cash Equivalents and Short-term Investments

Cash and cash equivalents includes cash on hand, amounts due from banks and highly liquid debt instruments that have original maturities of three months or less at date of purchase and are carried at amortized cost. Cash and cash equivalents also include money market mutual funds which are stated at fair value. Short-term investments consist of securities with remaining maturities of one year or less, but greater than three months at the time of acquisition and are carried at amortized cost, which approximates fair value.

12

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (continued)

Asset Valuation Reserve ("AVR") and IMR

The AVR is used to stabilize surplus from fluctuations in the fair value of bonds, stocks, mortgage loans, real estate and other invested assets. Changes in the AVR are accounted for as direct increases or decreases in surplus. The IMR captures interest related realized gains and losses on sales (net of taxes) of bonds, preferred stocks, mortgage loans, interest related other-than-temporary impairments (net of taxes) and realized gains or losses (net of taxes) on terminated interest rate related derivatives which are amortized into net income over the expected years to maturity of the investments sold or the item being hedged using the grouped method. An interest related other-than-temporary impairment occurs when the Company has the intent to sell an investment at the reporting date, before recovery of the cost of the investment. For loan-backed and structured securities, the non-interest related other-than-temporary impairment is booked to the AVR, and the interest related portion to the IMR.

Loaned Securities and Repurchase Agreements

The Company enters into securities lending agreements whereby certain investment securities are loaned to third-parties. Securities loaned are treated as financing arrangements. With respect to securities loaned, in order to reduce the Company’s risk under these transactions, the Company requires initial cash collateral equal to 102% of the fair value of domestic securities loaned. The Company records an offsetting liability in amounts payable under security lending agreements. The Company monitors the fair value of securities loaned with additional collateral obtained as necessary. The borrower of the loaned securities is permitted to sell or repledge those securities.

The Company enters into dollar roll repurchase agreements to sell and repurchase securities. Assets to be repurchased are the same, or substantially the same, as the assets sold. The Company agrees to sell securities at a specified price and repurchase the securities at a lower price. The Company receives cash in the amount of the sales proceeds and establishes a liability equal to the repurchase amount. The difference between the sale and repurchase amounts represents deferred income which is earned over the life of the agreement. The liability for repurchasing the assets is included in other liabilities.

The Company enters into tri-party reverse repurchase agreements to purchase and resell short-term securities. The Company receives securities as collateral, having a fair value at least equal to 102% of the purchase price paid by the Company for the securities and the Company’s designated custodian takes possession of this collateral. The Company is not permitted to sell or repledge these securities. The collateral is not recorded on the Company’s financial statements. However, if the counterparty defaults, the Company would then exercise its rights with respect to the collateral, including a sale of the collateral. The fair value of the securities held as collateral is monitored daily and additional collateral is obtained, where appropriate, to protect against credit exposure. The Company records the amount paid for securities purchased under agreements to resell in cash, cash equivalents and short-term investments.

Premiums and Related Expenses

Life premiums are recognized as revenue when due. Annuity considerations are recognized as revenue when received. Commissions and other costs associated with acquiring new business are charged to operations as incurred. Amounts received or paid under deposit type contracts without mortality or morbidity risk are not reported as income or benefits but are recorded directly as an adjustment to the liability for deposit funds.

Net Investment Income

Income from investments, including amortization of premium, accrual of discount and similar items, as well as income from prepayment penalties, is recorded within net investment income, unless otherwise stated herein.

13

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (continued)

Policy Reserves

Policy reserves are based on mortality tables and valuation interest rates, which are consistent with statutory requirements and are designed to be sufficient to provide for contractual benefits. The Company holds reserves greater than those developed under the minimum statutory reserving rules when the valuation actuary determines that the minimum statutory reserves are inadequate. Actual results could differ from these estimates and may result in the establishment of additional reserves. The valuation actuary monitors actual experience and, where circumstances warrant, revises assumptions and the related estimates for policy reserves. Refer to Note 12 - Insurance Liabilities for discussion of reserves in excess of minimum NAIC requirements.

Federal Income Taxes

Current federal income taxes are charged or credited to operations based upon amounts estimated to be payable or recoverable as a result of taxable operations for the current year and any adjustments to such estimates from prior years. Deferred federal income tax assets (“DTAs”) and deferred federal income tax liabilities (“DTLs”) are recognized for expected future tax consequences of temporary differences between statutory and taxable income. Temporary differences are identified and measured using a balance sheet approach whereby statutory and tax balance sheets are compared. Changes in DTAs and DTLs are recognized as a separate component of surplus (except for the net deferred taxes related to investments, which are included in unrealized gains and losses). Net DTAs are admitted to the extent permissible under NAIC SAP. Gross DTAs are reduced by a statutory valuation allowance, if it is more likely than not that some portion or all of the gross DTA will not be realized. The Company is required to establish a tax loss contingency if it is more likely than not that a tax position will not be sustained. The amount of the contingency reserve is management’s best estimate of the amount of the original tax benefit that could be reversed upon audit, unless the best estimate is greater than 50% of the original tax benefit, in which case the reserve is equal to the entire tax benefit.

The Company is a member of an affiliated group, which files a consolidated federal income tax return with New York Life. The consolidated income tax provision or benefit is allocated among the members of the group in accordance with a tax allocation agreement. This tax allocation agreement provides that the Company computes its share of the consolidated tax provision or benefit, in general, on a separate company basis, and may, where applicable, include the tax benefits of operating or capital losses utilizable in the New York Life's consolidated returns. Intercompany tax balances are settled quarterly on an estimated basis with a final settlement occurring within 30 days of the filing of the consolidated tax return. Current federal income taxes are charged or credited to operations based upon amounts estimated to be payable or recoverable as a result of taxable operations for the current year and any adjustments to such estimates from prior years.

Separate Accounts

The Company has established both non-guaranteed and guaranteed separate accounts with varying investment objectives which are segregated from the Company’s general account and are maintained for the benefit of separate accounts policyholders. Assets held in non-guaranteed separate accounts are stated at market value. Assets held in guaranteed separate accounts are carried at the same basis as the general account up to the value of policyholder reserves and at fair value thereafter.

The liability for separate accounts represents policyholders’ interests in the separate accounts assets, excluding liabilities representing due and accrued transfers to the general account. The liability for non-guaranteed separate accounts represents policyholders’ interests in the separate accounts assets, including accumulated net investment income and realized and unrealized gains and losses on those assets. For the guaranteed separate accounts, the liability represents amounts due to policyholders pursuant to the terms of the contract.

14

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (continued)

Other Assets and Liabilities

Other assets primarily consist of net DTAs and other receivables.

Other liabilities primarily consist of payable to parent, derivative liabilities, amounts payable for undelivered securities and reinsurance payables.

Nonadmitted Assets

Under statutory accounting practices, certain assets are designated as nonadmitted assets and are not included in the accompanying Statutory Statements of Financial Position since these assets are not permitted by the DSID to be taken into account in determining the Company’s financial condition.

Nonadmitted assets typically include agents’ debit balances, DTAs not realizable within three years, and receivables over ninety days past due. Changes to nonadmitted assets are reported as a direct adjustment to surplus in the accompanying Statutory Statements of Changes in Surplus.

Fair Value of Financial Instruments and Insurance Liabilities

Fair value of various assets and liabilities are included throughout the notes to the financial statements. Specifically, fair value disclosure of investments held is reported in Note 6 - Investments. Fair values for derivative instruments are included in Note 7 - Derivative Instruments and Risk Management. Fair values for insurance liabilities are reported in Note 12 - Insurance Liabilities. The aggregate fair value of all financial instruments summarized by type is included in Note 9 - Fair Value Measurements.

Contingencies

Amounts related to contingencies are accrued if it is probable that a liability has been incurred and an amount is reasonably estimable.

At the inception of a guarantee, the Company recognizes an initial liability at fair value for the obligations it has undertaken, regardless of the probability of performance under the guarantee.

Foreign Currency Transactions

For foreign currency items, income and expenses are translated at the average exchange rate for the period, while assets and liabilities are translated using the spot rate in effect at the date of the statements. Changes in the asset and liability values due to fluctuations in foreign currency exchange rates are recorded as unrealized capital gains and losses in surplus until the asset is sold or exchanged or the liability is settled. Upon settlement, previously recorded unrealized capital gains and losses are reversed, and the foreign exchange gain or loss for the entire holding period is recorded as a realized capital gain or loss in net income.

NOTE 4 - BUSINESS RISKS AND UNCERTAINTIES

The Company is exposed to an array of risks, including, but not limited to, regulatory actions, financial risk, risks associated with its investments and operational risk, including cyber security.

The Company is regulated by the insurance departments of the states and territories where it is licensed to do business. Although the federal government does not directly regulate the business of insurance, federal legislation and administrative policies can significantly and adversely affect the insurance industry and the Company. The Company is unable to predict whether any administrative or legislative proposals, at either the federal or state level, will be adopted in the future, or the effect, if any, such proposals would have on the Company.

15

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 4 - BUSINESS RISKS AND UNCERTAINTIES (continued)

The Company's insurance liabilities and assets under management are exposed to market risk, policyholder behavior risk and mortality/longevity risk. Market volatility and other equity market conditions may affect the Company’s exposure to risks related to guaranteed death benefits and guaranteed living benefits on variable annuity and certain variable universal life products. Furthermore, the level of sales of the Company’s insurance and investment products is influenced by many factors, including general market rates of interest, the strength, weakness and volatility of equity markets, and terms and conditions of competing products.

The Company is exposed to the risks normally associated with an investment portfolio, which include interest rate, liquidity, credit and counterparty risks. The Company controls its exposure to these risks by, among other things, closely monitoring and managing the duration and cash flows of its assets and liabilities, maintaining a large percentage of its portfolio in highly liquid securities, engaging in a disciplined process of underwriting, reviewing and monitoring credit risk, and by devoting significant resources to develop and periodically update its risk management policies and procedures.

The Company leverages technology systems and solutions to conduct business and to retain, store, protect, and manage confidential information. The failure of the Company’s technology systems and solutions, or those of a vendor, has the potential to disrupt its operations, result in the loss of customer business, damage the Company’s reputation, and expose the Company to litigation and regulatory action, all of which could adversely impact its profitability.

The disruption caused by the COVID-19 pandemic continues to have a major impact on the global economy, the supply chain and the economies of particular countries and industries. It has also resulted in elevated mortality and morbidity experience for the global population, and could have long-term effects on the Company’s life insurance business. The ultimate extent of the impact of the COVID-19 pandemic will depend on numerous factors, all of which are highly uncertain and cannot be predicted. These factors include the length and severity of the outbreak, including the impact of new variants of the virus and the efficacy of vaccines and therapeutic treatments in combating the virus, the responses to the pandemic taken by governments and private sector businesses, and the impacts on the Company’s customers, employees and vendors. Although the Company has taken certain steps to mitigate some of the adverse impacts resulting from the pandemic, these events could have an adverse effect on the risks described above and the Company’s results of operations and cash flows in any period and, depending on their severity and duration, could also adversely affect the Company’s financial condition.

NOTE 5 - RECENT ACCOUNTING PRONOUNCEMENTS

Changes in Accounting Principles

Accounting changes adopted to conform to the provisions of NAIC SAP or other state prescribed accounting practices are reported as changes in accounting principles. The cumulative effect of changes in accounting principles is generally reported as an adjustment to unassigned surplus in the period of the change in accounting principle. Generally, the cumulative effect is the difference between the amount of capital and surplus at the beginning of the year and the amount of capital and surplus that would have been reported at that date if the new accounting principles had been applied retroactively for all prior periods.

The NAIC adopted revisions to Statement of Statutory Accounting Principles ("SSAP") 32 “Preferred Stock.” The revisions include definitions, measurement and impairment guidance. The revisions require perpetual preferred stock and mandatory convertible preferred stock to be reported at fair value, not to exceed any current effective call price, among other changes. The Company adopted this guidance on January 1, 2021, which increased statutory surplus by $14 million.

16

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 5 - RECENT ACCOUNTING PRONOUNCEMENTS (continued)

On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which provides relief from certain requirements under U.S. GAAP. Section 4013 of the CARES Act gives entities temporary relief from the accounting and disclosure requirements for TDRs under U.S. GAAP (ASC 310-40)in certain situations. On April 7, 2020, a group of banking agencies issued an interagency statement, which was reaffirmed by the Financial Accounting Standards Board that also offered some practical expedients for evaluating whether loan modifications that occur in response to COVID-19 pandemic are TDRs. In response to these events, the NAIC adopted a number of accounting Interpretations in 2020, which continued to be effective during part of 2021 to provide similar relief under statutory accounting, INTs 20-03 and 20-07 allowed insurers to make minor, short-term modifications to mortgage loans and debt securities upon request from borrowers experiencing financial difficulty due to COVID-19, without having to evaluate whether such modifications fall within the TDR accounting guidance and potentially have to impair such investments. The Company has granted a number of short-term, minor modifications in its mortgage loan portfolio that allow borrowers not to make contractual payments of principal and/or interest for up to six months with the repayment taking place either at the end of the 6-month deferral period, throughout the life of the investment or at time of maturity. These modifications did not have a material impact on surplus or net income.

In 2020, the Company adopted Principles Based Reserving ("PBR"). Under PBR for individual life products, reserves are the higher of: a) the reserve using prescribed assumptions or b) the reserve computed using a single prescribed economic scenario or c) the reserve based on a wide range of future economic conditions. Under PBR for variable annuity products ("VM-21"), reserves are the higher of: a) the reserve based on a wide range of future economic conditions computed using prescribed experience factors and b) the reserve based on a wide range of future economic conditions computed using justified company experience factors. For individual life products, the new standards are mandatory for policies issued on or after January 1, 2020 and therefore, there was no impact to surplus on adoption. For variable annuity products, PBR is mandatory for old and new business as of January 1, 2020 and companies are allowed to elect a phase-in period of three years to report the change in reserve valuation basis as described in SSAP No. 51R Life Contracts. This change in valuation basis, which impacts variable annuity reserves written from 1981 to 2019 is permitted under the revisions to New York State Insurance Regulation 213 (11 NYCRR 103), in addition to the Commissioners' Annuity Reserve Valuation Method ("CARVM") adopted in VM-21. Since the impact of adopting PBR did not materially increase statutory reserves, the Company recorded the full impact in surplus in 2020 and did not elect the phase-in method.

In 2020, the NAIC issued Interpretation 20-01 to provide statutory accounting and reporting guidance for the adoption of ASU 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting under U.S. GAAP. This Interpretation adopts, with minor modification, the U.S. GAAP adopted guidance, which provides optional expedients and exceptions for applying current accounting guidance to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met, through December 31, 2022. The Company is performing an ongoing evaluation of the impact of reference rate reform on its contracts and hedging relationships. Since most of the Company's contracts and hedging relationships are expected to meet the criteria for applying the accounting expedients listed in the Interpretation, reference rate reform is not expected to significantly impact the Company's surplus or net income.

In 2019, the NAIC adopted revisions to the required disclosures under SSAP 100R “Fair Value.” The revisions adopt with modification new fair value disclosure changes under U.S. GAAP. The new requirements eliminate some previously required disclosures and provide clarification on disclosures for investments where the net asset value ("NAV") as a practical expedient to fair value is used for investments in funds that meet certain criteria. The updated disclosures have been reflected in Note 9 - Fair Value Measurements.

In 2019, the NAIC adopted revisions to SSAP 86 “Derivatives.” The revisions incorporate the hedge effectiveness documentation provisions reflected under U.S. GAAP. The revisions, among others, allow companies to perform subsequent assessments of hedge effectiveness qualitatively if certain conditions are met and allow companies more time to perform the initial quantitative hedge effectiveness assessment. The adoption of this guidance did not have an impact on the Company.

17

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 6 - INVESTMENTS

Bonds

The carrying value and estimated fair value of bonds by maturity at December 31, 2021 and 2020 were as follows (in millions):

	2021				2020
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Due in one year or less	$	5,418	$	5,507	$	4,974	$	5,094
Due after one year through five years	31,066		32,305		31,849		33,772
Due after five years through ten years(1)	27,078		28,537		27,348		30,310
Due after ten years	27,205		30,447		25,716		30,246
Total	$	90,767	$	96,796	$	89,887	$	99,422

(1) Includes an affiliated bond issued by Madison Capital Funding LLC (“MCF”) and an affiliated bond issued by NYL Investment Management Holdings LLC ("NYL Investments"). Refer to Note 11 - Related Party Transactions for a more detailed discussion of related party investments.

Corporate bonds are shown based on contractual maturity. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Mortgage and asset-backed securities ("ABS") are not due at a single maturity date and therefore are shown based on the expected cash flows of the underlying loans, which includes estimates of anticipated future prepayments.

In addition to the information disclosed above, short-term investments with a carrying value of $199 million and $88 million at December 31, 2021 and 2020, respectively, and cash equivalents with a carrying value of $1,748 million and $2,863 million at December 31, 2021 and 2020, respectively are due in one year or less. Carrying value approximates fair value for these investments.

At December 31, 2021 and 2020, the distribution of gross unrealized gains and losses on bonds were as follows (in millions):

	2021
	Carrying Value		Unrealized Gains		Unrealized Losses		Estimated Fair Value
U.S. governments	$	6,148	$	296	$	92	$	6,352
All other governments	266		21		1		286
U.S. special revenue and special assessment	14,594		1,902		22		16,474
Industrial and miscellaneous unaffiliated	66,739		4,088		269		70,558
Parent, subsidiaries, and affiliates	2,895		111		5		3,001
SVO Identified Funds	125		—		—		125
Total	$	90,767	$	6,418	$	389	$	96,796

18

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 6 - INVESTMENTS (continued)

	2020
	Carrying Value		Unrealized Gains		Unrealized Losses		Estimated Fair Value
U.S. governments	$	6,927	$	595	$	3	$	7,519
All other governments	237		34		—		271
U.S. special revenue and special assessment	15,558		2,391		2		17,947
Industrial and miscellaneous unaffiliated	64,313		6,537		179		70,671
Parent, subsidiaries, and affiliates	2,830		163		1		2,992
SVO identified funds	22		—		—		22
Total	$	89,887	$	9,720	$	185	$	99,422

Common and Preferred Stocks

The carrying value of and change in unrealized gains (losses) generated by common and preferred stocks at December 31, 2021 and 2020 were as follows (in millions):

	2021				2020
	Carrying Value		Change in Unrealized Gains (Losses)		Carrying Value		Change in Unrealized Gains (Losses)
Common stocks	$	1,594	$	213	$	1,287	$	83
Preferred stocks	41		17		7		—
Total	$	1,635	$	230	$	1,294	$	83

Mortgage Loans

The Company’s mortgage loans are diversified by property type, location and borrower, and are collateralized. The maximum and minimum lending rates for new commercial mortgage loans funded during 2021 were 11.1% and 1.6% and funded during 2020 were 6.8% and 2.5%, respectively. For 2021 and 2020, the maximum percentage of any one commercial loan to the value of the collateral at the time of the loan, exclusive of insured or guaranteed or purchase money mortgages was 92.4% (average percentage was 54.8% and 54.5% at December 31, 2021 and 2020, respectively). For 2021 and 2020, the maximum percentage of any residential loan to the value of the collateral at the time of the loan was 80.0% (average percentage was 52.5% and 53.4% at December 31, 2021 and 2020, respectively). The Company has no significant credit risk exposure to any one individual borrower.

The majority of the Company's commercial mortgage loans were held in a form of participations with the carrying value of $14,225 million and $14,863 million at December 31, 2021 and 2020, respectively. These loans were originated or acquired by New York Life. Refer to Note 11- Related Party Transactions for more details.

19

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 6 - INVESTMENTS (continued)

At December 31, 2021 and 2020, the distribution of the mortgage loan portfolio by property type and geographic location were as follows ($ in millions):

	2021				2020
	Carrying Value		% of Total		Carrying Value		% of Total
Property Type:
Apartment buildings	$	4,286	29.9	%	$	4,605	30.8	%
Office buildings	3,962		27.7		4,293		28.7
Retail facilities	2,853		19.9		2,929		19.6
Industrial	2,890		20.2		2,837		19.0
Hotels	304		2.1		274		1.8
Residential	8		0.1		10		0.1
Other	12		0.1		7		—
Total	$	14,315	100.0	%	$	14,955	100.0	%

	2021				2020
	Carrying Value		% of Total		Carrying Value		% of Total
Geographic Location:
Central	$	3,597	25.2	%	$	3,761	25.1	%
Pacific	3,457		24.2		3,445		23.0
South Atlantic	3,299		23.0		3,362		22.5
Middle Atlantic	3,123		21.8		3,270		21.9
New England	821		5.7		1,099		7.3
Other	18		0.1		18		0.2
Total	$	14,315	100.0	%	$	14,955	100.0	%

At December 31, 2021 and 2020, $1 million of mortgage loans and $73 million, respectively, were past due 90 days and over.

