Keep Good Going Annual Report

Transcription

1 Keep Good Going 2012 Annual Report

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3 Financial Highlights (In $ Millions) December 31, 2012 December 31, 2011 Policyholder Benefits and Dividends $ 8,099 $ 7,619 Surplus and Asset Valuation Reserves 19,613 17,861 Individual Life Insurance in Force 816, ,522 Assets Under Management 380, ,274 Operating Earnings 1,586 1,340 Insurance Sales 1,160 1,205 Total Annuity Sales 7,485 8,126 Mutual Fund Sales 17,224 18,936 For definitions of the company s performance measures, please see the Glossary of Terms on page 30. Note: New York Life or the company, as used throughout this Report, can refer either separately to the parent company, New York Life Insurance Company, or one of its subsidiaries, or collectively to all New York Life companies, which include the parent company and its subsidiaries and affiliates. Any discussion of ratings and safety throughout this Report applies only to the financial strength of New York Life, and not to the performance of any investment products issued by the company. Such products performance will fluctuate with market conditions. The New York State Department of Financial Services recognizes only statutory accounting practices for determining and reporting the financial condition and results of operations of an insurance company. The condensed consolidated statutory statement of financial position in this Report includes New York Life Insurance Company (NYLIC) and its domestic, wholly owned life insurance subsidiaries: New York Life Insurance and Annuity Corporation (NYLIAC) and NYLIFE Insurance Company of Arizona (NYLAZ). NYLAZ is not authorized in New York or Maine and does not conduct insurance business in New York or Maine. Policyholders may request a copy of the audited statutory financial statements applicable to their respective companies, New York Life s consolidated financial statements prepared in accordance with generally accepted accounting principles (GAAP), and the detailed reconciliation of the company s GAAP financial statements to its non-gaap performance measure (i.e., Operating Earnings) by contacting the Secretary of the parent, New York Life Insurance Company, 51 Madison Avenue, New York, New York The individual company audited statutory financial statements, New York Life s consolidated GAAP financial statements, and reconciliation to non-gaap performance measures are also available on our website (

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5 Contents A message from Ted Mathas Real life requires real solutions. Good times. Bad times. We re built for all times Investment Review Consolidated Statutory Statement of Financial Position 2012 Financial Overview Management s Discussion of Financial Responsibility Executive Management Committee Board of Directors Offices of New York Life Notes Glossary of Terms

6 A message from Ted Mathas When someone chooses to do business with New York Life, they likely are thinking not only about taking care of their own financial future, but also the financial futures of those they care about most. Few decisions in life are arguably more important. Still, far too many people never get around to doing what needs to be done: making the necessary plans today to ensure that tomorrow is just as good, if not better. And at New York Life, our promise is that we will help our customers keep that good going in their lives. Lately, it seems that more and more seemingly dependable institutions are being challenged to keep their promises. Some blame the sluggish economy we have all been working through these past few years. Others, frankly, made promises they had no business making in the first place. From our perspective, no excuse is acceptable especially when people have placed their trust in you to help create a secure financial future. At New York Life, we are here for good: to protect loved ones, to protect businesses, to help safeguard retirements. Permanently. Whenever we are needed whether that is today, tomorrow, or decades into the future we will be there, strong and secure, keeping our promises. New York Life Insurance Company

7 We have never claimed to have a secret formula for success. New York Life s approach to running our business is straightforward: It is always about making good and responsible decisions, just as we have done for nearly years. Ensuring we do so starts by keeping the company vibrant and growing no matter what is going on in the world around us. And this past year, while many companies continued to struggle, our Agents, employees, and representatives delivered another successful performance. Insurance and investment sales were again strong, and we were able to generate double-digit growth in earnings. Perhaps more importantly, we grew our surplus by 10 percent to a total of $19.6 billion.* This is the money over and above the reserves we already have on hand to pay benefits; money that further enhances the long-term financial strength our customers expect from us. In fact, out of roughly 900 companies selling life insurance in the United States today, not one has higher ratings for financial strength from A.M. Best, Fitch, Moody s, and Standard & Poor s than we do. We have never claimed to have a secret formula for success. New York Life s approach to running our business is straightforward: It is always about making good and responsible decisions, just as we have done for nearly 170 years. Every dollar of value we create is managed for our policyholders benefit. As a mutual life insurer, New York Life Insurance Company has no shareholders. So even in times like these, our priorities remain aligned with those of the people who have turned to us to help them protect their future. One of the biggest challenges in the life insurance business remains unprecedented low interest rates. The level of interest rates * Includes Asset Valuation Reserves; see Glossary of Terms on page 30. Annual Report

8 ... as important as our strong performance was in... what we believe is equally important are the additional steps we are taking to make the organization more fit for the challenging road ahead. directly affects our dividends, our crediting rates, and our earnings. This past July, the 10-year U.S. Treasury rate fell to 1.39 percent, the lowest point in the 140 years this rate has been tracked. And with the Federal Reserve focused on keeping rates very low in an effort to drive borrowing and spending, it will remain an ongoing challenge not only for insurers, but for any savers looking to make secure, long-term financial plans. While low levels of interest rates adversely affect dividends, our goal is to always pay as much as we possibly can, consistent with our number one priority of maintaining our financial strength. Given our very strong operating performance this past year, along with the additional capital we raised through the divestiture of most of our international operations, our company s Board of Directors approved a $100 million increase in dividends payable to New York Life s participating U.S. policyholders in The total payout this coming year will exceed $1.3 billion and represents an additional benefit beyond the guarantees we already provide through our products. While New York Life has continued to perform well since the onset of the financial crisis, we are running into the same economic headwinds as every other company. And even the best trained marathoner will always say: Running into the wind is always harder. That is why, as important as our strong performance was in 2012 (or any given year, for that matter), what we believe is equally important are the additional steps we are taking to make the organization more fit for the challenging road ahead. To help ensure we continue to perform at a high level over the long term, we made the decision this past year to consolidate, reorganize, and streamline nearly every area and function within our organization. The new structure now in place provides the platform to deliver higher levels of customer service. And, by increasing our operational efficiency, the company now costs $100 million less to run each year going forward. This restructuring was a challenging process. But as evidenced by our strong results, I could not be more proud of the way our people stepped up and got the job done. As noted, in 2012 we completed the divestiture of nearly all of our international operations. This, too, was part of our effort to dedicate even more resources to serving our U.S. customers. That doesn t mean New York Life is not pursuing growth opportunities within different demographic markets. We are but just in our own backyard. Through focused Agent recruiting, dedicated programs and marketing, and community involvement, we continue to serve the needs New York Life Insurance Company

9 of various ethnic populations throughout the United States. We also retained ownership of our subsidiary in Mexico, Seguros Monterrey New York Life. Seguros Monterrey has been serving the life insurance needs of our neighbors to the south for more than 70 years. It is already one of the top insurance companies in Mexico today; it is poised for significant growth in the years ahead and it will remain an important contributor to our organization and overall results. This past year, we also welcomed a new member to our Board of Directors: Gerald B. Smith, chairman and CEO of Smith, Graham & Co. Investment Advisors, L.P. Mr. Smith is an accomplished leader who brings broad management and investment experience to our company. The slow pace of economic recovery and continuing uncertainty will inevitably compel more Americans to take on additional responsibility for their own financial futures. And while we made some important changes within our organization this past year, we are still the same company, guided by our enduring values of financial strength, integrity, and humanity. In fact, we believe we are now in an even stronger position to deliver the solutions people need. No one should ever feel they have to go it alone when planning for the future. That is why we approach our business believing we not only have the ability to help people achieve their objectives we also have the responsibility to do so. Responsibility. That is something we need to see more of these days in our country. We are here to help individuals take responsibility for their futures and the futures of those they care about most. No matter what lies ahead or how needs may change, we stand ready to bring the confidence and security people deserve, so they can focus on the good things in life. Sincerely, Ted Mathas Chairman of the Board, President and Chief Executive Officer Annual Report

