Delaware Life Variable Account F – ‘N-4’ on 7/14/00

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Registration Statement for a Separate Account (Unit Investment Trust)   —   Form N-4
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: N-4         Registration Statement for a Separate Account        232   1.41M 
                          (Unit Investment Trust)                                
 2: EX-9        Voting Trust Agreement                                 1      6K 

N-4   —   Registration Statement for a Separate Account (Unit Investment Trust)
Document Table of Contents

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As Filed with the Securities and Exchange Commission on July 14, 2000     

                                                 REGISTRATION NO. 333-
                                                                       811-05846

--------------------------------------------------------------------------------
    SECURITIES AND EXCHANGE COMMISSION
    WASHINGTON, D.C. 20549

    ------------

                                     FORM N-4                              /X/

   REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

   AND

                                 AMENDMENT NO. 28                          /X/
    TO
   REGISTRATION STATEMENT UNDER THE INVESTMENT
   COMPANY ACT OF 1940

    SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
    (Exact Name of Registrant)

   SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
   (Name of Depositor)

   ONE SUN LIFE EXECUTIVE PARK
    WELLESLEY HILLS, MASSACHUSETTS 02481
    (Address of Depositor's Principal Executive Offices)

    DEPOSITOR'S TELEPHONE NUMBER: (781) 237-6030

     EDWARD M. SHEA, ASSISTANT VICE PRESIDENT AND SENIOR COUNSEL
   SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
    ONE COPLEY PLACE
   BOSTON, MASSACHUSETTS 02116
   (Name and Address of Agent for Service)

    COPIES OF COMMUNICATIONS TO:
   JOAN E. BOROS, ESQ.
    JORDEN BURT BOROS CICCHETTI BERENSON & JOHNSON LLP
    1025 THOMAS JEFFERSON STREET, N.W.
  SUITE 400 EAST
   WASHINGTON, D.C. 20007-0805

Approximate Date of Proposed Public Offering:  Upon the date of effectiveness   
or as soon thereafter as practicable.                                           

The Registrant hereby amends this Registration Statement on such date or        
dates as may be necessary to delay its effective date until the Registrant      
shall file a further amendment which specifically states that this              
Registration shall thereafter become effective in accordance with Section       
8(a) of the Securities Act of 1933 or until this Registration Statement shall   
become effective on such date as the Commission, acting pursuant to said        
Section 8(a) may determine.                                                     

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    PART A

    INFORMATION REQUIRED IN A PROSPECTUS

  Attached hereto and made a part hereof is the Profile and Prospectus dated
________ __, 2000 for each of the following:                                    

MFS Regatta Flex Four Variable and Fixed Annuity                        
  Futurity Select Four Variable and Fixed Annuity (To be filed by amendment)

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) 

                                                                __________, 2000

PROFILE 

MFS REGATTA FLEX FOUR 
VARIABLE AND FIXED
ANNUITY 

   THIS PROFILE IS A SUMMARY OF SOME OF THE MORE IMPORTANT POINTS THAT YOU
SHOULD KNOW AND CONSIDER BEFORE PURCHASING THE CONTRACT. THE CONTRACT IS MORE   
FULLY DESCRIBED IN THE FULL PROSPECTUS WHICH ACCOMPANIES THIS PROFILE. PLEASE   
READ THE PROSPECTUS CAREFULLY.                                                  

1. THE MFS REGATTA FLEX FOUR ANNUITY                                

    The MFS Regatta Flex Four Annuity is a flexible payment deferred annuity
contract ("Contract") designed for use in connection with retirement and        
deferred compensation plans, some of which may qualify for favorable federal    
income tax treatment. The Contract is intended to help you achieve your         
retirement savings or other long-term investment goals.                         

   The Contract has two phases: an Accumulation Phase and an Income Phase.
During the Accumulation Phase, you make payments into the Contract; any         
investment earnings under your Contract accumulate on a tax-deferred basis and  
are taxed as income only when withdrawn. During the Income Phase, we make       
annuity payments in amounts determined in part by the amount of money you have  
accumulated under your Contract during the Accumulation Phase. You choose when  
the Income Phase begins.                                                        

    You may choose among 29 variable investment options and a range of fixed
interest options. For a variable investment return you choose one or more       
Sub-Accounts in our Variable Account, each of which invests in shares of a      
corresponding series of the MFS/Sun Life Series Trust (collectively, the        
"Funds") listed in Section 4. The value of any portion of your Contract         
allocated to the Sub-Accounts will fluctuate up or down depending on the        
performance of the Series you select, and you may experience losses. For a fixed
interest rate, you may choose one or more Guarantee Periods offered in our Fixed
Account, each of which earns its own Guaranteed Interest Rate if you keep your  
money in that Guarantee Period for the specified length of time.                

  The Contract is designed to meet your need for investment flexibility.
Over the life of your Contract, you may allocate amounts among as many as 18 of 
the available variable and fixed investment options. Until we begin making      
annuity payments under your Contract, you can, subject to certain limitations,  
transfer money between options up to 12 times each year without a transfer      
charge or adverse tax consequences.                                             

2. ANNUITY PAYMENTS (THE INCOME PHASE)                              

    Just as you can elect to have your Contract value accumulate on either a
variable or fixed basis, or a combination of both, you can elect to receive     
annuity payments on either a variable or fixed basis or both. If you choose to  
have any part of your annuity payments come from the Sub-Accounts, the dollar   
amount of your annuity payments may fluctuate.                                  

 The Contract offers a variety of annuity options. You can select from
among the following methods of receiving either variable or fixed annuity       
payments under your Contract: (1) monthly payments continuing for your lifetime 
(assuming you are the annuitant); (2) monthly payments for your lifetime, but   
with payments continuing to your chosen beneficiary for a specified number of   
years after your first payment if you die before the end of the period you have 
selected; (3) monthly payments for your lifetime and the life of another person 
(usually your spouse) you have chosen; and (4) monthly payments for a specified 
number of years, with a cash-out option for variable payments. We may also agree
to other annuity options at our discretion.                                     

  Once the Income Phase begins, you cannot change your choice of annuity
payment method.                                                                 

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3. PURCHASING A CONTRACT                                            

      You may purchase a Contract for $10,000 or more, under most circumstances.
You may increase the value of your investment by adding $1,000 or more at any   
time during the Accumulation Phase. We may waive these limits. We will not      
accept a purchase payment if your account value is over $2 million, or if the   
purchase payment would cause your account value to exceed $2 million, unless we 
have approved the payment in advance.                                           

4. ALLOCATION OPTIONS                                               

     You can allocate your money among Sub-Accounts investing in the following
Funds:                                                                          

                                                                [Download Table]
                                                                                   
Bond Series                             Managed Sectors Series                     
Capital Appreciation Series             Massachusetts Investors Growth Stock Series
Capital Opportunities Series            Massachusetts Investors Trust Series       
Emerging Growth Series                  Mid Cap Growth Series                      
Emerging Markets Equity Series          Money Market Series                        
Equity Income Series                    New Discovery Series                       
Global Asset Allocation Series          Research Series                            
Global Governments Series               Research Growth and Income Series          
Global Growth Series                    Research International Series              
Global Telecommunications Series        Strategic Growth Series                    
Global Total Return Series              Strategic Income Series                    
Government Securities Series            Technology Series                          
High Yield Series                       Total Return Series                        
International Growth Series             Utilities Series                           
International Growth and Income Series                                             

    Market conditions will determine the value of an investment in any Fund.
Each Fund is described in the prospectus of the MFS/Sun Life Series Trust.      

      In addition to these variable options, you may also allocate your money to
one or more of the Guarantee Periods we make available. For each Guarantee      
Period, we offer a Guaranteed Interest Rate for the specified length of time.   

5. EXPENSES                                                         

The charges under the Contracts are as follows:                     

    If your account value is less than $100,000, we impose an annual Account
Fee of $50. We will waive the Account Fee if your Contract value was $100,000 or
more on your Account Anniversary, or if your Account was allocated only to the  
Fixed Account during the applicable Account Year. In addition, during both the  
Accumulation Phase and the Income Phase, we deduct insurance charges equal to   
1.35% per year of the average daily value of the Contract allocated among the   
Sub-Accounts. If your initial purchase payment is greater than $1,000,000, we   
will decrease the insurance charges to 1.10%.                                   

   If you elect one or more optional death benefit riders, we will deduct,
during the Accumulation Phase, an additional charge per year, depending upon the
number of riders you elect, as follows:                                         

                                                                [Download Table]

   NUMBER OF       % OF AVERAGE
RIDERS YOU ELECT   DAILY VALUE 
----------------   ------------
                               
     1                0.15%    
     2                0.25%    
     3                0.40%    

      No optional death benefit is offered if you are 80 or older on the date we
accept your Application. No charges for optional death benefit riders are       
assessed during the Income Phase.                                               

   There are no sales charges when you purchase your Contract. However, if
you withdraw money from your Contract, we will, with certain exceptions, impose 
a withdrawal charge. Your Contract allows a "free withdrawal amount," which you 
may withdraw before you incur the withdrawal charge. The rest                   

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of your withdrawal is subject to a withdrawal charge equal to a percentage of   
your account value based upon the number of complete account years that have    
expired since we issued your Contract. The withdrawal charge scale declines as  
follows:                                                                        

                                                                [Download Table]

NUMBER OF COMPLETE ACCOUNT YEARS                   
        SINCE WE ISSUED                            
         YOUR CONTRACT            WITHDRAWAL CHARGE
--------------------------------  -----------------
                                                   
               0                          6%       
               1                          6%       
               2                          5%       
               3                          5%       
           4 or more                      0%       

  If you withdraw, transfer, or annuitize money allocated to a Guarantee
Period more than 30 days before the expiration date of the Guarantee Period, the
amount will be subject to a Market Value Adjustment. This adjustment reflects   
the relationship between our current Guaranteed Interest Rates and the          
Guaranteed Interest Rate applicable to the amount being withdrawn. Generally, if
your Guaranteed Interest Rate is lower than the relevant current rate, then the 
adjustment will decrease your Contract value. Conversely, if your Guaranteed    
Interest Rate is higher than the relevant current rate, the adjustment will     
increase your Contract value. The Market Value Adjustment will not apply to the 
withdrawal of interest credited during the current Account Year, or to transfers
as part of our dollar-cost averaging program.                                   

In addition to the charges we impose under the Contracts, there are 
charges (which include management fees and operating expenses) imposed by each  
Fund, which range from 0.57% to 1.60% of the average net assets of the Fund,    
depending upon which Funds you select. The Fund's investment adviser has agreed 
to waive or reimburse a portion of expenses for some of the Funds; without this 
agreement, Fund expenses could be higher. Some of these agreements may be       
terminated at any time.                                                         

   The following chart is designed to help you understand the expenses you
will incur under your Contract, if you invest in one or more of the             
Sub-Accounts. The column "Total Annual Expenses" shows the sum of the "Total    
Annual Insurance Charges," as defined just above the chart, and the total       
expenses (net of any applicable expense reimbursement and/or fee waiver) for    
each Fund. The "Examples" Column contains two sets of examples: column (a) shows
two examples of the expenses, in dollars, you would pay under a Contract if you 
elect no optional death benefit riders, and column (b) shows two examples of the
expenses, in dollars, you would pay under a Contract if you elect all 3 optional
death benefit riders. Each set of examples assumes that you invested $1,000 in a
Contract which earns 5% annually and that you withdraw your money (1) at the end
of one year or (2) at the end of 10 years. For the first year, the Total Annual 
Expenses are deducted, as well as withdrawal charges. For year 10, the examples 
show the aggregate of all of the annual expenses deducted for the 10 years, but 
there is no withdrawal charge.                                                  

    During the Accumulation Phase, "Total Annual Insurance Charges" of 1.45%
as shown in the table below include insurance charges of 1.35% of your daily net
assets (1.20% for mortality and expense risks and 0.15% for administrative      
expenses) plus an additional 0.10%, which is used to represent the current $50  
annual Account Fee based on an assumed Contract value of $50,000. The actual    

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impact of the Account Fee may be greater or less than 0.10%, depending upon the 
value of your Contract. The 10-year total expense examples, below, reflect a $50
annual Account Fee.                                                             

                                                        [Enlarge/Download Table]

                                                                                            EXAMPLES:                 
                                                                                         TOTAL EXPENSES               
                                                                                             AT END                   
                                                                           -------------------------------------------
                                   TOTAL ANNUAL  TOTAL ANNUAL    TOTAL             (A)                    (B)         
                                    INSURANCE        FUND        ANNUAL    --------------------   --------------------
SUB-ACCOUNT                          CHARGES       EXPENSES     EXPENSES    1 YEAR    10 YEARS     1 YEAR    10 YEARS 
-----------                        ------------  ------------  ----------  --------   ---------   --------   ---------
                                                                                                                      
Bond Series                           1.45%         0.72%        2.17%       $78        $250        $81        $290   
Capital Appreciation Series           1.45%         0.76%        2.21%       $78        $254        $82        $294   
Capital Opportunities Series          1.45%         0.84%        2.29%       $79        $263        $83        $302   
Emerging Growth Series                1.45%         0.75%        2.20%       $78        $253        $82        $293   
Emerging Markets Equity Series        1.45%         1.60%        3.05%       $86        $336        $90        $373   
Equity Income Series                  1.45%         0.92%        2.37%       $80        $271        $83        $310   
Global Asset Allocation Series        1.45%         0.89%        2.34%       $79        $268        $83        $307   
Global Governments Series             1.45%         0.90%        2.35%       $79        $269        $83        $308   
Global Growth Series                  1.45%         1.01%        2.46%       $80        $280        $84        $319   
Global Telecommunications Series      1.45%         1.25%        2.70%       $83        $303        $86        $341   
Global Total Return Series            1.45%         0.89%        2.34%       $79        $268        $83        $307   
Government Securities Series          1.45%         0.61%        2.06%       $77        $239        $80        $280   
High Yield Series                     1.45%         0.83%        2.28%       $79        $260        $82        $299   
International Growth Series           1.45%         1.23%        2.68%       $83        $301        $86        $339   
International Growth and Income                                                                                       
 Series                               1.45%         1.16%        2.61%       $82        $294        $86        $333   
Managed Sectors Series                1.45%         0.79%        2.24%       $78        $257        $82        $297   
Massachusetts Investors Growth                                                                                        
 Stock Series                         1.45%         0.83%        2.28%       $79        $262        $83        $301   
Massachusetts Investors Trust                                                                                         
 Series                               1.45%         0.59%        2.04%       $76        $237        $80        $278   
Mid Cap Growth Series                 1.45%         1.00%        2.45%       $80        $279        $84        $318   
Money Market Series                   1.45%         0.57%        2.02%       $76        $235        $80        $276   
New Discovery Series                  1.45%         1.06%        2.51%       $81        $285        $85        $323   
Research Series                       1.45%         0.75%        2.20%       $78        $253        $82        $293   
Research Growth and Income Series     1.45%         0.86%        2.31%       $79        $265        $83        $304   
Research International Series         1.45%         1.23%        2.68%       $83        $301        $86        $339   
Strategic Growth Series               1.45%         1.00%        2.45%       $80        $279        $84        $318   
Strategic Income Series               1.45%         1.08%        2.53%       $81        $287        $85        $325   
Technology Series                     1.45%         1.00%        2.45%       $80        $279        $84        $318   
Total Return Series                   1.45%         0.69%        2.14%       $77        $247        $81        $288   
Utilities Series                      1.45%         0.82%        2.27%       $79        $261        $82        $300   

------------------------------                                                  

(a) Assuming no optional death benefit riders have been elected (total annual   
insurance charges equal 1.45%).                                         

(b) Assuming all three optional death benefit riders have been elected (total   
annual insurance charges equal 1.85%).                                  

  If your initial purchase payment is $1,000,000 or more, we will reduce
your insurance charges, during the Accumulation Phase, by 0.25%.                

  For more detailed information about Contract fees and expenses, please
refer to the fee table and discussion of Contract charges contained in the full 
Prospectus which accompanies this Profile.                                      

6. TAXES                                                            

      Under current federal tax laws, your earnings are not taxed until you take
them out of your Contract. If you take money out, earnings come out first and   
are taxed as income. If your Contract is funded with pre-tax or tax-deductible  
dollars (such as with a pension or IRA contribution) -- we call this a Qualified
Contract -- your entire withdrawal will be taxable. If you are younger than     
59 1/2 when you take money out, you may be charged a 10% federal penalty tax on 
the earnings. Annuity payments during the Income Phase are considered in part a 
return of your original investment. That portion of each payment is not taxable,
except under a Qualified Contract, in which case the entire payment will be     
taxable. In all cases, you should consult with your tax adviser for specific tax
information.                                                                    

     Different laws apply if your Contract is issued in Puerto Rico. Under the
tax laws of Puerto Rico, when an annuity payment is made under your Contract,   
your annuitant or any other payee is                                            

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required to include as gross income the portion of each annuity payment equal to
3% of the aggregate purchase payments you made under the Contract. The amount if
any, in excess of the included amount is excluded from gross income. After an   
amount equal to the aggregate amount excluded from gross income has been        
received, all of the annuity payments are considered to be taxable income.      

  You should consult with your tax adviser for specific tax information.

7. ACCESS TO YOUR MONEY                                             

You can withdraw money from your Contract at any time during the    
Accumulation Phase. During the first four Contract Years, you may withdraw a    
portion of the value of your Contract in each year without the imposition of the
withdrawal charge. The portion of your Account that is not subject to a         
withdrawal charge, during the first four Contract Years, is equal to 10% of all 
purchase payments. After your fourth Account Anniversary, any amount you        
withdraw is free of withdrawal charges.                                         

    We do not assess a withdrawal charge upon annuitization or transfers. In
certain circumstances, we will waive the withdrawal charges for a full or       
partial withdrawal when you are confined to an eligible nursing home. In        
addition, there may be other circumstances under which we may waive the         
withdrawal charge.                                                              

   In addition to the withdrawal charge, amounts you withdraw, transfer or
annuitize from the Fixed Account before your Guarantee Period has ended may be  
subject to a Market Value Adjustment.                                           

8. PERFORMANCE                                                      

      If you invest in one or more Sub-Accounts, the value of your Contract will
increase or decrease depending upon the investment performance of the Funds you 
choose. The Sub-Accounts have not been in operation for a full calendar year;   
therefore no performance information is provided in this Profile.               

9. DEATH BENEFIT                                                    

    If you die before the Contract reaches the Income Phase, the beneficiary
will receive a death benefit. To calculate the death benefit, we use a "Death   
Benefit Date," which is the earliest date we have both due proof of death and a 
written request specifying the manner of payment.                               

BASIC DEATH BENEFIT                                                 

     If you were 85 or younger when we issued your Contract, the death benefit
is the greatest of:                                                             

(1) the value of the Contract on the Death Benefit Date;            

(2) the amount we would pay in the event of a full surrender of the 
Contract on the Death Benefit Date; and                     

(3) your total purchase payments (adjusted for partial withdrawals) 
calculated as of the Death Benefit Date.                    

      If you were 86 or older when we issued your Contract, the death benefit is
equal to the amount set forth in (2) above. Because this amount will reflect any
applicable withdrawal charges and Market Value Adjustment, it may be less than  
your account value.                                                             

OPTIONAL DEATH BENEFIT RIDERS                                       

   Subject to availability in your state, if you are 79 or younger when we
issue your Contract, you may enhance this basic death benefit by electing one or
more of the following optional death benefit riders: the Maximum Anniversary    
Account Value Rider, the 5% Premium Roll-Up Rider, and the Earnings Enhancement 
Rider.                                                                          

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MAXIMUM ANNIVERSARY ACCOUNT VALUE RIDER                                 

   If you elect the Maximum Anniversary Account Value Rider, the death benefit
is the greater of:                                                              

   - any death benefit amounts payable under "Basic Death Benefit" (above), or

 - your highest Contract value on any Account Anniversary before your 81st
birthday, adjusted for any subsequent purchase payments, partial    
  withdrawals, and charges made between that Account Anniversary and the
Death Benefit Date.                                                 

5% PREMIUM ROLL-UP RIDER                                                

    If you elect the 5% Premium Roll-Up Rider, the death benefit is the greatest
of:                                                                             

   - any death benefit amounts payable under "Basic Death Benefit" (above), or

 - the sum of your total purchase payment plus interest accruals, adjusted
for partial withdrawals.                                            

      Under this rider, interest accrues at 5% per year on purchase payments and
transfers to the Variable Account while they remain in the Variable Account. The
5% accruals will continue until the earlier of:                                 

- first day of the month following your 80th birthday, or               

  - the day the death benefit amount under this rider equals twice the total
      of the purchase payments and transferred amounts adjusted for withdrawals.

   Net Purchase Payments under this rider will be adjusted for all partial
withdrawals as described in the Prospectus under the heading "Calculating the   
Death Benefit."                                                                 

EARNINGS ENHANCEMENT RIDER                                              

  If you elect the Earnings Enhancement Rider and you are 69 or younger when
we issue your Contract, the death benefit is:                                   

  - the greatest of any death benefit amounts payable under the "Basic Death
Benefit" (above), plus                                              

- 40% of the lesser of your net purchase payments or your Account Value 
 minus net purchase payments, calculated as of the Death Benefit Date.

     If you elect the Earnings Enhancement Rider, and you are between the ages
of 70 and 79 when we issue your Contract, the death benefit is:                 

  - the greatest of any death benefit amounts payable under the "Basic Death
Benefit" (above), plus                                              

    - 25% of the lesser of your net purchase payment or your Account Value minus
net purchase payments, calculated as of the Death Benefit Date.     

   Net Purchase Payments under this rider will be adjusted for all partial
withdrawals as described in the Prospectus under the heading "Calculating the   
Death Benefit."                                                                 

SELECTING MULTIPLE DEATH BENEFIT RIDERS                                 

 If you elect more than one death benefit rider, the death benefit will be
calculated as follows:                                                          

    1)  MAXIMUM ANNIVERSARY ACCOUNT VALUE RIDER COMBINED WITH 5% PREMIUM ROLL-UP
  RIDER: The death benefit will equal the greater of the death benefit
    under the Maximum Anniversary Account Value Rider or the death benefit
under the 5% Premium Roll-Up Rider.                               

2)  MAXIMUM ANNIVERSARY ACCOUNT VALUE RIDER COMBINED WITH EARNINGS      
     ENHANCEMENT RIDER: The death benefit will equal the death benefit under
     the Maximum Anniversary Account Value Rider, PLUS the amount calculated
under the Earnings Enhancement Rider. The death benefit           

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  under the Earnings Enhancement Rider is calculated using the account
    value before the application of the Maximum Anniversary Account Rider.

  3)  EARNINGS ENHANCEMENT RIDER COMBINED WITH 5% PREMIUM ROLL-UP RIDER: The
     death benefit will equal the death benefit under the 5% Premium Roll-Up
     Rider, PLUS the amount calculated under the Earnings Enhancement Rider.
  The death benefit under the Earnings Enhancement Rider is calculated
      using the account value before the application of the 5% Premium Roll-Up
Rider.                                                            

4)  MAXIMUM ANNIVERSARY ACCOUNT VALUE RIDER COMBINED WITH BOTH THE 5%   
 PREMIUM ROLL-UP RIDER AND THE EARNINGS ENHANCEMENT RIDER: The death
   benefit will equal the greater of the death benefit under the Maximum
       Anniversary Account Value Rider or the death benefit under the 5% Premium
      Roll-Up Rider, PLUS the amount calculated under the Earnings Enhancement
Rider. The death benefit under the Earnings Enhancement Rider is  
 calculated using the account value before the application of the 5%
     Premium Roll-Up Rider and that of the Maximum Anniversary Account Value
Rider.                                                            

     If your spouse is the sole beneficiary, your spouse may elect to continue
the Contract. The death benefit amount described above will be your new account 
value as of the Death Benefit Date. For purposes of calculating future death    
benefits, your spouse's age and the original issue date of the Contract will be 
used to determine applicable expense and death benefit amounts.                 

10. OTHER INFORMATION                                               

    FREE LOOK. Depending upon applicable state or federal law, if you cancel
your Contract within 10 days after receiving it, we will send you the value of  
your Contract as of the day we received your cancellation request (this may be  
more or less than the original purchase payment) and we will not deduct a       
withdrawal charge or Market Value Adjustment. However, based upon applicable    
state or federal law, we will refund the full amount of any purchase payment(s) 
we receive and the "free look" period may be greater than 10 days.              

     NO PROBATE. In most cases, when you die, the beneficiary will receive the
death benefit without going through probate. However, avoiding probate does not 
mean that the beneficiary will not have a tax liability as a result of receiving
the death benefit.                                                              

      WHO SHOULD PURCHASE A CONTRACT? The Contract is designed for those seeking
long-term tax-deferred accumulation of assets and annuity features, generally   
for retirement or other long-term investment purposes. The tax-deferred feature 
is most attractive to purchasers in high federal and state income tax brackets. 
You should note that qualified retirement investments automatically provide tax 
deferral regardless of whether or not the underlying contract is an annuity. You
should not buy a Contract if you are looking for a short-term investment or if  
you do not wish to risk a decrease in the value of your investment.             

      CONFIRMATIONS AND QUARTERLY STATEMENTS. You will receive a confirmation or
an acknowledgment of transactions within your Contract, except for those        
transactions which are part of an automated program, such as Dollar-Cost        
Averaging, Asset Allocation, Systematic Withdrawal and/or Portfolio Rebalancing.
On an annual basis, you will receive a complete statement of your transactions  
over the past quarter and a summary of your Account values at the end of that   
period.                                                                         

ADDITIONAL FEATURES. The Contract offers the following additional   
convenient features, which you may choose at no extra charge. These features may
be started or discontinued at any time by either you or the Company; however, we
may require up to a 30-day notice.                                              

    DOLLAR-COST AVERAGING -- This program lets you invest gradually in up to
12 Sub-Accounts.                                                                

     ASSET ALLOCATION -- This program rebalances your Account balance based on
the terms of the program. Different asset allocation models may be available    
over the lifetime of the Contract; however, only one program can be in effect at
any one time.                                                                   

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SYSTEMATIC WITHDRAWAL PROGRAM -- This program allows you to receive 
monthly, quarterly, semi-annual or annual payments during the Accumulation      
Phase.                                                                          

 PORTFOLIO REBALANCING PROGRAM -- Under this program, we automatically
reallocate your investments in the Sub-Accounts to maintain the proportions you 
select. You can elect rebalancing on a quarterly, semi-annual or annual basis.  

SECURED FUTURE PROGRAM -- This program guarantees the return of your
purchase payment by investing a portion of your investment into a Guarantee     
Period, and also allows you to allocate a portion of your investment to one or  
more Sub-Accounts.                                                              

11. INQUIRIES                                                       

      If you would like more information about buying a Contract, please contact
your broker or registered representative. If you have any other questions,      
please contact us at:                                                           

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                           
C/O RETIREMENT PRODUCTS AND SERVICES                                  
P.O. BOX 1024                                                         
BOSTON, MASSACHUSETTS 02103                                           
TELEPHONE: TOLL FREE (800) 752-7215                                   

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                                                                      PROSPECTUS
                                                                 _________, 2000

MFS REGATTA FLEX FOUR 

     Sun Life Assurance Company of Canada (U.S.) and Sun Life of Canada (U.S.)
Variable Account F offer the flexible payment deferred annuity contracts and    
certificates described in this Prospectus to groups and individuals.            

    You may choose among 29 variable investment options and a range of fixed
interest options. The variable options are Sub-Accounts in the Variable Account,
each of which invests in one of the following series of the MFS/Sun Life Series 
Trust (the "Funds"). The MFS/Sun Life Series Trust (the "Series Fund") is a     
mutual fund advised by our affiliate, Massachusetts Financial Services Company: 

                                                                [Download Table]
                                                                                   
Bond Series                             Managed Sectors Series                     
Capital Appreciation Series             Massachusetts Investors Growth Stock Series
Capital Opportunities Series            Massachusetts Investors Trust Series       
Emerging Growth Series                  Mid Cap Growth Series                      
Emerging Markets Equity Series          Money Market Series                        
Equity Income Series                    New Discovery Series                       
Global Asset Allocation Series          Research Series                            
Global Governments Series               Research Growth and Income Series          
Global Growth Series                    Research International Series              
Global Telecommunications Series        Strategic Growth Series                    
Global Total Return Series              Strategic Income Series                    
Government Securities Series            Technology Series                          
High Yield Series                       Total Return Series                        
International Growth Series             Utilities Series                           
International Growth and Income Series                                             

      The fixed account options are available for specified time periods, called
Guarantee Periods, and pay interest at a guaranteed rate for each period.       

      THIS PROSPECTUS MUST BE ACCOMPANIED BY A CURRENT PROSPECTUS FOR THE SERIES
FUND. PLEASE READ THIS PROSPECTUS AND THE SERIES FUND PROSPECTUS CAREFULLY      
BEFORE INVESTING AND KEEP THEM FOR FUTURE REFERENCE. THEY CONTAIN IMPORTANT     
INFORMATION ABOUT THE CONTRACTS AND THE FUNDS.                                  

      We have filed a Statement of Additional Information dated __________, 2000
(the "SAI") with the Securities and Exchange Commission (the "SEC"), which is   
incorporated by reference in this Prospectus. The table of contents for the SAI 
is on page ___ of this Prospectus. You may obtain a copy without charge by      
writing to us at the address shown below (which we sometimes refer to as our    
"Annuity Mailing Address") or by telephoning (800) 752-7215. In addition, the   
SEC maintains a website (http://www.sec.gov) that contains the SAI, material    
incorporated by reference, and other information regarding companies that file  
with the SEC.                                                                   

THE CONTRACTS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, 
ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE        
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.                    

THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE     
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.                                                               

ANY REFERENCE IN THIS PROSPECTUS TO RECEIPT BY US MEANS RECEIPT AT THE FOLLOWING
ADDRESS:                                                                        

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                           
C/O RETIREMENT PRODUCTS AND SERVICES                                  
P.O. BOX 1024                                                         
BOSTON, MASSACHUSETTS 02103                                           

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TABLE OF CONTENTS 

                                                                [Download Table]

                                                                PAGE  
                                                                      
Special Terms                                                        4
Expense Summary                                                      4
Summary of Contract Expenses                                         4
Underlying Fund Annual Expenses                                      5
Examples                                                             7
The Annuity Contract                                                 9
Communicating To Us About Your Contract                              9
Sun Life Assurance Company of Canada (U.S.)                         10
The Variable Account                                                10
Variable Account Options: The Funds                                 10
The Fixed Account                                                   13
The Fixed Account Options: The Guarantee Periods                    13
The Accumulation Phase                                              13
    Issuing Your Contract                                           13
    Amount and Frequency of Purchase Payments                       14
    Allocation of Net Purchase Payments                             14
    Your Account                                                    14
    Your Account Value                                              14
    Variable Account Value                                          14
    Fixed Account Value                                             15
    Transfer Privilege                                              16
    Waivers; Reduced Charges; Credits; Special Guaranteed             
     Interest Rates                                                 17
    Optional Programs                                               17
Withdrawals, Withdrawal Charge and Market Value Adjustment          19
    Cash Withdrawals                                                19
    Withdrawal Charge                                               20
    Types of Withdrawals Not Subject to Withdrawal Charge           21
    Market Value Adjustment                                         22
Contract Charges                                                    23
    Account Fee                                                     23
    Administrative Expense Charge                                   23
    Mortality and Expense Risk Charge                               23
    Charges for Optional Death Benefit Riders                       24
    Premium Taxes                                                   24
    Fund Expenses                                                   24
    Modification in the Case of Group Contracts                     24
Death Benefit                                                       24
    Amount of Death Benefit                                         24
    The Basic Death Benefit                                         25
    Optional Death Benefit Riders                                   25
    Spousal Continuance                                             26
    Calculating the Death Benefit                                   27
    Method of Paying Death Benefit                                  27
    Non-Qualified Contracts                                         27
    Selection and Change of Beneficiary                             28
    Payment of Death Benefit                                        28
    Due Proof of Death                                              28
The Income Phase -- Annuity Provisions                              28
    Selection of the Annuitant or Co-Annuitant                      28
    Selection of the Annuity Commencement Date                      29
    Annuity Options                                                 29
    Selection of Annuity Option                                     30
    Amount of Annuity Payments                                      30
    Exchange of Variable Annuity Units                              31
    Account Fee                                                     31
    Annuity Payment Rates                                           31
    Annuity Options as Method of Payment for Death Benefit          32

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                                                                [Download Table]
                                                                      
Other Contract Provisions                                           32
    Exercise of Contract Rights                                     32
    Change of Ownership                                             32
    Voting of Fund Shares                                           33
    Periodic Reports                                                33
    Substitution of Securities                                      34
    Change in Operation of Variable Account                         34
    Splitting Units                                                 34
    Modification                                                    34
    Discontinuance of New Participants                              35
    Reservation of Rights                                           35
    Right to Return                                                 35
Tax Considerations                                                  35
    U.S. Federal Tax Considerations                                 36
        DEDUCTIBILITY OF PURCHASE PAYMENTS                          36
        PRE-DISTRIBUTION TAXATION OF CONTRACTS                      36
        DISTRIBUTIONS AND WITHDRAWALS FROM NON-QUALIFIED              
        CONTRACTS                                                   36
        DISTRIBUTION AND WITHDRAWALS FROM QUALIFIED                   
        CONTRACTS                                                   37
        WITHHOLDING                                                 37
        INVESTMENT DIVERSIFICATION AND CONTROL                      37
        TAX TREATMENT OF THE COMPANY AND THE VARIABLE                 
        ACCOUNT                                                     37
        QUALIFIED RETIREMENT PLANS                                  37
        PENSION AND PROFIT-SHARING PLANS                            38
        TAX-SHELTERED ANNUITIES                                     38
        INDIVIDUAL RETIREMENT ACCOUNTS                              38
        ROTH IRAS                                                   39
    Puerto Rico Tax Considerations                                  39
Administration of the Contract                                      39
Distribution of the Contract                                        39
Performance Information                                             40
Available Information                                               41
Incorporation of Certain Documents by Reference                     41
Additional Information About the Company                            42
    General                                                         42
    Selected Financial Data                                         42
    Cautionary Statement                                            43
    Management's Discussion and Analysis of Financial                 
     Condition and Results of Operations -- Year Ended                
     December 31, 1999                                              43
    Management's Discussion and Analysis of Financial                 
     Condition and Results of Operations -- Quarterly                 
     Period Ended March 31, 2000                                    50
    Capital Resources                                               53
    Other Matters                                                   53
    Quantitative and Qualitative Disclosures About Market             
     Risk                                                           54
    Reinsurance                                                     56
    Reserves                                                        56
    Investments                                                     56
    Competition                                                     57
    Employees                                                       57
    Properties                                                      57
    State Regulation                                                57
Legal Proceedings                                                   58
Accountants                                                         58
Financial Statements                                                58
Table of Contents of Statement of Additional Information           107
Appendix A -- Glossary                                             109
Appendix B -- Withdrawals, Withdrawal Charges and the Market          
 Value Adjustment                                                  112
Appendix C -- Calculation of Basic Death Benefit                   115
Appendix D -- Calculation of Earnings Enhancement Optional            
 Death Benefit Rider                                               116
Appendix E -- Calculation of Death Benefit When All Three             
 Optional Death Benefit Riders are Selected                        117

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SPECIAL TERMS 

     Your Contract is a legal document that uses a number of specially defined
terms. We explain most of the terms that we use in this Prospectus in the       
context where they arise, and some are self-explanatory. In addition, for       
convenient reference, we have compiled a list of these terms in the Glossary    
included at the back of this Prospectus as Appendix A. If, while you are reading
this Prospectus, you come across a term that you do not understand, please refer
to the Glossary for an explanation.                                             

EXPENSE SUMMARY 

      The purpose of the following table is to help you understand the costs and
expenses that you will bear directly and indirectly under a Contract WHEN YOU   
ALLOCATE MONEY TO THE VARIABLE ACCOUNT. The table reflects expenses of the      
Variable Account as well as of each Fund. The table should be considered        
together with the narrative provided under the heading "Contract Charges" in    
this Prospectus, and with the Funds' prospectus(es). In addition to the expenses
listed below, we may deduct premium taxes, where required by state law.         