The Company maintains a watchlist of commercial loans that may potentially be impaired. Some of the general guidelines analyzed to include commercial loans within the watchlist are loan-to-value ratio (“LTV”), asset performance such as debt service coverage ratio, lease rollovers, income/expense hurdles, major tenant or borrower issues, the economic climate, and catastrophic events, among others. Collateral securing the loans placed on the watchlist generally take priority in being revalued in the Company’s inspection/evaluation commercial loan program that revalues properties securing commercial mortgage loans. The guideline for analyzing residential loans occurs once a loan is 60 or more days delinquent. At that point, generally an appraisal or broker’s price opinion of the underlying asset is obtained.

20

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 6 - INVESTMENTS (continued)

Fair value of the collateral for commercial mortgages (excluding credit loans) over $5 million is generally updated every three years, unless a more current appraisal is warranted. Commercial mortgages less than $5 million have an on-site inspection performed by an external inspection service generally every three years. If the loan is determined to be potentially troubled, the loan is more frequently monitored as to its status. Certain properties that serve as collateral for commercial mortgages have been placed on a different schedule to address additional risks that resulted from the economic shutdown as a result of COVID-19. LTV, which is based on collateral values, is deemed as one of the key mortgage loan indicators to assess credit quality and to assist in identifying problem loans. At December 31, 2021 and 2020, LTVs on the Company’s mortgage loans were as follows (in millions):

	2021
Loan to Value % (By Class)	Apartment Buildings		Office Buildings		Retail Facilities		Industrial		Hotels		Residential		Other		Total
Above 95%	$	—	$	23	$	—	$	—	$	—	$	—	$	—	$	23
91% to 95%	—		—		—		—		—		—		—		—
81% to 90%	—		105		188		—		—		—		—		293
71% to 80%	352		114		178		10		54		1		—		709
Below 70%	3,934		3,720		2,487		2,880		250		7		12		13,290
Total	$	4,286	$	3,962	$	2,853	$	2,890	$	304	$	8	$	12	$	14,315

	2020
Loan to Value % (By Class)	Apartment Buildings		Office Buildings		Retail Facilities		Industrial		Hotels		Residential		Other		Total
Above 95%	$	—	$	—	$	70	$	—	$	—	$	—	$	—	$	70
91% to 95%	—		—		—		—		—		—		—		—
81% to 90%	88		65		15		—		—		—		—		168
71% to 80%	383		133		513		41		—		—		—		1,070
Below 70%	4,134		4,095		2,331		2,796		274		10		7		13,647
Total	$	4,605	$	4,293	$	2,929	$	2,837	$	274	$	10	$	7	$	14,955

At December 31, 2021 and 2020, impaired mortgage loans were as follows (in millions):

	2021
Type	Impaired Loans with Allowance for Credit Losses		Related Allowance		Impaired Loans Without Allowance for Credit Losses		Average Recorded Investment		Interest Income Recognized		Interest Income on a Cash Basis During the Period
Residential	$	—	$	—	$	1	$	1	$	—	$	—
Commercial	23		4		—		4		—		—
Total	$	23	$	4	$	1	$	5	$	—	$	—

	2020
Type	Impaired Loans with Allowance for Credit Losses		Related Allowance		Impaired Loans Without Allowance for Credit Losses		Average Recorded Investment		Interest Income Recognized		Interest Income on a Cash Basis During the Period
Residential	$	—	$	—	$	1	$	1	$	—	$	—
Commercial	—		—		70		115		3		—
Total	$	—	$	—	$	71	$	116	$	3	$	—

21

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 6 - INVESTMENTS (continued)

Other Invested Assets

The carrying value of other invested assets at December 31, 2021 and 2020 consisted of the following (in millions):

	2021		2020
Investment in MCF	$	1,487	$	1,251
Limited partnerships and limited liability companies	1,235		784
Other investments	279		265
Real estate investment property	96		97
LIHTC investments	122		41
Loan to affiliate	18		22
Total other invested assets	$	3,237	$	2,460

Net investment income (loss) and change in unrealized gains (losses) for other invested assets for the years ended December 31, 2021, 2020 and 2019 consisted of the following (in millions):

	2021				2020				2019
	Net Investment Income (Loss)		Unrealized Gains (Losses)(1)		Net Investment Income (Loss)		Unrealized Gains (Losses)(1)		Net Investment Income (Loss)		Unrealized Gains (Losses)(1)
Investment in MCF	$	137	$	169	$	65	$	(26)	$	99	$	46
Limited partnerships and limited liability companies	42		176		22		11		16		40
Other investments	9		—		8		—		6		—
Real estate investment property	11		—		14		—		9		—
LIHTC investments	(12)		—		(12)		—		(14)		—
Total other invested assets	$	187	$	345	$	97	$	(15)	$	116	$	86

(1) Includes unrealized foreign exchange gains (losses) of less than $1 million, $3 million, and ($4) million in 2021, 2020, and 2019, respectively.

Investment in MCF consists of the Company's equity investment in this affiliate. The Company owns a majority interest in MCF. Dividends are recorded in Net investment income in the accompanying Statutory Statements of Operations when declared and changes in the equity of this investment are recorded in Change in unrealized capital gains on investments in the accompanying Statutory Statements of Financial Position. Refer to Note 11 - Related Party Transactions for more details on other transactions held with MCF.

Limited partnerships and limited liability companies primarily consist of limited partnership interests in mezzanine funds, wind energy investments, and other equity investments. Distributions, other than those deemed a return of capital, are recorded as Net investment income in the accompanying Statutory Statements of Operations. Undistributed earnings are included in Change in unrealized capital gains on investments in the accompanying Statutory Statements of Financial Position.

Other investments consist primarily of investments in surplus notes, preferred units of limited partnership, and other investments with characteristics of debt. Interest earned on these investments is included in Net investment income in the accompanying Statutory Statements of Operations.

22

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 6 - INVESTMENTS (continued)

The Company receives tax credits related to its investments in LIHTC partnerships. The Company’s unexpired tax credits on its investments in LIHTC expire within a range of 1 year to 13 years. During 2021, 2020 and 2019, the Company recorded amortization on these investments under the proportional amortized cost method of $12 million, $12 million, and $14 million, respectively. The Company recorded tax credits and other tax benefits on these investments of $15 million, $15 million, and $18 million for 2021, 2020 and 2019, respectively. The minimum holding period required for the Company’s LIHTC investments extends from 2 years to 17 years. The LIHTC investments are periodically subject to regulatory reviews by housing authorities where the properties are located. The Company is not aware of any adverse issues related to such regulatory reviews.

Assets on Deposit or Pledged as Collateral

At December 31, 2021 and 2020, the Company’s restricted assets (including pledged collateral) were as follows ($ in millions):

	2021
	Gross (Admitted and Nonadmitted) Restricted										Percentage
Restricted Asset Category	Total General Account		Total From Prior Year		Increase (Decrease)		Total Nonadmitted Restricted		Total Admitted Restricted		Gross (Admitted and Non-admitted) Restricted to Total Assets		Admitted Restricted to Total Admitted Assets
Collateral held under security lending agreements	$	675	$	675	$	—	$	—	$	675	0.4	%	0.4	%
Subject to reverse repurchase agreements	140		252		(112)		—		140		0.1		0.1
Subject to dollar repurchase agreements	—		1		(1)		—		—		0.0		0.0
Letter stock or securities restricted as to sale - excluding Federal Home Loan Bank (“FHLB”) capital stock	40		20		20		—		40		0.0		0.0
FHLB capital stock	29		22		7		—		29		0.0		0.0
On deposit with states	4		4		—		—		4		0.0		0.0
Total restricted assets	$	888	$	974	$	(86)	$	—	$	888	0.5	%	0.5	%

	2020
	Gross (Admitted and Nonadmitted) Restricted										Percentage
Restricted Asset Category	Total General Account		Total From Prior Year		Increase (Decrease)		Total Nonadmitted Restricted		Total Admitted Restricted		Gross (Admitted and Non-admitted) Restricted to Total Assets		Admitted Restricted to Total Admitted Assets
Collateral held under security lending agreements	$	675	$	675	$	—	$	—	$	675	0.4	%	0.4	%
Subject to reverse repurchase agreements	252		220		32		—		252		0.1		0.1
Subject to dollar repurchase agreements	1		1		—		—		1		0.0		0.0
Letter stock or securities restricted as to sale - excluding FHLB capital stock	20		20		—		—		20		0.0		0.0
FHLB capital stock	22		28		(6)		—		22		0.0		0.0
On deposit with states	4		4		—		—		4		0.0		0.0
Total restricted assets	$	974	$	948	$	26	$	—	$	974	0.6	%	0.6	%

23

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 6 - INVESTMENTS (continued)

Loaned Securities and Repurchase Agreements

The Company participates in securities lending programs whereby securities, which are included in investments, are loaned to third parties for the purpose of enhancing income on securities held through reinvestment of cash collateral received upon lending. For securities lending transactions, the Company requires initial collateral, usually in the form of cash, equal to 102% of the fair value of domestic securities loaned. The borrower of the loaned securities is permitted to sell or repledge those securities. At December 31, 2021, the Company recorded cash collateral received under these agreements of $675 million, and established a corresponding liability for the same amount, which is included in Amounts payable under security lending agreements in the accompanying Statutory Statements of Financial Position. For securities lending transactions, the carrying value of securities classified as bonds and on loan at December 31, 2021 was $628 million, with a fair value of $659 million. At December 31, 2020, the carrying value was $594 million, with a fair value of $659 million. The reinvested collateral is reported in bonds, Cash equivalent and short-term investments in the accompanying Statutory Statements of Financial Position. The total fair value of all reinvested collateral positions was $694 million and $693 million at December 31, 2021 and 2020, respectively.

At December 31, 2021, the carrying value and fair value of securities held under agreements to purchase and resell was $140 million, which were classified as tri-party reverse repurchase agreements and included with Cash, cash equivalents and short-term investments in the accompanying Statutory Statements of Financial Position. The securities had a weighted average maturity of three days and a weighted average yield of 0.1%. At December 31, 2020, the carrying value and fair value of securities held under agreements to purchase and resell was $252 million, which were classified as tri-party reverse repurchase agreements and included with Cash, cash equivalents and short-term investments in the accompanying Statutory Statements of Financial Position. The securities had a weighted average maturity of two days and a weighted average yield of 1.5%.

The Company participates in dollar repurchase agreements to sell and repurchase securities. The purchaser of the securities is permitted to sell or repledge those securities. The liability for repurchasing the assets is included in Borrowed money in the accompanying Statutory Statements of Financial Position. At December 31, 2021 and 2020, the Company was a party to dollar repurchase agreements in the general account for less than $1 million for both periods. At December 31, 2021 and 2020, the Company was not a party to any dollar repurchase agreements in the separate accounts.

Collateral Received

At December 31, 2021 and 2020, assets received as collateral reflected within the accompanying Statutory Statements of Financial Position, along with a liability to return such collateral, were as follows ($ in millions):

	2021
Cash Collateral Assets	Book/Adjusted Carrying Value		Fair Value		% Total Assets (Admitted and Nonadmitted)		% Total Admitted Assets
Securities lending	$	675	$	675	0.5	%	0.5	%
Derivatives	522		522		0.4		0.4
Total	$	1,197	$	1,197	1.0	%	1.0	%

	2020
Cash Collateral Assets	Book/Adjusted Carrying Value		Fair Value		% Total Assets (Admitted and Nonadmitted)		% Total Admitted Assets
Securities lending	$	675	$	675	0.5	%	0.5	%
Derivatives	304		304		0.2		0.2
Cash received on repurchase transactions	1		1		—		—
Total	$	980	$	980	0.8	%	0.8	%

24

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 6 - INVESTMENTS (continued)

	2021				2020
Recognized Liability to Return Collateral	Amount		% Total Liabilities		Amount		% Total Liabilities
Amounts payable under securities lending agreements	$	675	0.6	%	$	675	0.6	%
Other liabilities (derivatives)	506		0.4		288		0.3
Separate accounts liabilities (derivatives)	16		—		16		—
Borrowed money (repurchase agreements)	—		—		1		—
Total	$	1,197	1.0	%	$	980	0.9	%

Cash received on securities lending transactions and repurchase agreements is then reinvested in short-term investments and bonds with various maturities.

Composition of Collateral Received

The following table presents the terms and amounts of cash collateral received under security lending transactions and dollar repurchase agreements for the following types of securities loaned at December 31, 2021 and 2020 (in millions):

	2021
	Remaining Contractual Maturity of the Agreements
	Open		30 days or less(1)		31 to 60 days		61 to 90 days		Greater than 90 days		Total
U.S. government corporation & agencies	5		—		—		—		—		5
Foreign governments	5		—		—		—		—		5
U.S. corporate	563		—		—		—		—		563
Foreign corporate	102		—		—		—		—		102
Total general account securities lending transactions	$	675	$	—	$	—	$	—	$	—	$	675

(1) Less than $1 million of dollar repurchase agreements is in the general account in the U.S. government corporation & agencies category.

	2020
	Remaining Contractual Maturity of the Agreements
	Open		30 days or less(1)		31 to 60 days		61 to 90 days		Greater than 90 days		Total
US. Treasury	$	5	$	—	$	—	$	—	$	—	$	5
U.S. government corporation & agencies	2		1		—		—		—		3
Foreign governments	1		—		—		—		—		1
U.S. corporate	555		—		—		—		—		555
Foreign corporate	112		—		—		—		—		112
Total general account securities lending transactions	$	675	$	1	$	—	$	—	$	—	$	676

(1) Represents dollar repurchase agreements in the general account

At December 31, 2021 and 2020, there were no separate account securities cash collateral received under securities lending agreements.

25

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 6 - INVESTMENTS (continued)

Reinvestment of Collateral Received

The following tables present the term and aggregate fair value at December 31, 2021 and 2020 from the reinvestment of all collateral received in securities lending and dollar repurchase agreements (in millions):

	2021				2020
Period to Maturity	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Open	$	—	$	—	$	—	$	—
30 days or less	344		344		400		400
31 to 60 days	87		87		117		117
61 to 90 days	70		70		64		64
91 to 120 days	37		37		10		10
121 to 180 days	52		52		46		46
181 to 365 days	5		5		10		10
1 to 2 years	33		33		20		20
2 to 3 years	66		66		26		26
Greater than 3 years	—		—		—		—
Total collateral reinvested	$	694	$	694	$	693	$	693

To help manage the mismatch of maturity dates between the security lending transactions and the related reinvestment of the collateral received, the Company invests in highly liquid assets.

Reverse Repurchase Agreement Transactions

The following table provides contractual maturity, maximum balance during the year, and ending balance for tri-party repurchase agreements at December 31, 2021 and 2020 (in millions):

	2021				2020
	Maximum Balance		Ending Balance		Maximum Balance		Ending Balance
Open - No Maturity	$	—	$	—	$	—	$	—
Overnight	$	368	$	—	$	338	$	—
2 Days to 1 Week			$	140	$	—	$	252
> 1 Week to 1 Month	$	—	$	—	$	—	$	—
> 1 Month to 3 Months	$	—	$	—	$	—	$	—
> 3 Months to 1 Year	$	—	$	—	$	—	$	—
> 1 Year	$	—	$	—	$	—	$	—

At December 31, 2021 and 2020, the Company did not have any defaulted reverse repurchase agreements.

26

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 6 - INVESTMENTS (continued)

The following table presents the fair value of securities acquired under tri-party reverse repurchase agreement transactions, which were all NAIC rating of 1, for all four quarters of 2021 and 2020 (in millions):

	Maximum Balance		Ending Balance
Fourth Quarter 2021	$	221	$	140
Third Quarter 2021	$	258	$	220
Second Quarter 2021	$	240	$	239
First Quarter 2021	$	368	$	230
Fourth Quarter 2020	$	270	$	252
Third Quarter 2020	$	218	$	210
Second Quarter 2020	$	331	$	216
First Quarter 2020	$	338	$	338

The following table presents the securities at fair value pledged as collateral used in tri-party reverse repurchase agreements by remaining contractual maturity for four quarters of 2021 and 2020 (in millions):

	Overnight and Continuous		30 days or Less		31 to 90 Days		> 90 Days
Maximum Amount
Fourth Quarter 2021	$	—	$	—	$	—	$	225
Third Quarter 2021	$	—	$	—	$	—	$	263
Second Quarter 2021	$	—	$	—	$	—	$	245
First Quarter 2021	$	—	$	—	$	—	$	375
Fourth Quarter 2020	$	—	$	—	$	—	$	275
Third Quarter 2020	$	—	$	—	$	—	$	222
Second Quarter 2020	$	—	$	—	$	—	$	338
First Quarter 2020	$	—	$	—	$	—	$	345
Ending Balance
Fourth Quarter 2021	$	—	$	—	$	—	$	143
Third Quarter 2021	$	—	$	—	$	—	$	225
Second Quarter 2021	$	—	$	—	$	—	$	244
First Quarter 2021	$	—	$	—	$	—	$	235
Fourth Quarter 2020	$	—	$	—	$	—	$	257
Third Quarter 2020	$	—	$	—	$	—	$	214
Second Quarter 2020	$	—	$	—	$	—	$	221
First Quarter 2020	$	—	$	—	$	—	$	345

At December 31, 2021, and 2020, the Company had no recognized receivable for return of collateral or a recognized liability to return collateral.

27

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 6 - INVESTMENTS (continued)

Insurer Self-Certified Securities

The following represents securities for which the Company does not have all the information required for the NAIC to provide an NAIC designation, but for which the Company is receiving timely payments of principal and interest. These securities are referred to as "5GI Securities" ($ in millions):

General Account	2021					2020
Investments	Number of 5GI Securities	Carrying Value		Estimated Fair Value		Number of 5GI Securities	Carrying Value		Estimated Fair Value
Bonds - amortized cost	2	$	1	$	1	3	$	—	$	—
Loan-backed and structured securities - amortized cost	10	12		14		9	35		36
Total general account	12	$	13	$	15	12	$	35	$	36
Separate account:
Loan-backed and structured securities - amortized cost	2	$	1	$	1	—	$	—	$	—
Total separate account	2	$	1	$	1	—	$	—	$	—

Wash Sales

In the course of the Company’s investment management activities, securities may be sold and repurchased within 30 days of the sale date to meet individual portfolio objectives and to achieve the ongoing rebalancing of exposure.

The details by NAIC designation of 3 or below, or unrated, securities sold during the years ended December 31, 2021 and 2020, and reacquired within 30 days of the sale date are as follows ($ in millions):

2021
Description	NAIC Designation	Number of Transactions	Book Value of Securities Sold		Cost of Securities Repurchased		Realized Gains (Losses)
Bonds	NAIC 3	—	$	—	$	—	$	—
Bonds	NAIC 4	—	—		—		—
Bonds	NAIC 5	—	—		—		—
Bonds	NAIC 6	—	—		—		—
Preferred stock	NAIC 3	—	—		—		—
Preferred stock	NAIC 4	—	—		—		—
Preferred stock	NAIC 5	—	—		—		—
Preferred stock	NAIC 6	—	—		—		—
Common stock		2	1		1		—
		2	$	1	$	1	$	—

28

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 6 - INVESTMENTS (continued)

2020
Description	NAIC Designation	Number of Transactions	Book Value of Securities Sold		Cost of Securities Repurchased		Realized Gains (Losses)
Bonds	NAIC 3	—	$	—	$	—	$	—
Bonds	NAIC 4	—	—		—		—
Bonds	NAIC 5	—	—		—		—
Bonds	NAIC 6	—	—		—		—
Preferred stock	NAIC 3	—	—		—		—
Preferred stock	NAIC 4	—	—		—		—
Preferred stock	NAIC 5	—	—		—		—
Preferred stock	NAIC 6	—	—		—		—
Common stock		39	1		1		—
		39	$	1	$	1	$	—

NOTE 7 - DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT

The Company uses derivative instruments to manage interest rate, equity, and currency risk. These derivative instruments include foreign currency and bond forwards, interest rate and equity options, interest rate and equity futures, interest rate, total return, credit default and foreign currency swaps. The Company does not engage in derivative instrument transactions for speculative purposes.

The Company may enter into exchange traded futures and over-the-counter (“OTC”) derivative instruments. Exchange traded derivatives are executed through regulated exchanges and require daily posting of initial and variation margin. The Company is exposed to credit risk resulting from default of the exchange.

OTC derivatives may either be cleared through a clearinghouse (“OTC-cleared”) or transacted between the Company and a counterparty under bilateral agreements (“OTC-bilateral”). Similar to exchange traded futures, OTC-cleared derivatives require initial and daily variation margin collateral postings. When transacting OTC-cleared derivatives, the Company is exposed to credit risk resulting from default of the clearinghouse and/or default of the Futures Commission Merchant (e.g. clearinghouse agent).

