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New York Life Insurance Company51 Madison Avenue New York, New York 10010

newyorklife.com (800) 692-3086

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2009

Annual Report

World’s

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The Company You Keep Believing In

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On the front cover: Just prior to the publication of this year’s Annual Report, Fortune reported that New York Life scored highest in its industry in the magazine’s 2010 annual survey of the “World’s Most Admired Companies.” The full survey is available on Fortune.com.

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New York Life – Annual Report 2009

Financial Highlights*

Contents

2 To Our Policyholders

10 The Company You Keep

18 Principal Businesses of New York Life

22 2009 Investment Review

28 2009 Financial Overview

30 Report of Independent Auditors

31 Consolidated Balance Sheet

32 Consolidated Statement of Income

33 Notes to Financial Statements

44 Reconciliation Schedules

46 Management’s Discussion of

Financial Responsibility

47 Offi ces of New York Life

51 Senior Executive Offi cers

52 Board of Directors

54 Glossary of Terms

(DOLLARS IN MILLIONS) DECEMBER 31, 2008 DECEMBER 31, 2009

INSURANCE SALES $ 2,396 $ 2,655

INVESTMENT SALES 26,867 32,848

INDIVIDUAL LIFE INSURANCE IN FORCE 781,181 816,052

POLICYHOLDER BENEFITS AND DIVIDENDS 12,349 12,402

OPERATING REVENUE† 13,936 14,383

ASSETS UNDER MANAGEMENT 249,119 286,699

OPERATING EARNINGS† 1,283 1,222

SURPLUS AND ASSET VALUATION RESERVES‡ 12,826 15,009

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 affi liates.

Any discussion of ratings and safety throughout this Report applies only to the fi nancial strength of New York Life, and not to the performance of any investment products issued by the Company. Such products’ performance will fl uctuate with market conditions.

* See Glossary of Terms on page 54. For complete information, see pages 28–45.† For a detailed reconciliation of the Company’s GAAP performance measures to its non-GAAP performance measures, see page 45.‡ For a detailed reconciliation of the Company’s surplus and asset valuation reserves from GAAP equity, see page 43. Policyholders may request a copy of the GAAP-basis consolidated unabridged fi nancial statements (which are incorporated by reference into the Annual

Report) and the statutory fi nancial statements applicable to their respective companies by contacting the Secretary of the parent, New York Life Insurance Company, 51 Madison Avenue, New York, New York 10010. The audited fi nancial statements above are also available on our Web site (www.newyorklife.com).

The New York State Insurance Department recognizes only statutory accounting practices for determining and reporting the fi nancial condition and results of operations of an insurance company. See Note 8 on page 42 for further information.

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2To Our Policyholders

Just before the end of 2009, a group of the country’s leading economists issued an offi cial statement: The recession is now over.

When I heard that, I just had to shake my head in wonder.

Certainly, things might be starting to look up for Wall Street. But from where we at New York Life sit, it appears that most Americans still have some very real worries.

Last year, New York Life agents, in communities large and small, sat down with their clients in offi ces and over kitchen tables, asking, “Is this economy keeping you up at night?” and then, “What can we do to help?”

I personally heard about a good number of those conversations through letters and e-mails such as this one, from a veteran New York Life agent:

As the nation’s bank failures and market losses mounted, I knew that many people were becoming nervous about the safety of their fi nancial holdings. So I spent a week personally contacting every single one of my clients, to reassure them that they could depend upon the strength and security of New York Life. Ten minutes after phoning one of our newest annuity clients, a 77-year-old retiree, the man showed up, in person, at my offi ce door. “It just wasn’t enough to thank you over the phone,” he said. “You have saved my retirement.”

This has been a time of extreme fi nancial stress for many families – particularly those who faced the recession without adequate fi nancial protection.

In 2009, the nation suff ered another wave of business failures – from large fi nancial institutions to neighborhood stores. Unemployment reached its highest level in 70 years. Even families who did not face job losses found, in many cases, that their fi nancial goals – or retirement savings – had been upended by investment losses and declining real estate values. In this environment of economic uncertainty, a bedrock principle of personal fi nancial planning was rediscovered: Guarantees matter. Guarantees you can count on for life.

To Our Policyholders

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Last August, when the government bailout of fi nancial fi rms was still making headlines, you may have come across a front-page story* in The Wall Street Journal describing a company that had “fared much better” than the rest. In fact, according to the Journal, this Fortune 100 company was among the few major corporations in America that not only had the strength to endure the recession, but was one of an elite “class of winners.”

The company is New York Life.

The Wall Street Journal cited New York Life’s large cushion of “rainy-day capital” and “triple-A ratings” as reasons for its strong performance in a weakened economy. But I would suggest there is something even more fundamental at work here: For 165 years, New York Life has maintained a single unwavering focus – providing security and peace of mind to our policyholders. And those commodities have never been in higher demand than right now.

New York Life ended 2009 with record-setting total insurance sales of nearly $2.7 billion – proof that people recognize the dependable returns and critical protection that life insurance provides in volatile times.

It should be added, however, that not all life insurance companies experienced similar growth. In fact, in 2009, industry-wide sales of individual life insurance suff ered the worst decline in almost 70 years.† New York Life, on the other hand – with its triple-A fi nancial strength, nationwide network of highly trained career agents and primary focus on life insurance – led the industry in 2009 as number one in new life insurance sales.‡

In another confi rmation of the Company’s leadership, Fortune magazine named New York Life number one among the world’s top life insurance companies in its annual survey of “The World’s Most Admired Companies.”§ This survey, which asks executives, directors and analysts to rate companies within their own industry, is the most widely recognized ranking of corporate reputations.

“Guarantees matter. Guarantees you can count on for life.”

* Scism, Leslie, et al., “Slump Spurs Grab for Markets,” The Wall Street Journal, August 24, 2009, A1.† Source: LIMRA International, U.S. Life Insurance Sales Report, year-end 2009 results. ‡ Source: LIMRA International, U.S. Individual Life Insurance Sales Survey, year-end 2009 results. Sales based on all planned recurring premiums

plus 100 percent of reported single premiums. § Source: “The World’s Most Admired Companies” survey, Fortune, March 22, 2010, p. 121.

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How New York Life protects you better

Clearly, consumers now realize that not all life insurance companies are alike. And they have very good reasons to feel this way. Since 2008, Americans have witnessed:

Half a dozen life insurers applying for – and, in some cases, accepting – federal relief funds.

The balance sheets of several major insurers weakened signifi cantly by bad investment decisions and overly aggressive pricing strategies.

Downgrades to the fi nancial strength ratings of every major publicly owned life insurance company, including multiple downgrades of some of the nation’s largest insurers.

New York Life has always maintained that mutuality, rather than public ownership, is the preferred structure for a life insurance company. As a mutual company, we serve only one constituency: our policyholders. We retain generous capital reserves for their protection, unhampered by a conflicting need to maximize returns for shareholders.

Last year, one of the leading rating agencies confi rmed that mutual life insurance companies are winning business from consumers who, in the wake of economic uncertainty, regard mutual insurers as safe and who would rather be insured by a company that is not under pressure to provide returns for outside investors.*

Another rating agency, Standard & Poor’s, applauded New York Life’s avoidance of risky, overly aggressive products

in favor of off erings that enhance “the return to the mutual policyholders’ capital.”†

The case for mutuality was further validated last year, when, among the more than 1,000 life insurance companies in the United States, only New York Life and two other mutual companies maintained the highest ratings for fi nancial strength from all of the major rating agencies: Moody’s, Standard & Poor’s, Fitch and A.M. Best.

* National Underwriter Online News Service, “A.M. Best: Mutuals See Gains, Face Challenges,” Property-Casualty.com, October 5, 2009.† Standard & Poor’s, Full Analysis, New York Life Insurance Co. and New York Life Insurance and Annuity Corp., September 4, 2009.

“New York Life has always maintained that mutuality is the preferred structure for a life insurance company.”

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Whole life: The must-have financial asset for times like these

In recent years, many publicly owned life insurance companies have veered away from selling permanent cash value whole life insurance in favor of products that, in some cases, have proven to pose more risk for them and their customers.

At New York Life, whole life insurance continues to be our core product. In fact, we firmly believe that the security and guaranteed cash value of whole life makes it one of the most essential financial products you can own in this, or any, economy. Consider these facts:

The cash value of whole life insurance products from New York Life is guaranteed to grow year after year – both in good times and bad.

The cash value of whole life insurance products from New York Life grows tax-deferred.

Dividends have been paid to New York Life policyholders every year since 1854.

The accumulated cash value of New York Life’s whole life policies can be borrowed against for any reason or used as collateral for a loan.

Unlike term life insurance, which only off ers a death benefi t, it is these “living benefi ts” of New York Life’s whole life products that have always made them a valuable source of fi nancial protection, especially during eras of economic uncertainty.

For example, in America’s Great Depression, whole life policy loans helped save thousands of homes, businesses and family farms. New York Life alone

lent nearly a half-billion dollars (equivalent to about $8 billion in today’s dollars) to its policyholders during the first five years of the Depression.

“We firmly believe that the security and guaranteed cash value of whole life makes it one of the most essential financial products you can own.”

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Today, our policyholders are again relying upon whole life as a safe, dependable store of value. They are borrowing funds from the cash value of their policies to supplement retirement income, to inject needed capital into businesses or to ease the severity of other pressing fi nancial diffi culties.*

In 2009, there was a signifi cant increase in the number of Americans who purchased new whole life insurance policies from New York Life or who increased the coverage amounts on New York Life whole life insurance policies they already own. This was because, as explained last year in Forbes, whole life insurance from a mutual company is “a fi nancial bunker for scary times.”† After all, how many other places these days can one fi nd safety, guaranteed growth and access to loans in times of need?

The added value of the industry’s best agents

Beginning on page 10 of this Report, you can read about how insurance from New York Life has helped four families navigate successfully through what may be the most diffi cult economic environment of their generation. Throughout their stories, you will notice another common thread: Our policyholders place tremendous value on the long-term relationships they have

with their New York Life agents.

Agents have always been – and always will be – our primary method of distribution. New York Life’s nearly 12,000 agents in communities across the nation have

been playing a vital role in educating families on how to protect themselves against the worst effects of the recession.

As a result of their dedication to their clients, our U.S. agency team posted record-setting life insurance sales of $805 million in 2009.

* Policy loans accrue interest and reduce the policy’s total cash value and death benefi t. Unpaid loans can result in policy lapse.† Girouard, John E., “A Financial Bunker for Scary Times,” Forbes.com, February 10, 2009.

“ Agents have always been – and always will be – our primary method of distribution.”

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Serving many needs and many markets

Among the many who have been victims of the recession, retirees and those about to retire have been particularly susceptible to fi nancial setbacks. About seven years ago, we realized there was a rapidly growing need for an insurance product that could provide a consistent, guaranteed stream of income for retirees – a monthly retirement paycheck for life.

The answer to this need already existed in a somewhat obscure product called “single premium immediate annuities.” We customized it to better serve the needs of today’s retirees and reintroduced these annuities under the brand name Guaranteed Lifetime Income.

Since 2006, New York Life has been the nation’s number one provider of these products, with 2009 sales of nearly $1.8 billion and annual benefi ts to retirees now exceeding $500 million.* At a time when many people feel they can no longer completely rely

on pensions, Social Security or the long-term value of their investments, these Guaranteed Lifetime Income products have made it possible for them to live a more worry-free retirement.

New York Life Investments, our U.S. asset management company, serves individual and institutional investors with the same proven formula of fi nancial prudence and investment insight that has made the Company an icon of fi nancial strength. This legacy clearly takes on added importance in the current economic environment, as evidenced by the fact that New York Life Investments posted sales of nearly $23 billion in 2009, the highest in the fi rm’s history. These results were especially impressive against the backdrop of the extremely volatile equity and fi xed income markets.

Our domestic insurance business is complemented by our operations in seven of the world’s emerging markets: Mexico, India, China, Hong Kong, South Korea, Taiwan and Thailand. In spite of the eff ects of the global recession in these markets, our international business continued to gain market share in most of the places where New York Life does business.

* Guaranteed Lifetime Income and AARP Lifetime Income sales reported at 100 percent. Guaranteed Lifetime Income products are issued by New York Life Insurance and Annuity Corporation, a wholly-owned subsidiary of New York Life Insurance Company.

“By the end of 2009, New York Life’s surplus had grown to over $15 billion – the highest in Company history.”

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Our financial strength = Your family’s safety

For the past two years, we have reported to you on how New York Life’s disciplined approach to fi nancial management and focus on policyholder safety have helped insulate the Company and its customers from the severe recession-induced setbacks suffered by so many other insurers.

As a New York Life policyholder, you have the assurance of knowing that your fi nancial future is protected by a strong company that, even in a troubled economy, continues to achieve vibrant growth.

Operating revenue, which has grown steadily for the past fi ve years, totaled $14.4 billion in 2009. Operating earnings of $1.2 billion were almost on par with 2008’s record-setting results, in spite of the severe downward pressures of the fi nancial markets. Just as important, New York Life’s earnings have exhibited steady, stable long-term growth, in contrast to the erratic earnings performance of some publicly owned life insurers.

The Company’s consistent record of fi nancial strength is best demonstrated by the fact that we have, for each of the past 155 years – with no exceptions – returned a portion of our surplus to eligible policyholders as dividends. This represents signifi cant extra value received on top of the guaranteed annual growth in cash value our whole life policies deliver.

Of course, as a mutual company, our prime objective is to provide optimum value to policyholders, always in a manner consistent with protecting the Company’s fi nancial strength. For policyholders, the most important measure of fi nancial strength is our surplus, the funds that ensure we can meet all future obligations and a core component of our triple-A ratings. In 2008, surplus and asset valuation reserves totaled $12.8 billion. By the end of 2009, these funds had grown to over $15 billion – the highest in Company history.

The majority of our 2009 surplus gain came from organic growth, including improved market conditions. We took advantage of the extremely low interest-rate environment to further bolster our capital base with the issuance of surplus notes* last October. New York Life’s extremely strong credit ratings enabled us to obtain funds at very favorable terms. Through this well-timed off ering, we added nearly $1 billion to our already strong surplus – capital that will provide an extra cushion of safety for our policyholders today, while yielding opportunities for investments in the Company’s growth as the economy recovers.

* See Glossary of Terms on page 54.

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We were pleased to welcome two new members to New York Life’s board of directors in 2009: William G. Walter, who is chairman of the board and past president and chief executive offi cer of FMC Corporation, a leading manufacturer of agricultural, specialty and industrial chemicals; and Ralph de la Vega, president and chief executive offi cer of AT&T Mobility and Consumer Markets, with responsibility for all consumer marketing, sales, customer care and operations for the company’s wireless and wired businesses. Both of these accomplished leaders bring deep and broad management experience to our board.

Looking ahead, it is still impossible to accurately forecast how long it will take for the economy to return to a sound footing. But, in the meantime, there are signs that the events of the past few years have precipitated a lasting change in most people’s perspectives on spending, saving and planning for the future.

There are reasons to believe that there is a greater understanding of the risks of speculation and a new awareness that attempts to “beat the market” can never be a sound personal fi nancial plan.

In the years ahead, we believe many more people will rediscover why owning life insurance – in particular, permanent cash value whole life insurance – is an essential foundation for long-term fi nancial security.

We can already see the momentum building: Americans purchased 40,000 more life insurance policies from New York Life agents in 2009 than they did in 2008.

But this is not solely about numbers.

We never lose sight of the fact that our business is really about protecting one life, one family, one home, one business, one future for those you love. It is about you – and the unwavering commitment we make to being here for you when you need us.

That is our promise. Thank you for placing your trust in New York Life.

Ted MathasChairman of the Board, President and Chief Executive Offi cer

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10The Company You Keep in good times and bad

Jack Snyder

“It never occurred to me that I was sitting on a readily available asset – the cash value of our life insurance.”

The Company You Keep in good times and bad

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11The Company You Keep in good times and bad

Jack Snyder began his business 35 years ago with little more than a cutting machine and an old Ping-Pong® table. But he also had the right friend: New York Life Agent Ron Paulseen.

Jack had no idea that Ron would soon become one of New York Life’s most successful agents. And Ron might not have suspected that Jack’s company, Sharpline, would grow into one of the nation’s leading suppliers of pinstriping and vinyl graphics for cars, recreational vehicles and watercraft.

However, in 2008, as the nation’s economy went into free fall, sales of cars, RVs and boats plummeted – as did the demand for Sharpline’s products. As Jack recalls, “My company became a full-fledged participant in the recession.”

Soon, cash flow became a real challenge. His company needed a cushion of capital – but where could he get it? Bank loans were becoming increasingly diffi cult to obtain. And with the markets in steep decline, Jack knew he would suffer big losses if he tapped into his investment accounts.

“It never occurred to me,” Jack said, “that I was sitting on a readily available asset – the cash value of our life insurance. In my family, life insurance was something you paid for, but never touched.”

Fortunately, Ron provided the advice Jack needed. He reminded Jack that many millions of dollars in cash value had accumulated in the life insurance policies that he had purchased over the years for himself and his management team. “How soon could we have access to those funds?” Jack asked Ron. Ron’s answer: “Immediately.”

Today, with his company’s sales recovering, Jack plans to have the policy loans fully repaid in less than two years. For him, it was a convincing lesson in the living benefits of whole life insurance.

But there’s also something else Jack says he learned from his friend Ron: “When selecting a life insurance company, don’t ask who off ers the lowest price. Instead, make sure you know who can promise the greatest security. As far as I’m concerned, New York Life is the only choice.”

Policy loans accrue interest and reduce the policy’s total cash value and death benefi t. Unpaid loans can result in policy lapse.

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12The Company You Keep when guarantees matter

Susan and Steve Kim

“Without access to the value of that policy, we would have had to liquidate everything we own.”

