Annual Report 2014

For them.
For you.
For good.
2014 Annual Report
Our uniquely mutual,
diversified business strategy
pays big dividends. Again.
For the third consecutive year, we are raising
both our dividend scale and dividend payout.
Find out how on pages 4 and 5.
Financial Highlights
(IN $ MILLIONS)
Policyholder Benefits and Dividends
DECEMBER 31, 2014
DECEMBER 31, 2013
9,076
8,622
Individual Life Insurance In Force
871,138
840,455
Assets Under Management
540,895
425,139
2,024
1,764
21,937
21,141
1,213
1,195
Annuity Sales
11,289
9,673
Mutual Fund Sales
25,867
31,254
Operating Earnings Surplus and Asset Valuation Reserve
Insurance Sales
For definitions of the company’s performance measures, please see the Glossary of Terms on page 28.
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 10010. 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 (www.newyorklife.com).
A message from Ted Mathas
I am often struck by how
strongly the insights of my
children relate to business.
Recently, I engaged my daughter
in a conversation about trust.
She concluded that trust exists when you
believe the other person has your best
interests at heart and the person has a track
record of doing what he or she says. How
true, and not only in families.
American business has earned its trust
deficit. The erosion of the past decade
became a landslide with the financial crisis.
And while many economic indicators are
improving, trust remains in short supply.
A recent CNN/ORC International public
opinion poll revealed that only about 20
percent of people believe that big businesses
can be trusted to do what is right.*
From my perspective, the path to full
recovery—and our nation’s ability to grow
and prosper the way we know it can—
requires reestablishing trust. It’s not
something you buy or sell. It’s something
you earn. And it’s something New York Life’s
business has rested upon since opening our
doors 170 years ago.
When policyholders protect their families
with our products, they aren’t just placing
their money with us; they are placing their
2
New York Life Insurance Company
trust in us. And their expectations are our
singular focus: To be here, strong and secure,
to fulfill our obligations, whenever they come
due. To have our customers’ interests at
heart and to do what we say we will do.
In 2014, our agents and employees delivered
another performance worthy of our mission.
Strong sales and earnings further enhanced
the overall financial strength that backs the
guarantees we make to customers. Our company,
in fact, is one of only two life insurers in the United
States to have the highest ratings currently
awarded for financial strength from A.M. Best,
Fitch, Moody’s, and Standard & Poor’s.†
We were also the only major mutual U.S. life
insurance company to increase both its dividend
scale and total dividend payout to eligible
policyholders for the third consecutive year.‡
On pages 4–9 in this Report, you can find more
details about our results and dividend increase.
While the numbers provide a meaningful
scorecard, they don’t convey the full story.
Results in any given year are important. But
how we consistently deliver those results, and
what we do to strengthen people’s trust in us,
is our most important scorecard.
* http://i2.cdn.turner.com/cnn/2014/images/08/08/rel7g.pdf
† The “highest ratings currently awarded” refers to the highest ratings
currently awarded to any life insurer, specifically: A.M. Best A++ (as
of 6/4/2014), Fitch Ratings AAA (as of 3/26/2015), Moody’s Aaa (as
of 12/4/2014), Standard & Poor’s AA+ (as of 6/27/2014). Source:
third-party reports.
‡ Based on publicly available information on New York Life’s peer
mutual U.S. life insurers. This peer group is comprised of major
mutual U.S. insurance companies for whom life insurance is the
primary focus and primary line of business, and whose dividend
information is made publicly available.
“Our interests are aligned with those of our
policyholders. Their family’s protection. Their
financial security. Their long-term goals.”
At New York Life, the “how” begins with being
a mutual life insurance company. We are not
publicly traded; we do not have stockholders
or other outside investors. Our interests are
aligned with those of our policyholders. Their
family’s protection. Their financial security.
Their long-term goals.
For most of our customers, securing peace of
mind begins by working with one of our agents
in communities, large and small, across our
country. They are moms, dads, and neighbors.
They are also among the most highly skilled
insurance professionals in the industry.
They have a track record to believe in. We are
very proud that our team has led the United
States in membership in the Million Dollar
Round Table—the world’s premier association
of insurance agents and financial service
professionals—for 60 consecutive years.§ This
accomplishment would not be possible without
people placing their trust in us. Our agents work
to understand their customers’ needs and tailor
financial solutions to help meet their unique
goals. We stand 100% behind every promise
we make and try to exceed those expectations
whenever and wherever we prudently can.
We believe that a sustainable business
must be grounded in trust. We do not take
imprudent risks with the guarantees we make.
We value a lifelong trusting relationship
with our customers. As their needs change,
our agents and employees stand by them,
committed to helping them each step of the
way. As one retired agent recently wrote in a
letter to me, “New York Life has always been
blessed with good people with great integrity.”
I couldn’t agree more.
We don’t take trust for granted. Each of us
works every day to maintain our customers’
trust and help them make important decisions
to protect their families’ future. We are here
for them. For good.
Sincerely,
Ted Mathas
Chairman of the Board, President
and Chief Executive Officer
§ The Million Dollar Round Table (MDRT), the premier
association of financial professionals, is an organization
that recognizes excellence in the life insurance industry.
