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