SUMMARY OF CONTRACT EXPENSES

                                                                [Download Table]
                                                                    
TRANSACTION EXPENSES                                                
Sales Load Imposed on Purchase Payments.....................   $  0 
Deferred Sales Load (as a percentage of Purchase Payments           
  withdrawn) (1)                                                    
  Number of complete Account Years Since Contract Date              
    0.......................................................      6%
    1.......................................................      6%
    2.......................................................      5%
    3.......................................................      5%
    4 or more...............................................      0%
Transfer Fee (2)............................................   $ 15 
ANNUAL ACCOUNT FEE per Contract or Certificate..............   $ 50 
VARIABLE ACCOUNT ANNUAL EXPENSES (as a percentage of average        
  Variable Account assets)                                          

                                                        [Enlarge/Download Table]

FOR CONTRACTS WITH AN INITIAL                 FOR CONTRACTS WITH AN INITIAL               
PURCHASE PAYMENT                              PURCHASE PAYMENT                            
LESS THAN $1,000,000:                         OF $1,000,000 OR MORE:                      
                                                                                          
Mortality and Expense Risks Charge.... 1.20%  Mortality and Expense Risks Charge.... 0.95%
Administrative Expenses Charge........ 0.15%  Administrative Expenses Charge........ 0.15%
                                       =====                                         =====
Total Variable Annuity Annual                 Total Variable Annuity Annual               
Expenses.............................. 1.35%  Expenses.............................. 1.10%

DEATH BENEFIT CHARGE (if one or more of the optional death benefits is elected) 

                                                                [Download Table]

  NUMBER OF      % OF AVERAGE
RIDERS ELECTED   DAILY VALUE 
--------------   ------------
                             
     1              0.15%    
     2              0.25%    
     3              0.40%    

------------------------                                                        

(1) During the first four Contract Years a portion of your Account may be       
  withdrawn each year without imposition of any withdrawal charge and, after
your fourth Account Anniversary, any amount you withdraw is free of     
withdrawal charges.                                                     

(2) Currently, we impose no fee upon transfers; however, we reserve the right to
impose a fee of up to $15 per transfer. In addition, a Market Value     
 Adjustment may be imposed on amounts transferred from or within the Fixed
Account.                                                                

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UNDERLYING FUND ANNUAL EXPENSES (1) 
(AS A PERCENTAGE OF FUND NET ASSETS)

                                                        [Enlarge/Download Table]

                                                             OTHER            TOTAL ANNUAL FUND  
                                         MANAGEMENT    FUND EXPENSES(2)          EXPENSES(2)     
FUND                                        FEES     (AFTER REIMBURSEMENT)  (AFTER REIMBURSEMENT)
----                                     ----------  ---------------------  ---------------------
                                                                                                 
Bond Series.............................    0.60%            0.12%                  0.72%        
Capital Appreciation Series.............    0.71%            0.05%                  0.76%        
Capital Opportunities Series............    0.75%            0.09%                  0.84%        
Emerging Growth Series..................    0.70%            0.05%                  0.75%        
Emerging Markets Equity Series..........    1.25%            0.35%                  1.60%        
Equity Income Series....................    0.75%            0.17%                  0.92%        
Global Asset Allocation Series..........    0.75%            0.14%                  0.89%        
Global Governments Series...............    0.75%            0.15%                  0.90%        
Global Growth Series....................    0.90%            0.11%                  1.01%        
Global Telecommunications Series (4)....    1.00%            0.25%                  1.25%        
Global Total Return Series..............    0.75%            0.14%                  0.89%        
Government Securities Series............    0.55%            0.06%                  0.61%        
High Yield Series.......................    0.75%            0.08%                  0.83%        
International Growth Series.............    0.97%            0.25%                  1.23%        
International Growth and Income                                                                  
 Series.................................    0.97%            0.18%                  1.16%        
Managed Sectors Series..................    0.73%            0.06%                  0.79%        
Massachusetts Investors Growth Stock                                                             
 Series.................................    0.75%            0.08%                  0.83%        
Massachusetts Investors Trust Series....    0.55%            0.04%                  0.59%        
Mid Cap Growth Series (4)...............    0.75%            0.25%                  1.00%        
Money Market Series.....................    0.50%            0.07%                  0.57%        
New Discovery Series....................    0.90%            0.16%                  1.06%        
Research Series.........................    0.70%            0.05%                  0.75%        
Research Growth and Income Series.......    0.75%            0.11%                  0.86%        
Research International Series...........    1.00%            0.23%                  1.23%        
Strategic Growth Series(3)..............    0.75%            0.25%                  1.00%        
Strategic Income Series.................    0.75%            0.33%                  1.08%        
Technology Series (4)...................    0.75%            0.25%                  1.00%        
Total Return Series.....................    0.65%            0.04%                  0.69%        
Utilities Series........................    0.75%            0.07%                  0.82%        

------------------------                                                        

(1) The information relating to Fund expenses was provided by the Funds and we  
have not independently verified it. You should consult the Fund         
prospectus(es) for more information about Fund expenses. For all Funds  
   except the Global Telecommunications Series, the Mid Cap Growth Series, and
  the Technology Series, the "Management Fees," "Other Expenses," and "Total
Fund Expenses" are based on actual expenses for the fiscal year ended   
   December 31, 1999, net of any applicable expense reimbursements or waivers.
   Expense figures shown for the Global Telecommunications Series, the Mid Cap
    Growth Series, and the Technology Series are estimates for 2000 based on the
    applicable expense reimbursement waiver; no actual figures are shown because
these Funds have less than 12 months of investment performance.         

(2) Each Fund has an expense offset arrangement which reduces the Fund's        
   custodian fee based upon the amount of cash maintained by the Fund with its
custodian and dividend disbursing agent, and may enter into such other  
   arrangements and directed brokerage arrangements (which would also have the
effect of reducing the Fund's expenses). Any such fee reductions are not
reflected under                                                         

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"Other Expenses" in the table. Had these fees been taken into account,  
"Total Fund Expenses" for certain of the Funds would be as follows:     

                                                                [Download Table]
                                                                   
Bond Series.................................................  0.71%
Capital Appreciation Series.................................  0.75%
Capital Opportunities Series................................  0.83%
Equity Income Series........................................  0.91%
Global Asset Allocation Series..............................  0.88%
Global Telecommunications Series............................  1.76%
Mid Cap Growth Series.......................................  1.42%
New Discovery Series........................................  1.05%
Strategic Income Series.....................................  1.03%
Utilities Series............................................  0.81%

(3) MFS has agreed to bear the expenses of the Fund such that "Other Expenses," 
after taking into account the expense offset arrangement described in   
 Footnote (2) above, will not exceed 0.25% annually. This arrangement will
   continue until at least May 1, 2001, unless changed with the consent of the
  Series Fund's Board of Directors; provided, however, that this arrangement
will terminate prior to May 1, 2001 in the event that the Fund's "Other 
 Expenses" equal or fall below 0.25% annually. Without taking into account
 this fee waiver and/or expense reimbursement, the Fund's "Other Expenses"
and "Total Fund Expenses" would be estimated to be 3.26% and 4.01%,     
respectively.                                                           

(4) MFS has contractually agreed to bear the expenses of the Fund such that     
  "Other Expenses," after taking into account the expense offset arrangement
described in the previous paragraph, do not exceed 0.25% annually. This 
contractual arrangement will continue until at least May 1, 2001, unless
changed with the consent of the Series Fund's Board of Directors.       

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EXAMPLES

    If you surrender your Contract at the end of the applicable time period,
you would pay the following expenses on a $1,000 investment, assuming an average
Contract size of $50,000, a 5% annual return, and no optional death benefit     
riders have been elected:                                                       

                                                        [Enlarge/Download Table]

                                                              1 YEAR   3 YEARS   5 YEARS   10 YEARS
                                                             --------  --------  --------  --------
                                                                                                   
Bond Series.................................................   $78       $117      $116      $250  
Capital Appreciation Series.................................   $78       $118      $118      $254  
Capital Opportunities Series................................   $79       $121      $123      $263  
Emerging Growth Series......................................   $78       $118      $118      $253  
Emerging Markets Equity Series..............................   $86       $142      $160      $336  
Equity Income Series........................................   $80       $123      $127      $271  
Global Asset Allocation Series..............................   $79       $122      $125      $268  
Global Governments Series...................................   $79       $122      $126      $269  
Global Growth Series........................................   $80       $126      $131      $280  
Global Telecommunications Series............................   $83       $132      $143      $303  
Global Total Return Series..................................   $79       $122      $125      $268  
Government Securities Series................................   $77       $114      $111      $239  
High Yield Series...........................................   $79       $120      $121      $260  
International Growth Series.................................   $83       $132      $142      $301  
International Growth and Income Series......................   $82       $130      $139      $294  
Managed Sectors Series......................................   $78       $119      $120      $257  
Massachusetts Investors Growth Stock Series.................   $79       $120      $122      $262  
Massachusetts Investors Trust Series........................   $76       $114      $110      $237  
Mid Cap Growth Series.......................................   $80       $125      $131      $279  
Money Market Series.........................................   $76       $113      $109      $235  
New Discovery Series........................................   $81       $127      $134      $285  
Research Series.............................................   $78       $118      $118      $253  
Research Growth and Income Series...........................   $79       $121      $124      $265  
Research International Series...............................   $83       $132      $142      $301  
Strategic Growth Series.....................................   $80       $125      $131      $279  
Strategic Income Series.....................................   $81       $128      $135      $287  
Technology Series...........................................   $80       $125      $131      $279  
Total Return Series.........................................   $77       $116      $115      $247  
Utilities Series............................................   $79       $120      $122      $261  

    If you surrender your Contract at the end of the applicable time period,
you would pay the following expenses on a $1,000 investment, assuming an average
Contract size of $50,000, a 5% annual return, and all 3 optional death benefit  
riders have been elected:                                                       

                                                        [Enlarge/Download Table]

                                                              1 YEAR   3 YEARS   5 YEARS   10 YEARS
                                                             --------  --------  --------  --------
                                                                                                   
Bond Series.................................................   $81       $129      $137      $290  
Capital Appreciation Series.................................   $82       $130      $139      $294  
Capital Opportunities Series................................   $83       $132      $142      $302  
Emerging Growth Series......................................   $82       $130      $138      $293  
Emerging Markets Equity Series..............................   $90       $153      $179      $373  
Equity Income Series........................................   $83       $134      $146      $310  
Global Asset Allocation Series..............................   $83       $133      $145      $307  
Global Governments Series...................................   $83       $134      $145      $308  
Global Growth Series........................................   $84       $137      $151      $319  
Global Telecommunications Series............................   $86       $144      $163      $341  
Global Total Return Series..................................   $83       $133      $145      $307  
Government Securities Series................................   $80       $126      $131      $280  
High Yield Series...........................................   $82       $131      $141      $299  
International Growth Series.................................   $86       $143      $162      $339  
International Growth and Income Series......................   $86       $141      $158      $333  
Managed Sectors Series......................................   $82       $131      $140      $297  
Massachusetts Investors Growth Stock Series.................   $83       $132      $142      $301  
Massachusetts Investors Trust Series........................   $80       $125      $130      $278  
Mid Cap Growth Series.......................................   $84       $137      $150      $318  
Money Market Series.........................................   $80       $124      $129      $276  
New Discovery Series........................................   $85       $138      $153      $323  
Research Series.............................................   $82       $130      $138      $293  
Research Growth and Income Series...........................   $83       $133      $143      $304  
Research International Series...............................   $86       $143      $162      $339  
Strategic Growth Series.....................................   $84       $137      $150      $318  
Strategic Income Series.....................................   $85       $139      $154      $325  
Technology Series...........................................   $84       $137      $150      $318  
Total Return Series.........................................   $81       $128      $135      $288  
Utilities Series............................................   $82       $132      $141      $300  

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     If you do NOT surrender your Contract, or if you annuitize your Contract,
at the end of applicable time period, you would pay the following expenses on a 
$1,000 investment, assuming an average Contract size of $50,000, a 5% annual    
return, and no optional death benefit riders have been elected:                 

                                                        [Enlarge/Download Table]

                                                              1 YEAR   3 YEARS   5 YEARS   10 YEARS
                                                             --------  --------  --------  --------
                                                                                                   
Bond Series.................................................   $22       $68       $116      $250  
Capital Appreciation Series.................................   $22       $69       $118      $254  
Capital Opportunities Series................................   $23       $72       $123      $263  
Emerging Growth Series......................................   $22       $69       $118      $253  
Emerging Markets Equity Series..............................   $31       $94       $160      $336  
Equity Income Series........................................   $24       $74       $127      $271  
Global Asset Allocation Series..............................   $24       $73       $125      $268  
Global Governments Series...................................   $24       $73       $126      $269  
Global Growth Series........................................   $25       $77       $131      $280  
Global Telecommunications Series............................   $27       $84       $143      $303  
Global Total Return Series..................................   $24       $73       $125      $268  
Government Securities Series................................   $21       $65       $111      $239  
High Yield Series...........................................   $23       $71       $121      $260  
International Growth Series.................................   $27       $83       $142      $301  
International Growth and Income Series......................   $26       $81       $139      $294  
Managed Sectors Series......................................   $23       $70       $120      $257  
Massachusetts Investors Growth Stock Series.................   $23       $71       $122      $262  
Massachusetts Investors Trust Series........................   $21       $64       $110      $237  
Mid Cap Growth Series.......................................   $25       $76       $131      $279  
Money Market Series.........................................   $21       $63       $109      $235  
New Discovery Series........................................   $25       $78       $134      $285  
Research Series.............................................   $22       $69       $118      $253  
Research Growth and Income Series...........................   $23       $72       $124      $265  
Research International Series...............................   $27       $83       $142      $301  
Strategic Growth Series.....................................   $25       $76       $131      $279  
Strategic Income Series.....................................   $26       $79       $135      $287  
Technology Series...........................................   $25       $76       $131      $279  
Total Return Series.........................................   $22       $67       $115      $247  
Utilities Series............................................   $23       $71       $122      $261  

     If you do NOT surrender your Contract, or if you annuitize your Contract,
at the end of applicable time period, you would pay the following expenses on a 
$1,000 investment, assuming an average Contract size of $50,000, a 5% annual    
return, and all 3 optional death benefit riders have been elected:              

                                                        [Enlarge/Download Table]

                                                              1 YEAR   3 YEARS   5 YEARS   10 YEARS
                                                             --------  --------  --------  --------
                                                                                                   
Bond Series.................................................   $26       $ 80      $137      $290  
Capital Appreciation Series.................................   $26       $ 81      $139      $294  
Capital Opportunities Series................................   $27       $ 84      $142      $302  
Emerging Growth Series......................................   $26       $ 81      $138      $293  
Emerging Markets Equity Series..............................   $35       $106      $179      $373  
Equity Income Series........................................   $28       $ 86      $146      $310  
Global Asset Allocation Series..............................   $28       $ 85      $145      $307  
Global Governments Series...................................   $28       $ 85      $145      $308  
Global Growth Series........................................   $29       $ 89      $151      $319  
Global Total Return Series..................................   $31       $ 96      $163      $341  
Global Telecommunications Series............................   $28       $ 85      $145      $307  
Government Securities Series................................   $25       $ 77      $131      $280  
High Yield Series...........................................   $27       $ 83      $141      $299  
International Growth Series.................................   $31       $ 95      $162      $339  
International Growth and Income Series......................   $30       $ 93      $158      $333  
Managed Sectors Series......................................   $27       $ 82      $140      $297  
Massachusetts Investors Growth Stock Series.................   $27       $ 83      $142      $301  
Massachusetts Investors Trust Series........................   $25       $ 76      $130      $278  
Mid Cap Growth Series.......................................   $29       $ 88      $150      $318  
Money Market Series.........................................   $25       $ 75      $129      $276  
New Discovery Series........................................   $29       $ 90      $153      $323  
Research Series.............................................   $26       $ 81      $138      $293  
Research Growth and Income Series...........................   $27       $ 84      $143      $304  
Research International Series...............................   $31       $ 95      $162      $339  
Strategic Growth Series.....................................   $29       $ 88      $150      $318  
Strategic Income Series.....................................   $30       $ 91      $154      $325  
Technology Series...........................................   $29       $ 88      $150      $318  
Total Return Series.........................................   $26       $ 79      $135      $288  
Utilities Series............................................   $27       $ 83      $141      $300  

  THE EXAMPLES SHOULD NOT BE CONSIDERED TO BE REPRESENTATIONS OF PAST OR
FUTURE EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LOWER THAN THOSE SHOWN.  

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THE ANNUITY CONTRACT

     Sun Life Assurance Company of Canada (U.S.) (the "Company", "we" or "us")
and Sun Life of Canada (U.S.) Variable Account F (the "Variable Account") offer 
the Contract to groups and individuals for use in connection with their         
retirement plans. The Contract is available on a group basis and, in certain    
states, may be available on an individual basis. We issue an Individual Contract
directly to the individual owner of the Contract. We issue a Group Contract to  
the Owner, covering all individuals participating under the Group Contract; each
individual receives a Certificate that evidences his or her participation under 
the Group Contract.                                                             

      In this Prospectus, unless we state otherwise, we refer to both the owners
of Individual Contracts and participating individuals under Group Contracts as  
"Participants" and we address all Participants as "you"; we use the term        
"Contracts" to include Individual Contracts, Group Contracts, and Certificates  
issued under Group Contracts. For the purpose of determining benefits under both
Individual Contracts and Group Contracts, we establish an Account for each      
Participant, which we will refer to as "your" Account or a "Participant         
Account."                                                                       

     Your Contract provides a number of important benefits for your retirement
planning. It has an Accumulation Phase, during which you make payments under the
Contract and allocate them to one or more Variable Account or Fixed Account     
options, and an Income Phase, during which we make annuity payments based on the
amount you have accumulated. Your Contract provides tax deferral, so that you do
not pay taxes on your earnings under your Contract until you withdraw them. It  
provides a basic death benefit if you die during the Accumulation Phase. You may
enhance the basic death benefit by electing one or more optional death benefit  
riders and paying an additional charge for each optional death benefit rider you
elect. Finally, if you so elect, during the Income Phase we will make annuity   
payments to you or someone else for life or for another period that you choose. 

      You choose these benefits on a variable or fixed basis or a combination of
both. When you choose Variable Account investment options or a Variable Annuity 
option, your benefits will be responsive to changes in the economic environment,
including inflationary forces and changes in rates of return available from     
different types of investments. With these variable options, you assume all     
investment risk under your Contract. When you choose a Guarantee Period in our  
Fixed Account or a Fixed Annuity option, we assume the investment risk, except  
in the case of early withdrawals in the Accumulation Phase, where you bear the  
risk of unfavorable interest rate changes. You also bear the risk that the      
interest rates we will offer in the future and the rates we will use in         
determining your Fixed Annuity might not exceed our minimum guaranteed rate,    
which is 3% per year during the Accumulation Phase and 2.5% per year during the 
Income Phase, compounded annually.                                              

The Contract is designed for use in connection with retirement and  
deferred compensation plans, some of which qualify for favorable federal income 
tax treatment under Sections 401, 403, 408 or 408A of the Internal Revenue Code.
The Contract is also designed so that it may be used in connection with certain 
non-tax-qualified retirement plans, such as payroll savings plans and such other
groups (trusteed or nontrusteed) as may be eligible under applicable law. We    
refer to Contracts used with plans that receive favorable tax treatment as      
"Qualified Contracts," and all other Contracts as "Non-Qualified Contracts."    

COMMUNICATING TO US ABOUT YOUR CONTRACT 

      All materials sent to us, including Purchase Payments, must be sent to our
Annuity Mailing Address as set forth on the first page of this Prospectus. For  
all telephone communications, you must call (800) 752-7215.                     

     Unless this Prospectus states differently, we will consider all materials
sent to us and all telephone communications to be received on the date we       
actually receive them at our Annuity Mailing Address. However, we will consider 
all financial transactions, including Purchase Payments, withdrawal requests and
transfer instructions, to be received on the next Business Day if we receive    
them (1) on a day that is not a Business Day or (2) after 4:00 p.m., Eastern    
Time.                                                                           

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When we specify that notice to us must be in writing, we reserve the
right, at our sole discretion, to accept notice in another form.                

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) 

We are a stock life insurance company incorporated under the laws of
Delaware on January 12, 1970. We do business in 48 states, the District of      
Columbia, and Puerto Rico, and we have an insurance company subsidiary that does
business in New York. Our Executive Office mailing address is One Sun Life      
Executive Park, Wellesley Hills, Massachusetts 02481.                           

    We are an indirect wholly-owned subsidiary of Sun Life Assurance Company
of Canada ("Sun Life (Canada)"). Sun Life (Canada) completed its demutualization
on March 22, 2000. As a result of the demutualization, a new holding company,   
Sun Life Financial Services of Canada Inc. ("Sun Life Financial"), is now the   
ultimate parent of Sun Life (Canada) and the Company. Sun Life Financial, a     
corporation organized in Canada, is a reporting company under the Securities    
Exchange Act of 1934 with common shares listed on the Toronto, New York, London,
and Manila stock exchanges.                                                     

THE VARIABLE ACCOUNT

 We established the Variable Account as a separate account on July 13,
1989, pursuant to a resolution of our Board of Directors. The Variable Account  
funds the Contract and various other variable annuity and variable life         
insurance product contracts which we offer. These other products may have       
features, benefits and charges that are different from those under the Contract.

      Under Delaware insurance law and the Contract, the income, gains or losses
of the Variable Account are credited to or charged against the assets of the    
Variable Account without regard to the other income, gains, or losses of the    
Company. These assets are held in relation to the Contract and other variable   
annuity and variable life insurance contracts that provide benefits that vary in
accordance with the investment performance of the Variable Account. Although the
assets maintained in the Variable Account will not be charged with any          
liabilities arising out of any other business we conduct, all obligations       
arising under a Contract, including the promise to make annuity payments, are   
general corporate obligations of the Company.                                   

  The assets of the Variable Account are divided into Sub-Accounts. Each
Sub-Account invests exclusively in shares of a specific Fund. All amounts       
allocated to the Variable Account will be used to purchase Fund shares as       
designated by you at their net asset value. Any and all distributions made by   
the Funds with respect to the shares held by the Variable Account will be       
reinvested to purchase additional Fund shares at their net asset value.         
Deductions will be made from the Variable Account for cash withdrawals, annuity 
payments, death benefits, Account Fees, Contract charges against the assets of  
the Variable Account for the assumption of mortality and expense risks,         
administrative expenses and any applicable taxes. The Variable Account will be  
fully invested in Fund shares at all times.                                     

VARIABLE ACCOUNT OPTIONS: 
THE FUNDS 

The MFS/Sun Life Series Trust (the "Series Fund") is an open-end    
management investment company registered under the Investment Company Act of    
1940. Our affiliate, Massachusetts Financial Services Company ("MFS"), serves as
the investment adviser to the Series Fund.                                      

   The Series Fund is composed of 30 independent portfolios of securities,
each of which has separate investment objectives and policies. Shares of the    
Series Fund are issued in 30 series (each, a "Fund"), each corresponding to one 
of the portfolios. The Contract provides for investment by the Sub-Accounts in  
shares of the 29 Funds described below. Additional portfolios may be added to   
the Series Fund which may or may not be available for investment by the Variable
Account.                                                                        

BOND SERIES will mainly seek as high a level of current income as is  
believed to be consistent with prudent investment risk; its secondary 
objective is to seek to protect shareholders' capital.                

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   CAPITAL APPRECIATION SERIES will seek to maximize capital appreciation by
     investing in securities of all types, with major emphasis on common stocks.

CAPITAL OPPORTUNITIES SERIES will seek capital appreciation.          

EMERGING GROWTH SERIES will seek long-term growth of capital.         

EMERGING MARKETS EQUITY SERIES will seek capital appreciation.        

     EQUITY INCOME SERIES will mainly seek reasonable income by investing mainly
    in income producing securities; its secondary objective is to seek capital
appreciation.                                                         

  GLOBAL ASSET ALLOCATION SERIES will seek total return over the long term
 through investments in equity and fixed income securities and will also
seek to have low volatility of share price (I.E., net asset value per 
share) and reduced risk (compared to an aggressive equity/fixed income
portfolio).                                                           

 GLOBAL GOVERNMENTS SERIES will seek to provide moderate current income,
preservation of capital and growth of capital by investing in debt    
   obligations that are issued or guaranteed as to principal and interest by
either (i) the U.S. Government, its agencies, authorities, or         
 instrumentalities, or (ii) the governments of foreign countries (to the
  extent that the Fund's adviser believes that the higher yields available
   from foreign government securities are sufficient to justify the risks of
investing in these securities).                                       

GLOBAL GROWTH SERIES will seek capital appreciation by investing in   
securities of companies worldwide growing at rates expected to be well
above the growth rate of the overall U.S. economy.                    

 GLOBAL TELECOMMUNICATIONS SERIES will seek long-term growth of capital.

GLOBAL TOTAL RETURN SERIES will seek total return by investing in     
   securities which will provide above average current income (compared to a
 portfolio invested entirely in equity securities) and opportunities for
long-term growth of capital and income.                               

   GOVERNMENT SECURITIES SERIES will seek current income and preservation of
capital by investing in U.S. Government and U.S. Government-related   
securities.                                                           

     HIGH YIELD SERIES will seek high current income and capital appreciation by
  investing primarily in certain low rated or unrated securities (possibly
with equity features) of U.S. and foreign issuers (also known as "junk
bonds").                                                              

INTERNATIONAL GROWTH SERIES will seek capital appreciation.           

   INTERNATIONAL GROWTH AND INCOME SERIES will seek capital appreciation and
current income.                                                       

MANAGED SECTORS SERIES will seek capital appreciation by varying the  
weighting of its portfolio among 13 industry sectors.                 

    MASSACHUSETTS INVESTORS GROWTH STOCK SERIES will seek to provide long-term
growth of capital and future income rather than current income.       

    MASSACHUSETTS INVESTORS TRUST SERIES will seek long-term growth of capital
and future income while providing more current dividend income than is
normally obtainable from a portfolio of only growth stocks.           

MID CAP GROWTH SERIES will seek long-term growth of capital.          

MONEY MARKET SERIES will seek maximum current income to the extent    
  consistent with stability of principal by investing exclusively in money
market instruments maturing in less than 13 months.                   

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NEW DISCOVERY SERIES will seek capital appreciation.                  

     RESEARCH SERIES will seek to provide long-term growth of capital and future
income.                                                               

    RESEARCH GROWTH AND INCOME SERIES will seek to provide long-term growth of
capital, current income and growth of income.                         

RESEARCH INTERNATIONAL SERIES will seek capital appreciation.         

STRATEGIC GROWTH SERIES will seek capital appreciation.               

STRATEGIC INCOME SERIES will seek to provide high current income by   
 investing in fixed income securities and will seek to take advantage of
     opportunities to realize significant capital appreciation while maintaining
a high level of current income.                                       

TECHNOLOGY SERIES will seek capital appreciation.                     

TOTAL RETURN SERIES will seek mainly to obtain above-average income   
     (compared to a portfolio entirely invested in equity securities) consistent
with prudent employment of capital; its secondary objective is to take
advantage of opportunities for growth of capital and income since many
 securities offering a better than average yield may also possess growth
potential.                                                            

    UTILITIES SERIES will seek capital growth and current income (income above
    that available from a portfolio invested entirely in equity securities) by
  investing, under normal market conditions, at least 65% of its assets in
  equity and debt securities of both domestic and foreign companies in the
utilities industry.                                                   

Each Fund pays fees to MFS, as its investment adviser, for services 
rendered pursuant to investment advisory agreements. MFS also serves as         
investment adviser to each of the funds in the MFS Family of Funds, and to      
certain other investment companies established by MFS and/or us. MFS            
Institutional Advisers, Inc., a wholly-owned subsidiary of MFS, provides        
investment advice to substantial private clients. MFS and its predecessor       
organizations have a history of money management dating from 1924. MFS operates 
as an autonomous organization and the obligation of performance with respect to 
the investment advisory and underwriting agreements (including supervision of   
the sub-advisers noted below) is solely that of MFS. We undertake no obligation 
in this regard.                                                                 

    MFS may serve as the investment adviser to other mutual funds which have
similar investment goals and principal investment policies and risks as the     
Funds, and which may be managed by a Fund's portfolio manager(s). While a Fund  
may have many similarities to these other funds, its investment performance will
differ from their investment performance. This is due to a number of differences
between the Fund and these similar products, including differences in sales     
charges, expense ratios and cash flows.                                         

The Series Fund also offers its shares to other separate accounts   
established by the Company and our New York subsidiary in connection with       
variable annuity and variable life insurance contracts. Although we do not      
anticipate any disadvantages to this arrangement, there is a possibility that a 
material conflict may arise between the interests of the Variable Account and   
one or more of the other separate accounts investing in the Series Fund. A      
conflict may occur due to differences in tax laws affecting the operations of   
variable life and variable annuity separate accounts, or some other reason. We  
and the Series Fund's Board of Trustees will monitor events for such conflicts, 
and, in the event of a conflict, we will take steps necessary to remedy the     
conflict, including withdrawal of the Variable Account from participation in the
Fund which is involved in the conflict or substitution of shares of other Funds 
or other mutual funds.                                                          

MORE COMPREHENSIVE INFORMATION ABOUT THE FUNDS AND THE MANAGEMENT,  
INVESTMENT OBJECTIVES, POLICIES, RESTRICTIONS, EXPENSES AND POTENTIAL RISKS OF  
EACH FUND MAY BE FOUND IN THE ACCOMPANYING CURRENT FUND PROSPECTUS(ES). YOU     
SHOULD READ THE FUND PROSPECTUS(ES) CAREFULLY BEFORE INVESTING. THE STATEMENT OF
ADDITIONAL INFORMATION OF THE FUNDS IS AVAILABLE BY CALLING (800) 752-7215.     

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THE FIXED ACCOUNT 

 The Fixed Account is made up of all the general assets of the Company
other than those allocated to any separate account. Amounts you allocate to     
Guarantee Periods become part of the Fixed Account, and are available to fund   
the claims of all classes of our customers, including claims for benefits under 
the Contracts.                                                                  

    We will invest the assets of the Fixed Account in those assets we choose
that are allowed by applicable state insurance laws. In general, these laws     
permit investments, within specified limits and subject to certain              
qualifications, in federal, state and municipal obligations, corporate bonds,   
preferred and common stocks, real estate mortgages, real estate and certain     
other investments. We intend to invest primarily in investment-grade fixed      
income securities (I.E., rated by a nationally recognized rating service within 
the 4 highest grades) or instruments we believe are of comparable quality.      

 We are not obligated to invest amounts allocated to the Fixed Account
according to any particular strategy, except as may be required by applicable   
state insurance laws. You will not have a direct or indirect interest in the    
Fixed Account investments.                                                      

THE FIXED ACCOUNT OPTIONS:
THE GUARANTEE PERIODS 

      You may elect one or more Guarantee Period(s) from those we make available
from time to time. We publish Guaranteed Interest Rates for each Guarantee      
Period offered. We may change the Guaranteed Interest Rates we offer from time  
to time, but no Guaranteed Interest Rate will ever be less than 3% per year,    
compounded annually. Also, once we have accepted your allocation to a particular
Guarantee Period, we promise that the Guaranteed Interest Rate applicable to    
that allocation will not change for the duration of the Guarantee Period.       

      We determine Guaranteed Interest Rates at our discretion. We do not have a
specific formula for establishing the rates for different Guarantee Periods. Our
determination will be influenced by the interest rates on fixed income          
investments in which we may invest amounts allocated to the Guarantee Periods.  
We will also consider other factors in determining these rates, including       
regulatory and tax requirements, sales commissions and administrative expenses  
borne by us, general economic trends and competitive factors. We cannot predict 
the level of future interest rates.                                             

   We may from time to time at our discretion offer special interest rates
for new Purchase Payments that are higher than the rates we are then offering   
for renewals or transfers.                                                      

   Early withdrawals from your allocation to a Guarantee Period, including
cash withdrawals, transfers and commencement of an annuity option, may be       
subject to a Market Value Adjustment, which could decrease or increase the value
of your Account. See "Withdrawals, Withdrawal Charge and Market Value           
Adjustment."                                                                    

THE ACCUMULATION PHASE

  During the Accumulation Phase of your Contract, you make payments into
your Account, and your earnings accumulate on a tax-deferred basis. The         
Accumulation Phase begins with our acceptance of your first Purchase Payment and
ends the Business Day before your Annuity Commencement Date. The Accumulation   
Phase will end sooner if you surrender your Contract or die before the Annuity  
Commencement Date.                                                              

ISSUING YOUR CONTRACT                                                           

 When you purchase a Contract, a completed Application and the initial
Purchase Payment are sent to us for acceptance. When we accept an Individual    
Contract, we issue the Contract to you. When we accept a Group Contract, we     
issue the Contract to the Owner; we issue a Certificate to you as a Participant.

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 We will credit your initial Purchase Payment to your Account within 2
Business Days of receiving your completed Application. If your Application is   
not complete, we will notify you. If we do not have the necessary information to
complete the Application within 5 Business Days, we will send your money back to
you or ask your permission to retain your Purchase Payment until the Application
is made complete. Then we will apply the Purchase Payment within 2 Business Days
of when the Application is complete.                                            

AMOUNT AND FREQUENCY OF PURCHASE PAYMENTS                                       

    The amount of Purchase Payments may vary; however, we will not accept an
initial Purchase Payment of less than $10,000, and each additional Purchase     
Payment must be at least $1,000, unless we waive these limits. In addition, we  
will not accept a Purchase Payment if your Account Value is over $2 million, or 
if the Purchase Payment would cause your Account Value to exceed $2 million,    
unless we have approved the Payment in advance. Within these limits, you may    
make Purchase Payments at any time during the Accumulation Phase.               

ALLOCATION OF NET PURCHASE PAYMENTS                                             

    You may allocate your Purchase Payments among the different Sub-Accounts
and Guarantee Periods we offer, but any allocation to a Guarantee Period must be
at least $1,000. Over the life of your Contract, you may allocate amounts among 
as many as 18 of the available investment options.                              

In your Application, you may specify the percentage of each Purchase
Payment to be allocated to each Sub-Account or Guarantee Period. These          
percentages are called your allocation factors. You may change the allocation   
factors for future Payments by sending us notice of the change in a form        
acceptable to us, as required. We will use your new allocation factors for the  
first Purchase Payment we receive with or after we have received notice of the  
change, and for all future Purchase Payments, until we receive another change   
notice.                                                                         

Although it is currently not our practice, we may deduct applicable 
premium taxes or similar taxes from your Purchase Payments (see "Contract       
Charges -- Premium Taxes"). In that case, we will credit your Net Purchase      
Payment, which is the Purchase Payment minus the amount of those taxes.         

YOUR ACCOUNT                                                                    

   When we accept your first Purchase Payment, we establish an Account for
you, which we maintain throughout the Accumulation Phase of your Contract.      

YOUR ACCOUNT VALUE                                                              

  Your Account Value is the sum of the value of the 2 components of your
Contract, the Variable Account portion of your Contract ("Variable Account      
Value") and the Fixed Account portion of your Contract ("Fixed Account Value"). 
These 2 components are calculated separately, as described below under "Variable
Account Value" and "Fixed Account Value."                                       

VARIABLE ACCOUNT VALUE                                                          

VARIABLE ACCUMULATION UNITS                                         

      In order to calculate your Variable Account Value, we use a measure called
a Variable Accumulation Unit for each Sub-Account. Your Variable Account Value  
is the sum of your Account Value in each Sub-Account, which is the number of    
your Variable Accumulation Units for that Sub-Account times the value of each   
Unit.                                                                           

VARIABLE ACCUMULATION UNIT VALUE                                    

      The value of each Variable Accumulation Unit in a Sub-Account reflects the
net investment performance of that Sub-Account. We determine that value once on 
each day that the New York Stock Exchange is open for trading, at the close of  
trading, which is currently 4:00 p.m., Eastern Time. (The                       

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close of trading is determined by the New York Stock Exchange.) We also may     
determine the value of Variable Accumulation Units of a Sub-Account on days the 
Exchange is closed if there is enough trading in securities held by that        
Sub-Account to materially affect the value of the Variable Accumulation Units.  
Each day we make a valuation is called a "Business Day." The period that begins 
at the time Variable Accumulation Units are valued on a Business Day and ends at
that time on the next Business Day is called a "Valuation Period." On days other
than Business Days, the value of a Variable Accumulation Unit does not change.  

