(Exact name of registrant as specified in its charter)

(Former name, former address, and former fiscal year, if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [_]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes [ ] No [x]

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the last practicable date.

Registrant has 6,001 shares of common stock outstanding on August 12, 2004, all of which are owned by Sun Life Assurance Company of Canada (U.S.).

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For the six-month periods ended June 30,

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For the three-month periods ended June 30,

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(in thousands, except share data)

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For the six-month periods ended June 30,

For the three-month periods ended June 30,

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For the six-month periods ended June 30, 2004 and 2003

(Unaudited)

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For the six-month periods ended June 30,

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For the six-month periods ended June 30,

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SLNY is licensed and authorized to write all the business that was previously being written by KBL and SLNY. The merger had no effect on the existing rights and benefits of policyholders or contract holders of either company. Keyport, KBL, Sun Life U.S., Sun NY Predecessor, and SLNY were at all times relevant to the merger indirect wholly-owned subsidiaries of Sun Life Assurance Company of Canada ("SLOC"). SLOC is an indirect wholly-owned subsidiary of Sun Life Financial Inc. ("SLF"), a reporting company under the Securities Exchange Act of 1934.

SLNY is engaged in the sale of fixed and variable annuity contracts, group life, variable universal life, stop loss and group disability insurance contracts. These contracts are sold by insurance agents, some of whom are registered representatives of national and regional stock brokerage firms and brokers. On October 21, 2003, SLNY announced that it was introducing a portfolio of Variable Universal Life ("VUL") insurance products to customers in New York State.

On December 31, 2003, Keyport was merged into Sun Life U.S. with Sun Life U.S being the surviving company. Consequently, SLNY is now a wholly-owned subsidiary of Sun Life U.S.

The accompanying unaudited condensed financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") for stock life insurance companies and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. Operating results for the three and six-month periods ended June 30, 2004 are not necessarily indicative of the results that may be expected for the year ending December 31, 2004. These financial statements should be read in conjunction with the financial statements and notes thereto included in SLNY's Annual Report on Form 10-K for the year ended December 31, 2003.

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The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The most significant estimates are those used in determining the fair value of financial instruments, deferred policy acquisition costs ("DAC"), goodwill, other-than-temporary impairments of investment and the liabilities for future contract and policyholder benefits.

Certain amounts in the prior period's financial statements have been reclassified to conform to the 2004 presentation.

On January 1, 2004, SLNY adopted American Institute of Certified Public Accountants' Statement of Position 03-01 ("SOP 03-01"), "Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts." The major provisions of the SOP that affect SLNY require:

• Establishment of reserves primarily related to death benefit and income benefit guarantees provided under variable annuity contracts.
• Deferral of sales inducements that meet certain criteria, and amortization using the same method used for DAC.

SLNY offers various guarantees to certain policyholders including a return of no less than (a) total deposits made on the contract less any customer withdrawals, (b) total deposits made on the contract less any customer withdrawals plus a minimum return or (c) the highest contract value on a specified anniversary date minus any customer withdrawals following the contract anniversary. These guarantees include benefits that are payable in the event of death, upon annuitization, or at specified dates during the accumulation period of an annuity.

The table below represents information regarding SLNY's variable annuity contracts with guarantees at June 30, 2004 (in 000's):

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The liability for death and income benefit guarantees is established equal to a benefit ratio multiplied by the cumulative contract charges earned, plus accrued interest and less contract benefit payments. The benefit ratio is calculated as the estimated present value of all expected contract benefits divided by the present value of all expected contract charges. The benefit ratio may be in excess of 100%. For guarantees in the event of death, benefits represent the current guaranteed minimum death payments in excess of the current account balance. For guarantees at annuitization, benefits represent the present value of the minimum guaranteed annuity benefits in excess of the current account balance.

Projected benefits and assessments used in determining the liability for guarantees are developed using models and stochastic scenarios that are also used in the development of estimated expected future gross profits. Underlying assumptions for the liability related to income benefits include assumed future annuitization elections based upon factors such as eligibility conditions and the annuitant's attained age.