10 Real life requires real solutions. We have what people need. New York Life Insurance Company

11 Purchasing life insurance, as well as developing a solid financial portfolio, is an important step toward building financial security. But as we all know, needs usually change over time. No matter where our customers are in life, we can help them keep the good going by making sure their next steps are the right ones. More than 35 million American households have no life insurance whatsoever. 1 More Americans are living longer than ever before and about 70 percent of people over age 65 will need long-term care services. 2 For the next 20 years, approximately 10,000 baby boomers will turn 65 each day and many admit to having not adequately prepared for retirement. More than one in four American workers with 401(k) and other retirement savings accounts use them to pay current expenses. 4 Weathering the storm Much has happened in the world around us since we opened our doors in We re still keeping our promises, and we continue to earn the highest ratings currently awarded to a life insurer for financial strength. 5 > A.M. Best A++ Superior > Fitch Ratings AAA Exceptionally Strong > Moody s Investors Services Aaa Exceptional > Standard & Poor s AA+ Very Strong Life Insurance Life insurance can help make sure families are provided for and that children won t have to worry about their futures. From temporary or permanent policies, to policies offering guaranteed cash value accumulation or our variable universal life policies with returns tied to equity market performance, 6 to policies that allow for flexible premium payments (if structured properly), we can help customers find the solutions they need to help meet their objectives. Long-Term Care Insurance Long-term care insurance helps offset the potentially high cost of health care expenses relating to a disability, cognitive disorder, or chronic illness, which many people will likely face as they get older. Retirement Income Products With people living longer than ever before, one thing is clear they need to guard against running out of savings. We offer guaranteed annuities that will provide a steady stream of income immediately after purchase, or at a chosen later date. And this is money that people can count on receiving for as long as they live. Investment Annuities More people are turning to annuities to help accumulate money for retirement later in life. Whether they choose a product with guaranteed income, or variable annuities with returns tied to equity market performance, 6 these annuities grow on a tax-deferred basis, meaning no tax is paid on the earnings until funds are withdrawn. 7 Mutual Funds 8 With 45 retail funds in its lineup, MainStay Investments, a subsidiary of New York Life, has what people need to broaden their portfolios and meet their planning and investing goals. See Notes on page 29. Annual Report

12 Good times. Bad times. We re built for all times. At New York Life, we have a singular vision: to be there when people need us most. We re built to not only be there for policyholders, but for their children and generations to come. That s why the decisions we make are not for short-term gains, but for long-term performance. And it s why we make the time and investments necessary for our Agents and employees to be the best professionals in our industry. Our policyholders deserve our very best. We re up to the challenge. Agents New York Life s more than 12,000 Agents are among the best trained and top performing financial professionals in our industry. For more than 58 years, our Agents have led the prestigious Million Dollar Round Table (MDRT)* in membership. But their success reveals only half the story. New York Life Agents have relationships with their customers that often continue from one generation to the next. They know the families and communities they serve because they re neighbors, local business leaders, volunteers, and Little League coaches. They are there at some of the most important moments in a person s life a responsibility they don t take lightly. * Million Dollar Round Table, the premier association of financial professionals, is an organization that recognizes excellence in the life insurance industry. Mutuality As a mutual life insurance company, New York Life does not have shareholders. Therefore, we serve only one constituency: policyholders. And, since they need us to be there 10, 20, or even 30 years from now to pay benefits to their beneficiaries or to see them through their retirements, they need a life insurance company dedicated to long-term growth and commitment. Our strong surplus enables us to keep our promises, maintain our industry-leading financial strength ratings, and return value to our policyholders in the form of dividends. We re cautiously optimistic, analytical, and tough-minded we have important promises to keep. For 159 consecutive years, New York Life has paid dividends to its policyholders. In 2013, we ll pay policyholders $1.33 billion in dividends. New York Life Insurance Company

13 Corporate Responsibility It is estimated that one in seven Americans will lose a parent or sibling before the age of 20.* Dealing with loss early in life has a lasting impact on kids, and many end up suffering in silence. That s why the New York Life Foundation has invested more than $7 million over the last five years in programs and organizations that support grieving children. The Foundation s website, offers resources for schools, nonprofit organizations, parents, and children. The Foundation also supports camps nationwide where grieving children can go to heal, such as Camp Erin and Comfort Zone Camps. In 2012, the Foundation sponsored Helping Children Who Have Lost a Loved One: What Kids in Grief Want You to Know, a study that captured how children deal with loss, in their own words. The findings are helping educators and families better serve children in need. * 2010 Comfort Zone Camp Survey In 2012, thousands of New York Life Agents and employees dedicated more than 45,000 hours to volunteer efforts in their communities. Employees and Agents raised $3.4 million for charities nationwide during our annual Give for Good campaign. The New York Life Foundation made grants of nearly $15 million to organizations in New York City and across the nation. Our People When a company has many perspectives under one roof, problems often have more than one solution; opportunities emerge that were not always apparent; and decisions and actions can be handled in many different ways. Diversity at our company not only informs what we do, but how we do it. New York Life s employees have seven diverse organizations for networking, mentoring, and professional development, including the African American Employee Resource Group, the Asian Network Group, ENABLE (for people with disabilities), The Latino Connection, NYLPride (LGBT), NYL- VETS (for military veterans), and The Women s Initiative. In addition, rewarding and developing employees of every background is an investment we make each day, with training programs, online courses, experiential programs for managers, and a performance management program that helps everyone grow, develop, and achieve his or her best. Recognition and Awards How do we keep good going? By setting the bar for achievement in our industry, in our communities, and in our organization. Here s just a sample of where we ve been recognized. > Fortune magazine: #86 on the Fortune (May 21, 2012 issue) > Fortune magazine s list of World s Most Admired Companies 2013 (March 18, 2013 issue) > Working Mother magazine s 25 Best Companies for Multicultural Women (June/July 2012 issue) and 100 Best Companies (October 2012 issue) > Leadership Excellence magazine s Leadership (October 2012 issue) For a full listing of our awards, please visit Annual Report

14 Investment Review New York Life Insurance Company

15 The following investment review presents information for New York Life Insurance Company and its domestic insurance subsidiaries, New York Life Insurance and Annuity Corporation and NYLIFE Insurance Company of Arizona, assets of which represent most of the invested assets of the company. The cash and invested asset information below is presented on a statutory accounting basis. * Sound principles and strict standards guide New York Life s management of its investment portfolio. This includes conducting our own traditional, bottom-up research on individual investments and the underwriting of credit risk, rather than relying on third-party credit ratings. The company maintains strict diversification standards by asset classes, issuers, and sectors, and continues to hold ample liquidity in its investment portfolio. * Includes New York Life s investments in its international insurance affiliates and domestic non-insurance affiliates. Cash and Invested Assets As of December 31, 2012, New York Life and its domestic insurance subsidiaries had cash and invested assets of $180.1 billion and maintained a well-diversified investment portfolio. Cash and Invested Assets 1 (In $ Millions) December 31, 2012 December 31, 2011 Public Corporate Bonds and Loans Private Corporate Bonds and Loans U.S. Gov t and Agency Securities Non-Agency Commercial Mortgage-Backed Securities Non-Agency Asset-Backed Securities Non-Agency Residential Mortgage-Backed Securities $ 48,703 33,894 30,197 8,858 7,619 4,997 27% 19% 17% 5% 4% 3% $ 46,622 30,842 31,897 9,458 8,087 5,755 27% 18% 18% 5% 5% 3% Subtotal Fixed Income $ 134,268 75% $ 132,661 76% Mortgage Loans Equity and Other Interests 2 Policy Loans Cash and Short-Term Investments 3 Derivatives $ 18,810 12,301 9,277 4,395 1,057 10% 7% 5% 2% 1% $ 16,989 10,319 9,046 4,709 1,192 10% 6% 5% 3% 1% Total Cash and Invested Assets $ 180, % $ 174, % Numbers may not add up due to rounding. 1 Includes $75,596 million and $72,682 million of assets related to New York Life Insurance and Annuity Corporation for 2012 and 2011, respectively. 2 Includes New York Life s investments in its domestic non-insurance affiliates and international insurance affiliates. 3 Includes cash primarily received on financing transactions of $2,142 million and $3,762 million for 2012 and 2011, respectively. Annual Report