To measure these values, we use a factor -- which we call the "Net  
Investment Factor" -- which represents the net return on the Sub-Account's      
assets. At the end of any Valuation Period, the value of a Variable Accumulation
Unit for a Sub-Account is equal to the value of that Sub-Account's Variable     
Accumulation Units at the end of the previous Valuation Period, multiplied by   
the Net Investment Factor. We calculate the Net Investment Factor by dividing   
(1) the net asset value of a Fund share held in the Sub-Account at the end of   
that Valuation Period, plus the per share amount of any dividend or capital     
gains distribution made by that Fund during the Valuation Period, by (2) the net
asset value per share of the Fund share at the end of the previous Valuation    
Period; we then deduct a factor representing the mortality and expense risk     
charge and administrative expense charge for each day in the Valuation Period   
(see "Contract Charges").                                                       

  For a hypothetical example of how we calculate the value of a Variable
Accumulation Unit, see the Statement of Additional Information.                 

CREDITING AND CANCELING VARIABLE ACCUMULATION UNITS                 

     When we receive an allocation to a Sub-Account either from a Net Purchase
Payment or a transfer of Account Value, we credit that amount to your Account in
Variable Accumulation Units. Similarly, we cancel Variable Accumulation Units   
when you transfer or withdraw amounts from a Sub-Account, or when we deduct     
certain charges under the Contract. We determine the number of Units credited or
canceled by dividing the dollar amount by the Variable Accumulation Unit value  
for that Sub-Account at the end of the Valuation Period during which the        
transaction or charge is effective.                                             

FIXED ACCOUNT VALUE                                                             

     Your Fixed Account value is the sum of all amounts allocated to Guarantee
Periods, either from Net Purchase Payments, transfers or renewals, plus interest
credited on those amounts, and minus withdrawals, transfers out of Guarantee    
Periods, and any deductions for charges under the Contract taken from your Fixed
Account Value.                                                                  

    A Guarantee Period begins the day we apply your allocation and ends when
all calendar years (or months if the Guarantee Period is less than one year) in 
the Guarantee Period (measured from the end of the calendar month in which the  
amount was allocated to the Guarantee Period) have elapsed. The last day of the 
Guarantee Period is its Renewal Date.                                           

  Each additional Purchase Payment, transfer or renewal credited to your
Fixed Account Value will result in a new Guarantee Period with its own Renewal  
Date. Amounts allocated at different times to Guarantee Periods of the same     
duration may have different Renewal Dates.                                      

CREDITING INTEREST                                                  

We credit interest on amounts allocated to a Guarantee Period at the
applicable Guaranteed Interest Rate for the duration of the Guarantee Period.   
During the Guarantee Period, we credit interest daily at a rate that yields the 
Guaranteed Interest Rate on an annual effective basis.                          

GUARANTEE AMOUNTS                                                   

  Each separate allocation you make to a Guarantee Period, together with
interest credited thereon, is called a Guarantee Amount. Each Guarantee Amount  
is treated separately for purposes of determining the Market Value Adjustment. A
Guarantee Period that will extend beyond your maximum                           

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Annuity Commencement Date will result in an application of a Market Value       
Adjustment upon annuitization or withdrawals. Each new allocation to a Guarantee
Period must be at least $1,000.                                                 

RENEWALS                                                            

   We will notify you in writing between 45 and 75 days before the Renewal
Date for any Guarantee Amount. A new Guarantee Period of the same duration will 
begin automatically for that Guarantee Amount on the first day following the    
Renewal Date, unless before the Renewal Date we receive:                        

    (1) written notice from you electing a different Guarantee Period from among
those we then offer, or                                           

(2) instructions to transfer the Guarantee Amount to one or more        
       Sub-Accounts, in accordance with the transfer privilege provisions of the
Contract (see "Transfer Privilege").                              

      A Guarantee Amount will not renew into a Guarantee Period that will extend
beyond your Maximum Annuity Commencement Date. Unless you notify us otherwise,  
we will automatically renew your Guarantee Amount into the next available       
Guarantee Period.                                                               

EARLY WITHDRAWALS                                                   

If you withdraw, transfer, or annuitize an allocation to a Guarantee
Period 30 days prior to the Renewal Date, we will apply a Market Value          
Adjustment to the transaction. This could result in an increase or a decrease of
your Account Value, depending on interest rates at the time. You bear the risk  
that you will receive less than your principal if the Market Value Adjustment   
applies.                                                                        

TRANSFER PRIVILEGE                                                              

PERMITTED TRANSFERS                                                 

During the Accumulation Phase, you may transfer all or part of your 
Account Value to one or more Sub-Accounts or Guarantee Periods then available,  
subject to the following restrictions:                                          

-  You may not make more than 12 transfers in any Account Year;     

 -  The amount transferred from a Sub-Account must be at least $1,000,
      unless you are transferring your entire balance in that Sub-Account;

     -  Your Account Value remaining in a Sub-Account must be at least $1,000;

-  The amount transferred from a Guarantee Period must be the entire
        Guarantee Amount, except for transfers of interest credited during the
current Account Year;                                         

  -  At least 30 days must elapse between transfers to or from Guarantee
Periods;                                                      

    -  Transfers to or from Sub-Accounts are subject to terms and conditions
that may be imposed by the Funds; and                         

    -  We impose additional restrictions on market timers, which are further
described below.                                              

These restrictions do not apply to transfers made under an approved 
dollar-cost averaging program.                                                  

    There is usually no charge imposed on transfers; however, we reserve the
right to impose a transfer charge of $15 for each transfer. Transfers out of a  
Guarantee Period more than 30 days before the Renewal Date or any time after the
Renewal Date will be subject to the Market Value Adjustment described below.    
Under current law, there is no tax liability for transfers.                     

REQUESTS FOR TRANSFERS                                              

You may request transfers in writing or by telephone. The telephone 
transfer privilege is available automatically, and does not require your written
election. We will require personal identifying                                  

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information to process a request for a transfer made by telephone. We will not  
be liable for following instructions communicated by telephone that we          
reasonably believe are genuine.                                                 

   Your transfer request will be effective as of the close of the Business
Day if we receive your transfer request before the earlier of (a) 4:00 p.m.     
Eastern Time on a Business Day, or (b)the close of the New York Stock Exchange  
on days that the Stock Exchange closes before 4:00 p.m. Otherwise, your transfer
request will be effective on the next Business Day.                             

MARKET TIMERS                                                       

The Contracts are not designed for professional market timing       
organizations or other entities using programmed and frequent transfers. If you 
wish to employ such strategies, you should not purchase a Contract. Accordingly,
transfers may be subject to restrictions if exercised by a market timing firm or
any other third party authorized to initiate transfer transactions on behalf of 
multiple Participants. In imposing such restrictions, we may, among other       
things, not accept (1) the transfer instructions of any agent acting under a    
power of attorney on behalf of more than one Participant, or (2) the transfer   
instructions of individual Participants who have executed preauthorized transfer
forms that are submitted at the same time by market timing firms or other third 
parties on behalf of more than one Participant. We will not impose these        
restrictions unless our actions are reasonably intended to prevent the use of   
such transfers in a manner that will disadvantage or potentially impair the     
Contract rights of other Participants.                                          

 In addition, the Series Fund has reserved the right to temporarily or
permanently refuse exchange requests from the Variable Account if, in MFS'      
judgment, a Fund would be unable to invest effectively in accordance with its   
investment objective and policies, or would otherwise potentially be adversely  
affected. In particular, a pattern of exchanges that coincide with a market     
timing strategy may be disruptive to a Fund and therefore may be refused.       
Accordingly, the Variable Account may not be in a position to effectuate        
transfers and may refuse transfer requests without prior notice. We also reserve
the right, for similar reasons, to refuse or delay exchange requests involving  
transfers to or from the Fixed Account.                                         

WAIVERS; REDUCED CHARGES; CREDITS; SPECIAL GUARANTEED INTEREST RATES            

    We may reduce or waive the withdrawal charge, mortality and expense risk
charges, the administrative service fee or the annual Account Fee, credit       
additional amounts, grant special Guaranteed Interest Rates in certain          
situations, or offer other options or benefits. These situations may include    
sales of Contracts (1) where selling and/or maintenance costs associated with   
the Contracts are reduced, such as the sale of several Contracts to the same    
Participant, sales of large Contracts, and certain group sales, and (2) to      
officers, directors and employees of the Company or its affiliates, registered  
representatives and employees of broker-dealers with a current selling agreement
with the Company and affiliates of such representatives and broker-dealers,     
employees of affiliated asset management firms, and persons who have retired    
from such positions ("Eligible Employees") and immediate family members of      
Eligible Employees. Eligible Employees and their immediate family members may   
also purchase a Contract without regard to minimum Purchase Payment             
requirements. For other situations in which withdrawal charges may be waived,   
see "Withdrawals, Withdrawal Charge and Market Value Adjustment."               

OPTIONAL PROGRAMS                                                               

DOLLAR-COST AVERAGING                                               

     Dollar-cost averaging allows you to invest gradually, over time, in up to
12 Sub-Accounts. You may select a dollar-cost averaging program at no extra     
charge by allocating a minimum of $1,000 to a designated Sub-Account or to a    
Guarantee Period we make available in connection with the program. Amounts      
allocated to the Fixed Account under the program will earn interest at a rate   
declared by the Company for the Guarantee Period you select. Previously applied 
amounts may not be transferred to a Guarantee Period made available in          
connection with this program. At regular time intervals, we will                

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transfer the same amount automatically to one or more Sub-Accounts that you     
choose, up to a maximum of 12 Sub-Accounts. The program continues until your    
Account Value allocated to the program is depleted or you elect to stop the     
program. The final amount transferred from the Fixed Account will include all   
interest earned.                                                                

  No Market Value Adjustment (either positive or negative) will apply to
amounts automatically transferred from the Fixed Account under the dollar-cost  
averaging program. However, if you discontinue or alter the program prior to    
completion, amounts remaining in the Fixed Account will be transferred to the   
Money Market Fund investment option under the Contract, unless you instruct us  
otherwise, and the Market Value Adjustment will be applied. Any new allocation  
of a Purchase Payment to the program will be treated as commencing a new        
dollar-cost averaging program and is subject to the $1,000 minimum.             

    The main objective of a dollar-cost averaging program is to minimize the
impact of short-term price fluctuations on Account Value. In general, since you 
transfer the same dollar amount to the variable investment options at set       
intervals, dollar-cost averaging allows you to purchase more Variable           
Accumulation Units (and, indirectly, more Fund shares) when prices are low and  
fewer Variable Accumulation Units (and, indirectly, fewer Fund shares) when     
prices are high. Therefore, you may achieve a lower average cost per Variable   
Accumulation Unit over the long term. A dollar-cost averaging program allows you
to take advantage of market fluctuations. However, it is important to understand
that a dollar-cost averaging program does not assure a profit or protect against
loss in a declining market. We do not allow transfers into any of the Guarantee 
Periods.                                                                        

ASSET ALLOCATION                                                    

     One or more asset allocation programs may be available in connection with
the Contract, at no extra charge. Asset allocation is the process of investing  
in different asset classes -- such as equity funds, fixed income funds, and     
money market funds -- depending on your personal investment goals, tolerance for
risk, and investment time horizon. By spreading your money among a variety of   
asset classes, you may be able to reduce the risk and volatility of investing,  
although there are no guarantees, and asset allocation does not insure a profit 
or protect against loss in a declining market.                                  

     Currently, you may select one of 3 asset allocation models, each of which
represents a combination of Sub-Accounts with a different level of risk. The    
available models are: the conservative asset allocation model, the moderate     
asset allocation model, and the aggressive asset allocation model. Each model   
allocates a different percentage of Account Value to Sub-Accounts investing in  
the various asset classes, with the conservative asset allocation model         
allocating the lowest percentage to Sub-Accounts investing in the equity asset  
class and the aggressive asset allocation model allocating the highest          
percentage to the equity asset class. These asset allocation models, as well as 
the terms and conditions of the asset allocation program, are fully described in
a separate brochure. We may add or delete such programs in the future.          

    If you elect an asset allocation program, we will automatically allocate
your Purchase Payments among the Sub-Accounts represented in the model you      
choose. By electing an asset allocation program, you thereby authorize us to    
automatically reallocate your investment options that participate in the asset  
allocation program on a quarterly basis, or as determined by the terms of the   
Asset Allocation Program, to reflect the current composition of the model you   
have selected, without further instruction, until we receive notification that  
you wish to terminate the program or choose a different model.                  

SYSTEMATIC WITHDRAWAL PROGRAM                                       

If you have an Account Value of $10,000 or more, you may select our 
Systematic Withdrawal Program.                                                  

 Under this program, you determine the amount and frequency of regular
withdrawals you would like to receive from your Fixed Account Value and/or      
Variable Account Value and we will effect them automatically. The withdrawals   
under this program may be subject to surrender charges or a Market              

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Value Adjustment. They may also be included as income and subject to a 10%      
federal tax penalty. You should consult your tax adviser before choosing this   
option.                                                                         

     You may change or stop this program at any time, by written notice to us.

PORTFOLIO REBALANCING PROGRAM                                       

Under the Portfolio Rebalancing Program, we transfer funds among all
Sub-Accounts to maintain the percentage allocation you have selected among these
Sub-Accounts. At your election, we will make these transfers on a quarterly,    
semi-annual or annual basis.                                                    

    Portfolio Rebalancing does not permit transfers to or from any Guarantee
Period.                                                                         

SECURED FUTURE PROGRAM                                              

      Under the Secured Future Program, we divide your Purchase Payments between
the Fixed Account and the Variable Account. For the Fixed Account portion, you  
choose a Guarantee Period from among those we offer. We then allocate to that   
Guarantee Period the portion of your Purchase Payment necessary so that, at the 
end of the Guarantee Period, your Fixed Account allocation, including interest, 
will equal the entire amount of your original Purchase Payment. The remainder of
the original Purchase Payment will be invested in the Sub-Accounts of your      
choice. At the end of the Guarantee Period, you will be guaranteed the amount of
your original Purchase Payment (assuming no withdrawals), plus you will have the
benefit, if any, of the investment performance of the Sub-Accounts you have     
chosen.                                                                         

WITHDRAWALS, WITHDRAWAL CHARGE AND MARKET VALUE ADJUSTMENT

CASH WITHDRAWALS                                                                

REQUESTING A WITHDRAWAL                                             

      At any time during the Accumulation Phase, you may withdraw in cash all or
any portion of your Account Value. To make a withdrawal, you must send us a     
written request at our Annuity Mailing Address. Your request must specify       
whether you want to withdraw the entire amount of your Account or, if less, the 
amount you wish to receive.                                                     

  All withdrawals may be subject to a withdrawal charge (see "Withdrawal
Charge"), and withdrawals from your Fixed Account Value also may be subject to a
Market Value Adjustment (see "Market Value Adjustment"). Withdrawals also may   
have adverse income tax consequences, including a 10% penalty tax (see "Tax     
Considerations"). You should carefully consider these tax consequences before   
requesting a cash withdrawal.                                                   

FULL WITHDRAWALS                                                    

     If you request a full withdrawal, we calculate the amount we will pay you
as follows: We start with the total value of your Account at the end of the     
Valuation Period during which we receive your withdrawal request; we deduct the 
Account Fee for the Account Year in which the withdrawal is made; we add or     
subtract the amount of any Market Value Adjustment applicable to your Fixed     
Account Value; and finally, we deduct any applicable withdrawal charge.         

A full withdrawal results in the surrender of your Contract, and    
cancellation of all rights and privileges under your Contract.                  

PARTIAL WITHDRAWALS                                                 

  If you request a partial withdrawal, we will pay you the actual amount
specified in your request and then adjust the value of your Account by deducting
the amount paid, adding or deducting any Market Value Adjustment applicable to  
amounts withdrawn from the Fixed Account, and deducting any applicable          
withdrawal charge.                                                              

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      You may specify the amount you want withdrawn from each Sub-Account and/or
Guarantee Amount to which your Account is allocated. If you do not so specify,  
we will deduct the total amount you request pro rata, based on your Account     
Value at the end of the Valuation Period during which we receive your request.  

 If you request a partial withdrawal that would result in your Account
Value being reduced to an amount less than the Account Fee for the Account Year 
in which you make the withdrawal, we will treat it as a request for a full      
withdrawal.                                                                     

TIME OF PAYMENT                                                     

   We will pay you the applicable amount of any full or partial withdrawal
within 7 days after we receive your withdrawal request, except in cases where we
are permitted, and choose, to defer payment under the Investment Company Act of 
1940 and applicable state insurance law. Currently, we may defer payment of     
amounts you withdraw from the Variable Account only for the following periods:  

-  When the New York Stock Exchange is closed (except weekends and  
         holidays) or when trading on the New York Stock Exchange is restricted;

     -  When it is not reasonably practical to dispose of securities held by a
        Fund or to determine the value of the net assets of a Fund, because an
emergency exists; or                                          

  -  When an SEC order permits us to defer payment for the protection of
Participants.                                                 

    We also may defer payment of amounts you withdraw from the Fixed Account
for up to 6 months from the date we receive your withdrawal request. We do not  
pay interest on the amount of any payments we defer.                            

WITHDRAWAL RESTRICTIONS FOR QUALIFIED PLANS                         

    If your Contract is a Qualified Contract, you should carefully check the
terms of your retirement plan for limitations and restrictions on cash          
withdrawals.                                                                    

Special restrictions apply to withdrawals from Contracts used for   
Section 403(b) annuities (see "Tax Considerations -- Tax-Sheltered Annuities"). 

WITHDRAWAL CHARGE                                                               

   We do not deduct any sales charge from your Purchase Payments when they
are made. However, we may impose a withdrawal charge (known as a "contingent    
deferred sales charge") on certain amounts you withdraw. We impose this charge  
to defray some of our expenses related to the sale of the Contracts, such as    
commissions we pay to agents, the cost of sales literature, and other           
promotional costs and transaction expenses.                                     

FREE WITHDRAWAL AMOUNT                                              

    In each Account Year you may withdraw a portion of your Account Value --
which we call the "free withdrawal amount" -- before incurring the withdrawal   
charge.                                                                         

      The "free withdrawal amount" is equal to 10% of the amount of all Purchase
Payments you have made. After the fourth Account Anniversary, any amount you    
withdraw is free of withdrawal charges.                                         

      The "free withdrawal amount" that you do not use in an Account Year is not
cumulative. In other words, it will not be carried forward or available for use 
in future Account Years.                                                        

For an example of how we calculate the "free withdrawal amount," see
Appendix B.                                                                     

WITHDRAWAL CHARGE ON PURCHASE PAYMENTS                              

     If you withdraw more than the free withdrawal amount in any Account Year,
we consider the excess amount to be withdrawn first from Payments that you have 
not previously withdrawn. We impose                                             

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the withdrawal charge on the amount of these Payments. Thus, the maximum amount 
on which we will impose the withdrawal charge in any year will never be more    
than the total of all Payments that you have not previously withdrawn.          

     The amount of your withdrawal, if any, that exceeds the total of the free
withdrawal amount plus the aggregate amount of all Payments not previously      
withdrawn, is not subject to the withdrawal charge.                             

ORDER OF WITHDRAWAL                                                 

    When you make a withdrawal, we consider the free withdrawal amount to be
withdrawn first. We consider the oldest Purchase Payment that you have not      
already withdrawn to be withdrawn next, then the second oldest Purchase         
Payments, and so forth. Once all Purchase Payments are withdrawn, the balance   
withdrawn is considered to be accumulated value.                                

CALCULATION OF WITHDRAWAL CHARGE                                    

      We calculate the amount of the withdrawal charge by multiplying the amount
you withdraw by a percentage. As set forth below, the percentage decreases      
according to the number of complete Account Years since your Contract Date.     
After your fourth Account Anniversary, any amount you withdraw is free of       
withdrawal charges.                                                             

                                                                [Download Table]

NUMBER OF COMPLETE            
  ACCOUNT YEARS               
    SINCE YOUR      WITHDRAWAL
  CONTRACT DATE       CHARGE  
------------------  ----------
                              
        0               6%    
        1               6%    
        2               5%    
        3               5%    
    4 or more           0%    

     The withdrawal charge will never be greater than 6% of the excess of your
Account Value over the "free withdrawal amount," as defined above.              

  For a Group Contract, we may modify the withdrawal charges and limits,
upon notice to the Owner of the Group Contract. However, any modification will  
apply only to Accounts established after the date of the modification.          

For additional examples of how we calculate withdrawal charges, see 
Appendix B.                                                                     

TYPES OF WITHDRAWALS NOT SUBJECT TO WITHDRAWAL CHARGE                           

     If approved by your state, we will waive the withdrawal charge for a full
or partial withdrawal if:                                                       

-  at least one year has passed since we issued your Contract, and  

  -  you are confined to an eligible nursing home and have been confined
  there for at least the preceding 180 days, or any shorter period
required by your state.                                       

    An "eligible nursing home" means a licensed hospital or licensed skilled
or intermediate care nursing facility at which medical treatment is available on
a daily basis and daily medical records are kept for each patient. You must     
provide us evidence of confinement in the form we determine.                    

  For each Qualified Contract, the free withdrawal amount in any Account
Year will be the greater of the free withdrawal amount described above and any  
amounts required to be withdrawn to comply with the minimum distribution        
requirement of the Internal Revenue Code. This waiver of the withdrawal charge  
applies only to the portion of the required minimum distribution attributable to
that Qualified Contract.                                                        

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     We do not impose the withdrawal charge on amounts you apply to provide an
annuity, amounts we pay as a death benefit, except under the Cash Surrender     
method, or amounts you transfer among the Sub-Accounts, between the Sub-Accounts
and the Fixed Account, or within the Fixed Account.                             

MARKET VALUE ADJUSTMENT                                                         

   If permitted under the laws of your state, we will apply a Market Value
Adjustment if you withdraw or transfer amounts from your Fixed Account Value    
more than 30 days before the end of the applicable Guarantee Period. For this   
purpose, using Fixed Account Value to provide an annuity is considered a        
withdrawal, and the Market Value Adjustment will apply. However, we will not    
apply the Market Value Adjustment to automatic transfers to a Sub-Account from a
Guarantee Period as part of our dollar-cost averaging program.                  

    We apply the Market Value Adjustment separately to each Guarantee Amount
in the Fixed Account, that is to each separate allocation you have made to a    
Guarantee Period together with interest credited on that allocation. However, we
do not apply the adjustment to the amount of interest credited during your      
current Account Year. Any withdrawal from a Guarantee Amount is attributed first
to such interest.                                                               

      A Market Value Adjustment may decrease, increase or have no effect on your
Account Value. This will depend on changes in interest rates since you made your
allocation to the Guarantee Period and the length of time remaining in the      
Guarantee Period. In general, if the Guaranteed Interest Rate we currently      
declare for Guarantee Periods equal to the balance of your Guarantee Period (or 
your entire Guarantee Period for Guarantee Periods of less than one year) is    
higher than your Guaranteed Interest Rate, the Market Value Adjustment is likely
to decrease your Account Value. If our current Guaranteed Interest Rate is      
lower, the Market Value Adjustment is likely to increase your Account Value.    

     We determine the amount of the Market Value Adjustment by multiplying the
amount that is subject to the adjustment by the following formula:              

                                                                [Download Table]
                             
                N/12         
  1 + I                      
( --------  )             -1 
  1 + J + b                  

where:                                                                          

     I is the Guaranteed Interest Rate applicable to the Guarantee Amount from
which you withdraw, transfer or annuitize;                                      

J is the Guaranteed Interest Rate we declare at the time of your    
withdrawal, transfer or annuitization for Guarantee Periods equal to the length 
of time remaining in the Guarantee Period applicable to your Guarantee Amount,  
rounded to the next higher number of complete years, for Guarantee Periods of   
one year or more. For any Guarantee Periods of less than one year, J is the     
Guaranteed Interest Rate we declare at the time of your withdrawal, transfer or 
annuitization for a Guarantee Period of the same length as your Guarantee       
Period. If, at that time, we do not offer the applicable Guarantee Period we    
will use an interest rate determined by straight-line interpolation of the      
Guaranteed Interest Rates for the Guarantee Periods we do offer;                

      N is the number of complete months remaining in your Guarantee Period; and

      b is a factor that currently is 0%, but that in the future we may increase
to up to 0.25%. Any increase would be applicable only to Participants who       
purchase their Contracts after the date of that increase.                       

   We will apply the Market Value Adjustment to the amount being withdrawn
after deduction of any Account Fee, if applicable, but before we impose any     
withdrawal charge on the amount withdrawn.                                      

For examples of how we calculate the Market Value Adjustment, see   
Appendix B.                                                                     

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CONTRACT CHARGES

ACCOUNT FEE                                                                     

    During the Accumulation Phase of your Contract, we will deduct from your
Account an annual Account Fee of $50 to help cover the administrative expenses  
we incur related to the issuance of Contracts and the maintenance of Accounts.  
We deduct the Account Fee on each Account Anniversary. We deduct the Account Fee
pro rata from each Sub-Account and each Guarantee Period, based on the          
allocation of your Account Value on your Account Anniversary.                   

We will not charge the Account Fee if:                              

     (1)  your Account has been allocated only to the Fixed Account during the
applicable Account Year; or                               

    (2)  your Account Value is $100,000 or more on your Account Anniversary.

  If you make a full withdrawal of your Account, we will deduct the full
amount of the Account Fee at the time of the withdrawal. In addition, on the    
Annuity Commencement Date we will deduct a pro rata portion of the Account Fee  
to reflect the time elapsed between the last Account Anniversary and the day    
before the Annuity Commencement Date.                                           

     After the Annuity Commencement Date, we will deduct an annual Account Fee
of $50 in the aggregate in equal amounts from each Variable Annuity payment we  
make during the year. We do not deduct any Account Fee from Fixed Annuity       
payments.                                                                       

ADMINISTRATIVE EXPENSE CHARGE                                                   

      We deduct an administrative expense charge from the assets of the Variable
Account at an annual effective rate equal to 0.15% during both the Accumulation 
Phase and the Income Phase. This charge is designed to reimburse us for expenses
we incur in administering the Contracts, Participant Accounts and the Variable  
Account that are not covered by the annual Account Fee.                         

MORTALITY AND EXPENSE RISK CHARGE                                               

During both the Accumulation Phase and the Income Phase, we deduct a
mortality and expense risk charge from the assets of the Variable Account at an 
effective annual rate equal to 1.20%, if your initial Purchase Payment was less 
than $1,000,000, or 0.95% if your initial Purchase Payment was $1,000,000 or    
more. The mortality risk we assume arises from our contractual obligation to    
continue to make annuity payments to each Annuitant, regardless of how long the 
Annuitant lives and regardless of how long all Annuitants as a group live. This 
obligation assures each Annuitant that neither the longevity of fellow          
Annuitants nor an improvement in life expectancy generally will have an adverse 
effect on the amount of any annuity payment received under the Contract. The    
mortality risk also arises from our contractual obligation to pay a death       
benefit upon the death of the Participant prior to the Annuity Commencement     
Date. The expense risk we assume is the risk that the annual Account Fee and the
administrative expense charge we assess under the Contract may be insufficient  
to cover the actual total administrative expenses we incur. If the amount of the
charge is insufficient to cover the mortality and expense risks, we will bear   
the loss. If the amount of the charge is more than sufficient to cover the      
risks, we will make a profit on the charge. We may use this profit for any      
proper corporate purpose, including the payment of marketing and distribution   
expenses for the Contract.                                                      

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CHARGES FOR OPTIONAL DEATH BENEFIT RIDERS                                       

      If you elect an optional death benefit rider, we will deduct a charge from
the assets of the Variable Account based upon the number of optional death      
benefits riders you elect, as follows:                                          

                                                                [Download Table]

NUMBER OF      % OF    
RIDERS YOU    AVERAGE  
  ELECT     DAILY VALUE
----------  -----------
                       
    1         0.15%    
    2         0.25%    
    3         0.40%    

PREMIUM TAXES                                                                   

  Some states and local jurisdictions impose a premium tax on us that is
equal to a specified percentage of the Purchase Payments you make. In many      
states there is no premium tax. We believe that the amounts of applicable       
premium taxes currently range from 0% to 3.5%. You should consult a tax adviser 
to find out if your state imposes a premium tax and the amount of any tax.      

In order to reimburse us for the premium tax we may pay on Purchase 
Payments, our policy is to deduct the amount of such taxes from the amount you  
apply to provide an annuity at the time of annuitization. However, we reserve   
the right to deduct the amount of any applicable tax from your Account at any   
time, including at the time you make a Purchase Payment or make a full or       
partial withdrawal. We do not make any profit on the deductions we make to      
reimburse premium taxes.                                                        

FUND EXPENSES                                                                   

There are fees and charges deducted from each Fund. These fees and  
expenses are described in the Fund prospectus(es) and related Statements of     
Additional Information.                                                         

MODIFICATION IN THE CASE OF GROUP CONTRACTS                                     

For Group Contracts, we may modify the annual Account Fee, the      
administrative expense charge and the mortality and expense risk charge upon    
notice to Owners. However, such modification will apply only with respect to    
Participant Accounts established after the effective date of the modification.  

DEATH BENEFIT 

   If the Covered Person dies during the Accumulation Phase, we will pay a
death benefit to your Beneficiary, using the payment method elected (a single   
cash payment or one of our Annuity Options). If the Beneficiary is not living on
the date of death of the Covered Person, we will pay the death benefit in one   
sum to your estate. We do not pay a death benefit if the Covered Person dies    
during the Income Phase. However, the Beneficiary will receive any annuity      
payments provided under an Annuity Option that is in effect. If your Contract   
names more than one Covered Person, we will pay the death benefit upon the first
death of such Covered Persons.                                                  

AMOUNT OF DEATH BENEFIT                                                         

 To calculate the amount of the death benefit, we use a "Death Benefit
Date." The Death Benefit Date is the date we receive proof of the death of the  
Covered Person in an acceptable form ("Due Proof of Death") if you have elected 
a death benefit payment method before the death of the Covered Person and it    
remains in effect. Otherwise, the Death Benefit Date is the later of the date we
receive Due Proof of Death or the date we receive the Beneficiary's election of 
either payment method or, if the Beneficiary is your spouse, Contract           
continuation. If we do not receive the Beneficiary's election within 60 days    
after we receive Due Proof of Death, we reserve the right to provide a lump sum 
to your Beneficiary.                                                            

 The amount of the death benefit is determined as of the Death Benefit
Date.                                                                           

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THE BASIC DEATH BENEFIT                                                         

In general, if you were 85 or younger on the date we accepted your  
Application, the death benefit will be the greatest of the following amounts:   

  1.  Your Account Value for the Valuation Period during which the Death
Benefit Date occurs;                                        

     2.  The amount we would pay if you had surrendered your entire Account on
the Death Benefit Date; and                                 

 3.  Your total Purchase Payments (adjusted for partial withdrawals as
         described in "Calculating the Death Benefit") as of the Death Benefit
Date.                                                       

For examples of how to calculate this basic death benefit, see      
Appendix C.                                                                     

     If you were 86 or older on your Contract Date, the death benefit is equal
to amount (2) above. Because this amount will reflect any applicable withdrawal 
charges and Market Value Adjustment, it may be less than your Account Value.    

OPTIONAL DEATH BENEFIT RIDERS                                                   

   Subject to availability in your state, you may enhance the "Basic Death
Benefit" by electing one or more of the following optional death benefit riders.
You must make your election before the date on which your Contract becomes      
effective. You will pay a charge for each optional death benefit rider you      
elect. (For a description of these charges, see "Charges for Optional Death     
Benefit Riders.") The Maximum Anniversary Account Value Rider, the 5% Premium   
Roll-Up Rider, and the Earnings Enhancement Rider are available only if you are 
younger than 80 on the Contract Date. Any optional death benefit election may   
not be changed after the Contract is issued. For a complete description of how  
the death benefits under the optional death benefit riders are calculated, see  
"Calculating the Death Benefit."                                                

MAXIMUM ANNIVERSARY ACCOUNT VALUE RIDER                             

Under this rider, the death benefit will be the greater of:         

-  any of the death benefit amounts payable under the "Basic Death  
Benefit" (above), or                                          

     -  your highest Account Value on any Account Anniversary before your 81st
  birthday, adjusted for any subsequent Purchase Payments, partial
       withdrawals and charges made between that Account Anniversary and the
Death Benefit Date.                                           

5% PREMIUM ROLL-UP RIDER                                            

Under this rider, the death benefit will be the greater of:         

-  any of the death benefit amounts payable under the "Basic Death  
Benefit" (above), or                                          

-  the sum of your total Purchase Payments plus interest accruals,  
adjusted for partial withdrawals.                             

   Under this rider, interest accrues at a rate of 5% per year on Purchase
Payments and transfers to the Variable Account while they remain in the Variable
Account. The 5% interest accruals will continue until the earlier of:           

-  the first day of the month following your 80th birthday, or      

 -  the day the death benefit amount under this rider equals twice the
       total of your Purchase Payments and transferred amounts, adjusted for
withdrawals.                                                  

   Net Purchase Payments under this rider will be adjusted for all partial
withdrawals, as described in "Calculating the Death Benefit."                   

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EARNINGS ENHANCEMENT RIDER                                          

 Under this rider, if you are 69 or younger on your Contract Date, the
death benefit will be:                                                          

 -  the greatest of any of the death benefit amounts payable under the
"Basic Death Benefit" (above), plus                           

    -  40% of the lesser of your net Purchase Payments or your Account Value
       minus net Purchase Payments, calculated as of the Death Benefit Date.

     If you are between the ages of 70 and 79 on your Contract Date, the death
benefit will be:                                                                

 -  the greatest of any of the death benefit amounts payable under the
"Basic Death Benefit" (above), plus                           

    -  25% of the lesser of your net Purchase Payments or your Account Value
       minus net Purchase Payments, calculated as of the Death Benefit Date.

  For examples of how the death benefit is calculated under the Earnings
Enhancement Rider, see Appendix D.                                              

SELECTING MULTIPLE DEATH BENEFIT RIDERS                             

      If you elect more than one optional death benefit rider, the death benefit
will be calculated as follows:                                                  

    1)  MAXIMUM ANNIVERSARY ACCOUNT VALUE RIDER COMBINED WITH 5% PREMIUM ROLL-UP
  RIDER: The death benefit will equal the greater of the death benefit
    under the Maximum Anniversary Account Value Rider or the death benefit
under the 5% Premium Roll-Up Rider.                               

2)  MAXIMUM ANNIVERSARY ACCOUNT VALUE RIDER COMBINED WITH EARNINGS      
     ENHANCEMENT RIDER: The death benefit will equal the death benefit under
     the Maximum Anniversary Account Value Rider, PLUS the amount calculated
under the Earnings Enhancement Rider. The death benefit under the 
     Earnings Enhancement Rider is calculated using the Account Value before
the application of the Maximum Anniversary Account Rider.         

  3)  EARNINGS ENHANCEMENT RIDER COMBINED WITH 5% PREMIUM ROLL-UP RIDER: The
     death benefit will equal the death benefit under the 5% Premium Roll-Up
     Rider, PLUS the amount calculated under the Earnings Enhancement Rider.
  The death benefit under the Earnings Enhancement Rider is calculated
      using the Account Value before the application of the 5% Premium Roll-Up
Rider.                                                            

 4)  MAXIMUM ANNIVERSARY ACCOUNT VALUE RIDER, THE 5% PREMIUM ROLL-UP RIDER
  AND THE EARNINGS ENHANCEMENT RIDER: The death benefit will equal the
      GREATER of the death benefit under the Maximum Anniversary Account Value
     Rider or the death benefit under the 5% Premium Roll-Up Rider, PLUS the
       amount calculated under the Earnings Enhancement Rider. The death benefit
  under the Earnings Enhancement Rider is calculated using the Account
  Value before the application of the 5% Premium Roll-Up Rider and the
Maximum Anniversary Account Value Rider.                          