When transacting OTC-bilateral derivatives, the Company is exposed to the potential default of its OTC-bilateral counterparty. The Company manages its credit risk by entering into transactions with creditworthy counterparties, using master netting arrangements, and obtaining collateral where appropriate. The Company also deals with a large number of counterparties, thus limiting its exposure to any single counterparty. The Company also has controls in place to monitor credit exposures of OTC-bilateral counterparties by limiting transactions within specified dollar limits and adjusting transaction levels where appropriate, to minimize risk. All of the net credit exposure for the Company from derivatives transactions is with investment-grade counterparties. In addition, certain of the Company's agreements provide that if the Company's (or its counterparty's) credit rating were to fall below a specified credit rating assigned by a credit rating agency, the other party could request immediate payout on all transactions under the agreements. The Company's policy is to not offset amounts for derivatives executed with the same counterparty under the same master netting agreement with the associated collateral.

Collateralization plays a central role in the Company's mitigation of risk related to derivatives. For OTC-cleared and exchange traded derivatives, the Company obtains collateral through variation margin which is adjusted daily based on the parties' net derivative position.

29

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 7 - DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT (continued)

For OTC-bilateral derivatives, the Company obtains collateral in accordance with the terms of credit support annexes (“CSAs”) negotiated as part of the master agreements entered into with most OTC-bilateral counterparties. CSAs define the terms under which collateral is transferred between the parties in order to mitigate credit risk arising from “in the money” derivative positions. The Variation Margin CSA requires that an OTC-bilateral counterparty post collateral to secure its anticipated derivative obligation, taking into account netting arrangements. Under federal regulation that became effective on September 1, 2021, additional margin is required to be posted to and collected from counterparties to OTC-bilateral derivatives to cover market movements over a ten day close-out period. This "initial margin" is documented under its own Initial Margin CSA and amounts posted under the Initial Margin CSA must be maintained at a third-party custodian, without any right of rehypothecation. Cash collateral is invested in short-term investments. Securities posted by the Company as collateral under derivative contracts continue to be reported as assets in the Company's Statutory Statements of Financial Position. Securities received as collateral under derivative contracts are not reported in the Company's Statutory Statements of Financial Position.

The Company may be exposed to credit-related losses in the event that an OTC-bilateral counterparty fails to perform its obligations under its contractual terms. In contractual arrangements with OTC-bilateral counterparties that do not include netting provisions, in the event of default, credit exposure is limited to the positive fair value of derivatives at the reporting date. In contractual arrangements with OTC-bilateral counterparties that include netting provisions, in the event of default, credit exposure is limited to the net fair value, if positive, of all derivatives at the reporting date. At December 31, 2021 and 2020, the Company held collateral for derivatives of $377 million and $201 million, respectively, including $48 million and $28 million, respectively, of securities. Fair value of derivatives in a net asset position, net of collateral, was less than $1 million and $1 million at December 31, 2021 and 2020, respectively.

Interest Rate Risk Management

The Company enters into various types of interest rate derivatives primarily to minimize exposure to fluctuations in interest rates on assets and liabilities held by the Company.

Interest rate swaps are used by the Company to hedge interest rate risk for individual and portfolios of assets. Interest rate swaps are agreements with other parties to exchange, at specified intervals, the difference between interest amounts calculated by reference to an agreed upon notional value. Generally, no cash is exchanged at the onset of the contract and no principal payments are made by either party. The Company does not act as an intermediary or broker in interest rate swaps.

Interest rate (Treasury) futures are used by the Company to manage duration of the Company's fixed income portfolio. Interest rate futures are exchange traded contracts to buy or sell a bond at a specific price at a future date.

Interest rate options are used by the Company to hedge the risk of increasing interest rates on policyholder liabilities. Under these contracts, the Company will receive payments from counterparties should an agreed upon interest rate level be reached and payments will continue to increase under the option contract until an agreed upon interest rate ceiling, if applicable.

Currency Risk Management

The primary purpose of the Company’s foreign currency hedging activities is to protect the value of foreign currency denominated assets from the risk of changes in foreign exchange rates.

Foreign currency swaps are agreements with other parties to exchange, at specified intervals, principal and interest in one currency for the same in another, at a fixed exchange rate, which is generally set at inception and calculated by reference to an agreed upon notional value. Generally, only principal payments are exchanged at the onset and the end of the contract.

Foreign currency forwards involve the exchange of foreign currencies at a specified future date and at a specified price. No cash is exchanged at the time the agreement is entered into.

30

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 7 - DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT (continued)

Equity Risk Management

The Company purchases equity put options and equity futures to minimize exposure to the equity risk associated with guarantees on certain underlying policyholder liabilities. There are upfront fees paid related to option contracts at the time the agreements are entered into.

The Company enters into total return swaps to hedge equity exposure in the general account portfolio.

Replication Transactions

Bond forwards are paired with other investment grade bonds in replication transactions to generate the return and price risk of long-dated fixed income securities.

Credit default swaps are paired with investment grade bonds in replication transactions to generate the return and price risk of long dated corporate bonds.

The following tables present the notional amount, gross fair value and carrying value of derivative instruments that are qualifying and designated for hedge accounting, including replications, by type of hedge designation, and those that are not designated for hedge accounting at December 31, 2021 and 2020 (in millions):

	2021
	Primary Risk Exposure	Notional Amount(1)		Fair Value(2)				Carrying Value(3)
Derivative Type				Asset		Liability		Asset		Liability
Derivatives qualifying and designated:
Cash flow hedges:
Foreign currency swaps	Currency	$	286	$	13	$	9	$	14	$	9
Interest rate swaps	Interest	12		3		—		—		—
Subtotal cash flow hedges		298		16		9		14		9
Replications:
Bond forwards	Interest	1,000		5		39		—		—
Credit default swaps	Interest	50		1		—		1		—
Subtotal replications		1,050		6		39		1		—
Total derivatives qualifying and designated		1,348		22		48		15		9
Derivatives not designated:
Foreign currency forwards	Currency	274		6		—		6		—
Foreign currency swaps	Currency	3,854		313		16		313		16
Futures	Interest	15		—		—		—		—
Equity options	Equity	908		11		—		11		—
Interest rate options	Interest	6,327		16		—		16		—
Interest rate swaps	Interest	2,846		220		—		220		—
Total derivatives not designated		14,224		566		16		566		16
Total derivatives		$	15,572	$	588	$	64	$	581	$	25

(1) Notional amount of derivative instruments provides a measure of involvement in these types of transactions and generally does not represent the amount exchanged between the parties engaged in the transaction.

(2) For a discussion of valuation methods for derivative instruments refer to Note 9 - Fair Value Measurements.

(3) The carrying value of derivatives in an asset position is reported within Other investments and the carrying value of derivatives in a liability position is reported within Other liabilities in the accompanying Statutory Statements of Financial Position.

31

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 7 - DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT (continued)

	2020
	Primary Risk Exposure	Notional Amount(1)		Fair Value(2)				Carrying Value(3)
Derivative Type				Asset		Liability		Asset		Liability
Derivatives qualifying and designated:
Cash flow hedges:
Foreign currency swaps	Currency	$	302	$	11	$	21	$	12	$	18
Interest rate swaps	Interest	12		4		—		—		—
Subtotal cash flow hedges		314		15		21		12		18
Replications:
Bond forwards	Interest	2,335		41		72		—		—
Subtotal replications		2,335		41		72		—		—
Total derivatives qualifying and designated		2,649		56		93		12		18
Derivatives not designated:
Foreign currency forwards	Currency	293		—		13		—		13
Foreign currency swaps	Currency	3,457		224		89		224		89
Futures	Interest	40		—		—		—		—
Equity options	Equity	290		11		—		11		—
Interest rate options	Interest	38,002		18		—		18		—
Interest rate swaps	Interest	2,876		249		1		249		1
Total return swaps	Equity	656		1		74		1		74
Total derivatives not designated		45,614		503		177		503		177
Total derivatives		$	48,263	$	559	$	270	$	515	$	195

(1) Notional amount of derivative instruments provides a measure of involvement in these types of transactions and generally does not represent the amount exchanged between the parties engaged in the transaction.

(2) For a discussion of valuation methods for derivative instruments refer to Note 9 - Fair Value Measurements.

(3) The carrying value of derivatives in an asset position is reported within Other investments and the carrying value of derivatives in a liability position is reported within Other liabilities in the accompanying Statutory Statements of Financial Position.

Derivatives Qualifying and Designated

Cash Flow Hedges

The Company’s cash flow hedges primarily include hedges of floating rate securities and foreign currency denominated assets. Derivative instruments used in cash flow hedges that meet criteria indicating that they are highly effective are valued and reported in a manner that is consistent with the hedged asset.

The Company designates and accounts for the following as qualified cash flow hedges: (1) interest rate swaps used to convert floating rate investments to fixed rate investments; (2) foreign currency swaps used to hedge the foreign currency cash flow exposure of foreign currency denominated investments.

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NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 7 - DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT (continued)

The following table presents the effects of derivatives in cash flow hedging relationships for the years ended December 31, 2021, 2020 and 2019 (in millions):

	Surplus(1)						Net Realized Capital Gains (Losses)						Net Investment Income
Derivative Type	2021		2020		2019		2021		2020		2019		2021		2020		2019
Foreign currency swaps	$	11	$	(12)	$	(12)	$	2	$	—	$	10	$	2	$	2	$	1
Interest rate swaps	—		—		—		—		—		—		1		1		—
Total	$	11	$	(12)	$	(12)	$	2	$	—	$	10	$	3	$	3	$	1

(1) The amount of gain (loss) recognized in surplus is reported as a Change in net unrealized losses on investments in the accompanying Statutory Statements of Changes in Surplus.

Derivatives Replications

The following table presents the effects of derivatives in replication relationships for the years end December 31, 2021, 2020 and 2019 (in millions):

	Gain or (Loss) Recognized in Surplus1						Gain or (Loss) Recognized in Net Realized Capital Gains (Losses)						Gain or (Loss) Recognized in Net Investment Income
Derivative Type	2021		2020		2019		2021		2020		2019		2021		2020		2019
Bond forwards	$	—	$	—	$	—	$	(173)	$	—	$	—	$	19	$	17	$	—

(1) The amount of gain (loss) recognized in surplus is reported as a Change in net unrealized capital losses on investments in the accompanying Statutory Statements of Changes in Surplus.

Derivatives Not Designated

The following table summarizes the surplus and net income impact on derivative instruments not designated for the years ended December 31, 2021, 2020 and 2019 (in millions):

	Surplus(1)						Net Realized Capital Gains (Losses)						Net Investment Income
Derivative Type	2021		2020		2019		2021		2020		2019		2021		2020		2019
Equity options	$	5	$	5	$	(5)	$	(4)	$	—	$	(4)	$	—	$	(4)	$	(7)
Foreign currency forwards	19		(12)		(4)		—		(6)		14		—		—		—
Foreign currency swaps	161		(109)		(16)		(3)		13		36		42		47		46
Futures	—		—		(1)		(87)		—		1		—		—		—
Interest rate options	3		14		(10)		5		(1)		—		(6)		(20)		(21)
Interest rate swaps	(27)		178		103		(4)		(29)		—		22		18		8
Total return swap	73		(73)		—		(147)		—		—		—		—		—
Total	$	234	$	3	$	67	$	(240)	$	(23)	$	47	$	58	$	41	$	26

(1) The amount of gain (loss) recognized in surplus is reported as a Change in net unrealized capital gains on investments in the accompanying Statutory Statements of Changes in Surplus.

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NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 8 - SEPARATE ACCOUNTS

Separate Accounts Activity

The Company utilizes separate accounts to record and account for assets and liabilities for particular lines of business and/or transactions, includingvariable universal life (“VUL”) insurance products guaranteed, VUL insurance products non-guaranteed, variable annuity (“VA”) products non-guaranteed, universal life (“UL”) insurance products guaranteed.

In accordance with the domiciliary state procedures for approving items within the separate accounts, the separate accounts classification of the following items are supported by a specific state statute:

The separate accounts are subject to Section 2932 of the Delaware Insurance Code and the regulations thereunder. Assets of guaranteed separate accounts are invested in accordance with the provisions of Chapter 13 of the Delaware Insurance Code.

All items that were permitted for separate accounts reporting were supported by state statute.

The assets legally and not legally insulated from the general account at December 31, 2021 and 2020 are attributed to the following products/transactions (in millions):

	2021				2020
Product/Transaction	Legally Insulated Assets		Separate Accounts Assets (Not Legally Insulated)(1)		Legally Insulated Assets		Separate Accounts Assets (Not Legally Insulated)(2)
VA products non-guaranteed	$	39,321	$	38	$	34,151	$	35
VUL insurance products non-guaranteed	12,508		22		10,343		5
UL insurance products guaranteed	6,385		33		6,187		38
VUL insurance products guaranteed	169		8		196		6
Total	$	58,383	$	101	$	50,877	$	84

(1) Separate accounts assets classified as not legally insulated support $41 million of remittances and items not allocated and other transfers to the general account due or accrued (net), $21 million of derivatives, $20 million of payable for securities, $5 million of other liabilities and $14 million of surplus.

(2) Separate accounts assets classified as not legally insulated support $35 million of remittances and items not allocated and other transfers to the general account due or accrued (net), $25 million of derivatives, $18 million of payable for securities, $5 million of other liabilities, and $1 million of surplus.

Guaranteed Separate Accounts

The Company maintains four guaranteed separate accounts for universal life insurance policies and one guaranteed separate accounts for a private placement variable universal life policy, with assets of $6,595 million and $6,427 million at December 31, 2021 and 2020, respectively. These accounts provide a guarantee of principal and interest with a market value adjustment imposed upon certain surrenders. A transfer adjustment charge is imposed upon certain transfers. Interest rates on these contracts may be adjusted periodically. The assets of these separate accounts are stated at amortized cost up to the value of policyholder reserves and at fair value thereafter. Certain derivatives not qualifying for hedge accounting are stated at fair value.

Non-Guaranteed Separate Accounts

The Company maintains non-guaranteed separate accounts for its VA and VUL products, some of which are registered with the Securities and Exchange Commission. Assets in non-guaranteed separate accounts were $51,889 million and $44,534 million at December 31, 2021 and 2020, respectively. The assets of these separate accounts represent investments in shares of New York Life sponsored MainStay VP Funds Trust and other non-proprietary insurance-dedicated funds.

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NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 8 - SEPARATE ACCOUNTS (continued)

Certain of these variable contracts have guaranteed minimum death benefit (“GMDB”) and guaranteed minimum accumulation benefit (“GMAB”) features that are guaranteed by the assets of the general account.

To compensate the general account for the risk taken, the separate accounts have paid risk charges as follows for the past five years (in millions):

Year	Amount
2021	$	62
2020	$	57
2019	$	54
2018	$	54
2017	$	51

The general account of the Company made payments toward separate accounts guarantees as follows for the past five years (in millions):

Year	Amount
2021	$	4
2020	$	5
2019	$	3
2018	$	7
2017	$	7

The general account holds reserves on these guarantees. Refer to Note 12 - Insurance Liabilities for discussion of GMAB and GMDB reserves.

Information regarding the separate accounts of the Company for the years ended December 31, 2021 and 2020 was as follows (in millions):

	2021
	Non-Indexed Guarantee Less than / Equal to 4%		Non-Indexed Guarantee More than 4%		Non-Guaranteed Separate Accounts		Total
Premiums, considerations or deposits	$	150	$	—	$	3,908	$	4,058
Reserves at 12/31:
For accounts with assets at:
Fair value	$	—	$	—	$	50,655	$	50,655
Amortized cost	6,034		508		—		6,542
Total reserves	$	6,034	$	508	$	50,655	$	57,197
By withdrawal characteristics:
With fair value adjustment	$	6,034	$	508	$	—	$	6,542
At fair value	—		—		50,655		50,655
Total reserves	$	6,034	$	508	$	50,655	$	57,197

35

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 8 - SEPARATE ACCOUNTS (continued)

	2020
	Non-Indexed Guarantee Less than / Equal to 4%		Non-Indexed Guarantee More than 4%		Non-Guaranteed Separate Accounts		Total
Premiums, considerations or deposits	$	167	$	—	$	2,313	$	2,480
Reserves at 12/31:
For accounts with assets at:
Fair value	$	—	$	—	$	43,491	$	43,491
Amortized cost	5,872		503		—		6,375
Total reserves	$	5,872	$	503	$	43,491	$	49,866
By withdrawal characteristics:
With fair value adjustment	5,872		503		$	—	$	6,375
At fair value	—		—		$	43,491	$	43,491
Total reserves	$	5,872	$	503	$	43,491	$	49,866

The following is a reconciliation of net transfers to (from) the general account to the separate accounts (in millions):

	2021		2020		2019
Transfers to separate accounts	$	4,058	$	2,481	$	3,110
Transfers from separate accounts	(2,211)		(1,771)		(2,412)
Net transfers to (from) separate accounts	$	1,847	$	710	$	698
Reconciling Adjustment:
Change in reserve valuation basis(1)	$	62	$	—	$	—
Net transfers to separate accounts	$	1,909	$	710	$	698

(1) Refer to Note 12 - Insurance liabilities for more details on change in reserve valuation basis.

NOTE 9 - FAIR VALUE MEASUREMENTS

The Company's financial assets and liabilities carried at fair value have been classified, for disclosure purposes, based on a hierarchy defined by SSAP No. 100, "Fair Value Measurements". 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. This guidance establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement.

The levels of the fair value hierarchy are based on the inputs to the valuation as follows:  

Level 1    Fair value is based on unadjusted quoted prices for identical assets or liabilities in an active market. Active markets are defined as a market in which many transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2    Observable inputs other than level 1 prices, such as quoted prices in active markets for similar assets or liabilities; quoted prices in markets that are not active for identical or similar assets or liabilities, or other model driven inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Valuations are generally obtained from third-party pricing services for identical or comparable assets or liabilities or through the use of valuation methodologies using observable market inputs.

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NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 9 - FAIR VALUE MEASUREMENTS (continued)

Level 3    Instruments whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions in pricing the asset or liability. Pricing may also be based upon broker quotes that do not represent an offer to transact. Prices are determined using valuation methodologies such as option pricing models, discounted cash flow models and other similar techniques. Non-binding broker quotes, which are utilized when pricing service information is not available, are reviewed for reasonableness based on the Company’s understanding of the market, and are generally considered Level 3. To the extent the internally developed valuations use significant unobservable inputs, they are classified as Level 3.

Determination of Fair Value

The Company has an established and well-documented process for determining fair value. Security pricing is applied using a hierarchy approach whereby publicly available prices are first sought from nationally recognized third-party pricing services. For most private placement securities, the Company applies a matrix-based pricing methodology, which uses spreads derived from third-party benchmark bond indices. For private placement securities that cannot be priced through these processes, the Company uses internal models and calculations. All other securities are submitted to independent brokers for prices. The Company performs various analyses to ascertain that the prices represent fair value. Examples of procedures performed include, but are not limited to, back testing recent trades, monitoring trading volumes, and performing variance analysis of monthly price changes using different thresholds based on asset type. The Company also performs an annual review of all third-party pricing services. During this review, the Company obtains an understanding of the process and sources used by the pricing service to ensure that they maximize the use of observable inputs, the pricing service’s frequency of updating prices, and the controls that the pricing service uses to ensure that their prices reflect market assumptions. The Company also selects a sample of securities and obtains a more detailed understanding from each pricing service regarding how they derived the price assigned to each security. Where inputs or prices do not reflect market participant assumptions, the Company will challenge these prices and apply different methodologies that will enhance the use of observable inputs and data. The Company may use non-binding broker quotes or internal valuations to support the fair value of securities that go through this formal price challenge process.At December 31, 2021, the Company challenged the price it received from third party pricing services on general account securities with a book value of $14 million and a market value of $15 million. The Company did not have any price challenges on separate account securities for what it received from third party pricing services. At December 31, 2020, the Company did not have any price challenges on general account and separate account securities from what it received from third party pricing services.

In addition, the Company has a pricing committee that provides oversight over the Company’s prices and fair value process for securities. The committee meets quarterly and is responsible for the review and approval of the Company’s valuation procedures. The committee is also responsible for the review of pricing exception reports as well as the review of significant inputs used in the valuation of assets that are valued internally.

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NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 9 - FAIR VALUE MEASUREMENTS (continued)

The following tables present the estimated fair value and carrying amounts of the Company’s financial instruments at December 31, 2021 and 2020 (in millions):

	2021
	Fair Value		Carrying Value		Level 1		Level 2		Level 3		NAV as a Practical Expedient
Assets:
Bonds	$	96,796	$	90,767	$	125	$	93,085	$	3,586	$	—
Preferred stocks	41		41		—		7		34		—
Common stocks(1)	1,594		1,594		1,419		13		74		88
Mortgage loans	14,817		14,315		—		—		14,817		—
Cash, cash equivalents and short-term investments	1,763		1,763		186		1,577		—		—
Derivatives	588		581		—		588		—		—
Derivatives collateral	36		36		—		36		—		—
Other invested assets(1)	413		379		—		138		275		—
Investment income due and accrued	715		715		—		715		—		—
Separate accounts assets	58,840		58,484		50,823		5,773		1,159		1,085
Total assets	$	175,603	$	168,675	$	52,553	$	101,932	$	19,945	$	1,173
Liabilities:
Deposit fund contracts:
Annuities certain	$	1,038	$	1,016	$	—	$	—	$	1,038	$	—
Derivatives	64		25		—		64		—		—
Derivatives collateral	506		506		—		506		—		—
Amounts payable under securities lending agreements	675		675		—		675		—		—
Payable to parent and affiliates	116		116		—		116		—		—
Separate accounts liabilities - derivatives	21		21		—		21		—		—
Total liabilities	$	2,420	$	2,359	$	—	$	1,382	$	1,038	$	—

(1)Excludes investments accounted for under the equity method.