2014 Annual Report
3
By continuing to be a mutual
company, we remain uniquely
aligned with our customers.
As is the case with
any business, New
York Life needs to
generate earnings—
or profits.
But because we’re a mutual life insurer,
earnings are not our true bottom line.
Unlike publicly traded companies that must
distribute the money they make to their
shareholders, we put that money to work
on behalf of our policyholders.
We are the only major mutual U.S. life insurer
increasing both its dividend scale and payout
for the third consecutive year. In 2015, we will
pay out $1.56 billion in dividends to eligible
4
New York Life Insurance Company
individual life insurance policyholders—a new
record for the company.
This is a 12 percent increase over the amount of
dividends paid during 2014. We also raised our
dividend scale for the third consecutive year—
the only company among our peers to do so.
The following graph includes our annual
dividend payouts, as well as other benefits
paid, such as claims and annuity payments.
Policyholder Benefits
and Dividends
For definitions of the
company’s performance
measures, see Glossary
of Terms on page 28.
How are we able
to deliver this?
Year
2014
9.1
2013
8.6
2012
8.1
2011
7.6
2010
7.2
When it comes to dividends, no other
economic factor has a bigger effect than
interest rates. And low interest rates over the
last several years continue to be a significant
challenge for life insurers.
There are only a few options available to life
insurers to help offset the adverse impact
of a low interest rate environment on its
ability to pay dividends to policyholders.
This is where
New York Life
is different.
In $ Billions
We have a large and growing global
investment management business. And
we’ve begun using some of the earnings from
that operation to enhance dividends for our
life insurance policyholders.
Over the last few years, we’ve also been able
to direct a portion of our strong surplus to
enhance dividends—something we continued
to do this year.
They can tap into surplus. They can chase
higher yields by taking on more investment
risk. Or they can operate other successful
businesses to generate additional earnings
to help support dividends. However, these
options can prove very challenging for publicly
traded life insurers, which answer first to their
shareholders, or for mutuals that do not have
a diversified business portfolio and robust
financial surplus.
continue paying a healthy dividend while
maintaining our financial strength. That’s a
unique advantage our policyholders enjoy.
New York Life has a long track record of creating
value for our policyholders in all that we do.
Every year since 1854, through wars, pandemics,
and financial crises, we have paid a dividend.
That’s mutuality in action. Mutuality the
New York Life way.
This combination of our strong surplus and
diverse mix of businesses enables us to
2014 Annual Report
5
More individuals and
institutions are turning to us.
Individual Life Insurance in Force
Year
Assets Under Management
In $ Billions
In $ Billions
2014
871.1
2014
540.9
2013
840.5
2013
425.1
2012
816.4
2012
378.4
2011
789.5
2011
335.9
2010
757.5
2010
304.5
Life insurance is a product that has withstood the test of
time. No matter what is going on in the world, it continues
to have a place in virtually every prudent financial plan.
Our consistent growth in individual life insurance in force
means more people are placing their trust in us to protect
their families and businesses.
For definitions of the company’s performance
measures, see Glossary of Terms on page 28.
6
Year
New York Life Insurance Company
The premiums and fees we collect on the individual life
insurance and annuity products we sell are invested and
managed for our policyholders’ long-term security and peace
of mind. Since the financial crisis, an increasing number
of institutional customers are also turning to us for our
investment expertise. This has significantly contributed to
our strong growth in assets under management since 2010.
Our customers’ trust, backed
by our financial strength.
Operating Earnings
Year
Surplus and Asset Valuation Reserve
In $ Millions
Year
In $ Billions
2014
2,024
2014
21.9
2013
1,764
2013
21.1
2012
1,586
2012
19.6
2011
1,340
2011
17.9
2010
1,309
2010
16.8
The growth of our life insurance business and assets under
management—along with the related investment returns
we generate—drives our strong earnings and surplus.
It helps to cushion against adverse economic events so we
can continue to meet our obligations regardless of what’s
going on in the world around us.
When assessing the financial strength of a life insurer, no
other measure is more important than surplus. It is an
additional source of capital above and beyond the ample
reserves already set aside to pay the benefits we promise.
Of the more than 800 life insurers in the United States today,
only two have the highest ratings for financial strength
currently awarded to any life insurance company by the four
major rating agencies. New York Life is one of them.
For definitions of the company’s performance
measures, see Glossary of Terms on page 28.
2014 Annual Report
7
8
New York Life Insurance Company
We have the solutions people need.
Insurance Sales
Year
Annuity Sales
In $ Millions
Year
In $ Billions
2014
1,213
2014
11.3
2013
1,195
2013
9.7
2012
1,150
2012
7.5
2011
1,196
2011
8.1
2010
1,139
2010
8.7
Guaranteed Income Annuities
All Other Annuities
Mutual Fund Sales
Year
In $ Billions
2014
25.9
2013
31.3
2012
17.2
2011
18.9
2010
10.9
Protecting families or businesses against the unexpected.
Helping parents save for their children’s college tuition.