The Company You Keep wh en guarantees matt er

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13The Company You Keep when guarantees matter

Even as a teenager, Steve Kim knew he would one day fi nd a place for himself in Best Realty, his mother and father’s growing real estate company. James and Susan Kim realized their son was serious when he got a real estate license at age 18, shortly after graduating from high school.

The future of the family’s business looked bright – until a routine doctor’s visit revealed James Kim had cancer. “There was no reason to suspect anything was the matter with him,” Steve recalls. “He worked out, didn’t smoke or drink, and took care of his health.” Susan adds, “We were absolutely shocked.”

James had always been skeptical about purchasing life insurance, preferring to invest every dollar into the growth of his business. But Cindy Choo, his New York Life agent, had persuaded him over the years to gradually build a signifi cant amount of whole life coverage for himself and his family.

The two years of medical bills that followed James’s diagnosis took a heavy toll on the Kims. Fortunately, Cindy had added a Living Benefi ts Rider to one of the whole life policies, allowing early payment of a portion of the death benefi t in case of a terminal illness. Steve says, “Without access to the value of that policy, we would have had to liquidate everything we own. I imagine our home would have been the fi rst thing to go.”

Even still, the family’s debts continued to mount. “My husband was unable to work during the two years he was battling the disease,” Susan points out. At the same time, the recession had crippled the real estate market, putting tremendous strain on the business.

James passed away in 2008. With the proceeds from the life insurance he purchased to protect his family, Susan and Steve were able to erase their debts and put their company on a sound footing. Steve – now a co-owner of Best Realty – believes his father took comfort in knowing his wife and son would be able to face the future with confi dence.

Cindy Choo visited James in the hospital shortly before his passing. Barely strong enough to speak, he motioned her to the bedside and laid his hand on hers. “Thank you,” he whispered. “Thank you for all you did to take good care of us.”

Living Benefi ts Rider is subject to state availability and not available on all policies.

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14The Company You Keep for a lifetime

Dr. Vaman and Veena Chaubal

“I tell everyone, ‘We sleep very well at night because of New York Life.’”

The Company You Keep for a lifet ime

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15The Company You Keep for a lifetime

Several generations of parents in Tinton Falls, New Jersey, have trusted Dr. Vaman Chaubal to look after the health of their children. Vaman and his wife, Veena, trust their financial well-being in retirement to their New York Life agent of 30 years, Bill Van Winkle.

Back in 2008, Bill cautioned Vaman and Veena that, by having their entire nest egg in the stock market, they could be putting their retirement savings at risk.

The couple was worried, too. But every time they discussed their fears with their stockbroker, he told them, “Don’t worry about it. The markets will always go up and down.”

“That might be fi ne advice to give a 20-year-old,” concluded Vaman. “But for us, in this chapter of our lives, nothing is more important than safety. So I went to Bill and asked him, ‘What can we do?’”

Bill showed the Chaubals how to use the funds they had in stocks to purchase guaranteed lifetime income annuities that will provide them with a secure monthly income for life.

They exited the market just in time, only a few weeks before it crashed. Vaman and Veena estimate that, had they remained fully invested in stocks, they would have lost at least half of their savings.

After purchasing the annuities, Vaman and Veena asked Bill if anything bad could happen to their retirement income if the economy continued to falter. Bill reassured them, “Don’t worry. Your income is guaranteed by the strength of New York Life.”

According to Vaman, he no longer gets dinner invitations from his stockbroker: “But I’m okay with that. The annuities have given us a peaceful life. We know exactly what our income will be every month. We are able to plan and budget with no worries. I tell everyone, ‘We sleep very well at night because of New York Life.’”

Guaranteed Lifetime Income products are issued by New York Life Insurance and Annuity Corporation, a wholly-owned subsidiary of New York Life Insurance Company. Guarantees are backed by the claims-paying ability of the issuer.

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16The Company You Keep for generations

The Company You Keep for generations

Cathy and Craig Christiansen

“Just when it seemed we were at the end of our rope, some real-life angels intervened.”

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17The Company You Keep for generations

Craig Christiansen still remembers sitting in the lap of his great-uncle, Abe Duran, hearing stories about Abe’s days as a top agent for New York Life in the 1920s. Great-Uncle Abe bought Craig’s family their fi rst whole life insurance policy – a policy that, years later, would help save a dream.

This dream began when Craig and his wife, Cathy, discovered an abandoned century-old train depot in the little town of Bald Knob, Arkansas. The building had become a dilapidated wreck and was slated for demolition. But Craig and Cathy envisioned a restored historic landmark, one that would someday house a model railroad store and train museum.

“A lot of hard work and love went into bringing this depot back to life,” said Craig. “But we came close to losing it all – the depot, our home, our savings, everything – when my mother passed away earlier this year.”

Craig and his mother shared responsibility for the family’s investment accounts. Unfortunately, despite their estate planning eff orts, all of their shared assets became temporarily entangled in dispute, leaving Craig and Cathy in a precarious fi nancial position.

As Craig tells it, “Just when it seemed we were at the end of our rope, some real-life angels intervened.” Two old family friends, father and son New York Life Agents Arthur and Tracy Wood of Dallas, along with Arkansas Agent Jerry Coats, stepped forward to off er their assistance. They asked Craig and Cathy, “What about those whole life policies you own? You can borrow what you need from the cash value that’s built up.” The very next day, Craig was cashing a check for loan proceeds from New York Life.

He recalls, “After I lost my mom, a lot of people came to us with their hands out. The trustee wanted money. The attorneys wanted money. The tax people wanted money. New York Life people were the only ones who said, ‘We are here to help.’ Thank goodness for Jerry and Arthur and Tracy!”

To which Cathy replies, “Don’t forget our fourth New York Life angel – Uncle Abe. I’m pretty sure he had a hand in this, too.”

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18Principal Businesses of New York Life

U.S. Life Insurance and AgencyThe troubled economy of the past two years has been, for many Americans, a wake-up call, reminding them of the necessity of protecting their fi nancial futures with triple-A fi nancial strength-rated life insurance from New York Life, the number one seller of individual life insurance in the nation.* Whole life insurance, our flagship product, offers customers the peace of mind of knowing that, even in the most severe economic downturns, not only are their families protected, but they also can access the cash value of their policies whenever they need it, no questions asked.† And its cash value is guaranteed to grow, year after year, for as long as they own their policies.

New York Life provides life insurance primarily through our network of nearly 12,000 career agents nationwide. These agents are backed by one of the most highly regarded training and lifetime education programs in the industry. The value of these trusted advisors was never more apparent than during the onset of the fi nancial crisis, when they quickly rallied to come to the aid of their clients. With confi dence in many fi nancial institutions badly shaken, our agents contacted policyholders to reassure them of New York Life’s strength and safety, helped them fi nd solutions to immediate concerns and worked with them to help assess how best to respond to the impact of the crisis on their families’ fi nancial plans.

Nowhere is the professionalism of our agents more evident than in their dominance of the Million Dollar Round Table (MDRT). Qualifying for MDRT ranks an agent among the top one percent of life insurance professionals in the world, and MDRT membership is a widely recognized sign of superior

technical knowledge, client service and ethical standards. For the 55th consecutive year, New York Life led all U.S. insurers in MDRT membership, with more than 2,000 agent members.

In 2009, Tim FitzGerald (top, right) of our Shreveport, Louisiana, offi ce and Michael Brown (bottom, right) of our Greater Kansas City offi ce received the highest honors we bestow on our agents – the New York Life Council presidency and vice presidency, respectively.

In addition to our career agents, we also provide life insurance through our Advanced Market Network of independent insurance brokers, who off er corporate- and bank-owned insurance products, as well as insurance solutions for high net-worth individuals.

Through an exclusive marketing arrangement with AARP, New York Life off ers insurance coverage to the association’s nearly 38 million members. The success of this program has made the Company the largest direct response marketer of life insurance in the nation.‡ The exclusive term and permanent life insurance products available to AARP members provide the protection of life insurance from New York Life in smaller face amounts. New York Life is also the exclusive provider of fi xed immediate group annuities to AARP’s membership.§

New York Life off ers insurance to members of other affi nity groups through our Group Membership Association division, focusing on professional, military, educational and alumni associations.

Principal Businesses of New York Life

* Source: LIMRA International, U.S. Individual Life Insurance Sales Survey, year-end 2009 results. Sales based on all planned recurring premiums plus 100 percent of reported single premiums.

† Cash value is accessed through policy loans and surrenders, which both reduce the policy’s cash surrender value and total death benefi t.‡ Source: LIMRA International, U.S. Individual Life Insurance Sales Survey, year-end 2009 and other publicly available sources.§ New York Life’s fi xed annuities are issued by New York Life Insurance and Annuity Corporation, a wholly-owned subsidiary of New York Life Insurance Company.

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Retirement Income SecurityApproximately 77 million baby boomers in the United States are now approaching or already in retirement. For many of these men and women, the economic recession provided a harsh lesson in how costly it can be to assume too much risk when crafting a fi nancial plan for this stage of life.

Poorly performing investments can have a devastating impact on retirement security, particularly for the growing number of retirees who do not have defi ned benefi t pensions. Social Security benefi ts, which were never designed to serve as a sole source of retirement income, today only cover a small fraction of the average retiree’s living expenses. There are also the added fi nancial demands of increasing longevity: For a healthy married couple in their mid-sixties, there is now a 50 percent chance that one spouse will live beyond his or her 92nd birthday.* With so many retirements spanning 30 years or more, many people face the very real prospect of outliving their savings.

Our Retirement Income Security division offers a comprehensive suite of products that can provide solutions for all stages of retirement planning: Guaranteed Lifetime Income (GLI), Investment Annuities and Long-Term Care Insurance. To round out these retirement strategies, this business unit also distributes the Company’s family of MainStay mutual funds.†

Guaranteed Lifetime Income products are immediate fi xed annuities that offer the security of monthly retirement income checks for life and feature important options, such as access to cash for unex-pected expenses, inflation protection and legacy benefi ts.‡ New York Life is the dominant provider in this marketplace, with a 25 percent share of the

market.§ GLI products are sold by our agents, by broker-dealers and also through banks, where New York Life now accounts for more than half of all such products sold.

Investment Annuities offer our customers the ability to accumulate money for their retirement on a tax-deferred basis, meaning no tax is paid on earnings until the funds are withdrawn. Our variable deferred annuities, in which money can be allocated among a variety of investment choices and/or to a guaranteed fi xed account, are sold by New York Life’s network of career agents.** Fixed interest deferred annuities, which earn a guaranteed rate of interest, are sold by agents and also by a growing number of banks and broker-dealers nationwide.‡

Long-Term Care: An estimated 70 percent of Americans over the age of 65 will need long-term care services during their lifetimes – and the great majority of them will not qualify for government assistance to cover the costs.†† Those costs can be great: Average fees in 2009 for care in an assisted living facility topped $36,000 per year.†† That is why long-term care insurance, which can help pay for either out-of-home or at-home care, is now considered a fi nancial planning essential.

In the long-term care insurance business, New York Life remains one of the few major insurers that have never raised the rates of in force policyholders, a reflection of the Company’s prudent underwriting and pricing practices. In addition, 2009 was the fi fth consecutive year that New York Life returned a dividend to eligible long-term care policyholders, further setting ourselves apart from competitors.

* Source: American Society of Actuaries, 2000 Mortality Tables.† Mutual funds are distributed through NYLIFE Distributors LLC, a wholly-owned subsidiary of New York Life Insurance Company, Member FINRA/SIPC. ‡ New York Life’s fi xed annuities are issued by New York Life Insurance and Annuity Corporation (“NYLIAC”), a wholly-owned subsidiary of New York Life

Insurance Company. § Source: LIMRA International, U.S. Individual Annuity Sales Survey, year-end 2009 results. Based on fi xed immediate annuity sales.

** Variable annuities are issued by NYLIAC and distributed by NYLIFE Distributors LLC, Member FINRA/SIPC. †† U.S. Department of Health and Human Services: National Clearinghouse for Long-Term Care Information: www.longtermcare.gov.

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New York Life InvestmentsFounded upon its acumen in managing the investment portfolio of New York Life Insurance Company, New York Life Investments ranks among the largest asset management fi rms in the United States,* with more than $256 billion in assets under management.†

In addition to managing $146 billion of New York Life’s investment assets, New York Life Investments provides investment management services to institutional and retail clients, offers retirement plans for employers and individuals, and delivers guaranteed products to both the qualifi ed and non-qualifi ed markets.Through its multi-boutique structure, the fi rm offers one of the broadest arrays of investment management competencies in the industry:

Traditional Businesses

New York Life Investments Fixed Income Investors Group (FIIG) manages the bulk of New York Life’s investment assets and also serves clients in the institutional market.New York Life Investments Real Estate Group manages a portfolio of real estate debt and equity investments for New York Life’s General Account and third-party investors, with offi ces across the country providing a national presence.New York Life Investments Guaranteed Products is a global provider of institutional fi xed income investment products issued by New York Life to investors seeking high quality, low volatility and stable returns.Madison Capital Funding is a fi nance company focused exclusively on the corporate fi nancing needs of private equity sponsors throughout the United States, providing fi nancing for acquisitions, recapitalizations, management buyouts and leveraged buyouts.

Asset Management Boutiques

MacKay Shields is a fi xed income-focused advisory fi rm managing assets on behalf of institutional clients and retail sub-advisory relationships. Institutional Capital (ICAP) is a value-oriented, large cap equity investment fi rm managing both institutional and retail assets. Madison Square Investors offers quantitative investment solutions to a wide range of individual, corporate, public, endowment and foundation, and multi-employer retirement plans for union clients.New York Life Capital Partners manages the private equity investment activities of New York Life Insurance Company and third-party institu-tional clients.McMorgan & Company specializes in serving the needs of the union market, linking clients to the investment expertise available across New York Life Investments.

Retail Investments

Through MainStay Investments, the expertise of our investment managers is made available to individual investors. Clients can select from among some of the most highly regarded mutual funds in the industry,‡ including equity, fi xed income, blended, international and asset allocation funds. MainStay Managed Accounts provides individual portfolio solutions for small and mid-size institutions and high net-worth individuals.

Retirement Plan Services

New York Life Retirement Plan Services provides retirement plan management and administration for more than 1,900 corporations and union clients. For more than four decades we have off ered a full range of products and services, including defi ned contribution, defi ned benefi t and executive benefi t plans.

* Source: New York Life Investments ranked 28th among the more than 700 money managers surveyed by Pensions & Investments, May 18, 2009, “The Largest Money Managers.” Rankings are based on total worldwide institutional assets under management for year-end 2008.

† NYL Investments assets under management consist of certain assets of the Company’s domestic and international insurance operations and assets managed for third-party investors, including mutual funds, separately managed accounts and retirement plans.

‡ Source: Barron’s magazine – The MainStay Fund Family ranked third on Barron’s 2009 list of the 48 Best Fund Families over a 10-year period ended December 31, 2009.

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New York Life InternationalNew York Life International is the global arm of the Company, with operations in Mexico, India, China, Hong Kong, South Korea, Taiwan and Thailand. Today, 21 percent of New York Life’s total life insurance sales come from these international markets.

Our international strategy is based upon exporting to overseas markets New York Life’s core strength – 165 years of experience delivering fi nancial security and peace of mind. In addition, we are keenly aware that life insurance can play an important part in stabilizing and improving the fi nancial futures of entire communities that may have previously had very limited access to fi nancial protection products.

Just as in our domestic business, the primary focus of New York Life’s international business is life insurance distributed through a career agency organization. New York Life’s proprietary systems for recruiting and training agents have proven highly successful around the world. Over 660 of our international agents qualifi ed in 2009 for the Million Dollar Round Table, an honor reserved for the top one percent of life insurance agents in the world. In India and Mexico, our agency forces are recognized as among the most productive in the industry.

While our international operations are built upon the traditions and legacy of the parent company, New York Life International and its business partners tailor their operations to meet the preferences and needs of each market. We enhance our ability to reach customers through additional distribution channels, including sales through Thailand’s most prominent bank, strategic partnerships in India, worksite sales in Mexico and telemarketing in Taiwan.

In all we do, we strive to be the life insurer of choice for policyholders, distributors and employees, building a customer-focused business that meets the protection needs of families across Asia and Latin America. The Company’s international operations received numerous recognitions in 2009, including awards for community involvement in Hong Kong, for innovation in India and Taiwan, and for an exceptional workplace environment in Mexico.

Rather than simply exporting a product, we are transplanting the principles and ideals that have made New York Life successful – humanity, integrity and fi nancial strength.

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222009 Investment Review

CASH AND INVESTED ASSETS†

(DOLLARS IN MILLIONS) DECEMBER 31, 2008

PUBLIC CORPORATE BONDS AND LOANS $ 42,890 29%

PRIVATE CORPORATE BONDS AND LOANS 22,856 15%

U.S. GOV’T AND AGENCY SECURITIES 20,644 14%

COMMERCIAL MORTGAGE-BACKED SECURITIES 10,939 7%

NON-AGENCY RESIDENTIAL SECURITIES 7,792 5%

ASSET-BACKED SECURITIES 6,400 4%

SUBTOTAL FIXED INCOME $111,521 75%

MORTGAGE LOANS 15,292 10%

EQUITIES 8,500 6%

POLICY LOANS 7,811 5%

CASH AND SHORT TERMS‡ 5,560 4%

DERIVATIVES 934 1%

TOTAL CASH AND INVESTED ASSETS† $149,618 100%

DECEMBER 31, 2009

$ 43,973 28%

24,568 16%

28,672 18%

10,996 7%

7,131 5%

6,718 4%

$122,058 77%

15,201 10%

7,362 5%

8,363 5%

3,919 2%

702 0%

$157,605 100%

Numbers may not add up due to rounding.† Includes $53,713 million and $63,666 million of assets related to New York Life Insurance and Annuity Corporation for 2008 and 2009, respectively.‡ Includes cash primarily received on fi nancing transactions of $2,970 million and $2,209 million for 2008 and 2009, respectively, and money market mutual

funds of $447 million and $50 million for 2008 and 2009, respectively.