16 Fixed Income Assets The fixed income portfolio continues to be dominated by high-quality investments, with 92 percent being investment grade. The public and private corporate bond and loan portfolio remains well diversified across the broad industry spectrum and is comprised of securities issued by more than 2,165 individual issuers. The fixed income portfolio is managed to limit exposure to individual issuers according to credit quality and other factors. No single corporate exposure was greater than $325 million. The portfolio s ten largest holdings by issuer represented 1.5 percent of cash and invested assets. Diversification of Corporate Bonds and Loans* (In $ Millions) Utilities Consumer Products Banking/Brokerage Healthcare Energy Conglomerates/Diversified Mfg. Real Estate Investment Trusts Cable & Media Retail Gas Pipelines Sovereign/Foreign Government Aerospace & Defense Insurance Other December 31, 2012 $ 14,326 10,211 5,822 5,726 4,784 4,365 3,575 2,755 2,700 2,671 2,557 2,365 2,227 18,513 17% 12% 7% 7% 6% 5% 4% 3% 3% 3% 3% 3% 3% 22% Total $ 82, % Numbers may not add up due to rounding. *Includes $37,060 million of assets related to New York Life Insurance and Annuity Corporation. Fixed Income by Quality* (In $ Millions) NAIC Rating Approximate Rating Agency Equivalent Quality December 31, 2012 December 31, 2011 NAIC 1 NAIC 2 AAA to A- BBB+ to BBB- Highest Quality High Quality $ 89,889 33,962 67% 25% $ 91,650 30,403 69% 23% Investment Grade $ 123,851 92% $ 122,053 92% NAIC 3 NAIC 4 NAIC 5 NAIC 6 BB+ to BB- B+ to B- CCC+ to CCC- CC to D Medium Quality Low Quality Lower Quality In or Near Default $ 5,414 3,690 1, % 3% 1% 0% $ 5,371 3,828 1, % 3% 1% 0% Below Investment Grade $ 10,417 8% $ 10,608 8% Total Fixed Income $ 134, % $ 132, % Numbers may not add up due to rounding. *Includes $63,806 million and $62,518 million of assets related to New York Life Insurance and Annuity Corporation for 2012 and 2011, respectively. New York Life Insurance Company

17 Non-Agency Commercial Mortgage-Backed Securities As of year-end 2012, New York Life and its domestic insurance subsidiaries owned $8.9 billion in non-agency commercial mortgage-backed securities, representing five percent of cash and invested assets. The majority of these securities are of the highest quality, as 98 percent were classified as NAIC 1. Notwithstanding the ratings, these securities are selected by our real estate investment professionals based on the quality of the underlying mortgage loans. Non-Agency Commercial Mortgage-Backed Securities by NAIC Rating Category* (In $ Millions) NAIC Rating Approximate Rating Agency Equivalent Quality December 31, 2012 NAIC 1 NAIC 2 NAIC 3 6 AAA to A- BBB+ to BBB- BB+ to D Highest Quality High Quality Medium Quality to In or Near Default $ 8, % 1% 1% Total $ 8, % Numbers may not add up due to rounding. *Includes $4,348 million of assets related to New York Life Insurance and Annuity Corporation. Non-Agency Asset-Backed Securities As of year-end 2012, New York Life and its domestic insurance subsidiaries owned $7.6 billion in non-agency asset-backed securities, representing four percent of cash and invested assets. Approximately 91 percent of these securities were rated NAIC 1 and are collateralized by a broad range of collateral types. These securities are diversified by issuance year. Non-Agency Asset-Backed Securities by NAIC Rating Category* (In $ Millions) NAIC Rating Approximate Rating Agency Equivalent Quality December 31, 2012 NAIC 1 NAIC 2 NAIC 3 6 AAA to A- BBB+ to BBB- BB+ to D Highest Quality High Quality Medium Quality to In or Near Default $ 6, % 6% 3% Total $ 7, % Numbers may not add up due to rounding. *Includes $4,023 million of assets related to New York Life Insurance and Annuity Corporation. Annual Report

18 Non-Agency Residential Mortgage-Backed Securities As of year-end 2012, New York Life and its domestic insurance subsidiaries owned $5.0 billion in non-agency residential mortgagebacked securities, representing three percent of cash and invested assets. The mortgage loans underlying these securities were held predominantly by prime borrowers. The majority of these securities were classified as NAIC 1 and 87 percent are collateralized by fixed-rate mortgage loans. Non-Agency Residential Mortgage-Backed Securities by Type and NAIC Rating Category* (In $ Millions) NAIC Rating Approximate Rating Agency Equivalent Quality Prime Mid-Prime Sub-Prime Total NAIC 1 NAIC 2 NAIC 3 NAIC 4 NAIC 5 NAIC 6 AAA to A- BBB+ to BBB- BB+ to BB- B+ to B- CCC+ to CCC- CC to D Highest Quality High Quality Medium Quality Low Quality Lower Quality In or Near Default $ 1, $ $ $ 2, Total $ 3,313 $ 1,165 $ 519 $ 4,997 *Includes $2,517 million of assets related to New York Life Insurance and Annuity Corporation. Mortgage Loans The $18.8 billion mortgage loans portfolio consists of $18.5 billion of loans on commercial real estate properties and $0.3 billion of loans on single-family residential properties as of year-end Commercial Mortgage Loans The company s mortgage loan investment style emphasizes conservative underwriting and a focus on high-quality properties. The commercial mortgage loan portfolio is broadly diversified by both property type and geographic location. The company employs a proactive portfolio monitoring program with a goal of early identification of potential problems. The commercial mortgage loan portfolio has historically performed very well and the company believes that the portfolio is strongly positioned in the current economic environment. As of December 31, 2012, none of the commercial mortgage loans were delinquent and there were no foreclosures during the year. Single-Family Residential Loans In addition to the non-agency residential mortgage-backed securities highlighted earlier, New York Life and its domestic insurance subsidiaries owned $0.3 billion in fixed-rate residential loans. Includes $245 million of assets related to New York Life Insurance and Annuity Corporation. Commercial Mortgage Loans by Geographic Region* (In $ Millions) December 31, 2012 Southeast Middle Atlantic Pacific North Central South Central Other Total Office Buildings Retail Multi-Family Industrial Other Commercial Property Total $ 5,224 4,142 4,104 2,074 1,474 1,515 Commercial Mortgage Loans by Property Type* (In $ Millions) December 31, 2012 $ 6,547 4,840 3,919 3, % 22% 22% 11% 8% 8% $ 18, % 35% 26% 21% 17% 1% $ 18, % Numbers may not add up due to rounding. * Includes $7,884 million of assets related to New York Life Insurance and Annuity Corporation. New York Life Insurance Company