Guiding people as they plan for retirement. We help people
across the nation achieve their financial objectives.
Our strong track record of insurance, annuity, and mutual fund
sales is not only a measure of the company’s growth, it’s an
indication more people are turning to us for assistance.
For definitions of the company’s performance
measures, see Glossary of Terms on page 28.
2014 Annual Report
9
2014 Investment Review
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.
The assets of these entities 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, while continuing to hold ample liquidity
in its investment portfolio.
Cash and Invested Assets
As of December 31, 2014, New York Life and its
domestic insurance subsidiaries had cash and invested
assets of $197.2 billion and maintained a well-diversified
investment portfolio.
* Includes New York Life’s investments in its non-insurance and international insurance affiliates.
Cash and Invested Assets1
(IN $ MILLIONS)
DECEMBER 31, 2014
Public Corporate Bonds and Loans
$ 53,882
27%
$ 50,962
27%
Private Corporate Bonds and Loans
39,481
20%
36,736
20%
U.S. Gov’t and Agency Securities
29,764
15%
30,762
16%
Non-Agency Asset-Backed Securities 10,577
5%
8,035
4%
Non-Agency Commercial Mortgage-Backed Securities
8,885
5%
8,900
5%
Non-Agency Residential Mortgage-Backed Securities
3,276
2%
4,069
2%
$ 145,865
74%
$ 139,464
74%
$ 22,208
11%
$ 20,458
11%
14,421
7%
13,436
7%
9,742
5%
9,491
5%
Cash and Short-Term Investments 3,926
2%
3,961
2%
Derivatives 1,074
1%
1,006
1%
$ 197,236
100%
Subtotal Fixed Income
Mortgage Loans
Equity and Other Interests 2
Policy Loans
3
Total Cash and Invested Assets
Includes $84,118 million and $80,149 million of assets related to New York Life Insurance and Annuity Corporation for 2014 and 2013, respectively.
Includes New York Life’s investments in its non-insurance and international insurance affiliates.
Includes cash primarily received on financing transactions of $2,076 million and $2,043 million for 2014 and 2013, respectively.
1
2
3
10
DECEMBER 31, 2013
New York Life Insurance Company
$ 187,816 100%
Fixed Income Assets
The fixed income portfolio continues to be dominated by
high-quality investments, with 93 percent rated as 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 about
2,400 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 $280 million. The portfolio’s 10 largest holdings by issuer
represented 1.3 percent of cash and invested assets.
Fixed Income by Quality*
(IN $ MILLIONS)
DECEMBER 31, 2013
DECEMBER 31, 2014
NAIC Rating
Approximate Rating Agency Equivalent
Quality
NAIC 1
AAA to A-
Highest Quality
NAIC 2
BBB+ to BBB-
High Quality
Investment Grade
$ 95,764
66% $ 89,257
64%
39,256
27% 39,879
29%
$ 135,020
93%
$ 129,136
93%
$ 5,919
4% $ 5,500
4%
NAIC 3
BB+ to BB-
Medium Quality
NAIC 4
B+ to B-
Low Quality
3,738
2% 3,382
2%
NAIC 5
CCC+ to CCC-
Lower Quality
1,088
1% 1,375
1%
NAIC 6
CC+ to D
In or Near Default
100
0% 71
0%
$ 10,845
7%
$ 10,328
7%
Below Investment Grade
Total Fixed Income
$ 145,865 100%
$ 139,464 100%
* Includes $68,111 million and $67,381 million of assets related to New York Life Insurance and Annuity Corporation for 2014 and 2013, respectively.
Diversification of Corporate Bonds and Loans*
(IN $ MILLIONS)
Utilities
DECEMBER 31, 2014
$ 13,408
14%
Cable & Media
$ 3,551
4%
Consumer Products
8,624
9%
Energy
8,615
9%
Transportation
3,384
4%
Technology
3,179
3%
Healthcare
6,731
Real Estate Investment Trusts
5,460
7%
Chemicals
2,916
3%
6%
Retail
2,897
3%
Banking/Brokerage
Municipal
5,254
6%
Aerospace & Defense
2,756
3%
5,114
6%
Sovereign/Foreign Governments
1,958
2%
Conglomerates/Diversified Mfg.
4,782
5%
Other (No single category exceeds $1.9 billion)
14,734
16%
Total
$ 93,363 100%
* Includes $43,835 million of assets related to New York Life Insurance and Annuity Corporation.
2014 Annual Report
11
Non-Agency Asset-Backed Securities
As of year-end 2014, New York Life and its domestic insurance
subsidiaries owned $10.6 billion in non-agency asset-backed
securities, representing five percent of cash and invested assets.
Approximately 80 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)
DECEMBER 31, 2014
NAIC Rating
Approximate Rating Agency Equivalent
Quality
NAIC 1
AAA to A-
Highest Quality
NAIC 2
BBB+ to BBB-
High Quality
NAIC 3–6
BB+ to D
Medium Quality and Below
Total
$ 8,516
80%
1,351
13%
710
7%
$ 10,577
100%
* Includes $5,316 million of assets related to New York Life Insurance and Annuity Corporation.