The liability for guarantees will be re-evaluated periodically, and adjustments will be made to the liability balance through a charge or credit to policyowner benefits.

Guaranteed minimum accumulation benefits or withdrawal benefits are considered to be derivatives under Financial Accounting Standards Board Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities," and are recognized at fair value through earnings.

SLNY currently offers enhanced or bonus crediting rates to policyholders on certain of its annuity products. Through December 31, 2003, the expenses associated with certain of these bonuses were deferred and amortized. Others were expensed as incurred. Effective January 1, 2004, upon adoption of SOP 03-01, the expenses associated with offering a bonus are deferred and amortized over the life of the related contract in a pattern consistent with the amortization of DAC.

In June 2004, the Financial Accounting Standards Board ("FASB") issued FASB Staff Position ("FSP") FAS 97-1 to address questions that exist in practice regarding when it is appropriate to recognize an unearned revenue liability under SFAS No. 97. FSP FAS 97-1 is effective for financial statements for fiscal periods beginning after June 18, 2004. SLNY is currently evaluating the effect of FSP FAS 97-1.

In November 2003, the FASB ratified a consenus on the disclosure provisions of Emerging Issues Task Force ("EITF") Issue 03-1, "The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments." SLNY complied with the disclosure provisions of this rule in Note 4 to the Financial Statements included in its Annual Report on Form 10-K for the year ended December 31, 2003. In March 2004, the FASB reached a consensus regarding the application of a three-step impairment model to determine whether cost method investments are other-than-temporarily impaired. The provisions of this rule are required to be applied prospectively to all current and future investments accounted for in accordance with SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities," and other cost method investments for the fiscal reporting periods beginning after June 15, 2004.

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SLNY has agreements with Sun Life U.S. and certain other affiliates, under which SLNY receives, as requested, certain investment and administrative services on a cost reimbursement basis. Expenses under these agreements amounted to approximately $3.7 million and $6.5 million for the three and six-month periods ended June 30, 2004, respectively, and $2.9 million and $5.5 million for the three and six-month periods ended June 30, 2003, respectively.

SLNY paid $91,000 and $171,000 for the three and six-month periods ended June 30, 2004, respectively, and $31,000 and $50,000 for the three and six-month periods ended June 30, 2003, respectively, in commission fees to MFS/Sun Life Financial Distributors, Inc., an affiliate.

SLNY paid $0.6 million and $1.4 million for the three and six-month periods ended June 30, 2004, respectively, and $1.2 million and $2.0 million for the three and six-month periods ended June 30, 2003, respectively, in commission fees to Independent Financial Marketing Group, Inc., an affiliate.

Management believes intercompany expenses are calculated on a reasonable basis. However, these amounts may not necessarily be indicative of the costs that would be incurred if SLNY operated on a stand-alone basis.

The effects of reinsurance for the six-month periods ended June 30 were as follows (in 000's):

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SLNY is contingently liable for the portion of the policies reinsured under each of its existing reinsurance agreements in the event the reinsurance companies are unable to pay their portion of any reinsured claim. Management believes that any liability from this contingency is unlikely. However, to limit the possibility of such losses, SLNY periodically evaluates the financial condition of its reinsurers and monitors concentration of credit risk.

SLNY conducts business principally in three operating segments and maintains a corporate segment to provide for the capital needs of the various operating segments and to engage in other financing-related activities. Net investment income is allocated based on segmented assets. SLNY does not materially depend on one or a few customers, brokers or agents for a significant portion of its operations. Management evaluates the results of the operating segments on an after-tax basis.

The Wealth Management Segment markets and administers both individual and group fixed and variable annuity products.

The Group Protection Segment markets and administers group life insurance, stop loss insurance, long-term disability and short-term disability products. These products are sold to companies that provide group benefits for their employees.

The individual insurance products offered by the Individual Protection Segment are primarily conversions from SLNY's group life products. On October 21, 2003, SLNY announced that it received approval to sell Variable Universal Life ("VUL") insurance products to customers in New York State.