SPOUSAL CONTINUANCE                                                             

     If your spouse is your Beneficiary, upon your death your spouse may elect
to continue the Contract as the Participant, rather than receive the death      
benefit amount. In that case, we will not pay a death benefit, but the          
Contract's Account Value will be equal to your Contract's death benefit amount, 
as defined under the "Basic Death Benefit" or any optional death benefit rider  
you have selected. All Contract provisions, including any optional death benefit
riders you have selected, will continue as if your spouse had purchased the     
Contract on the Death Benefit Date with a deposit equal to the death benefit    
amount. For purposes of calculating death benefits and expenses from that date  
forward, your spouse's age on the original effective date of the Contract will  
be used.                                                                        

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CALCULATING THE DEATH BENEFIT                                                   

   In calculating the death benefit amount payable under option (3) of the
"Basic Death Benefit" or any of the optional death benefit riders, any partial  
withdrawals will reduce the death benefit amount to an amount equal to the death
benefit amount immediately before the withdrawal multiplied by the ratio of the 
Account Value immediately after the withdrawal to the Account Value immediately 
before the withdrawal.                                                          

      If the death benefit is the amount payable under options (2) or (3) of the
"Basic Death Benefit" or under any of the optional death benefit riders, your   
Account Value may be increased by the excess, if any, of that amount over option
(1) of the "Basic Death Benefit." Any such increase will be allocated to the    
Sub-Accounts in proportion to your Account Value in those Sub-Accounts on the   
Death Benefit Date. Such increase will be made only if the Beneficiary elects to
annuitize, elects to defer annuitization, or elects to continue the Contract.   
Also, any portion of this new Account Value attributed to the Fixed Account will
be transferred to the available Money Market Fund investment option (without the
application of a Market Value Adjustment). If your spouse, as the named         
Beneficiary, elects to continue the Contract after your death, your spouse may  
transfer any such Fixed Account portion back to the Fixed Account and begin a   
new Guarantee Period.                                                           

METHOD OF PAYING DEATH BENEFIT                                                  

   The death benefit may be paid in a single cash payment or as an annuity
(either fixed, variable or a combination), under one or more of our Annuity     
Options. We describe the Annuity Options in this Prospectus under "The Income   
Phase -- Annuity Provisions."                                                   

      During the Accumulation Phase, you may elect the method of payment for the
death benefit. If no such election is in effect on the date of your death, the  
Beneficiary may elect either a single cash payment or an annuity. If the        
Beneficiary is your spouse, the Beneficiary may elect to continue the Contract. 
These elections are made by sending us a completed election form, which we will 
provide. If we do not receive the Beneficiary's election within 60 days after we
receive Due Proof of Death, we will pay the death benefit in a single cash      
payment.                                                                        

If we pay the death benefit in the form of an Annuity Option, the   
Beneficiary becomes the Annuitant/Payee under the terms of that Annuity Option. 

NON-QUALIFIED CONTRACTS                                                         

    If your Contract is a Non-Qualified Contract, special distribution rules
apply to the payment of the death benefit. The amount of the death benefit must 
be distributed either (1) as a lump sum within 5 years after your death, or     
(2) if in the form of an annuity, over a period not greater than the life or    
expected life of the "designated beneficiary" within the meaning of             
Section 72(s) of the Internal Revenue Code, with payments beginning no later    
than one year after your death.                                                 

      The person you have named as Beneficiary under your Contract, if any, will
be the "designated beneficiary." If the named Beneficiary is not living and no  
contingent beneficiary has been named, the Annuitant automatically becomes the  
designated beneficiary.                                                         

   If the designated beneficiary is your surviving spouse, your spouse may
continue the Contract in his or her own name as Participant. To make this       
election, your spouse must give us written notification within 60 days after we 
receive Due Proof of Death. The special distribution rules will then apply on   
the death of your spouse. To understand what happens when your spouse continues 
the Contract, see "Spousal Continuance," above.                                 

      During the Income Phase, if the Annuitant dies, the remaining value of the
Annuity Option in place must be distributed at least as rapidly as the method of
distribution under that option.                                                 

      If the Participant is not a natural person, these distribution rules apply
on a change in, or the death of, either the Annuitant or the Co-Annuitant.      

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 Payments made in contravention of these special rules would adversely
affect the treatment of the Contracts as annuity contracts under the Internal   
Revenue Code. Neither you nor the Beneficiary may exercise rights that would    
have that effect.                                                               

SELECTION AND CHANGE OF BENEFICIARY                                             

You select your Beneficiary in your Application. You may change your
Beneficiary at any time by sending us written notice on our required form,      
unless you previously made an irrevocable Beneficiary designation. A new        
Beneficiary designation is not effective until we record the change.            

PAYMENT OF DEATH BENEFIT                                                        

  Payment of the death benefit in cash will be made within 7 days of the
Death Benefit Date, except if we are permitted to defer payment in accordance   
with the Investment Company Act of 1940. If an Annuity Option is elected, the   
Annuity Commencement Date will be the first day of the second calendar month    
following the Death Benefit Date, and your Account will remain in effect until  
the Annuity Commencement Date.                                                  

DUE PROOF OF DEATH                                                              

We accept any of the following as proof of any person's death:      

-  An original certified copy of an official death certificate;     

-  An original certified copy of a decree of a court of competent   
jurisdiction as to the finding of death; or                   

-  Any other proof we find satisfactory.                            

THE INCOME PHASE -- ANNUITY PROVISIONS

    During the Income Phase, we make regular monthly annuity payments to the
Annuitant.                                                                      

  The Income Phase of your Contract begins with the Annuity Commencement
Date. On that date, we apply your Account Value, adjusted as described below,   
under the Annuity Option(s) you have selected, and we make the first annuity    
payment.                                                                        

Once the Income Phase begins, no lump sum settlement option or cash 
withdrawals are permitted, except pursuant to Annuity Option D, Monthly Payments
for a Specified Period Certain, as described below under the heading "Annuity   
Options," and you cannot change the Annuity Option selected. You may request a  
full withdrawal before the Annuity Commencement Date, which will be subject to  
all charges applicable on withdrawals (see "Withdrawals, Withdrawal Charge and  
Market Value Adjustment").                                                      

SELECTION OF THE ANNUITANT OR CO-ANNUITANT                                      

     You select the Annuitant in your Application. The Annuitant is the person
who receives annuity payments during the Income Phase and on whose life these   
payments are based. In your Contract, the Annuity Option(s) refer to the        
Annuitant as the "Payee." If you name someone other than yourself as Annuitant  
and the Annuitant dies before the Income Phase, you become the Annuitant.       

   In a Non-Qualified Contract, if you name someone other than yourself as
Annuitant, you may also select a Co-Annuitant, who will become the new Annuitant
if the original Annuitant dies before the Income Phase. If both the Annuitant   
and Co-Annuitant die before the Income Phase, you become the Annuitant. If you  
have named both an Annuitant and a Co-Annuitant, you may designate one of them  
to become the sole Annuitant as of the Annuity Commencement Date, if both are   
living at that time. If you have not made that designation on the 30th day      
before the Annuity Commencement Date, and both the Annuitant and the            
Co-Annuitant are still living, the Co-Annuitant will become the Annuitant.      

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      When an Annuity Option has been selected as the method of paying the death
benefit, the Beneficiary is the Payee of the annuity payment.                   

SELECTION OF THE ANNUITY COMMENCEMENT DATE                                      

You select the Annuity Commencement Date in your Application. The   
following restrictions apply to the date you may select:                        

      -  The earliest possible Annuity Commencement Date is the first day of the
first month following your first Account Anniversary.         

    -  The latest possible Annuity Commencement Date is the first day of the
        month following the later of the Annuitant's 95th birthday or 10 years
  after the Contract Date. If there is a Co-Annuitant, the Annuity
Commencement Date applies to the younger of the Annuitant and 
Co-Annuitant.                                                 

     -  The Annuity Commencement Date must always be the first day of a month.

     You may change the Annuity Commencement Date from time to time by sending
us written notice, with the following additional limitations:                   

      -  We must receive your notice at least 30 days before the current Annuity
Commencement Date.                                            

  -  The new Annuity Commencement Date must be at least 30 days after we
receive the notice.                                           

There may be other restrictions on your selection of the Annuity    
Commencement Date imposed by your retirement plan or applicable law. In most    
situations, current law requires that for a Qualified Contract, certain minimum 
distributions must commence no later than April 1 following the year the        
Annuitant reaches age 70 1/2 (or, for Qualified Contracts other than IRAs, no   
later than April 1 following the year the Annuitant retires, if later than the  
year the Annuitant reaches age 70 1/2).                                         

ANNUITY OPTIONS                                                                 

 We offer the following Annuity Options for payments during the Income
Phase. Each Annuity Option may be selected for a Variable Annuity, a Fixed      
Annuity, or a combination of both. We may also agree to other settlement        
options, at our discretion.                                                     

ANNUITY OPTION A -- LIFE ANNUITY                                    

     We provide monthly payments during the lifetime of the Annuitant. Annuity
payments stop when the Annuitant dies. There is no provision for continuation of
any payments to a Beneficiary.                                                  

      ANNUITY OPTION B -- LIFE ANNUITY WITH 60, 120, 180 OR 240 MONTHLY PAYMENTS
CERTAIN                                                             

We make monthly payments during the lifetime of the Annuitant. In   
addition, we guarantee that the Beneficiary will receive monthly payments for   
the remainder of the period certain, if the Annuitant dies during that period.  
The election of a longer period results in smaller monthly payments. If no      
Beneficiary is designated, we pay the discounted value of the remaining payments
in one sum to the Annuitant's estate. The Beneficiary may also elect to receive 
the discounted value of the remaining payments in one sum. The discount rate for
a Variable Annuity will be the assumed interest rate in effect; the discount    
rate for a Fixed Annuity will be based on the interest rate we used to determine
the amount of each payment.                                                     

ANNUITY OPTION C -- JOINT AND SURVIVOR ANNUITY                      

     We make monthly payments during the lifetime of the Annuitant and another
person you designate and during the lifetime of the survivor of the two. We stop
making payments when the survivor dies. There is no provision for continuance of
any payments to a Beneficiary.                                                  

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ANNUITY OPTION D -- MONTHLY PAYMENTS FOR A SPECIFIED PERIOD CERTAIN 

We make monthly payments for a specified period of time from 5 to 30
years, as you elect. If payments under this option are paid on a variable       
annuity basis, the Annuitant may elect to receive, at any time, some or all of  
the discounted value of the remaining payments, less any applicable withdrawal  
charge; the discount rate for this purpose will be the assumed interest rate in 
effect. If the Annuitant dies during the period selected, the remaining income  
payments are made as described under Annuity Option B. The election of this     
Annuity Option may result in the imposition of a penalty tax. The 5- to 9-year  
period certain is not available if your Account has been issued within the past 
4 years.                                                                        

SELECTION OF ANNUITY OPTION                                                     

    You select one or more of the Annuity Options, which you may change from
time to time during the Accumulation Phase, as long as we receive your selection
or change in writing at least 30 days before the Annuity Commencement Date. If  
we have not received your written selection on the 30th day before the Annuity  
Commencement Date, you will receive Annuity Option B, for a life annuity with   
120 monthly payments certain.                                                   

     You may specify the proportion of your Adjusted Account Value you wish to
provide a Variable Annuity or a Fixed Annuity. Under a Variable Annuity, the    
dollar amount of payments will vary, while under a Fixed Annuity, the dollar    
amount of payments will remain the same. If you do not specify a Variable       
Annuity or a Fixed Annuity, your Adjusted Account Value will be divided between 
Variable Annuities and Fixed Annuities in the same proportions as your Account  
Value was divided between the Variable and Fixed Accounts on the Annuity        
Commencement Date. You may allocate your Adjusted Account Value applied to a    
Variable Annuity among the Sub-Accounts, or we will use your existing           
allocations.                                                                    

  There may be additional limitations on the options you may elect under
your particular retirement plan or applicable law.                              

      REMEMBER THAT THE ANNUITY OPTIONS MAY NOT BE CHANGED ONCE ANNUITY PAYMENTS
BEGIN.                                                                          

AMOUNT OF ANNUITY PAYMENTS                                                      

ADJUSTED ACCOUNT VALUE                                              

   The Adjusted Account Value is the amount we apply to provide a Variable
Annuity and/or a Fixed Annuity. We calculate Adjusted Account Value by taking   
your Account Value on the Business Day just before the Annuity Commencement Date
and making the following adjustments:                                           

-  We deduct a proportional amount of the Account Fee, based on the 
fraction of the current Account Year that has elapsed.        

  -  If applicable, we apply the Market Value Adjustment to your Account
 Value in the Fixed Account, which may result in a deduction, an
addition, or no change.                                       

    -  We deduct any applicable premium tax or similar tax if not previously
deducted.                                                     

VARIABLE ANNUITY PAYMENTS                                           

      On the Annuity Commencement Date, we will exchange your Account's Variable
Annuity Units for annuitization units which have annual insurance charges of    
1.35% of your average daily net assets (1.10% if your initial Purchase Payment  
was $1,000,000 or more).                                                        

  Variable Annuity payments may vary each month. We determine the dollar
amount of the first payment using the portion of your Adjusted Account Value    
applied to a Variable Annuity and the Annuity Payment Rates in your Contract,   
which are based on an assumed interest rate of 3% per year, compounded annually.
See "Annuity Payment Rates."                                                    

   To calculate the remaining payments, we convert the amount of the first
payment into Annuity Units for each Sub-Account; we determine the number of     
those Annuity Units by dividing the portion                                     

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of the first payment attributable to the Sub-Account by the Annuity Unit Value  
of that Sub-Account for the Valuation Period ending just before the Annuity     
Commencement Date. This number of Annuity Units for each Sub-Account will remain
constant (unless the Annuitant requests an exchange of Annuity Units). However, 
the dollar amount of the next Variable Annuity payment -- which is the sum of   
the number of Annuity Units for each Sub-Account times its Annuity Unit Value   
for the Valuation Period ending just before the date of the payment -- will     
increase, decrease, or remain the same, depending on the net investment return  
of the Sub-Accounts.                                                            

    If the net investment return of the Sub-Accounts selected is the same as
the assumed interest rate of 3%, compounded annually, the payments will remain  
level. If the net investment return exceeds the assumed interest rate, payments 
will increase and, conversely, if it is less than the assumed interest rate,    
payments will decrease.                                                         

Please refer to the Statement of Additional Information for more    
information about calculating Variable Annuity Units and Variable Annuity       
payments, including examples of these calculations.                             

FIXED ANNUITY PAYMENTS                                              

   Fixed Annuity payments are the same each month. We determine the dollar
amount of each Fixed Annuity payment using the fixed portion of your Adjusted   
Account Value and the applicable Annuity Payment Rates. These will be either    
(1) the rates in your Contract, which are based on a minimum guaranteed interest
rate of 2.5% per year, compounded annually, or (2) new rates we have published  
and are using on the Annuity Commencement Date, if they are more favorable. See 
"Annuity Payment Rates."                                                        

MINIMUM PAYMENTS                                                    

    If your Adjusted Account Value is less than $2,000, or the first annuity
payment for any Annuity Option is less than $20, we will pay the Adjusted       
Account Value to the Annuitant in one payment.                                  

EXCHANGE OF VARIABLE ANNUITY UNITS                                              

    During the Income Phase, the Annuitant may exchange Annuity Units in one
Sub-Account for Annuity Units in another Sub-Account, up to 12 times each       
Account Year. To make an exchange, the Annuitant sends us, at our Annuity       
Mailing Address, a written request stating the number of Annuity Units in the   
Sub-Account he or she wishes to exchange and the new Sub-Account for which      
Annuity Units are requested. The number of new Annuity Units will be calculated 
so the dollar amount of an annuity payment on the date of the exchange would not
be affected. To calculate this number, we use Annuity Unit values for the       
Valuation Period during which we receive the exchange request.                  

    Before exchanging Annuity Units in one Sub-Account for those in another,
the Annuitant should carefully review the Fund prospectus(es) for the investment
objectives and risk disclosure of the Funds in which the Sub-Accounts invest.   

    During the Income Phase, we permit only exchanges among Sub-Accounts. No
exchanges to or from a Fixed Annuity are permitted.                             

ACCOUNT FEE                                                                     

     During the Income Phase, we deduct the annual Account Fee of $50 in equal
amounts from each Variable Annuity payment. We do not deduct the annual Account 
Fee from Fixed Annuity payments.                                                

ANNUITY PAYMENT RATES                                                           

The Contracts contain Annuity Payment Rates for each Annuity Option 
described in this Prospectus. The rates show, for each $1,000 applied, the      
dollar amount of (a) the first monthly Variable Annuity payment based on the    
assumed interest rate specified in the applicable Contract (3% per year,        
compounded annually), and (b) the monthly Fixed Annuity payment, when this      
payment is based on                                                             

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the minimum guaranteed interest rate specified in the Contract (at least 2.5%   
per year, compounded annually). We may change these rates under Group Contracts 
for Accounts established after the effective date of such change (see "Other    
Contract Provisions -- Modification").                                          

      The Annuity Payment Rates may vary according to the Annuity Option elected
and the adjusted age of the Annuitant. The Contracts also describe the method of
determining the adjusted age of the Annuitant. The mortality table used in      
determining the Annuity Payment Rates for Annuity Options A, B and C is the     
Annuity 2000 Table.                                                             

ANNUITY OPTIONS AS METHOD OF PAYMENT FOR DEATH BENEFIT                          

     You or your Beneficiary may also select one or more Annuity Options to be
used in the event of the Covered Person's death before the Income Phase, as     
described under the "Death Benefit" section of this Prospectus. In that case,   
your Beneficiary will be the Annuitant. The Annuity Commencement Date will be   
the first day of the second month beginning after the Death Benefit Date.       

OTHER CONTRACT PROVISIONS 

EXERCISE OF CONTRACT RIGHTS                                                     

    An Individual Contract belongs to the individual to whom the Contract is
issued. A Group Contract belongs to the Owner. In the case of a Group Contract, 
the Owner may expressly reserve all Contract rights and privileges; otherwise,  
each Annuitant will be entitled to exercise such rights and privileges. In any  
case, such rights and privileges can be exercised without the consent of the    
Beneficiary (other than an irrevocably designated Beneficiary) or any other     
person. Such rights and privileges may be exercised only during the lifetime of 
the Annuitant before the Annuity Commencement Date, except as the Contract      
otherwise provides.                                                             

 The Annuitant becomes the Payee on and after the Annuity Commencement
Date. The Beneficiary becomes the Payee on the death of the Participant prior to
the Annuity Commencement Date, or on the death of the Annuitant after the       
Annuity Commencement Date. Such Payee may thereafter exercise such rights and   
privileges, if any, of ownership which continue.                                

CHANGE OF OWNERSHIP                                                             

Ownership of a Qualified Contract may not be transferred except to: 
(1) the Annuitant; (2) a trustee or successor trustee of a pension or profit    
sharing trust which is qualified under Section 401 of the Internal Revenue Code;
(3) the employer of the Annuitant, provided that the Qualified Contract after   
transfer is maintained under the terms of a retirement plan qualified under     
Section 403(a) of the Internal Revenue Code for the benefit of the Annuitant;   
(4) the trustee or custodian of an individual retirement account plan qualified 
under Section 408 of the Internal Revenue Code for the benefit of the           
Participants under a Group Contract; or (5) as otherwise permitted from time to 
time by laws and regulations governing the retirement or deferred compensation  
plans for which a Qualified Contract may be issued. Subject to the foregoing, a 
Qualified Contract may not be sold, assigned, transferred, discounted or pledged
as collateral for a loan or as security for the performance of an obligation or 
for any other purpose to any person other than the Company.                     

 The Owner of a Non-Qualified Contract may change the ownership of the
Contract prior to the Annuity Commencement Date; and each Participant, in like  
manner, may change the ownership interest in a Contract. A change of ownership  
will not be binding on us until we receive written notification. When we receive
such notification, the change will be effective as of the date on which the     
request for change was signed by the Owner or Participant, as appropriate, but  
the change will be without prejudice to us on account of any payment we make or 
any action we take before receiving the change. If you change the Owner of a    
Non-Qualified Contract, you will become immediately liable for the payment of   
taxes on any gain realized under the Contract prior to the change of ownership, 
including possible liability for a 10% federal excise tax.                      

     Change of ownership may affect the availability of optional death benefit
riders or the expenses incurred with the optional death benefit riders.         

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VOTING OF FUND SHARES                                                           

We will vote Fund shares held by the Sub-Accounts at meetings of    
shareholders of the Funds or in connection with similar solicitations, but will 
follow voting instructions received from persons having the right to give voting
instructions. During the Accumulation Phase, you will have the right to give    
voting instructions, in the case of a Group Contract where the Owner has        
reserved this right. During the Income Phase, the Payee -- that is the Annuitant
or Beneficiary entitled to receive benefits -- is the person having such voting 
rights. We will vote any shares attributable to us and Fund shares for which no 
timely voting instructions are received in the same proportion as the shares for
which we receive instructions from Owners, Participants and Payees, as          
applicable.                                                                     

   Owners of Qualified Contracts issued on a group basis may be subject to
other voting provisions of the particular plan and of the Investment Company Act
of 1940. Employees who contribute to plans that are funded by the Contracts may 
be entitled to instruct the Owners as to how to instruct us to vote the Fund    
shares attributable to their contributions. Such plans may also provide the     
additional extent, if any, to which the Owners shall follow voting instructions 
of persons with rights under the plans. If no voting instructions are received  
from any such person with respect to a particular Participant Account, the Owner
may instruct the Company as to how to vote the number of Fund shares for which  
instructions may be given.                                                      

     Neither the Variable Account nor the Company is under any duty to provide
information concerning the voting instruction rights of persons who may have    
such rights under plans, other than rights afforded by the Investment Company   
Act of 1940, or any duty to inquire as to the instructions received or the      
authority of Owners, Participants or others, as applicable, to instruct the     
voting of Fund shares. Except as the Variable Account or the Company has actual 
knowledge to the contrary, the instructions given by Owners under Group         
Contracts and Payees will be valid as they affect the Variable Account, the     
Company and any others having voting instruction rights with respect to the     
Variable Account.                                                               

    All Fund proxy material, together with an appropriate form to be used to
give voting instructions, will be provided to each person having the right to   
give voting instructions at least 10 days prior to each meeting of the          
shareholders of the Fund. We will determine the number of Fund shares as to     
which each such person is entitled to give instructions as of the record date   
set by the Fund for such meeting, which is expected to be not more than 90 days 
prior to each such meeting. Prior to the Annuity Commencement Date, the number  
of Fund shares as to which voting instructions may be given to the Company is   
determined by dividing the value of all of the Variable Accumulation Units of   
the particular Sub-Account credited to the Participant Account by the net asset 
value of one Fund share as of the same date. On or after the Annuity            
Commencement Date, the number of Fund shares as to which such instructions may  
be given by a Payee is determined by dividing the reserve held by the Company in
the Sub-Account with respect to the particular Payee by the net asset value of a
Fund share as of the same date. After the Annuity Commencement Date, the number 
of Fund shares as to which a Payee is entitled to give voting instructions will 
generally decrease due to the decrease in the reserve.                          

PERIODIC REPORTS                                                                

 During the Accumulation Period we will send you, or such other person
having voting rights, at least once during each Account Year, a statement       
showing the number, type and value of Accumulation Units credited to your       
Account and the Fixed Accumulation Value of your Account, which statement shall 
be accurate as of a date not more than 2 months previous to the date of mailing.
These periodic statements contain important information concerning your         
transactions with respect to your Contract. It is your obligation to review each
such statement carefully and to report to us, at the address or telephone number
provided on the statement, any errors or discrepancies in the information       
presented therein within 60 days of the date of such statement. Unless we       
receive notice of any such error or discrepancy from you within such period, we 
may not be responsible for correcting the error or discrepancy.                 

    In addition, every person having voting rights will receive such reports
or prospectuses concerning the Variable Account and the Funds as may be required
by the Investment Company Act of 1940                                           

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and the Securities Act of 1933. We will also send such statements reflecting    
transactions in your Account as may be required by applicable laws, rules and   
regulations.                                                                    

  Upon request, we will provide you with information regarding fixed and
variable accumulation values.                                                   

SUBSTITUTION OF SECURITIES                                                      

 Shares of any or all Funds may not always be available for investment
under the Contract. We may add or delete Funds or other investment companies as 
variable investment options under the Contract. We may also substitute for the  
shares held in any Sub-Account shares of another Fund or shares of another      
registered open-end investment company or unit investment trust, provided that  
the substitution has been approved, if required, by the SEC. In the event of any
substitution pursuant to this provision, we may make appropriate endorsement to 
the Contract to reflect the substitution.                                       

CHANGE IN OPERATION OF VARIABLE ACCOUNT                                         

   At our election and subject to any necessary vote by persons having the
right to give instructions with respect to the voting of Fund shares held by the
Sub-Accounts, the Variable Account may be operated as a management company under
the Investment Company Act of 1940 or it may be deregistered under the          
Investment Company Act of 1940 in the event registration is no longer required. 
Deregistration of the Variable Account requires an order by the SEC. In the     
event of any change in the operation of the Variable Account pursuant to this   
provision, we may make appropriate endorsement to the Contract to reflect the   
change and take such other action as may be necessary and appropriate to effect 
the change.                                                                     

SPLITTING UNITS                                                                 

We reserve the right to split or combine the value of Variable      
Accumulation Units, Annuity Units or any of them. In effecting any such change  
of unit values, strict equity will be preserved and no change will have a       
material effect on the benefits or other provisions of the Contract.            

MODIFICATION                                                                    

      Upon notice to the Participant, in the case of an Individual Contract, and
the Owner and Participant(s), in the case of a Group Contract (or the Payee(s)  
during the Income Phase), we may modify the Contract if such modification:      
(i) is necessary to make the Contract or the Variable Account comply with any   
law or regulation issued by a governmental agency to which the Company or the   
Variable Account is subject; (ii) is necessary to assure continued qualification
of the Contract under the Internal Revenue Code or other federal or state laws  
relating to retirement annuities or annuity contracts; (iii) is necessary to    
reflect a change in the operation of the Variable Account or the Sub-Account(s) 
(see "Change in Operation of Variable Account"); (iv) provides additional       
Variable Account and/or fixed accumulation options; or (v) as may otherwise be  
in the best interests of Owners, Participants, or Payees, as applicable. In the 
event of any such modification, we may make appropriate endorsement in the      
Contract to reflect such modification.                                          

    In addition, upon notice to the Owner, we may modify a Group Contract to
change the withdrawal charges, Account Fee, mortality and expense risk charges, 
administrative expense charges, the tables used in determining the amount of the
first monthly variable annuity and fixed annuity payments and the formula used  
to calculate the Market Value Adjustment, provided that such modification       
applies only to Participant Accounts established after the effective date of    
such modification. In order to exercise our modification rights in these        
particular instances, we must notify the Owner of such modification in writing. 
The notice shall specify the effective date of such modification which must be  
at least 60 days following the date we mail notice of modification. All of the  
charges and the annuity tables which are provided in the Group Contract prior to
any such modification will remain in effect permanently, unless improved by the 
Company, with respect to Participant Accounts established prior to the effective
date of such modification.                                                      

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DISCONTINUANCE OF NEW PARTICIPANTS                                              

  We may limit or discontinue the acceptance of new Applications and the
issuance of new Certificates under a Group Contract by giving 30 days prior     
written notice to the Owner. This will not affect rights or benefits with       
respect to any Participant Accounts established under such Group Contract prior 
to the effective date of such limitation or discontinuance.                     

RESERVATION OF RIGHTS                                                           

     We reserve the right, to the extent permitted by law, to: (1) combine any
2 or more variable accounts; (2) add or delete Funds, sub-series thereof or     
other investment companies and corresponding Sub-Accounts; (3) add or remove    
Guarantee Periods available at any time for election by a Participant; and (4)  
restrict or eliminate any of the voting rights of Participants (or Owners) or   
other persons who have voting rights as to the Variable Account. Where required 
by law, we will obtain approval of changes from Participants or any appropriate 
regulatory authority. In the event of any change pursuant to this provision, we 
may make appropriate endorsement to the Contract to reflect the change.         

RIGHT TO RETURN                                                                 

     If you are not satisfied with your Contract, you may return it by mailing
or delivering it to us at our Annuity Mailing Address, as shown on the cover of 
this Prospectus, within 10 days after it was delivered to you. When we receive  
the returned Contract, it will be cancelled and we will refund to you your      
Account Value.                                                                  

   If applicable state law requires, we will return the full amount of any
Purchase Payment(s) we received. State law may also require us to give you a    
longer "free look" period or allow you to return the Contract to your sales     
representative.                                                                 

 If you are establishing an Individual Retirement Account ("IRA"), the
Internal Revenue Code requires that we give you a disclosure statement          
containing certain information about the Contract and applicable legal          
requirements. We must give you this statement on or before the date the IRA is  
established. If we give you the disclosure statement before the seventh day     
preceding the date the IRA is established, you will not have any right of       
revocation under the Code. If we give you the disclosure statement at a later   
date, then you may give us a notice of revocation at any time within 7 days     
after your Contract Date. Upon such revocation, we will refund your Purchase    
Payment(s). This right of revocation with respect to an IRA is in addition to   
the return privilege set forth in the preceding paragraph. We allow a           
Participant establishing an IRA a "ten day free-look," notwithstanding the      
provisions of the Internal Revenue Code.                                        

TAX CONSIDERATIONS

     This section describes general federal income tax consequences based upon
our understanding of current federal tax laws. Actual federal tax consequences  
may vary depending on, among other things, the type of retirement plan with     
which you use and where the site where your Contract was issued. Also,          
legislation affecting the current tax treatment of annuity contracts could be   
enacted in the future and could apply retroactively to Contracts that you       
purchased before the date of enactment. We do not make any guarantee regarding  
the federal, state, or local tax status of any Contract or any transaction      
involving any Contract. You should consult a qualified tax professional for     
advice before purchasing a Contract or executing any other transaction (such as 
a rollover, distribution, withdrawal or payment) involving a Contract.          

U.S. FEDERAL TAX CONSIDERATIONS                                                 

  The following discussion applies only to those Contracts issued in the
United States. For a discussion of tax considerations effecting Contracts issued
in Puerto Rico, see "Puerto Rico Tax Considerations," below.                    

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DEDUCTIBILITY OF PURCHASE PAYMENTS                                  

For federal income tax purposes, Purchase Payments made under       
Non-Qualified Contracts are not deductible.                                     

PRE-DISTRIBUTION TAXATION OF CONTRACTS                              

   Generally, an increase in the value of a Contract will not give rise to
tax, prior to distribution.                                                     

However, corporate (or other non-natural person) Owners of, and     
Participants under, a Non-Qualified Contract incur current tax, regardless of   
distribution, on Contract value increases. Such current taxation does not apply,
though, to (i) immediate annuities, which the Internal Revenue Code (the "Code")
defines as a single premium contract with an annuity commencement date within   
one year of the date of purchase, or (ii) any Contract that the non-natural     
person holds as agent for a natural person (such as where a bank or other entity
holds a Contract as trustee under a trust agreement).                           

   You should note that qualified retirement investments generally provide
tax deferral regardless of whether the underlying contract is an annuity.       

DISTRIBUTIONS AND WITHDRAWALS FROM NON-QUALIFIED CONTRACTS          

The Account Value will include an amount attributable to Purchase   
Payments, the return of which is not taxable, and an amount attributable to     
investment earnings, the return of which is taxable at ordinary income rates.   
The relative portions of a distribution that derive from nontaxable Purchase    
Payments and taxable investment earnings depend upon the timing of the          
distribution.                                                                   

     If you withdraw less than your entire Account Value under a Non-Qualified
Contract before the Annuity Commencement Date, you must treat the withdrawal    
first as a return of investment earnings. You may treat only withdrawals in     
excess of the amount of the Account Value attributable to investment earnings as
a return of Purchase Payments. Account Value amounts assigned or pledged as     
collateral for a loan will be treated as if withdrawn from the Contract.        

     If a Payee receives annuity payments under a Non-Qualified Contract after
the Annuity Commencement Date, however, the Payee treats a portion of each      
payment as a nontaxable return of Purchase Payments. In general, the nontaxable 
portion of such a payment bears the same ratio to the total payment as the      
Purchase Payments bear to the Payee's expected return under the Contract. The   
remainder of the payment constitutes a taxable return of investment earnings.   
Once the Payee has received nontaxable payments in an amount equal to total     
Purchase Payments, all future distributions constitute fully taxable ordinary   
income. If the Annuitant dies before the Payee recovers the full amount of      
Purchase Payments, the Payee may deduct an amount equal to unrecovered Purchase 
Payments.                                                                       

    Upon the transfer of a Non-Qualified Contract by gift (other than to the
Participant's spouse), the Participant must treat an amount equal to the Account
Value minus the total amount paid for the Contract as income.                   

   A penalty tax of 10% may apply to taxable cash withdrawals and lump-sum
payments from Non-Qualified Contracts. This penalty will not apply in certain   
circumstances, such as distributions pursuant to the death of the Participant or
distributions under an immediate annuity (as defined above), or after age       
59 1/2.                                                                         

DISTRIBUTIONS AND WITHDRAWALS FROM QUALIFIED CONTRACTS              

    Generally, distributions from a Qualified Contract will constitute fully
taxable ordinary income. Also, a 10% penalty tax will, except in certain        
circumstances, apply to distributions prior to age 59 1/2.                      

Distributions from a Qualified Contract are not subject to current  
taxation or a 10% penalty, however, if:                                         

 -  the distribution is a hardship distribution or part of a series of
     payments for life or for a specified period of 10 years or more (an
"eligible rollover distribution"), and                        

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    -  the Participant or Payee rolls over the distribution (with or without
       actually receiving the distribution) into a qualified retirement plan
eligible to receive the rollover.                             

Only you or your spouse may elect to roll over a distribution to an 
eligible retirement plan.                                                       

WITHHOLDING                                                         

      In the case of an eligible rollover distribution (as defined above) from a
Qualified Contract (other than from a Contract issued for use with an individual
retirement account), we (or the plan administrator) must withhold and remit to  
the U.S. Government 20% of the distribution, unless the Participant or Payee    
elects to make a direct rollover of the distribution to another qualified       
retirement plan that is eligible to receive the rollover; however, only you or  
your spouse may elect a direct rollover. In the case of a distribution from     
(i) a Non-Qualified Contract, (ii) a Qualified Contract issued for use with an  
individual retirement account, or (iii) a Qualified Contract where the          
distribution is not an eligible rollover distribution, we will withhold and     
remit to the U.S. Government a part of the taxable portion of each distribution 
unless, prior to the distribution, the Participant or Payee provides us his or  
her taxpayer identification number and instructs us (in the manner prescribed)  
not to withhold. The Participant or Payee may credit against his or her federal 
income tax liability for the year of distribution any amounts that we (or the   
plan administrator) withhold.                                                   

INVESTMENT DIVERSIFICATION AND CONTROL                              

    The Treasury Department has issued regulations that prescribe investment
diversification requirements for mutual fund series underlying nonqualified     
variable contracts. Contracts must comply with these regulations to qualify as  
annuities for federal income tax purposes. Contracts that do not meet the       
guidelines are subject to current taxation on annual increases in value. We     
believe that each Fund available as an investment option under the Contract     
complies with these regulations. The preamble to the regulations states that the
Internal Revenue Service may promulgate guidelines under which an owner's       
excessive control over investments underlying the contract will preclude the    
contract from qualifying as an annuity for federal tax purposes. We cannot      
predict whether such guidelines, if in fact promulgated, will be retroactive. We
reserve the right to modify the Contract and/or the Variable Account to the     
extent necessary to comply with any such guidelines, but cannot assure that such
modifications would satisfy any retroactive guidelines.                         