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. New York Life’s investment in its international insurance affi liates and domestic non-insurance affi liates is included in the Equities line of the table below. New York Life International, the largest

affi liate in asset size, had cash and invested assets of $7.4 billion. Cash and invested assets are presented on a GAAP basis on the balance sheet on page 31. A reconciliation of cash and invested assets from a GAAP basis to a statutory basis is presented on page 44.

Cash and Invested Assets As of December 31, 2009, New York Life and its domestic insurance subsidiaries had cash and invested assets of $157.6 billion and maintained a well-diversifi ed investment portfolio.

2009

Investment Review

New York Life Insurance Company and Its Domestic Insurance Subsidiaries

* NYLIFE Insurance Company of Arizona is not authorized in New York or Maine, and does not conduct insurance business in New York or Maine.

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FIXED INCOME BY QUALITY*

(DOLLARS IN MILLIONS)

APPROXIMATE RATINGNAIC RATING AGENCY EQUIVALENT QUALITY DECEMBER 31, 2008

NAIC 1 AAA TO A- HIGHEST QUALITY $ 76,395 69%

NAIC 2 BBB+ TO BBB- HIGH QUALITY 25,876 23%

INVESTMENT GRADE 102,271 92%

NAIC 3 BB+ TO BB- MEDIUM QUALITY 4,505 4%

NAIC 4 B+ TO B- LOW QUALITY 3,088 3%

NAIC 5 CCC+ TO CCC- LOWER QUALITY 1,556 1%

NAIC 6 CC TO D IN OR NEAR DEFAULT 101 0%

BELOW INVESTMENT GRADE 9,250 8%

TOTAL FIXED INCOME $111,521 100%

DECEMBER 31, 2009

$ 83,057 68%

27,849 23%

110,906 91%

5,455 4%

3,887 3%

1,606 1%

204 0%

11,152 9%

$122,058 100%

Numbers may not add up due to rounding.* Includes $43,797 million and $54,799 million of assets related to New York Life Insurance and Annuity Corporation for 2008 and 2009, respectively.

DIVERSIFICATION OF CORPORATE BONDS AND LOANS*


ELECTRIC UTILITIES $10,625 16%

CONSUMER PRODUCTS 6,205 9%

OIL AND GAS 4,315 6%

BANKING 4,276 6%

HEALTH CARE 3,923 6%

SERVICES 3,619 5%

REITS 3,107 5%

GAS PIPELINES 2,580 4%

INSURANCE 2,532 4%

MACHINERY/TECHNOLOGY 2,521 4%

CABLE AND MEDIA 2,484 4%

SOVEREIGN/FOREIGN GOVERNMENT 2,252 3%

RETAIL 2,250 3%

OTHER 17,852 26%

TOTAL $68,541 100%

Numbers may not add up due to rounding.* Includes $28,861 million of assets related to New York Life Insurance

and Annuity Corporation.

Fixed Income Assets The fi xed income portfolio continues to be domi-nated by high-quality investments, with 91 percent being investment grade. A signifi cant proportion of fi xed income assets as of December 31, 2009, were rated highest-quality (“NAIC 1”), representing 68 percent of total fi xed assets.

The corporate bond and loan portfolio remains well diversifi ed across the broad industry spectrum and is comprised of securities issued by more than 2,300 individual issuers.

The fi xed income portfolio is managed to limit exposure to individual issuers according to credit quality and other factors. No single corporate exposure was greater than $298 million. The portfolio’s ten largest holdings by issuer represented 1.5 percent of cash and invested assets.

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Commercial Mortgage-Backed Securities As of year-end 2009, New York Life and its domestic insurance subsidiaries owned $11 billion in com-mercial mortgage-backed securities, representing 7 percent of cash and invested assets. The majority of these securities were rated AAA even after repeated downgrades of a large number of such securities by the rating agencies. Notwithstanding the ratings, these securities are selected by our real estate investment professionals based on the quality of the underlying mortgage loans.

Non-Agency Residential SecuritiesAs of year-end 2009, New York Life and its domestic insurance subsidiaries owned $7.1 billion in non-agency residential securities, representing 5 percent of cash and invested assets. The mortgage loans underlying these securities were held predominantly by prime borrowers. The majority of these securities were classifi ed as NAIC 1 and 94 percent are collateralized by fi xed-rate mortgage loans. Only $298 million, or less than 0.2 percent of cash and invested assets, are collateralized by sub-prime mortgage loans.

COMMERCIAL MORTGAGE-BACKED SECURITIES

BY RATING CATEGORY*


AAA $ 9,808 89%

AA 718 7%

A 371 3%

BBB 85 1%

BB OR LOWER 14 0%

TOTAL $10,996 100%

* Includes $4,862 million of assets related to New York Life Insurance and Annuity Corporation.

2009

Investment Review


NON-AGENCY RESIDENTIAL SECURITIES BY TYPE AND NAIC RATING CATEGORY*


APPROXIMATE RATINGNAIC RATING AGENCY EQUIVALENT QUALITY PRIME MID-PRIME SUB-PRIME TOTAL

NAIC 1 AAA TO A- HIGHEST QUALITY $3,108 $ 830 $241 $4,179

NAIC 2 BBB+ TO BBB- HIGH QUALITY 717 36 0 753

NAIC 3 BB+ TO BB- MEDIUM QUALITY 731 196 17 944

NAIC 4 B+ TO B- LOW QUALITY 800 226 33 1,059

NAIC 5 CCC+ TO CCC- LOWER QUALITY 87 89 7 183

NAIC 6 CC TO D IN OR NEAR DEFAULT 13 0 0 13

TOTAL $5,456 $1,377 $298 $7,131


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Asset-Backed SecuritiesAs of year-end 2009, New York Life and its domestic insurance subsidiaries owned $6.7 billion in asset-backed securities, representing 4 percent of cash and invested assets. Approximately 67 percent of these securities were rated AAA and are collateralized by a broad range of collateral types. These securities are seasoned by issuance year and remain highly rated.

Mortgage Loans As of year-end 2009, the $15.2 billion of mortgage loans represented $14.3 billion of loans on com-mercial real estate properties and $0.9 billion of loans on single-family residential properties.

Commercial Mortgage Loans The Company’s mortgage loan investment practices emphasize conservative underwriting and focus on high-quality properties. The commercial mortgage loan portfolio is broadly diversifi ed by both property type and geographic location. The Company employs a proactive portfolio monitoring program with a goal of early identifi cation 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, 2009, none of the commercial mortgage loans were delinquent. During 2009, only two out of over 600 loans were foreclosed upon, representing $41 million* in outstanding principal.

Single-Family Residential LoansIn addition to the non-agency residential securities highlighted earlier, New York Life and its domestic insurance subsidiaries owned $0.9 billion† in fi xed-rate residential loans. None of these were sub-prime loans.

ASSET-BACKED SECURITIES BY RATING*


AAA $4,516 67%

AA 841 13%

A 755 11%

BBB 488 7%

BB OR LOWER 118 2%

TOTAL $6,718 100%


COMMERCIAL MORTGAGE LOANS BY

GEOGRAPHIC REGION*


SOUTHEAST $ 3,698 26%

MIDDLE ATLANTIC 3,110 22%

PACIFIC 3,107 22%

NORTH CENTRAL 1,804 13%

SOUTH CENTRAL 1,395 10%

OTHER 1,137 8%

TOTAL MORTGAGE LOANS $14,251 100%

Numbers may not add up due to rounding.* Includes $4,813 million of assets related to New York Life Insurance

and Annuity Corporation.

COMMERCIAL MORTGAGE LOANS BY PROPERTY TYPE*


OFFICE BUILDINGS $ 4,936 35%

RETAIL 3,269 23%

INDUSTRIAL 3,211 23%

MULTI-FAMILY 2,624 18%

OTHER COMMERCIAL PROPERTY 211 1%

TOTAL MORTGAGE LOANS $14,251 100%


* Includes $7 million of assets related to New York Life Insurance and Annuity Corporation. † Includes $848 million of assets related to New York Life Insurance and Annuity Corporation.

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Equity and Other InterestsAs of year-end 2009, New York Life and its domestic insurance subsidiaries had $7.4 billion of assets classifi ed as equity and other interests.

Of this amount, $2.8 billion represented limited partnerships and other interests invested in diverse sectors of the economy. Private equity investments of $2.4 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.

EQUITY AND OTHER INTERESTS*


VARIOUS LIMITED PARTNERSHIPS

AND OTHER INTERESTS 2,803 38%

PRIVATE EQUITY 2,360 32%

INVESTMENTS IN AFFILIATES 1,595 22%

REAL ESTATE 458 6%

PUBLIC EQUITY 75 1%

CONVERTIBLE PREFERRED STOCKS 71 1%

TOTAL $7,362 100%

* Includes $570 million of assets related to New York Life Insurance and Annuity Corporation.

DerivativesAs of year-end 2009, New York Life and its domestic insurance subsidiaries had certain outstanding derivative positions carried as assets of $702 million.* Offsetting these were derivative liabilities of $437 million for a net asset of $265 million. The derivative transactions are entered into to meet the hedging needs of the Company or replicate permissible investments. The single largest derivative activity involves the purchase of interest rate caps to protect against a rise in interest rates. Other derivatives include cross currency and interest rate swaps. Cross currency swaps are 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 primarily convert fi xed-rate investments to fl oating-rate investments in support of fl oating-rate liabilities.

Derivative trades may expose New York Life and its domestic insurance subsidiaries to counterparty credit risk. This risk is controlled through the establishment of collateral support agreements, which 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. These dollar limits are intentionally set at a low threshold. Derivatives credit exposure to each counterparty is combined with other direct credit risk to the same counterparty and managed against prudent credit risk limits.

2009

Investment Review


* Includes $218 million of assets related to New York Life Insurance and Annuity Corporation.

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Asset/Liability and Investment Risk ManagementThe investment portfolio has potential exposure to various sources of investment risk, including interest rate, credit and equity price risks. New York Life has established comprehensive policies and procedures at both the corporate and business segment levels to minimize overall 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. One measure used to quantify and control overall investment risk is the Statutory Surplus-at-Risk metric that measures the potential impact of adverse changes in fi nancial market and credit conditions over a 12-month period at a high confi dence level. We supplement this measure with stress testing of extreme economic scenarios that incorporate fi nancial market stresses, and we evaluate the risk impact of such scenarios on our assets, liabilities and overall capital position.

A substantial positive operating cash fl ow supports New York Life’s strong liquidity and ability to meet its liabilities when due. Primary sources of cash include sales of insurance and investment products, investment income, maturities and prepayments. Additional liquidity to meet unexpected cash de-mands can be provided by New York Life’s portfolio of liquid assets, which include U.S. Treasury securities, short-term money market investments, agency bonds, agency mortgage-backed securities and public investment grade bonds. Funds are also available through a commercial paper program administered by New York Life Capital Corporation, an indirect, wholly-owned subsidiary of New York Life, and a bank revolving credit facility, which is used to back up the commercial paper issuance program. We can also access the collateralized borrowing facility with the Federal Home Loan Bank of New York.

Management evaluates the impact of various stress events on the Company’s liquidity using the analysis

of various stress scenarios. Based on the results of these stress tests, management believes that the Company has more than ample liquidity and fi nancial strength to provide for foreseeable cash requirements, including cash outfl ows in extreme stressed conditions. Various liquidity risk indicators are tracked regularly to provide management with an early indication of any potential liquidity issues.

Earnings and cash flows relating to fi xed-rate investments are sensitive to interest rate changes.New York Life manages interest rate risk as part of its asset/liability management process and product design procedures. Asset/liability management strategies include segmentation of investments by product line and the construction of investment portfolios designed to specifi cally satisfy the projected cash needs of the product lines. Interest rate risk is also assessed and controlled by modeling asset and liability cash fl ows on a product-by-product basis, under current and various other projected interest rate scenarios, and purchase of hedges where appropriate. New York Life’s asset/liability position is monitored regularly, enabling management to adjust asset portfolios through dynamic rebalancing or option purchases, or to alter liability cash fl ows, in order to effi ciently mitigate risk exposures exceeding management’s risk tolerances.

New York Life’s investments in corporate bonds and mortgage loans expose it to potential credit losses. Credit risk is managed by applying disciplined credit evaluation and underwriting standards; aligning allocations to lower-quality, higher-yielding investments with our risk-return tolerances; and diversifying exposures by industry, issuer and property type.

New York Life’s holdings of public and private equity securities are subject to market risk. These holdings are diversifi ed and managed against risk tolerance limits established by individual product lines and at the aggregate corporate level.

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282009 Financial Overview

POLICYHOLDER BENEFITS AND DIVIDENDS

YEAR IN $ BILLIONS

2009 12.4

2008 12.3

2007 12.4

2006 11.2

2005 9.9

This chart shows the benefits and dividends paid to policyholders in the U.S. during the last fi ve years. Benefits primarily include death claims paid to benefi ciaries, annuity payments and surrender benefits. Dividends are payments made to eligible policyholders from divisible surplus. The Company has consistently paid over $12 billion in benefi ts and dividends over the last three years.

SURPLUS AND ASSET VALUATION RESERVES*

YEAR IN $ MILLIONS

2009 15,009

2008 12,826

2007 14,680

2006 13,859

2005 12,853

Surplus and asset valuation reserves, the funds that ensure we can meet future obligations to policyholders and fi nance our growth, totaled a record $15 billion at the end of 2009, an increase of $2.2 billion during the year. Total surplus is one of the key indicators of the Company’s long-term financial strength and stability.

OPERATING EARNINGS

YEAR IN $ MILLIONS

2009 1,222

2008 1,283

2007 1,278

2006 1,096

2005 942

Operating earnings is the measure used for management purposes to track the Company’s results from ongoing operations and the underlying profitability of our business. In 2009, New York Life recorded its fourth consecutive year of operating earnings over $1 billion. Our stability of earnings refl ects the resilience of our business profi le in all economic conditions. The decline from the record level set in 2008 refl ects lower asset-based income as a result of the weakening of the equity markets at the end of 2008.

2009

Financial Overview

The following pages present the consolidated fi nancial results for New York Life Insurance Company and its subsidiaries (“the Company”). Our primary management reporting system is based on accounting principles generally accepted in the United States of America (“GAAP”), with certain adjustments that we believe result in a more appropriate tracking of operating results. Results reported on this basis are referred to as “non-GAAP

performance measures.” In addition, statutory results are tracked as an important measure of capital adequacy.

For a detailed reconciliation of the Company’s GAAP performance measures to its non-GAAP performance measures, see page 45.

For defi nitions of the Company’s performance measures, see Glossary of Terms on page 54.

* See footnote on page 43.

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292009 Financial Overview

OPERATING REVENUE

YEAR IN $ BILLIONS

2009 14.4

2008 13.9

2007 12.9

2006 11.8

2005 10.7

This chart shows the revenue the Company has generated from its domestic and international business during the last five years – primarily premium and fee income, deposits included in policyholder account balances for life and annuity products, and net margins on guaranteed products. Operating revenue has increased each year since 2005.

INSURANCE SALES

YEAR IN $ MILLIONS

2009 2,655

2008 2,396

2007 2,117

2006 1,876

2005 1,571

This chart shows the growth of new insurance sales since 2005 and includes results from both our domestic and international operations. 2009 was another record year for the Company, exceeding $2.6 billion in sales. Over the past four years, our insurance sales have grown at a compound annual rate of 14 percent.

INVESTMENT SALES

YEAR IN $ MILLIONS

2009 32,848

2008 26,867

2007 25,208

2006 23,717

2005 18,696

Investment sales include new sales of investment annuities, mutual funds and other investment-related products by both our domestic and international operations. In 2009, investment sales increased over 22 percent, or nearly $6 billion, from 2008, due to growth of our third-party asset management business.

INDIVIDUAL LIFE INSURANCE IN FORCE

YEAR IN $ BILLIONS

2009 816.1

2008 781.2

2007 750.9

2006 694.8

2005 647.7

This chart shows the growth of the Company’s individual life insurance in force over the last four years. Our steady growth – over $168 billion since 2005 – is the sign of a strong and vibrant company.

ASSETS UNDER MANAGEMENT

YEAR IN $ BILLIONS

2009 286.7

2008 249.1

2007 280.0

2006 261.5

2005 222.8

The Company’s assets under management rose 15 percent over 2008, refl ecting the strength of the Company’s diversifi ed products and distribution channels.

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30Report of Independent Auditors

Report of Independent Auditors

To the Board of Directors of New York Life Insurance Company

We have audited, in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet of New York Life Insurance Company and its subsidiaries as of December 31, 2009 and 2008, and the related consolidated statements of income, of equity and of cash flow for the years then ended (not presented herein) appearing on the Company Web site and available from New York State Insurance Depart-ment; and in our report dated March 17, 2010, we expressed an unqualifi ed opinion on those consolidated fi nancial statements.

In our opinion, the information set forth in the accompanying condensed consolidated fi nancial statements is fairly stated, in all material respects, in relation to the consolidated fi nancial statements from which it has been derived.

As described in Note 3 to the consolidated fi nancial statements, the Company changed its method of accounting for other-than-temporary impairments of fi xed maturity investments and its method of presenting non-controlling interests in partially-owned consolidated subsidiaries in 2009.