Non-Agency Commercial Mortgage-Backed Securities
As of year-end 2014, 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)
DECEMBER 31, 2014
NAIC Rating
Approximate Rating Agency Equivalent
Quality
NAIC 1
AAA to A-
Highest Quality
NAIC 2
BBB+ to BBB-
High Quality
NAIC 3–6
BB+ to D
Medium Quality and Below
Total
* Includes $4,742 million of assets related to New York Life Insurance and Annuity Corporation.
12
New York Life Insurance Company
$ 8,726
98%
115
1%
44
1%
$ 8,885
100%
Non-Agency Residential Mortgage-Backed Securities
As of year-end 2014, New York Life and its domestic insurance
subsidiaries owned $3.3 billion in non-agency residential
mortgage-backed securities, representing two percent of
cash and invested assets. The mortgage loans underlying
these securities were held predominantly by prime borrowers.
78% of these securities were classified as NAIC 1 and 92
percent are collateralized by fixed-rate mortgage loans.
Non-Agency Residential Mortgage-Backed Securities by NAIC Rating Category*
(IN $ MILLIONS)
DECEMBER 31, 2014
NAIC Rating
Approximate Rating Agency Equivalent
Quality
NAIC 1
AAA to A-
Highest Quality
NAIC 2
BBB+ to BBB-
NAIC 3–6
BB+ to D
$ 2,549
78%
High Quality
235
7%
Medium Quality and Below
492
15%
$ 3,276
100%
Total
* Includes $1,585 million of assets related to New York Life Insurance and Annuity Corporation.
Mortgage Loans
The $22.2 billion mortgage loans portfolio consists of
$22.1 billion of loans on commercial real estate properties
and $129 million of loans on single-family residential
properties as of year-end 2014.
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, 2014, none of
the commercial mortgage loans were delinquent, and there
were no foreclosures during the year.
Commercial Mortgage Loans by Geographic Region*
(IN $ MILLIONS)
Southeast
DECEMBER 31, 2014
$ 5,407
25%
Middle Atlantic
5,066
23%
Pacific
4,689
21%
North Central
2,802
13%
South Central
Other
1,409
2,706
6%
12%
$ 22,079
100%
Total
* Includes $10,264 million of assets related to New York Life Insurance and Annuity Corporation.
2014 Annual Report
13
Single-Family Residential Loans
Commercial Mortgage Loans by Property Type*
(IN $ MILLIONS)
Office Buildings
DECEMBER 31, 2014
$ 7,120
32%
Multi-Family
6,481
30%
Retail
5,781
26%
Industrial
2,379
11%
318
1%
$ 22,079
100%
Other Commercial Property
Total
In addition to the non-agency residential mortgage-backed
securities highlighted earlier, New York Life and its domestic
insurance subsidiaries owned $129 million† in residential loans.
† Includes $113 million of assets related to New York Life Insurance and Annuity Corporation.
* Includes $10,264 million of assets related to New York Life Insurance and Annuity Corporation.
Equity and Other Interests
New York Life and its domestic insurance subsidiaries had
$14.4 billion of assets classified as equity and other interests
as of year-end 2014. Of this amount, $4.4 billion represented
limited partnerships and other interests invested in diverse
sectors of the economy. Private equity investments of
$3.9 billion primarily represent leveraged buyout funds in a
range of vintage years that are managed by various thirdparty private equity groups. Allocations to private equity
provide an opportunity to exceed the returns of public
equities over the long term. The public equity portfolio of
$2.4 billion consists primarily of high dividend-yielding stocks
diversified across various companies, sectors, and regions.
Real estate investments of $1.9 billion represent direct and
indirect wholly-owned properties. Investments in affiliates
consist of holdings in the company’s investment management
and international insurance operating subsidiaries.
Equity and Other Interests*
(IN $ MILLIONS)
Various Limited Partnerships and Other Interests
$ 4,428
31%
Private Equity
3,854
27%
Public Equity
2,374
16%
Real Estate
1,868
13%
Investments in Affiliates
1,831
13%
66
0%
$ 14,421
100%
Preferred Stock
Total
* Includes $1,607 million of assets related to New York Life Insurance and Annuity Corporation.
14
DECEMBER 31, 2014
New York Life Insurance Company
Derivatives
As of year-end 2014, New York Life and its domestic
insurance subsidiaries had outstanding derivative asset
positions of $1,074 million, offset by derivative liabilities of
$500 million, resulting in a net asset value of $574 million.
New York Life enters into derivative transactions to meet the
hedging needs of the company or to replicate permissible
investments. Derivatives include the purchase of cross
currency swaps, forward agreements, and interest rate
swaps and options. Cross currency swaps and forward
agreements are typically used 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. Interest rate options are used to protect against
a spike in interest rates, while equity options are used
to mitigate the embedded equity risk in variable annuity
guaranteed benefits.
New York Life and its domestic insurance subsidiaries control
over-the-counter derivative counterparty credit risk through
the establishment of collateral support agreements. These
agreements require the daily posting of cash collateral by
the derivative counterparties if and when the market value
of derivative positions with the counterparty exceeds a
predetermined dollar limit, which in most cases is zero.