The Corporate Segment includes the unallocated capital of SLNY and items not otherwise attributable to the other segments.

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SLNY is not aware of any contingent liabilities arising from litigation, income taxes or other matters that could have a material effect upon the financial condition, results of operations or cash flows of SLNY.

In the normal course of business, SLNY has entered into agreements that include indemnities in favor of third parties, such as engagement letters with advisors and consultants, outsourcing agreements, underwriting and agency agreements, information technology agreements, distribution agreements and service agreements. SLNY has also agreed to indemnify its directors and certain of its officers and employees in accordance with SLNY's by-laws. Due to the nature of these indemnification agreements, it is not possible to estimate SLNY's potential liability.

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This discussion includes forward-looking statements by SLNY under the Private Securities Litigation Reform Act of 1995. These statements are not matters of historical fact; they relate to such topics as volume growth, market share, market risk and financial goals. It is important to understand that these forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those that the statements anticipate. These risks and uncertainties may concern, among other things:

Net income was $6.0 million and $5.3 million for the six-months ended June 30, 2004 and 2003, respectively. The increase in income was primarily attributed to the increase in the Wealth Management Segment, as discussed below.

SLNY's net income from operations reflects the operations of its four business segments: Wealth Management, Individual Protection, Group Protection and Corporate.

The following provides a summary of operations by segment for the six-month periods ended June 30, 2004 and 2003, respectively (in 000's):

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The Wealth Management Segment focuses on the savings and retirement needs of individuals preparing for retirement or who have already retired. It primarily markets to affluent consumers, selling individual and group fixed and variable annuities. Its major product lines are fixed and variable annuities. In certain variable annuities, contractholders have the choice of allocating payments either to a fixed account, which provides a guaranteed rate of return, or to variable accounts. In the variable accounts, the contractholder can choose from a range of investment options and styles. The return depends upon investment performance of the options selected.

The Wealth Management Segment has been significantly impacted by changes in the financial markets. The pre-tax income was $8.4 million and $5.3 million for the six-month periods ended June 30, 2004 and 2003, respectively. The increase in income over the same period in 2003 was primarily due to improvements in net investment income while interest credited to contractholders declined.

Total revenues were $57.5 million and $54.5 million for the six-month periods ended June 30, 2004 and 2003, respectively. The increase of $3.0 million was primarily due to an increase in net investment income and fee income partially offset by a decrease in realized gains on sales of investments. The significant changes for the six months ended June 30, 2004, as compared to the six months ended June 30, 2003 were as follows:

Investment income - was $45.9 million and $40.0 million for the six-month periods ended June 30, 2004 and 2003, respectively. The increase of $5.9 million during 2004, as compared to 2003, was the result of a higher average investment yield of $1.1 million and an increase in average invested assets of $4.8 million.

Realized investment gains - were $3.0 million and $7.2 million for the six-month periods ended June 30, 2004 and 2003, respectively. Sales of investments generally are made to maximize total return and take advantage of prevailing market conditions. SLNY incurred write-downs of fixed maturities for other-than-temporary impairments of $0.2 million and $33,000 for the six-month periods ended June 30, 2004 and 2003, respectively.

Fee and other income - were $7.6 million and $6.6 million for the six-month periods ended June 30, 2004 and 2003, respectively. Fee and other income consist primarily of separate account fees and similar charges, including mortality and expense ("M&E") charges earned on variable annuity balances. M&E charges, which are based on the market values of the assets in the separate accounts supporting the contracts, were $4.2 million and $3.5 million for the six-month periods ended June 30, 2004 and 2003, respectively. Variable product fees represented 1.41% and 1.36% of the average variable annuity separate account balances for the six-month periods ended June 30, 2004 and 2003, respectively. The increase in separate account income was due to an increase in average separate account assets. Average separate account assets were $593.8 million and $510.4 million for the six-month periods ended June 30, 2004 and 2003, respectively.