PricewaterhouseCoopers LLPNew York, New YorkMarch 17, 2010

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31Consolidated Balance Sheet

Consolidated Balance Sheet

New York Life Insurance Company and Subsidiaries

(DOLLARS IN MILLIONS) DECEMBER 31, 2008 DECEMBER 31, 2009

ASSETS

FIXED MATURITIES (INCLUDES SECURITIES PLEDGED AS COLLATERAL THAT CAN

BE SOLD OR REPLEDGED OF $3,155 IN 2008 AND $1,111 IN 2009)

AVAILABLE FOR SALE, AT FAIR VALUE $106,460 $128,138

HELD TO MATURITY, AT AMORTIZED COST 322 377

TRADING SECURITIES, AT FAIR VALUE 4,383 4,585

EQUITY SECURITIES (INCLUDES SECURITIES PLEDGED AS COLLATERAL THAT CAN

BE SOLD OR REPLEDGED OF $849 IN 2008 AND $1,314 IN 2009)

UNAFFILIATED, AVAILABLE FOR SALE, AT FAIR VALUE 2,298 411

AFFILIATED 94 104

TRADING SECURITIES, AT FAIR VALUE 1,553 2,381

MORTGAGE LOANS 15,410 15,264

POLICY LOANS 7,984 8,564

SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL 693 450

OTHER INVESTMENTS 10,507 10,029

TOTAL INVESTMENTS 149,704 170,303

CASH AND CASH EQUIVALENTS 5,049 4,415

DEFERRED POLICY ACQUISITION COSTS 10,132 8,930

INVESTMENT INCOME DUE AND ACCRUED 1,720 1,764

GOODWILL 505 520

OTHER ASSETS 6,940 3,616

SEPARATE ACCOUNT ASSETS 14,836 18,605

TOTAL ASSETS $188,886 $208,153

LIABILITIES

POLICYHOLDERS’ ACCOUNT BALANCES $ 77,188 $ 80,879

FUTURE POLICY BENEFITS 66,868 71,730

DIVIDENDS PAYABLE TO POLICYOWNERS 1,270 1,283

POLICY CLAIMS 849 913

DEBT 1,783 3,481

COLLATERAL RECEIVED ON SECURITIES LENDING 3,301 1,146

OTHER LIABILITIES 7,885 9,648

SEPARATE ACCOUNT LIABILITIES 14,836 18,605

TOTAL LIABILITIES 173,980 187,685

EQUITY

ACCUMULATED OTHER COMPREHENSIVE LOSS (5,745) (1,451)

RETAINED EARNINGS 19,424 20,867

TOTAL NEW YORK LIFE EQUITY 13,679 19,416

NON-CONTROLLING INTEREST 1,227 1,052

TOTAL EQUITY 14,906 20,468

TOTAL LIABILITIES AND EQUITY $188,886 $208,153

See accompanying notes to condensed consolidated fi nancial statements.

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32Consolidated Statement of Income

Consolidated Statement of Income

New York Life Insurance Company and Subsidiaries

(DOLLARS IN MILLIONS) YEAR ENDED DECEMBER 31,

2008 2009

REVENUE

PREMIUMS $10,647 $11,496

FEES – UNIVERSAL LIFE AND ANNUITY POLICIES 960 1,026

NET INVESTMENT INCOME 7,918 8,853

NET INVESTMENT (LOSSES) GAINS:

TOTAL OTHER-THAN-TEMPORARY IMPAIRMENTS ON FIXED MATURITY SECURITIES (840) (894)

TOTAL OTHER-THAN-TEMPORARY IMPAIRMENTS ON FIXED MATURITY SECURITIES

RECOGNIZED IN ACCUMULATED OTHER COMPREHENSIVE LOSS - 508

ALL OTHER NET INVESTMENT (LOSSES) GAINS, NET (2,656) 773

TOTAL NET INVESTMENT (LOSSES) GAINS (3,496) 387

OTHER INCOME 801 484

TOTAL REVENUE 16,830 22,246

EXPENSES

POLICYHOLDER BENEFITS 6,937 6,964

INCREASE IN LIABILITIES FOR FUTURE POLICY BENEFITS 3,579 4,478

INTEREST CREDITED TO POLICYHOLDERS’ ACCOUNT BALANCES 3,232 3,268

OPERATING EXPENSES 3,276 4,341

DIVIDENDS TO POLICYHOLDERS 1,602 1,458

TOTAL EXPENSES 18,626 20,509

(LOSS) INCOME FROM OPERATIONS BEFORE INCOME TAXES

AND NON-CONTROLLING INTEREST (1,796) 1,737

INCOME TAX (BENEFIT) EXPENSE (599) 447

NET (LOSS) INCOME (1,197) 1,290

NON-CONTROLLING INTEREST INCOME 181 37

NET (LOSS) INCOME ATTRIBUTABLE TO NEW YORK LIFE $ (1,016) $ 1,327

See accompanying notes to condensed consolidated fi nancial statements.

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33Notes to Financial Statements

Notes to Condensed Consolidated Financial Statements

New York Life Insurance Company and Subsidiaries, December 31, 2008 and 2009

Note 1Nature of Operations

New York Life Insurance Company, a mutual life insurance company, and its subsidiaries (“the Company”) off er a wide range of insurance and investment products and services including life and health insurance, long-term care, annuities ( including single premium immediate annuities or guaranteed lifetime income annuities), pension products, mutual funds, and other investments and investment advisory services. The Company is domiciled in New York State and is comprised of four primary business operations: U.S. Life Insurance and Agency, Retirement Income Security, Investment Management and International Operations. U.S. Life Insurance and Agency and Retirement Income Security operations are conducted through New York Life Insurance Company (“New York Life”), the parent company, and its wholly owned U.S. insurance subsidiaries: New York Life Insurance and Annuity Corporation (“NYLIAC”) and NYLIFE Insurance Company of Arizona (“NYLIFE of Arizona”). U.S. Life Insurance and Agency comprises the individual, group and corporate owned life insurance operations. This business unit also includes group membership association operations, which underwrite group life, health and disability programs for professional and affi nity organizations, and AARP operations, which is the exclusive provider of life insurance (through New York Life) and fi xed immediate and deferred annuities (through NYLIAC) to members of AARP. Retirement Income Security comprises the Company’s guaranteed lifetime income annuities, fi xed and variable investment annuities, and long-term care insurance. Investment Management activities are conducted primarily through New York Life and various registered investment advisory subsidiaries of its wholly owned subsidiary, New York Life Investment Management Holdings LLC (“New York Life Investments”). The Company markets individual insurance and investment products in Asia and Latin America primarily through New York Life International, LLC (“NYL International”), a wholly owned subsidiary of New York Life. NYLIFE LLC is a wholly owned subsidiary of New York Life, and is a holding company for certain non-insurance subsidiaries of New York Life. NYLIFE LLC, through its subsidiaries, off ers securities brokerage, fi nancial planning and investment advisory services, trust services and capital fi nancing.

BASIS OF PRESENTATION The accompanying consolidated fi nancial statements have been extracted from the Company’s unabridged audited consolidated fi nancial statements (available on the Company’s website and from the New York State Insurance Department) and prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and refl ect the consolidation of the parent company with its majority owned and controlled subsidiaries: principally NYLIAC, NYLIFE of Arizona, New York Life Investments,

NYL International and NYLIFE LLC, as well as variable interest entities in which the Company is considered the primary benefi ciary, and certain investments in joint ventures and limited partnerships in certain instances where the Company is deemed to exercise control. All intercompany transactions have been eliminated in consolidation.

Certain amounts in prior years have been reclassifi ed to conform to the current year presentation. These reclassifi cations had no eff ect on net income or equity as previously reported, and were primarily related to investments held in consolidated investment companies (refer to Note 2 – Signifi cant Accounting Policies for further discussion).

The New York State Insurance Department (“the Department”) recognizes only statutory accounting practices (“SAP”) for determining and reporting the fi nancial condition and results of operations of an insurance company. Accounting practices used to prepare statutory fi nancial statements for regulatory fi lings of life insurance companies diff er in certain instances from GAAP (refer to Note 8 – Statutory Financial Information for further discussion).

Note 2Signifi cant Accounting Policies

USE OF ESTIMATES The preparation of consolidated fi nancial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the fi nancial statements. Actual results could diff er from those estimates.

INVESTMENTS Fixed maturity investments, which the Company has both the ability and the intent to hold to maturity, are stated at amortized cost and classifi ed as held-to-maturity. Investments classifi ed as available-for-sale or trading are reported at fair value. For a discussion on valuation methods for fi xed maturities reported at fair value refer to Note 7 – Fair Value Measurements. The amortized cost of debt securities is adjusted for amortization of premium and accretion of discounts. Interest income, as well as the related amortization of premium and accretion of discount, is included in net investment income in the accompanying Consolidated Statement of Income. Unrealized gains and losses on available-for-sale securities are reported in accumulated other comprehensive income (“AOCI”), net of deferred taxes and related adjustments, in the accompanying Consolidated Balance Sheet. Unrealized gains and losses from fi xed maturity investments classifi ed as trading are refl ected in net investment gains ( losses) in the accompanying Consolidated Statement of Income.

Included within fi xed maturity investments are mortgage-backed and asset-backed securities. Amortization of the premium or discount from the purchase of these securities considers the estimated timing and amount of cash fl ows of the underlying loans, including prepayment assumptions based on data obtained from

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a bank or internal estimates. For high credit quality mortgage-backed and asset-backed securities (those rated AA or above at date of acquisition), cash flows are provided quarterly, and the amortized cost and eff ective yield of the security are adjusted as necessary to refl ect historical prepayment experience and changes in estimated future prepayments. The adjustments to amortized cost are recorded as a charge or credit to net investment income in accordance with the retrospective method. For asset-backed and mortgage-backed securities rated below AA at date of acquisition, certain fl oating rate securities and securities with the potential for a loss of a portion of the original investment due to contractual prepayments ( i.e., interest-only securities); the eff ective yield is adjusted prospectively for any changes in estimated cash fl ows.

Unaffi liated equity securities are carried at fair value. For a discussion on valuation methods for equity securities refer to Note 7 – Fair Value Measurements. Unrealized gains and losses on equity securities classifi ed as available-for-sale are refl ected in net unrealized investment gains in AOCI, net of deferred taxes and related adjustments, in the accompanying Consolidated Balance Sheet. Unrealized gains and losses from investments in equity securities classifi ed as trading are refl ected in net investment gains ( losses) in the accompanying Consolidated Statement of Income.

Affi liated equity securities represent holdings in entities where there is at least 20 percent ownership or where the Company has the ability to exercise signifi cant infl uence through its relationship, and are accounted for by the equity method of accounting. Accordingly, respective net earnings or losses are included in net income in the accompanying Consolidated Statement of Income.

The cost basis of fi xed maturities and equity securities is adjusted for impairments in value deemed to be other than temporary.

Factors considered in evaluating whether a decline in value is other-than-temporary include: i) whether the decline is substantial; ii) the duration that the fair value has been less than cost; and iii) the fi nancial condition and near-term prospects of the issuer. For equity securities, the Company also considers in its other-than-temporary impairment (“OTTI”) analysis its intent and ability to hold a particular equity security for a period of time suffi cient to allow for the recovery of its value to an amount equal to or greater than cost. When it is determined that a decline in value is other-than-temporary, the carrying value of the equity security is reduced to its fair value with the associated realized loss reported in net investment gains ( losses).

With respect to fi xed maturities in an unrealized loss position, an OTTI is recognized in earnings when it is anticipated that the amortized cost will not be recovered. The entire difference between the fi xed maturity’s cost and its fair value is recognized in earnings only when either the Company (a) has the intent to sell the fi xed maturity security or ( b) more likely than not will be required to sell the fi xed maturity security before its anticipated

recovery. If neither of these two conditions exists, an OTTI would be recognized in earnings (“credit loss”) for the difference between the amortized cost basis of the fi xed maturity and the present value of projected future cash flows expected to be collected. If the fair value is less than the present value of projected future cash fl ows expected to be collected, this portion of OTTI related to other-than-credit factors (“noncredit loss”) would be recognized in other comprehensive income (loss) (“OCI”). The net present value is calculated by discounting the Company’s best estimate of projected future cash flows at the effective interest rate implicit in the debt security prior to impairment.

The determination of cash fl ow estimates in the net present value is subjective and methodologies will vary, depending on the type of security. The Company considers all information relevant to the collectability of the security, including past events, current conditions, and reasonably supportable assumptions and forecasts in developing the estimate of cash flows expected to be collected. This information generally includes, but may not be limited to, the remaining payment terms of the security, estimated prepayment speeds, defaults, recoveries upon liquidation of the underlying collateral securing the notes, and the fi nancial condition of the issuer(s), credit enhancements and other third-party guarantees. In addition, other information, such as industry analyst reports and forecasts, sector credit ratings, the fi nancial condition of the bond insurer for insured fi xed income securities and other market data relevant to the collectability may also be considered, as well as the expected timing of the receipt of insured payments, if any. The estimated fair value of the collateral may be used to estimate recovery value if the Company determines that the security is dependent on the liquidation of the collateral for recovery.

The new cost basis of an impaired security is not adjusted for subsequent increases in estimated fair value. In periods subsequent to the recognition of an OTTI, the impaired fi xed maturity security is accounted for as if it had been purchased on the measurement date of the impairment. Accordingly, the discount (or reduced premium) based on the new cost basis may be accreted into net investment income in future periods based on prospective changes in cash flow estimates, to reflect adjustments to the effective yield.

Mortgage loans on real estate that are funded through the insurance company are carried at unpaid principal balances, net of discounts/premiums and valuation allowances, and are secured. Specifi c valuation allowances are established for the excess carrying value of the mortgage loan over its estimated fair value, when it is probable that based on current information and events, the Company will be unable to collect all amounts due under the contractual terms of the loan agreement. Specifi c valuation allowances are based on the estimated fair value of the collateral. Fair value is determined by discounting the projected cash fl ows

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for each property to determine the current net present value. The Company also has a general valuation allowance for probable incurred but not specifi cally identifi ed losses. The general allowance is based on the Company’s historical loss experience and other factors for the mortgage loan portfolio. Mortgage loans that are funded through New York Life Investments are carried at fair value. These mortgage loans are held in a partially-owned limited partnership that follows the specialized accounting practices for investment companies, which requires that the mortgage loans be fair valued.

Policy loans are stated at the aggregate balance due. A valuation allowance is established for policy loan balances, including capitalized interest that exceeds the related policy’s cash surrender value.

Cash equivalents include investments that have remaining maturities of three months or less at date of purchase and are carried at fair value.

Short-term investments include investments with remaining maturities of one year or less, but greater than three months, at the time of acquisition and are carried at fair value. Short-term investments are included in fi xed maturities on the Consolidated Balance Sheet.

Other investments consist primarily of direct investments in limited partnerships and limited liability companies, derivatives, real estate and collateralized third-party commercial loans. Investments in limited partnerships and limited liability companies are accounted for using the equity method of accounting. Investments in real estate, which the Company has the intent to hold for the production of income, are carried at depreciated cost, net of write-downs for other-than-temporary declines in fair value. Properties held for sale are carried at the lower of depreciated cost or fair value, less estimated selling costs.

In many cases, investment in limited partnerships and limited liability companies qualify as investment companies and apply specialized accounting practices, which result in unrealized gains and losses being recorded in the accompanying Consolidated Statement of Income. The Company retains this specialized accounting practice in consolidation. For such consolidated limited partnerships, the underlying investments, which may consist of various classes of assets, are aggregated and stated at fair value in other investments in the accompanying Consolidated Balance Sheet. For such limited partnerships accounted for under the equity method, the unrealized gains and losses from the underlying investments are reported in net investment income in the accompanying Consolidated Statement of Income.

Collateralized third-party commercial loans that management has the intent and ability to hold until maturity or payoff are reported at their outstanding unpaid principal balances reduced by any

charge off or loss reserve and net of any deferred fees on originated loans, or unamortized premiums or discounts on purchased loans. At the time of funding of a loan, management determines the amount of the loan that will be held for sale. The syndication amounts have historically been sold within one year. Loans held for sale are carried at the lower of cost or fair value on an individual asset basis.

Net investment gains ( losses) on sales are generally computed using the specifi c identifi cation method.

DEFERRED POLICY ACQUISITION COSTS (“DAC”) The costs of acquiring new and maintaining renewal business and certain costs of issuing policies that vary with and are primarily related to the production of new and renewal business have been deferred and recorded as an asset in the accompanying Consolidated Balance Sheet. These costs consist primarily of commissions, certain expenses of underwriting and issuing contracts and certain agency expenses.

For traditional participating life insurance policies, such costs are amortized over the estimated life of the contracts, in proportion to estimated gross margins, basing amortization initially on pricing assumptions and updating periodically for actual results. For universal life and deferred annuity contracts, such costs are amortized in proportion to estimated gross profi ts over the estimated eff ective life of those contracts. Changes in assumptions for all policies and contracts are refl ected as retroactive adjustments in the current year’s amortization. For these contracts, the carrying amount of DAC is adjusted at each balance sheet date as if the unrealized investment gains or losses had been realized and included in the gross margins or gross profi ts used to determine current period amortization. The increase or decrease in DAC due to unrealized investment gains or losses is recorded in OCI. Beginning 2009 for new business, the Company increased the expected life for traditional participating life insurance policies, universal life policies and deferred annuity contracts up to a maximum of 99 years.

DAC for term contracts, group life and health, and long-term care contracts are amortized in proportion to premium income over the effective premium-paying period of the contract. Assumptions as to anticipated premiums are made at the date of policy issuance and are consistently applied during the life of the contract. Deviations from estimated experience are included in operating expenses in the accompanying Consolidated Statement of Income when they occur. For single premium immediate annuities with life contingencies and single premium structured settlements with life contingencies, all acquisition costs are charged to expense immediately because generally all premiums are received at the inception of the contract.

The Company assesses internal replacements to determine whether such modifi cations signifi cantly change the contract terms. When

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the modifi cation substantially changes the contract, DAC is written off immediately through income and only new deferrable expenses associated with the replacements are deferred. DAC written off at the date of lapse cannot be restored when a policy subsequently reinstates. If the contract modifi cations do not substantially change the contract, DAC amortization on the original policy will continue and any acquisition costs associated with the related modifi cation are expensed.