TAX TREATMENT OF THE COMPANY AND THE VARIABLE ACCOUNT               

 As a life insurance company under the Code, we will record and report
operations of the Variable Account separately from other operations. The        
Variable Account will not, however, constitute a regulated investment company or
any other type of taxable entity distinct from our other operations. We will not
incur tax on the income of the Variable Account (consisting primarily of        
interest, dividends, and net capital gains) if we use this income to increase   
reserves under Contracts participating in the Variable Account.                 

QUALIFIED RETIREMENT PLANS                                          

      You may use Qualified Contracts with several types of qualified retirement
plans. Because tax consequences will vary with the type of qualified retirement 
plan and the plan's specific terms and conditions, we provide below only brief, 
general descriptions of the consequences that follow from using Qualified       
Contracts in connection with various types of qualified retirement plans. We    
stress that the rights of any person to any benefits under these plans may be   
subject to the terms and conditions of the plans themselves, regardless of the  
terms of the Qualified Contracts that you are using. These terms and conditions 
may include restrictions on, among other things, ownership, transferability,    
assignability, contributions and distributions.                                 

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PENSION AND PROFIT-SHARING PLANS                                    

    Sections 401(a), 401(k) and 403(a) of the Code permit business employers
and certain associations to establish various types of retirement plans for     
employees. The Tax Equity and Fiscal Responsibility Act of 1982 eliminated most 
differences between qualified retirement plans of corporations and those of     
self-employed individuals. Self-employed persons, as a general rule, may        
therefore use Qualified Contracts as a funding vehicle for their retirement     
plans.                                                                          

TAX-SHELTERED ANNUITIES                                             

    Section 403(b) of the Code permits public school employees and employees
of certain types of charitable, educational and scientific organizations        
specified in Section 501(c)(3) of the Code to purchase annuity contracts and,   
subject to certain limitations, exclude the amount of purchase payments from    
gross income for tax purposes. The Code imposes restrictions on cash withdrawals
from Section 403(b) annuities.                                                  

    If the Contracts are to receive tax-deferred treatment, cash withdrawals
of amounts attributable to salary reduction contributions (other than           
withdrawals of accumulation account value as of December 31, 1988) may be made  
only when the Participant attains age 59 1/2, separates from service with the   
employer, dies or becomes disabled (within the meaning of Section 72(m)(7) of   
the Code). These restrictions apply to (i) any post-1988 salary reduction       
contributions, (ii) any growth or interest on post-1988 salary reduction        
contributions, and (iii) any growth or interest on pre-1989 salary reduction    
contributions that occurs on or after January 1, 1989. It is permissible,       
however, to withdraw post-1988 salary reduction contributions in cases of       
financial hardship. While the Internal Revenue Service has not issued specific  
rules defining financial hardship, we expect that to qualify for a hardship     
distribution, the Participant must have an immediate and heavy bona fide        
financial need and lack other resources reasonably available to satisfy the     
need. Hardship withdrawals (as well as certain other premature withdrawals) will
be subject to a 10% tax penalty, in addition to any withdrawal charge applicable
under the Contracts. Under certain circumstances the 10% tax penalty will not   
apply if the withdrawal is for medical expenses.                                

    Under the terms of a particular Section 403(b) plan, the Participant may
be entitled to transfer all or a portion of the Account Value to one or more    
alternative funding options. Participants should consult the documents governing
their plan and the person who administers the plan for information as to such   
investment alternatives.                                                        

INDIVIDUAL RETIREMENT ACCOUNTS                                      

      Sections 219 and 408 of the Code permit eligible individuals to contribute
to an individual retirement program, including Simplified Employee Pension      
Plans, Employer/Association of Employees Established Individual Retirement      
Account Trusts, and Simple Retirement Accounts. Such IRAs are subject to        
limitations on contribution levels, the persons who may be eligible, and on the 
time when distributions may commence. In addition, certain distributions from   
some other types of retirement plans may be placed in an IRA on a tax-deferred  
basis. If we sell Contracts for use with IRAs, the Internal Revenue Service or  
other agency may impose supplementary information requirements. We will provide 
purchasers of the Contracts for such purposes with any necessary information.   
You will have the right to revoke the Contract under certain circumstances, as  
described in the section of this Prospectus entitled "Right to Return."         

ROTH IRAS                                                           

Section 408A of the Code permits an individual to contribute to an  
individual retirement program called a Roth IRA. Unlike contributions to a      
traditional IRA under Section 408 of the Code, contributions to a Roth IRA are  
not tax-deductible. Provided certain conditions are satisfied, distributions are
generally tax-free. Like traditional IRAs, Roth IRAs are subject to limitations 
on contribution amounts and the timing of distributions. If an individual       
converts a traditional IRA into a Roth IRA the full amount of the IRA is        
included in taxable income. The Internal Revenue Service and other              

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agencies may impose special information requirements with respect to Roth IRAs. 
We will provide the necessary information for Contracts issued in connection    
with Roth IRAs.                                                                 

PUERTO RICO TAX CONSIDERATIONS                                                  

     Puerto Rico tax laws with respect to qualified retirement plans described
in this Prospectus vary significantly from those discussed above under "U.S.    
Federal Tax Considerations." Although we currently offer the Contract in Puerto 
Rico in connection with qualified retirement plans, the text of this Prospectus 
under the heading "U.S. Federal Tax Considerations" dealing with such qualified 
retirement plans is inapplicable to Puerto Rico and should be disregarded.      

 The following discussion applies if your Contract is issued in Puerto
Rico:                                                                           

   Under Section 1022 of the Puerto Rico Internal Revenue Code of 1994, as
amended (the "1994 Code"), the Contract offered by this Prospectus is considered
an annuity contract. The 1994 Code provides that no income tax is payable on    
increases in value of accumulation shares of annuity units credited to a        
variable annuity contract until payments are made to the annuitant or other     
payee under such contract.                                                      

If any annuity distributions are made under an annuity contract, the
annuitant or other payee will be required to include as gross income the portion
of each payment equal to 3% of the aggregate premiums or other consideration    
paid for the annuity. The amount, if any, in excess of the included amount is   
excluded from gross income. After an amount equal to the aggregate amount       
excluded from gross income has been received up to your investment, all of the  
annuity payments are considered to be taxable income.                           

      In the event payment under a Contract is made in a lump sum, the amount of
the payment would be included in the gross income of the Annuitant or other     
Payee to the extent of the Annuitant's aggregate premiums or other consideration
paid.                                                                           

     For further information regarding the income tax consequences of owning a
Contract, you should consult a qualified tax adviser.                           

ADMINISTRATION OF THE CONTRACT

 We perform certain administrative functions relating to the Contract,
Participant Accounts, and the Variable Account. These functions include, but are
not limited to, maintaining the books and records of the Variable Account and   
the Sub-Accounts; maintaining records of the name, address, taxpayer            
identification number, Contract number, Participant Account number and type, the
status of each Participant Account and other pertinent information necessary to 
the administration and operation of the Contract; processing Applications,      
Purchase Payments, transfers and full and partial withdrawals; issuing Contracts
and Certificates; administering annuity payments; furnishing accounting and     
valuation services; reconciling and depositing cash receipts; providing         
confirmations; providing toll-free customer service lines; and furnishing       
telephonic transfer services.                                                   

DISTRIBUTION OF THE CONTRACT

We offer the Contract on a continuous basis. Contracts are sold by  
licensed insurance agents in those states where the Contract may be lawfully    
sold. Such agents will be registered representatives of broker-dealers          
registered under the Securities Exchange Act of 1934 who are members of the     
National Association of Securities Dealers, Inc. and who have entered into      
distribution agreements with the Company and the general distributor, Clarendon 
Insurance Agency, Inc. ("Clarendon"), One Sun Life Executive Park, Wellesley    
Hills, Massachusetts 02481. Clarendon, a wholly-owned subsidiary of the Company,
is registered with the SEC under the Securities Exchange Act of 1934 as a       
broker-dealer and is a member of the National Association of Securities Dealers,
Inc.                                                                            

Commissions and other distribution compensation will be paid by the 
Company to the selling agents and will not be more than 5.50% of Purchase       
Payments. In addition, after the first Account Year, broker-dealers who have    
entered into distribution agreements with the Company may receive an            

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annual renewal commission of no more than 1.00% of the Participant's Account    
Value. In addition to commissions, the Company may, from time to time, pay or   
allow additional promotional incentives, in the form of cash or other           
compensation. We reserve the right to offer these additional incentives only to 
certain broker-dealers that sell or are expected to sell during specified time  
periods certain minimum amounts of Contracts or Certificates or other contracts 
offered by the Company. Promotional incentives may change at any time.          
Commissions may be waived or reduced in connection with certain transactions    
described in this Prospectus under the heading "Waivers; Reduced Charges;       
Credits; Special Guaranteed Interest Rates."                                    

PERFORMANCE INFORMATION 

From time to time the Variable Account may publish reports to       
shareholders, sales literature and advertisements containing performance        
information relating to the Sub-Accounts. This information may include          
standardized and non-standardized "Average Annual Total Return," "Cumulative    
Growth Rate" and "Compound Growth Rate." We may also advertise "yield" and      
"effective yield" for some variable options.                                    

      Average Annual Total Return measures the net income of the Sub-Account and
any realized or unrealized gains or losses of the Fund in which it invests, over
the period stated. Average Annual Total Return figures are annualized and       
represent the average annual percentage change in the value of an investment in 
a Sub-Account over that period. Standardized Average Annual Total Return        
information covers the period after the Variable Account was established or, if 
shorter, the life of the Series. Non-standardized Average Annual Total Return   
covers the life of each Fund, which may predate the Variable Account. Cumulative
Growth Rate represents the cumulative change in the value of an investment in   
the Sub-Account for the period stated, and is arrived at by calculating the     
change in the Accumulation Unit Value of a Sub-Account between the first and the
last day of the period being measured. The difference is expressed as a         
percentage of the Accumulation Unit Value at the beginning of the base period.  
"Compound Growth Rate" is an annualized measure, calculated by applying a       
formula that determines the level of return which, if earned over the entire    
period, would produce the cumulative return.                                    

     Average Annual Total Return figures assume an initial purchase payment of
$1,000 and reflect all applicable withdrawal and Contract charges. The          
Cumulative Growth Rate and Compound Growth Rate figures that we advertise do not
reflect withdrawal charges or the Account Fee, although such figures do reflect 
all recurring charges. Results calculated without withdrawal and/or certain     
Contract charges will be higher. We may also use other types of rates of return 
that do not reflect withdrawal and Contract charges.                            

 The performance figures used by the Variable Account are based on the
actual historical performance of the underlying Funds for the specified periods,
and the figures are not intended to indicate future performance. For periods    
before the date the Contracts became available, we calculate the performance    
information for the Sub-Account on a hypothetical basis. To do this, we reflect 
deductions of the current Contract fees and charges from the historical         
performance of the corresponding Funds.                                         

    Yield is a measure of the net dividend and interest income earned over a
specific one month or 30-day period (7-day period for the available Money Market
Sub-Account), expressed as a percentage of the value of the Sub-Account's       
Accumulation Units. Yield is an annualized figure, which means that we assume   
that the Sub-Account generates the same level of net income over a one-year     
period and compound that income on a semi-annual basis. We calculate the        
effective yield for the Money Market Sub-Account similarly, but include the     
increase due to assumed compounding. The Money Market Sub-Account's effective   
yield will be slightly higher than its yield as a result of its compounding     
effect.                                                                         

  The Variable Account may also from time to time compare its investment
performance to various unmanaged indices or other variable annuities and may    
refer to certain rating and other organizations in its marketing materials. More
information on performance and our computations is set forth in the Statement of
Additional Information.                                                         

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     The Company may also advertise the ratings and other information assigned
to it by independent industry ratings organizations. Some of these organizations
are A.M. Best, Moody's Investor's Service, Standard and Poor's Insurance Rating 
Services, and Duff and Phelps. Each year A.M. Best reviews the financial status 
of thousands of insurers, culminating in the assignment of Best's rating. These 
ratings reflect A.M. Best's current opinion of the relevant financial strength  
and operating performance of an insurance company in comparison to the norms of 
the life/health industry. Best's ratings range from A++ to F. Standard and      
Poor's and Duff and Phelps' ratings measure the ability of an insurance company 
to meet its obligations under insurance policies it issues. These two ratings do
not measure the insurance company's ability to meet non-policy obligations.     
Ratings in general do not relate to the performance of the Sub-Accounts.        

 We may also advertise endorsements from organizations, individuals or
other parties that recommend the Company or the Contracts. We may occasionally  
include in advertisements (1) comparisons of currently taxable and tax deferred 
investment programs, based on selected tax brackets; or (2) discussions of      
alternative investment vehicles and general economic conditions.                

AVAILABLE INFORMATION 

     The Company and the Variable Account have filed with the SEC registration
statements under the Securities Act of 1933 relating to the Contracts. This     
Prospectus does not contain all of the information contained in the registration
statements and their exhibits. For further information regarding the Variable   
Account, the Company and the Contracts, please refer to the registration        
statements and their exhibits.                                                  

    In addition, the Company is subject to the informational requirements of
the Securities Exchange Act of 1934. We file reports and other information with 
the SEC to meet these requirements. You can inspect and copy this information   
and our registration statements at the SEC's public reference facilities at the 
following locations: WASHINGTON, D.C. -- 450 Fifth Street, N.W., Room 1024,     
Washington, D.C. 20549; CHICAGO, ILLINOIS -- 500 West Madison Street, Chicago,  
IL 60661; NEW YORK, NEW YORK -- 7 World Trade Center, 13th Floor, New York, NY  
10048. The Washington, D.C. office will also provide copies by mail for a fee.  
You may also find these materials on the SEC's website (http:// www.sec.gov).   

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 

    The Company's Annual Report on Form 10-K for the year ended December 31,
1999 and its Quarterly Reports on Form 10-Q for the periods ended March 31, 2000
and June 30, 2000, filed with the SEC, are incorporated by reference in this    
Prospectus. Any statement contained in a document we incorporate by reference is
deemed modified or superceded to the extent that a later filed document,        
including this Prospectus, shall modify or supercede that statement. Any        
statement so modified or superceded shall not be deemed, except as so modified  
or superceded, to constitute part of this Prospectus.                           

      The Company will furnish, without charge, to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of such person, a
copy of the document referred to above which has been incorporated by reference 
in this Prospectus, other than exhibits to such document (unless such exhibits  
are specifically incorporated by reference in this Prospectus). Requests for    
such document should be directed to the Secretary, Sun Life Assurance Company of
Canada (U.S.), One Sun Life Executive Park, Wellesley Hills, Massachusetts      
02481, telephone (800) 225-3950.                                                

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ADDITIONAL INFORMATION ABOUT THE COMPANY

GENERAL                                                                         

     The Company is engaged in the sale of individual variable life insurance,
group life and disability insurance, and individual and group fixed and variable
annuities. These contracts are sold in both the tax-qualified and               
non-tax-qualified markets. These products are distributed through individual    
insurance agents, insurance brokers and broker-dealers.                         

     For the year ended December 31, 1999, the Company filed its Annual Report
on Form 10-K using audited statutory financial statements. The Company prepared 
these financial statements using accounting practices prescribed or permitted by
the Insurance Department of the State of Delaware, which is a comprehensive     
basis of accounting other than generally accepted accounting principles. The    
Company has changed its basis of accounting to generally accepted accounting    
principles ("GAAP") effective January 1, 2000 and has filed its Quarterly Report
on Form 10-Q for the period ended June 30, 2000 in accordance with GAAP.        

     The Company has restated its financial statements originally filed in its
Annual Report on Form 10-K in accordance with GAAP. These financial statements  
are included in this Prospectus and are referred to in Management's Discussion  
and Analysis of Financial Condition and Results of Operations. See Note 13 to   
Consolidated Financial Statements of the Company for a reconcilation of         
statutory surplus to GAAP equity and statutory net income to GAAP net income.   

SELECTED FINANCIAL DATA                                                         

   The following selected financial data for the Company should be read in
conjunction with the audited Consolidated Financial Statements and the Notes    
thereto included in this Prospectus beginning on page __ and the Unaudited      
Consolidated Financial Statements and the Notes thereto included in this        
Prospectus beginning on page __.                                                

                                                        [Enlarge/Download Table]

                                            FOR THE          FOR THE YEAR ENDED DECEMBER 31,    
                                          PERIOD ENDED   ---------------------------------------
                                         JUNE 30, 2000      1999          1998          1997    
                                         --------------  -----------   -----------   -----------
                                                             (IN THOUSANDS)                     
                                                                                                
Revenues                                                                                        
  Premiums and other revenue............   $        --   $   262,603   $   382,477   $   406,883
  Net investment income and realized                                                            
    gains...............................            --       367,296       464,226       552,380
                                           -----------   -----------   -----------   -----------
                                                    --       629,899       846,703       959,263
                                           -----------   -----------   -----------   -----------
Benefits and expenses                                                                           
  Policyholder benefits.................            --       334,890       588,108       672,350
  Other expenses........................            --       212,197       233,663       190,105
                                           -----------   -----------   -----------   -----------
                                                    --       547,087       821,771       862,455
                                           -----------   -----------   -----------   -----------
Operating gain..........................            --        82,812        24,932        96,808
Federal income tax expense..............            --        29,080        10,768        35,338
                                           -----------   -----------   -----------   -----------
Net income..............................   $        --   $    53,732   $    14,164   $    61,470
                                           ===========   ===========   ===========   ===========
Assets..................................   $        --   $21,484,913   $18,248,262   $17,335,515
                                           ===========   ===========   ===========   ===========
Surplus notes...........................   $        --   $   565,000   $   565,000   $   565,000
                                           ===========   ===========   ===========   ===========

    The Company has not restated the financial statements for 1996 and 1995;
therefore, selected financial data on a statutory basis of accounting for the   
Company, as presented in its Annual Report on                                   

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Form 10-K for the year ended December 31, 1999, and for the period ended        
June 30, 2000 are shown below.                                                  

                                                        [Enlarge/Download Table]

                            FOR THE                        FOR THE YEAR ENDED DECEMBER 31,                  
                          PERIOD ENDED   -------------------------------------------------------------------
                         JUNE 30, 2000      1999          1998          1997          1996          1995    
                         --------------  -----------   -----------   -----------   -----------   -----------
                                                           (IN THOUSANDS)                                   
                                                                                                            
Revenues                                                                                                    
  Premiums, annuity                                                                                         
    deposits and other                                                                                      
    revenue.............   $        --   $ 2,869,250   $ 2,581,463   $ 2,623,629   $ 2,215,322   $ 1,883,901
  Net investment income                                                                                     
    and realized                                                                                            
    gains...............            --       190,844       187,208       298,121       310,172       315,966
                           -----------   -----------   -----------   -----------   -----------   -----------
                                    --     3,060,094     2,768,671     2,921,750     2,525,494     2,199,867
                           -----------   -----------   -----------   -----------   -----------   -----------
Benefits and expenses                                                                                       
  Policyholder                                                                                              
    benefits............            --     2,706,121     2,416,950     2,579,104     2,232,528     1,995,208
  Other expenses........            --       239,136       214,607       206,065       175,342       150,937
                           -----------   -----------   -----------   -----------   -----------   -----------
                                    --     2,945,257     2,631,557     2,785,169     2,407,870     2,146,145
                           -----------   -----------   -----------   -----------   -----------   -----------
Operating gain..........            --       114,837       137,114       136,581       117,624        53,722
Federal income tax                                                                                          
  expense (benefit).....            --        24,479        11,713         7,339        (5,400)       17,807
                           -----------   -----------   -----------   -----------   -----------   -----------
Net income..............   $        --   $    90,358   $   125,401   $   129,242   $   123,024   $    35,915
                           ===========   ===========   ===========   ===========   ===========   ===========
Assets..................   $        --   $19,948,155   $16,902,621   $15,925,357   $13,621,952   $12,359,683
                           ===========   ===========   ===========   ===========   ===========   ===========
Surplus notes...........   $        --   $   565,000   $   565,000   $   565,000   $   315,000   $   650,000
                           ===========   ===========   ===========   ===========   ===========   ===========

See discussion in "Management's Discussion and Analysis of Financial Condition  
and Results of Operations."                                                     

CAUTIONARY STATEMENT                                                            

This following discussions include forward-looking statements by the
Company under the Private Securities Litigation Reform Act of 1995. These       
statements are not matters of historical fact; they relate to such topics as    
future product sales, 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:                                  

   - Heightened competition, particularly in terms of price, product features,
   and distribution capability, which could constrain the Company's growth
and profitability.                                                  

- Changes in interest rates and market conditions.                      

- Regulatory and legislative developments.                              

- Developments in consumer preferences and behavior patterns.           

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      
OPERATIONS -- YEAR ENDED DECEMBER 31, 1999                                      

RESULTS OF OPERATIONS                                                           

The following table provides a summary of income from operations by 
segment, which is discussed more fully below.                                   

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NET INCOME FROM CONTINUING OPERATIONS BY SEGMENT
(IN MILLIONS) 

                                                        [Enlarge/Download Table]

                                                               1999      1998      1997  
                                                             --------  --------  --------
                                                                                         
Wealth Management...........................................  $59.7     $ 60.0    $ 60.7 
Individual Protection.......................................   (0.1)     (46.5)     (3.2)
Group Protection............................................    0.4        1.3      (0.8)
Corporate...................................................   (6.2)      (0.7)      4.8 
                                                              -----     ------    ------ 
                                                              $53.7     $ 14.1    $ 61.5 
                                                              =====     ======    ====== 

YEAR ENDED DECEMBER 31, 1999 COMPARED TO 1998:                      

NET INCOME                                                          

      Net income increased by $28.2 million to $42.4 million in 1999, reflecting
an increase of $39.6 million in income from continuing operations, an increase  
of $0.9 million in income from discontinued operations, and $12.3 million       
after-tax loss from the sales of Massachusetts Casualty Insurance Company       
("MCIC") and New London Trust F.S.B. ("NLT") which occurred in 1999.            

NET INCOME FROM CONTINUING OPERATIONS BY SEGMENT                    

 The Company's income from operations reflects the operations of its 4
business segments: the Wealth Management segment, the Individual Protection     
segment, the Group Protection segment and the Corporate segment.                

WEALTH MANAGEMENT SEGMENT                                           

     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 upscale consumers in the U.S., selling individual and group
fixed and variable annuities. Its major product lines, "Regatta" and "Futurity,"
are combination fixed/variable annuities. In these combination annuities,       
contract holders have the choice of allocating payments either to a fixed       
account, which provides a guaranteed rate of return, or to variable accounts.   
Withdrawals from the fixed account are subject to market value adjustment. In   
the variable accounts, the contract holder can choose from a range of investment
options and styles. The return depends upon investment performance of the       
options selected. Investment funds available under Regatta products are managed 
by Massachusetts Financial Services Company ("MFS"), an affiliate of the        
Company. Investment funds available under Futurity products are managed by      
several investment managers, including MFS and Sun Capital Advisers, Inc., a    
subsidiary of the Company.                                                      

The Company distributes its annuity products through a variety of   
channels. For the Regatta products, about half are sold through securities      
brokers, a further one-fourth through financial institutions, and the remainder 
through insurance agents and financial planners. The Futurity products,         
introduced in February 1998, are primarily distributed through a dedicated      
wholesaler network, including Sun Life of Canada (U.S.) Distributors, Inc., a   
subsidiary of the Company.                                                      

  Although new pension products are not currently sold, there has been a
substantial block of group retirement business in-force, including guaranteed   
investment contracts ("GICs"), pension plans and group annuities. A significant 
portion of these pension contracts are non-surrenderable, with the result that  
the Company's liquidity exposure is limited. GICs were marketed directly in the 
U.S. through independent managers. In 1997, the Company decided to no longer    
market group pension and GIC products.                                          

     Net income decreased by $0.3 million to $59.7 million in 1999 as compared
to 1998. The increase in fee and other income, due to increased business, was   
partially offset by higher operating expenses, resulting from both increased    
business and continued investment in the Futurity distribution                  

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network. In addition, the loss of earnings from the GICs, which block of        
business is declining, contributed to the minor decline in earnings. Following  
are the major factors affecting the Wealth Management segment's results in 1999 
as compared to 1998:                                                            

-    Fee and other income increased primarily as a result of higher variable    
annuity account balances. Fee income was higher by approximately $37  
million in 1999 compared to 1998. Market appreciation and net deposit 
    activity have been key factors in the growth in the account balances. This
    growth has generated corresponding increases in fee income, since fees are
 determined based on the average assets held in these accounts. Variable
    annuity assets have increased by approximately $3.8 billion, or 31%, since
January 1, 1999.                                                      

-    Net deposits of annuity products increased by $53 million to $290 million  
 compared with 1998. The increase in net deposits results primarily from
    significant increases in new deposits offset by increased variable annuity
 surrenders in 1999. Management believes the increase in new deposits is
  mainly a result of the success of the Company's introduction, during the
    fourth quarter of 1998, of a higher Dollar Cost Averaging ("DCA") rate and
     a new six-month DCA program. Under these programs, which were redesigned in
     late 1996, deposits are made into the fixed portion of the annuity contract
    and receive a bonus rate of interest for the policy year. During the year,
    the fixed deposit is systematically transferred to the variable portion of
  the contract in equal periodic installments. While fixed annuity account
   deposits increased, deposits directly into variable accounts decreased in
     1999. The Company believes this decline was a consequence of the heightened
interest in the DCA programs in 1999.                                 

Total new deposits to fixed and variable annuities increased by $479  
   million to $2,746 million in 1999. Sales of the Futurity line of products
represented $341 million or 12% of total annuity deposits in 1999, an 
   increase of $219 million from 1998. The Company expects that sales of the
Futurity product will continue to increase in the future, based on    
management's beliefs that market demand is growing for multi-manager  
variable annuity products, such as Futurity; that the productivity of 
Futurity's wholesale distribution network, established in 1998, will  
continue to grow; and that the marketplace will continue to respond   
favorably to introductions of new Futurity products and product       
enhancements.                                                         

    The surrenders are primarily related to older products which are no longer
   actively marketed. The Company expects that as the separate account block
of business continues to grow, from both net deposits and asset       
     appreciation, and as an increasing number of accounts are no longer subject
to surrender charges, surrenders will tend to increase. The Company is
implementing a conservation program with the aim of improving asset   
retention.                                                            

-    There has been a shift in demand to variable account products from general 
account products. Most sales are either DCA or variable deposits. As a
   consequence, there has been a decline in average general account invested
 assets and, in turn, net investment income has declined. Net investment
income reflects only income earned on invested assets of the general  
     account. Net investment income and realized gains for the Wealth Management
  segment decreased by approximately $26 million in 1999 compared to 1998.
This decline in average general account assets primarily reflects the 
Company's decision in 1997 to no longer market group pension and GIC  
  products and as a consequence, a declining block of in-force business as
GICs mature and are surrendered.                                      

-    Policyholder benefits (the major elements of which are interest credited to
  contractholder deposits and annuity benefits) decreased by approximately
   $12.6 million in 1999 as compared to 1998. This is less than the decrease
   in investment income as the surrenders of maturing GIC contracts on which
   the Company earns a positive spread are being partially replaced by sales
  of annuities under the Company's Dollar Cost Averaging ("DCA") programs.
Under these programs, deposits are made into the fixed portion of the 
    annuity contract and receive a bonus rate of interest for the policy year.
 During the year, the fixed deposit is systematically transferred to the
variable portion of the contract in equal periodic installments.      

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-    Other operating expenses increased by $9.0 million reflecting the increased
    volumes of both new business and inforce business and continued investment
in the growth of the Futurity products wholesale distribution network.

-    Amortization of deferred policy acquisition costs increased by             
$6.8 million primarily reflecting the impact of the increased variable
  annuity gross profits due to significant asset appreciation during 1999,
and the resulting increase in fee income.                             

INDIVIDUAL PROTECTION SEGMENT                                       

      The Company currently markets individual variable life insurance products.
These products include a variable universal life product marketed to the        
company-owned life insurance ("COLI") market, which product was introduced in   
late 1997. In September 1999, the Company introduced a new variable life product
as part of the Futurity product portfolio.                                      

  Prior to 1999, the Individual Protection segment consisted of two main
elements, internal reinsurance and other life products.                         

Internal Reinsurance                                                

    In recent years, the Company has had various reinsurance agreements with
Sun Life (Canada). In some of these arrangements, Sun Life (Canada) has         
reinsured the mortality risks of individual life policies sold in prior years by
the Company. These agreements, in the aggregate, had an immaterial effect on net
income in the years 1998 and 1999. Under another reinsurance agreement, which   
became effective January 1, 1991 and terminated October 1, 1998, the Company    
reinsured certain individual life insurance contracts issued by Sun Life        
(Canada). Prior to its termination, this agreement had the effect of increasing 
income from operations by approximately $16.5 million in 1998. In addition, the 
effect of terminating this agreement was to decrease 1998 net income by         
approximately $64.0 million as the termination payment made was greater than the
net reserves (reserves assumed less deferred policy acquisition costs) held     
under the agreement. Because this agreement terminated in 1998, it had no effect
on income from operations in 1999.                                              

Other Life Products                                                 

     Net income associated with the other life products directly issued by the
Company from the Individual Protection segment decreased by approximately       
$0.5 million from 1998.                                                         

GROUP PROTECTION SEGMENT                                            

 The Group Protection segment focuses on providing life and disability
insurance to small and medium size employers as part of those companies'        
employee benefit plans. This segment operates only in the state of New York     
through a subsidiary. Net income from the Group Protection segment decreased by 
$0.9 million from 1998 primarily due to unfavorable claims experience in the    
group life product.                                                             

CORPORATE SEGMENT                                                   

      The Corporate segment includes the unallocated capital of the Company, its
debt financing and items not otherwise attributable to the other segments.      

Net income for the Corporate segment decreased by $5.5 million to   
($6.2) million. This decrease reflected lower net investment income, mainly from
lower assets due to dividend payments in 1999 of $80 million and in 1998 of     
$50 million, and increased operational expenses. Income taxes in 1999 reflected 
an income tax benefit associated with tax operating losses with subsidiaries not
allocated to the operating segments.                                            

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YEAR ENDED DECEMBER 31, 1998 COMPARED TO 1997:                      

NET INCOME                                                          

Net income decreased by $116.3 million to $14.2 million in 1998,    
reflecting a decrease of $47.4 million in income from continuing operations and 
a decrease of $68.9 million in income from discontinued operations. On          
December 24, 1997 the Company transferred through a dividend its investment in  
MFS. Net income of MFS in 1997 included in income from discontinued operations  
was $61.9 million. Net income from NLT and MCIC, which were both sold during    
1999, included in income from discontinued operations was $.1 million in 1998   
and $7.1 million in 1997.                                                       

NET INCOME FROM CONTINUING OPERATIONS BY SEGMENT                    

WEALTH MANAGEMENT SEGMENT                                           

     Net income decreased by $0.7 million to $60.0 million in 1998 as compared
to 1997. Increased fee and other income was mainly offset by higher operating   
expenses. Both fee income and operating expenses increased as a result of the   
increased business. In addition the start-up of the Company's own wholesaling   
distribution network for the Futurity product line increased operating expenses 
during 1998. Also impacting net income was the loss of earnings from GICs, which
block of business declined. Following are the major factors affecting the Wealth
Management segment's results in 1998 as compared to 1997:                       

 - Fee and other income increased primarily as a result of higher variable
annuity account balances. Fee income was higher by approximately    
     $29 million in 1998 compared to 1997. Market appreciation and net deposit
      activity have been key factors in the growth in the account balances. This
      growth has generated corresponding increases in fee income, since fees are
   determined based on the average assets held in these accounts. Variable
annuity assets increased by approximately $2.8 billion or 30% since 
January 1, 1998.                                                    

- Net deposits of annuity products decreased by $131 million to         
  $237 million compared with 1997. The decrease in net deposits resulted
from both a decrease in new deposits and increased variable annuity 
   surrenders in 1998. Management believes the decrease in new deposits is
   mainly a result increased competition in the marketplace. In particular
  the competition in the DCA programs has intensified. During the fourth
quarter of 1998, the Company introduced a higher DCA rate and a new 
  six-month DCA program. While fixed annuity account deposits decreased,
   deposits directly into variable accounts increased in 1998. The Company
    believes the increase in variable deposits was a consequence of both the
   continuing strong growth in equity markets generally and the continuing
strong performance of the investment funds underlying the Company's 
variable annuity products.                                          

Total new deposits to fixed and variable annuities decreased by     
    $53 million to $2,267 million in 1998. Sales of the new Futurity line of
      products represented $122 million or 5% of total annuity deposits in 1998.
   The Company expects that sales of the Futurity product will continue to
    increase in the future, based on management's beliefs that market demand
     is growing for multi-manager variable annuity products, such as Futurity;
that the productivity of Futurity's wholesale distribution network, 
     established in 1998, will continue to grow; and that the marketplace will
   continue to respond favorably to introductions of new Futurity products
and product enhancements.                                           

      The surrenders are primarily related to older products which are no longer
   actively marketed and particularly those for which the surrender charge
      period has expired. The Company expects that as the separate account block
of business continues to grow, from both net deposits and asset     
appreciation, and as an increasing number of accounts are no longer 
subject to surrender charges, surrenders will tend to increase.     

    - There has been a shift in demand to variable account products from general
   account products. As a consequence, there has been a decline in average
   general account invested assets and, in turn, net investment income has
declined. Net investment income reflects only income earned on      

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      invested assets of the general account. Net investment income and realized
gains for the Wealth Management segment decreased by approximately  
    $72 million in 1998 as compared to 1997. This decline in average general
  account assets primarily reflects the Company's decision in 1997 to no
longer market group pension and GIC products and as a consequence, a
    declining block of in-force business as GICs mature and are surrendered.

  - Policyholder benefits (the major elements of which are interest credited
to contractholder deposits and annuity benefits) decreased by       
    approximately $62 million in 1998 as compared to 1997. This is less than
the decrease in investment income as the surrenders of maturing GIC 
 contracts on which the Company earns a positive spread were partially
replaced by sales of annuities under the Company's DCA programs.    

- Other operating expenses increased by $16.0 million reflecting the    
    increased volumes of both new business and inforce business and expenses
associated with the startup of the Futurity product line and a new  
distribution network dedicated to marketing the Futurity products.  
  Enhancements were made to the technology infrastructure to support the
growth in business.                                                 

- Amortization of deferred policy acquisition costs increased by        
      $4.0 million primarily reflecting the impact of increased variable annuity
    gross profits due to significant asset appreciation during 1998, and the
resulting increase in fee income.                                   

INDIVIDUAL PROTECTION SEGMENT                                       

  Prior to 1999, the Individual Protection segment consisted of two main
elements, internal reinsurance and other life products.                         

Internal Reinsurance                                                

    In recent years, the Company has had various reinsurance agreements with
Sun Life (Canada). In some of these arrangements, Sun Life (Canada) has         
reinsured the mortality risks of individual life policies sold in prior years by
the Company. These agreements, in the aggregate, had an immaterial effect on net
income in the years 1998 and 1997. Under another reinsurance agreement, which   
became effective January 1, 1991 and terminated October 1, 1998, the Company    
reinsured certain individual life insurance contracts issued by Sun Life        
(Canada). Prior to its termination, this agreement had the effect of increasing 
income from operations by approximately $16.5 million in 1998. In addition, the 
effect of terminating this agreement was to decrease 1998 net income by         
approximately $64.0 million as the termination payment made was greater than the
net reserves (reserves assumed less deferred policy acquisition costs) held     
under the agreement. This resulted in a net loss on the reinsurance in 1998 of  
$47.5 million as compared to a loss of $7.6 million in 1997.                    

Other Life Products                                                 

     Net income associated with the other life products directly issued by the
Company from the Individual Protection segment decreased by approximately       
$3.3 million from 1997. The decrease reflects primarily higher death benefit    
payments, increased operating expenses associated with growth of the COLI       
business and increased amortization of deferred policy acquisition costs.       