19 Equity and Other Interests New York Life and its domestic insurance subsidiaries had $12.3 billion of assets classified as equity and other interests as of year-end Of this amount, $3.5 billion represented limited partnerships and other interests invested in diverse sectors of the economy. Private equity investments of $3.4 billion primarily represent leveraged buyout funds in a range of vintage years that are managed by various third-party private equity groups. Allocations to private equity provide an opportunity to exceed the returns of public equities over the long term. Investments in affiliates consist of the company s investment management and insurance operating subsidiaries. The public equity portfolio of $2.0 billion consists primarily of high dividend yielding stocks diversified across various companies, sectors, and regions. Real estate investments of $1.1 billion represent direct and indirect wholly owned properties. Equity and Other Interests* (In $ Millions) December 31, 2012 Various Limited Partnerships and Other Interests Private Equity Investments in Affiliates Public Equity Real Estate Convertible Preferred Securities Total $ 3,502 3,407 2,201 2,030 1, % 28% 18% 17% 9% 1% $ 12, % Numbers may not add up due to rounding. * Includes $1,111 million of assets related to New York Life Insurance and Annuity Corporation. Derivatives As of year-end 2012, New York Life and its domestic insurance subsidiaries had certain outstanding derivative positions carried as assets of $1,057 million. 1 Offsetting these were derivative liabilities of $455 million for a net asset of $602 million. The derivative transactions are entered into to meet the hedging needs of the company or to replicate permissible investments. Derivatives include the purchase of interest rate options to protect against a spike in interest rates, cross currency swaps, interest rate swaps, and forward agreements. Cross currency swaps and forward agreements are typically entered into to convert assets or liabilities of the company that are designated in a foreign currency into U.S. dollars. Interest rate swaps are used to lock in yields of future investments, and to convert fixed-rate investments to floating-rate investments in support of floating-rate liabilities. New York Life and its domestic insurance subsidiaries control derivative counterparty credit risk through the establishment of collateral support agreements. These agreements require the daily postings of cash collateral by the derivative counterparties if and when the market value of derivative positions with the counterparty exceeds a predetermined dollar limit. These dollar limits are intentionally set at a low threshold. Credit exposure to each derivative counterparty is combined with other direct credit risk to the same counterparty and managed against prudent credit risk limits. Asset/Liability and Investment Risk Management The long-term promises New York Life makes to policyholders are backed by sound asset/liability management. Because the company s liabilities are generally fixed income-like in nature, a well-diversified fixed income portfolio forms the foundation of the investment portfolio. Although the General Account assets collectively support all of our product lines, New York Life s approach to asset/liability management is founded on the segregation of assets supporting various products offered to clients. These portfolios are specifically tailored to fit the unique interest rate sensitivities and cash flow characteristics associated with each of these product segments. In addition, New York Life takes a comprehensive enterprise view, taking measures to mitigate overall risk exposures at the corporate level. New York Life has established policies and procedures at the corporate and business unit levels to manage risk exposures. The Investment Committee of the Board of Directors provides oversight over New York Life s investment activity, including review of various risk factors and establishment of investment policies. New York Life supplements our financial modeling with comprehensive stress testing, which is intended to assess the company s financial resilience and sustainability of our business model to extreme events. The stress testing results lead to the implementation of risk mitigation strategies and contingency planning, both key to ensuring the long-term financial strength of the company. 1 Includes $139 million of assets and $90 million of liabilities related to New York Life Insurance and Annuity Corporation. Annual Report

20 Consolidated Statutory Statement of Financial Position Condensed Statutory Statement of Financial Position December 31, 2012 (In $ Millions) New York Life Insurance New York Life Insurance Company 1 and Annuity Corporation 1 Consolidated 2 Assets Cash and invested assets 3 Investment income due and accrued Other assets Separate account assets $ 110,819 1,126 11,784 10,998 $ 75, ,075 26,246 $ 180,108 1,720 3,652 37,244 Total Assets $ 134,727 $ 109,510 $ 222,724 Liabilities Policy benefit reserves Dividends payable to policyholders Other liabilities Separate account liabilities $ 96,475 1,340 7,072 10,992 $ 63,766 12,892 25,688 $ 157,425 1,340 8,240 36,106 Total Liabilities (excluding Asset Valuation Reserves) $ 115,879 $ 102,346 $ 203,111 Surplus and Asset Valuation Reserves Asset valuation reserves Surplus $ 2,279 16,569 $ 765 6,399 $ 3,044 16,569 Total Surplus and Asset Valuation Reserves $ 18,848 $ 7,164 $ 19,613 Total Liabilities and Surplus $ 134,727 $ 109,510 $ 222,724 1 Policyholders may request a copy of the statutory financial statements audited by an independent accounting firm by contacting the Secretary of the parent, New York Life Insurance Company, 51 Madison Avenue, New York, New York The individual company audited financial statements are also available on our website ( and from the New York State Department of Financial Services. 2 The unaudited condensed consolidated statutory statement of financial position compiled by management reflects the consolidation of the audited statutory statement of financial position of New York Life Insurance Company (NYLIC) with its domestic wholly owned life insurance subsidiaries, New York Life Insurance and Annuity Corporation (NYLIAC) and NYLIFE Insurance Company of Arizona (NYLAZ). The consolidated statutory statement of financial position has been derived from the individual separate audited statutory statements of financial position of NYLIC, NYLIAC, and NYLAZ, which were prepared in accordance with accounting practices prescribed or permitted by the New York State Department of Financial Services, or the Delaware or Arizona Department of Insurance (statutory basis of accounting). NYLIC s cash and invested assets and surplus include the surplus of its domestic wholly owned life insurance subsidiaries, which, along with all other significant intercompany transactions (primarily in other assets and other liabilities), have been eliminated in consolidation. As a result, amounts in the table above may not add across. NYLAZ is not authorized in New York or Maine, and does not conduct insurance business in New York or Maine. The NYLAZ audited statutory financial statements are available on our website or from the Arizona Department of Insurance. 3 For more detail on cash and invested assets, see 2012 Investment Review beginning on page 10. New York Life Insurance Company

21 December 31, 2011 New York Life New York Life Insurance Company 1 Insurance and Annuity Corporation 1 Consolidated 2 Assets Cash and invested assets 3 Investment income due and accrued Other assets Separate account assets $ 107,935 1,035 11,773 9,943 $ 72, ,950 23,065 $ 174,916 1,626 3,730 33,008 Total Assets $ 130,686 $ 103,287 $ 213,280 Liabilities Policy benefit reserves Dividends payable to policyholders Other liabilities Separate account liabilities $ 93,934 1,245 8,361 9,947 $ 61,258 13,014 22,560 $ 152,502 1,245 9,677 31,995 Total Liabilities (excluding Asset Valuation Reserves) $ 113,487 $ 96,832 $ 195,419 Surplus and Asset Valuation Reserves Asset valuation reserves Surplus $ 2,070 15,129 $ 661 5,794 $ 2,732 15,129 Total Surplus and Asset Valuation Reserves $ 17,199 $ 6,455 $ 17,861 Total Liabilities and Surplus $ 130,686 $ 103,287 $ 213,280 Annual Report