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. To further
enhance the safety of derivatives strategies, and as
mandated under the Dodd-Frank law, the counterparty
for all new interest rate swaps is a central clearinghouse.
Asset/Liability and Investment Risk Management
The long-term promises New York Life makes to
policyholders are backed by sound asset/liability
management. A well diversified fixed income portfolio forms
the foundation of the investment portfolio that supports
these liabilities. New York Life’s approach to asset/liability
management is founded on the segmentation 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
enterprise and business unit levels to manage risk exposures.
The Investment Committee of the Board of Directors
provides oversight of 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 under 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.
2014 Annual Report
15
Consolidated Statutory
Statement of Financial Position
(IN $ MILLIONS)
DECEMBER 31, 2014
New York Life
Insurance Company1
New York Life Insurance
and Annuity Corporation1
$ 120,706
$ 84,118
$ 197,236
1,310
624
1,934
Consolidated2
Assets
Cash and invested assets3 Investment income due and accrued
Other assets
12,442
7,473
4,063
Separate account assets
11,809
34,622
46,431
$ 146,267
$ 126,837
$ 249,664
$ 104,165
$ 71,412
$ 172,495
1,625
--
1,625
Total Assets
Liabilities
Policy benefit reserves
Dividends payable to policyholders
Other liabilities
7,641
13,088
8,819
11,792
33,775
44,788
$ 125,223
$ 118,275
$ 227,727
$ 2,438
$ 893
$ 3,331
18,606
7,669
18,606
$ 21,044
$ 8,562
$ 21,937
$ 146,267
$ 126,837
$ 249,664
Separate account liabilities
Total Liabilities (excluding Asset Valuation Reserve)
Surplus and Asset Valuation Reserve
Asset Valuation Reserve
Surplus
Total Surplus and Asset Valuation Reserve
Total Liabilities and Surplus
Policyowners 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 10010. The individual company audited financial statements are also available on our website (www.newyorklife.com)
and from the New York State Department of Financial Services.
1
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.
2
3
For more detail on cash and invested assets, see 2014 Investment Review beginning on page 10.
16
New York Life Insurance Company
(IN $ MILLIONS)
DECEMBER 31, 2013
New York Life
Insurance Company1
New York Life Insurance
and Annuity Corporation1
$ 114,329
$ 80,149
$ 187,816
1,287
604
1,893
Consolidated2
Assets
Cash and invested assets3 Investment income due and accrued
Other assets
12,264
7,384
3,913
Separate account assets
11,318
31,809
43,127
$ 139,198
$ 119,946
$ 236,749
$ 99,335
$ 67,983
$ 164,361
1,467
--
1,467
Total Assets
Liabilities
Policy benefit reserves
Dividends payable to policyholders
Other liabilities
Separate account liabilities
Total Liabilities (excluding Asset Valuation Reserve)
6,824
13,193
8,041
11,300
31,154
41,739
$ 118,926
$ 112,330
$ 215,608
$ 2,418
$ 868
$ 3,287
17,854
6,748
17,854
$ 20,272
$ 7,616
$ 21,141
$ 139,198
$ 119,946
$ 236,749
Surplus and Asset Valuation Reserve
Asset Valuation Reserve
Surplus
Total Surplus and Asset Valuation Reserve
Total Liabilities and Surplus
2014 Annual Report
17
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
internal control over financial reporting
requirements of the NAIC Model Audit Rule.
The requirements are similar to those required
by the Sarbanes-Oxley Act of 2002, in that
they identify management’s responsibilities
over its financial statements and require
management to certify as to the integrity of
the financial statements and the effectiveness
of internal control over financial reporting. Our
statement to that effect can be viewed on the
company’s website, www.newyorklife.com.
Certain of the financial information contained
in this Annual Report has been derived from
financial statements that have been audited
by the company’s independent auditors, in
18
New York Life Insurance Company
accordance with auditing standards generally
accepted in the United States of America.
We support strong and effective corporate
governance from our Board of Directors,
continuously review our business results
and strategic choices, and focus on financial
stewardship. 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 of management’s fulfillment of its
responsibilities for accounting controls and
preparation of financial statements.
Theodore A. Mathas
John T. Fleurant
Chairman of the Board, President and
Chief Executive Officer
April 1, 2015
Executive Vice President and
Chief Financial Officer
April 1, 2015
You have responsibilities
and dreams. We can help
you with both.
Families grow.
Careers take
unexpected turns.
Priorities change.
Our business is personal. It’s about protecting
families and helping to secure financial futures.
It’s built on relationships that span decades and,
sometimes, generations. A commitment like
that requires a tremendous amount of trust. And
earning your trust begins with one of our agents.
Insurance and financial planning decisions are
arguably among the most important you will
ever make. That’s why you’ll often find yourself
doing most of the talking when you meet with
your agent. His or her job is not about pitching
the latest and greatest product on our shelves.
It’s about listening to your concerns and
understanding what you want to achieve.