GROUP PROTECTION SEGMENT                                            

Net income from the Group Protection segment of $1.3 million in 1998
increased by $2.1 million from 1997 primarily due to favorable claims           
experience. The claims experience in the disability products was poor in 1997   
due to a greater number of claims. Claims returned to more normal levels in     
1998.                                                                           

CORPORATE SEGMENT                                                   

Net income for the Corporate segment decreased by $5.5 million to   
($0.7) million. This decrease reflected lower net investment income, from both  
lower interest rates and lower assets from dividend payments in 1998 of $50     
million, increased interest expense and increased operational expenses.         

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FINANCIAL CONDITION AND LIQUIDITY                                               

ASSETS                                                              

     The Company's total assets comprise those held in its general account and
those held in its separate accounts. General account assets support general     
account liabilities. Separate accounts are investment vehicles for the Company's
variable life and annuity contracts. Policyholders may choose from among various
investment options offered under these contracts according to their individual  
needs and preferences. Policyholders assume the investment risks associated with
these choices. State insurance law provides that separate account asset equal to
reserves and other liabilities are not available to fund the liabilities of the 
general account.                                                                

The following table summarizes significant changes in asset balances
during 1999. The changes are discussed below.                                   

                                                        [Enlarge/Download Table]

                                                        ASSETS ($ IN MILLIONS)                    
                                                ---------------------------------------  % CHANGE 
                                                DECEMBER 31, 1999    DECEMBER 31, 1998   1999/1998
                                                ------------------   ------------------  ---------
                                                                                                  
General account assets.........................     $ 5,361.6            $ 5,945.3         (10.9) 
Separate account assets........................      16,123.3             12,302.9          31.1  
                                                    ---------            ---------         -----  
Total assets...................................     $21,484.9            $18,248.2          17.7  
                                                    =========            =========         =====  

    General account assets decreased by 10.9% in 1999, but variable separate
account assets increased by 31.1%. This growth in variable separate accounts as 
compared to the general account reflects 2 main factors: (1) appreciation of the
funds held in the variable separate accounts exceeded that of the funds held in 
the general account; and (2) annuity deposits into variable accounts, including 
transfers under the DCA programs, have increased, while annuity deposits into   
fixed accounts have slowed. The Company believes this pattern has reflected a   
shift in the preferences of policyholders, which is largely attributable to the 
strong performance of equity markets in general and of the Company's variable   
account funds in particular.                                                    

      The assets of the general account are available to support general account
liabilities. For management purposes, it is the Company's practice to segment   
its general account to facilitate the matching of assets and liabilities.       
General account assets primarily comprise cash, invested assets, and deferred   
policy acquisition costs, which represented essentially all of general account  
assets at December 31, 1999. Major types of invested asset holdings included    
fixed maturity securities, short-term investments, mortgages, real estate and   
other invested assets. The Company's fixed maturity securities amounted to      
$2,677.3 million, representing 59.0% of the Company's total cash plus invested  
assets ("total portfolio") at December 31, 1999, and included both public and   
private issues. It is the Company's policy to acquire only investment-grade     
securities. As a result, the overall quality of the fixed maturity portfolio is 
high. At December 31, 1999, only 6.0% of the fixed maturity portfolio was       
invested in below-investment-grade securities. Short-term investments of $177.2 
million in fixed maturity securities represented 3.9% of the total portfolio.   
The Company's mortgage holdings amounted to $931.4 million at December 31, 1999,
representing 20.5% of the total portfolio. All mortgage holdings at             
December 31, 1999 were in good standing. The Company believes that the high     
quality of its mortgage portfolio is largely attributable to its stringent      
underwriting standards. At December 31, 1999, investment real estate amounted to
$95.1 million, representing about 2.1% of the total portfolio. The Company      
invests in real estate to enhance yields and, because of the long-term nature of
these investments, the Company uses them for purposes of matching with products 
having long-term liability durations. Other invested assets amounted to         
$67.9 million, representing about 1.5% of the portfolio. Cash and cash          
equivalents of $550.3 million at December 31, 1999 represented about 12.1% of   
the total portfolio.                                                            

LIABILITIES                                                         

      As with assets, the proportion of variable separate account liabilities to
total liabilities has been increasing. Most of the Company's liabilities        
comprise reserves for life insurance and for annuity contracts and deposit      
funds. The Company expects the declining trend in general account liabilities to
continue, because it believes that net maturities will continue to exceed sales 
for the fixed contracts                                                         

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associated with these liabilities. This trend stems mainly from the Company's   
1997 decision to discontinue selling group pension and GIC contracts and to     
focus its marketing efforts on its combination fixed/variable annuity products. 

------------------------

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      
OPERATIONS -- QUARTERLY PERIOD ENDED JUNE 30, 2000                              

RESULTS OF OPERATIONS                                                           

THREE MONTHS ENDED JUNE 30, 2000 COMPARED TO 1999:                  

NET INCOME                                                          

     Net income increased by $31.9 million to $27.7 million in the first three
months of 2000, reflecting an increase of $7.1 million in income from continuing
operations, a decrease of $0.8 million in income from discontinued operations,  
and $25.6 million of after-tax loss from the sale of Massachusetts Casualty     
Insurance Company which occurred in 1999.                                       

NET INCOME FROM OPERATIONS BY SEGMENT                               

The following table provides a summary of income from operations by 
segment, which is discussed more fully below.                                   

NET INCOME FROM OPERATIONS BY SEGMENT 
(IN MILLIONS) 

                                                        [Enlarge/Download Table]

                                                          THREE MONTHS                         
                                                              ENDED                            
                                                            MARCH 31,                          
                                                       -------------------                     
                                                         2000       1999    $ CHANGE  % CHANGE 
                                                       --------   --------  --------  ---------
                                                                                               
Wealth Management.....................................  $32.6      $18.1     $14.5       80.1% 
Individual Protection.................................   (0.1)        --      (0.1)         -- 
Group Protection......................................    0.6        0.4       0.2       50.0% 
Corporate.............................................   (5.4)       2.1      (7.5)    (357.1%)
                                                        -----      -----     -----    -------- 
                                                        $27.7      $20.6     $ 7.1       34.5% 
                                                        =====      =====     =====    ======== 

WEALTH MANAGEMENT SEGMENT                                           

     Net income increased by $14.5 million to $32.6 million in the first three
months of 2000 primarily due to the increased volume of in-force business.      
Following are the major factors affecting the Wealth Management segment's       
results in the first quarter of 2000 as compared to the same period in 1999.    

    -  Fee income increased primarily as a result of higher variable annuity
         account balances. Fee income was higher by approximately $19 million in
     the first three months of 2000 compared to the same period in 1999.
       Market appreciation and net deposit activity have been key factors in
the growth in the account balances. This growth has generated 
        corresponding increases in fee income, since fees are determined based
       on the average assets held in these accounts. Variable annuity assets
have increased by almost $5 billion since January 1, 1999.    

      -  Net deposits of annuity products decreased by $99 million compared with
 the first quarter of 1999. The decrease in net deposits results
      primarily from increases in variable annuity surrenders in 2000. The
        surrenders are primarily related to older products which are no longer
     actively marketed. The Company expects that as the separate account
       block of business continues to grow, from both net deposits and asset
     appreciation, and as an increasing number of accounts are no longer
subject to surrender charges, surrenders will tend to         

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       increase. The Company is implementing a conservation program with the
aim of improving asset retention.                             

-  Total new deposits to fixed and variable annuities increased by  
    $26 million to $669 million in 2000. Sales of the Futurity line of
         products represented $155 million of total annuity deposits in 2000, an
       increase of $96 million from the same three month period in 1999. The
     Company expects that sales of the Futurity product will continue to
   increase in the future, based on management's beliefs that market
        demand is growing for multi-manager variable annuity products, such as
      Futurity; that the productivity of Futurity's wholesale distribution
   network, established in 1998, will continue to grow; and that the
        marketplace will continue to respond favorably to introductions of new
Futurity products and product enhancements.                   

 -  There has been a shift in demand to variable account products from
         general account products. As a consequence, there has been a decline in
      average general account invested assets and, in turn, net investment
        income has declined. Net investment income reflects only income earned
      on invested assets of the general account. Net investment income and
realized gains for the Wealth Management segment decreased by 
        $20 million for the first three months of 2000 as compared to the same
period in 1999. This decline in average general account assets
       primarily reflects the Company's decision in 1997 to no longer market
        group pension and GIC products and as a consequence, a declining block
of in-force business as GICs mature and are surrendered.      

-  Policyholder benefits (the major elements of which are interest  
        credited to contractholder deposits and annuity benefits) decreased by
        approximately $5.4 million in the three months ended March 31, 2000 as
        compared to the same period in 1999. This is less than the decrease in
        investment income as the surrenders of maturing GIC contracts on which
     the Company earns a positive spread are being partially replaced by
      sales of annuities under the Company's Dollar-Cost Averaging ("DCA")
  programs. Under these programs, deposits are made into the fixed
      portion of the annuity contract and receive a bonus rate of interest
for the policy year. During the year, the fixed deposit is    
       systematically transferred to the variable portion of the contract in
equal periodic installments.                                  

  -  Underwriting, acquisition and other operating expenses increased by
        $4.0 million reflecting the increased volumes of both new business and
inforce business.                                             

-  Amortization of deferred policy acquisition costs decreased by   
         $21.6 million primarily reflecting the impact of the increased variable
        annuity assets, due to significant appreciation during the latter part
  of 1999 and through the first quarter of 2000, and the resulting
      increase in expected future gross profits from increased fee income.
   Since future gross profits are expected to be higher, the current
amortization of deferred policy acquisition costs is lower.   

INDIVIDUAL PROTECTION SEGMENT                                       

      The Company currently markets individual variable life insurance products.
These products include a variable universal life product marketed to the        
company-owned life insurance ("COLI") market, which product was introduced in   
late 1997. In September 1999, the Company introduced a new variable life product
as part of the Futurity product portfolio. The Company's management expects that
the Company's variable life business will grow and become more significant in   
the future.                                                                     

Net income from the Individual Protection segment decreased by      
$0.1 million from the same period in 1999.                                      

GROUP PROTECTION SEGMENT                                            

 The Group Protection segment focuses on providing life and disability
insurance to small and medium size employers as part of those companies'        
employee benefit plans. This segment operates only in the state of New York     
through a subsidiary. Net income from the Group Protection segment increased by 
$0.2 million from the same period in 1999 primarily due to favorable claims     
experience.                                                                     

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CORPORATE SEGMENT                                                   

      The Corporate segment includes the unallocated capital of the Company, its
debt financing, and items not otherwise attributable to the other segments.     

In the first three months of 2000, income from operations for the   
Corporate segment decreased by $7.5 million to a ($5.4) million net loss. This  
decrease reflected lower net investment income, mainly from lower assets due to 
dividend payments in 1999 of $75 million, increased operational expenses and    
increased income taxes. Income taxes in 1999 reflected an income tax benefit    
associated with tax operating losses with subsidiaries not allocated to the     
operating segments.                                                             

FINANCIAL CONDITION AND LIQUIDITY                                   

ASSETS                                                              

-    The Company's total assets comprise those held in its general account and  
     those held in its separate accounts. General account assets support general
account liabilities. Separate accounts are investment vehicles for the
 Company's variable life and annuity contracts. Policyholders may choose
from among various investment options offered under these contracts   
   according to their individual needs and preferences. Policyholders assume
     the investment risks associated with these choices. Separate account assets
are not available to fund the liabilities of the general account.     

The following table summarizes significant changes in asset balances
during the first three months of 2000. The changes are discussed below.         

                                                        [Enlarge/Download Table]

                                                                  ASSETS                          
                                                              (IN MILLIONS)              % CHANGE 
                                                   MARCH 31, 2000    DECEMBER 31, 1999   2000/1999
                                                   ---------------   ------------------  ---------
                                                                                                  
General Account Assets............................    $ 5,187.0          $ 5,361.6         (3.3)  
Separate Account Assets...........................     17,298.8           16,123.3          7.3   
                                                      ---------          ---------         ----   
Total Assets......................................    $22,485.8          $21,484.9          4.7   
                                                      =========          =========         ====   

 General account assets decreased by 3.3% in the first three months of
2000, but variable separate account assets increased by 7.3%. This growth in    
variable separate accounts as compared to the general account reflects two main 
factors: appreciation of the funds held in the variable separate accounts has   
exceeded that of the funds held in the general account; and annuity deposits    
into variable accounts, including transfers under the DCA programs have         
increased, while annuity deposits into fixed accounts have slowed. The Company  
believes this pattern has reflected a shift in the preferences of policyholders,
which is largely attributable to the strong performance of equity markets in    
general and of the Company's variable account funds in particular.              

      The assets of the general account are available to support general account
liabilities. For management purposes, it is the Company's practice to segment   
its general account to facilitate the matching of assets and liabilities.       
General account assets primarily comprise cash, invested assets, and deferred   
policy acquisition costs, which represented essentially all of general account  
assets at March 31, 2000. Major types of invested asset holdings included fixed 
maturity securities, short-term investment mortgages, real estate and other     
invested assets. The Company's fixed maturity securities comprised 70.5% of the 
Company's portfolio at March 31, 2000, and included both public and private     
issues. It is the Company's policy to acquire only investment-grade securities. 
As a result, the overall quality of the fixed maturity portfolio is high. At    
March 31, 2000, only 5.1% of the fixed maturity portfolio was rated             
below-investment-grade. Short-term investments in fixed maturity securities     
represented 2.1% of the total portfolio. The Company's mortgage holdings        
amounted to $898.1 million at March 31, 2000, representing 22.3% of the total   
portfolio. All mortgage holdings at March 31, 2000 were in good standing. The   
Company believes that the high quality of its mortgage portfolio is largely     
attributable to its stringent underwriting standards. At March 31, 2000,        
investment real estate amounted to $94.3 million, representing about 2.3% of the
total portfolio. The Company invests in real estate to enhance yields and,      
because of the long-term nature of these investments, the Company uses them for 
purposes                                                                        

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of matching with products having long-term liability durations. Other invested  
assets amounted to $68.3 million, representing about 1.7% of the portfolio.     
These holdings comprised mainly leveraged lease investments.                    

LIABILITIES                                                         

      As with assets, the proportion of variable separate account liabilities to
total liabilities has been increasing. Most of the Company's liabilities        
comprise reserves for life insurance and for annuity contracts and deposit      
funds. The Company expects the declining trend in general account liabilities to
continue, because it believes that net maturities will continue to exceed sales 
for the fixed contracts associated with these liabilities. This trend stems     
mainly from the Company's 1997 decision to discontinue selling group pension and
GIC contracts and to focus its marketing efforts on its combination             
fixed/variable annuity products.                                                

------------------------

CAPITAL RESOURCES                                                               

CAPITAL ADEQUACY                                                    

The National Association of Insurance Commissioners ("NAIC") adopted
regulations at the end of 1993 that established minimum capitalization          
requirements for insurance companies, based on risk-based capital ("RBC")       
formulas applied to statutory surplus. These requirements are intended to       
identify undercapitalized companies, so that specific regulatory actions can be 
taken on a timely basis. The RBC formula for life insurance companies calculates
capital requirements related to asset, insurance, interest rate, and business   
risks. According to the RBC calculation, the Company's capital was well in      
excess of its required capital at year-end 1999.                                

LIQUIDITY                                                           

The Company's liquidity requirements are generally met by funds from
operations. The Company's main uses of funds are to pay out death benefits and  
other maturing insurance and annuity contract obligations; to make pay-outs on  
contract terminations; to purchase new investments; to fund new business        
ventures; and to pay normal operating expenditures and taxes. The Company's main
sources of funds are premiums and deposits on insurance and annuity products;   
proceeds from the sale of investments; income from investments; and repayments  
of investment principal.                                                        

      In managing its general account assets in relation to its liabilities, the
Company has segmented these assets by product or by groups of products. The     
Company manages each segment's assets based on an investment policy that it has 
established for that segment. Among other matters, this investment policy       
considers liquidity requirements and provides cash flow estimates. The Company  
reviews these policies quarterly.                                               

 The Company's liquidity targets are intended to enable it to meet its
day-to-day cash requirements. On a quarterly basis, the Company compares its    
total "liquifiable" assets to its total demand liabilities. Liquifiable assets  
comprise cash and assets that could quickly be converted to cash should the need
arise. These assets include short-term investments and other current assets and 
investment-grade bonds. The Company's policy is to maintain a liquidity ratio in
excess of 100%, and it did so through December 31, 1999. Based on its ongoing   
liquidity analyses, the Company believes that its available liquidity is more   
than sufficient to meet its liquidity needs.                                    

OTHER MATTERS                                                                   

DEMUTUALIZATION                                                     

     Sun Life (Canada), the Company's ultimate parent as of December 31, 1999,
completed its demutualization on March 22, 2000. As a result of the             
demutualization, a new holding company, Sun Life Financial Services of Canada,  
Inc. ("SLF"), is now the ultimate parent of Sun Life (Canada) and the Company.  
Sun Life Financial, a corporation organized in Canada, is a reporting company   
under the                                                                       

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Securities Exchange Act of 1934, as amended, with common shares listed on the   
Toronto, New York, London, and Manila stock exchanges.                          

SALE OF SUBSIDIARIES                                                

  On February 5, 1999, the Company sold Massachusetts Casualty Insurance
Company ("MCIC"), a disability insurance company, to Centre Solutions (U.S.)    
Limited, a wholly-owned subsidiary of Centre Reinsurance Holdings Limited. The  
net proceeds of this sale were $34.0 million and the Company realized a post-tax
loss of $25.5 million.                                                          

      On October 29, 1999, the Company sold New London Trust F.S.B. ("NLT") to a
subsidiary of Phoenix Home Life Mutual Insurance Company for approximately      
$30.3 million and realized a post-tax gain of $13.2 million.                    

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                      

     This discussion covers market risks associated with investment portfolios
that support the Company's general account liabilities. This discussion does not
cover market risks associated with those investment portfolios that support     
separate account products. For these products, the policyholder, rather than the
Company, assumes these market risks.                                            

GENERAL                                                             

      The assets of the general account are available to support general account
liabilities. For purposes of managing these assets in relation to these         
liabilities, the Company notionally segments these assets by product or by      
groups of products. The Company manages each segment's assets based on an       
investment policy that it has established for that segment. The policy covers   
the segment's liability characteristics and liquidity requirements, provides    
cash flow estimates, and sets targets for asset mix, duration, and quality. Each
quarter, investment and business unit managers review these policies to ensure  
that the policies remain appropriate, taking into account each segment's        
liability characteristics.                                                      

TYPES OF MARKET RISKS                                               

   The Company's management believes that stringent underwriting standards
and practices have resulted in high-quality portfolios and have the effect of   
limiting credit risk. It is the Company's policy, for example, not to purchase  
below-investment-grade securities. Also, as a matter of investment policy, the  
Company assumes no foreign currency or commodity risk, nor does it assume equity
price risk except to the extent that it holds real estate in its portfolios.    
(Investment real estate holdings represented approximately 2.1% of the Company's
total general account portfolio at December 31, 1999, and ____ of the Company's 
total general account portfolio at June 30, 2000.) The management of interest   
rate risk exposure is discussed below.                                          

INTEREST RATE RISK MANAGEMENT                                       

    The Company's fixed interest rate liabilities are primarily supported by
well-diversified portfolios of fixed interest investments. They are also        
supported by holdings of real estate and floating rate notes. All of these fixed
interest investments are held for other than trading purposes and can include   
publicly issued and privately placed bonds and commercial mortgage loans. Public
bonds can include Treasury bonds, corporate bonds, and money market instruments.
The Company's fixed income portfolios also hold securitized assets, including   
mortgage-backed securities ("MBS") and asset-backed securities. These securities
are subject to the same standards applied to other portfolio investments,       
including relative value criteria and diversification guidelines. In portfolios 
backing interest-sensitive liabilities, the Company's policy is to limit MBS    
holdings to less than 10% of total portfolio assets. In all portfolios, the     
Company restricts MBS investments to pass-through securities issued by U.S.     
government agencies and to collateralized mortgage obligations, which are       
expected to exhibit relatively low volatility. The Company does not engage in   
leveraged transactions and it does not invest in the more speculative forms of  
these instruments such as the interest-only, principal-only, inverse floater, or
residual tranches.                                                              

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      Changes in the level of domestic interest rates affect the market value of
fixed interest assets and liabilities. Segments whose liabilities mainly arise  
from the sale of products containing interest rate guarantees for certain terms 
are sensitive to changes in interest rates. In these segments, the Company uses 
"immunization" strategies, which are specifically designed to minimize the loss 
from wide fluctuations in interest rates. The Company supports these strategies 
using analytical and modeling software acquired from outside vendors.           

Significant features of the Company's immunization models include:  

- an economic or market value basis for both assets and liabilities;    

- an option pricing methodology;                                        

- the use of effective duration and convexity to measure interest rate  
sensitivity; and                                                    

- the use of key rate durations to estimate interest rate exposure at   
different parts of the yield curve and to estimate the exposure to  
non-parallel shifts in the yield curve.                             

     The Company's Interest Rate Risk Committee meets monthly. After reviewing
duration analyses, market conditions and forecasts, the Committee develops      
specific asset management strategies for the interest-sensitive portfolios.     
These strategies may involve managing to achieve small intentional mismatches,  
either in terms of total effective duration or for certain key rate durations,  
between the liabilities and related assets of particular segments. The Company  
manages these mismatches to a tolerance range of plus or minus 0.5.             

     Asset strategies may include the use of Treasury futures or interest rate
swaps to adjust the duration profiles for particular portfolios. All derivative 
transactions are conducted under written operating guidelines and are marked to 
market. Total positions and exposures are reported to the Board of Directors on 
a monthly basis. The counterparties to hedging transactions are major highly    
rated financial institutions, with respect to which the risk of the Company's   
incurring losses related to credit exposures is considered remote.              

      Liabilities categorized as financial instruments and held in the Company's
general account had a fair value of $3,634.4 million at December 31, 1999 and a 
fair value of $_____ million at June 30, 2000. Fixed income investments         
supporting those liabilities had a fair value of $4,308.6 million and $4,065.8  
at December 31, 1999 and June 30, 2000, respectively. The Company performed a   
sensitivity analysis on these interest-sensitive liabilities and assets on      
December 31, 1999 and on June 30, 2000. The December 31, 1999 analysis showed   
that if there were an immediate increase of 100 basis points in interest rates, 
the fair value of the liabilities would show a net decrease of $118.0 million   
and the corresponding assets would show a net decrease of $73.6 million. The    
June 30, 2000 analysis showed that if there were an immediate increase of 100   
basis points in interest rates, the fair value of the liabilities would show a  
net decrease of $_____ million and the corresponding assets would show a net    
decrease of $_____ million.                                                     

    By comparison, liabilities categorized as financial instruments and held
in the Company's general account at had a fair value of $4,385.0 million        
December 31, 1998, and a fair value of $3,105.2 million at December 31, 1999.   
Fixed income investments supporting those liabilities had a fair value of       
$5,104.9 million and $4,308.6 million at December 31, 1998 and December 31,     
1999, respectively. The Company performed a sensitivity analysis on these       
interest-sensitive liabilities and assets at December 31, 1998 and at           
December 31, 1999. The December 31, 1998 analysis showed that if there were an  
immediate increase of 100 basis points in interest rates, the fair value of the 
liabilities would show a net decrease of $185.4 million and the corresponding   
assets would show a net decrease of $168.7 million. The December 31, 1999       
analysis showed that if there were an immediate increase of 100 basis points in 
interest rates, the fair value of the liabilities would show a net decrease of  
$63.8 million and the corresponding assets would show a net decrease of         
$118.0 million.                                                                 

   The Company produced these estimates using computer models. Since these
models reflect assumptions about the future, they contain an element of         
uncertainty. For example, the models contain assumptions about future           
policyholder behavior and asset cash flows. Actual policyholder behavior and    
asset cash flows could differ from what the models show. As a result, the       
models' estimates of duration                                                   

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and market values may not reflect what actually will occur. The models are      
further limited by the fact that they do not provide for the possibility that   
management action could be taken to mitigate adverse results. The Company       
believes that this limitation is one of conservatism; that is, it will tend to  
cause the models to produce estimates that are generally worse than one might   
actually expect, all other things being equal.                                  

     Based on its processes for analyzing and managing interest rate risk, the
Company's management believes the Company's exposure to interest rate changes   
will not materially affect its near-term financial position, results of         
operations, or cash flows.                                                      

REINSURANCE                                                                     

    The Company has agreements with Sun Life (Canada) which provide that Sun
Life (Canada) will reinsure the mortality risks of the individual life insurance
contracts sold by the Company. Under these agreements, basic death benefits and 
supplementary benefits are reinsured on a yearly renewable term basis and       
coinsurance basis, respectively.                                                

     Effective January 1, 1991, the Company entered into an agreement with Sun
Life (Canada) under which certain individual life insurance contracts issued by 
Sun Life (Canada) were reinsured by the Company on a 90% coinsurance basis. Also
effective January 1, 1991 the Company entered into an agreement with Sun Life   
(Canada) which provides that Sun Life (Canada) will reinsure the mortality risks
in excess of $500,000 per policy for the individual life insurance contracts    
assumed by the Company in the reinsurance agreement described above. Such death 
benefits are reinsured on a yearly renewable term basis. The life reinsurance   
assumed agreement requires the reinsurer to withhold funds in amounts equal to  
the reserves assumed. The Company terminated these agreements effective         
October 1, 1998.                                                                

The Company has also executed reinsurance agreements with unrelated 
companies which provide reinsurance of certain individual life insurance        
contracts on a modified coinsurance basis under which all deficiency reserves   
are ceded.                                                                      

During 1999, the Company entered into an agreement with an unrelated
company which provides reinsurance on certain fixed group annuity contracts.    
Also during 1999, the Company entered into three agreements with two unrelated  
companies for the purpose of obtaining stop-loss coverage of guaranteed minimum 
death benefit exposure with respect to the Company's variable annuity business. 

The Company has agreements with Sun Life (Canada) whereby Sun Life  
(Canada) reinsures the mortality and mortality risks of the group life insurance
contracts and group long term disability contracts. Under these agreements,     
certain death benefits and long-term disability benefits are reinsured on a     
yearly renewable basis.                                                         

RESERVES                                                                        

      In accordance with the life insurance laws and regulations under which the
Company operates, it is obligated to carry on its books, as liabilities,        
actuarially determined reserves to meet its obligations on its outstanding      
contracts. Reserves are based on mortality tables in general use in the United  
States and are computed to equal amounts that, with additions from premiums to  
be received, and with interest on such reserves compounded annually at certain  
assumed rates, will be sufficient to meet the Company's policy obligations at   
their maturities or in the event of an insured's death. In the accompanying     
Financial Statements, these reserves are determined in accordance with statutory
regulations.                                                                    

INVESTMENTS                                                                     

      Of the Company's total assets of $21.5 billion at December 31, 1999, 75.1%
($16.1 billion) consisted of unitized and non-unitized separate account assets, 
13.3% ($2.9 billion) was invested in bonds and similar securities, 4.3%         
($931.4 million) was invested in mortgages, 0.4% ($95.1 million) was invested in
real estate, and the remaining 6.9% ($1.5 billion) was invested in cash and     
other assets.                                                                   

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COMPETITION                                                                     

      The Company is engaged in a business that is highly competitive because of
the large number of stock and mutual life insurance companies and other entities
marketing insurance products. According to a 1999 statistical study published by
A.M. Best, the Company ranked 36th among North American life insurance companies
based upon admitted assets as of December 31, 1998.                             

EMPLOYEES                                                                       

   The Company and Sun Life (Canada) have entered into a service agreement
which provides that the latter will furnish the Company, as required, with      
personnel as well as certain services and facilities on a cost reimbursement    
basis. As of August 31, 2000, the Company had 385 direct employees who are      
employed at its Principal Executive Office in Wellesley Hills, Massachusetts and
at its Retirement Products and Services Division in Boston, Massachusetts.      

PROPERTIES                                                                      

The Company occupies office space owned by it and leased to Sun Life
(Canada) and certain unrelated parties for lease terms not exceeding 5 years.   
The Company also occupies office space which it leases from unaffiliated parties
for various lease terms.                                                        

STATE REGULATION                                                                

      The Company is subject to the laws of the State of Delaware governing life
insurance companies and to regulation by the Commissioner of Insurance of       
Delaware. An annual statement is filed with the Commissioner of Insurance on or 
before March lst in each year relating to the operations of the Company for the 
preceding year and its financial condition on December 31st of such year. Its   
books and records are subject to review or examination by the Commissioner or   
his agents at any time and a full examination of its operations is conducted at 
periodic intervals.                                                             

    The Company is also subject to the insurance laws and regulations of the
other states and jurisdictions in which it is licensed to operate. The laws of  
the various jurisdictions establish supervisory agencies with broad             
administrative powers with respect to licensing to transact business, overseeing
trade practices, licensing agents, approving policy forms, establishing reserve 
requirements, fixing maximum interest rates on life insurance policy loans and  
minimum rates for accumulation of surrender values, prescribing the form and    
content of required financial statements and regulating the type and amounts of 
investments permitted. Each insurance company is required to file detailed      
annual reports with supervisory agencies in each of the fire jurisdictions in   
which it does business and its operations and accounts are subject to           
examination by such agencies at regular intervals.                              

    In addition, many states regulate affiliated groups of insurers, such as
the Company, Sun Life (Canada) and its affiliates, under insurance holding      
company legislation. Under such laws, inter-company transfers of assets and     
dividend payments from insurance subsidiaries may be subject to prior notice or 
approval, depending on the size of such transfers and payments in relation to   
the financial positions of the companies involved. Under insurance guaranty fund
laws in most states, insurers doing business therein can be assessed (up to     
prescribed limits) for policyholder losses incurred by insolvent companies. The 
amount of any future assessments of the Company under these laws cannot be      
reasonably estimated. However, most of these laws do provide that an assessment 
may be excused or deferred if it would threaten an insurer's own financial      
strength and many permit the deduction of all or a portion of any such          
assessment from any future premium or similar taxes payable.                    

    Although the federal government generally does not directly regulate the
business of insurance, federal initiatives often have an impact on the business 
in a variety of ways. Current and proposed federal measures which may           
significantly affect the insurance business include employee benefit regulation,
removal of barriers preventing banks from engaging in the insurance business,   
tax law changes affecting the taxation of insurance companies, the tax treatment
of insurance products and its impact on the relative desirability of various    
personal investment vehicles.                                                   

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LEGAL PROCEEDINGS 

     There are no pending legal proceedings affecting the Variable Account. We
and our subsidiaries are engaged in various kinds of routine litigation which,  
in management's judgment, is not of material importance to our respective total 
assets or material with respect to the Variable Account.                        

ACCOUNTANTS 

The financial statements of the Variable Account for the year ended 
December 31, 1999 included in the Statement of Additional Information and the   
consolidated financial statements of the Company for the years ended            
December 31, 1999, 1998 and 1997 included in this Prospectus have been audited  
by ____________________, independent auditors, as stated in their reports       
appearing herein, and are included in reliance upon the report of such firm     
given upon their authority as experts in accounting and auditing.               

FINANCIAL STATEMENTS

The financial statements of the Company which are included in this  
Prospectus should be considered only as bearing on the ability of the Company to
meet its obligations with respect to amounts allocated to the Fixed Account and 
with respect to the death benefit and the Company's assumption of the mortality 
and expense risks. They should not be considered as bearing on the investment   
performance of the Fund shares held in the Sub-Accounts of the Variable Account.

The financial statements of the Variable Account for the year ended 
December 31, 1999 are included in the Statement of Additional Information.      

 [An auditors' letter and consent will be included in the Registration
Statement prior to effectiveness.]                                              

------------------------

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

CONSOLIDATED STATEMENTS OF INCOME (IN MILLIONS)                                 
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                            

                                                        [Enlarge/Download Table]

                                                              1999     1998     1997 
                                                              ----     ----     ---- 
                                                                                     
REVENUES                                                                             
    Premiums and annuity considerations..................... $ 45.1   $203.3   $257.4
    Net investment income...................................  365.0    455.9    539.9
    Net realized investment gains...........................    2.3      8.4     12.5
    Fee and other income....................................  217.5    179.2    149.5
                                                             ------   ------   ------
    Total revenues..........................................  629.9    846.8    959.3
                                                             ------   ------   ------
BENEFITS AND EXPENSES                                                                
    Policyowner benefits....................................  334.9    588.2    672.3
    Other operating expenses................................  101.1    100.0     85.4
    Amortization of deferred policy acquisition costs.......   67.8     88.8     62.3
                                                             ------   ------   ------
    Total benefits and expenses.............................  503.8    777.0    820.0
                                                             ------   ------   ------
    Income from operations..................................  126.1     69.8    139.3
    Interest expense........................................   43.3     44.9     42.5
                                                             ------   ------   ------
    Income before income tax expense and discontinued                                
      operations............................................   82.8     24.9     96.8

INCOME TAX EXPENSE:                                                                  
    Federal.................................................   28.8     10.9     34.0
    State...................................................     .3      (.1)     1.3
                                                             ------   ------   ------
    Income tax expense......................................   29.1     10.8     35.3
                                                             ------   ------   ------
Net income from continuing operations.......................   53.7     14.1     61.5
Net loss on disposal of subsidiaries, after tax.............  (12.3)      --       --
Discontinued operations.....................................    1.0       .1     69.0
                                                             ------   ------   ------
NET INCOME.................................................. $ 42.4   $ 14.2   $130.5
                                                             ======   ======   ======

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL 
STATEMENTS. 

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

CONSOLIDATED BALANCE SHEETS (IN MILLIONS)                                       
DECEMBER 31, 1999 AND 1998                                                      

                                                                [Download Table]

                                                               1999       1998   
                                                               ----       ----   
                                                                                 
ASSETS                                                                           
    Investments                                                                  
    Fixed maturities available-for-sale at fair value                            
      (amortized cost of $2,685.4 and $3,311.9 in 1999 and                       
      1998, respectively)................................... $ 2,677.3  $ 3,488.4
    Trading fixed maturities at fair value (amortized cost                       
      of $1.0 and $1.5 in 1999 and 1998, respectively)......       1.0        1.5
    Short-term investments..................................     177.2      336.0
    Mortgage loans..........................................     931.4      969.8
    Real estate.............................................      95.1       99.0
    Policy loans............................................      40.7       42.6
    Other invested assets...................................      67.9       64.2
                                                             ---------  ---------
    Total investments.......................................   3,990.6    5,001.5

    Cash and cash equivalents...............................     550.3      264.7
    Accrued investment income...............................      50.5       61.9
    Deferred policy acquisition costs.......................     686.3      523.9
    Outstanding premiums....................................       2.7         .8
    Other assets............................................      81.2         .1
    Separate account assets.................................  16,123.3   12,302.9
    Net assets from discontinued operations.................        --       92.4
                                                             ---------  ---------
    Total assets............................................ $21,484.9  $18,248.2
                                                             =========  =========
LIABILITIES                                                                      
    Future contract and policy benefits..................... $   729.3  $   736.1
    Contractholder deposit funds and other policy                                
      liabilities...........................................   3,144.8    3,658.2
    Unearned revenue........................................       7.1        6.7
    Accrued expenses and taxes..............................      98.8       32.8
    Deferred federal income taxes...........................      77.7      113.1
    Long-term debt payable to affiliates....................     565.0      565.0
    Other liabilities.......................................      67.7       55.8
    Separate account liabilities............................  16,123.3   12,302.9
                                                             ---------  ---------
    Total liabilities.......................................  20,813.7   17,470.6
                                                             ---------  ---------
COMMITMENTS AND CONTINGENCIES -- NOTE 15                                         

STOCKHOLDER'S EQUITY                                                             
    Common stock, $1,000 par value -- 10,000 shares                              
      authorized; 5,900 shares issued and outstanding....... $     5.9  $     5.9
    Additional paid-in capital..............................     199.4      199.4
    Accumulated other comprehensive income..................       7.1       75.9
    Retained earnings.......................................     458.8      496.4
                                                             ---------  ---------
    Total stockholder's equity..............................     671.2      777.6
                                                             ---------  ---------
    Total liabilities and stockholder's equity.............. $21,484.9  $18,248.2
                                                             =========  =========

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL 
STATEMENTS. 