Surrender charges are also included in fee and other income. Surrender charges represent revenues earned on the early withdrawal of fixed and variable annuity policyholder balances. Surrender charges on fixed, equity-indexed and variable annuity surrenders generally are assessed at declining rates applied to policyholder surrenders during the first five to seven years of the contract. Total surrender charges were $1.4 million and $1.6 million for the six-month periods ended June 30, 2004 and 2003, respectively.

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Policyholder benefits - were $2.8 million and $3.9 million for the six-month periods ended June 30, 2004 and 2003, respectively. The $1.1 million decrease in 2004 compared to 2003 was primarily due to a decrease in minimum death benefits on variable annuity contracts.

Interest credited - to policyholders was $38.9 million and $40.1 million for the six-month periods ended June 30, 2004 and 2003, respectively. The decrease of $1.2 million during the six-month period ended June 30, 2004, as compared to the six-month period ended June 30, 2003, was the result of a lower average interest credited rate ($2.1 million) and an increase in average policyholder balances ($3.4 million). In addition, interest credited was increased during the first quarter of 2003 by a reserve adjustment of $2.5 million, which was recorded as a component of interest credited to policyholders. (Interest credited to policyholders was accurately recorded at the policy level at all times.)

Other Operating Expenses - were $5.4 million and $4.0 million for the six-month periods ended June 30, 2004 and 2003, respectively. The increase of $1.4 million occurred primarily within general operating expenses due to higher allocated operating expenses.

Amortization of deferred policy acquisition costs - relates to the costs of acquiring new business, which vary with and are primarily related to, the production of new annuity business. Such acquisition costs included commissions, costs of policy issuance, underwriting and selling expenses. Amortization expense was $2.1 million and $1.2 million for the six-month periods ended June 30, 2004 and 2003, respectively. The increase in deferred policy acquisition costs ("DAC") amortization for the six months ended June 30, 2004 was primarily due to higher profits in 2004.

Cumulative effect of accounting changes - on January 1, 2004, SLNY adopted American Institute of Certified Public Accountants' Statement of Position 03-01 ("SOP 03-01"), "Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts." The major provisions of the SOP that affect SLNY require: (a) establishment of reserves primarily related to death benefit and income benefit guarantees provided under variable annuity contracts; and, (b) deferral of sales inducements that meet certain criteria and amortization using the same method used for DAC.

The Group Protection Segment markets and administers group life insurance, stop loss insurance and long-term and short-term disability products. These products are sold to companies that provide group benefits for their employees. The Group Protection Segment had a pretax income of approximately $1.1 million and $1.2 million for the six-month periods ended June 30, 2004 and 2003, respectively.

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Total expenditures in 2004 increased by approximately $2.8 million in comparison to 2003. The expense increase is due to increased benefits to policyholders of approximately $1.9 million due primarily to the growing insurance block of business, particularly group life. As associated with the growth in business, the expense increase is also attributed to higher operating expenses and commission payments of approximately $0.5 million and $0.3 million, respectively.

The Individual Protection Segment products offered by SLNY are primarily conversions from its group life products. Pretax income was approximately $70,000 and $0.2 million for the six-month periods ended June 30, 2004 and 2003, respectively.

The decrease in income is primarily due to an increase in policyowner death benefits of $0.2 million.

The Corporate Segment includes the unallocated capital of SLNY and items not otherwise attributable to the other segments. Pretax income within the Corporate Segment was approximately $22,000 and $1.4 million for the six-month periods ended June 30, 2004 and 2003, respectively.

The decrease in net income was mainly due to a decrease in net investment income of approximately $1.0 million.

Omitted pursuant to Instruction H(2)(c) of Form 10-Q.

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SLNY is engaged in various kinds of routine litigation incidental to the business which, in management's judgment, is not expected to be material to SLNY's business or financial condition.

Omitted pursuant to Instruction H(2)(b) of Form 10-Q.

Omitted pursuant to Instruction H(2)(b) of Form 10-Q.

Omitted pursuant to Instruction H(2)(b) of Form 10-Q.

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SLNY did not file any reports on Form 8-K during the quarter ended June 30, 2004.

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SIGNATURES