Whether you are starting your first job,
welcoming your first great-grandchild, or
somewhere in between, your agent can help
find the solutions you need today to protect
tomorrow. Their guidance, in fact, is one of the
most valuable services our agents offer all of
our policyholders. And you can be certain our
agents are among the best in the business.
New York Life agents have led the United States in membership
in the Million Dollar Round Table for 60 consecutive years.
CONSECUTIVE
YEARS
According to its website, the Million Dollar Round Table’s mission is “To
be a valued, member-driven, international network of leading insurance
and investment financial services professionals/advisors who serve their
clients by exemplary performance and the highest standards of ethics,
knowledge, service and productivity.”
2014 Annual Report
19
Throughout our history, New York Life
has not only insured countless lives, we
have also consistently helped people in the
cities and towns where we live and work.
Whether it’s helping
grieving children
recover from the
loss of a loved one
or providing relief
to the victims of
natural disasters, our
missions in business
and philanthropy are
the same: to be there
when we are needed.
Since its inception in 1979, the New York
Life Foundation has awarded over $200
million to charities and causes that share our
commitment to building a better tomorrow.
Our primary focus is helping young people in
two specific areas: educational enhancement
and bereavement.
Studies show that kids who begin high
school well-prepared are four times as likely
to graduate and go on to college. To this
end, we support organizations that offer
programs to help build stronger academic
foundations for students in middle school
during the critical after-school and summer
hours, such as:
• A
fter-School All-Stars, which provides
free, high-quality after-school programs
to low-income, disadvantaged youth in
14 cities across the country, serving over
92,000 kids annually in over 400 schools;
• N
ational 4-H Council, whose Juntos
(“together”) program assists Latino youth to
make a successful transition to high school
and prepare them to graduate on time and
achieve post-secondary success; and
• Y
MCA of Greater New York, which provides
teens with comprehensive, year-round
services designed to help them enter high
20 New York Life Insurance Company
school prepared to thrive, graduate high
school on time, and gain acceptance to
college prepared to succeed.
We also support organizations that help
children grieving the death of a parent or
other close family member, such as Comfort
Zone Camp, the Moyer Foundation’s Camp
Erin, and the National Alliance for Grieving
Children. Along with providing important
funding for these local and national
programs, we work with experts in the field
to develop and disseminate resources for
adults who interact with grieving children.
Our newest endeavor in this field is the Coalition
to Support Grieving Students, which we
helped convene and fully funded. The
Coalition consists of the nation’s leading
professional organizations representing
educators, school administrators, and
school mental health providers, that have come
together to endorse www.grievingstudents.org,
a website dedicated to training school
personnel to help grieving students return
to the classroom.
Our own website, www.AChildinGrief.com,
also provides parents, family members,
educators, and other concerned adults with
the tools they need to help a child cope with
the death of a loved one.
Volunteers for Good
Beyond our financial support,
our employees and agents
volunteer in communities all
across our country through our
Volunteers for Good program.
In 2014, we contributed 68,000
volunteer hours—hours
that improved childhood
bereavement centers, provided
families in need with nutritious
food, and supported other
worthwhile endeavors. We also
awarded over $1 million in grants
to the organizations where our
people gave their time.
Matching
Gifts Program
To support our agents,
employees, and retirees in their
philanthropy, the Foundation
last year matched $2.87 million
of their contributions to
K-12 schools, colleges and
universities, and childhood
bereavement organizations.
2014–A Year of Giving
$12.2M
Foundation Grants
$2.87M
Matching Gifts
$1.04M
$800K
Community
Impact Grants
$188K
Scholarships
Volunteer Grants
2014 Annual Report
21
Executive Management
Committee
As of April 1, 2015
Theodore A. Mathas
Mark W. Pfaff
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
EXECUTIVE VICE PRESIDENT AND CO-PRESIDENT
OF THE INSURANCE AND AGENCY GROUP
As CEO, Ted Mathas is responsible for
managing all aspects of the company,
including all domestic and international
business operations. In addition, as chairman
he has overall responsibility for matters
pertaining to the Board of Directors.
Mark Pfaff shares oversight of the company’s
Insurance and Agency Group, the largest
business division of New York Life. He is
responsible for all aspects of the company’s
Career Agency distribution channel, which
includes recruiting, training and development,
and management of all of New York Life’s field
Managers, Agents, and General Offices across
the United States.
John Y. Kim
VICE CHAIRMAN, PRESIDENT OF THE INVESTMENTS
GROUP, AND CHIEF INVESTMENT OFFICER
John Kim is responsible for all divisions
and subsidiaries of the Investments Group,
which includes the investment management,
annuities, and retirement plan recordkeeping
businesses. He also oversees New York Life’s
Enterprise Technology division.
Christopher O. Blunt
EXECUTIVE VICE PRESIDENT AND CO-PRESIDENT
OF THE INSURANCE AND AGENCY GROUP
Chris Blunt shares oversight of the company’s
Insurance and Agency Group, the largest
business division of New York Life. He is
responsible for strategic direction, marketing,
finance, service, and technology functions for
life and long-term care insurance products,
for direct marketing and Group Membership
Association business, as well as the company’s
insurance operation in Mexico.