22 Financial Overview This page presents the consolidated financial results of the company. For definitions of the company s performance measures, please see the Glossary of Terms on page 30. Policyholder Benefits and Dividends Surplus and Asset Valuation Reserves Individual Life Insurance in Force Year In $ Billions Year In $ Billions Year In $ Billions Assets Under Management Operating Earnings Insurance Sales Year In $ Billions Year In $ Billions Year In $ Millions , , , , Agency Recurring Premium Life Insurance Sales All Other Insurance Sales Total Annuity Sales Mutual Fund Sales Year In $ Billions Year In $ Billions Guaranteed Income Annuities All Other Annuities New York Life Insurance Company

23 Management s Discussion of Financial Responsibility Management is responsible for the preparation and integrity of the financial information presented in the Annual Report. The company has complied with the NAIC Model Audit Rule and although we are not an SEC registrant, we have elected to comply voluntarily with Section 302 of the Sarbanes- Oxley Act of 2002, which identifies management s responsibilities over its financial statements and requires management to certify as to the integrity of the financial statements and the effectiveness of internal controls. Our statement to that effect can be viewed on the company s website, The company maintains a strong system of internal accounting controls, monitored by our corporate staff of professionally trained internal auditors. We encourage strong and effective corporate governance from our Board of Directors, continuously review our business results and strategic choices, and focus on financial stewardship. The company s controls are designed to provide reasonable assurance that assets are safeguarded and that transactions and events are recorded properly. The company has evaluated the effectiveness of its controls and procedures for financial reporting purposes as of December 31, 2012 and 2011, and has concluded that they are effective. The financial information contained in this Report has been derived from financial statements that have been audited by the company s independent auditors, in accordance with auditing standards generally accepted in the United States of America. The Audit Committee of the Board of Directors of New York Life Insurance Company, which is comprised exclusively of directors who are not officers or employees of the company, meets regularly with management, the internal auditors, and the independent auditors to provide oversight so that management fulfills its responsibilities for accounting controls and preparation of financial statements. Theodore A. Mathas Chairman of the Board, President and Chief Executive Officer April 1, 2013 Michael E. Sproule Executive Vice President and Chief Financial Officer April 1, 2013 Annual Report

24 Executive Management Committee As of March, Theodore A. Mathas CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER As CEO, Ted Mathas is responsible for managing all aspects of the company, including all business operations in the United States and Mexico. In addition, as Chairman he has overall responsibility for matters pertaining to the Board of Directors. Christopher O. Blunt EXECUTIVE VICE PRESIDENT AND PRESIDENT OF THE INSURANCE GROUP Chris Blunt is responsible for establishing the overall strategic direction for New York Life s life and long-term care insurance products, including the marketing, finance, service, and technology functions that support these products. Mr. Blunt also oversees the supplemental distribution channels for the U.S. life business, including the direct marketing business in Tampa, FL, and the Group Membership Association business. In addition, he oversees New York Life s operations in Mexico. John Y. Kim EXECUTIVE VICE PRESIDENT, PRESIDENT OF THE INVESTMENTS GROUP, AND CHIEF INVESTMENT OFFICER John Kim is responsible for establishing the overall strategic direction for a broad array of institutional and retail products and solutions, which includes retail mutual funds, individual annuities, group annuities, institutional asset management, and retirement plan services. He is responsible for the marketing, finance, technology, distribution, and service functions that support these product lines. In addition, he oversees the company s General Account and investment policies and strategies. Frank M. Boccio EXECUTIVE VICE PRESIDENT AND CHIEF ADMINISTRATIVE OFFICER Frank Boccio oversees an array of corporate-wide shared services, including information systems and technology, internal audit, procurement services, insurance management, records management, business resiliency, and security. He also oversees the company s charitable giving through its corporate responsibility programs and the New York Life Foundation. Sheila K. Davidson EXECUTIVE VICE PRESIDENT, CHIEF LEGAL OFFICER, AND GENERAL COUNSEL Sheila Davidson oversees all of the company s legal, compliance, and corporate governance operations, as well as the Public Relations unit. New York Life Insurance Company

25 Mark W. Pfaff EXECUTIVE VICE PRESIDENT AND HEAD OF AGENCY Mark Pfaff is responsible for New York Life s Career Agency distribution channel. He oversees all aspects of the company s recruiting, development, and management of New York Life s field managers and Agents in the United States. Michael E. Sproule EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER Michael Sproule is responsible for all of the company s finance functions, including Controller s, Risk Management, Tax, Treasury, the Office of the Chief Actuary, Financial Planning, Ratings Agencies, and Corporate Development. John T. Fleurant SENIOR VICE PRESIDENT, FINANCE; DEPUTY CHIEF FINANCIAL OFFICER; AND CONTROLLER John Fleurant oversees the company s Controller s, Tax, and Treasury departments. In addition, he is responsible for the financial planning, accounting policy, and ratings agency relationships. George Nichols III SENIOR VICE PRESIDENT IN CHARGE OF THE OFFICE OF GOVERNMENTAL AFFAIRS George Nichols oversees New York Life s Office of Governmental Affairs, which monitors state, federal, and international legislative and regulatory activity on behalf of the company. He is responsible for assisting senior management in developing New York Life s position and strategy on public policy issues and in communicating with key policymakers and regulators. Barry A. Schub SENIOR VICE PRESIDENT Barry Schub oversees Strategy, Communications, and Human Resources for New York Life. His responsibilities include overall corporate strategy; brand management and corporate marketing, including corporate communications and Internet sites; and all aspects of human resources. Joel M. Steinberg SENIOR VICE PRESIDENT, CHIEF RISK OFFICER, AND CHIEF ACTUARY Joel Steinberg is responsible for leading the risk management activities across the company. He also has oversight responsibilities for all actuarial functions, including economic capital, product pricing, financial reporting, and embedded value. Susan A. Thrope SENIOR VICE PRESIDENT, DEPUTY GENERAL COUNSEL, AND SECRETARY Susan Thrope is responsible for the Office of the Corporate Secretary, which assists New York Life s chairman and CEO in all matters pertaining to the Board of Directors, its Standing Committees, and the Executive Management Committee, including the development and administration of policies, procedures, and legal advice with respect to corporate governance matters. Annual Report

