NEW YORK LIFE INSURANCE COMPANY AND SUBSIDIARIES ...

NEW YORK LIFE INSURANCE COMPANY AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

(GAAP Basis)

December 31, 2019 and 2018

Table of Contents

Page Number

Report of Independent Auditors

1

Consolidated Statements of Financial Position

2

Consolidated Statements of Operations

3

Consolidated Statements of Comprehensive Income

4

Consolidated Statements of Equity

5

Consolidated Statements of Cash Flows

6

Notes to Consolidated Financial Statements

Note 1 - Nature of Operations

7

Note 2 - Basis of Presentation

7

Note 3 - Significant Accounting Policies

7

Note 4 - Business Risks and Uncertainties

22

Note 5 - Recent Accounting Pronouncements

22

Note 6 - Investments

24

Note 7 - Derivative Instruments and Risk Management

34

Note 8 - Separate Accounts

40

Note 9 - Fair Value Measurements

Note 10 - Investment Income and Investment Gains and Losses, and Management Fees and

Other Income

41

Note 11 - Policyholders¡¯ Liabilities

65

Note 12 - Deferred Policy Acquisition Costs and Sales Inducements

70

Note 13 - Reinsurance

71

Note 14 - Benefit Plans

73

Note 15 - Goodwill and Other Intangible Assets

85

Note 16 - Commitments and Contingencies, Loaned Securities and Repurchase Agreements

86

Note 17 - Income Taxes

89

Note 18 - Debt

91

Note 19 - Equity

93

Note 20 - Supplemental Cash Flow Information

95

Note 21 - Statutory Financial Information

96

Note 22 - Subsequent Events

96

Glossary of Terms

61

97

Report of Independent Auditors

To the Board of Directors of New York Life Insurance Company:

We have audited the accompanying consolidated financial statements of New York Life Insurance Company

and its subsidiaries (the ¡°Company¡±), which comprise the consolidated statements of financial position as

of December 31, 2019 and 2018, and the related consolidated statements of operations, of comprehensive

income, of equity and of cash flows for the years then ended.

Management's Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial

statements in accordance with accounting principles generally accepted in the United States of America;

this includes the design, implementation, and maintenance of internal control relevant to the preparation

and fair presentation of consolidated financial statements that are free from material misstatement, whether

due to fraud or error.

Auditors¡¯ Responsibility

Our responsibility is to express an opinion on the consolidated financial statements based on our audits. We

conducted our audits in accordance with auditing standards generally accepted in the United States of

America. Those standards require that we plan and perform the audit to obtain reasonable assurance about

whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the

consolidated financial statements. The procedures selected depend on our judgment, including the

assessment of the risks of material misstatement of the consolidated financial statements, whether due to

fraud or error. In making those risk assessments, we consider internal control relevant to the Company's

preparation and fair presentation of the consolidated financial statements in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on

the effectiveness of the Company's internal control. Accordingly, we express no such opinion. An audit also

includes evaluating the appropriateness of accounting policies used and the reasonableness of significant

accounting estimates made by management, as well as evaluating the overall presentation of the

consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and

appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material

respects, the financial position of New York Life Insurance Company and its subsidiaries as of December 31,

2019 and 2018, and the results of their operations and their cash flows for the years then ended in

accordance with accounting principles generally accepted in the United States of America.

New York, New York

March 12, 2020

PricewaterhouseCoopers LLP, PricewaterhouseCoopers Center, 300 Madison Avenue, New York, NY 10017

T: (646) 471 3000, F: (813) 286 6000, us

1

NEW YORK LIFE INSURANCE COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

December 31,

2019

2018

(in millions)

Assets

Fixed maturities (includes $1,275 and $1,297 of securities pledged to creditors in

2019 and 2018, respectively):

Available-for-sale, at fair value

Securities at fair value

Equity securities:

Securities, at fair value (cost: $3,178 and $3,521 in 2019 and 2018, respectively)

Affiliated

Mortgage loans and other loans (includes $1,240 and $1,104 measured at fair value

in 2019 and 2018, respectively), net of allowances

Policy loans

Other investments

Total investments

Cash and cash equivalents

Deferred policy acquisition costs

Other assets (includes $3,433 and $3,397 measured at fair value in 2019 and 2018,

respectively)

Separate account assets

Total assets

Liabilities

Future policy benefits (includes $7,818 and $7,545 measured at fair value in 2019

and 2018, respectively)

Policyholders¡¯ account balances

Dividends payable to policyholders

Policy claims

Debt (includes $1,474 and $1,621 measured at fair value in 2019 and 2018,

respectively)

Collateral received on securities lending

Other liabilities (includes $4,600 and $4,631 measured at fair value in 2019 and

2018, respectively)

Separate account liabilities

Total liabilities

Equity

Accumulated other comprehensive income

Retained earnings

Total New York Life equity

Non-controlling interest

Total equity

Total liabilities and equity

$

$

$

$

204,297

21,645

$

3,672

8

3,627

10

41,244

12,448

20,827

304,141

5,353

6,718

39,388

12,142

18,701

275,346

6,379

8,313

11,851

43,585

371,648

12,151

36,955

339,144

131,476

123,504

1,275

1,261

$

$

123,527

119,954

1,248

1,368

7,010

1,304

5,876

1,327

14,715

43,585

324,130

11,953

36,955

302,208

5,230

37,765

42,995

4,523

47,518

371,648

(1,893)

35,017

33,124

3,812

36,936

339,144

$

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

2

182,620

18,858

NEW YORK LIFE INSURANCE COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

Years Ended December 31,

2019

2018

(in millions)

Revenues

Premiums

Fees - universal life and annuity policies

Net investment income

Net investment gains (losses):

Other-than-temporary impairments on fixed maturities

Other-than-temporary impairments on fixed maturities recognized in

accumulated other comprehensive income

All other net investment gains (losses)

Total net investment gains (losses)

Management fees and other income

Total revenues

$

$

(161)

Expenses

Policyholder benefits

Increase in liabilities for future policy benefits

Interest credited to policyholders' account balances

Dividends to policyholders

Operating expenses

Total expenses

Income before income tax expense and non-controlling interests

Income tax expense

Net income

Less: income attributable to non-controlling interests

$

Net income attributable to New York Life

16,317

1,729

12,025

(95)

32

3,031

2,902

1,526

34,499

32

(912)

(975)

1,573

28,770

10,487

7,350

3,941

2,009

7,101

30,888

10,229

5,370

2,856

1,962

6,489

26,906

3,611

494

3,117

389

1,864

75

1,789

343

2,728

$

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

3

15,002

1,691

11,479

1,446

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