22
New York Life Insurance Company
Sheila K. Davidson
EXECUTIVE VICE PRESIDENT, CHIEF LEGAL
OFFICER, AND GENERAL COUNSEL
Sheila Davidson oversees all of the company’s
legal, compliance, corporate governance, and
public relations operations.
John T. Fleurant
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
John Fleurant oversees the company’s finance
functions, including accounting policy, financial
reporting and controls, tax, treasury, financial
planning and analysis, risk management,
and actuarial functions. He also oversees
corporate services.
We choose to do business in
what we strongly believe is the
only “right” way to do business.
George Nichols III
Joel M. Steinberg
SENIOR VICE PRESIDENT IN CHARGE OF
THE OFFICE OF GOVERNMENTAL AFFAIRS
SENIOR VICE PRESIDENT, CHIEF RISK OFFICER,
AND CHIEF ACTUARY
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.
Joel Steinberg is responsible for the
oversight of risk management and actuarial
activities across the company, including
monitoring and measurement of risk,
financial reporting, product pricing and
required capital determination.
Katherine O’Brien
SENIOR VICE PRESIDENT AND
CHIEF HUMAN RESOURCES OFFICER
Katherine O’Brien oversees all of the human
resources operations for New York Life. She
is responsible for employee relations, talent
acquisition and management, HR business
partners, and compensation and benefits.
She is also responsible for oversight of the
Office of Diversity and Inclusion.
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.
2014 Annual Report 23
New York Life
Board of Directors
As of April 1, 2015
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, Admiral Joseph W. Prueher, Theodore A. Mathas,
Betty C. Alewine, Michele G. Buck, S. Thomas Moser
24 New York Life Insurance Company
Betty C. Alewine
Theodore A. Mathas
Elected as a director in 1998, she is the former
president and chief executive officer of
COMSAT Corporation. Mrs. Alewine is chair
of the Board’s Governance Committee and a
member of the Compensation Committee.
Elected as a director in 2006, he is chairman
of the board, president and chief executive
officer of New York Life.
Michele G. Buck
Elected as a director in 2013, she is the
president, North America of The Hershey
Company. Ms. Buck is a member of the Board’s
Audit and Insurance & Operations Committees.
Ralph de la Vega
Elected as a director in 2009, he is the
president and chief executive officer of AT&T
Mobility. Mr. de la Vega chairs the Board’s Audit
Committee and is a member of the Insurance
& Operations and Investment Committees.
Mark L. Feidler
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 an
Admiral U.S. Navy (Ret.), a former James
R. Schlesinger Distinguished Professor at
the University of Virginia, and former U.S.
Ambassador to the People’s Republic of
China. Admiral Prueher is a member of the
Board’s Compensation, Governance, and
Insurance & Operations Committees.
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 is a
member of the Board’s Audit, Compensation,
Governance, and Investment Committees. He
currently serves as the Board’s lead director.
Thomas C. Schievelbein
Kent B. Foster
Gerald B. Smith
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 Compensation and
Governance Committees.
Elected as a director in 2006, he is the
chairman, president and chief executive officer
of The Brink’s Company. Mr. Schievelbein
chairs the Board’s Compensation Committee
and is a member of the Audit and Governance
Committees.
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.
2014 Annual Report
25
Offices of New York Life
Its major subsidiaries and affiliates (as of April 1, 2015)
New York Life
Insurance Company
Group Membership
Association Division
WWW.NEWYORKLIFE.COM
1 Rockwood Road
Sleepy Hollow, NY 10591
800-695-4226
(Disability Insurance Claims)
800-792-9686
(Life Insurance Claims)
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 800-692-3086.
Home Office
51 Madison Avenue
New York, NY 10010
212-576-7000
Home Office –
Westchester Campus
1 Rockwood Road
Sleepy Hollow, NY 10591
914-846-7000
Long-Term Care
Insurance Division
6200 Bridgepoint Parkway
Suite 400
Austin, TX 78730
800-224-4582
NYL Direct
5505 West Cypress Street
Tampa, FL 33607
866-801-9615
26 New York Life Insurance Company
Seguros Monterrey New York Life
WWW.MNYL.COM.MX
Headquarters
Paseo de la Reforma #342
Col. Juárez
06600 México, D.F.
52-55-53269000
New York Life Investments Group
WWW.NYLINVESTMENTS.COM
The retail products of the New York Life
Investments Group are available to consumers
through New York Life’s career Agents. For
questions and further information, call your New
York Life Agent or 800-692-3086. To contact
one of the New York Life Investments Group
companies directly, please refer to the list below.