DERIVATIVE FINANCIAL INSTRUMENTS Derivative fi nancial instruments are accounted for at fair value. The treatment of changes in the fair value of derivatives depends on the characteristics of the transaction, including whether it has been designated and qualifi es as part of a hedging relationship. Derivatives that do not qualify for hedge accounting are carried at fair value with changes in value included in net investment gains (losses) in the accompanying Consolidated Statement of Income.

POLICYHOLDERS’ ACCOUNT BALANCES The Company’s liability for policyholders’ account balances represents the contract value that has accrued to the benefi t of the policyholder as of the balance sheet date. This liability is generally equal to the accumulated account deposits, plus interest credited, less policyholder withdrawals and other charges assessed against the account balance. This liability also includes amounts that have been assessed to compensate the insurer for services to be performed over future periods, and the fair value of embedded derivatives in the above contracts.

FUTURE POLICY BENEFITS The Company’s liability for future policy benefi ts is primarily comprised of the present value of estimated future payments to or on behalf of policyholders, where the timing and amount of payment depends on policyholder mortality or morbidity, less the present value of future net premiums. For traditional individual participating life insurance products, the mortality assumptions applied are those used to calculate the policies’ guaranteed cash surrender values. The interest rate assumptions are based on the dividend guarantees. For non-participating traditional life insurance, annuity and long-term care products, expected mortality and or morbidity for lapse or surrender are generally based on the Company’s historical experience or standard industry tables including a provision for the risk of adverse deviation. Interest rate assumptions are based on factors such as market conditions and expected investment returns. Although mortality, morbidity and interest rate assumptions are “locked in” upon the issuance of new insurance, annuity business and long-term care policies with fi xed and guaranteed terms, signifi cant changes in experience or assumptions may require the Company to provide for expected future losses on a product by establishing premium defi ciency reserves. Premium defi ciency reserves, if required, are determined based on assumptions at the time the premium defi ciency reserve is

established and do not include a provision for the risk of adverse deviation. The Company’s liability for policy claims includes a liability for unpaid claims and claim adjustment expenses. The Company does not establish loss reserves until a loss has occurred. However, unpaid claims and claim adjustment expenses include estimates of claims that the Company believes have been incurred but have not yet been reported as of the balance sheet date. The Company’s liability for future policy benefi ts also includes liabilities for guarantee benefi ts related to certain nontraditional long-duration life and annuity contracts and deferred profi t on limited pay contracts.

DEBT Debt is generally carried at unpaid principal balance.

RECOGNITION OF INSURANCE INCOME AND RELATED EXPENSES Premiums from traditional participating life insurance policies, term life policies, annuity policies with life contingencies and group life and health contracts are recognized as income when due. The associated benefi ts and expenses are matched with income so as to result in the recognition of profi ts over the life of the contracts. This match is accomplished by providing for liabilities for future policy benefi ts and the deferral and subsequent amortization of policy acquisition costs.

Amounts received under universal life-type contracts and investment contracts are reported as deposits to policyholders’ account balances. Revenues from these contracts consist of amounts assessed during the period for mortality and expense risk, policy administration and surrender charges, and are included as fee income in the Consolidated Statement of Income. In addition to fees, the Company earns investment income from the investment of policyholders’ deposits in the Company’s general account portfolio. Amounts previously assessed to compensate the Company for services to be performed over future periods are deferred and recognized into income over the period benefi ted, using the same assumptions and factors used to amortize DAC costs. Policy benefi ts and claims that are charged to expense include benefi t claims incurred in the period in excess of related policyholders’ account balances.

Premiums for contracts with a single premium or a limited number of premium payments due over a signifi cantly shorter period than the total period over which benefi ts are provided are recorded as income when due. Any excess profi t is deferred and recognized as income in a constant relationship to insurance in force and, for annuities, in relation to the amount of expected future benefi t payments.

Premiums, universal life fee income, benefi ts and expenses are stated net of reinsurance ceded. Estimated reinsurance ceding allowances are recognized over the life of the reinsured policies using assumptions consistent with those used to account for the underlying policies.

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POLICYHOLDERS’ DIVIDENDS The amount of dividends to be paid to New York Life participating policyholders is determined annually by New York Life’s board of directors. The aggregate amount of policyholders’ dividends is based on New York Life’s statutory results and past experience, including investment income, net realized investment gains and losses over a number of years, mortality experience, and other factors. New York Life accrues dividends to policyholders when they are due to the policyholder.

The amount of dividends to be paid to NYL International’s policyholders is determined by means of formulas specifi c to each country’s regulations that refl ect the relative contribution of each group’s policies to the results of operations.

FEDERAL INCOME TAXES Current federal income taxes are charged or credited to operations based upon amounts estimated to be payable or recoverable as a result of taxable operations for the current year and any adjustments to such estimates from prior years. Deferred federal income tax assets and liabilities are recognized for expected future tax consequences of temporary diff erences between GAAP and taxable income. Temporary differences are identifi ed and measured using a balance sheet approach whereby GAAP and tax balance sheets are compared. Deferred income taxes are generally recognized based on enacted tax rates and a valuation allowance is recorded if it is more likely than not that any portion of the deferred tax asset will not be realized.

New York Life fi les a consolidated federal income tax return with certain of its domestic insurance and non-insurance subsidiaries. The consolidated income tax liability is allocated among the members of the group in accordance with a tax allocation agreement. The tax allocation agreement provides that each member of the group is allocated its share of the consolidated tax provision or benefi t, determined generally on a separate company basis, but may, where applicable, recognize the tax benefi ts of net operating losses or capital losses utilizable in the consolidated group. Intercompany tax balances are generally settled quarterly on an estimated basis with a fi nal settlement within 30 days of the fi ling of the consolidated return.

In accordance with the authoritative guidance related to income taxes, the Company determines whether it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefi t can be recorded in the fi nancial statements. The amount of tax benefi t recognized for an uncertain tax position is the largest amount of benefi t that is greater than 50 percent likely of being realized upon settlement. Unrecognized tax benefi ts are included within other liabilities and are charged to earnings in the period that such determination is made. The Company classifi es interest and penalties related to tax uncertainties as income tax expense.

BENEFIT PLANS New York Life maintains various qualifi ed and non-qualifi ed plans that provide defi ned benefi t pension and other postretirement benefi ts covering eligible U.S. employees and agents. A December 31 measurement date is used for all defi ned benefi t pension and other postretirement benefi t plans.

Under authoritative guidance related to pension plan obligations, the projected pension benefi t obligation (“PBO”) is defi ned as the actuarially calculated present value of vested and non-vested pension benefi ts accrued based on future salary levels. The PBO of the defi ned benefi t pension plans are determined using a variety of actuarial assumptions, from which actual results may vary.

Under authoritative guidance related to postretirement benefi t plans, the accumulated postretirement plan benefi t obligations (“APBO”) represents the actuarial present value of future other postretirement benefi ts attributed to employee services rendered through a particular date and is the valuation basis upon which liabilities are established. The APBO is determined using a variety of actuarial assumptions, from which actual results may vary.

The Company recognizes the funded status of each of the pension and postretirement plans on the accompanying Consolidated Balance Sheet in OCI. The funded status of a plan is measured as the diff erence between plan assets at fair value and PBO for pension plans or the APBO for any other postretirement plan.

Net periodic benefi t cost is determined using management estimates and actuarial assumptions to derive service cost, interest cost and expected return on plan assets for a particular year. Net periodic benefi t cost also includes the applicable amortization of any prior service cost (credit) arising from the increase (decrease) in prior years’ benefi t costs due to plan amendments or initiation of new plans. These costs are amortized into net periodic benefi t cost over the expected service years of employees whose benefi ts are aff ected by such plan amendments. Actual experience related to plan assets and/or the benefi t obligations may diff er from that originally assumed when determining net periodic benefi t cost for a particular period, resulting in gains or losses. To the extent such aggregate gains or losses exceed 10 percent of the greater of the benefi t obligations or the market-related asset value of the plans, they are amortized into net periodic benefi t cost over the expected service years of employees expected to receive benefi ts under the plans.

The obligations and expenses associated with these plans require an extensive use of assumptions such as the discount rate, expected rate of return on plan assets, rate of future compensation increases, healthcare cost trend rates, as well as assumptions regarding participant demographics such as rate and age of retirements, withdrawal rates and mortality. Management, in consultation with

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its external consulting actuarial fi rm, determines these assumptions based upon a variety of factors such as historical performance of the plan and its assets, currently available market and industry data, and expected benefi t payout streams. The assumptions used may differ materially from actual results due to, among other factors, changing market and economic conditions and changes in participant demographics.

New York Life also sponsors defi ned contribution plans for substantially all U.S. employees and agents under which a portion of employees/agents contributions are matched. Accordingly, the Company recognizes compensation cost for current matching contributions. As all contributions are transferred currently to the Trust for these plans, no liability for matching contributions is recognized in the accompanying Consolidated Balance Sheet.

New York Life also maintains for certain eligible participants a non-qualifi ed unfunded arrangement that credits deferral amounts and matching contributions in respect of compensation in excess of the amount that may be taken into account under the defi ned contribution plan because of applicable IRS limits. Accordingly, the Company recognizes compensation cost for current matching contributions and holds a liability for these benefi ts, which is included in other liabilities in the accompanying Consolidated Balance Sheet.

New York Life provides certain benefi ts to eligible employees and agents during employment for paid absences. For those benefi ts that accumulate or vest, a liability is accrued over the employees’ expected service period. For those benefi ts that do not accumulate or vest, a liability is accrued when the benefi t is incurred.

BUSINESS RISKS AND UNCERTAINTIES The securities and credit markets have been experiencing extreme volatility and disruption and under certain interest rate scenarios, the Company could be subject to disintermediation risk and/or reduction in net interest spread or profi t margins.

The Risk-Based Capital, or RBC ratio, is the primary measure by which regulators evaluate the capital adequacy of New York Life. RBC is determined by statutory rules that consider risks related to the type and quality of invested assets, insurance-related risks associated with New York Life’s products, interest-rate risk and general business risks. A continuation or worsening of the disruptions in the capital markets could increase equity and credit losses and reduce New York Life’s statutory surplus and RBC ratio. To the extent that New York Life’s statutory capital resources are deemed to be insuffi cient to maintain a particular rating by one or more rating agencies, the Company may seek to improve its capital position, including through operational changes and potentially seeking outside capital.



Note 3Recent Accounting Pronouncements

In April 2009, the FASB revised the authoritative guidance for the recognition and presentation of OTTI. This guidance amends previously used methodology for determining whether an OTTI exists for fi xed maturity securities, changes the presentation of OTTI for fi xed maturity securities, and requires additional disclosures for OTTI on fi xed maturity and equity securities in interim and annual fi nancial statements. It requires that an OTTI be recognized in earnings for a fi xed maturity security in an unrealized loss position when it is anticipated that the amortized cost will not be recovered. In such situations, the OTTI recognized in earnings is the entire diff erence between the fi xed maturity security’s amortized cost and its fair value only when either: i) the Company has the intent to sell the fi xed maturity security or ii) it is more likely than not that the Company will be required to sell the fi xed maturity security before recovery of the decline in fair value below amortized cost. If neither of these two conditions exists, the diff erence between the amortized cost basis of the fi xed maturity security and the present value of projected future cash fl ows expected to be collected is recognized as an OTTI in earnings (“credit loss”). If the fair value is less than the present value of projected future cash fl ows expected to be collected, this portion of OTTI related to other-than-credit factors (“noncredit loss”) is recorded as other comprehensive income (loss). When an unrealized loss on a fi xed maturity security is considered temporary, the Company continues to record the unrealized loss in other comprehensive income (loss) and not in earnings. There was no change for equity securities which, when an OTTI has occurred, continue to be impaired for the entire diff erence between the equity security’s cost or amortized cost and its fair value with a corresponding charge to earnings.

Prior to the adoption of the OTTI guidance, the Company recognized in earnings an OTTI for a fi xed maturity security in an unrealized loss position unless it could assert that it had both the intent and ability to hold the fi xed maturity security for a period of time suffi cient to allow for a recovery of fair value to the security’s amortized cost basis. Also prior to the adoption of this guidance the entire diff erence between the fi xed maturity security’s amortized cost basis and its fair value was recognized in earnings if it was determined to have an OTTI.

This guidance is effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. The Company early adopted this guidance effective January 1, 2009, which resulted in an increase of $116 million, net of related DAC, policyholder liability and tax adjustments, to retained earnings with a corresponding increase to accumulated other comprehensive loss

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to reclassify the noncredit loss portion of previously recognized OTTI losses on fi xed maturity securities held at January 1, 2009.

In December 2007, the FASB issued authoritative guidance related to non-controlling interests (formerly known as “minority interest”). The guidance includes provisions that call for: i) the ownership interests in subsidiaries held by parties other than the parent be clearly identifi ed, labeled and presented in the Consolidated Statement of Financial Position within equity, but separate from the parent’s equity; ii) the amount of consolidated net income attributable to the parent and to the non-controlling interest be clearly identifi ed and presented on the face of the Consolidated Statement of Income; and iii) all changes in a parent’s ownership interest in a subsidiary when control of the subsidiary is retained should be accounted for consistently as equity transactions. In contrast, when control over a subsidiary is relinquished and the subsidiary is deconsolidated, a parent is required to recognize a gain or loss in net income as well as provide certain associated expanded disclosures. This guidance is effective January 1, 2009, and requires prospective application as of the beginning of the fi scal year in which the standard is initially applied, except for the presentation and disclosure requirements which are to be applied retrospectively for all periods presented. The Company’s adoption of this guidance did not have a material eff ect on the Company’s consolidated fi nancial position or results of operations, but did affect fi nancial statement presentation and disclosure. The adoption of this guidance resulted in $1,227 million and $1,052 million of non-controlling interest being reclassifi ed into equity on the Consolidated Balance Sheet as of December 31, 2008, and December 31, 2009, respectively.

In June 2009, the FASB issued authoritative guidance for, and on July 1, 2009, launched, the FASB’s Accounting Standards Codifi cation as the source of authoritative GAAP to be applied by nongovernmental entities. The Codifi cation is not intended to change GAAP but is a new structure which takes accounting pronouncements and organizes them by accounting topic. This guidance is effective for fi nancial statements issued for interim and annual periods ending after September 15, 2009. The Company’s adoption of this guidance effective for the interim reporting period ending September 30, 2009, impacts the way the Company references GAAP accounting standards in the fi nancial statements but has no impact on the consolidated fi nancial statements.

In May 2009, the FASB issued authoritative guidance for subsequent events, which addresses the accounting for and disclosure of subsequent events not addressed in other applicable GAAP, including disclosure of the date through which subsequent events have been evaluated. The Company’s adoption of this guidance, effective with the annual reporting period ended December 31, 2009, did not have a material eff ect on the Company’s consolidated fi nancial position or results of operations. The required

disclosure of the date through which subsequent events have been evaluated is provided in Note 9 – Subsequent Events.

In April 2009, the FASB revised the authoritative guidance for fair value measurements and disclosures to provide guidance on: i) estimating the fair value of an asset or liability if there was a signifi cant decrease in the volume and level of trading activity for these assets or liabilities and ii) identifying transactions that are not orderly. Further, this new guidance requires additional disclosures about fair value measurements. This guidance is effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. The Company early adopted this guidance, effective January 1, 2009; however, it did not have a material impact on the Company’s consolidated fi nancial position or results of operations.

In February 2008, the FASB issued authoritative guidance that delayed the effective date of guidance related to fair value measurements and disclosures to fi scal years beginning after November 15, 2008, for all non-fi nancial assets and non-fi nancial liabilities, except those that are recognized or disclosed at fair value in the fi nancial statements on a recurring basis. The Company adopted this guidance effective January 1, 2009.

In April 2007, the FASB issued authoritative guidance, which permitted companies to offset cash collateral receivables or payables with net derivative positions under certain circumstances. The Company’s adoption of this guidance, eff ective January 1, 2008, did not have an eff ect on the Company’s consolidated fi nancial position or results of operations.

In February 2007, the FASB issued authoritative guidance related to fair value option. This guidance permits entities to choose to measure many fi nancial instruments and certain other items at fair value that are not currently required to be measured at fair value. A company should report unrealized gains and losses on items for which the fair value option has been elected in earnings. This guidance also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose diff erent measurement attributes for similar types of assets and liabilities. The Company did not elect the fair value option for any fi nancial assets or fi nancial liabilities.

In September 2006, the FASB issued authoritative guidance related to fair value measurements and disclosures. This guidance defi nes fair value, establishes a framework for measuring fair value and expands disclosures around fair value measurements. This guidance does not require any new fair value measurements, but the application of this guidance could change current practices in determining fair value. The Company adopted this guidance effective January 1, 2008.