26 Board of Directors As of March, New York Life Insurance Company

27 Betty C. Alewine Elected as a director in 1998, she is the former president and chief executive officer of COMSAT Corporation. Mrs. Alewine is a member of the Board s Audit, Corporate Organization & Compensation, and Governance Committees. Ralph de la Vega Elected as a director in 2009, he is president and chief executive officer of AT&T Mobility, where he is responsible for the wireless business. Mr. de la Vega chairs the Board s Audit Committee and is a member of the Insurance & Operations and Investment Committees. Mark L. Feidler Elected as a director in 2006, he is a founding partner in MSouth Equity Partners and a former president and chief operating officer of BellSouth Corporation. Mr. Feidler chairs the Board s Governance Committee and is a member of the Corporate Organization & Compensation and Investment Committees. Kent B. Foster Elected as a director in 1995, he is the former chairman and chief executive officer of Ingram Micro Inc. Mr. Foster is a member of the Board s Governance and Investment Committees. Christina A. Gold Elected as a director in 2001, she is the former president, chief executive officer, and director of The Western Union Company. Mrs. Gold is a member of the Board s Corporate Organization & Compensation and Insurance & Operations Committees. Conrad K. Harper He served as a director from 1992 to 1993 and rejoined the Board in 1996 after leaving to serve as the Legal Adviser of the U.S. Department of State. He is a retired partner of the law firm of Simpson Thacher & Bartlett LLP. Mr. Harper is a member of the Board s Governance and Investment Committees. Theodore A. Mathas Elected as a director in 2006, he is chairman of the board, president and chief executive officer of New York Life. S. Thomas Moser Elected as a director in 2008, he is a former vice chairman of KPMG, LLP, the U.S. member firm of KPMG International. Mr. Moser chairs the Board s Insurance & Operations Committee and is a member of the Audit Committee. Admiral Joseph W. Prueher Elected as a director in 2001, he is the James R. Schlesinger Distinguished Professor at the University of Virginia, Admiral U.S. Navy (Ret.), and former U.S. Ambassador to the People s Republic of China. Admiral Prueher chairs the Board s Corporate Organization & Compensation Committee and is a member of the Governance Committee. Thomas C. Schievelbein Elected as a director in 2006, he is the chairman, president and chief executive officer of The Brink s Company. Mr. Schievelbein is a member of the Board s Insurance & Operations, Audit, Governance, and Corporate Organization & Compensation Committees. He currently serves as the Board s lead director. Gerald B. Smith Elected as a director in 2012, he is the chairman and CEO of Smith, Graham & Co. Investment Advisors, L.P. Mr. Smith is a member of the Board s Audit and Investment Committees. William G. Walter Elected as a director in 2009, he is the former chairman, president and chief executive officer of FMC Corporation. Mr. Walter chairs the Board s Investment Committee and is a member of the Insurance & Operations Committee. Back, Left to Right: William G. Walter, Gerald B. Smith, Mark L. Feidler, Kent B. Foster, Thomas C. Schievelbein Front, Left to Right: Ralph de la Vega, Christina A. Gold, Conrad K. Harper, Theodore A. Mathas, Betty C. Alewine, Admiral Joseph W. Prueher, S. Thomas Moser Annual Report

28 Offices of New York Life Its major subsidiaries and affiliates (as of March 1, 2 1 ) NEW YORK LIFE INSURANCE COMPANY New York Life maintains more than 120 offices throughout the country, as well as a network of dedicated customer service centers. For questions about our products and services, please call your New York Life Agent or HOME OFFICE 51 Madison Avenue New York, NY HOME OFFICE WESTCHESTER CAMPUS 1 Rockwood Road Sleepy Hollow, NY GENERAL OFFICES ALABAMA Birmingham General Office 2311 Highland Avenue South Suite 100 Birmingham, AL Huntsville General Office Amsouth Center 200 Clinton Avenue, NW Suite 600 Huntsville, AL Mobile General Office 1110 Montlimar Drive Suite 1010 Mobile, AL Montgomery General Office 4121 Carmichael Road Suite 501 Montgomery, AL ALASKA Alaska General Office 701 West 8th Avenue Suite 900 Anchorage, AK ARIZONA Arizona General Office North Scottsdale Road Suite 400 Scottsdale, AZ Tucson General Office One South Church Avenue Suite 1230 Tucson, AZ ARKANSAS Arkansas General Office Executive Center Drive Suite 301 Little Rock, AR CALIFORNIA Central California General Office 7112 North Fresno Street Suite 300 Fresno, CA Central Coast General Office 300 East Esplanade Drive Suite 2050 Oxnard, CA Covina Valley General Office 3201 Temple Avenue Suite 200 Pomona, CA East Bay General Office Bishop Ranch # Camino Ramon Suite 525 San Ramon, CA Fullerton General Office 675 Placentia Avenue Suite 250 Brea, CA Greater Pasadena General Office 801 N. Brand Blvd. 14th Floor Glendale, CA Greater San Francisco General Office 425 Market Street Suite 1600 San Francisco, CA Inland Empire General Office Tri-City Corporate Center 451 East Vanderbilt Way Suite 400 San Bernardino, CA Los Angeles General Office 6300 Wilshire Boulevard Suite 2200 Los Angeles, CA Northern California General Office 2999 Douglas Boulevard Suite 350 Roseville, CA Orange Coast General Office 2020 Main Street Suite 1200 Irvine, CA San Diego General Office 4365 Executive Drive Suite 800 San Diego, CA New York Life Insurance Company

29 San Fernando Valley General Office 6320 Canoga Avenue Suite 900 Woodland Hills, CA Santa Clara General Office 550 South Winchester Blvd. Suite 405 San Jose, CA Silicon Valley General Office 1731 Technology Drive Suite 400 San Jose, CA Stockton General Office 3255 West March Lane Suite 300 Stockton, CA COLORADO Colorado General Office 6850 West 52nd Avenue Suite 200 Arvada, CO CONNECTICUT Connecticut Valley General Office 360 Bloomfield Avenue Suite 402 Windsor, CT Southern Connecticut General Office Merritt & Corporate Park 99 Hawley Lane Suite 1400 Stratford, CT FLORIDA Jacksonville General Office 7880 Gate Parkway Suite 200 Jacksonville, FL Orlando General Office 495 North Keller Road Suite 150 Maitland, FL South Florida General Office Lake Shore Plaza II 1300 Concord Terrace 5th Floor Sunrise, FL Tampa General Office 3109 West Dr. Martin Luther King Jr. Boulevard Suite 300 Tampa, FL GEORGIA Central Georgia General Office 6055 Lakeside Commons Drive Suite 300 Macon, GA Greater Atlanta General Office 5909 Peachtree Dunwoody Road Building D, Suite 1100 Atlanta, GA Savannah General Office 9 Park of Commerce Boulevard Suite 200 Savannah, GA HAWAII Hawaii General Office 841 Bishop Street Suite 1900 Honolulu, HI IDAHO Idaho General Office Pioneer Plaza One 1109 West Myrtle Street Suite 300 Boise, ID ILLINOIS Chicago North Shore General Office 520 Lake Cook Road Room 600 Deerfield, IL Greater Chicago General Office 3010 Highland Parkway Suite 700 Downers Grove, IL Western Illinois General Office 20 N. Martingale Road Suite 400 Schaumburg, IL INDIANA Indiana General Office North Meridian Street Suite 850 Carmel, IN IOWA Cedar Rapids General Office 1625 Boyson Road Suite 200 Hiawatha, IA Des Moines General Office 4900 University Avenue Suite 225 West Des Moines, IA KANSAS Greater Kansas City General Office 7500 College Boulevard Suite 800 Overland Park, KS Kansas General Office 125 North Market Suite 1600 Wichita, KS KENTUCKY Kentucky General Office 9300 Shelbyville Road Suite 1250 Louisville, KY LOUISIANA Louisiana General Office 2431 South Acadian Thruway Suite 350 Baton Rouge, LA New Orleans General Office 639 Loyola Avenue Suite 1900 New Orleans, LA Shreveport General Office 401 Edwards Street Suite 1700 Shreveport, LA Annual Report