NYL Investors LLC
WWW.NEWYORKLIFE.COM/NYLINVESTORS
51 Madison Avenue
New York, NY 10010
212-576-7000
New York Life Investment
Management LLC
Cornerstone Capital
Management
51 Madison Avenue
New York, NY 10010
212-576-7000
WWW.CORNERSTONECAPITAL.COM
1180 Avenue of the Americas, 22nd Floor
New York, NY 10036
212-938-6500
MainStay Investments1
3600 Minnesota Drive, Suite 70
Minneapolis, MN 55435
952-229-8100
WWW.MAINSTAYINVESTMENTS.COM
169 Lackawanna Avenue
Parsippany, NJ 07054
800-624-6782
GoldPoint Partners LLC
New York Life Retirement Plan Services
WWW.GOLDPOINTPARTNERS.COM
51 Madison Avenue, Suite 1600
New York, NY 10010
212-576-6500
WWW.NEWYORKLIFERETIREMENTPLANS.COM
690 Canton Street
Westwood, MA 02090
781-619-2000
Institutional Capital LLC (ICAP)
Ausbil Investment
Management Limited
WWW.INSTITUTIONALCAP.COM
225 West Wacker Drive, Suite 2400
Chicago, IL 60606
312-424-9100
WWW.AUSBIL.COM.AU
Level 23
207 Kent Street
Sydney NSW 2000
Australia
+61 2 9259 0200
MacKay Shields LLC
WWW.MACKAYSHIELDS.COM
1345 Avenue of the Americas
New York, NY 10105
212-758-5400
Candriam Investors Group
WWW.CANDRIAM.COM
BELGIUM
Madison Capital Funding LLC
Avenue des Arts 58
B-1000 Bruxelles
Belgium
+32 2 509 60 00
30 South Wacker Drive, Suite 3700
Chicago, IL 60606
312-596-6900
WWW.MCFLLC.COM
FRANCE
Private Advisors, LLC
40, rue Washington
75408 Paris Cedex 08
France
+33 1 53 93 40 00
WWW.PRIVATEADVISORS.COM
901 East Byrd Street, Suite 1400
Richmond, VA 23219
804-289-6000
LUXEMBOURG
136, route d’Arlon
1150 Luxembourg
Luxembourg
+352 27 97 1
1
ainStay Investments is a registered service
M
mark and name under which New York Life
Investment Management LLC does business.
2014 Annual Report
27
Glossary of Terms
Policyholder Benefits and Dividends1– 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. Divisible surplus is the portion of the company’s total
surplus that is available, following each year’s operations, for distribution in
the form of dividends. Each year the board of directors votes on the amount
and allocation of the divisible surplus.
Individual Life Insurance In Force2 – represents the total face amount
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 – 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 New York Life Investments3 receives a revenue share are
included in assets under management. Assets under administration
associated with agreements where New York Life Investments receives only
an administration fee are not included in assets under management.
Operating Earnings4 – is the measure used for management purposes to track
the company’s results from ongoing operations and the underlying profitability
of the business. This metric is based on accounting principles generally
accepted in the United States of America (GAAP) with certain adjustments
we believe are more appropriate as a measurement approach (non-GAAP).
Operating earnings equal GAAP net income adjusted for, primarily, the removal
of gains and losses from investments and related adjustments.
Surplus and Asset Valuation Reserve – Total surplus, which includes the
Asset Valuation Reserve, is one of the key indicators of the company’s longterm financial strength and stability and is presented on a consolidated basis
of the company.
Annuity Sales – represent premium income on our deferred annuities
(both fixed and variable) and on our Guaranteed Income Annuities, which
includes our immediate fixed annuity product (Guaranteed Lifetime Income)
and our flexible premium deferred income annuity product (Guaranteed
Future Income). 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 through NYLIFE Distributors LLC, a wholly owned subsidiary
of New York Life Insurance Company.
NYLIC’s policyholder benefits and dividends were $6.44 billion and
$6.24 billion for the twelve months ended December 31, 2014 and
2013, respectively. NYLIAC policyholder benefits were $2.64 billion and
$2.41 billion for the twelve months ended December 31, 2014 and 2013,
respectively. Dividends are not guaranteed.
1 The company’s individual life insurance in force totaled $871.14 billion at
December 31, 2014 (including $169.18 billion for NYLIAC).
2
New York Life Investments is a service mark used by New York Life
Investment Management Holdings LLC and its subsidiary, New York Life
Investment Management LCC.
3 A reconciliation of operating earnings to the company’s consolidated GAAP
net income is available on the company’s website (www.newyorklife.com).
4 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.
5 Insurance Sales5 – 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 initial premium is paid and the policy is issued.
Where applicable, prior period numbers have been restated to conform to
current year definition.
MainStay Funds are managed by New York Life Investment Management,
LLC, an indirect wholly owned subsidiary of New York Life Insurance
Company, and distributed through NYLIFE Distributors LLC, 169
Lackawanna Avenue, Parsippany, NJ, 07054, a wholly owned subsidiary of
New York Life Insurance Company, Member FINRA/SIPC.
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.
For more information about MainStay Funds, call 800-MAINSTAY
(624-6782) 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 contains this and other information about the investment
company. Please read the prospectus or summary prospectus, carefully
before investing.
28
New York Life Insurance Company
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 800-598-2019 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.
7777 (4/15)
New York Life Insurance Company
51 Madison Avenue
New York, NY 10010
www.newyorklife.com
(800) 692-3086