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Note 4Debt

Debt consisted of the following at December 31, 2008 and 2009:

(DOLLARS IN MILLIONS) 2008 2009

6.75% SURPLUS NOTES, DUE NOVEMBER 15, 2039 $ - $ 998

5.875% SURPLUS NOTES, DUE MAY 15, 2033 991 991

CAPITAL CORPORATION’S COMMERCIAL PAPER DEBT ISSUANCE, VARIOUS MATURITY DATES THROUGH

JANUARY 2009 AND JANUARY 2010 FOR 2008 AND 2009, RESPECTIVELY (THE WEIGHTED AVERAGE

INTEREST RATE IS APPROXIMATELY 1.20% AND 0.20% FOR 2008 AND 2009, RESPECTIVELY) 475 592

REAL ESTATE MORTGAGE INVESTMENT CONDUIT, DUE MARCH 1, 2012 (INTEREST RATE IS LIBOR

PLUS 175 BASIS POINTS) - 500

SHARED APPRECIATION INCOME LINKED SECURITIES, DUE AUGUST 22, 2011 (COUPON RATE OF 3.3%) 228 233

NON-RECOURSE DEBT 56 145

OTHER 33 22

TOTAL DEBT $1,783 $3,481

On October 8, 2009, New York Life issued surplus notes (“2009 Notes”) with a principal balance of $1 billion, at a discount of $2 million, bearing interest at 6.75 percent, with a maturity date of November 15, 2039. On May 5, 2003, New York Life issued surplus notes (“2003 Notes”) with a principal balance of $1 billion, at a discount of $10 million, bearing interest at 5.875 percent, with a maturity date of May 15, 2033. Both the 2003 Notes and 2009 Notes (collectively “Notes”) were issued pursuant to Rule 144A under the Securities Act of 1933, as amended, and are administered by a United States bank as registrar/paying agent. Interests on the Notes are scheduled to be paid semi-annually on May 15 and November 15 of each year. The fi rst payment on the 2009 Notes will commence on May 15, 2010.

The Notes are unsecured and subordinated to all present and future indebtedness, policy claims and other creditor claims of New York Life. There are no principal payments due in respect of the Notes prior to maturity. Each payment of interest or principal may be made only with the prior approval of the Superintendent of the Department and only out of surplus funds, which the Superintendent determines to be available for such payments under New York State Insurance law. Provided that approval is granted by the Superintendent, the Notes may be redeemed at the option of the Company at any time, in whole or in part, at the “make-whole” redemption price equal to the greater of ( i) the principal amount of the Notes to be redeemed or (ii) the sum of the present values of the remaining scheduled interest and principal payments on the Notes to be redeemed, excluding accrued interest as of the date on which the Notes are to be redeemed, discounted to the date of redemption on a semi-annual basis at an adjusted treasury rate plus 20 basis points (“bps”) in the case of the 2003 Notes and 40 bps in the case of the 2009 Notes,

plus in each case, accrued interest on the Notes to be redeemed through the redemption date.

During December 2009, the Company entered into a Real Estate Mortgage Investment Conduit (“REMIC”) with a trust known as Madison ResCom Securities Funding Trust 2009 (“the Trust”) that meets the criteria for a qualifi ed SPE. The Company transferred REMIC eligible mortgage-backed assets with a fair value and book value of $1.2 billion and $1.7 billion, respectively. The Trust, in turn, issued a $500 million senior debt tranche (“regular interest”) and a residual equity tranche (“residual interest”). The regular interest was sold to an outside third party and New York Life retained the residual interest. The transfer of the assets to the Trust was accounted for as a secured borrowing and the securities remain on the Company’s Consolidated Balance Sheet with the $500 million proceeds received from the sale of the regular interest recognized as debt on the accompanying Consolidated Balance Sheet. The cash fl ows from the transferred assets are used to pay down the regular interest. The REMIC is dissolved upon the earlier of the date on which the notes have been paid in full, March 1, 2012, or the occurrence of an event of default, at which time the trustee will engage an auction to sell for cash all of the property owned by the Trust for its fair market value. The excess proceeds, after payment of amounts due to the regular interest holder, are paid to the holder of the residual interest.

On August 16, 2001, the Company entered into an agreement with Credit Suisse (“CS”) (formerly Credit Suisse First Boston International and Credit Suisse First Boston Corporation), referred to as Shared Appreciation Income Linked Securities (“SAILS”) in the above table. Under the agreement, the Company agreed to a forward sale of certain of its shares of ESI, an investment of the Company.

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The Company may deliver up to 18 million shares of ESI common stock on August 22, 2011, or settle the transaction in cash instead of delivering shares.

On September 23, 2009, the Company entered into a loan agreement with Wachovia Bank, N.A. to borrow $105 million included in non-recourse debt in the table on page 40. The loan has a maturity date of October 20, 2014, and bears a variable interest rate of LIBOR plus 3.75 percent, which is payable quarterly in arrears. At December 31, 2009, interest expense and accrued interest on the loan was $1 million.

At December 31, 2008 and 2009, the Company was required to consolidate certain entities with an outstanding debt balance of $56 million and $40 million, respectively, which is included in non-recourse debt in the table on page 40.

Other debt primarily represents capital leases. Amounts due on other debt are $9 million in 2010, $2 million in 2011, $2 million in 2012, $2 million in 2013, $2 million in 2014 and $5 million thereafter.

LINE OF CREDIT The Company entered into a $1.5 billion revolving credit facility with a consortium of banks effective July 27, 2005. The agreement is a fi ve-year revolving credit facility that charges an annual facility fee of 4 bps. The borrowing rate is 16 bps over LIBOR. If borrowings exceed 50 percent of the total facility, the borrowing rate will be 16 bps over LIBOR plus 5 bps. The annual facility fees and borrowing rates could increase if New York Life’s Standard & Poor’s and Moody’s fi nancial strength ratings are downgraded.

To date, the Company has not utilized this credit facility.

Note 5Commitments and Contingencies

LITIGATION The Company and/or its subsidiaries are defendants in individual and/or alleged class action suits arising from their agency sales force, insurance (including variable contracts registered under the federal securities law), investment, retail securities, employment and/or other operations, including actions involving retail sales practices. Most of the actions seek substantial or unspecifi ed compensatory and punitive damages. The Company and/or its subsidiaries are also from time to time involved in various governmental, administrative, and investigative proceedings and inquiries.

Notwithstanding the uncertain nature of litigation and regulatory inquiries, the outcome of which cannot be predicted, the Company believes that, after provisions made in the consolidated fi nancial statements, the ultimate liability that could result from litigation and proceedings would not have a material adverse effect on the Company’s fi nancial position; however, it is possible that settlements or adverse determinations in one or more actions or other proceedings in the future could have a material adverse eff ect on the Company’s operating results for a given year.

Note 6Related Party Transactions

COMPANY MANAGED MUTUAL FUNDS New York Life Investments, through its subsidiaries, is responsible for providing investment advisory and certain related administrative services to the MainStay Group of Funds (“Funds”). As a result, New York Life Investments, through its subsidiaries, earns investment management, account-ing, administration and service fees related to the Funds, which aggregated $320 million and $300 million for the years ended December 31, 2008 and 2009, respectively, and are included in other income in the accompanying Consolidated Statement of Income. The amounts receivable from the Funds at December 31, 2008 and 2009, was $25 million and $35 million, respectively, and is included in other assets in the accompanying Consolidated Balance Sheet.

Note 7Fair Value Measurements

DETERMINATION OF FAIR VALUES The Company has an established and well-documented process for determining fair value. The following is a description of the valuation methodologies used to determine fair value, as well as the general classifi cation of such instruments pursuant to the valuation hierarchy.

FIXED MATURITIES AND EQUITY SECURITIES The fair value of fi xed maturities and equity securities is determined by considering one of three primary sources. Security pricing is applied using a hierarchical approach whereby publicly available prices are fi rst sought from third-party pricing services, the remaining unpriced securities are submitted to independent brokers for prices and, lastly, securities are priced using an internal pricing model.

Prices from a third-party pricing vendor for securities that are not traded on an exchange are generally valued using a discounted cash-flow model or a market approach. Typical inputs used by these pricing sources include, but are not limited to, benchmark yields, reported trades, issuer spreads, bids, offers, benchmark securities, estimated cash fl ows and prepayment speeds.

Prices from pricing services and broker quotes are validated on an ongoing basis to ensure the adequacy and reliability of the fair value measurement. The Company performs both quantitative and qualitative analysis of the prices including initial and ongoing review of third-party pricing methodologies, back testing of recent trades, and a thorough review of pricing trends and statistics.

Independent pricing vendors do not cover private placement securities. These securities are priced by an internally developed model based upon assigned comparable public issues adjusted for liquidity, maturity and rating. The Company assigns a credit rating based upon internal analysis.

DERIVATIVE INSTRUMENTS Derivative instruments are reported on the Consolidated Balance Sheet at fair value and are reported in other investments or other liabilities. Derivative instruments generally are fair valued using pricing valuation models, which utilize observable market data. The remaining derivatives are either exchange traded or priced by broker quotations.

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The following reconciles consolidated GAAP net income attributable to New York Life to the statutory net income of New York Life, as reported to regulatory authorities:


GAAP NET (LOSS) INCOME ATTRIBUTABLE TO NEW YORK LIFE $(1,016) $1,327

REMOVAL OF SUBSIDIARIES NET LOSS (INCOME) 222 (676)

GAAP NET (LOSS) INCOME NEW YORK LIFE PARENT COMPANY (794) 651

ADJUSTMENTS TO NEW YORK LIFE PARENT COMPANY GAAP BASIS FOR:

REMOVAL OF NET CAPITALIZATION OF DAC (792) (19)

RE-ESTIMATION OF FUTURE POLICY BENEFITS AND POLICYHOLDERS’ ACCOUNT BALANCES (240) (124)

REMOVAL OF UNREALIZED LIMITED PARTNERSHIP LOSSES (GAINS) IN GAAP NET INVESTMENT INCOME 995 (98)

REMOVAL OF DEFERRED INCOME TAXES (174) 246

POLICYHOLDER DIVIDENDS 148 96

INCLUSION OF INTEREST MAINTENANCE RESERVE (“IMR”) CAPITALIZATION, NET OF AMORTIZATION 171 (83)

FAIR VALUE ADJUSTMENT OF CERTAIN LIABILITIES (345) 269

NET INVESTMENT LOSSES (GAINS) 439 (758)

INCLUSION OF DIVIDEND INCOME FROM SUBSIDIARIES - 244

OTHER 28 31

STATUTORY NET (LOSS) INCOME* $ (564) $ 455

* Statutory net (loss) income includes the net (loss) income of New York Life only, and excludes the statutory net (loss) income of its domestic insurance subsidiaries of $(385) million and $228 million for the years ended December 31, 2008 and 2009, respectively.

Note 8Statutory Financial Information

As discussed in Note 1 - Nature of Operations, the Department recognizes only SAP prescribed or permitted by the State of New York for determining and reporting the fi nancial condition and results of operations of an insurance company, its solvency under New York State Insurance Law and whether its fi nancial condition warrants the payment of a dividend to its policyholders. In addition, the Company’s insurance subsidiaries, NYLIAC and NYLIFE of Arizona, are subject to reporting requirements with the Delaware and Arizona Insurance Departments. No consider-ation is given by any of the State Insurance Departments to fi nancial statements prepared in accordance with GAAP in making such determinations.

The NAIC Accounting Practices and Procedures Manual (“NAIC SAP”) has been adopted as a component of prescribed or permitted practices by the State of New York. Prescribed statutory accounting practices include state laws and regulations. Permitted statutory accounting practices encompass accounting practices that are not prescribed; such practices diff er from state to state, may diff er from company to company within a state and may change in the future. The Company has no permitted practices.

In 2008, New York Insurance Law was amended to remove the statutory impediments to full adoption of NAIC SAP. The one remaining diff erence between accounting practices prescribed by the State of New York and NAIC SAP was that the Company was required to hold an indemnity reserve in connection with its 2003 Notes, whereas this was not required under NAIC SAP. No such indemnity reserve was required by the Department in 2009.

The following table reconciles the Company’s surplus at December 31, 2008 and 2009, between NAIC SAP and practices prescribed by the State of New York:


STATUTORY SURPLUS, NEW YORK BASIS $11,793 $13,686

STATE PRESCRIBED PRACTICES:

SURPLUS NOTES INDEMNITY RESERVE 67 -

STATUTORY SURPLUS, NAIC SAP $11,860 $13,686

For the years ended December 31, 2008 and 2009, there were no differences in net income between NAIC SAP and practices prescribed by the State of New York.

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The following reconciles consolidated New York Life GAAP equity to statutory capital of the Company, as reported to regulatory authorities:


CONSOLIDATED NEW YORK LIFE GAAP EQUITY, EXCLUDING NET UNREALIZED INVESTMENT GAINS (LOSSES) $17,991 $19,298

NET UNREALIZED INVESTMENT (LOSSES) GAINS IN AOCI (4,312) 118

CONSOLIDATED NEW YORK LIFE GAAP EQUITY 13,679 19,416

ADJUSTMENTS TO GAAP BASIS FOR:

REMOVAL OF CAPITALIZATION OF DAC (10,132) (8,930)

RE-ESTIMATION OF FUTURE POLICY BENEFITS AND POLICYHOLDERS’ ACCOUNT BALANCES 2,009 2,610

ESTABLISHMENT OF IMR (106) (213)

MARK TO MARKET ON INVESTMENTS, PRE-TAX AND DAC 8,207 (599)

REMOVAL OF CERTAIN ASSETS THAT ARE NON-ADMITTED FOR STATUTORY ACCOUNTING (1,317) (1,328)

NET ADJUSTMENT FOR DEFERRED TAXES (2,571) 695

REMOVAL OF GOODWILL IN EXCESS OF STATUTORY LIMITATIONS (371) (380)

INCLUSION OF SURPLUS NOTES, NET OF INDEMNIFICATION RESERVE 924 1,989

LIABILITY FOR PENSION AND POST RETIREMENT BENEFITS 1,923 1,599

NET ASSETS OF SEPARATE ACCOUNTS 557 73

OTHER 24 77

STATUTORY CAPITAL* $12,826 $15,009

* Statutory capital includes statutory surplus and the asset valuation reserve (“AVR”) on a consolidated basis of the Company. New York Life’s statutory surplus was $11,793 million and $13,686 million at December 31, 2008 and 2009, respectively. Included in New York Life’s statutory surplus is NYLIAC’s statutory surplus totaling $3,596 million and $4,998 million at December 31, 2008 and 2009, respectively. AVR for New York Life was $649 million and $832 million at December 31, 2008 and 2009, respectively. AVR for New York Life’s domestic insurance subsidiaries was $384 million and $491 million at December 31, 2008 and 2009, respectively.

Note 9Subsequent Events

As of March 17, 2010, the date the fi nancial statements were available to be issued, there have been no events occurring subsequent to the close of the Company’s books or accounts for the accompanying consolidated fi nancial statements that would have a material effect on the fi nancial condition of the Company.

70092ne_txt 4370092ne_txt 43 4/20/10 10:47 AM4/20/10 10:47 AM


44Reconciliation Schedules

(DOLLARS IN MILLIONS) DECEMBER 31, 2008* DECEMBER 31, 2009

GAAP CONSOLIDATED INVESTED ASSETS $149,704 $170,303

GAAP CONSOLIDATED CASH AND CASH EQUIVALENTS 5,049 4,415

TOTAL GAAP CONSOLIDATED CASH AND INVESTED ASSETS 154,753 174,718

REMOVAL OF NON-INSURANCE AND FOREIGN INSURANCE AFFILIATES

GAAP CASH AND INVESTED ASSETS IN EXCESS OF GAAP EQUITY (8,754) (9,825)

GAAP CASH AND INVESTED ASSETS – NEW YORK LIFE DOMESTIC 145,999 164,893

ADJUSTMENTS TO GAAP BASIS FOR:

REMOVAL OF MARK TO MARKET ON INVESTMENTS PRINCIPALLY ON FIXED MATURITIES AND EQUITIES 8,144 (760)

REMOVAL OF CERTAIN SEPARATE ACCOUNT ASSETS RECLASSIFIED TO THE GENERAL ACCOUNT (5,131) (6,551)

DIFFERENCE IN CARRYING VALUE OF NON-INSURANCE AND FOREIGN INSURANCE AFFILIATES (1,705) (1,882)

INCLUSION OF INTER-COMPANY LOAN TO SUBSIDIARY, ELIMINATED IN GAAP CONSOLIDATION 2,203 1,907

OTHER, PRINCIPALLY THE REMOVAL OF ASSETS NON-ADMITTED UNDER STATUTORY ACCOUNTING, THE

GAAP GENERAL RESERVE ON MORTGAGE LOANS AND THE RECLASSIFICATION OF BANK OVERDRAFTS

AND COMPANY-OWNED REAL ESTATE AND ENCUMBRANCES 108 (2)

STATUTORY CASH AND INVESTED ASSETS – NEW YORK LIFE DOMESTIC $149,618 $157,605

* Certain prior year amounts have been reclassifi ed to conform to the current year presentation.

Reconciliation of Cash and Invested Assets:

GAAP Basis to Statutory Basis

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45Reconciliation Schedules

The following reconciles consolidated GAAP net ( loss) income to operating earnings:

CONSOLIDATED GAAP NET (LOSS) INCOME TO OPERATING EARNINGS*


CONSOLIDATED GAAP NET (LOSS) INCOME $ (1,016) $ 1,327

ADJUSTMENT TO REMOVE LOSSES (GAINS) ON INVESTMENTS (NET OF TAX AND DAC)

1. REMOVAL OF NET INVESTMENT LOSSES (GAINS) AND RELATED ADJUSTMENTS† 1,430 (121)

2. REMOVAL OF LOSSES (GAINS) ON LIMITED PARTNERSHIPS IN NET INVESTMENT INCOME‡ 509 (88)

CONSOLIDATED GAAP NET INCOME AFTER REMOVING LOSSES (GAINS) ON INVESTMENTS 923 1,118

ALL OTHER ADJUSTMENTS TO CONSOLIDATED GAAP NET (LOSS) INCOME FOR

(NET OF TAX AND DAC, IF APPLICABLE):

3. ADJUSTMENT FOR POLICYHOLDER DIVIDENDS SUPPORTED BY CAPITAL GAINS AND/OR

UNASSIGNED SURPLUS§ 296 94

4. INCLUSION OF AMORTIZATION OF CERTAIN STATUTORY INTEREST MAINTENANCE RESERVE** 49 (3)

5. REMOVAL OF ICAP LLC (“ICAP”) ACQUISITION-RELATED EXPENSES†† 5 3

6. INCLUSION OF ICAP KEY-MAN INSURANCE PROCEEDS 10 10

OPERATING EARNINGS‡‡ $ 1,283 $ 1,222

* Note: Certain 2008 amounts have been reclassifi ed to conform to the 2009 presentation.† 2008 and 2009, includes DAC off set of $(602)million and $65 million, respectively, and tax (benefi t) expense of $(694) million and $29 million, respectively.‡ 2008 and 2009, includes DAC off set of $(131) million and $112 million, respectively, and tax (benefi t) expense of $(276) million and $48 million, respectively.§ 2008 and 2009, includes DAC off set of $(118) million and $(150) million, respectively, and tax benefi t of $(234) million and $(17) million, respectively.

