REPORT ON EXAMINATION OF THE NEW YORK LIFE …

[Pages:5]REPORT ON EXAMINATION OF THE

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION AS OF

DECEMBER 31, 2012

TABLE OF CONTENTS

SALUTATION .................................................................................................................................... 1 SCOPE OF EXAMINATION.............................................................................................................. 1 SUMMARY OF SIGNIFICANT FINDINGS ..................................................................................... 3 COMPANY HISTORY ....................................................................................................................... 3 MANAGEMENT AND CONTROL ................................................................................................... 3

Management................................................................................................................................. 3 Shareholders................................................................................................................................. 3 Directors....................................................................................................................................... 4 Committees .................................................................................................................................. 5 Officers ........................................................................................................................................ 5 Corporate Records ....................................................................................................................... 6 Holding Company System ........................................................................................................... 6 Affiliated Agreements.................................................................................................................. 7 Unaffiliated Agreements ............................................................................................................ 14 TERRITORY AND PLAN OF OPERATION .................................................................................. 14 Territory ..................................................................................................................................... 14 Plan of Operation ....................................................................................................................... 14 GROWTH OF COMPANY ............................................................................................................... 18 REINSURANCE................................................................................................................................ 19 Assumed..................................................................................................................................... 19 Ceded ......................................................................................................................................... 20 ACCOUNTS AND RECORDS ......................................................................................................... 22 FINANCIAL STATEMENTS ........................................................................................................... 23 Assets ......................................................................................................................................... 24 Liabilities, Surplus and Other Funds ......................................................................................... 25 Summary of Operations ............................................................................................................. 25 Capital and Surplus Account ..................................................................................................... 27 Reconciliation of Surplus since last Examination...................................................................... 28 Dividends ................................................................................................................................... 29 Capitalization ............................................................................................................................. 29 SCHEDULE OF EXAMINATION ADJUSTMENTS...................................................................... 29 NOTES TO FINANCIAL STATEMENTS....................................................................................... 29 PRIOR EXAM COMMENTS AND RECOMMENDATIONS ........................................................ 34 COMMENTS AND RECOMMENDATIONS.................................................................................. 35 CONCLUSION.................................................................................................................................. 35

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May 15, 2014

SALUTATION

Honorable Karen Weldin Stewart, CIR-ML Delaware Insurance Commissioner Delaware Department of Insurance Rodney Building 841 Silver Lake Blvd. Dover, Delaware 19904 Dear Commissioner,

In compliance with instructions and pursuant to statutory provisions contained in Certificate of Authority No. 13.003, dated March 25, 2013, an examination has been made of the affairs, financial condition and management of the

NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION hereinafter referred to as "the Company" or "NYLIAC" and incorporated under the laws of the State of Delaware. The Company's registered agent in Delaware is The Corporation Trust Company located at 200 Continental Drive, Suite 306, Newark, Delaware 19713. The examination was conducted at the Company's administrative office located at 51 Madison Avenue, New York, New York 10010.

The report of examination thereon is respectfully submitted.

SCOPE OF EXAMINATION The last examination was completed as of December 31, 2007, by the Delaware Insurance Department. This examination covered the period of January 1, 2008, through December 31, 2012, and encompasses a general review of transactions during the period, the Company's business policies and practices, as well as management and relevant corporate

New York Life Insurance and Annuity Corporation

matters, with a determination of the financial condition of the Company at December 31, 2012. Transactions subsequent to the examination date were reviewed where deemed necessary.

We conducted our examination in accordance with the National Association of Insurance Commissioners (NAIC) Financial Condition Examiners Handbook (Handbook) and generally accepted statutory insurance examination standards consistent with the Insurance Laws and Regulations of the State of Delaware. The NAIC Handbook requires that we plan and perform the examination to evaluate the financial condition and identify prospective risks of the Company by obtaining information about the Company including corporate governance, identifying and assessing inherent risks within the Company and evaluating system controls and procedures used to mitigate those risks. The examination also included assessing the principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation, management's compliance with Statutory Accounting Principles and annual statement instructions when applicable to domestic state regulations.

All accounts and activities of the Company were considered in accordance with the risk focused examination process. The examination report addresses regulatory issues reviewed during the examination process.

During the course of this examination, consideration was given to work performed by the Company's external accounting firm, PricewaterhouseCoopers LLP (PwC). Certain auditor work papers of their 2012 audit have been incorporated into the work papers of the examiners and have been utilized in determining the scope, areas of emphasis in conducting the examination and in the area of risk mitigation and substantive testing.

In addition to items noted in this report, the topics below were reviewed without material exception and are included in the work papers of this examination:

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New York Life Insurance and Annuity Corporation

Fidelity Bonds and Other Insurance Pensions, Stock Ownership and Insurance Plans Statutory Deposits Subsequent Events

SUMMARY OF SIGNIFICANT FINDINGS There were no material adverse findings, adjustments to the financial statements, or specific recommendations as a result of this examination.

COMPANY HISTORY The Company was incorporated on November 3, 1980, under the laws of the State of Delaware. A Certificate of Authority, issued by the Insurance Commissioner on December 26, 1980, and amended on September 12, 1983, authorized the Company to transact the business of life insurance, including annuities, variable annuities, credit life insurance, health insurance, credit health insurance and variable life insurance.

MANAGEMENT AND CONTROL Management

Pursuant to the General Corporation Law of the State of Delaware as implemented by the Company's Certificate of Incorporation and bylaws, all corporate powers and its business, property and affairs are managed by or under the direction of its Board of Directors. Shareholders

In accordance with Article II, Section 1 of the Company's bylaws, the annual shareholder's meeting shall be held at such date and time and at such place as the Board of Directors may determine.

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New York Life Insurance and Annuity Corporation

Directors

Pursuant to the General Corporation Law of the State of Delaware, as implemented by

the Company's Certificate of Incorporation and bylaws, all corporate powers and its business

property and affairs are managed by, or under the direction of, its Board of Directors (Board). In

accordance with Article III, Section 1 of the Company's bylaws, the Board shall consist of at

least one member. Each Director shall hold office for one year until his successor is elected and

qualified, or until earlier resignation or removal. The sole shareholder fixed the number of

Directors at thirteen on July 1, 2010.

The twelve members of the Board, who are all officers of the parent New York Life

Insurance Company (NYL), serving as of December 31, 2012, each elected or appointed in

accordance with Company bylaws, were as follows:

Director Theodore Alexander Mathas Christopher Thomas Ashe

Christopher Owsley Blunt Frank Michael Boccio Michael Edward Sproule Stephen Paul Fisher

John Thomas Fleurant

Steven Daniel Lash

Mark William Pfaff Arthur Harutyun Seter Joel Martin Steinberg Susan Ann Thrope

New York Life Insurance Company Title Chairman of the Board, President & Chief Executive Officer Senior Vice President & Chief Financial Officer - Investments Group Executive Vice President & President - Insurance Group Executive Vice President & Chief Administrative Officer Executive Vice President & Chief Financial Officer Senior Vice President ? Mainstay Funds & Chief Marketing Officer Senior Vice President ? Finance, Deputy Chief Financial Officer & Controller Senior Vice President & Chief Financial Officer ? Insurance Group Executive Vice President & Head of Agency Senior Vice President & Deputy Chief Investment Officer Senior Vice President, Chief Risk Officer & Chief Actuary Senior Vice President, Deputy General Counsel & Secretary

There was a vacancy on the Board at December 31, 2012, due to the retirement of

Solomon Goldfinger effective November 30, 2012. The sole shareholder fixed the number of

Directors at twelve on January 31, 2013, and at thirteen on February 25, 2014.

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