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (IN MILLIONS)                   
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                            

                                                                [Download Table]

                                                              1999     1998    1997 
                                                              ----     ----    ---- 
                                                                                    
Net income.................................................. $ 42.4   $14.2   $130.5
Other comprehensive income                                                          
  Net unrealized holding gains (losses) on                                          
    available-for-sale securities,                                                  
    net of tax..............................................  (68.6)   (4.3)    26.7
  Other.....................................................    (.2)     --       --
                                                             ------   -----   ------
                                                              (68.8)   (4.3)    26.7
                                                             ------   -----   ------
Comprehensive income........................................ $(26.4)  $ 9.9   $157.2
                                                             ======   =====   ======

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL 
STATEMENTS. 

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (IN MILLIONS)                   
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                            

                                                        [Enlarge/Download Table]

                                                             ACCUMULATED                          
                                                ADDITIONAL      OTHER                    TOTAL    
                                        COMMON   PAID-IN    COMPREHENSIVE  RETAINED  STOCKHOLDER'S
                                        STOCK    CAPITAL       INCOME      EARNINGS     EQUITY    
                                        -----    -------       ------      --------     ------    
                                                                                                  
Balance at December 31, 1996...........  $5.9     $199.4        $ 53.5     $ 470.6      $ 729.4   
                                         ----     ------        ------     -------      -------   
    Net income.........................    --         --            --       130.5        130.5   
    Other comprehensive income.........    --         --          26.7          --         26.7   
    Dividends to stockholder...........    --         --            --       (68.9)       (68.9)  
                                         ----     ------        ------     -------      -------   
Balance at December 31, 1997...........   5.9      199.4          80.2       532.2        817.7   
                                         ----     ------        ------     -------      -------   
    Net income.........................    --         --            --        14.2         14.2   
    Other comprehensive income.........    --         --          (4.3)         --         (4.3)  
    Dividends to stockholder...........    --         --            --       (50.0)       (50.0)  
                                         ----     ------        ------     -------      -------   
Balance at December 31, 1998...........   5.9      199.4          75.9       496.4        777.6   
                                         ----     ------        ------     -------      -------   
    Net income.........................    --         --            --        42.4         42.4   
    Other comprehensive income.........    --         --         (68.8)         --        (68.8)  
    Dividends to stockholder...........    --         --            --       (80.0)       (80.0)  
                                         ----     ------        ------     -------      -------   
Balance at December 31, 1999...........  $5.9     $199.4        $  7.1     $ 458.8      $ 671.2   
                                         ====     ======        ======     =======      =======   

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL 
STATEMENTS. 

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

CONSOLIDATED STATEMENTS OF CASH FLOWS (IN MILLIONS)                             
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                            

                                                        [Enlarge/Download Table]

                                                               1999      1998        1997    
                                                               ----      ----        ----    
                                                                                             
CASH FLOWS FROM OPERATING ACTIVITIES:                                                        
Net income from continuing operations....................... $  53.7   $    14.1   $    61.5 
Adjustments to reconcile net income to net cash provided by                                  
  operating activities:                                                                      
    Amortization of discount and premiums...................    (0.5)        0.2          .6 
    Depreciation and amortization...........................     3.7         2.2         2.5 
    Net realized gains on investments.......................    (2.3)       (8.4)      (12.5)
    Interest credited to contractholder deposits............   216.4       238.7       282.9 
    Deferred federal income taxes...........................    14.5        (8.6)       (1.6)
    Cash dividends from subsidiaries........................    19.3          --        40.6 
Changes in assets and liabilities:                                                           
    Deferred acquisition costs..............................   (88.4)      208.7       (82.9)
    Accrued investment income...............................    11.4        31.1        25.8 
    Other assets............................................   (75.3)       78.5      (189.0)
    Future contract and policy benefits.....................    (7.5)   (1,124.0)      182.5 
    Other, net..............................................    72.3       896.6         7.7 
                                                             -------   ---------   --------- 
Net cash provided by operating activities...................   217.3       329.1       318.1 
                                                             -------   ---------   --------- 
CASH FLOWS FROM INVESTING ACTIVITIES:                                                        
Sales, maturities and repayments of:                                                         
    Available-for-sale fixed maturities..................... 1,240.9     1,665.6     1,535.8 
    Subsidiaries............................................    57.5         0.6          -- 
    Other invested assets...................................      --         0.9          .4 
    Mortgage loans..........................................   385.7       316.9       463.0 
    Real estate.............................................     2.8         6.0        15.1 
Purchases of:                                                                                
    Available-for-sale fixed maturities.....................  (615.2)   (1,346.7)   (1,334.1)
    Equity securities.......................................      --        (0.2)        (.3)
    Other invested assets...................................    (7.4)      (11.4)       (5.5)
    Mortgage loans..........................................  (344.9)     (123.0)     (159.0)
    Real estate.............................................    (1.6)       (1.1)      (10.1)
Capital contributions to subsidiaries.......................      --          --        (2.0)
Changes in other investing activities, net..................     3.1       (14.4)        (.5)
Net change in policy loans..................................     1.9        (1.6)        (.2)
Net change in short-term investments........................   155.9       (38.2)     (152.9)
                                                             -------   ---------   --------- 
Net cash provided by investing activities...................   878.7       453.4       349.7 
                                                             -------   ---------   --------- 

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL 
STATEMENTS. 

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (IN MILLIONS)                 
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                            

                                                        [Enlarge/Download Table]

                                                               1999        1998        1997    
                                                               ----        ----        ----    
                                                                                               
CASH FLOWS FROM FINANCING ACTIVITIES:                                                          
    Deposits to contractholder deposit funds................   1,536.8       910.8     1,023.6 
    Withdrawals from contractholder deposit funds...........  (2,267.2)   (1,803.2)   (1,550.8)
    Issuance of long-term debt and borrowed funds...........        --          --       360.1 
    Repayment of long-term debt and borrowed funds..........        --      (110.1)      (58.0)
    Dividends paid to stockholder...........................     (80.0)      (50.0)         -- 
                                                             ---------   ---------   --------- 
Net cash used in financing activities.......................    (810.4)   (1,052.5)     (225.1)
                                                             ---------   ---------   --------- 
Net change in cash and cash equivalents.....................     285.6      (270.0)      442.7 
    Cash and cash equivalents, beginning of year............     264.7       534.7        92.0 
                                                             ---------   ---------   --------- 
    Cash and cash equivalents, end of year.................. $   550.3   $   264.7   $   534.7 
                                                             =========   =========   ========= 
SUPPLEMENTAL CASH FLOW INFORMATION                                                             
    Interest paid........................................... $    43.3   $    40.5   $    42.0 
    Income taxes paid.......................................       5.5        50.6        32.9 

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL 
STATEMENTS. 

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                      
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                                    

1.  DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES      

GENERAL                                                                         

Sun Life Assurance Company of Canada (U.S.) (the "Company") is incorporated as a
life insurance company domiciled in the state of Delaware. The Company and its  
subsidiaries are licensed in 49 states and certain other territories and are    
engaged in the sale of individual variable life insurance, individual fixed and 
variable annuities, group fixed and variable annuities, group pension contracts,
group life and disability insurance, and other asset management services.       

The Company is a wholly-owned subsidiary of Sun Life of Canada (U.S.) Holdings, 
Inc. ("Life Holdco"), which is an indirect wholly-owned subsidiary of Sun Life  
Assurance Company of Canada ("SLOC"), the Company's ultimate parent as of       
December 31, 1999. SLOC is a life insurance company domiciled in Canada which   
reorganized from a mutual life insurance company to a stock life insurance      
company on March 22, 2000. As a result of the demutualization, a new holding    
company, Sun Life Financial Services of Canada, Inc. ("SLC"), became the        
ultimate parent of SLOC and the Company.                                        

BASIS OF PRESENTATION                                                           

The consolidated financial statements have been prepared in accordance with     
generally accepted accounting principles ("GAAP") in the United States of       
America for stockholder-owned life insurance companies and include the accounts 
of the Company and its subsidiaries.                                            

For the year ended December 31, 1999, the Company filed its Annual Report on    
Form 10-K using audited statutory financial statements. The Company prepared the
statutory financial statements using accounting practices prescribed or         
permitted by the Insurance Department of the State of Delaware, which is a      
comprehensive basis of accounting other than GAAP. See Note 13 for a            
reconciliation of statutory surplus to GAAP equity and statutory net income to  
GAAP net income.                                                                

The Company owns all of the outstanding shares of Sun Life Insurance and Annuity
Company of New York ("Sun Life (N.Y.)"), Sun Life of Canada (U.S.)              
Distributors, Inc. (formerly Sun Investment Services Company) ("Sundisco"), Sun 
Life Financial Services Limited ("SLFSL"), Sun Benefit Services Company, Inc.   
("Sunbesco"), Sun Capital Advisers, Inc. ("Sun Capital"), Sun Life Finance      
Corporation ("Sunfinco"), Sun Life of Canada (U.S.) SPE 97-1, Inc. ("SPE 97-1"),
Clarendon Insurance Agency, Inc. ("Clarendon"), and Sun Life Information        
Services Ireland Limited ("SLIRL"). All significant intercompany transactions   
have been eliminated in consolidation.                                          

Sun Life (N.Y.) is engaged in the sale of individual fixed and variable annuity 
contracts and group life and disability insurance contracts in its state of     
domicile, New York. Sundisco is a registered investment adviser and             
broker-dealer. SLFSL serves as the marketing administrator for the distribution 
of the offshore products of Sun Life Assurance Company of Canada (Bermuda), an  
affiliate. Sun Capital is a registered investment adviser. SPE 97-1 was         
organized for the purpose of engaging in activities incidental to securitizing  
mortgage loans. Clarendon is a registered broker-dealer that acts as the general
distributor of certain annuity and life insurance contracts issued by the       
Company and its affiliates. SLIRL provides information systems development      
services to the Company and it's affiliates. Sunfinco and Sunbesco are currently
inactive.                                                                       

During 1999, the Company sold two of its subsidiaries, Massachusetts Casualty   
Insurance Company ("MCIC") and New London Trust F.S.B. ("NLT") to separate,     
unaffiliated parties. MCIC is a life insurance company, which issues only       
individual disability income policies. NLT is a federally chartered savings     
bank, which grants commercial, residential real estate and installment loans.   
The Company owned a majority of Massachusetts Financial Services Company        
("MFS"), an investment adviser and                                              

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                          
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                                    

1.  DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING               
POLICIES (CONTINUED):                                                           
broker-dealer, until December 24, 1997. The results of operations of these      
subsidiaries are reported as discontinued operations.                           

USE OF ESTIMATES                                                                

The preparation of financial statements in conformity with generally accepted   
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of         
contingent assets and liabilities at the date of the financial statements and   
the reported amount of revenues and expenses during the reporting period. The   
most significant estimates are those used in determining deferred policy        
acquisition costs, investment allowances and the liabilities for future         
policyholder benefits. Actual results could differ from those estimates.        

FINANCIAL INSTRUMENTS                                                           

In the normal course of business, the Company enters into transactions involving
various types of financial instruments, including cash and cash equivalents,    
investments such as fixed maturities, mortgage loans and equity securities, off 
balance sheet financial instruments, debt, loan commitments and financial       
guarantees. These instruments involve credit risk and also may be subject to    
risk of loss due to interest rate fluctuation. The Company evaluates and        
monitors each financial instrument individually and, when appropriate, obtains  
collateral or other security to minimize losses. Financial instruments are more 
fully described in Note 5.                                                      

CASH AND CASH EQUIVALENTS                                                       

Cash and cash equivalents primarily include cash, commercial paper, money market
investments, and short-term bank participations. All such investments have      
maturities of three months or less and are considered cash equivalents for      
purposes of reporting cash flows.                                               

INVESTMENTS                                                                     

The Company accounts for its investments in accordance with Statement of        
Financial Accounting Standards No. 115, "Accounting for Certain Investments of  
Debt and Equity Securities". At the time of purchase, fixed maturity securities 
are classified based on intent, as held-to-maturity, trading, or available-for  
sale or trading. In order for the security to be classified as held-to-maturity,
the Company must have positive intent and ability to hold the securities to     
maturity. Securities held-to-maturity are stated at cost, adjusted for          
amortization of premiums, and accretion of discounts. Securities that do not    
meet this criterion are classified as available-for-sale. Available-for-sale    
securities are carried at aggregate fair value with changes in unrealized gains 
or losses reported net of policyholder related amounts and of deferred income   
taxes in a separate component of other comprehensive income. Trading securities 
are carried at aggregate fair value with changes in unrealized gains or losses  
reported as a component of net investment income. Fair values are obtained from 
external market quotations. For privately placed fixed maturities, fair values  
are estimated by taking into account prices for publicly traded securities of   
similar credit risk, maturities repayment and liquidity characteristics. All    
security transactions are recorded on a trade date basis. The Company's         
accounting policy for impairment requires recognition of an other than temporary
impairment charge on a security if it is determined that the Company is unable  
to recover all amounts due under the contractual obligations of the security. In
addition, for securities expected to be sold, an other than temporary impairment
charge is recognized if the Company does not expect the fair value of a security
to recover to cost or amortized cost prior to the expected date of sale. Once an
impairment charge has been recorded, the Company then continues to review the   
other than temporarily impaired securities for additional impairment, if        
necessary.                                                                      

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                          
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                                    

1.  DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING               
POLICIES (CONTINUED):                                                           
Mortgage loans are stated at unpaid principle balances, net of provisions for   
estimated losses. Mortgage loans acquired at a premium or discount are carried  
at amortized values net of provisions for estimated losses. Loans, which include
primarily commercial first mortgages, and real estate and are diversified by    
property type and geographic area throughout the United States. Mortgage loans  
are collateralized by the related properties and generally are no more than 75% 
of the properties' value at the time that the original loan is made.            

A loan is recognized as impaired when it is probable that the principal or      
interest are not collectible in accordance with the contractual terms of the    
loan. Measurement of impairment is based on the present value of expected future
cash flows discounted at the loan's effective interest rate, or at the loan's   
observable market price. A specific valuation allowance is established if the   
fair value of the impaired loan is less than the recorded amount. Loans are also
charged against the allowance when determined to be uncollectible. The allowance
is based on a continuing review of the loan portfolio, past loss experience and 
current economic conditions, which may affect the borrower's ability to pay.    
While management believes that it uses the best information available to        
establish the allowance, future adjustments to the allowance may become         
necessary if economic conditions differ from the assumptions used in making the 
evaluation.                                                                     

Real estate investments are held for the production of income or held-for-sale. 
Real estate investments held for the production of income are carried at the    
lower of cost adjusted for accumulated depreciation or fair value. Depreciation 
of buildings and improvements is calculated using the straight-line method over 
the estimated useful life of the property, generally 40 to 50 years. Real estate
investments held-for-sale are primarily acquired through foreclosure of mortgage
loans. The cost of real estate that has been acquired through foreclosure is the
estimated fair value less estimated costs to dispose at the time of foreclosure.

Policy loans are carried at the amount of outstanding principal balance not in  
excess of net cash surrender values of the related insurance policies.          

Other invested assets consist primarily of leveraged leases and tax credit      
partnerships.                                                                   

The Company uses derivative financial instruments including financial futures   
contracts, equity options, interest rate swaps, foreign currency swaps and      
forward spread lock contracts as a means of hedging exposure to interest rate,  
currency and equity price risk. Hedge accounting is used to account for certain 
derivatives. To qualify for hedge accounting, the changes in fair value of the  
derivative must be expected to substantially offset the changes in the value of 
the hedged item. Hedges are monitored to ensure that there is a correlation     
between the derivative instrument and the hedged investment. Derivative         
instruments qualifying for hedge accounting treatment are marked to market and  
the related changes in fair value are included in a separate component of       
stockholder's equity. To the extent that the correlation of the derivative      
instrument and hedged item is not established, the derivative instrument is     
marked to market and the related change in fair value is recognized on the      
statement of operations as a component of net investment income.                

Investment income is recognized on an accrual basis. Realized gains and losses  
on the sales of investments are recognized in operations at the date of sale and
are determined using the specific cost identification method. When an impairment
of a specific investment or a group of investments is determined to be other    
than temporary, a realized investment loss is recorded. Changes in the provision
for estimated losses on mortgage loans and real estate are included in net      
realized investment gains and losses.                                           

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                          
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                                    

1.  DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING               
POLICIES (CONTINUED):                                                           
Interest income on loans is recorded on the accrual basis. Loans are placed in a
non-accrual status when management believes that the borrower's financial       
condition, after giving consideration to economic and business conditions and   
collection efforts, is such that collection of principal and interest is        
doubtful. When a loan is placed in non-accrual status, all interest previously  
accrued is reversed against current period interest income. Interest accruals   
are resumed on such loans only when they are brought fully current with respect 
to principle and interest, have performed on a sustained basis for a reasonable 
period of time, and when, in the judgment of management, the loans are estimated
to be fully collectible as to both principal and interest.                      

DEFERRED POLICY ACQUISITION COSTS                                               

Acquisition costs consist of commissions, underwriting and other costs which    
vary with and are primarily related to the production of new business.          
Acquisition costs related to investment-type contracts, primarily deferred      
annuity and guaranteed investment contracts, and universal and variable life    
products are deferred and amortized with interest in proportion to the present  
value of estimated gross profits to be realized over the estimated lives of the 
contracts. Estimated gross profits are composed of net investment income, net   
realized investment gains and losses, life and variable annuity fees, surrender 
charges and direct variable administrative expenses. This amortization is       
reviewed annually and adjusted retrospectively when the Company revises its     
estimate of current or future gross profits to be realized from this group of   
products, including realized and unrealized gains and losses from investments.  
Acquisition costs related to fixed annuities and other life insurance products  
are deferred and amortized; generally in proportion to the ratio of annual      
revenue to the estimated total revenues over the contract periods based upon the
same assumptions used in estimating the liability for future policy benefits.   

Deferred acquisition costs for each life product are reviewed to determine if   
they are recoverable from future income, including investment income. If such   
costs are determined to be unrecoverable, they are expensed at the time of      
determination. Although realization of deferred policy acquisition costs is not 
assured, the Company believes it is more likely than not that all of these costs
will be realized. The amount of deferred policy acquisition costs considered    
realizable, however, could be reduced in the near term if the estimates of gross
profits or total revenues discussed above are reduced. The amount of            
amortization of deferred policy acquisition costs could be revised in the near  
term if any of the estimates discussed above are revised.                       

OTHER ASSETS                                                                    

Property, equipment, leasehold improvements and capitalized software cost which 
are included in other assets are stated at cost, less accumulated depreciation  
and amortization. Depreciation is provided using the straight-line or           
accelerated method over the estimated useful lives of the related assets, which 
generally range from 3 to 30 years. Amortization of leasehold improvements is   
provided using the straight-line method over the lesser of the term of the      
leases or the estimated useful life of the improvements. Reinsurance receivables
from reinsurance ceded are included in other assets.                            

POLICY LIABILITIES AND ACCRUALS                                                 

Future policy benefits are liabilities for life, health and annuity products.   
Such liabilities are established in amounts adequate to meet the estimated      
future obligations of policies in force. Future policy benefits for individual  
life insurance and annuity policies are computed using interest rates ranging   
from                                                                            

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                          
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                                    

1.  DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING               
POLICIES (CONTINUED):                                                           
4.5% to 5.5% for life insurance and 6.0% to 11.3% for annuities. The liabilities
associated with traditional life insurance, annuity and disability insurance    
products are computed using the net level premium method based on assumptions   
about future investment yields, mortality, morbidity and persistency. The       
assumptions used are based upon both the Company and its affiliates' experience 
and industry standards. Estimated liabilities are established for group life and
health policies that contain experience rating provisions.                      

Contractholder deposit funds consist of policy values that accrue to the holders
of universal life-type contracts and investment-related products such as        
deferred annuities and guaranteed investment contracts. The liabilities are     
determined using the retrospective deposit method and consist of net deposits   
and investment earnings less administrative charges. The liability is before the
deduction of any applicable surrender charges.                                  

Other policy liabilities include liabilities for policy and contract claims.    
These amounts consist of the estimated amount payable for claims reported but   
not yet settled and an estimate of claims incurred but not reported. The amount 
reported is based upon historical experience, adjusted for trends and current   
circumstances. Management believes that the recorded liability is sufficient to 
provide for the associated claims adjustment expenses. Revisions of these       
estimates are included in operations in the year such refinements are made.     

REVENUE AND EXPENSES                                                            

Premiums for traditional individual life and annuity products are considered    
revenue when due. Premiums related to group life and group disability insurance 
are recognized as revenue pro-rata over the contract period. The unexpired      
portion of these premiums is recorded as unearned premiums. Revenue from        
universal life-type products and investment-related products includes charges   
for cost of insurance (mortality), initiation and administration of the policy  
and surrender charges. Revenue is recognized when the charges are assessed      
except that any portion of an assessment that relates to services to be provided
in future years is deferred and recognized over the period during which the     
services are provided.                                                          

Benefits and expenses, other than deferred policy acquisition costs, related to 
traditional life, annuity, and disability contracts, including group policies,  
are recognized when incurred in a manner designed to match them with related    
premium revenue and spread income recognition over expected policy lives. For   
universal life-type and investment-type contracts, benefits include interest    
credited to policyholders' accounts and death benefits in excess of account     
values, which are recognized as incurred.                                       

INCOME TAXES                                                                    

The Company and its subsidiaries participate in a consolidated federal income   
tax return with US Holdco and other affiliates. Deferred income taxes are       
generally recognized when assets and liabilities have different values for      
financial statement and tax reporting purposes, and for other temporary taxable 
and deductible differences as defined by Statement of Financial Accounting      
Standards No. 109, "Accounting for Income Taxes". These differences result      
primarily from policy reserves, policy acquisition expenses and unrealized gains
or losses on investments, and are generally not chargeable with liabilities that
arise from any other business of the Company. Separate account assets are       
subject to general account claims only to the extent the value of such assets   
exceeds the separate account liabilities.                                       

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                          
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                                    

1.  DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING               
POLICIES (CONTINUED):                                                           
SEPARATE ACCOUNTS                                                               

The Company has established separate accounts applicable to various classes of  
contracts providing for variable benefits. Contracts for which funds are        
invested in separate accounts include variable life insurance and individual and
group qualified and non-qualified variable annuity contracts. Assets and        
liabilities of the separate accounts, representing net deposits and accumulated 
net investment earnings less fees, held primarily for the benefit of contract   
holders, are shown as separate captions in the financial statements. Assets held
in the separate accounts are carried at market value and the investment risk of 
such securities is retained by the policyholder.                                

NEW ACCOUNTING PRONOUNCEMENTS                                                   

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative           
Instruments and Hedging Activities" ("SFAS No. 133"), which establishes         
accounting and reporting standards for derivative instruments. SFAS No. 133     
requires that an entity recognize all derivatives as either assets or           
liabilities at fair value in the statement of financial position, and           
establishes special accounting for the following three types of hedges: fair    
value hedges, cash flow hedges, and hedges of foreign currency exposures of net 
investments in foreign operations.                                              

In June 1999, the FASB issued Statement of Financial Accounting Standards No.   
137 ("SFAS No. 137"), "Accounting for Derivative Instruments and Hedging        
Activities -- Deferral of the Effective Date of FASB Statement No. 133." SFAS   
No. 137 delays the effective date of SFAS No. 133 for all fiscal quarters until 
fiscal years beginning after June 15, 2000. The Company is evaluating SFAS No.  
133 and has not determined its effect on the consolidated financial statements. 

On January 1, 1999, the Company adopted the American Institute of Certified     
Public Accountants (AICPA) Statement of Position (SOP) 97-3, "Accounting by     
Insurance and Other Enterprises for Insurance-Related Assessments." This        
statement provides guidance on when an insurance or other enterprise should     
recognize a liability for guaranty fund and other assessments and on how to     
measure such liability. The adoption of SOP 97-3 had no material impact on the  
financial position or results of operations.                                    

On January 1, 1999, the Company adopted AICPA SOP 98-1, "Accounting for the     
Costs of Computer Software Developed or Obtained for Internal Use." This SOP    
provides guidance for determining whether costs of software developed or        
obtained for internal use should be capitalized or expensed as incurred. In the 
past, the Company has expensed such costs as they were incurred. The adoption of
SOP 98-1, resulted in an increase in pre-tax income of $6,232,000 for the year  
ended December 31, 1999.                                                        

2.  SIGNIFICANT TRANSACTIONS WITH AFFILIATES                                    

Effective October 1, 1998, the Company terminated a reinsurance agreement with  
Sun Life Assurance Company of Canada resulting in a decrease in income from     
operations to the Company of approximately $64,000,000.                         

On February 11, 1999, two notes previously issued to the Company by             
Massachusetts Financial Services Company ("MFS"), an affiliate, were combined   
into a new note with a February 11, 2000 maturity date. The original notes were 
each issued for $110,000,000. One note was issued on February 11, 1998 at an    
interest rate of 6.0% and a due date of February 11, 1999. The other note was   
issued on December 22, 1998 at an interest rate of 5.55% and a due date of      
February 11, 1999. These two notes and an additional $10,000,000 were combined  
into a new note of $230,000,000 with a floating interest                        

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                          
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                                    

2.  SIGNIFICANT TRANSACTIONS WITH AFFILIATES (CONTINUED):                       
rate based on the six month LIBOR rate plus 25 basis points. The $230,000,000   
note was repaid to the Company on December 21,1999.                             

On December 31, 1998, the Company had an additional $20,000,000 investment in   
notes issued by MFS, scheduled to mature in 2000. These notes were repaid to the
Company on December 21, 1999.                                                   

On January 14, 2000, the Company purchased $200,000,000 of notes from MFS.      

On February 5, 1999, the Company sold MCIC to an unaffiliated company. The net  
proceeds of this sale were $33,965,000. The Company realized a loss of          
$25,465,000 net of a $14,482,000 tax benefit.                                   

On October 29, 1999, the Company sold NLT to an unaffiliated company for        
$30,254,000. The Company realized a gain of $13,170,000 after taxes of          
$10,186,000.                                                                    

On December 22, 1999, the Company acquired twenty-eight mortgages from SLOC for 
a total cost of $118,092,000.                                                   

Dividends in the amounts of $80,000,000 and $50,000,000, were declared and paid 
by the Company to its parent, Life Holdco during 1999 and 1998, respectively. On
December 24, 1997 the Company transferred as a dividend to Life Holdco all of   
its ownership in MFS valued at $68,951,000. These dividends were approved by the
Company's Board of Directors.                                                   

The Company has management services agreements with SLOC, which provides that   
SLOC will furnish, as requested, personnel as well as certain services and      
facilities on a cost-reimbursement basis. Expenses under these agreements       
amounted to approximately $30,745,000 in 1999, $17,381,000 in 1998, and         
$17,152,000 in 1997.                                                            

As more fully described in Note 7, the Company has been involved in several     
reinsurance transactions with its ultimate parent, SLOC.                        

On December 22, 1997, the Company issued a $250,000,000 surplus note to Life    
Holdco. This note has an interest rate of 8.625% and is due on or after         
November 6, 2027.                                                               

On May 9, 1997, the Company issued a short-term note of $600,000,000 to Life    
Holdco at an interest rate of 5.10%, which was extended at various interest     
rates. This note was repaid on December 22, 1997.                               

On December 23, 1997, the Company issued a $110,000,000 note to US Holdco at an 
interest rate of 5.80%, which was repaid on March 1, 1998. A $110,000,000 note  
was also issued to the Company by MFS on December 23, 1997 at an interest rate  
of 5.85% and was repaid on February 11, 1998.                                   

On December 31, 1996, the Company issued a $58,000,000 note to SLOC at an       
interest rate of 5.70% which was repaid on February 10, 1997. Also on           
December 31, 1996, the Company was issued a $58,000,000 note by MFS at an       
interest rate of 5.76%. This note was repaid to the Company on February 10,     
1997.                                                                           

The Company accrued $4,259,000 and $4,259,000 for interest on surplus notes for 
the years ended December 31, 1999 and 1998, respectively.                       

The Company expensed $43,266,000, $44,903,000, and $42,481,000 for interest on  
surplus notes and notes payable for the years ended December 31, 1999, 1998 and 
1997, respectively.                                                             

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                          
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                                    

2.  SIGNIFICANT TRANSACTIONS WITH AFFILIATES (CONTINUED):                       
The Company had $565,000,000 of surplus notes issued to affiliates and          
outstanding as of December 31, 1999 and 1998. The following table lists the     
details of the surplus notes outstanding (in 000's):                            

                                                        [Enlarge/Download Table]

                                                             MATURITY  PRINCIPAL   RATE 
                                                             --------  ---------   ---- 
                                                                                        
Sun Canada Financial Co..................................... 12/15/07  $150,000   6.625%
Sun Canada Financial Co..................................... 12/15/15   150,000   7.250%
Sun Canada Financial Co..................................... 12/15/07     7,500   6.125%
Sun Canada Financial Co..................................... 12/15/15     7,500   5.750%
Life Holdco................................................. 11/06/27   250,000   8.625%
                                                                       --------         
        Total...............................................           $565,000         
                                                                       ========         

3.  INVESTMENTS                                                                 

FIXED MATURITIES                                                                

The amortized cost and fair value of fixed maturities were as follows (in       
000's):                                                                         

                                                        [Enlarge/Download Table]

                                                                 DECEMBER 31, 1999                
                                                 -------------------------------------------------
                                                                GROSS        GROSS      ESTIMATED 
                                                 AMORTIZED    UNREALIZED   UNREALIZED      FAIR   
                                                    COST        GAINS        LOSSES       VALUE   
                                                    ----        -----        ------       -----   
                                                                                                  
Fixed maturities available-for-sale:                                                              
    United States treasury securities, U.S.                                                       
      Government and agency securities.......... $  107,272    $ 2,104      $ (3,191)   $  106,186
    States, provinces and political                                                               
      subdivisions..............................     32,593         15          (161)       32,447
    Mortgage-backed securities..................     98,903      1,225          (541)       99,588
    Public utilities............................    360,672      7,954        (9,780)      358,846
    Transportation..............................    327,544      8,585        (4,258)      331,871
    Finance.....................................    281,303      4,632        (6,935)      279,000
    Corporate...................................  1,477,105     22,851       (30,556)    1,469,400
                                                 ----------    -------      --------    ----------
Total fixed maturities available-for-sale....... $2,685,392    $47,366      $(55,422)   $2,677,338
                                                 ==========    =======      ========    ==========

Trading fixed maturities:                                                                         
    United States treasury securities, U.S.                                                       
      Government and agency securities.......... $    1,000    $     2      $     --    $    1,002
                                                 ----------    -------      --------    ----------
Total trading fixed securities.................. $    1,000    $     2      $     --    $    1,002
                                                 ==========    =======      ========    ==========

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                          
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                                    

3.  INVESTMENTS (CONTINUED):                                                    

                                                        [Enlarge/Download Table]

                                                                 DECEMBER 31, 1998                
                                                 -------------------------------------------------
                                                                GROSS        GROSS      ESTIMATED 
                                                 AMORTIZED    UNREALIZED   UNREALIZED      FAIR   
                                                    COST        GAINS        LOSSES       VALUE   
                                                    ----        -----        ------       -----   
                                                                                                  
Fixed maturities available-for-sale:                                                              
    United States treasury securities, U.S.                                                       
      Government and agency securities.......... $  221,724    $  8,356     $   (360)   $  229,720
    States, provinces and political                                                               
      subdivisions..............................     25,888       2,825            0        28,713
    Mortgage-backed securities..................    238,539       6,864       (1,501)      243,902
    Public utilities............................    473,243      31,526         (235)      504,534
    Transportation..............................    378,393      31,168          (53)      409,508
    Finance.....................................    369,809      15,927       (1,911)      383,825
    Corporate...................................  1,604,323      94,123      (10,224)    1,688,222
                                                 ----------    --------     --------    ----------
Total fixed maturities available-for-sale....... $3,311,919    $190,789     $(14,284)   $3,488,424
                                                 ==========    ========     ========    ==========

Trading fixed maturities:                                                                         
    United States treasury securities, U.S.                                                       
      Government and agency securities.......... $    1,506    $     35     $     --    $    1,541
                                                 ----------    --------     --------    ----------
Total trading fixed securities.................. $    1,506    $     35     $     --    $    1,541
                                                 ==========    ========     ========    ==========

There were no contractual fixed maturity investment commitments at December 31, 
1999 and 1998, respectively.                                                    

The amortized cost and estimated fair value by maturity periods for fixed       
maturity investments are shown below (in 000's). Actual maturities may differ   
from contractual maturities on mortgage-backed securities because borrowers may 
have the right to call or prepay obligations with or without call or prepayment 
penalties, or the Company may have the right to put or sell the obligations back
to the issuers.                                                                 

                                                                [Download Table]

                                                                DECEMBER 31, 1999   
                                                             -----------------------
                                                             AMORTIZED    ESTIMATED 
                                                                COST      FAIR VALUE
                                                                ----      ----------
                                                                                    
Maturities of available for sale securities:                                        
    Due in one year or less................................. $  216,235   $  216,417
    Due after one year through five years...................    933,481      924,198
    Due after five years through ten years..................    600,735      605,804
    Due after ten years.....................................    934,941      930,919
                                                             ----------   ----------
                                                             $2,685,392   $2,677,338
                                                             ==========   ==========

Maturities of trading securities:                                                   
    Due in one year or less................................. $      500          500
    Due after one year through five years................... $      500          502
                                                             ----------   ----------
                                                             $    1,000   $    1,002
                                                             ==========   ==========

Gross gains of $12,496,128, $25,752,149 and $18,292,309 and gross losses of     
$7,646,028, $1,439,129, and $5,284,286 were realized on the voluntary sale of   
fixed maturities for the years ended December 31, 1999, 1998, and 1997,         
respectively.                                                                   

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                          
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                                    

3.  INVESTMENTS (CONTINUED):                                                    
Fixed maturites with an amortized cost of approximately $3,009,000 and          
$2,976,000 at December 31, 1999 and 1998 respectively, were on deposit with     
Federal and State governmental authorities as required by law.                  