** 2008 and 2009, includes DAC offset of $(5) million and $(25) million, respectively, and tax benefi t of $(25) million and $(5) million, respectively.†† 2008 and 2009, includes tax benefi t of $(3) million and $(1) million, respectively.‡‡ Refer to Glossary of Terms on page 54.

The following reconciles consolidated GAAP revenue to operating revenue:

CONSOLIDATED GAAP REVENUE TO OPERATING REVENUE


CONSOLIDATED GAAP REVENUE $16,830 $22,246

ADJUSTMENTS TO CONSOLIDATED GAAP REVENUE FOR:

1. REMOVAL OF NET INVESTMENT INCOME AND NET INVESTMENT GAINS/LOSSES (4,419) (9,240)

2. ADJUSTMENT TO REPORT ALL INTERNATIONAL SUBSIDIARIES AT PERCENTAGE OWNERSHIP (666) (679)

3. REMOVAL OF CERTAIN GAAP PREMIUMS AND NON-OPERATING REVENUE (437) (438)

4. INCLUSION OF CERTAIN DEPOSITS CREDITED IN POLICYHOLDERS’ ACCOUNT BALANCES 2,196 2,130

5. INCLUSION OF NET MARGINS ON GUARANTEED PRODUCTS 349 276

6. INCLUSION OF CERTAIN STATUTORY PREMIUMS 83 88

OPERATING REVENUE* $13,936 $14,383

* Refer to Glossary of Terms on page 54.

Reconciliation of GAAP Performance Measures

to Non-GAAP Performance Measures

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46Management’s Discussion

Management’s Discussion of Financial Responsibility

Management is responsible for the preparation and integrity of the fi nancial information presented in the Annual Report. The Company’s consolidated fi nancial statements, incorporated by reference herein, have been prepared in conformity with accounting principles generally accepted in the United States of America. In management’s opinion, the consolidated statements present fairly the Company’s fi nancial position, results of operations and cash fl ows as of, and for the years ended, December 31, 2009 and 2008.

The Company maintains a strong system of internal accounting controls, monitored by our corporate staff of professionally trained internal auditors. We encourage strong and eff ective corporate governance from our board of directors, continuously review our business results and strategic choices and focus on fi nancial 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 eff ectiveness of its controls and procedures for fi nancial reporting purposes as of December 31, 2009 and 2008, and has concluded that they are eff ective.

PricewaterhouseCoopers LLP, the Company’s independent auditor, has audited the consolidated fi nancial statements of the Company in accordance with auditing standards generally accepted in the United States of America. The report appears on page 30.

The Audit Committee of the board of directors of New York Life Insurance Company, which is comprised exclusively of directors who are not offi cers or employees of the Company, meets regularly with management, the internal auditors and the independent auditors to provide oversight so that management fulfi lls its responsibilities for accounting controls and preparation of fi nancial statements.

Although we are not an SEC registrant, we have elected to comply voluntarily with section 302 of the Sarbanes-Oxley Act of 2002, which identifi es management’s responsibilities over its fi nancial statements and requires management to certify as to the integrity of the fi nancial statements and the eff ectiveness of internal controls. Our statement to that eff ect can be viewed on the Company’s Web site, www.newyorklife.com.

Theodore A. Mathas Michael E. SprouleChairman of the Board, President and Executive Vice President andChief Executive Offi cer Chief Financial Offi cerApril 1, 2010 April 1, 2010

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47Offices of New York Life

NEW YORK LIFE INSURANCE

COMPANY

www.newyorklife.com

New York Life maintains more than 120 offi ces throughout all 50 states, as well as a network of dedicated customer service centers. For ques-tions about our products and services, please call your New York Life agent or 800-692-3086.

HOME OFFICE

51 Madison AvenueNew York, NY 10010212-576-7000

HOME OFFICE –

WESTCHESTER CAMPUS

1 Rockwood RoadSleepy Hollow, NY 10591914-846-7000

General Offices

ALABAMA

Birmingham General Offi ce2311 Highland Avenue SouthSuite 100 Birmingham, AL 35205205-933-0302

Huntsville General Offi ceAmsouth Center200 Clinton Avenue NWSuite 600Huntsville, AL 35801256-533-9770

Mobile General Offi ce1110 Montlimar Drive10th FloorSuite 1010Mobile, AL 36609251-460-4606

Montgomery General Offi ce4121 Carmichael RoadSuite 501Montgomery, AL 36106334-244-1696

ALASKA

Alaska General Offi ce701 West 8th AvenueSuite 900Anchorage, AK 99501907-279-6471

ARIZONA

Arizona General Offi ce14850 North Scottsdale RoadSuite 400Scottsdale, AZ 85254480-840-2000

Tucson General Offi ce1 South Church AvenueSuite 1230Tucson, AZ 85701520-620-5300

ARKANSAS

Arkansas General Offi ce10810 Executive Center DriveSuite 301Little Rock, AR 72211501-223-1600

CALIFORNIA

Central California General Offi ce7112 North Fresno StreetSuite 300Fresno, CA 93720559-447-3900

Central Coast General Offi ce300 East Esplanade DriveSuite 2050Oxnard, CA 93036805-656-4598

Covina Valley General Offi ce3201 Temple AvenueSuite 200Pomona, CA 91768909-598-2333

East Bay General Offi ce6210 Stoneridge Mall RoadSuite 100Pleasanton, CA 94588925-847-4500

Fullerton General Offi ce675 Placentia AvenueSuite 250Brea, CA 92821714-255-5100

Greater San Francisco General Offi ce100 Pine StreetSuite 3000San Francisco, CA 94111415-393-6060

Inland Empire General Offi ceTri-City Corporate Center451 East Vanderbilt WaySuite 400San Bernardino, CA 92408909-387-1900

Los Angeles General Offi ce6300 Wilshire BoulevardSuite 1900Los Angeles, CA 90048323-782-3000

Northern California General Offi ce2999 Douglas BoulevardSuite 350Roseville, CA 95661916-774-6200

Orange Coast General Offi ce2020 Main StreetSuite 200Irvine, CA 92614949-797-2400

San Diego General Offi ce8910 University Center LaneSuite 300San Diego, CA 92122858-623-8600

San Fernando Valley General Offi ce6320 Canoga AvenueSuite 900Woodland Hills, CA 91367818-884-4009

Silicon Valley General Offi ce1731 Technology DriveSuite 400San Jose, CA 95110408-452-6000

Stockton General Offi ce3255 West March LaneSuite 300Stockton, CA 95219209-955-2400

COLORADO

Colorado General Offi ce6850 West 52nd AvenueSuite 103Arvada, CO 80002303-403-5600

Denver General Offi ce3200 Cherry Creek South DriveSuite 700Denver, CO 80209303-744-2000

CONNECTICUT

Connecticut Valley General Offi ce360 Bloomfi eld AvenueSuite 402Windsor, CT 06095860-285-8884

Southern Connecticut General Offi ceMerritt & Corporate Park99 Hawley LaneSuite 1400Stratford, CT 06614203-385-5100

FLORIDA

Jacksonville General Offi ce7880 Gate ParkwaySuite 200Jacksonville, FL 32256904-997-3000

Orlando General Offi ce200 South Orange AvenueSuite 2900Orlando, FL 32801407-999-0921

South Florida General Offi ceLake Shore Plaza II1300 Concord Terrace5th FloorSunrise, FL 33323954-772-5200

Tampa General Offi ce3109 West Dr. Martin Luther King Jr. Boulevard Suite 300 Tampa, FL 33607813-281-0100

GEORGIA

Central Georgia General Offi ce6055 Lakeside Commons DriveSuite 300Macon, GA 31210478-477-3222

Greater Atlanta General Offi ce5909 Peachtree Dunwoody RoadBuilding DSuite 1100Atlanta, GA 30328770-730-2000

Savannah General Offi ce9 Park of Commerce BoulevardSuite 200Savannah, GA 31405912-355-3353

HAWAII

Honolulu General Offi ce841 Bishop StreetSuite 1400Honolulu, HI 96813808-538-3811

IDAHO

Idaho General Offi cePioneer Plaza One1109 West Myrtle StreetSuite 300 Boise, ID 83702208-343-4648

Offices of New York Life,

Its Major Subsidiaries and Affiliates

70092ne_txt 4770092ne_txt 47 4/20/10 10:47 AM4/20/10 10:47 AM



ILLINOIS

Chicago North Shore General Offi ce520 Lake Cook RoadRoom 600Deerfi eld, IL 60015847-317-9200

Greater Chicago General Offi ceHighland Landmark III3010 Highland ParkwaySuite 700Downers Grove, IL 60515630-795-5000

Western Illinois General Offi ce1051 Perimeter DriveSuite 750Schaumburg, IL 60173847-585-4900

INDIANA

Indiana General Offi ce11350 North Meridian StreetSuite 500Carmel, IN 46032317-580-8200

IOWA

Cedar Rapids General Offi ce4250 River Center Court NECedar Rapids, IA 52402319-395-9525

Des Moines General Offi ce4900 University AvenueSuite 225West Des Moines, IA 50266515-453-1300

KANSAS

Greater Kansas City General Offi ce7500 College BoulevardSuite 800Overland Park, KS 66210913-451-9100

Kansas General Offi ce125 North MarketSuite 1600Wichita, KS 67202316-262-0671

KENTUCKY

Kentucky General Offi ce9300 Shelbyville RoadSuite 1250Louisville, KY 40222502-327-8589

LOUISIANA

Baton Rouge General Offi ce2431 South Acadian ThruwaySuite 350 Baton Rouge, LA 70808225-387-9300

Louisiana General Offi ce400 East Kaliste Saloom RoadSuite 5100Lafayette, LA 70508337-261-9800

New Orleans General Offi ce639 Loyola AvenueSuite 1900New Orleans, LA 70113504-569-0500

Shreveport General Offi ceLouisiana Bank Tower401 Edwards StreetSuite 1700Shreveport, LA 71101318-222-4143

MAINE

Maine General Offi ce500 Southborough DriveSuite 300South Portland, ME 04106207-871-7474

MARYLAND

Baltimore General Offi ceCourt Towers210 West Pennsylvania AvenueSuite 260Towson, MD 21204410-321-6161

Greater Washington General Offi ceDemocracy Center6901 Rockledge DriveSuite 800Bethesda, MD 20817301-214-6600

MASSACHUSETTS

Boston General Offi ce800 South StreetSuite 600Waltham, MA 02453781-647-4100

MICHIGAN

Greater Detroit General Offi ce4000 Town CenterSuite 1300Southfi eld, MI 48075248-352-0620

Michigan General Offi ce2150 Association DriveSuite 200Okemos, MI 48864517-347-4300

MINNESOTA

Minnesota General Offi ce3600 Minnesota DriveSuite 100Edina, MN 55435952-897-5000

MISSISSIPPI

Mississippi General Offi ce4780 I 55 North Frontage RoadSuite 200Jackson, MS 39211601-982-1300

MISSOURI

Saint Louis General Offi ceCity Place OneOne City Place DriveSuite 260 Creve Coeur, MO 63141314-567-9080

MONTANA

Montana General Offi ce401 North 31st StreetSuite 800Billings, MT 59101406-255-6300

NEBRASKA

Nebraska General Offi ce1 Valmont PlazaSuite 100Omaha, NE 68154402-496-6400

NEVADA

Las Vegas General Offi ce3993 Howard Hughes Parkway Suite 500 Las Vegas, NV 89169702-796-2000

Reno General Offi ce50 West Liberty StreetSuite 500Reno, NV 89501775-323-0751

NEW HAMPSHIRE

New Hampshire General Offi ce1155 Elm Street8th FloorManchester, NH 03101603-669-5957

NEW JERSEY

New Jersey General Offi cePark 80 West, Plaza 1Suite 503Saddle Brook, NJ 07663201-845-6900

South Jersey General Offi ce1820 Chapel Avenue WestSuite 280Cherry Hill, NJ 08002856-488-6900

NEW MEXICO

New Mexico General Offi ce6565 Americas Parkway NESuite 500Albuquerque, NM 87110505-888-2000

NEW YORK

Albany General Offi ce26 Century Hill DriveSuite 301Latham, NY 12110518-220-4200

Brooklyn General Offi ce One Metro Tech Center17th FloorBrooklyn, NY 11201718-692-5700

Buffalo-Erie General Offi ce6400 Main StreetSuite 110Williamsville, NY 14221716-631-2323

Finger Lakes General Offi ce375 Woodcliff Drive2nd Floor Fairport, NY 14450585-248-6700

Greater New York General Offi ce420 Lexington Avenue14th & 15th FloorsNew York, NY 10170646-227-8888

Hudson Valley General Offi ce460 Temple Hill RoadNew Windsor, NY 12553845-569-8200

Long Island General Offi ce576 Broad Hollow RoadMelville, NY 11747631-391-2900

Manhattan General Offi ce120 Broadway37th Floor New York, NY 10271212-261-0200

Queens General Offi ce1983 Marcus AvenueSuite 210Lake Success, NY 11042516-327-2900

River View General Offi ce390 Berry Street4th FloorBrooklyn, NY 11211718-486-4600



(Continued)

70092ne_txt 4870092ne_txt 48 4/20/10 10:47 AM4/20/10 10:47 AM



Westchester General Offi ce411 Theodore Fremd AvenueRye, NY 10580914-934-5500

NORTH CAROLINA

Charlotte General Offi ce6100 Fairview RoadSuite 400Charlotte, NC 28210704-371-8500

Raleigh General Offi ce3200 Beechleaf Court Suite 820Raleigh, NC 27604919-781-3100

NORTH DAKOTA

North Dakota General Offi ce2000 44th Street SouthSuite 501 Fargo, ND 58103701-237-4311

OHIO

Cincinnati General Offi ce8044 Montgomery RoadSuite 400 Cincinnati, OH 45236513-621-9999

Columbus General Offi ce485 Metro Place South3rd FloorSuite 350Dublin, OH 43017614-793-2121

Northern Ohio General Offi ce6000 Lombardo CenterSuite 300Seven Hills, OH 44131216-520-1345

Toledo General Offi ce1684 Woodlands DriveSuite 100Maumee, OH 43537419-887-4700

OKLAHOMA

Oklahoma City General Offi ce3030 NW ExpresswaySuite 1800Oklahoma City, OK 73112405-813-7400

Tulsa General Offi ce2431 East 61st StreetSuite 650Tulsa, OK 74136918-587-3301

OREGON

Greater Oregon General Offi ce2601 25th Street SE3rd FloorSuite 350Salem, OR 97302503-585-4820

Portland General Offi ce10260 SW Greenburg RoadSuite 650Portland, OR 97223503-452-4074

PENNSYLVANIA

Constitution General Offi ce555 East City Line AvenueSuite 800Bala Cynwyd, PA 19004610-660-7600

Greater Philadelphia General Offi cePennsylvania Business Campus100 Witmer RoadSuite 100Horsham, PA 19044215-441-3240

Harrisburg General Offi ce3401 North Front Street1st FloorHarrisburg, PA 17110717-232-2555

Northeastern Pennsylvania General Offi ce220 Penn AvenueSuite 100Scranton, PA 18503570-969-3111

Pittsburgh-Johnstown General Offi ce225 West Station Square Drive Suite 640Pittsburgh, PA 15219412-392-3600

Valley Forge General Offi ce1205 Westlakes DriveSuite 180Berwyn, PA 19312484-595-2400

SOUTH CAROLINA

Charleston General Offi ce200 Meeting StreetSuite 202Charleston, SC 29401843-720-1900

Greenville General Offi ce935 South Main StreetSuite 400Greenville, SC 29601864-213-5433

SOUTH DAKOTA

Great Plains General Offi ce5101 South Nevada AvenueSuite 200Sioux Falls, SD 57108605-373-1400

TENNESSEE

Knoxville General Offi ceTwo Center Square625 South Gay StreetSuite 400Knoxville, TN 37902865-523-0741

Memphis General Offi ceRenaissance Center1715 Aaron Brenner DriveSuite 204Memphis, TN 38120901-761-1810

Nashville General Offi ce840 Crescent Centre DriveSuite 500Franklin, TN 37067615-224-9500

TEXAS

Austin General Offi ce6200 Bridgepoint ParkwaySuite 300Austin, TX 78730512-329-4200

Dallas General Offi ce12201 Merit Drive10th & 11th FloorsSuite 1000Dallas, TX 75251972-387-2929

El Paso General Offi ce201 East Main StreetSuite 600El Paso, TX 79901915-534-3200

Fort Worth General Offi ceCater Burgess Plaza777 Main StreetSuite 3300Fort Worth, TX 76102817-336-2565

Houston General Offi ce1330 Post Oak BoulevardSuite 1900Houston, TX 77056713-961-4545

San Antonio General Offi ce8000 IH-10 WestSuite 800San Antonio, TX 78230210-342-7878

South Texas General Offi ce5350 South Staples DriveSuite 101Corpus Christi, TX 78411361-994-1000

West Texas General Offi ce6121 79th StreetUnit ALubbock, TX 79424806-698-5600

UTAH

Utah General Offi ceSouth Towne Corporate Center 1150 West Civic Center DriveSuite 600Sandy, UT 84070801-567-7400

VERMONT

Vermont General Offi ceThe Park at Water Tower Hill463 Mountain View DriveColchester, VT 05446802-655-8300

VIRGINIA

Norfolk General Offi ce999 Waterside DriveSuite 900Norfolk, VA 23510757-628-1800

Northern Virginia General Offi ce8075 Leesburg PikeSuite 200Vienna, VA 22182703-749-3700

Richmond General Offi ce4400 Cox RoadSuite 110Glen Allen, VA 23060804-935-5300

Roanoke General Offi ce111 Franklin Plaza5th FloorRoanoke, VA 24011540-982-2241

WASHINGTON

Eastern Washington General Offi ce1009 North Center ParkwaySuite 200Kennewick, WA 99336509-783-7461

Seattle General Offi ce11400 SE 8th StreetSuite 300Bellevue, WA 98004425-462-4800

70092ne_txt 4970092ne_txt 49 4/20/10 10:47 AM4/20/10 10:47 AM



Tacoma General Offi ce1201 Pacifi c AvenueSuite 1600Tacoma, WA 98402253-597-7100

WISCONSIN

Milwaukee General Offi ce135 South 84th Street Suite 201Milwaukee, WI 53214414-256-8700

Wisconsin General Offi ce999 Fourier DriveSuite 300Madison, WI 53717608-831-4416

WYOMING

Wyoming General Offi ceMcMurry Business Park6000 East 2nd StreetSuite 2001Casper, WY 82609307-266-1485

LONG-TERM CARE

INSURANCE DIVISION

6200 Bridgepoint ParkwaySuite 400Austin, TX 78730800-224-4582

AARP LIFE INSURANCE AND

LIFETIME INCOME PROGRAMS

www.nylaarp.com5505 West CypressTampa, FL 33607800-695-5164

GROUP MEMBERSHIP

ASSOCIATION DIVISION

1 Rockwood RoadSleepy Hollow, NY 10591800-695-4226 (Disability Insurance Claims)800-792-9686 (Life Insurance Claims)

NEW YORK LIFE INVESTMENTS*

www.nylim.com

New York Life Investments’ retail products 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 New York Life Investments’ companies directly, please refer to the list below.