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NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 9 - FAIR VALUE MEASUREMENTS (continued)

	2020
	Fair Value		Carrying Value		Level 1		Level 2		Level 3		NAV as a Practical Expedient
Assets:
Bonds	$	99,422	$	89,887	$	22	$	96,115	$	3,285	$	—
Preferred stocks	21		7		—		—		21		—
Common stocks(1)	1,286		1,286		1,138		5		55		88
Mortgage loans	15,783		14,955		—		—		15,783		—
Cash, cash equivalents and short-term investments	2,799		2,799		270		2,529		—		—
Derivatives	559		515		—		559		—		—
Derivatives collateral	38		38		—		38		—		—
Other invested assets(1)	339		281		—		124		215		—
Investment income due and accrued	731		731		—		731		—		—
Separate accounts assets	51,556		50,961		44,276		5,905		1,079		296
Total assets	$	172,534	$	161,460	$	45,706	$	106,006	$	20,438	$	384
Liabilities:
Deposit fund contracts:
Annuities certain	$	1,126	$	1,084	$	—	$	—	$	1,126	$	—
Derivatives	270		195		—		270		—		—
Derivatives collateral	288		288		—		288		—		—
Amounts payable under securities lending agreements	675		675		—		675		—		—
Separate accounts liabilities - derivatives	26		25		—		25		1		—
Total liabilities	$	2,385	$	2,267	$	—	$	1,258	$	1,127	$	—

(1)Excludes investments accounted for under the equity method.

Bonds

For U.S. SAP, bonds reported as Level 1 represent investments in certain SVO approved ETF and mutual funds, which are SVO-Identified Investments that are eligible for classification as bonds as identified in the NAIC’s SVO Purposes and Procedure Manual. Valuation of these securities is based on unadjusted quoted prices in active markets that are readily and regularly available. All other ETFs and mutual funds are classified and accounted for as common stock.

Securities priced using a pricing service are generally classified as Level 2. The pricing service generally uses an income-based valuation approach by using a discounted cash-flow model or it may also use a market approach by looking at recent trades of a specific security to determine fair value on public securities or a combination of the two. Typical inputs used by these pricing services include, but are not limited to: benchmark yields, reported trades, issuer spreads, bids, offers, benchmark securities, estimated cash flows and prepayment speeds.

Private placement securities are primarily priced using a market approach such as a matrix-based pricing methodology, which uses spreads derived from third-party benchmark bond indices. Specifically, the Barclays Investment Grade Corporate Index is used for investment-grade securities and the Citi High Yield Cash Index is used for below investment-grade securities. These indices are two widely recognized, reliable and well regarded benchmarks by participants in the financial services industry, which represent the broader U.S. public bond markets. The spreads derived from each matrix are adjusted for liquidity. The liquidity premium is standardized and based on market transactions. These securities are classified as Level 2.

39

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 9 - FAIR VALUE MEASUREMENTS (continued)

Certain private placement securities that cannot be priced using the matrix pricing described above, are priced by an internally developed discounted cash flow model or are priced based on internal calculations. The model uses observable inputs with a discount rate based off spreads of comparable public bond issues, adjusted for liquidity, rating and maturity. The Company assigns a credit rating for private placement securities based upon internal analysis. The liquidity premium is usually based on market transactions. These securities are classified as Level 2.

For some of the private placement securities priced through the model, the liquidity adjustments may not be based on market data, but rather, calculated internally. If the impact of the liquidity adjustment, which usually requires the most judgment, is not significant to the overall value of the security, the security is still classified as Level 2. If it is deemed to be significant, the security is classified as Level 3.

The valuation techniques for most Level 3 bonds are generally the same as those described in Level 2. However, if the investments are less liquid or are lightly traded, there is generally less observable market data, and therefore these investments will be classified as Level 3. Circumstances where observable market data are not available may include events such as market illiquidity and credit events related to the security. In addition, certain securities are priced based upon internal valuations using significant unobservable inputs. If a security could not be priced by a third-party vendor or through internal pricing models, broker quotes are received and reviewed by each investment analyst. These inputs may not be observable. Therefore, Level 3 classification is determined to be appropriate.

Included in bonds are affiliated bonds from MCF and NYL Investments. The affiliated bond from MCF had a carrying value of $2,134 million and a fair value of $2,201 million at December 31, 2021, and a carrying value of $2,069 million and a fair value of $2,158 million at December 31, 2020. The fair value of this security is calculated internally and may include inputs that may not be observable and is therefore classified as Level 3. Also included in bonds is an affiliated bond from NYL Investments which had a carrying value of $762 million and fair value of $800 million at December 31, 2021, and a carrying value of $762 million and a fair value of $835 million at December 31, 2020. The fair value of this security is calculated internally using observable inputs and is therefore classified as Level 2.

Preferred Stocks

Preferred stocks valued using prices from third-party pricing services generally use a discounted cash flow model or a market approach to arrive at the security’s fair value and are classified as Level 2. Preferred stocks classified as Level 3 are valued based on internal valuations where significant inputs are deemed to be unobservable.

Common Stocks

These securities are mostly comprised of exchange traded U.S. and foreign common stock and mutual funds. The fair value of these securities is primarily based on unadjusted quoted prices in active markets that are readily and regularly available and are classified as Level 1. Common stocks that do not trade in an active market and are valued based on prices obtained from independent pricing vendors using unadjusted quoted prices in active markets for similar securities that are readily and regularly available are classified as level 2. Common stocks priced through an internal valuation where significant inputs are deemed to be unobservable, including securities issued by government organizations where fair value is fixed, are classified as Level 3. For common stocks that do not have a readily available fair value, NAV is used as a practical expedient.

Mortgage Loans

The estimated fair value of mortgage loans is determined using an income approach, based upon the present value of the expected cash flows discounted at an interpolated treasury yield plus a spread. The spread is based on management’s judgment and assumptions, which takes into account matters such as property type, LTV and remaining term of each loan, etc. The spread is a significant component of the pricing inputs, and therefore, these investments are classified as Level 3.

40

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 9 - FAIR VALUE MEASUREMENTS (continued)

Cash, Cash Equivalents, Short-term Investments and Investment Income Due and Accrued

Cash on hand and money market mutual funds are classified as Level 1. Cash overdrafts (i.e. outstanding checks) are classified as Level 2. Due to the short-term maturities of cash equivalents, short term investments, and investment income due and accrued, carrying value approximates fair value and is classified as Level 2.

Derivatives

The fair value of derivative instruments is generally derived using valuation models that use an income approach, except for derivatives that are exchange-traded, which are valued using quoted prices in an active market. Where valuation models are used, the selection of a particular model depends upon the contractual terms of, and specific risks inherent in the instrument, as well as the availability of pricing information in the market. The Company generally uses similar models to value similar instruments. Valuation model inputs include contractual terms, yield curves, foreign exchange rates, equity prices, credit curves, measures of volatility and other factors. Exchange-traded derivatives are valued using a market approach as fair value is based on quoted prices in active market and are classified as Level 1. OTC derivatives that trade in liquid markets, where model inputs are observable for substantially the full term, are classified as Level 2. Derivatives that are valued based upon models with any significant unobservable market inputs or inputs from less actively traded markets, or where the fair value is solely derived using broker quotations, are classified as Level 3.

Derivatives Collateral

The carrying value of these instruments approximates fair value since these assets and liabilities are generally short-term in nature.

Other Invested Assets

Other invested assets are principally comprised of LIHTC investments, preferred units of a limited partnership, and other investments with characteristics of debt. The fair value of LIHTC investments is derived using an income valuation approach, which is based on a discounted cash flow calculation using a discount rate that is determined internally and therefore classified as Level 3 (refer to Note 6 - Investments for details on LIHTC investments). The fair value of investments with debt characteristics is derived using an income valuation approach, which is based on a discounted cash flow calculation that may or may not use observable inputs and therefore is classified as Level 3. The fair value of the preferred units in a limited partnership is derived internally based on market comparable preferred units and recent transactions by the limited partnership. The valuation technique used required inputs that were both unobservable and significant and therefore classified as Level 3.

Separate Accounts Assets

Separate accounts assets reported as Level 1 in the fair value hierarchy are mostly comprised of ETFs, common stocks and actively traded open-end mutual funds with a daily NAV. The NAV can be observed by redemption and subscription transactions between third parties, or may be obtained from third-party asset managers. Common stocks are generally traded on an exchange. Separate accounts assets reported as Level 2 relate to investments in U.S. government and treasury securities, corporate bonds and mortgage-backed securities. These separate accounts assets are valued and assigned within the fair value hierarchy, consistent with the methodologies described herein for similar financial instruments held within the general account of the Company.

Separate accounts assets reported as Level 3 relate to investments in corporate bonds. These are instruments whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.

41

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 9 - FAIR VALUE MEASUREMENTS (continued)

The following tables provide additional information for investments that are measured at fair value using NAV as a practical expedient, as allowed under authoritative guidance, for investments that meet specified criteria (in millions):

2021
Category of Investment	Investment Strategy	Fair Value Determined using NAV		Unfunded Commitments		Redemption Frequency	Redemption Notice Period
Hedge fund	Multi-strategy	$	1,027	$	—	Monthly, Quarterly, Semi Annually and Annually	180 days or less
Hedge fund	Sector investing	27		—		Monthly	30 days
Hedge fund	Fixed Income Arbitrage	4		—		Quarterly	100 days or less
Hedge fund	Long/short equity	3		—		Monthly	30 days
Private Equity	Venture Capital	24		—		Quarterly	95 days
Mutual Fund	Multi-strategy, Global Allocation	88		—		Quarterly, Weekly	5 days - 45 days (Assets subject to lock up periods)
		$	1,173	$	—

2020
Category of Investment	Investment Strategy	Fair Value Determined using NAV		Unfunded Commitments		Redemption Frequency	Redemption Notice Period
Hedge fund	Multi-strategy	$	265	$	—	Monthly, Quarterly and Semi Annual	180 days or less
Hedge fund	Sector investing	26		—		Monthly	30 days
Hedge fund	Fixed Income Arbitrage	3		—		Quarterly	100 days or less
Hedge fund	Long/short equity	2		—		Monthly	30 days
Mutual funds	Multi-strategy, global allocation	88		—		Quarterly, Weekly	5 days - 45 days (Assets subject to lock up periods)
		$	384	$	—

Annuities Certain

Fair values for annuities certain liabilities are estimated using discounted cash flow calculations based on interest rates currently being offered for similar contracts with maturities consistent with those remaining for the contracts being valued.

Separate Accounts Liabilities – Derivatives

For separate accounts derivative instruments, fair value is determined using the same procedures as the general account disclosed above.

42

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 9 - FAIR VALUE MEASUREMENTS (continued)

The following tables present the balances of assets and liabilities measured at fair value at December 31, 2021 and 2020 (in millions):

	2021
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		NAV as a Practical Expedient		Total
Assets at fair value
Bonds
SVO-identified bond ETF	$	125	$	—	$	—	$	—	$	125
Foreign corporate	—		4		—		—		4
Non-agency ABS	—		—		12		—		12
Total bonds	125		4		12		—		141
Preferred stocks	—		7		34		—		$	41
Common stocks	1,419		13		74		88		1,594
Derivatives	—		566		—		—		566
Separate accounts assets	50,803		2		8		1,085		51,898
Other invested assets	—		—		87		—		87
Total assets at fair value	$	52,347	$	592	$	215	$	1,173	$	54,327
Liabilities at fair value
Derivatives	$	—	$	16	$	—	$	—	$	16
Separate accounts liabilities - derivatives(1)	—		4		—		—		4
Total liabilities at fair value	$	—	$	20	$	—	$	—	$	20

(1) Separate accounts contract holder liabilities are not included in the table as they are reported at contract value and not fair value in the Company’s statutory financial statements.

	2020
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		NAV as a Practical Expedient		Total
Assets at fair value
Bonds
SVO-identified bond ETF	$	22	$	—	$	—	$	—	$	22
U.S. corporate	—		11		—		—		11
Non-agency ABS	—		1		—		—		1
Total bonds	22		12		—		—		34
Common stocks	1,138		5		55		88		1,286
Derivatives	—		503		—		—		503
Separate accounts assets	44,238		1		3		296		44,538
Total assets at fair value	$	45,398	$	521	$	58	$	384	$	46,361
Liabilities at fair value
Derivatives	$	—	$	177	$	—	$	—	$	177
Separate accounts liabilities - derivatives(1)	—		8		—		—		8
Total liabilities at fair value	$	—	$	185	$	—	$	—	$	185

(1) Separate accounts contract holder liabilities are not included in the table as they are reported at contract value and not fair value in the Company’s statutory financial statements.

43

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 9 - FAIR VALUE MEASUREMENTS (continued)

The tables below present a reconciliation of Level 3 assets and liabilities for the years ended December 31, 2021 and 2020 (in millions):

	2021
	Balance at 1/1		Transfers into Level 3		Transfers out of Level 3		Total Gains (Losses) Included in Net Income		Total Gains (Losses) Included in Surplus		Purchases		Issuances		Sales		Settlements		Balance at 12/31
Bonds:
U.S. corporate	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Non-agency ABS	—		11		—		(1)		(1)		3		—		—		—		12
Total bonds	—		11		—		(1)		(1)		3		—		—		—		12
Preferred Stocks			5		—		—		29		—		—		—		—		34
Common stocks	55		—		(4)		30		17		7		—		(31)		—		74
Derivatives	—		—		—		(6)		6		—		—		—		—		—
Separate accounts assets	3		—		—		2		3		—		—		—		—		8
Other invested assets	—		87		—		—		—		—		—		—		—		87
Total	$	58	$	103	$	(4)	$	25	$	54	$	10	$	—	$	(31)	$	—	$	215

	2020
	Balance at 1/1		Transfers into Level 3		Transfers out of Level 3		Total Gains (Losses) Included in Net Income		Total Gains (Losses) Included in Surplus		Purchases		Issuances		Sales		Settlements		Balance at 12/31
Bonds:
U.S. corporate	$	14	$	1	$	(14)	$	—	$	(1)	$	—	$	—	$	—	$	—	$	—
Non-agency ABS	2		—		(2)		—		—		—		—		—		—		—
Total bonds	16		1		(16)		—		(1)		—		—		—		—		—
Common stocks	40		—		(2)		1		13		12		—		(9)		—		55
Derivatives	1		—		—		(20)		19		—		—		—		—		—
Separate accounts assets	1		—		(1)		(1)		2		2		—		—		—		3
Total	$	58	$	1	$	(19)	$	(20)	$	33	$	14	$	—	$	(9)	$	—	$	58

Transfers Between Levels

Transfers between levels may occur due to changes in valuation sources, or changes in the availability of market observable inputs, which generally are caused by changes in market conditions such as liquidity, trading volume or bid-ask spreads, or as a result of a security measured at amortized cost at the beginning of the period, but measured at estimated fair value at the end of the period, or vice versa due to a ratings downgrade or upgrade.

Transfers into and out of Level 3

The Company’s basis for transferring assets and liabilities into and out of Level 3 is based on changes in the observability of data, a change in the security’s measurement.

Transfers into Level 3 totaled $103 million for the year ended December 31, 2021, which primarily relates to Stone Ridge Holdings Group preferred shares in other invested assets of $87 million and perpetual preferred stocks of $5 million which both are measured at fair value effective 2021, and $11 million of non-agency asset-backed securities that were measured at amortized cost at the beginning of the period and measured at fair value at the end of the period. Transfers out of Level 3 totaled$4 million for the year ended December 31, 2021, which primarily relates to common stock securities that had level changes due to the use of a quoted price in an active market.

44

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 9 - FAIR VALUE MEASUREMENTS (continued)

Transfers into Level 3 were less than $1 million for the year ended December 31, 2020, which relates to a U.S. Corporate security that was measured at amortized cost at the beginning of the period and measured at fair value at the end of the period. Transfers out of Level 3 totaled $19 million for the year ended December 31, 2020, which primarily relates to $14 million of U.S. Corporate securities and $2 million of non-agency asset-backed securities that were measured at fair value at the beginning of the period and measured at amortized cost at the end of the period and $2 million of common stock securities that had a level change due to the use of a quoted price in an active market.

There were no liabilities measured at fair value at December 31, 2021 and 2020.

NOTE 10 - INVESTMENT INCOME AND CAPITAL GAINS AND LOSSES

The components of Net investment income for the years ended December 31, 2021, 2020, and 2019 were as follows (in millions):

	2021		2020		2019
Bonds	$	3,319	$	3,364	$	3,454
Common stocks - unaffiliated	32		25		37
Mortgage loans	632		622		671
Policy loans	64		46		54
Other invested assets1	197		106		125
Short-term investments	2		11		36
Derivative instruments	80		61		28
Gross investment income	4,326		4,235		4,405
Investment expenses	(169)		(171)		(178)
Net investment income	4,157		4,064		4,227
Net gain from separate accounts	56		44		47
Amortization of IMR	48		32		26
Net investment income, including net gain from separate accounts and amortization of IMR	$	4,261	$	4,140	$	4,300

(1) Includes real estate net investment income of $11 million, $14 million, and $9 million for the years ended December 31, 2021, 2020, and 2019, respectively.

Due and accrued investment income is excluded from surplus when amounts are over 90 days past due or collection is uncertain. At December 31, 2021 there was no due and accrued investment income that was nonadmitted on bonds and less than $1 million at December 31, 2020.

The following table shows the Company's securities redeemed or otherwise disposed of as a result of a callable feature (including make whole call provisions) or tender and the amount of investment income generated as a result of a prepayment and/or acceleration fee ($ in millions):

	2021				2020				2019
	General Account(1)		Separate Account		General Account(1)		Separate Account		General Account(1)		Separate Account
Number of cusips	302		177		245		134		$	166	$	108
Investment income	$	137	$	8	$	87	$	5	$	48	$	3

(1) Included in the net investment income on bonds. Refer to net investment income table above.

45

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 10 - INVESTMENT INCOME AND CAPITAL GAINS AND LOSSES (continued)

For the years ended December 31, 2021, 2020, and 2019, net realized capital gains (losses) were as follows (in millions):

	2021		2020		2019
Bonds	$	160	$	24	$	(56)
Mortgage loans	4		(84)		—
Common stocks - unaffiliated	73		50		18
Other invested assets	(9)		(19)		(17)
Derivatives	(408)		(23)		57
Net realized capital (losses) gains before tax and transfers to the IMR	(180)		(52)		2
Less:
Capital gains tax expense	47		62		3
Net realized capital (losses) gains after tax transferred to IMR	(70)		63		19
Net realized capital losses after tax and transfers to the IMR	$	(157)	$	(177)	$	(20)

Proceeds from investments in bonds sold were $1,857 million, $2,460 million, and $1,224 million for the years ended December 31, 2021, 2020, and 2019, respectively. Gross gains of $169 million, $170 million, and $44 million in 2021, 2020 and 2019 respectively, and gross losses of $26 million, $19 million, and $16 million in 2021, 2020, and 2019, respectively, were realized on these sales. The Company computes gains and losses on sales under the specific identification method.

The following table provides a summary of OTTI losses included as realized capital losses for the years ended December 31, 2021, 2020 and 2019 (in millions):

	2021		2020		2019
Bonds	$	23	$	129	$	54
Common and preferred stocks	3		17		4
Other invested assets	6		19		19
Mortgage Loans	—		84		—
Total	$	32	$	249	$	77

Refer to Note 19 - Loan-Backed and Structured Security Impairments for a list with each loan-backed and structured security at a CUSIP level where the present value of cash flows expected to be collected is less than the amortized cost basis during the current reporting period.

46

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 10 - INVESTMENT INCOME AND CAPITAL GAINS AND LOSSES (continued)

The following tables present the Company’s gross unrealized losses and fair values for bonds and equity securities aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at December 31, 2021 and 2020 (in millions):

	2021
	Less than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses(1)
Bonds
U.S. governments	$	2,027	$	70	$	280	$	22	$	2,307	$	92
All other governments	61		1		—		—		61		1
U.S. Special Revenue and Special Assessment	893		17		131		5		1,024		22
Industrial and miscellaneous unaffiliated	11,944		214		1,501		56		13,445		270
Parent, subsidiaries, and affiliates	—		—		157		5		157		5
Total bonds	14,925		302		2,069		88		16,994		390
Equity securities (unaffiliated)
Common stocks	226		9		—		—		226		9
Preferred stocks	—		—		—		—		—		—
Total equity securities	226		9		—		—		226		9
Total	$	15,151	$	311	$	2,069	$	88	$	17,220	$	399

(1) Includes unrealized losses related to NAIC 6 bonds of $1 million included in the statutory carrying amount.