30 Offices of New York Life (cont d.) MAINE Maine General Office 500 Southborough Drive Suite 300 South Portland, ME MARYLAND Baltimore General Office Timonium II Building 1954 Greenspring Drive Suite 700 Timonium, MD Greater Washington General Office Democracy Center 6901 Rockledge Drive Suite 800 Bethesda, MD MASSACHUSETTS Boston General Office 201 Jones Road 5th Floor Waltham, MA MICHIGAN Greater Detroit General Office 4000 Town Center Suite 1300 Southfield, MI Michigan General Office 333 Bridge Street NW Suite 205 Grand Rapids, MI MINNESOTA Minnesota General Office 3600 Minnesota Drive Suite 100 Edina, MN MISSISSIPPI Mississippi General Office 1052 Highland Colony Parkway Suite 101 Ridgeland, MS MISSOURI St. Louis General Office 1 City Place Drive Suite 260 Creve Coeur, MO MONTANA Montana General Office 401 North 31st Street Suite 800 Billings, MT NEBRASKA Nebraska General Office FNB Parkway Suite 100 Omaha, NE NEVADA Las Vegas General Office 3993 Howard Hughes Parkway Suite 500 Las Vegas, NV Reno General Office 50 West Liberty Street Suite 500 Reno, NV NEW HAMPSHIRE New Hampshire General Office 1155 Elm Street 8th Floor Manchester, NH NEW JERSEY New Jersey General Office 250 Pehle Avenue Suite 503 Saddle Brook, NJ South Jersey General Office 1000 Atrium Way Suite 500 Mount Laurel, NJ NEW MEXICO New Mexico General Office 6565 Americas Parkway NE Suite 500 Albuquerque, NM NEW YORK Albany General Office 26 Century Hill Drive Suite 301 Latham, NY Buffalo General Office 6400 Main Street Suite 110 Williamsville, NY Finger Lakes General Office 375 Woodcliff Drive 2nd Floor Fairport, NY Greater New York General Office 420 Lexington Avenue 14th & 15th Floors New York, NY Hudson Valley General Office 460 Temple Hill Road New Windsor, NY Long Island General Office 576 Broad Hollow Road Melville, NY Manhattan General Office 120 Broadway 29th Floor New York, NY Nassau General Office 1983 Marcus Avenue Suite 210 Lake Success, NY Queens General Office Queens Blvd. Rego Park, NY River View General Office 390 Berry Street 4th Floor Brooklyn, NY Westchester General Office 777 Westchester Ave. 4th Floor White Plains, NY NORTH CAROLINA Charlotte General Office 6100 Fairview Road Suite 400 Charlotte, NC Raleigh General Office 3200 Beechleaf Court Suite 820 Raleigh, NC New York Life Insurance Company

31 Offices of New York Life (cont d.) NORTH DAKOTA North Dakota General Office th Street South Suite 501 Fargo, ND OHIO Cincinnati General Office 8044 Montgomery Road Suite 400 Cincinnati, OH Columbus General Office 485 Metro Place South Suite 350 Dublin, OH Northern Ohio General Office 6000 Lombardo Center Suite 300 Seven Hills, OH Toledo General Office 1684 Woodlands Drive Suite 100 Maumee, OH OKLAHOMA Oklahoma City General Office 3030 NW Expressway Suite 1800 Oklahoma City, OK Tulsa General Office 2431 East 61st Street Suite 650 Tulsa, OK OREGON Greater Oregon General Office 500 Liberty Street SE Suite 500 Salem, OR PENNSYLVANIA Constitution General Office 555 East City Avenue Suite 800 Bala Cynwyd, PA Greater Philadelphia General Office Pennsylvania Business Campus 100 Witmer Road Suite 100 Horsham, PA Harrisburg General Office 3401 North Front Street 1st Floor Harrisburg, PA Northeastern Pennsylvania General Office 220 Penn Avenue Suite 100 Scranton, PA Pittsburgh-Johnstown General Office 225 West Station Square Drive Suite 640 Pittsburgh, PA Valley Forge General Office 1205 Westlakes Drive Suite 180 Berwyn, PA SOUTH CAROLINA Greater South Carolina General Office 200 Meeting Street Suite 202 Charleston, SC Greenville General Office 935 South Main Street Suite 400 Greenville, SC SOUTH DAKOTA Great Plains General Office 5101 South Nevada Avenue Suite 200 Sioux Falls, SD TENNESSEE Knoxville General Office 265 Brookview Centre Way Suite 102 Knoxville, TN Memphis General Office Renaissance Center 1715 Aaron Brenner Drive Suite 701 Memphis, TN Nashville General Office 840 Crescent Centre Drive Suite 500 Franklin, TN TEXAS Austin General Office 6200 Bridgepoint Parkway Suite 300 Austin, TX Dallas General Office Merit Drive Suite 1000 Dallas, TX El Paso General Office 303 North Oregon St. Suite 1100 El Paso, TX Fort Worth General Office 777 Main Street Suite 3300 Fort Worth, TX Houston General Office 3200 Southwest Freeway Suite 1900 Houston, TX San Antonio General Office 8000 IH-10 West Suite 800 San Antonio, TX South Texas General Office 5350 South Staples Drive Suite 101 Corpus Christi, TX West Texas General Office th Street Unit A Lubbock, TX UTAH Utah General Office South Towne Corporate Center West Civic Center Drive Suite 600 Sandy, UT VERMONT Vermont General Office The Park at Water Tower Hill 463 Mountain View Drive Colchester, VT VIRGINIA Norfolk General Office 999 Waterside Drive Suite 900 Norfolk, VA Annual Report

32 Offices of New York Life (cont d.) Northern Virginia General Office 8075 Leesburg Pike Suite 200 Vienna, VA Richmond General Office 4435 Waterfront Drive Suite 400 Glen Allen, VA Roanoke General Office 111 Franklin Plaza 5th Floor Roanoke, VA WASHINGTON Eastern Washington General Office 1009 North Center Parkway Suite 200 Kennewick, WA Seattle General Office NE 4th Street Suite 1400 Bellevue, WA Tacoma General Office 1201 Pacific Avenue Suite 1600 Tacoma, WA WEST VIRGINIA West Virginia General Office 500 Virginia Street East Suite 1100 Charleston, WV WISCONSIN Milwaukee General Office 135 South 84th Street Suite 201 Milwaukee, WI Wisconsin General Office 999 Fourier Drive Suite 300 Madison, WI WYOMING Wyoming General Office McMurry Business Park 6000 East 2nd Street Suite 2001 Casper, WY LONG-TERM CARE INSURANCE DIVISION 6200 Bridgepoint Parkway Suite 400 Austin, TX NYL DIRECT 5505 West Cypress Street Tampa, FL GROUP MEMBERSHIP ASSOCIATION DIVISION 1 Rockwood Road Sleepy Hollow, NY (Disability Insurance Claims) (Life Insurance Claims) MEXICO Seguros Monterrey New York Life Headquarters Paseo de la Reforma #342 Col. Juárez México, D.F NEW YORK LIFE INVESTMENTS GROUP The retail products of New York Life Investments are available to consumers through New York Life s career Agents. For questions and further information, call your New York Life Agent or To contact one of the New York Life Investments Group companies directly, please refer to the list below. HEADQUARTERS 51 Madison Avenue New York, NY MAINSTAY INVESTMENTS Lackawanna Avenue Parsippany, NJ MAINSTAY FIXED INCOME INVESTORS 51 Madison Avenue New York, NY REAL ESTATE INVESTORS 51 Madison Avenue New York, NY GOLDPOINT PARTNERS LLC 51 Madison Avenue 16th Floor New York, NY NEW YORK LIFE RETIREMENT PLAN SERVICES plans.com 690 Canton Street Westwood, MA CORNERSTONE CAPITAL MANAGEMENT HOLDINGS LLC Avenue of the Americas New York, NY MACKAY SHIELDS LLC Avenue of the Americas New York, NY ICAP LLC West Wacker Drive Suite 2400 Chicago, IL MADISON CAPITAL FUNDING LLC 30 South Wacker Drive Suite 3700 Chicago, IL PRIVATE ADVISORS, LLC Bayberry Court Richmond, VA MainStay Investments is a registered service mark and name under which New York Life Investment Management LLC does business. New York Life Insurance Company