HOME OFFICE

(Headquarters, Real Estate Group, Fixed Income Investment Group and New York Life Capital Partners)51 Madison AvenueNew York, NY 10010212-576-7000

MAINSTAY INVESTMENTS

www.mainstayinvestments.com169 Lackawanna AvenueParsippany, NJ 07054800-MAINSTAY

NEW YORK LIFE CAPITAL PARTNERS

51 Madison Avenue16th FloorNew York, NY 10010212-576-6500

NEW YORK LIFE RETIREMENT

PLAN SERVICES

www.nylim.com/retirement690 Canton StreetWestwood, MA 02090781-619-2000

MADISON SQUARE INVESTORS LLC

www.nylim.com/institutional1180 Avenue of the AmericasNew York, NY 10036212-938-6500

MACKAY SHIELDS LLC

www.mackayshields.com9 West 57th StreetNew York, NY 10019212-758-5400

ICAP LLC

www.institutionalcap.com225 West Wacker DriveSuite 2400Chicago, IL 60606312-424-9100

MCMORGAN & CO. LLC

www.mcmorgan.com425 Market StreetSuite 1600San Francisco, CA 94105415-788-9300

MADISON CAPITAL FUNDING LLC

www.mcfl lc.com30 South Wacker DriveSuite 3700Chicago, IL 60606312-596-6900

NEW YORK LIFE

INTERNATIONAL, LLC

New York Life and its international subsidiaries and joint ventures do business in seven markets around the world in addition to the United States.

HOME OFFICE

51 Madison AvenueNew York, NY 10010212-576-7000

Asia Region

Regional Offi ce32nd Floor, Shui On Centre6 Harbour RoadWanchai, Hong Kong852-2116-4399

CHINA

Haier New York Life Insurance Co., Ltd.www.hnylic.cnHeadquarters:36F 3601 Jin Mao Tower88 Century AvenuePu Dong New Area, Shanghai 200121, P.R.C.86-21-5047-2188

HONG KONG

New York Life Insurance Worldwide Limitedwww.newyorklife.com.hkHeadquarters:33/F, New York Life Tower Windsor House311 Gloucester RoadCauseway Bay, Hong Kong852-2881-0688

INDIA

Max New York Life Insurance Company Limitedwww.maxnewyorklife.comHeadquarters:11th Floor, DLF SquareJacaranda Marg, DLF City, Phase II Gurgaon 122 002, Haryana, India91-124-256-1717

SOUTH KOREA

New York Life Insurance Limitedwww.nyli.co.krHeadquarters:11th Floor, Shinyoung B/D68-5 Cheongdam-DongGangnam-GuSeoul 135-100, Korea82-2-2107-4600

TAIWAN

New York Life Insurance Taiwan Corporationwww.nylitc.com.twHeadquarters:14/F, No. 133 Min Sheng East Road Section 3Taipei, Taiwan, ROC886-2-2719-5277

THAILAND

Siam Commercial New York Life Insurance Public Company Limitedwww.scnyl.comHeadquarters:1060 Siam Commercial Bank BuildingNew Petchburi RoadMakkasan, RajitheveeBangkok 10400, Thailand66-2-655-3000

Latin America Region

MEXICO

Seguros Monterrey New York Life, S.A. de C.V.www.seguros-monterrey.com.mxHeadquarters:Presidente Masaryk #8Col. Bosques de Chapultepec11588 Mexico, D.F.52-55-5326-9101



(Continued)

* 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 LLC.

70092ne_txt 5070092ne_txt 50 4/20/10 10:47 AM4/20/10 10:47 AM


51Senior Executive Officers

Senior Executive Officers

(as of April 1, 2010)

Chairman of the Board,

President and Chief

Executive Officer

Theodore A. Mathas*

Vice Chairman of the Board

and Chief Investment Officer

Gary E. Wendlandt*

Executive Vice President and

Chief Administrative Officer

Frank M. Boccio*

Executive Vice President,

Chief Legal Officer and

General Counsel

Sheila K. Davidson*


Chief Financial Officer

Michael E. Sproule*

Executive Vice Presidents

Christopher O. Blunt*

John Y. Kim*

Richard L. Mucci*

Mark W. Pfaff *

Senior Vice President

and General Auditor

Mark E. Arning

Senior Vice President,

Controller and Chief

Accounting Officer

John A. Cullen

Senior Vice President and

Chief Human Resources Offi cer

Barry A. Schub*


Chief Information Officer

Eileen T. Slevin*

Senior Vice President

and Chief Actuary

Joel M. Steinberg

Senior Vice President,

Deputy General

Counsel and Secretary

Susan A. Thrope*

First Vice President

and Treasurer

Richard J. Witterschein

Senior Vice Presidents

Patricia L. BarbariMichael T. BarriereScott L. BerlinAlexander A. BurbatskyJohn R. CassagneMichael D. CoffeyJohn P. CurryMichael A. DeMiccoBrian DuffyLeonard J. ElmerThomas F. EnglishSusan B. EricksenMichael G. GalloSolomon Goldfi nger*

Michael J. GordonJohn M. GradyRobert J. HebronMaryann L. IngenitoE. Thomas JohnsonThomas W. KellyAngela T. KyleSteven D. LashAkshay MadanBarbara J. McInerneyRobert McKinleyJohn R. MeyerGary J. MillerGeorge Nichols III*

Michael M. OleskePaul T. Pasteris*

Gideon A. PellSteven A. RautenbergGerard A. RocchiAlbert J. SchiffMichael F. ScovelArthur H. SeterRonald J. Terry

NEW YORK LIFE INVESTMENTS

Chairman

Gary E. Wendlandt*

President and Chief

Executive Officer

John Y. Kim*

Executive Vice President

Frank J. Ollari

Senior Managing Director

and General Counsel

George S. Shively

Senior Managing Director

and Chief Financial Officer

David G. Bedard

Senior Managing Directors

Sara L. Badler Jefferson C. BoyceTrevor J. ClarkThomas A. CloughAllan DowiakStephen P. FisherDrew E. LawtonAnthony R. MalloyAlison H. MicucciSusan L. PaternosterDonald A. SalamaRichard C. SchwartzJohn C. SicilianoMark W. TalgoHugh J. WadeJulia A. Warren

INSTITUTIONAL CAPITAL LLC

Chief Executive Officer and

Chief Investment Officer

Jerrold K. Senser

MACKAY SHIELDS LLC

Chief Operating Officer

Lucille Protas

MADISON SQUARE INVESTORS LLC

Chief Executive Officer

Tony H. Elavia

MCMORGAN & COMPANY LLC


John F. Santaguida

NEW YORK LIFE

CAPITAL PARTNERS LLC


Thomas M. Haubenstricker

NEW YORK LIFE

INTERNATIONAL, LLC

Chairman and Chief

Executive Officer

Richard L. Mucci*

Vice Chairman and

Chief Executive Officer,

Latin America

William Beaty



Greater China

Gary Bennett



Asia Sub-Region

Russell G. Bundschuh


Chief Financial Officer

Craig A. Merdian


General Counsel

Maria G. Gutierrez

Senior Vice Presidents

Thomas BurkeMichael D. BursonMay ChunShauna CollingwoodCamille CondonAnnette DonselaarSusan OrmistonVikram SawhneyKa Luk Stanley Tai

* Member of the Company’s Executive Management Committee.

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52Board of Directors

Board of Directors

WILLIAM G. WALTER Elected as a director in 2009, he is the current chairman and former president and chief executive offi cer of FMC Corporation, a leading manufacturer of agricultural, specialty and industrial chemicals. He is a member of the board’s Corporate Organization & Compensation, 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 offi cer of BellSouth Corporation. Mr. Feidler is vice chair of the board’s Governance Committee and is a member of the Insurance & Operations and Investment Committees.

ADMIRAL JOSEPH W. PRUEHER Elected as a director in 2001. 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 Audit and Governance Committees.

GARY E. WENDLANDT Elected as a director in 2007, he is vice chairman of the board and chief investment offi cer of New York Life.

FREDERICK O. TERRELL Elected as a director in 2003, he is managing partner and chief executive offi cer of Provender Capital Group, LLC. Mr. Terrell chairs the board’s Investment Committee and is a member of the Corporate Organization & Compensation and Insurance & Operations Committees.

KENT B. FOSTER Elected as a director in 1995, he is the former chairman and chief executive offi cer of Ingram Micro Inc. Mr. Foster is a member of the board’s Corporate Organization & Compensation, Audit and Governance Committees.

THOMAS C. SCHIEVELBEIN Elected as a director in 2006 and currently lead director, he is the former president of Northrop Grumman Newport News. Mr. Schievelbein is vice chair of the board’s

Insurance & Operations Committee and is a member of the Audit and Corporate Organization & Compensation Committees.

RALPH DE LA VEGA Elected as a director in 2009, he is president and chief executive offi cer of AT&T Mobility and Consumer Markets. Mr. de la Vega is a member of the board’s Insurance & Operations Committee.

CHRISTINA A. GOLD Elected as a director in 2001, she is the president and chief executive offi cer and a director of The Western Union Company. Mrs. Gold chairs the board’s Insurance & Operations Com-mittee and is a member of the Audit and Corporate Organization & Compensation Committees.

CONRAD K. HARPER He served as a director from 1992 to 1993 and rejoined the board in 1996. Mr. Harper is Of Counsel to the law fi rm of Simpson, Thacher & Bartlett LLP. Mr. Harper chairs the board’s Governance Committee and is a member of the Investment Committee.

THEODORE A. MATHAS Elected as a director in 2006, he is chairman of the board, president and chief executive offi cer of New York Life.

BETTY C. ALEWINE Elected as a director in 1998, she is the former president and chief executive offi cer of COMSAT Corporation. Mrs. Alewine chairs the board’s Audit Committee and is a member of the Governance and Investment Committees.

ROBERT M. BAYLIS Elected as a director in 1996, he is a retired vice chairman of CS First Boston. Mr. Baylis is a member of the board’s Investment, Governance and Corporate Organization & Compensation Committees.

S. THOMAS MOSER Elected as a director in 2008, he is a former vice chairman of KPMG, LLP, the U.S. member fi rm of KPMG International. Mr. Moser is a member of the board’s Audit, Investment and Insurance & Operations Committees.

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53Board of Directors

BACK, LEFT TO RIGHT: William G. Walter; Mark L. Feidler; Admiral Joseph W. Prueher; Gary E. Wendlandt; Frederick O. Terrell; 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; Robert M. Baylis; S. Thomas Moser

70092ne_txt 5370092ne_txt 53 4/20/10 10:47 AM4/20/10 10:47 AM


54Glossary of Terms

Glossary of Terms

INSURANCE SALES – represent annualized fi rst-year premium on products with signifi cant mortality or morbidity risk, where a sale is generally counted when the policy is paid. Certain insurance sales are discounted to reflect the relative importance of these sales as follows: all single premium and all COLI sales are counted at 50 percent, except for COLI Private Placement Variable Universal Life and BOLI sales (which are counted at 10 percent). Insurance sales are generated from both our domestic and international businesses (where sales are reported at ownership percentage).*

INVESTMENT SALES – represent current year purchase of products primarily having market risk, where a sale is counted when money is received. Investment sales include individual accumulation annuities, mutual funds and third-party asset management. International investment sales are reported at ownership percentage.†

INDIVIDUAL LIFE INSURANCE IN FORCE – the sum of the face amounts of domestic and international life insurance contracts outstanding at a given time.

POLICYHOLDER BENEFITS AND DIVIDENDS – include domestic insurance operations and are presented on a statutory basis. Benefi ts primarily include death claims paid to benefi ciaries, annuity payments and surrender benefi ts.‡

OPERATING REVENUE – includes statutory premiums for life and annuity products, net margins on guaranteed products and fee income associated with the asset management business. Premiums on most life insurance products and considerations on immediate annuity products (defi ned as “Guaranteed Lifetime Income Insurance”) are weighted at 100 percent. Annuity considerations on investment income products, all BOLI policies and certain PPVUL policies where premium is not expected to recur annually are weighted at 10 percent. The premiums and fees associated with all of our international subsidiaries are included at their ownership percentage.

ASSETS UNDER MANAGEMENT – consists of 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.

OPERATING EARNINGS – the key measure used for management purposes to track the Company’s profi tability from ongoing operations. Operating earnings equal GAAP net income adjusted for the removal, net of applicable tax and DAC, of: ( i) net investment gains and losses and related adjustments; ( ii) capital gains and losses on limited partnerships included in net investment income; ( iii) ICAP LLC acquisition-related expenses. Net income is further adjusted to include, net of applicable tax and DAC: (iv) capital gains and/or unassigned surplus that support policyholder dividends; (v) certain interest maintenance reserve amortization;§ (vi) net ICAP key-man insurance proceeds.

SURPLUS AND ASSET VALUATION RESERVES – include statutory surplus and the asset valuation reserve (“AVR”) of the Company on a consolidated basis (also referred to as Statutory Capital ). Statutory surplus represents assets minus liabilities of the Company based on the accounting rules specifi ed by the state insurance regulators. The AVR is required by insurance regulators to stabilize surplus from defaults on bonds, mortgage loans and real estate along with fluctuations in the market value of equity securities. Changes in the AVR are accounted for as direct increases or decreases in surplus. The AVR on a consolidated basis includes the AVR of New York Life’s domestic insurance subsidiaries.

SURPLUS NOTE – An unsecured debt instrument, with a stated interest rate and maturity date, issued by an insurance company that is subordinate to all policyholder and benefi ciary claims, and all other classes of creditors. Interest payments and principal repayments may only be made with the permission of the New York State Insurance Department. As a result of these provisions, these notes are reported as a component of statutory surplus in accordance with statutory accounting principles.

* This indicator has been revised for the years 2005-2008 to conform to the Company’s change in defi nition to exclude our Argentine operations eff ective 1/1/2009.† This indicator has been revised for the years 2005-2008 to conform to the Company’s change in defi nition of investment sales to exclude sales from our Argentine

operations and include sales from certain of our investment management boutique operations, primarily New York Life Capital Partners, which were previously excluded, eff ective 1/1/2009. 2006 investment sales include $1.1 billion of sales related to an acquisition of an investment subsidiary in 2006.

‡ This indicator has been revised for the years 2005-2008 to exclude the Company’s international operations at percent ownership and interest on deposit funds. NYLIC’s policyholder benefi ts and dividends were $7.2 billion and $7.6 billion for the twelve months ended December 31, 2008 and 2009, respectively. New York Life Insurance and Annuity Corporation policyholder benefi ts and dividends were $5.1 billion and $4.8 billion at December 31, 2008 and 2009, respectively. Dividends are not guaranteed. NYLIFE of Arizona is not authorized in New York or Maine and does not conduct insurance business in New York or Maine.

§ Interest Maintenance Reserve (“IMR”): In accordance with statutory accounting principles, interest-related net realized capital gains/losses on all types of fi xed 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.

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70092ne_txt 5470092ne_txt 54 4/20/10 10:47 AM4/20/10 10:47 AM

On the front cover: Just prior to the publication of this year’s Annual Report, Fortune reported that New York Life scored highest in its industry in the magazine’s 2010 annual survey of the “World’s Most Admired Companies.” The full survey is available on Fortune.com.

70092ne_cvr 270092ne_cvr 2 4/20/10 10:48 AM4/20/10 10:48 AM

New York Life Insurance Company51 Madison Avenue New York, New York 10010

newyorklife.com (800) 692-3086

77

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(4/1

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2009

Annual Report

World’s

#1 M

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The Company You Keep Believing In

70092ne_cvr 170092ne_cvr 1 4/20/10 10:48 AM4/20/10 10:48 AM

the company you keep believing in annuities... · new york life insurance company 51 madison avenue...

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