	2020
	Less than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses(1)
Bonds
U.S. governments	$	325	$	3	$	9	$	—	$	334	$	3
All other governments	—		—		—		—		—		—
U.S. special revenue and special assessment	270		2		6		—		276		2
Industrial and miscellaneous unaffiliated	3,773		142		1,847		37		5,620		179
Parent, Subsidiaries, and affiliates	161		1		—		—		161		1
Total bonds	4,529		148		1,862		37		6,391		185
Equity securities (unaffiliated)
Common stocks	126		7		—		—		126		7
Total equity securities	126		7		—		—		126		7
Total	$	4,655	$	155	$	1,862	$	37	$	6,517	$	192

(1)Includes unrealized losses of $1 million related to NAIC 6 bonds included in the statutory carrying amount.

At December 31, 2021, the gross unrealized loss on bonds and equity securities was comprised of approximately 2,606 and 356 different securities, respectively, which are included in the table above. Of the total amount of bond unrealized losses, $343 million or 88% is related to unrealized losses on investment grade securities and $47 million or 12% is related to below investment grade securities. At December 31, 2020, the gross unrealized loss on bonds and equity securities was comprised of approximately 1,039 and 450 different securities, respectively, which are included in the table above. Of the total amount of bond unrealized losses, $132 million, or 72%, is related to unrealized losses on investment grade securities and $53 million, or 28%, is related to below investment grade securities. Investment grade is defined as a security having a credit rating from the NAIC of 1 or 2; a rating of Aaa, Aa, A or Baa from Moody’s or a rating of AAA, AA, A or BBB from Standard & Poor's; or a comparable internal rating if an externally provided rating is not available.

47

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 10 - INVESTMENT INCOME AND CAPITAL GAINS AND LOSSES (continued)

The amount of gross unrealized losses for bonds where fair value had declined by 20% or more of the amortized cost, totaled $21 million. The period of time that each of these securities has continuously been below amortized cost by 20% or more consists of $19 million for six months or less, $1 million for greater than six months through 12 months, and $2 million for greater than 12 months. In accordance with the Company's impairment policy, the Company performed quantitative and qualitative analysis to determine if the decline was temporary. For those securities where the decline was considered temporary, the Company did not recognize an impairment when it had the ability and intent to hold until recovery.

The change in unrealized capital gains (losses) for the years ended December 31, 2021 and 2020 were as follows (in millions):

	Change in Unrealized Gains (Losses)						Change in Unrealized Foreign Exchange Gains (Losses)						Total Change in Unrealized Gains (Losses)
	2021		2020		2019		2021		2020		2019		2021		2020		2019
Bonds	$	(2)	$	(2)	$	6	$	(113)	$	192	$	106	$	(115)	$	190	$	112
Preferred Stocks	17		—		—		—		—		—		17		—		—
Common stocks unaffiliated	231		60		240		(18)		23		(2)		213		83		238
Common stocks affiliated	—		—		—		—		—		—		—		—		—
Mortgage loans	(3)		17		(17)		—		—		—		(3)		17		(17)
Other invested assets	345		(18)		90		—		3		(4)		345		(15)		86
Cash, cash equivalents and short-term investments	—		—		—		—		1		1		—		1		1
Derivatives	244		(8)		56		—		—		—		244		(8)		56
Aggregate write-ins	—		—		—		—		—		—		—		—		—
Total change in unrealized on investments	832		49		375		(131)		219		101		701		268		476
Capital gains tax (benefit) expense	(112)		(62)		(90)		—		—		—		(112)		(62)		(90)
Total change in unrealized gains (losses), net of tax	$	720	$	(13)	$	285	$	(131)	$	219	$	101	$	589	$	206	$	386

NOTE 11 - RELATED PARTY TRANSACTIONS

Capital Contributions

For the years ended December 31, 2021 and 2020, the Company made capital contributions to MCF of $66 million and $72 million, respectively. The Company did not make any capital contributions to MCF in 2019.

Dividend Distributions

For the years ended December 31, 2021 and 2020, the Company paid a dividend to its parent company, New York Life, in the amount of $942 million and $932 million, respectively. The Company did not pay a dividend to New York Life in 2019.

For the years ended December 31, 2021, 2020 and 2019, the Company received dividend distributions from MCF of $137 million, $65 million and $99 million, respectively.

48

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 11 - RELATED PARTY TRANSACTIONS (continued)

Material Transactions

The following table presents material related party transactions between the Company, its parent, and its affiliates, for the years ended December 31, 2021 and 2020:

Date of Transaction	Name of Related Party	Nature of Relationship	Type of Transaction	Description
Loans and Credit Agreements:
12/31/2015	MCF	Non-insurance affiliate	Note funding agreement	The Company and New York Life entered into a note funding agreement with MCF (as amended from time to time, the ("MCF Note Agreement") and acquired a variable funding note issued by MCF. The funding limit is determined using 2.25% multiplied by the cash and invested assets amount, as of such date of determination. Cash and invested assets amount means, as of any date of determination, the sum of (x) the net admitted cash and invested assets of the Company (y) the net admitted cash and invested assets of New York Life (excluding any portion thereof attributable to New York Life's investment in the Company), in each case, based on the most recently available quarterly or annual financial statements of New York Life or the Company, as applicable. All outstanding advances made to MCF under the MCF Note Agreement will be due in full on December 31, 2025.
12/23/2004 (amended as of 6/5/2020)	New York Life Capital Corporation ("NYLCC")	Non-insurance affiliate	Credit agreement	NYLCC has agreed to make loans to the Company in an amount up to, but not exceeding, $750 million from proceeds from the issuance of commercial paper. During 2021 and 2020, the credit facility was not used, no interest was paid and no outstanding balance was due.
9/30/1993 (amended from time to time)	New York Life	Parent	Credit agreement	The Company has a credit agreement with New York Life whereby the Company may borrow in the amount of up to $750 million. At December 31, 2021 and 2020, the Company has not borrowed under this agreement.
4/1/1999 (amended as of 6/5/2020)	New York Life	Parent	Credit agreement	The Company entered into an amended and restated credit agreement with New York Life, amended June 5, 2020, whereby the Company may lend in the amount of up to $750 million. During 2021 the Company lent and was repaid a $600 million loan to New York Life. The loan was only outstanding for a few days, $3,288 interest was received and there was no outstanding balance due. During 2020, the credit facility was not used, no interest was paid and no outstanding balance was due.
Service Agreements:
4/27/2006 (amended from time to time	NYLIFE Distributors, LLC.	Non-insurance affiliate	Variable product distribution agreement	The Company has appointed NYLIFE Distributors, LLC as the underwriter and/or wholesale distributor of the Company's variable products. For the years ended December 31, 2021, 2020 and 2019, the Company received service fees of $50 million, $44 million and $45 million, respectively, under a 12b-1 Plan Services Agreement, in consideration for providing 12b-1 Plan services attributable to the variable products.
Amended and restated at 5/29/2009	New York Life	Parent	Administration agreement	New York Life provides the Company with certain services and facilities including, but not limited to accounting, tax and auditing services, legal services, actuarial services, electronic data processing operations and communications operations. New York Life charges the Company for the identified costs associated with these services and facilities under the terms of a service agreement between New York Life and the Company.For the years ended December 31, 2021, 2020 and 2019, the fees incurred associated with these services and facilities, amounted to $862 million, $827 million and $875 million, respectively, and are reflected in Operating expenses and Net investment income in the accompanying Statutory Statements of Operations.
Various	New York Life	Parent	Participation in mortgage loans, Real estate owned and real estate	The Company's interests in commercial mortgage loans and certain real estate investments are primarily held in the form of participations originated or acquired by New York Life.
1/1/2005,(amended 3/28/2014)	New York Life Investment Management LLC ("NYLIM")	Non-insurance affiliate	Administrative service agreement	NYLIM has a management agreement with the MainStay VP Funds Trust (“the Fund”), a registered investment company whose shares are sold to various separate accounts of the Company. Under the terms of the agreement, NYLIM pays the Company administrative fees for providing services to the Fund.

49

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 11 - RELATED PARTY TRANSACTIONS (continued)

Date of Transaction	Name of Related Party	Nature of Relationship	Type of Transaction	Description
4/1/2000, as amended from time to time	NYL Investors, LLC	Non-insurance affiliate	Investment advisory agreement	The Company is a party to an investment advisory agreement with NYL Investors, LLC, as amended from time to time, to receive investment advisory and administrative services from NYL Investors, LLC. The payments are required to be made within 90 days from the time of billing.
Other Agreements:
Various	New York Life	Parent	Sale of corporate owned life insurance policies ("COLI")	The Company sold various COLI policies to New York Life for the purpose of informally funding certain benefits for New York Life employees and agents. These policies were issued on the same terms as policies sold to unrelated customers. At December 31, 2021 and 2020, policyholder reserve balances for these policies amounted to $4,309 million and $4,192 million, respectively, and were included in Policy reserves and Separate accounts liabilities in the accompanying Statutory Statements of Financial Position.
10/5/2017	REEP-OFC 2300 Empire LLC / Retreat at Seven Bridges	Non-insurance affiliate	Mortgage loan in real estate	In connection with the acquisition of an office building by REEP-OFC 2300 Empire LLC and a pledge of an unleveraged equity interest in the owner of Retreat at Seven Bridges, an existing multifamily property, the Company provided a first mortgage loan to REEP-OFC 2300 Empire LLC and REEP-MF Woodridge IL LLC.
6/11/2012	New York Life	Parent	Tenancy in common agreement	In connection with a $150 million land acquisition of a fee simple estate in land underlying an office building and related improvements and encumbered by a ground lease located at 1372 Broadway, New York, NY by New York Life (73.8% interest) and the Company (26.2% interest), the Company and New York Life entered into a Tenancy in Common Agreement in which the agreement sets forth the terms that govern, in part, each entity's interest in the property.
Various	New York Life	Parent	Structured settlement agreements	The Company has sold certain annuity contracts to New York Life in order that New York Life may satisfy its third-party obligations under certain structured settlement agreements. The Company has been directed by New York Life to make the payments under the annuity contracts directly to the beneficiaries under these structured settlement agreements. At December 31, 2021 and 2020, the policyholder reserves related to these contracts amounted to $146 million and $145 million, respectively, and are included in Policy reserves in the accompanying Statutory Statements of Financial Position.
Various	New York Life	Parent	Structured settlement agreements	The Company is the assumed obligor for certain structured settlement agreements with unaffiliated insurance companies, beneficiaries and other non-affiliated entities. To satisfy its obligations under these agreements, the Company owns all rights, title and interest in and to certain structured settlement annuity contracts issued by New York Life. The obligations are based upon the actuarially determined present value of expected future payments. Interest rates used in establishing such obligations ranged from 3.50% to 7.65%. The Company has directed New York Life to make the payments under the annuity contracts directly to the beneficiaries under the structured settlement agreements. At December 31, 2021 and 2020, the carrying value of the interest in annuity contracts and the corresponding obligations under structured settlement agreements amounted to $9,875 million and $9,537 million, respectively.
Significant Transactions:
10/15/2020	NYL Investments	Non-insurance affiliate	Purchase of bond investment	The Company owns a bond issued by NYL Investments with a carrying value of $600 million. On October 15, 2020, the Company purchased this note from New York Life for $608 million, and includes principal and accrued interest.
11/23/2020	NYL Investments	Non-insurance affiliate	Initial funding of a second bond investment	The company funded a bond from NYL Investments for $162 million

At December 31, 2021 and 2020, the Company reported a net amount of $90 million and $76 million, respectively, as amounts payable to parent and affiliates. The terms of the underlying agreements generally require that these amounts be settled in cash within 90 days.

In the ordinary course of business, the Company enters into reinsurance agreements with its parent and affiliates. Material reinsurance agreements have been disclosed in Note 13 – Reinsurance. In addition, the Company may enter into guarantees and/or keep wells with its parent and affiliates. Material guarantee agreements and/ or keep wells have been disclosed in Note 15 – Commitments and Contingencies.

50

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 12 - INSURANCE LIABILITIES

Insurance liabilities at December 31, 2021 and 2020 were as follows (in millions):

	2021		2020
Life insurance reserves	$	29,248	$	28,516
Annuity reserves and supplementary contracts with life contingencies	70,698		71,410
Asset adequacy and special reserves	26		29
Total policy reserves	99,972		99,955
Deposit funds	1,482		1,524
Policy claims	1,062		326
Total insurance liabilities	$	102,516	$	101,805

Life Insurance Reserves

Reserves for life insurance policies are maintained principally using the 1958 Commissioners’ Extended Term Mortality Table and the 1958, 1980, 2001 and 2017 Commissioners’ Standard Ordinary Mortality Tables under the Commissioners’ Reserve Valuation ("CRVM") Method or Net Level Premium Reserve Method with valuation interest rates ranging from 3.0% to 6.0%. Reserves for universal life secondary guarantee products are determined under the Actuarial Guideline XXXVIII methodology. Reserves for policies issued in 2020 and later were determined based on principle-based standards as set forth in the NAIC Valuation Manual.

In 2021, the DSID granted approval for the Company to change the valuation basis for reserves for certain blocks of life insurance policies from the minimum statutory reserve standard required under either New York or Washington law to the NAIC valuation basis. The Company recorded a net change in reserve valuation basis of $536 million for the year ended December 31, 2021, which was reported as a direct increase in surplus in the accompanying Statutory Statements of Changes in Surplus. For the year ended December 31, 2020, there were no changes in reserve basis for life insurance reserves.

The Company has established policy reserves on contracts issued January 1, 2001 and later that exceed the minimum amounts determined under Appendix A-820, “Minimum Life and Annuity Reserve Standards” of NAIC SAP by approximately $48 million and $195 million at December 31, 2021 and 2020, respectively.

At December 31, 2021 and 2020, the Company’s liabilities for GMDB reserves, which are associated with certain variable life products, amounted to $9 million and $11 million, respectively, and were recorded in Policy reserves in the accompanying Statutory Statements of Financial Position.

Surrender values are promised in excess of life reserves on certain policies. This excess is included as part of miscellaneous reserves. No surrender values are promised in excess of any other reserves. Additional reserves are held on account of anticipated extra mortality for policies subject to extra premiums.

At December 31, 2021 and 2020, the Company had $10,736 million and $15,766 million, respectively, of insurance in-force for which the gross premiums were less than the net premiums according to the standard of valuation set by the State of Delaware.

The tabular interest has been determined by formula as described in the NAIC instructions except for certain universal life products for which tabular interest has been determined from the basic data for the calculation of policy reserves. The tabular less actual reserves 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.

51

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 12 - INSURANCE LIABILITIES (continued)

Annuity Reserves and Supplementary Contracts with Life Contingencies

Reserves for single premium immediate annuities, guaranteed future income annuities, and supplementary contracts involving life contingencies purchased prior to 2018 are based principally on 1983 Table A, A2000, 2012 IAR table and CARVM, with assumed interest rates ranging from 3.8% to 6.0%. Purchases in 2018 and later years are reserved with valuation interest rates satisfying both the valuation manual requirements for maximum valuation interest rates for income annuities ("VM-22") and the New York State Department of Financial Services ("NYSDFS") Regulation 213 maximum valuation rate requirements, applying the 2012 IAR Table. The VM-22 rates range from 1.00% to 4.00%. 

Reserves for fixed deferred annuities are based principally on 1971 Individual Annuity Mortality, 1983 Table A, A2000, 2012 IAR and CARVM, with assumed interest rates ranging from 3.0% to 10.0%. Reserves for variable deferred annuities are based principally on VM-21 and NYSDFS Regulation 213, with assumed interest rates ranging from 3% to 8.25%. For the index-linked account corresponding to a variable annuity product, we also apply Actuarial Guideline XXXV. Generally, owners of the Company’s deferred annuities are able, at their discretion, to withdraw funds from their policies. The withdrawals in excess of the surrender charge-free withdrawal amount may be subject to surrender charges in the early years.

At December 31, 2021 and 2020, the Company’s liabilities for GMDB, GMAB, GFIB, and EBB reserves, which are associated with variable annuity products, amounted to $26 million and $29 million, respectively, and were recorded in Policy reserves in the accompanying Statutory Statements of Financial Position.

The Company recorded a $16 million increase in reserves for annuities as a change in valuation basis in 2020, which was reported as a direct reduction in surplus in the accompanying Statutory Statements of Changes in Surplus.

The tabular interest has been determined by formula as described in the NAIC instructions except for individual deferred annuities for which tabular interest has been determined from the basic data for the calculation of policy reserves. The tabular less actual reserves 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.

Deposit Funds

Deposit funds at December 31, 2021 and 2020 were as follows (in millions):

	2021		2020
Fixed period annuities	$	1,016	$	1,084
Supplemental contracts without life contingencies	449		410
Continued interest accounts	17		30
Total deposit funds	$	1,482	$	1,524

52

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 12 - INSURANCE LIABILITIES (continued)

Withdrawal Characteristics of Annuity Reserves and Deposit Funds

Thefollowing table reflects the withdrawal characteristics of annuity reserves and deposit fund liabilities at December 31, 2021 and 2020 ($ in millions):

Individual Annuities

	2021
	General Account		Separate Accounts with Guarantees		Separate Accounts Non-guaranteed		Total		% of Total
Subject to discretionary withdrawal:
With fair value adjustment	$	26,804	$	—	$	—	$	26,804	25	%
At book value less current surrender charge of 5% or more	6,168		—		—		6,168		6
At fair value	—		—		38,294		38,294		35
Total with adjustment or at fair value	32,972		—		38,294		71,266		66
At book value without adjustment	20,486		—		—		20,486		19
Not subject to discretionary withdrawal	16,687		—		—		16,687		15
Total	$	70,145	$	—	$	38,294	$	108,439	100	%
Amount with current surrender charge of 5% or more that will have less than a 5% surrender charge in the following year	$	498	$	—	$	—	$	498

	2020
	General Account		Separate Accounts with Guarantees		Separate Accounts Non-guaranteed		Total		% of Total
Subject to discretionary withdrawal:
With fair value adjustment	$	28,061	$	—	$	—	$	28,061	27	%
At book value less current surrender charge of 5% or more	6,969		—		—		6,969		7
At fair value	—		—		33,216		33,216		32
Total with adjustment or at fair value	35,030		—		33,216		68,246		66
At book value without adjustment	19,716		—		—		19,716		19
Not subject to discretionary withdrawal	16,045		—		—		16,045		15
Total	$	70,791	$	—	$	33,216	$	104,007	100	%
Amount with current surrender charge of 5% or more that will have less than a 5% surrender charge in the following year	$	932	$	—	$	—	$	932

53

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NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 12 - INSURANCE LIABILITIES (continued)

Group Annuities

	2021
	General Account		Separate Accounts with Guarantees		Separate Accounts Non-guaranteed		Total		% of Total
Subject to discretionary withdrawal:
With fair value adjustment	$	43	$	—	$	—	$	43	8	%
At book value less current surrender charge of 5% or more	—		—		—		—		—
At fair value	—		—		—		—		—
Total with adjustment or at fair value	43		—		—		43		8
At book value without adjustment	40		—		—		40		7
Not subject to discretionary withdrawal	469		—		—		469		85
Total	$	552	$	—	$	—	$	552	100	%
Amount with current surrender charge of 5% or more that will have less than a 5% surrender charge in the following year	$	—	$	—	$	—	$	—

	2020
	General Account		Separate Accounts with Guarantees		Separate Accounts Non-guaranteed		Total		% of Total
Subject to discretionary withdrawal:
With fair value adjustment	$	57	$	—	$	—	$	57	9	%
At book value less current surrender charge of 5% or more	—		—		—		—		—
At fair value	—		—		—		—		—
Total with adjustment or at fair value	57		—		—		57		9
At book value without adjustment	44		—		—		44		7
Not subject to discretionary withdrawal	518		—		—		518		84
Total	$	619	$	—	$	—	$	619	100	%
Amount with current surrender charge of 5% or more that will have less than a 5% surrender charge in the following year	$	—	$	—	$	—	$	—

54

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 12 - INSURANCE LIABILITIES (continued)

Deposit-Type Contracts

	2021
	General Account		Separate Accounts with Guarantees		Separate Accounts Non-guaranteed		Total		% of Total
Subject to discretionary withdrawal:
With fair value adjustment	$	—	$	—	$	—	$	—	—	%
At book value less current surrender charge of 5% or more	—		—		—		—		—
At fair value	—		—		—		—		—
Total with adjustment or at fair value	—		—		—		—		—
At book value without adjustment	288		—		—		288		19
Not subject to discretionary withdrawal	1,194		—		—		1,194		81
Total	$	1,482	$	—	$	—	$	1,482	100	%
Amount with current surrender charge of 5% or more that will have less than a 5% surrender charge in the following year	$	—	$	—	$	—	$	—