33 Notes Page 7 1) LIMRA, Trends in Life Insurance Ownership study, Study conducted every six years, 2) U.S. Department of Health and Human Services, National Clearinghouse for Long-Term Care information, Will You Need LTC?, 3) MSN Money, Five reasons boomers will go bust, July 2012, 4) The Washington Post, 401(k) breaches undermining retirement security for millions, January 15, ) Source, Third Party Ratings Reports: A.M. Best A++ (as of 6/5/2012), Fitch Ratings AAA (as of 6/22/2012), Moody s Aaa (as of 12/11/2012), Standard & Poor s AA+ (as of 8/8/2011). Returns and guarantees do not apply to the safety or investment performance of any registered products because they are subject to market risk and will fluctuate in value. 6) Variable universal life insurance and variable annuities are both issued by New York Life Insurance and Annuity Corporation and distributed by NYLIFE Distributors, LLC, Member FINRA/SIPC and are offered by a prospectus. Contact your financial professional or call (800) for a prospectus. Investors are asked to consider the investment objectives, risks and charges, and expenses of the investments carefully before investing. Both the product and the underlying fund prospectuses contain this and other information about the product and underlying investment options and can be obtained from your Registered Representative. Please read the prospectuses carefully before investing. 7) Investment annuities refers to both fixed and variable deferred annuities. See footnote 6 above for more information on variable annuities. 8) MainStay Funds are managed by New York Life Investment Management, LLC, an indirect wholly owned subsidiary of New York Life Insurance Company, and distributed by NYLIFE Distributors, LLC, 169 Lackawanna Avenue, Parsippany, NJ 07054, a wholly owned indirect subsidiary of New York Life Insurance Company. NYLIFE Distributors, LLC, is a member of FINRA/ SIPC. For more information about MainStay Funds, call (800) MAINSTAY ( ) for a prospectus or a summary prospectus. Investors are asked to consider the investment objectives, risks and charges, and expenses carefully before investing. The prospectus and summary prospectus contain this and other information about the investment company and can be obtained from your Registered Representative. Please read the prospectus or summary prospectus carefully before investing. MainStay Investments is a registered service mark and name under which New York Life Investment Management LLC does business. MainStay Investments, an indirect wholly owned subsidiary of New York Life Insurance Company, provides investment advisory products and services. Annual Report

34 Glossary of Terms Policyholder Benefits and Dividends 1 include the consolidated results of NYLIC and its domestic insurance subsidiaries presented on a statutory basis. Intercompany transactions have been eliminated in consolidation. Benefits primarily include death claims paid to beneficiaries and annuity payments. Dividends are payments made to eligible policyholders from divisible surplus. Surplus and Asset Valuation Reserves Total surplus, which includes the Asset Valuation Reserves, is one of the key indicators of the company s long-term strength and stability and is presented on a consolidated basis of the company. Individual Life Insurance In Force 2 represents the total face amounts of individual life insurance contracts (term, whole life, and universal life) outstanding for NYLIC and its domestic insurance subsidiaries at a given time. Assets Under Management 3 consists of the cash and invested assets and separate account assets of the company s domestic and international insurance operations and assets the company manages for third-party investors, including mutual funds, separately managed accounts, and retirement plans. Assets under administration associated with agreements under which NYL Investments receives a revenue share are included in assets under management. Assets under administration associated with agreements where NYL Investments receives only an administration fee are not included in assets under management. Operating Earnings 4 is the measure used for management purposes to track the company s results from ongoing operations and the underlying profitability of the business. Operating earnings equal GAAP net income adjusted for the removal of net income (loss) from discontinued operations of certain international markets and related restructuring expenses. Net income is further adjusted for, net of applicable tax and Deferred Acquisition Costs (DAC): (i) the removal of gains and losses from investments and related adjustments; (ii) the inclusion of capital gains and/or unassigned surplus that support policyholder dividends; (iii) the inclusion of certain interest maintenance reserve amortization 5 ; (iv) the inclusion of gains or losses on certain annuity reserve guarantees; and (v) the inclusion of other nonoperating items. Insurance Sales 6 represent annualized first-year premiums on participating issued whole life insurance, term life insurance, universal life insurance, longterm care insurance, and other health insurance products. A sale is generally counted when the policy is paid. Total Annuity Sales represents premium income on fixed single premium annuities offered by our Guaranteed Income Annuities, which includes our immediate fixed annuity products (Guaranteed Lifetime Income) and our flexible premium deferred income annuity products (Guaranteed Future Income), as well as the premium income on our fixed and variable deferred annuities. Sales are generally recognized when premiums are received. Annuities are primarily issued by NYLIAC. Mutual Fund Sales represent total cash deposited to new and existing accounts of the MainStay Funds, New York Life s proprietary mutual funds. MainStay Funds are managed by New York Life Investment Management LLC and distributed by NYLIFE Distributors LLC, a wholly owned subsidiary of New York Life Insurance Company. 1 NYLIC s policyholder benefits and dividends were $5.93 billion and $5.61 billion for the 12 months ended December 31, 2012 and 2011, respectively. NYLIAC policyholder benefits were $2.18 billion and $2.02 billion for the 12 months ended December 31, 2012 and 2011, respectively. Dividends are not guaranteed. 2 The company s individual life insurance in force totaled $ billion at December 31, 2012 (including $ billion for NYLIAC). 3 All prior period information has been modified to conform with the current period definition. (NYL Investments is a service mark used by New York Life Investment Holding, LLC and its subsidiary, New York Life Investment Management, LLC.) 4 A reconciliation of operating earnings to the company s consolidated GAAP net income is available on the company s website ( com). This indicator has been revised for years primarily to conform to the company s adoption of new accounting guidance related to Deferred Acquisition Costs (DAC), effective January 1, Interest Maintenance Reserve (IMR): In accordance with statutory accounting principles, interest-related net realized capital gains/losses on all types of fixed income investments are accumulated in this reserve. These capital gains/losses are then amortized into operating earnings over the remaining maturity of the investment, assuming it was not sold. 6 Adjustments are made to reflect the relative importance of certain sales, primarily: single premium sales sold through our Agents and Advanced Markets Network (AMN) retail distribution channel, our network of independent agents and brokers, are counted at 10 percent. Sales are generated from both domestic and Mexican operations. Agency Recurring Premium Life Insurance Sales refers to those products that are sold through our career Agent force and regular premiums to be paid every year. MainStay Funds are managed by New York Life Investment Management, LLC, an indirect wholly owned subsidiary of New York Life Insurance Company, and distributed by NYLIFE Distributors LLC, 169 Lackawanna Avenue, Parsippany, NJ, 07054, a wholly owned subsidiary of New York Life Insurance Company. NYLIFE Distributors LLC is a member of FINRA/SIPC. For more information about MainStay Funds, call 800-MAINSTAY ( ) for a prospectus, or a summary prospectus. Investors are asked to consider the investment objectives, risks and charges, and expenses carefully before investing. The prospectus and summary prospectus contain this and other information about the investment company. Please read the prospectus or summary prospectus carefully before investing. MainStay Investments is a registered service mark and name under which New York Life Investment Management LLC does business. MainStay Investments, an indirect wholly owned subsidiary of New York Life Insurance Company, provides investment advisory products and services. Variable annuities are issued by New York Life Insurance and Annuity Corporation and distributed by NYLIFE Distributors, LLC, Member FINRA/ SIPC and are offered by a prospectus. Contact your financial professional or call for a prospectus. Investors are asked to consider the investment objectives, risks, charges, and expenses of the investments carefully before investing. Both the product and the underlying fund prospectuses contain this and other information about the product and underlying investment option. Please read the prospectus carefully before investing. New York Life Insurance Company

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36 New York Life Insurance Company 51 Madison Avenue New York, NY (800) (4/13)