	2020
	General Account		Separate Accounts with Guarantees		Separate Accounts Non-guaranteed		Total		% of Total
Subject to discretionary withdrawal:
With fair value adjustment	$	—	$	—	$	—	$	—	—	%
At book value less current surrender charge of 5% or more	—		—		—		—		—
At fair value	—		—		—		—		—
Total with adjustment or at fair value	—		—		—		—		—
At book value without adjustment	258		—		—		258		17
Not subject to discretionary withdrawal	1,255		—		—		1,255		83
Total	$	1,513	$	—	$	—	$	1,513	100	%
Amount with current surrender charge of 5% or more that will have less than a 5% surrender charge in the following year	$	—	$	—	$	—	$	—

55

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 12 - INSURANCE LIABILITIES (continued)

Withdrawal Characteristics of Life Insurance Reserves

The following tables reflect the withdrawal characteristics of life insurance reserves at December 31, 2021 and 2020 ($ in millions):

	2021
	General Account						Separate Accounts Guaranteed and Non-guaranteed
	Account Value		Cash Value		Reserve		Account Value		Cash Value		Reserve
Subject to discretionary withdrawal, surrender, or policy loans:
Term policies with cash value	$	—	$	—	$	—	$	—	$	—	$	—
Universal life	19,248		19,570		19,393		6,373		6,373		6,373
Universal life with secondary guarantees	5,561		4,921		8,411		—		—		—
Indexed universal life	—		—		—		—		—		—
Indexed universal life with secondary guarantees	—		—		—		—		—		—
Indexed life	—		—		—		—		—		—
Other permanent cash value life insurance	—		—		—		—		—		—
Variable life	11		11		16		66		66		66
Variable universal life	1,734		1,729		1,478		10,277		10,121		12,463
Miscellaneous reserves	—		—		—		—		—		—
Not subject to discretionary withdrawal or no cash values:
Term policies without cash value	—		—		—		—		—		—
Accidental death benefits	—		—		—		—		—		—
Disability - active lives	—		—		2		—		—		—
Disability - disabled lives	—		—		74		—		—		—
Miscellaneous reserves	—		—		628		—		—		—
Total life insurance (gross)	26,554		26,231		30,002		16,716		16,560		18,902
Reinsurance ceded	—		—		754		—		—		—
Total life insurance (net)	$	26,554	$	26,231	$	29,248	$	16,716	$	16,560	$	18,902

56

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 12 - INSURANCE LIABILITIES (continued)

	2020
	General Account						Separate Accounts Guaranteed and Non-guaranteed
	Account Value		Cash Value		Reserve		Account Value		Cash Value		Reserve
Subject to discretionary withdrawal, surrender, or policy loans:
Term policies with cash value	$	—	$	—	$	—	$	—	$	—	$	—
Universal life	18,749		18,909		18,215		6,178		6,178		6,178
Universal life with secondary guarantees	5,351		4,659		8,224		—		—		—
Indexed universal life	—		—		—		—		—		—
Indexed universal life with secondary guarantees	—		—		—		—		—		—
Indexed life	—		—		—		—		—		—
Other permanent cash value life insurance	—		—		—		—		—		—
Variable life	11		11		16		57		57		57
Variable universal life	1,731		1,729		1,726		10,482		10,326		10,416
Miscellaneous reserves	—		—		—		—		—		—
Not subject to discretionary withdrawal or no cash values:
Term policies without cash value	—		—		—		—		—		—
Accidental death benefits	—		—		—		—		—		—
Disability - active lives	—		—		2		—		—		—
Disability - disabled lives	—		—		74		—		—		—
Miscellaneous reserves	—		—		862		—		—		—
Total life insurance (gross)	25,842		25,308		29,119		16,717		16,561		16,651
Reinsurance ceded	—		—		603		—		—		—
Total life insurance (net)	$	25,842	$	25,308	$	28,516	$	16,717	$	16,561	$	16,651

57

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 13 - REINSURANCE

The effects of reinsurance on the accompanying Statutory Statements of Financial Position at December 31, 2021 and 2020 were as follows (in millions):

	2021		2020
Policy reserves:
Direct	$	100,726	$	100,558
Assumed	—		—
Ceded	(754)		(603)
Policy reserves	$	99,972	$	99,955
Policy claims:
Direct	$	525	$	443
Assumed	687		4
Ceded(1)	(150)		(121)
Policy claims	$	1,062	$	326
Reinsurance recoverable(2)	$	71	$	54

(1) Includes reinsurance recoverable related to unpaid losses of $100 million and $68 million at December 31, 2021 and 2020, respectively.

(2) Included in Other assets in the accompanying Statutory Statements of Financial Position.

The effects of reinsurance on the accompanying Statutory Statements of Operations for the years ended December 31, 2021, 2020 and 2019 were as follows (in millions):

	2021		2020		2019
Premiums:
Direct(1)	$	13,461	$	13,200	$	13,856
Assumed	1,090		5		5
Ceded	(539)		(548)		(517)
Premiums	$	14,012	$	12,657	$	13,344
Benefit payments:
Direct	$	14,265	$	13,063	$	12,965
Assumed	1,388		9		9
Ceded	(739)		(655)		(499)
Benefit payments	$	14,914	$	12,417	$	12,475

(1) Includes considerations for supplementary contracts with life contingencies of $48 million, $58 million and $76 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Reinsurance Assumed

On December 31, 2020, New York Life acquired Life Insurance Company of North America ("LINA") as part of its acquisition of Cigna’s group life and group disability insurance business, now named New York Life Group Benefit Solutions ("GBS”). Following the closing of the acquisition, the Company entered into an affiliated reinsurance agreement to reinsure mortality risk arising under LINA's group term life insurance business on a yearly renewable term basis. This transfer of life insurance mortality risk allows the Company to diversify its overall risk profile, as the Company's risk profile was previously weighted more heavily toward interest rate and asset risk. Entry into the yearly renewable term treaty also reduces LINA's exposure to mortality risk. At December 31, 2021, the Company held assumed liabilities for policy claims relating to this reinsurance agreement of $686 million, which are included in the Policy claims in the accompanying Statutory Statements of Financial Position.

58

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 13 - REINSURANCE (continued)

Reinsurance Ceded

The Company enters into reinsurance agreements in the normal course of its insurance business to reduce overall risk and to be able to issue life insurance policies in excess of its retention limits. Currently, the Company primarily reinsures the mortality risk on new life insurance policies on a quota share yearly renewable term basis, except for custom guarantee universal life and asset flex products. Most of the reinsurance ceded on new and inforce business is on an automatic basis. The quota share currently ceded on new business ranges from 15% to 90% . All products are ceded from first dollar with the exception of variable universal life which has a minimum size policy ceded of $1 million. Cases in excess of the Company’s retention and certain substandard cases are ceded on a facultative basis. The majority of the Company's facultative reinsurance is for substandard cases which the Company typically cedes 90%.

The ceding of risk does not discharge the Company from its primary obligations to policyholders. To the extent that the assuming companies become unable to meet their obligations under reinsurance contracts, the Company remains contingently liable. Each reinsurer is reviewed to evaluate its financial stability before entering into each reinsurance contract and throughout the period that the reinsurance contract is in place.

Life insurance ceded was 45% and 47% of total life insurance in-force at December 31, 2021 and 2020. The reserve reductions taken for life insurance reinsured at December 31, 2021 and 2020 were $754 million and $603 million, respectively.

The Company has reinsurance agreements with New York Life Agents Reinsurance Company (“NYLARC”). NYLARC is a life insurance company wholly owned by NYLARC Holding Company, Inc., whose shareholders consist of New York Life's top agents who meet certain criteria and who may also be agents of the Company or NYLIFE Insurance Company of Arizona ("NYLAZ"). NYLARC reinsures a portion of certain life insurance products sold by its shareholders. The purpose of NYLARC is to retain high production agents, and increase the volume and quality of the business that they submit to New York Life, NYLAZ and the Company.

NOTE 14 - BENEFIT PLANS

The Company shares in the cost of the following plans sponsored by New York Life: (1) certain defined benefit pension plans for eligible employees and agents, (2) certain defined contribution plans for substantially all employees and agents, (3) certain postretirement life and health benefits for retired employees and agents including their eligible dependents, and (4) postemployment benefits. The expense for these plans is allocated to the Company in accordance with an intercompany cost sharing agreement. The liabilities for these plans are included with the liabilities for the corresponding plan of New York Life. The Company’s share of the cost of these plans was as follows for the years ended December 31, 2021, 2020 and 2019 (in millions):

	2021		2020		2019
Defined benefit pension	$	32	$	30	$	28
Defined contribution	10		10		10
Postretirement life and health	6		6		5
Postemployment	2		2		3
Total	$	50	$	48	$	46

59

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 15 - COMMITMENTS AND CONTINGENCIES

Guarantees

At the inception of a guarantee (except unlimited guarantees), the Company recognizes an initial liability at fair value for the obligations it has undertaken, regardless of the probability of performance under the guarantee. This includes guarantees made on behalf of affiliates unless the guarantee is deemed unlimited. At December 31, 2021 and 2020, the Company had no such guarantees.

Litigation

The Company is a defendant in individual and/or alleged class action suits arising from its agency sales force, insurance (including variable contracts registered under the federal securities law), investment, retail securities, and/or other operations, including actions involving retail sales practices. Some of these actions seek substantial or unspecified compensatory and punitive damages. The Company is also from time to time involved in various governmental, administrative, and investigative proceedings and inquiries.

Notwithstanding the uncertain nature of litigation and regulatory inquiries, the outcome of which cannot be predicted, the Company believes that, after provisions made in the financial statements, the ultimate liability that could result from litigation and proceedings would not have a material adverse effect on the Company’s financial position; however, it is possible that settlements or adverse determinations in one or more actions or other proceedings in the future could have a material adverse effect on the Company’s operating results for a given year.

Borrowed Money

Refer to Note 6 - Investments for a more detailed discussion of the Company's commitments for loaned securities and repurchase agreements.

Assessments

Most of the jurisdictions in which the Company is licensed to transact business require life insurers to participate in guaranty associations which are organized to pay contractual benefits pursuant to insurance policies issued by impaired, insolvent or failed life insurers. These associations levy assessments, up to prescribed limits, on all member insurers in a particular state on the basis of the proportionate share of the premiums written by member insurers in the line of business in which the impaired, insolvent or failed life insurer is engaged. Some states permit member insurers to recover assessments through full or partial premium tax offsets.

Other Commitments and Contingencies

Prior to July 1, 2002, the Company did business in Taiwan through a branch operation (the "Taiwan Branch"). On July 1, 2002, the Taiwan Branch ceased operations and all of its liabilities and assets, including policy liabilities were transferred to New York Life Insurance Taiwan Corporation ("Taiwan Corporation"), an indirect subsidiary of New York Life. On December 31, 2013, Taiwan Corporation was sold to Yuanta Financial Holding Co. Ltd. ("Yuanta"). Under the terms of the sale agreement, Yuanta has agreed to satisfy in full, or to cause Taiwan Corporation to satisfy in full, all of Taiwan Corporation's obligations under the Taiwan Branch policies that were transferred to Taiwan Corporation on July 1, 2002. However, the Company, under Taiwan law, also remains contingently liable for these policies in the event that neither Taiwan Corporation nor Yuanta meets its obligations. This contingent liability of the Company has not been recognized on the accompanying Statutory Statements of Financial Position because it does not meet the probable and estimable criteria of SSAP No. 5R.

At December 31, 2021 and 2020, the Company and its guaranteed separate accounts had contractual commitments to extend credit for commercial mortgage loans at both fixed and variable rates of interest, which amounted to approximately $875millionand $1,004 million, respectively. These commitments are diversified by property type and geographic location. There were no contractual commitments to extend credit under residential loan agreements at December 31, 2021 and 2020.

60

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 15 - COMMITMENTS AND CONTINGENCIES (continued)

At December 31, 2021 and 2020, the Company and its guaranteed separate accounts had outstanding contractual obligations to acquire additional private placement securities amounting to $578 million and $769 million, respectively.

Unfunded commitments on limited partnership, limited liability companies and other invested assets amounted to $999 million and $539 million at December 31, 2021 and 2020, respectively. Unfunded commitments on LIHTC amounted to $86 million and $5 million at December 31, 2021 and 2020, respectively. At December 31, 2021 and 2020, unfunded commitments on LIHTC are included in Other invested assets, with an offset in Other liabilities in the accompanying Statutory Statement of Financial Position.

Several commercial banks have customary security interests in certain assets of the Company to secure potential overdrafts and other liabilities of the Company that may arise under custody, securities lending and other banking agreements with such banks.

FHLB Agreement

The Company is a member of the FHLB of Pittsburgh. Membership in the FHLB of Pittsburgh provides the Company with a significant source of alternative liquidity. Advances received by the general account are included in Other liabilities in the accompanying Statutory Statements of Financial Position. When borrowing from the FHLB of Pittsburgh, the Company is required to post collateral in the form of eligible securities, including mortgage-backed, government and agency debt instruments for each of the advances received. Upon any event of default by the Company, the FHLB of Pittsburgh's recovery from the collateral is limited to the amount of the Company's liability to the FHLB of Pittsburgh.

The amount of FHLB of Pittsburgh common stock held, in aggregate exclusively in the Company’s general account at December 31, 2021 and 2020 was as follows (in millions):

	2021		2020
Membership stock - Class B (1)	$	29	$	22
Activity stock	—		—
Aggregate total	$	29	$	22
Actual or estimated borrowing capacity as determined by the insurer	$	6,232	$	5,502

(1) Membership stock is not eligible for redemption.

At December 31, 2021 and 2020, the Company did not have an outstanding balance due to the FHLB of Pittsburgh. The maximum amount borrowed and collateral pledged to the FHLB of Pittsburgh during the years ended December 31, 2021 and 2020 was as follows (in millions):

	2021				2020
	General Account		Separate Account		General Account		Separate Account
Fair Value	$	1,665	$	—	$	1,512	$	—
Carrying Value	$	1,665	$	—	$	1,512	$	—
Maximum Amount Borrowed During the Year	$	—	$	—	$	—	$	—

The Company does not have any prepayment obligations for the borrowing arrangement.

61

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 16 - INCOME TAXES

The components of the net DTAs and DTLs were as follows at December 31, 2021 and 2020 (in millions):

	2021						2020						Change
	Ordinary		Capital		Total		Ordinary		Capital		Total		Ordinary		Capital		Total
Gross DTAs	$	1,168	$	277	$	1,445	$	1,095	$	198	$	1,293	$	73	$	79	$	152
Statutory valuation allowance	—		—		—		—		—		—		—		—		—
Adjusted gross DTAs	1,168		277		1,445		1,095		198		1,293		73		79		152
Nonadmitted DTAs (1)	331		—		331		349		—		349		(18)		—		(18)
Subtotal net admitted DTAs	837		277		1,114		746		198		944		91		79		170
Gross DTLs	292		419		711		289		264		553		3		155		158
Net admitted DTAs (2)	$	545	$	(142)	$	403	$	457	$	(66)	$	391	$	88	$	(76)	$	12

(1) DTAs are nonadmitted primarily because they are not expected to be realized within three years of the Statutory Statements of Financial Position date.

(2) The total net admitted DTAs are included in Other assets in the accompanying Statutory Statements of Financial Position.

The admission calculation components are as follows (paragraph references throughout Note 16 are to paragraphs of SSAP No. 101 “Income Taxes, A Replacement of SSAP No. 10R and SSAP No. 10”) (in millions):

	December 31, 2021						December 31, 2020						Change
	Ordinary		Capital		Total		Ordinary		Capital		Total		Ordinary		Capital		Total
Federal income taxes paid in prior years recoverable through loss carrybacks (Paragraph 11.a)	$	—	$	19	$	19	$	—	$	20	$	20	$	—	$	(1)	$	(1)
Adjusted gross DTAs expected to be realized (excluding the amount of DTAs from paragraph 11.a above) after application of the threshold limitation (the lesser of paragraph 11.b.i and 11.b.ii below):	385		—		385		371		—		371		14		—		14
Adjusted gross DTAs expected to be realized following the balance sheet date. (Paragraph 11.b.i)	385		—		385		371		—		371		14		—		14
Adjusted gross DTAs allowed per limitation threshold (Paragraph 11.b.ii)	N/A		N/A		1,400		N/A		N/A		1,359		N/A		N/A		41
Adjusted gross DTAs (excluding the amount of DTAs from paragraphs 11.a and 11.b above) offset by gross DTLs (Paragraph 11.c)	452		258		710		375		178		553		77		80		157
DTAs admitted as the result of application of SSAP 101 (Total of paragraphs 11.a, 11.b, 11.c).	$	837	$	277	$	1,114	$	746	$	198	$	944	$	91	$	79	$	170

The ratio used to determine the applicable period used in paragraph 11.b.i above and the amount of adjusted capital and surplus used to determine the percentage threshold limitation in paragraph 11.b.ii above at December 31, 2021 and 2020 are as follows ($ in millions):

	2021			2020
Ratio percentage used to determine recovery period and threshold limitation amount.	967		%	1,006		%
Amount of adjusted capital and surplus used to determine recovery period and threshold limitation in paragraph 11.b.ii above.	$	9,331		$	9,057

62

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 16 - INCOME TAXES (continued)

There was no impact on the Company’s adjusted gross and net admitted DTAs due to tax planning strategies at December 31, 2021 and 2020.

The Company did not use reinsurance in its tax planning strategies. The Company had no unrecognized DTLs at December 31, 2021 and 2020. Additionally, the Company had no adjustments to gross DTAs because of a change in circumstances that causes a change in judgment about the realizability of the related DTAs.

Enactment of the CARES Act did not have a financial impact on the Company.

Significant components of the current federal and foreign income taxes for the years ended December 31, 2021, 2020 and 2019 were as follows (in millions):

	2021		2020		2019		Change 2021-2020		Change 2020-2019
Federal(1)	$	187	$	102	$	226	$	85	$	(124)
Foreign	—		—		—		—		—
Subtotal	187		102		226		85		(124)
Federal income tax on net capital gains (losses)	47		62		4		(15)		58
Other	—		—		(22)		—		22
Total federal and foreign income taxes	$	234	$	164	$	208	$	70	$	(44)

(1) The Company had investment tax credits of $27 million, $31 million and $24 million for the years ended December 31, 2021, 2020 and 2019, respectively.

63

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 16 - INCOME TAXES (continued)

The tax effects of temporary differences that give rise to DTAs and DTLs at December 31, 2021 and 2020 were as follows (in millions):

	2021		2020		Change
DTAs
Ordinary:
Policyholder reserves	$	654	$	691	$	(37)
Deferred acquisition costs	337		292		45
Investments	137		71		66
Pension accrual	24		27		(3)
Receivables - nonadmitted	12		11		1
Fixed assets	2		2		—
Other	2		1		1
Subtotal	1,168		1,095		73
Nonadmitted	331		349		(18)
Admitted ordinary DTAs	837		746		91
Capital:
Investments	277		198		79
Subtotal	277		198		79
Nonadmitted	—		—		—
Admitted capital DTAs	277		198		79
Total admitted DTAs	1,114		944		170
DTLs
Ordinary:
Policyholder reserves	159		198		(39)
Investments	133		91		42
Subtotal	292		289		3
Capital:
Investments	419		264		155
Subtotal	419		264		155
Total DTLs	711		553		158
Net admitted DTAs	$	403	$	391	$	12
Deferred income tax expense on change in net unrealized capital gains					$	(112)
Increase in net deferred taxes related to other items					106
Decrease in DTAs nonadmitted					18
Increase in net admitted DTAs					$	12

64

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 16 - INCOME TAXES (continued)

The Company’s income tax expense and change in net DTAs for the years ended December 31, 2021, 2020 and 2019 differs from the amount obtained by applying the statutory rate of 21% to net gain from operations after dividends to policyholders and before federal income taxes for the following reasons (in millions):

	2021		2020		2019		Change 2021-2020		Change 2020-2019
Net gain from operations after dividends to policyholders and before federal and foreign income taxes at statutory rate	$	141	$	97	$	184	$	44	$	(87)
Net realized capital gains (losses) at statutory rate	(38)		(11)		—		(27)		(11)
Tax exempt income	(39)		(40)		(50)		1		10
Tax credits, net of withholding	(37)		(34)		(30)		(3)		(4)
Amortization of IMR	(10)		(7)		(5)		(3)		(2)
Dividend from MCF	(29)		(14)		(21)		(15)		7
Partnership income from MCF	46		11		30		53		(19)
Prior year audit liability and settlement	(1)		6		(15)		(7)		21
Non-admitted assets	—		—		(8)		—		8
Other items impacting surplus	96		(7)		13		103		(20)
Other	(1)		1		3		(2)		(2)
Federal and foreign income taxes incurred and change in net deferred taxes during the year	$	128	$	2	$	101	$	126	$	(99)
Federal and foreign income tax expense reported in the Company's Statutory Statements of Operations	$	187	$	102	$	227	$	85	$	(125)
Capital gains tax expense (benefit) incurred	47		62		4		(15)		58
Increase in net DTAs	(106)		(162)		(109)		56		(53)
Change in current and deferred income taxes reported in surplus	—		—		(21)		—		21
Federal and foreign income taxes incurred and change in net deferred taxes during the year	$	128	$	2	$	101	$	126	$	(99)

The Company’s federal income tax return is consolidated with New York Life, NYLAZ, NYLIFE LLC, New York Life Enterprises LLC, NYL Investments, NYL Investors, LLC, LINA, NYLGICNY, and LINA Benefit Payments, Inc. Refer to Note 3 – Significant Accounting Policies - Federal Income Taxes.

The New York Life federal income tax returns are routinely examined by the Internal Revenue Service ("IRS") and provisions are made in the financial statements in anticipation of the results of these audits. The IRS has completed audits through 2010 and tax years 2011 through 2013 are currently under examination. There were no material effects on the Company’s accompanying Statutory Statements of Operations as a result of these audits. The Company believes that its recorded income tax liabilities are adequate for all open years.

The Company does not anticipate any significant changes to its total unrecognized tax benefits within the next 12 months.

The Company did not have any operating loss and tax credit carry forwards available for tax purposes. The total income taxes incurred in prior years that will be available for recoupment in the event of future net losses total $52 million, $86 million and $31 million, related to the years ended December 31, 2021, 2020 and 2019, respectively.

At December 31, 2021 and 2020, the Company recorded a current income tax (payable)/receivable of $(4) million and $(53) million, respectively, which is included in Other assets and Other liabilities in the accompanying Statutory Statements of Financial Position.

65

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 16 - INCOME TAXES (continued)

At December 31, 2021, the Company had no protective tax deposits on deposit with the IRS under Section 6603 of the Internal Revenue Code.

NOTE 17 - CAPITAL AND SURPLUS

Capitalization

The Company has 20,000 shares authorized, with a par value of $10,000 per share with 2,500 shares issued and outstanding. All shares are common stock and are owned by New York Life. The Company has no preferred stock.

For the year ended December 31, 2020, the Company received a capital contribution in the form of an affiliated equity investment in MCF from New York Life for $530 million. The Company did not receive a capital contribution from New York Life for the years ended December 31, 2021 and 2019.

Other Surplus Adjustments

Other adjustments, net in the accompanying Statutory Statements of Changes in Surplus at December 31, 2021, 2020 and 2019, principally include the effects of the following (in millions):

	2021		2020		2019
Surplus withdrawn from separate accounts	$	55	$	45	$	44
Changes in surplus relating to separate accounts	(44)		(44)		(47)
Change in liability for reinsurance in unauthorized companies	(2)		—		(2)
Total	$	9	$	1	$	(5)

Nonadmitted Assets

Under statutory accounting rules, a nonadmitted asset is defined as an asset having economic value other than that which can be used to fulfill policyholder obligations, or those assets that are unavailable due to encumbrances or other third-party interests. These assets are not recognized in the accompanying Statutory Statements of Financial Position, and are, therefore, considered nonadmitted. The changes between years in nonadmitted assets are charged or credited directly to surplus.

NOTE 18 - DIVIDENDS TO STOCKHOLDER

The Company is subject to restrictions on the payment of dividends to New York Life. Under the Delaware Insurance Code, cash dividends can be paid only out of that part of the Company’s available and accumulated surplus funds which are derived from realized net operating profits on its business and realized capital gains, and dividends (or other distributions) on capital stock can be declared and paid only out of earned surplus (being an amount equal to the unassigned funds of the Company as set forth in its most recent annual statement submitted to the Delaware Insurance Commissioner (“the Commissioner”), including all or part of the surplus arising from unrealized capital gains or revaluation of assets), except as otherwise approved by the Commissioner (provided that stock dividends may be paid out of any available surplus funds). Furthermore, no extraordinary dividend may be paid until 30 days after the Commissioner has received notice of such declaration and has not disapproved such payment within such 30 day period, or the Commissioner has approved such payment within that 30 day period. Extraordinary dividends are defined as any dividend or distribution or cash or other property, whose fair market value, together with that of other dividends or distributions made within the preceding 12 months, exceeds the greater of (1) 10 percent of the Company’s surplus as regards policyholders as of the preceding December 31 or (2) the net gain from operations of the Company for the 12 month period ending on the preceding December 31 (not including pro rata distributions of any class of the Company’s own securities).

66

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 18 - DIVIDENDS TO STOCKHOLDER (continued)

At December 31, 2021, the amount of earned surplus of the Company available for the payment of dividends was $5,252 million. The maximum amount of dividends that may be paid in 2022 without prior notice to or approval of the Commissioner is $971 million.

Dividends may be declared by the Board of Directors of the Company from available surplus, as it deems appropriate, on a non-cumulative basis. For the years ended December 31, 2021, 2020 and 2019, the Company paid dividends to its sole stockholder, New York Life, in the amount of $942 million, $932 million and $0 million, respectively.

NOTE 19 - WRITTEN PREMIUMS

Deferred and uncollected life insurance premiums and annuity considerations at December 31, 2021 and 2020 were as follows (in millions):

	2021				2020
	Gross		Net of Loading		Gross		Net of Loading
Group life(1)	$	388	$	388	$	—	$	—

(1) Represents reinsurance premiums assumed from LINA. Refer to Note 13 - Reinsurance for more details.

Deferred premium is the portion of the annual premium not earned at the reporting date. Loading of deferred premium is an amount obtained by subtracting the valuation net deferred premium from the gross deferred premium and generally includes allowances for acquisition costs and other expenses.

Uncollected premium is gross premium net of reinsurance that is due and unpaid at the reporting date. Net premium is the amount used in the calculation of reserves. The change in loading is included as an expense and is not shown as a reduction to premium income.

NOTE 20 - LOAN-BACKED AND STRUCTURED SECURITY IMPAIRMENTS

The Company does not have any loan-backed and structured securities, which are other-than-temporarily impaired where the Company intends to sell, or does not have the intent and ability to hold until recovery, at December 31, 2021.

The following table lists each loan-backed and structured security at a CUSIP level where the present value of cash flows expected to be collected is less than the amortized cost basis during the current year (in thousands):

IMPAIRMENTS TAKEN ON CURRENT HOLDINGS DURING THE CURRENT YEAR
(1)	(2)		(3)		(4)		(5)		(6)		(7)
CUSIP(1,2)	Amortized Cost Before Current Period OTTI		Projected Cash Flows		Current Period Recognized OTTI		Amortized Cost After OTTI		Fair Value		Financial Statement Reporting Period
General Account
059469AF3	$	590	$	582	$	8	$	582	$	578	12/31/2021
17029RAA9	78		33		46		33		32		12/31/2021
17309BAB3	103		102		1		102		102		12/31/2021
46628SAE3	1,695		1,591		103		1,591		1,658		12/31/2021
57643MDX9	12		2		10		2		19		12/31/2021
69337AAM8	520		512		8		512		481		12/31/2021
69337VAE0	1,350		1,348		2		1,348		1,297		12/31/2021
46628BBD1	16		15		—		15		16		9/30/2021
69337AAM8	532		520		13		520		494		9/30/2021
69337VAE0	1,430		1,357		72		1,357		1,296		9/30/2021

67

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 20 - LOAN-BACKED AND STRUCTURED SECURITY IMPAIRMENTS (continued)

IMPAIRMENTS TAKEN ON CURRENT HOLDINGS DURING THE CURRENT YEAR
(1)	(2)	(3)	(4)		(5)	(6)	(7)
CUSIP(1,2)	Amortized Cost Before Current Period OTTI	Projected Cash Flows	Current Period Recognized OTTI		Amortized Cost After OTTI	Fair Value	Financial Statement Reporting Period
12628KAF9	718	680	38		680	706	6/30/2021
12628LAJ9	149	143	6		143	148	6/30/2021
12638PAE9	1,001	910	91		910	937	6/30/2021
15132EFL7	292	164	128		164	213	6/30/2021
17029RAA9	78	31	47		31	23	6/30/2021
19237JAD5	71	56	15		56	69	6/30/2021
65537BAC4	1,955	1,819	136		1,819	1,928	6/30/2021
69337AAM8	545	532	13		532	505	6/30/2021
69337VAE0	1,673	1,662	10		1,662	1,591	6/30/2021
93934FLW0	831	806	26		806	823	6/30/2021
94988PAC7	2,554	1,443	1,111		1,443	1,443	6/30/2021
94988PAD5	37,445	35,720	1,726		35,720	35,720	6/30/2021
94988YAB0	845	638	206		638	638	6/30/2021
94988YAD6	866	812	54		812	812	6/30/2021
94988YAF1	863	813	50		813	813	6/30/2021
94988YAH7	2,650	2,114	535		2,114	2,114	6/30/2021
94989FAB0	825	669	156		669	669	6/30/2021
94989FAF1	845	625	220		625	625	6/30/2021
94989FAH7	2,575	2,367	208		2,367	2,367	6/30/2021
12629EAD7	832	822	10		822	818	3/31/2021
17029RAA9	36	30	6		30	36	3/31/2021
32052MAA9	2	2	—		2	2	3/31/2021
3622E8AC9	2,366	2,216	150		2,216	2,333	3/31/2021
362334MD3	3	3	—		3	3	3/31/2021
36849XAA4	7,215	5,865	1,351		5,865	7,006	3/31/2021
36849XAB2	1,273	—	1,273		—	1,199	3/31/2021
61749EAE7	588	543	46		543	573	3/31/2021
61749EAH0	640	596	45		596	630	3/31/2021
69337AAM8	604	545	59		545	516	3/31/2021
69337VAE0	1,738	1,674	65		1,674	1,562	3/31/2021
76110VSU3	169	145	24		145	37	3/31/2021
78637VAB4	685	630	55		630	668	3/31/2021
78637VAD0	683	629	55		629	667	3/31/2021
78637VAF5	683	628	55		628	667	3/31/2021
78637VAH1	688	634	54		634	673	3/31/2021
78637VAK4	726	669	56		669	714	3/31/2021
78637VAM0	736	679	57		679	725	3/31/2021
78637VAP3	740	685	55		685	729	3/31/2021
78637VAR9	760	704	55		704	749	3/31/2021
78637VAT5	774	718	56		718	764	3/31/2021
78637VAV0	787	730	57		730	778	3/31/2021
78637VAX6	816	761	55		761	807	3/31/2021
Subtotal - General Account	XXX	XXX	$	8,681	XXX	XXX

68

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

NOTE 20 - LOAN-BACKED AND STRUCTURED SECURITY IMPAIRMENTS (continued)

IMPAIRMENTS TAKEN ON CURRENT HOLDINGS DURING THE CURRENT YEAR
(1)	(2)		(3)		(4)		(5)		(6)		(7)
CUSIP(1,2)	Amortized Cost Before Current Period OTTI		Projected Cash Flows		Current Period Recognized OTTI		Amortized Cost After OTTI		Fair Value		Financial Statement Reporting Period
Guaranteed Separate Accounts
059469AF3	$	98,197	$	96,867	$	1,330	$	96,867	$	96,375	12/31/2021
001406AB3	68,038		45,615		22,423		45,615		48,012		6/30/2021
12628KAF9	93,689		88,670		5,019		88,670		92,046		6/30/2021
94988PAC7	348,278		196,790		151,488		196,790		196,771		6/30/2021
94988PAD5	5,106,192		4,870,842		235,350		4,870,842		4,870,940		6/30/2021
94988YAB0	115,161		87,030		28,131		87,030		87,036		6/30/2021
94988YAD6	118,043		110,720		7,323		110,720		110,727		6/30/2021
94988YAF1	117,739		110,868		6,871		110,868		110,877		6/30/2021
94988YAH7	361,302		288,297		73,005		288,297		288,317		6/30/2021
94989FAB0	112,525		91,248		21,277		91,248		91,256		6/30/2021
94989FAF1	115,288		85,291		29,997		85,291		85,291		6/30/2021
94989FAH7	351,150		322,735		28,415		322,735		322,743		6/30/2021
126673QR6	146,795		146,768		27		146,768		146,132		3/31/2021
3622E8AC9	50,344		47,152		3,192		47,152		49,644		3/31/2021
61749EAE7	45,261		41,761		3,500		41,761		44,077		3/31/2021
61749EAH0	137,236		127,682		9,554		127,682		134,904		3/31/2021
76110VSU3	1,487		1,274		213		1,274		325		3/31/2021
Subtotal - Guaranteed Separate Accounts	XXX		XXX		627		XXX		XXX
Grand Total	XXX		XXX		$	9,308	XXX		XXX

(1)Only the impaired lots within each CUSIP are included within this table.

(2)CUSIP amounts less than $1 thousand within this table are shown as zero.

NOTE 21 - SUBSEQUENT EVENTS

At March 10, 2022, the date the financial statements were available to be issued, there have been no events occurring subsequent to the close of the Company’s books or accounts for the accompanying statutory financial statements that would have a material effect on the financial condition of the Company.

69

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

GLOSSARY OF TERMS

Term	Description
ABS	Asset-backed securities
AVR	Asset valuation reserve
CARES Act	Coronavirus Aid, Relief, and Economic Security Act
CARVM	Commissioners’ Annuity Reserve Valuation Method
CLICNY	Cigna Life Insurance Company of New York
COLI	Corporate owned life insurance
CRVM	Commissioners’ Reserve Valuation
CSAs	Credit support annexes
DSID	Delaware State Insurance Department
DTA(s)	Deferred tax asset(s)
DTL(s)	Deferred tax liability(ies)
ETFs	exchange traded funds
FHLB	Federal Home Loan Bank
GBS	Group Benefit Solutions
GMAB	Guaranteed minimum accumulation benefit
GMDB	Guaranteed minimum death benefit
IMR	Interest maintenance reserve
IRS	Internal Revenue Service
LIHTC	Low-income housing tax credit
LINA	Life Insurance Company of North America
LTV	Loan to value ratio
MCF	Madison Capital Funding LLC
MCF Note Agreement	New York Life note funding agreement with MCF
NAIC	National Association of Insurance Commissioners
NAIC SAP	National Association of Insurance Commissioners’ Accounting Practices and Procedures
NAV	Net asset value
New York Life	New York Life Insurance Company
NYLARC	New York Life Agents Reinsurance Company
NYLAZ	NYLIFE Insurance Company of Arizona
NYLCC	New York Life Capital Corporation
NYLGICNY	New York Life Group Insurance Company of NY
NYLIM	New York Life Investment Management LLC
NYL Investments	New York Life Investment Management Holdings LLC
NYSDFS	New York State Department of Financial Services
OTC	Over-the-counter
OTC-cleared	Over-the-counter clearinghouse
OTC-bilateral	Over-the-counter bilateral agreements
OTTI	Other-than-temporary impairment(s)
PBR	Principle-based reserving
REO	Real estate owned
SSAP	Statement of statutory accounting principle
SVO	Securities Valuation Office

70

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

NOTES TO STATUTORY FINANCIAL STATEMENTS

Term	Description
Taiwan Branch	NYLIAC's former branch operations in Taiwan
Taiwan Corporation	New York Life Insurance Taiwan Corporation
TDR	Troubled debt restructuring
The Commissioner	Delaware Insurance Commissioner
The Company	New York Life Insurance and Annuity Corporation
The Fund	The MainStay VP Funds Trust
U.S. GAAP	Accounting principles generally accepted in the United States of America
UL	Universal life
VA	Variable annuity
VM-21	Valuation manual requirements for PBR for variable annuity products
VM-22	Valuation manual requirements for maximum valuation interest rates for income annuities
VUL	Variable universal life
Yuanta	Yuanta Financials Holding Co., Ltd.

71

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

SCHEDULE 1 - SUPPLEMENTAL SCHEDULE OF SELECTED FINANCIAL DATA

At and for the Year Ended December 31, 2021

The following is a summary of certain financial information included in exhibits and schedules in the Annual Statement filed with the Delaware Insurance Department subjected to audit procedures by independent auditors and utilized by actuaries in the determination of reserves.

Investment Income Earned:
U.S. government bonds	$	193,332,058
Other bonds (unaffiliated)	3,026,073,977
Bonds of affiliates	99,511,624
Preferred stocks (unaffiliated)	138,268
Preferred stocks of affiliates	—
Common stocks (unaffiliated)	32,283,679
Common stocks of affiliates	—
Mortgage loans	632,010,761
Real estate	7,933,966
Premium notes, policy loans and liens	63,754,043
Cash on hand and on deposit	21,813
Short-term investments	1,623,250
Derivative instruments	79,759,675
Other invested assets	175,809,481
Aggregate write-ins for investment income	9,912,152
Gross investment income	$	4,322,164,747
Real Estate Owned - Book Value less Encumbrances	$	95,731,841
Mortgage Loans - Book Value:
Residential mortgages	$	7,553,137
Commercial mortgages	13,746,184,850
Mezzanine real estate loans	560,925,813
Total mortgage loans	$	14,314,663,800
Mortgage Loans by Standing - Book Value:
Good standing	$	14,313,419,901
Good standing with restructured terms	$	—
Interest overdue more than 90 days, not in foreclosure	$	588,900
Foreclosures in process	$	654,999
Other Invested Assets - Statement Value	$	3,096,275,241
Collateral Loans	$	—

72

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

SCHEDULE 1 - SUPPLEMENTAL SCHEDULE OF SELECTED FINANCIAL DATA (continued)

Bonds and Stocks of Parent, Subsidiaries and Affiliates - Book Value:
Bonds	$	2,895,559,880
Preferred stocks	$	—
Common stocks	$	—
Bonds and Short-Term Investments by Maturity and NAIC Designation:
Bonds by maturity - statement value:
Due within one year or less	$	7,197,073,556
Over one year through five years	31,066,434,335
Over five years through 10 years	27,078,124,791
Over 10 years through 20 years	11,638,359,989
Over 20 years	15,566,991,162
Total by maturity	$	92,546,983,833
Bonds by NAIC designation - statement value
NAIC 1	$	58,520,850,216
NAIC 2	29,366,847,951
NAIC 3	2,509,321,454
NAIC 4	1,637,413,016
NAIC 5	398,857,727
NAIC 6	113,693,469
Total by NAIC designation	$	92,546,983,833
Total bonds publicly traded	$	52,490,192,179
Total bonds privately placed	$	40,056,791,654
Preferred Stocks - Statement Value	$	41,168,369
Common Stocks - Fair Value	$	1,593,582,240
Short-Term Investments - Book Value	$	198,683,654
Options, Caps and Floors Owned - Statement Value	$	27,015,612
Options, Caps and Floors Written and In-Force - Statement Value	$	—
Collar, Swap and Forward Agreements Open - Statement Value	$	529,137,597
Future Contracts Open - Current Value	$	(18,371)
Cash on Deposit	$	(183,897,413)

73

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

SCHEDULE 1 - SUPPLEMENTAL SCHEDULE OF SELECTED FINANCIAL DATA (continued)

Life Insurance In-Force (in thousands):
Industrial	$	—
Ordinary	$	182,301,740
Credit life	$	—
Group life	$	688,505,866
Amount of Accidental Death Insurance In-Force Under
Ordinary Policies (in thousands):	$	926,007
Life Insurance Policies with Disability Provisions In-Force (in thousands):
Industrial	$	—
Ordinary	$	14,915,068
Credit life	$	—
Group life	$	—
Supplementary Contracts In-Force:
Ordinary - not involving life contingencies
Amount on deposit	$	465,879,126
Income payable	$	53,051,444
Ordinary - involving life contingencies
Income payable	$	46,092,616
Group - not involving life contingencies
Amount on deposit	$	—
Income payable	$	—
Group - involving life contingencies
Income payable	$	—
Annuities:
Ordinary
Immediate - amount of income payable	$	1,756,779,371
Deferred - fully paid account balance	$	43,768,710,328
Deferred - not fully paid - account balance	$	42,313,363,883
Group
Amount of income payable	$	83,229,538
Fully paid account balance	$	1,505,635
Not fully paid - account balance	$	—

74

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

SCHEDULE 1 - SUPPLEMENTAL SCHEDULE OF SELECTED FINANCIAL DATA (continued)

Accident and Health Insurance - Premiums In-Force
Ordinary	$	—
Group	$	—
Credit	$	—
Deposit Funds and Dividend Accumulations:
Deposit funds - account balance	$	230,916,085
Dividend accumulations - account balance	$	—
Claim Payments 2021 (in thousands):
Group accident and health - year ended December 31, 2019
2021	$	—
2020	$	—
2019	$	—
2018	$	—
2017	$	—
Prior	$	—
Other accident and health
2021	$	—
2020	$	—
2019	$	—
2018	$	—
2017	$	—
Prior	$	—
Other coverages that use developmental methods to calculate
claims reserves (in thousands):
2021	$	788,390
2020	$	940,401
2019	$	772,338
2018	$	572,941
2017	$	489,716
Prior	$	(11,692)

75

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

SCHEDULE 2 - SUMMARY INVESTMENT SCHEDULE

At and for the Year Ended December 31, 2021

	Gross Investment				Admitted Assets as
Investment Categories	Holdings*				Reported in the Annual Statement
	Amount		Percentage		Amount		Securities Lending Reinvested Collateral Amount	Total Amount		Percentage
Bonds:
U.S. governments	$	6,147,883,480	5.431	%	$	6,147,883,480	—	$	6,147,883,480	5.433	%
All other governments	265,846,259		0.235		265,846,259		—	265,846,259		0.235
U.S. states, territories and possessions, etc. guaranteed	—		—		—		—	—		—
U.S. political subdivisions of states, territories, and possessions, guaranteed	—		—		—		—	—		—
U.S. special revenue and special assessment obligations, etc. non-guaranteed	14,593,904,742		12.893		14,593,904,742		—	14,593,904,742		12.897
Industrial and miscellaneous	66,068,807,577		58.367		66,068,807,577		—	66,068,807,577		58.388
Hybrid securities	—		—		—		—	—		—
Parent, subsidiaries and affiliates	2,895,559,880		2.558		2,895,559,880		—	2,895,559,880		2.559
SVO identified funds	124,592,908		0.110		124,592,908		—	124,592,908		0.110
Unaffiliated Bank loans	670,759,310		0.593		670,759,310		—	670,759,310		0.593
Total long-term bonds	90,767,354,156		80.186		90,767,354,156		—	90,767,354,156		80.215
Preferred Stocks:
Industrial and miscellaneous (Unaffiliated)	41,168,368		0.036		41,168,368		—	41,168,368		0.036
Parent, subsidiaries and affiliates	—		—		—		—	—		—
Total preferred stocks	41,168,368		0.036		41,168,368		—	41,168,368		0.036
Common Stock:
Industrial and miscellaneous Publicly traded (Unaffiliated)	1,070,437,305		0.946		1,070,437,305		—	1,070,437,305		0.946
Industrial and miscellaneous Other (Unaffiliated)	88,761,428		0.078		88,761,428		—	88,761,428		0.078
Parent, subsidiaries and affiliates Publicly traded	—		—		—		—	—		—
Parent, subsidiaries and affiliates Other	—		—		—		—	—		—
Mutual funds	434,383,503		0.384		434,383,503		—	434,383,503		0.384
Unit investment trusts	—		—		—		—	—		—
Closed-end funds	—		—		—		—	—		—
Total common stocks	1,593,582,236		1.408		1,593,582,236		—	1,593,582,236		1.408
Mortgage loans:
Farm mortgages	—		—		—		—	—		—
Residential mortgages	7,553,140		0.007		7,553,140		—	7,553,140		0.007
Commercial mortgages	13,746,184,846		12.144		13,749,759,846		—	13,749,759,846		12.151
Mezzanine real estate loans	560,925,814		0.496		560,925,814		—	560,925,814		0.496
Total valuation allowance	—		—		(3,575,000)		—	(3,575,000)		(0.003)
Total mortgage loans	14,314,663,800		12.646		14,314,663,800		—	14,314,663,800		12.651
Real Estate:

76

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

SCHEDULE 2 - SUMMARY INVESTMENT SCHEDULE (continued)

	Gross Investment				Admitted Assets as
Investment Categories	Holdings*				Reported in the Annual Statement
	Amount		Percentage		Amount		Securities Lending Reinvested Collateral Amount	Total Amount		Percentage
Properties occupied by company	—		—		—		—	—		—
Properties held for production of income	95,731,841		0.085		95,731,841		—	95,731,841		0.085
Properties held for sale	—		—		—		—	—		—
Total real estate	95,731,841		0.085		95,731,841		—	95,731,841		0.085
Cash, cash equivalents and short-term investments:
Cash	(183,897,413)		(0.162)		(183,897,413)		—	(183,897,413)		(0.163)
Cash equivalents	1,747,991,566		1.544		1,747,991,569		—	1,747,991,569		1.545
Short-term investments	198,683,654		0.176		198,683,654		—	198,683,654		0.176
Total cash, cash equivalents and short-term investments	1,762,777,807		1.557		1,762,777,810		—	1,762,777,810		1.558
Contract loans	874,018,790		0.772		856,848,819		—	856,848,819		0.757
Derivatives	580,947,822		0.513		580,947,822		—	580,947,822		0.513
Other invested assets	3,120,163,858		2.756		3,096,275,241		—	3,096,275,241		2.736
Receivables for securities	9,295,742		0.008		9,295,742		—	9,295,742		0.008
Securities Lending	—		—		—		—
Other invested assets	36,240,540		0.032		36,240,540		—	36,240,540		0.032
Total invested assets	$	113,195,944,960	100.000	%	$	113,154,886,375	—	$	113,154,886,375	100.000	%

* Gross investment holdings as valued in compliance with NAIC Accounting Practices & Procedures Manual.

77

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

SCHEDULE 3 – INVESTMENT RISKS INTERROGATORIES

At and for the Year Ended December 31, 2021

NAIC Group Code: 0826 NAIC Company Code: 91596 EIN: 13-3044743

The Investment Risks Interrogatories are to be filed by April 1. They are also to be included with the Audited Statutory Financial Statements.

Answer the following interrogatories by reporting the applicable U.S. dollar amounts and percentages of the reporting entity’s total admitted assets held in that category of investments.

1.Reporting entity’s total admitted assets as reported on Page 2 of this annual statement. $124,647,055,269

2.Ten largest exposures to a single issuer/borrower/investment.

	Description of			Percentage of Total
Issuer	Exposure	Amount		Admitted Assets
NEW YORK LIFE INS CO (MADISON CAPITAL FUNDING LLC )	Affiliated Bonds/Limited Partnership	$	3,620,486,569	2.90	%
WELLS FARGO	Bonds/Equity	$	1,052,508,547	0.84	%
JP MORGAN	Bonds/Equity	$	1,012,218,098	0.81	%
NYLIM HOLDINGS NOTE	Bonds	$	762,000,000	0.61	%
MORGAN STANLEY	Bonds/Equity	$	757,647,831	0.61	%
GS MORTGAGE	Bonds	$	746,354,353	0.60	%
CITIGROUP	Bonds/Equity	$	596,714,374	0.48	%
THE MACERICH COMPANY	Mortgage Loans	$	477,885,388	0.38	%
MAPLETREE INVESTMENTS PTE LTD	Mortgage Loans	$	476,000,000	0.38	%
CALIFORNIA STATE TEACHERS RETIREMENT SYSTEM	Mortgage Loans	$	418,564,212	0.34	%

3.Amounts and percentages of the reporting entity’s total admitted assets held in bonds and preferred stocks by NAIC rating.

Rating	Bonds		Percentage of Total Admitted Assets		Preferred Stocks			Percentage of Total Admitted Assets
NAIC – 1	$	58,520,850,216	46.95	%	P/RP - 1	$	—	—	%
NAIC – 2	$	29,366,847,951	23.56	%	P/RP - 2	$	3,788,023	—	%
NAIC – 3	$	2,509,301,029	2.01	%	P/RP - 3	$	—	—	%
NAIC – 4	$	1,637,413,017	1.31	%	P/RP - 4	$	—	—	%
NAIC – 5	$	398,878,159	0.32	%	P/RP - 5	$	—	—	%
NAIC – 6	$	113,693,469	0.09	%	P/RP - 6	$	37,380,345	0.03	%

78

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

SCHEDULE 3 – INVESTMENT RISKS INTERROGATORIES (continued)

4.Assets held in foreign investments:

Are assets held in foreign investments less than 2.5% of the reporting entity’s total admitted assets?

Yes [ ] No [X]

If response to 4.01 above is Yes, responses are not required for interrogatories 5-10

Total admitted assets held in foreign investments	$	14,445,374,617	11.59	%
Foreign-currency-denominated investments	$	—	—	%
Insurance liabilities denominated in that same foreign currency	$	—	—	%

5.Aggregate foreign investment exposure categorized by NAIC sovereign rating:

Countries rated NAIC-1	$	13,954,685,882	11.20	%
Countries rated NAIC-2	$	363,602,897	0.29	%
Countries rated NAIC-3 or below	$	127,085,838	0.10	%

6.Largest foreign investment exposures by country, categorized by NAIC sovereign rating:

Countries rated NAIC-1:
UNITED KINGDOM	$	4,133,201,612	3.32	%
CAYMAN ISLANDS	$	3,381,678,388	2.71	%
Countries rated NAIC-2:
MEXICO	$	145,968,554	0.12	%
PERU	$	34,120,211	0.03	%
Countries rated NAIC-3 or below:
BARBADOS	$	66,461,111	0.05	%
BAHAMAS	$	25,157,298	0.02	%

7. Aggregate unhedged foreign currency exposure $ 492,398,429  0.40  %

8.Aggregate unhedged foreign currency exposure categorized by the country’s NAIC sovereign rating:

Countries rated NAIC-1:	$	485,369,047	0.39	%
Countries rated NAIC-2:	$	5,323,412	—	%
Countries rated NAIC-3 or below:	$	1,705,969	—	%

9.Largest unhedged foreign currency exposures by country, categorized by the country’s NAIC sovereign rating:

Countries rated NAIC-1:
LUXEMBOURG	$	162,742,252	0.13	%
AUSTRALIA	$	114,398,471	0.09	%
Countries rated NAIC-2:
INDIA	$	2,870,272	—	%
ITALY	$	883,771	—	%
Countries rated NAIC-3 or below:
BRAZIL	$	887,059	—	%
SOUTH AFRICA	$	706,336	—	%

10.Ten largest non-sovereign (i.e. non-governmental) foreign issues:

79

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

SCHEDULE 3 – INVESTMENT RISKS INTERROGATORIES (continued)

Issuer	NAIC Rating
SMITH & NEPHEW PLC	2.B	$	144,500,000	0.12	%
TRITAX BIG BOX REIT PLC	2.A	$	135,783,624	0.11	%
STATNETT SF	1.F	$	123,800,000	0.10	%
BANCO SANTANDER SA	1.E FE	$	115,957,014	0.09	%
ANGLIAN WATER GROUP LTD	1.G FE	$	114,409,254	0.09	%
ANGEL TRAINS GRP	2.B	$	112,283,914	0.09	%
BUUK INFRASTRUCTURE ISSUER PLC	2.B.FE	$	101,990,094	0.08	%
BRITISH LAND COMPANY PLC	1.F	$	101,300,043	0.08	%
COMPAGNIE DES LEVURES LESAFFRE SA	2.A	$	96,661,978	0.08	%
THAMES WATER UTILITIES HOLDINGS	2.A	$	94,813,605	0.08	%

11.Amounts and percentages of the reporting entity’s total admitted assets held in Canadian investments and unhedged Canadian currency exposure.

Are assets held in Canadian investments less than 2.5% of the reporting entity’s total admitted assets? Yes [X] No [ ]

If response to 11.01 is Yes, detail is not required for the remainder of Interrogatory 11

12.Report aggregate amounts and percentages of the reporting entity’s total admitted assets held in investments with contractual sales restrictions.

Are assets held in investments with contractual sales restrictions less than 2.5% of the reporting entity’s total admitted assets? Yes[X] No[ ]

If response to 12.01 is Yes, responses are not required for the remainder of Interrogatory 12

13. Amounts and percentages of admitted assets held in the ten largest equity interests:

Are assets held in equity interest less than 2.5% of the reporting entity’s total admitted assets?

Yes [] No [X]

If response to 13.01 above is Yes, responses are not required for the remainder of Interrogatory 13

Issuer
MADISON CAPITAL FUNDING LLC	$	1,486,926,689	1.19	%
VANGUARD 500 INDEX FUND	$	305,783,669	0.25	%
S&P DEPOSITORY RECEIPTS	$	250,068,340	0.20	%
CANDRIAM WORLD ALTERNATIVE ALPHAMAX V	$	88,224,611	0.07	%
STONE RIDGE HOLDING GROUP LP - PREFERRED SHARES	$	87,210,000	0.07	%
GOLDPOINT MEZZANINE PARTNERS IV, LP	$	83,357,156	0.07	%
CURZON CAPITAL PARTNERS 5 LONG-LIFE LP	$	81,575,060	0.07	%
REEP-RTL NPM GA LLC	$	73,578,607	0.06	%
CANDRIAM GF HIGH YIELD CORPORATE BOND	$	71,026,995	0.06	%
MACKAY SHIELDS EUROPEAN CREDIT OPPORTUNITY FUND LIMITED	$	57,869,422	0.05	%

80

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

SCHEDULE 3 – INVESTMENT RISKS INTERROGATORIES (continued)

14. Amounts and percentages of the reporting entity’s total admitted assets held in nonaffiliated, privately placed equities:

Are assets held in nonaffiliated, privately placed equities less than 2.5% of the reporting entity’s total admitted assets? Yes [X] No [ ]

If response to 14.01 above is yes, responses are not required for 14.02 through 14.05.

Aggregate statement value of investments held in nonaffiliated, privately placed equities

Largest three investments held in nonaffiliated, privately placed equities:

Ten largest fund managers:

Fund Manager	Total Invested		Diversified		Nondiversified
STONE RIDGE	$	934,394,008	$	—	$	934,394,008
THE VANGUARD GROUP, INC.	$	305,783,669	$	305,783,669	$	—
CANDRIAM LUXEMBOURG	$	292,552,987	$	—	$	292,552,987
STATE STREET GLOBAL ADVISORS	$	250,068,340	$	250,068,340	$	—
BLACKROCK ADVISORS, LLC	$	125,191,449	$	125,191,449	$	—
GOLDPOINT PARTNERS	$	155,582,798	$	—	$	155,582,798
MACKAY SHIELDS LLC	$	105,446,250	$	47,576,828	$	57,869,422
INDEXIQ ADVISORS LLC	$	70,489,793	$	55,647,137	$	14,842,656
AUSBIL INVESTMENT MANAGEMENT LIMITED	$	63,611,550	$	—	$	63,611,550
WHITEHORSE	$	47,318,231	$	—	$	47,318,231

15. Amounts and percentages of the reporting entity’s total admitted assets held in general partnership interests:

Are assets held in general partnership interests less than 2.5% of the reporting entity’s total admitted assets? Yes [X] No [ ]

If response to 15.01 above is Yes responses are not required for the remainder of Interrogatory 15

16. Amounts and percentages of the reporting entity’s total admitted assets held in mortgage loans:

Are mortgage loans reported in Schedule B less than 2.5% of the reporting entity’s total admitted assets? Yes [ ] No [X]

If response to 16.01 above is Yes, responses are not required for the remainder of Interrogatory 16 and Interrogatory 17

Type ( Residential, Commercial, Agricultural)
Commercial	$	405,500,000	0.33	%
Commercial	$	306,245,000	0.25	%
Commercial	$	256,048,019	0.21	%
Commercial	$	247,100,000	0.20	%
Commercial	$	236,085,030	0.19	%
Commercial	$	228,900,000	0.18	%
Commercial	$	182,562,620	0.15	%
Commercial	$	180,094,655	0.14	%
Commercial	$	159,458,830	0.13	%
Commercial	$	159,000,000	0.13	%

81

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

SCHEDULE 3 – INVESTMENT RISKS INTERROGATORIES (continued)

Amount and percentage of the reporting entity’s total admitted assets held in the following categories of mortgage loans:

Construction loans	$	261,014,641	0.21	%
Mortgage loans over 90 days past due	$	588,900	—	%
Mortgage loans in the process of foreclosure	$	654,999	—	%
Mortgage loans foreclosed	$	70,043,441	0.06	%
Restructured mortgage loans	$	—	—	%

17.Aggregate mortgage loans having the following loan-to-value ratios as determined from the most current appraisal as of the annual statement date:

Loan-to-Value	Residential				Commercial				Agricultural
above 95%	$	—	—	%	$	22,641,150	0.02	%	$	—	—	%
91% to 95%	$	—	—	%	$	—	—	%	$	—	—	%
81% to 90%	$	—	—	%	$	292,748,127	0.23	%	$	—	—	%
71% to 80%	$	654,999	—	%	$	707,441,543	0.57	%	$	—	—	%
Below 70%	$	6,898,138	0.01	%	$	13,284,279,843	10.66	%	$	—	—	%

18. Amounts and percentages of the reporting entity’s total admitted assets held in each of the five largest investments in real estate:

Are assets held in real estate reported less than 2.5% of the reporting entity’s total admitted assets

Yes [X] No [ ]

If response to 18.01 above is Yes, responses are not required for the remainder of Interrogatory 18

19. Report aggregate amounts and percentages of the reporting entity’s total admitted assets held in investments held in mezzanine real estate loans:

Are assets held in investment held in mezzanine real estate loans less than 2.5% of the reporting entity’s total admitted assets Yes [X] No [ ]

If response to 19.01 above is Yes, responses are not required for the remainder of Interrogatory 19

20.Amounts and percentages of the reporting entity’s total admitted assets subject to the following types of agreements:

					At End of Each Quarter
	At Year End				1st Qtr		2nd Qtr		3rd Qtr
Securities lending agreements (do not include assets held as collateral for such transactions)	$	627,831,122	0.50	%	$	625,066,731	$	611,289,897	$	629,487,560
Repurchase agreements	$	—	—	%	$	—	$	—	$	—
Reverse repurchase agreements	$	140,003,000	0.11	%	$	230,307,000	$	239,209,000	$	220,303,000
Dollar repurchase agreements	$	210,281	—	%	$	—	$	997,580	$	503,149,619
Dollar reverse repurchase agreements	$	—	—	%	$	—	$	—	$	—

82

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

SCHEDULE 3 – INVESTMENT RISKS INTERROGATORIES (continued)

21.Amounts and percentages of the reporting entity’s total admitted assets for warrants not attached to other financial instruments, options, caps, and floors:

	Owned			Written
Hedging	$	27,015,612	0.02%	$	—	—%
Income generation	$	—	—%	$	—	—%
Other	$	—	—%	$	—	—%

22.Amounts and percentages of the reporting entity’s total admitted assets of potential exposure for collars, swaps, and forwards:

				At End of Each Quarter
	At Year End			1st Qtr		2nd Qtr		3rd Qtr
Hedging	$	107,119,714	0.09%	$	105,607,703	$	102,364,529	$	101,785,901
Income generation	$	—	—%	$	—	$	—	$	—
Replications	$	5,972,573	—%	$	10,710,596	$	9,199,548	$	6,491,399
Other	$	—	—%	$	—	$	—	$	—

23.Amounts and percentages of the reporting entity’s total admitted assets of potential exposure for futures contracts:

				At End of Each Quarter
	At Year End			1st Qtr		2nd Qtr		3rd Qtr
Hedging	$	368,825	—%	$	36,943,492	$	43,427,386	$	732,473
Income generation	$	—	—%	$	—	$	—	$	—
Replications	$	—	—%	$	—	$	—	$	—
Other	$	—	—%	$	—	$	—	$	—

83

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION

SCHEDULE 4 - SUPPLEMENTAL SCHEDULE OF REINSURANCE CONTRACTS

At and for the Year Ended December 31, 2021

1.Ceded Reinsurance contracts (or multiple contracts with the same reinsurer or its affiliates) subject to A-791 that includes a provision, which limits the reinsurer’s assumption of significant risks identified as in A-791.

None

2.Ceded Reinsurance contracts (or multiple contracts with the same reinsurer or its affiliates) not subject to A-791, for which reinsurance accounting was applied and includes a provision that limits the reinsurer’s assumption of risk.

None

3.Ceded Reinsurance contracts containing features (except reinsurance contracts with a federal or state facility) described below which result in delays in payment in form or in fact:

a.Provisions which permit the reporting of losses, or settlements are made, less frequently than quarterly or payments due from the reinsurer are not made in cash within ninety (90) days of the settlement date (unless there is no activity during the period).

None

b.Payment schedules, accumulating retentions from multiple years or any features inherently designed to delay timing of the reimbursement to the ceding entity.

None

4.Contracts for which the reporting entity has reflected reinsurance accounting credit for any contracts not subject to Appendix A-791 and not yearly renewable term, which meet the risk-transfer requirements of SSAP 61R, including any new assumption reinsurance contracts.

None

5.Risk ceded which is not subject to A-791 and not yearly renewable term reinsurance, under any reinsurance contract (or multiple contracts with the same reinsurer or its affiliates) during the period covered by the financial statement, and either:

a.Accounted for that contract as reinsurance under statutory accounting principles (SAP) and as a deposit under U.S. generally accepted accounting principles (GAAP); or

None

b.Accounted for that contract as reinsurance under U.S. GAAP and as a deposit under SAP. If yes, explain why the contract (s) is treated different for GAAP and SAP.

None

84