No fixed maturities have been pledged to collateralize various liabilities at   
December 31, 1999 and 1998, respectively.                                       

As of December 31, 1999 and 1998, 94% of the Company's fixed maturities were    
investment grade and there were no significant concentrations by issuer or by   
industry, other than U.S. Treasury securities. Investment grade securities are  
those that are rated "BBB" or better by nationally recognized rating agencies.  
The Company believes that unrealized losses are temporary in nature, and        
accordingly, no provisions for permanent impairment of value have been recorded.
All of the Company's securities were income producing for the periods ending    
December 31, 1999, 1998 and 1997.                                               

MORTGAGE LOANS AND REAL ESTATE                                                  

The Company invests in commercial first mortgage loans and real estate          
throughout the United States. Investments are diversified by property type and  
geographic area. Mortgage loans are collateralized by the related properties and
generally are no more than 75% of the properties' value at the time that the    
original loan is made. Real estate investments classified as held for sale have 
been obtained primarily through foreclosure. The carrying value of mortgage     
loans and real estate investments net of applicable reserves were as follows (in
000's):                                                                         

                                                                [Download Table]

                                                                DECEMBER 31,    
                                                             -------------------
                                                               1999       1998  
                                                               ----       ----  
                                                                                
Total mortgage loans........................................ $931,351   $969,799
                                                             ========   ========
Real estate:                                                                    
    Held for sale...........................................    7,804      4,323
    Held for production of income...........................   87,290     94,625
                                                             --------   --------
Total real estate........................................... $ 95,094   $ 98,948
                                                             ========   ========

Accumulated depreciation on real estate was $18,529,000 and $16,829,000 at      
December 31, 1999 and 1998, respectively.                                       

The Company monitors the condition of the mortgage loans in its portfolio. In   
those cases where mortgages have been restructured, appropriate allowances for  
losses have been made. The Company has restructured mortgage loans totaling     
$28,019,000 and $39,804,000 at December 31, 1999 and 1998, respectively, against
which there are allowances for losses of $3,705,000 and $5,700,000,             
respectively. In those cases where, in management's judgment, the mortgage      
loans' values are impaired, appropriate losses are recorded. The carrying value 
of impaired loans was $19,356,000 and $27,500,000 with related reserves of      
$2,123,000 and $3,730,000 as of December 31, 1999 and 1998, respectively. All   
impaired loans were reserved as of December 31, 1999 and 1998. The average      
carrying value of impaired loans was $19,491,000 and $27,313,000 with related   
interest income while such loans were impaired of $1,782,000 and $2,181,000 as  
of December 31, 1999 and 1998, respectively. During 1999 and 1998, non-cash     
investing activities included real estate acquired through foreclosure of       
mortgage loans, which had a fair value of $20,433,000 and $22,372,000,          
respectively.                                                                   

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                          
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                                    

3.  INVESTMENTS (CONTINUED):                                                    
The investment valuation allowances, which have been deducted in arriving at    
investment carrying values as presented in the consolidated balance sheets, were
as follows (in 000's):                                                          

                                                        [Enlarge/Download Table]

                                                BALANCE AT                            BALANCE AT 
                                                JANUARY 1,  ADDITIONS  SUBTRACTIONS  DECEMBER 31,
                                                ----------  ---------  ------------  ------------
                                                                                                 
    1999                                                                                         
Mortgage loans.................................   $6,600     $4,045       $(2,895)     $ 7,750   
Real estate....................................    1,250      1,379          (906)       1,723   

    1998                                                                                         
Mortgage loans.................................   $6,671     $1,098       $(1,169)     $ 6,600   
Real estate....................................      806        569          (125)       1,250   

Mortgage loans and real estate investments comprise the following property types
and geographic regions (in 000's):                                              

                                                        [Enlarge/Download Table]

                                                                  DECEMBER 31,       
                                                             ----------------------- 
                                                                1999         1998    
                                                                ----         ----    
                                                                                     
Property Type:                                                                       
    Office building......................................... $  357,466   $  370,679 
    Residential.............................................     58,546       55,952 
    Retail..................................................    433,970      401,549 
    Industrial/warehouse....................................    156,204      248,417 
    Other...................................................     29,732           -- 
    Valuation allowances....................................     (9,473)      (7,850)
                                                             ----------   ---------- 
Total....................................................... $1,026,445   $1,068,747 
                                                             ==========   ========== 

Geographic region:                                                                   
    California.............................................. $  117,355   $  134,789 
    Massachusetts...........................................     99,661      115,807 
    Michigan................................................     69,545       71,678 
    New York................................................     65,107       67,407 
    Ohio....................................................     43,946       56,682 
    Pennsylvania............................................    159,328      155,216 
    Washington..............................................     68,657       73,555 
    All other...............................................    412,319      401,463 
    Valuation allowances....................................     (9,473)      (7,850)
                                                             ----------   ---------- 
Total....................................................... $1,026,445   $1,068,747 
                                                             ==========   ========== 

At December 31, 1999, scheduled mortgage loan maturities were as follows        
(000's):                                                                        

                                                                [Download Table]
                                                
2000..................................  $113,731
2001..................................    71,648
2002..................................    72,535
2003..................................    41,430
Thereafter............................   632,007
                                        --------
Total.................................  $931,351
                                        ========

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                          
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                                    

3.  INVESTMENTS (CONTINUED):                                                    
Actual maturities could differ from contractual maturities because borrowers may
have the right to prepay obligations with or without prepayment penalties and   
loans may be refinanced.                                                        

The Company has made commitments of mortgage loans on real estate and other     
loans into the future. The outstanding commitments for these mortgages amount to
$15,911,000 and $31,563,000 at December 31, 1999 and 1998, respectively.        

SECURITIES LENDING                                                              

The Company has a securities lending program operated on its behalf by the      
Company's primary custodian, Chase Manhattan of New York. The custodian has     
indemnified the Company against losses arising from this program. The total par 
value of securities out on loan was $0 and $0 at December 31, 1999 and 1998,    
respectively. The Company requires collateral at 102% of the value of securities
loaned. As of December 31, 1999 and 1998, the Company received collateral with a
fair value of $0 and $0 for securities on loan. The income resulting from this  
program was $37,000, $135,000 and $230,000 for the years ended December 31,     
1999, 1998 and 1997, respectively.                                              

LEVERAGED LEASES                                                                

The Company is a lessor in a leverage lease agreement entered into on           
October 21, 1994, under which equipment having an estimated economic life of    
25-40 years was leased for a term of 9.78 years. The Company's equity investment
represented 22.9% of the purchase price of the equipment. The balance of the    
purchase price was furnished by third-party long-term debt financing,           
collateralized by the equipment and non-recourse to the Company. At the end of  
the lease term, the master Lessee may exercise a fixed price purchase option to 
purchase the equipment. The Company's net investment in leveraged leases is     
composed of the following elements (in 000's):                                  

                                                                [Download Table]

                                                                DECEMBER 31,     
                                                             ------------------- 
                                                               1999       1998   
                                                               ----       ----   
                                                                                 
Lease contracts receivable.................................. $ 69,766   $ 78,937 
Less: non-recourse debt.....................................  (69,749)   (78,920)
                                                             --------   -------- 
Net Receivable..............................................       17         17 
Estimated residual value of leased assets...................   41,150     41,150 
Less: unearned and deferred income..........................   (7,808)    (8,932)
                                                             --------   -------- 
Investment in leverage lease................................   33,359     32,235 
Less: fees..................................................     (113)      (138)
                                                             --------   -------- 
Net investment in leverage leases........................... $ 33,246   $ 32,097 
                                                             ========   ======== 

DERIVATIVES                                                                     

The Company uses derivative financial instruments for risk management purposes  
to hedge against specific interest rate risk, to alter investment rate exposures
arising from mismatches between assets and liabilities, and to minimize the     
Company's exposure to fluctuations in interest rates, foreign currency exchange 
rates and general market conditions. The derivative financial instruments used  
by the Company include futures, interest rate swap agreements, options, and     
interest rate and currency swap agreements structured as forward spread lock    
contracts. The Company does not hold or issue any derivative instruments for    
trading purposes.                                                               

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                          
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                                    

3.  INVESTMENTS (CONTINUED):                                                    
FUTURES                                                                         

A futures contract is a contractual agreement to make or take delivery of a     
notional principal amount at a specified future date in accordance with terms   
specified by a regulated futures exchange. Although futures contracts generally 
specify delivery terms for the underlying commodity or financial instrument,    
most futures contracts are settled in cash prior to delivery by executing a     
futures position opposite to the original position. That is, a contract to take 
delivery (a "long" position) is offset by executing a contract to make delivery 
(a "short" position), and vice versa.                                           

The Company purchases futures contracts to hedge against interest rate          
fluctuations. Gains or losses on contracts that qualify as hedges are deferred  
until the earliest of the completion of the hedging transaction, determination  
that the transaction will no longer take place, or determination that the hedge 
is no longer effective. Upon completion of the hedge, where it is impractical to
allocate gains (losses) to specific hedged assets or liabilities, gains (losses)
are deferred and amortized over the remaining life of the hedged assets. If     
instruments being hedged by futures are disposed, any unamortized gains (losses)
are included in the determination of gain or loss from the disposition. Gains   
(losses) on hedge contracts that are deemed ineffective are realized            
immediately. There were no deferred gains (losses), disposed hedges, or hedges  
deemed ineffective in 1999 and 1998. The Company had no futures contracts       
outstanding at December 31, 1999 and 1998, respectively.                        

INTEREST RATE SWAPS                                                             

Interest rate swap agreements are contracts with other parties to exchange at   
specified intervals, the difference between fixed and floating rate interest    
amounts based upon a notional principal amount. No cash is exchanged at the     
outset of the contract and no principal payments are made by either party. A    
single net payment is usually made by one counterparty at each interest payment 
date.                                                                           

The Company enters into interest rate swap agreements to hedge against exposure 
to interest rate fluctuations. Because the underlying principal is not          
exchanged, the Company's maximum exposure to counterparty credit risk is the    
difference in payments exchanged. The net payable/receivable is recognized over 
the life of the swap contract as an adjustment to net investment income. The net
increase (decrease) in net investment income related to interest rate swaps was 
($2,512,745), ($1,685,909) and ($2,579,536) for the years ended December 31,    
1999, 1998 and 1997 respectively. The company's derivatives did not qualify for 
hedge accounting treatment in 1999 and 1998. As a result, the realized gains and
losses were realized immediately in those years and the deferred balances as of 
year ended December 31, 1997 were realized during 1998.                         

PUT OPTIONS                                                                     

Options are legal contracts that give the contractholder the right to buy or    
sell a specific amount of the underlying interest at a strike price upon        
exercise of the option. Cash is exchanged to purchase the option and on exercise
date, the holder of the option can elect to exercise or allow it to expire. The 
Company utilizes options to hedge against stock market exposure inherent in the 
mortality and expense risk charges and guaranteed minimum death benefit features
of the Company's variable annuities.                                            

FORWARD SPREAD LOCK CONTRACTS                                                   

Interest rate and currency swap agreements structured as forward spread lock    
contracts are swap agreements which are executed in a current period but        
effective on a future date. The contracts outline the interest or currency      
rates, which each party agrees to at contract date as well as the outset of the 
contract. No principal payments are made by either party. A single net payment  
is made to close out the contract prior to the effective date in the event that 
either party to the contract wishes to terminate                                

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                          
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                                    

3.  INVESTMENTS (CONTINUED):                                                    
the agreement. If the contract is not terminated prior to the effective future  
date, the contract becomes a swap agreement as described above.                 

The Company's underlying notional or principal amounts associated with open     
derivatives positions were as follows (in 000's):                               

                                                                [Download Table]

                                                                OUTSTANDING AT    
                                                               DECEMBER 31, 1999  
                                                             ---------------------
                                                             NOTIONAL     MARKET  
                                                             PRINCIPAL   VALUE OF 
                                                              AMOUNTS    POSITIONS
                                                              -------    ---------
                                                                                  
Interest rate swaps......................................... $368,000    $  9,522 
Foreign currency swaps......................................    1,700         295 
                                                             --------    -------- 
    Total................................................... $369,700    $  9,817 
                                                             ========    ======== 


                                                                OUTSTANDING AT    
                                                               DECEMBER 31, 1998  
                                                             ---------------------
                                                             NOTIONAL     MARKET  
                                                             PRINCIPAL   VALUE OF 
                                                              AMOUNTS    POSITIONS
                                                              -------    ---------
Interest rate swaps.                                         $ 297,000   ) (10,656
                                                                                  
Foreign currency swaps......................................    3,100         689 
                                                             --------    -------- 
    Total................................................... $300,100    $ (9,967)
                                                             ========    ======== 

During 1998, the Company discontinued hedge accounting treatment for certain    
derivative instruments for which correlation could not be established. The      
Company recognized gross realized gains of $4,734,971 and $6,567,922 in 1999 and
1998, respectively, as well as gross realized losses of $1,789,357 and          
$20,538,120 during 1999 and 1998, respectively.                                 

The Company's primary risks associated with these transactions are exposure to  
potential credit loss in the event of non-performance by counterparties and     
market risk. The Company regularly assesses the strength of the counterparties  
and generally enters into transactions with counterparties rated "A" or better  
by nationally recognized ratings agencies. Management believes that the risk of 
incurring losses related to credit risk is remote. As of December 31, 1999 and  
1998, the Company's derivatives had no significant concentration of credit risk.
The Company does not require collateral or other security to support derivative 
financial instruments with credit risk.                                         

4.  NET REALIZED INVESTMENT GAINS AND LOSSES                                    

Net realized investment gains (losses) consisted of the following (in 000's):   

                                                        [Enlarge/Download Table]

                                                               1999      1998       1997   
                                                               ----      ----       ----   
                                                                                           
Fixed maturities............................................ $(1,839)  $ 21,811   $    671 
Mortgage and other loans....................................   1,981         36      9,465 
Real estate.................................................    (742)       499      2,393 
Derivative instruments......................................   2,945    (13,970)       (63)
                                                             -------   --------   -------- 
    Total................................................... $ 2,345   $  8,376   $ 12,466 
                                                             =======   ========   ======== 

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                          
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                                    

5.  NET INVESTMENT INCOME                                                       

Net investment income consisted of the following (in 000's):                    

                                                        [Enlarge/Download Table]

                                                               1999       1998       1997   
                                                               ----       ----       ----   
                                                                                            
Fixed maturities............................................ $254,390   $295,167   $324,150 
Equity securities...........................................      (33)        37         -- 
Mortgage and other loans....................................   90,638    103,804    128,214 
Real estate.................................................    6,829      7,844      7,070 
Policy loans................................................    3,172      2,934      3,639 
Derivatives.................................................   17,671    (11,880)    (3,060)
Income on funds withheld under reinsurance..................       --     67,045     85,840 
Other.......................................................   (1,416)      (817)       943 
                                                             --------   --------   -------- 
    Gross investment income.................................  371,251    464,134    546,796 
Less: Investment expenses...................................    6,273      8,277      6,882 
                                                             --------   --------   -------- 
    Net investment income................................... $364,978   $455,857   $539,914 
                                                             ========   ========   ======== 

6.  FAIR VALUE OF FINANCIAL INSTRUMENTS                                         

SFAS 107 excludes certain insurance liabilities and other non-financial         
instruments from its disclosure requirements. The fair value amounts presented  
herein do not include the expected interest margin (interest earnings over      
interest credited) to be earned in the future on investment-type products or    
other intangible items. Accordingly, the aggregate fair value amounts presented 
herein do not necessarily represent the underlying value of the Company;        
likewise, care should be exercised in deriving conclusions about the Company's  
business or financial condition based on the fair value information presented   
herein.                                                                         

The following table presents the carrying amounts and estimated fair values of  
the Company's financial instruments at December 31, 1999 and 1998 (in 000's):   

                                                        [Enlarge/Download Table]

                                                  DECEMBER 31, 1999        DECEMBER 31, 1998    
                                                  -----------------        -----------------    
                                                CARRYING    ESTIMATED    CARRYING    ESTIMATED  
                                                 AMOUNT     FAIR VALUE    AMOUNT     FAIR VALUE 
                                                 ------     ----------    ------     ---------- 
                                                                                                
Financial assets:                                                                               
      Cash and cash equivalents............... $  550,265   $  550,265  $  264,744   $  264,744 
      Fixed maturities........................  2,678,340    2,678,340   3,489,965    3,489,965 
      Short-term investments..................    177,213      177,213     336,026      336,026 
      Mortgages...............................    931,351      933,725     969,800    1,014,189 
      Derivatives.............................      9,817        9,817      (9,967)      (9,967)
      Policy loans............................     40,660       40,660      42,595       42,595 
      Other invested assets...................     67,938       67,938      64,177       64,177 

Financial liabilities:                                                                          
      Guaranteed investment contracts......... $  677,265   $  665,830  $1,064,357   $1,089,070 
      Contractholder deposit funds............  2,279,413    2,213,896   2,449,585    2,460,530 
      Fixed annuity contracts.................    112,794      105,845     113,913      114,661 
      Interest sensitive life insurance.......    116,999      119,659     118,076      120,077 
      Long-term debt..........................    565,000      529,212     565,000      600,625 

The fair values of cash and cash equivalents are estimated to be cost plus      
accrued interest which approximates fair value. The fair values of short-term   
bonds are estimated to be the amortized cost. The fair values of publicly traded
fixed maturities are based upon market prices or dealer quotes. For             

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                          
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                                    

6.  FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED):                            
privately placed fixed maturities, fair values are estimated by taking into     
account prices for publicly traded securities of similar credit risk, maturity, 
repayment and liquidity characteristics. The fair values of mortgage and other  
loans are estimated by discounting future cash flows using current rates at     
which similar loans would be made to borrowers with similar credit ratings and  
for the same remaining maturities.                                              

Policy loans are state at unpaid principal balances which approximate fair      
value.                                                                          

The fair values of the Company's general account insurance reserves and         
contractholder deposits under investment-type contracts (insurance, annuity and 
pension contracts that do not involve mortality or morbidity risks) are         
estimated using discounted cash flow analyses or surrender values based on      
interest rates currently being offered for similar contracts with maturities    
consistent with those remaining for all contracts being valued. Those contracts 
that are deemed to have short-term guarantees have a carrying amount equal to   
the estimated market value.                                                     

The fair values of other deposits with future maturity dates are estimated using
discounted cash flows.                                                          

The fair value of notes payable and other borrowings are estimated using        
discounted cash flow analyses based upon the Company's current incremental      
borrowing rates for similar types of borrowings. The carrying amount of all     
other assets is assumed to approximate fair value. The company's commitments to 
extend credit approximate fair value.                                           

7.  REINSURANCE                                                                 

INDIVIDUAL INSURANCE                                                            

The Company has agreements with SLOC which provide that SLOC will reinsure the  
mortality risks of the individual life insurance contracts sold by the Company. 
Under these agreements basic death benefits and supplementary benefits are      
reinsured on a yearly renewable term basis and coinsurance basis, respectively. 

Effective January 1, 1991, the Company entered into an agreement with SLOC under
which certain individual life insurance contracts issued by SLOC were reinsured 
by the Company on a 90% coinsurance basis. Also effective January 1, 1991, the  
Company entered into an agreement with SLOC which provides that SLOC will       
reinsure the mortality risks in excess of $500,000 per policy for the individual
life insurance contracts assumed by the Company in the reinsurance agreement    
described above. Such death benefits are reinsured on a yearly renewable term   
basis. These two agreements were terminated effective October 1, 1998.          

The Company has an agreement with an unrelated company which provides           
reinsurance of certain individual life insurance contracts on a modified        
coinsurance basis and under which all deficiency reserves related to these      
contracts are reinsured.                                                        

GROUP INSURANCE                                                                 

The Company has agreements with SLOC whereby SLOC reinsures the mortality and   
morbidity risks of the group life insurance contracts and group long-term       
disability contracts. Under these agreements, certain death benefits and        
long-term disability benefits are reinsured on a yearly renewable term basis.   
The agreements provide that SLOC will reinsure the mortality risks in excess of 
$50,000 per policy for group life contracts and $3,000 per policy per month for 
long-term disability contracts ceded by the Company.                            

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                          
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                                    

7.  REINSURANCE (CONTINUED):                                                    
The effects of reinsurance were as follows (in 000's):                          

                                                        [Enlarge/Download Table]

                                                             FOR THE YEARS ENDED DECEMBER 31,
                                                             --------------------------------
                                                               1999        1998        1997  
                                                               ----        ----        ----  
                                                                                             
Insurance premiums                                                                           
    Direct.................................................. $ 33,033    $ 39,168    $ 43,312
    Assumed.................................................       --     159,787     211,657
    Ceded...................................................    5,814      11,867      13,180
                                                             --------    --------    --------
Net Premiums................................................ $ 27,219    $187,088    $241,789
                                                             ========    ========    ========

Insurance and other individual policy benefits and claims                                    
    Direct.................................................. $318,519    $330,592    $411,834
    Assumed.................................................       --     248,664     241,947
    Ceded...................................................    3,821      11,170       5,361
                                                             --------    --------    --------
Net policy benefits and claims.............................. $314,698    $568,086    $648,420
                                                             ========    ========    ========

The Company 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, the Company evaluates the financial condition of
its reinsurers and monitors concentration of credit risk.                       

8.  RETIREMENT PLANS                                                            

PENSION PLAN                                                                    

The Company and its subsidiaries participate with SLOC in a non-contributory    
defined benefit pension plan covering essentially all employees. Benefits under 
all plans are based on years of service and employees' average compensation.    

The Company's funding policies for the pension plans are to contribute amounts  
which at least satisfy the minimum amount required by the Employee Retirement   
Income Security Act of 1974 ("ERISA"); currently the plans are fully funded.    
Most pension plan assets consist of separate accounts of SLOC or other insurance
company contracts. The following table sets forth the change in the pension     
plan's                                                                          

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                          
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                                    

8.  RETIREMENT PLANS (CONTINUED):                                               
projected benefit obligations and assets, as well as the plans funded status at 
December 31, 1999 and 1998 (in 000's):                                          

                                                                [Download Table]

                                                                 YEAR ENDED      
                                                                DECEMBER 31,     
                                                             ------------------- 
                                                               1999       1998   
                                                               ----       ----   
                                                                                 
Change in projected benefit obligation:                                          
Projected benefit obligation at beginning of year........... $110,792   $ 79,684 
Service cost................................................    5,632      4,506 
Interest cost...............................................    6,952      6,452 
Actuarial loss (gain).......................................  (21,480)    21,975 
Benefits paid...............................................   (2,376)    (1,825)
                                                             --------   -------- 
Projected benefit obligation at end of year................. $ 99,520   $110,792 
                                                             ========   ======== 

Change in fair value of plan assets:                                             
Fair value of plan assets at beginning of year.............. $151,575   $136,610 
Actual return on plan assets................................    9,072     16,790 
Benefits paid...............................................   (2,376)    (1,825)
Fair value of plan assets at end of year.................... $158,271   $151,575 
Funded status............................................... $ 58,752   $ 40,783 
Unrecognized net actuarial loss.............................  (20,071)    (2,113)
Unrecognized transition obligation..........................  (22,617)   (24,674)
Unrecognized prior service cost.............................    7,081      7,661 
                                                             --------   -------- 
Prepaid benefit cost........................................ $ 23,145   $ 21,657 
                                                             ========   ======== 

The following table sets forth the components of the net periodic pension cost  
for the years ended December 31, 1999 and 1998 (in 000's).                      

                                                                [Download Table]

                                                                 YEAR ENDED     
                                                                DECEMBER 31,    
                                                             -------------------
                                                               1999       1998  
                                                               ----       ----  
                                                                                
Components of net periodic benefit cost:                                        
Service cost................................................ $ 5,632    $ 4,506 
Interest cost...............................................   6,952      6,452 
Expected return on plan assets.............................. (12,041)   (10,172)
Amortization of transition obligation asset.................  (2,056)    (2,056)
Amortization of prior service cost..........................     580        580 
Recognized net actuarial gain...............................    (554)      (677)
                                                             -------    ------- 
Net periodic benefit cost................................... $(1,487)   $(1,367)
                                                             =======    ======= 
The Company's share of net periodic benefit cost............ $   736    $   586 
                                                             =======    ======= 

The projected benefit obligations were based on calculations that utilize       
certain assumptions. The assumed weighted average discount rate was 7.5% and    
6.75% for the years ended December 31, 1999 and 1998, respectively. The expected
return on plan assets for 1999 and 1998 was 8.75% and 8.00%, respectively, and  
the assumed rate of compensation increase for both 1999 and 1998 was 4.50%.     

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                          
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                                    

8.  RETIREMENT PLANS (CONTINUED):                                               
The Company and certain subsidiaries also participate with SLOC and certain     
affiliates in a 401(k) savings plan for which substantially all employees are   
eligible. Under the various plans the Company matches, up to specified amounts, 
employees' contributions to the plan. The Company's contributions were $284,000 
and $231,000 for the years ended December 31, 1999 and 1998, respectively.      

OTHER POST-RETIREMENT BENEFIT PLANS                                             

In addition to pension benefits, the Company and certain subsidiaries provide   
certain health, dental, and life insurance benefits ("postretirement benefits") 
for retired employees and dependents. Substantially all employees of the        
participating companies may become eligible for these benefits if they reach    
normal retirement age while working for the Company, or retire early upon       
satisfying an alternate age plus service condition. Life insurance benefits are 
generally set at a fixed amount.                                                

The following table sets forth the change in other postretirement benefit plans'
obligations and assets, as well as the plans' funded status at December 31, 1999
and 1998 (in 000's).                                                            

                                                                [Download Table]

                                                                 YEAR ENDED      
                                                                DECEMBER 31,     
                                                             ------------------- 
                                                               1999       1998   
                                                               ----       ----   
                                                                                 
Change in benefit obligation:                                                    
Benefit obligation at beginning of year..................... $ 10,419   $  9,845 
Service cost................................................      413        240 
Interest cost...............................................      845        673 
Actuarial loss..............................................    1,048        308 
Benefits paid...............................................     (508)      (647)
                                                             --------   -------- 
Benefit obligation at end of year........................... $ 12,217   $ 10,419 
                                                             ========   ======== 

Change in fair value of plan assets:                                             
Fair value of plan assets at beginning of year.............. $     --   $     -- 
Employer contributions......................................      508        647 
Benefits paid...............................................     (508)      (647)
                                                             --------   -------- 
Fair value of plan assets at end of year.................... $     --   $     -- 
                                                             ========   ======== 

Funded Status............................................... $(12,217)  $(10,419)
Unrecognized net actuarial loss.............................    1,469        586 
Unrecognized transition obligation..........................      140        185 
                                                             --------   -------- 
Prepaid (accrued) benefit cost.............................. $(10,608)  $ (9,648)
                                                             ========   ======== 

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                          
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                                    

8.  RETIREMENT PLANS (CONTINUED):                                               
The following table sets forth the components of the net periodic postretirement
benefit costs for the years ended December 31, 1999 and 1998 (in 000's).        

                                                                [Download Table]

                                                              1999     1998   
                                                              ----     ----   
                                                                              
Components of net periodic benefit cost                                       
Service cost................................................ $  413  $    240 
Interest cost...............................................    845       673 
Amortization of transition obligation(asset)................     45        45 
Recognized net actuarial loss (gain)........................    164       (20)
                                                             ------  -------- 
Net periodic benefit cost................................... $1,467  $    938 
                                                             ======  ======== 
The Company's share of net periodic benefit cost............ $  185  $     95 
                                                             ======  ======== 

In order to measure the postretirement benefit obligation at December 31, 1999, 
the Company assumed a 10.9% annual rate of increase in the per capita cost of   
covered health care benefits. These rates were assumed to decrease gradually to 
5.0% for 2005 and remain at that level thereafter. Assumed health care cost     
trend rates have a significant effect on the amounts reported for the health    
care plans. For example, increasing the health care cost trend rate assumptions 
by one percentage point in each year would increase the accumulated             
postretirement benefit obligation at December 31, 1999 by $2.8 million, and the 
aggregate of the service and interest cost components of net periodic           
postretirement benefit expense for 1999 by $0.3 million. Conversely, decreasing 
assumed rates by one percentage point in each year would decrease the           
accumulated postretirement benefit obligation at December 31, 1999 by $2.3      
million, and the aggregate of the service and interest cost components of net   
periodic postretirement benefit expense for 1999 by $0.5 million. The assumed   
weighted average discount rate used in determining the postretirement benefit   
obligation was 7.5% and 6.75% for the year ended December 31, 1999 and 1998,    
respectively.                                                                   

9.  FEDERAL INCOME TAXES                                                        

The Company and its subsidiaries file a consolidated federal income tax return  
with US Holdco as previously described in Note 1. Federal income taxes are      
calculated as if the Company was filing a separate federal income tax return. A 
summary of the components of federal income tax expense in the consolidated     
statements of income for the years ended December 31, 1999, 1998 and 1997 were  
as follows (in 000's):                                                          

                                                        [Enlarge/Download Table]

                                                               1999     1998      1997  
                                                               ----     ----      ----  
                                                                                        
Federal income tax expense                                                              
    Current................................................. $18,570  $19,476   $35,689 
    Deferred................................................  10,210   (8,551)   (1,674)
                                                             -------  -------   ------- 
Total....................................................... $28,780  $10,925   $34,015 
                                                             =======  =======   ======= 

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                          
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                                    

9.  FEDERAL INCOME TAXES (CONTINUED):                                           
Federal income taxes attributable to the consolidated operations are different  
from the amounts determined by multiplying income before federal income taxes by
the expected federal income tax rate of 35%. The Company's effective rate       
differs from the federal income tax rate as follows:                            

                                                        [Enlarge/Download Table]

                                                               1999      1998      1997  
                                                               ----      ----      ----  
                                                                                         
Expected federal income tax expense......................... $28,969   $ 9,405   $36,925 
Low income housing credit...................................  (6,348)   (4,446)   (3,270)
Additional tax provision....................................   6,851     5,423     1,004 
Other.......................................................    (692)      543      (644)
                                                             -------   -------   ------- 
Federal income tax expense.................................. $28,780   $10,925   $34,015 
                                                             =======   =======   ======= 

The deferred income tax (asset) liability represents the tax effects of         
temporary differences between the carrying amounts of assets and liabilities    
used for financial reporting purposes and the amounts used for income tax       
purposes. The components of the Company's deferred tax (assets) and liabilities 
as of December 31, 1999 and 1998 were as follows (in 000's):                    

                                                                [Download Table]

                                                               1999        1998    
                                                               ----        ----    
                                                                                   
Deferred tax asset                                                                 
    Actuarial liabilities................................... $ 136,560   $ 118,074 
    Investments, net........................................ $     943          -- 
                                                             ---------   --------- 
Total deferred tax asset.................................... $ 137,503   $ 118,074 

Deferred tax liabilities                                                           
    Investments, net........................................ $      --   $ (65,704)
    Deferred policy acquisition costs.......................  (193,238)   (144,366)
    Other...................................................   (21,940)    (21,105)
                                                             ---------   --------- 
Total deferred tax liability................................ $(215,178)  $(231,175)
                                                             ---------   --------- 
Net deferred tax liability.................................. $ (77,675)  $(113,101)
                                                             =========   ========= 

The Company makes payments under the tax sharing agreements as if it were filing
as a separate company.                                                          

The Company's federal income tax returns are routinely audited by the Internal  
Revenue Service ("IRS"), and provisions are made in the consolidated financial  
statements in anticipation of the results of these audits. The Company is       
currently under audit by the IRS for the years 1994 and 1995. In the Company's  
opinion, adequate tax liabilities have been established for all years and any   
adjustments that might be required for the years under audit will not have a    
material effect on the Company's financial statements. However, the amounts of  
these tax liabilities could be revised in the future if estimates of the        
Company's ultimate liability are revised.                                       

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                          
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                                    

10. LIABILITY FOR UNPAID CLAIMS AND CLAIMS ADJUSTMENT EXPENSES                  

Activity in the liability for unpaid claims and claims adjustment expenses      
related to the group life and group disability products is summarized below (in 
000's):                                                                         

                                                                [Download Table]

                                                               1999      1998  
                                                               ----      ----  
                                                                               
Balance at January 1........................................ $15,002   $13,016 
Less reinsurance recoverables...............................  (3,232)   (2,777)
                                                             -------   ------- 
Net balance at January 1....................................  11,770    10,239 
                                                             -------   ------- 
Incurred related to:                                                           
  Current year..............................................  12,187    10,212 
  Prior years...............................................  (1,487)   (1,721)
                                                             -------   ------- 
Total incurred..............................................  10,700     8,491 
                                                             -------   ------- 
Paid losses related to:                                                        
  Current year..............................................  (6,755)   (5,146)
  Prior years...............................................  (1,996)   (1,814)
                                                             -------   ------- 
Total paid..................................................  (8,751)   (6,960)
                                                             -------   ------- 

Net balance at December 31..................................  17,755    15,002 
Plus reinsurance recoverables...............................  (4,036)   (3,232)
                                                             -------   ------- 
Balance at December 31...................................... $13,719   $11,770 
                                                             =======   ======= 

The Company regularly updates its estimates of liabilities for unpaid claims and
claims adjustments expenses as new information becomes available and further    
events occur which may impact the resolution of unsettled claims for its        
individual and group disability lines of business. Changes in prior estimates   
are recorded in results of operations in the year such changes are determined to
be needed.                                                                      

11. DEFERRED POLICY ACQUISITION COSTS                                           

The following illustrates the changes to the deferred policy acquisition cost   
asset (in 000's):                                                               

                                                                [Download Table]

                                                               1999       1998    
                                                               ----       ----    
                                                                                  
Balance at January 1........................................ $523,872   $ 719,819 
    Acquisition costs deferred..............................  156,228     144,324 
    Amortized to expense during year........................  (67,815)    (88,794)
    Adjustment for unrealized investment gains(losses)                            
      during year...........................................   73,993     (11,139)
    Adjustment for termination of reinsurance agreement.....       --    (240,338)
                                                             --------   --------- 
Balance at December 31...................................... $686,278   $ 523,872 
                                                             ========   ========= 

12. SEGMENT INFORMATION                                                         

The Company conducts business principally in five 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. Each    
segment was defined consistent with the way results are evaluated by the chief  
operating decision-maker.                                                       

INDIVIDUAL PROTECTION                                                           

The Individual Protection segment markets and administers life insurance        
products sold to individuals and corporate owners of individual life insurance. 
The products include a variety of whole life, universal life and variable life  
products.                                                                       

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                          
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                                    

12. SEGMENT INFORMATION (CONTINUED):                                            
GROUP PROTECTION                                                                

The Group Protection segment markets and administers group life insurance, long 
term disability and short-term disability products. These products are sold to  
employers which provide group benefits for their employees.                     

WEALTH MANAGEMENT                                                               

The Wealth Management segment markets and administers both individual and group 
fixed and variable annuity products and provides asset management services to   
certain of the Company's separate accounts.                                     

CORPORATE SEGMENT                                                               

The Corporate segment includes the unallocated capital of the Company, its debt 
financing, and items not otherwise attributable to the other segments.          

Management evaluates the results of the operating segments on a pre-tax basis.  
The Company does not materially depend on one or a few customers, brokers or    
agents. The following amounts pertain to the various business segments (in      
000's):                                                                         

                                                        [Enlarge/Download Table]

                                                     YEAR ENDED DECEMBER 31, 1999                  
                                   ----------------------------------------------------------------
                                    TOTAL        TOTAL        PRETAX    NET OPERATING      TOTAL   
                                   REVENUES   EXPENDITURES    INCOME       INCOME         ASSETS   
                                   --------   ------------    ------       ------         ------   
                                                                                                   
Individual Protection............. $17,139      $ 18,001     $   (861)     $   (118)    $   291,508
Group Protection..................  16,095        15,541          554           360          20,038
Wealth Management................. 543,424       460,788       82,636        59,734      20,534,218
Corporate.........................  53,241        52,758          483        (6,244)        639,149
                                   --------     --------     --------      --------     -----------
    Total......................... $629,899     $547,088     $ 82,812      $ 53,732     $21,484,913
                                   ========     ========     ========      ========     ===========

                                                        [Enlarge/Download Table]

                                                   YEAR ENDED DECEMBER 31, 1998                
                                   ------------------------------------------------------------
                                                                                               
Individual Protection............. $230,219    $300,478    $(70,259)   $(46,469)    $   357,042
Group Protection..................  14,993       13,023       1,970       1,260          18,163
Wealth Management................. 538,053      457,483      80,570      59,978      17,211,359
Corporate.........................  63,438       50,787      12,651        (705)        661,698
                                   --------    --------    --------    --------     -----------
    Total......................... $846,703    $821,771    $ 24,932    $ 14,064     $18,248,262
                                   ========    ========    ========    ========     ===========

                                                        [Enlarge/Download Table]

                                                   YEAR ENDED DECEMBER 31, 1997                
                                   ------------------------------------------------------------
                                                                                               
Individual Protection............. $295,933    $301,216    $ (5,283)   $ (3,260)    $ 1,554,818
Group Protection..................  12,425       13,603      (1,178)       (764)         13,793
Wealth Management................. 586,925      499,225      87,700      60,709      15,026,991
Corporate.........................  63,980       48,411      15,569       4,785         739,913
                                   --------    --------    --------    --------     -----------
    Total......................... $959,263    $862,455    $ 96,808    $ 61,470     $17,335,515
                                   ========    ========    ========    ========     ===========

13. REGULATORY FINANCIAL INFORMATION                                            

The insurance subsidiaries are required to file annual statements with state    
regulatory authorities prepared on an accounting basis prescribed or permitted  
by such authorities (statutory basis). Statutory surplus differs from           
shareholder's equity reported in accordance with generally accepted accounting  
principles for stock life insurance companies primarily because policy          
acquisition costs are expensed when incurred, investment reserves are based on  
different assumptions, post-retirement benefit costs                            

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                          
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                                    

13. REGULATORY FINANCIAL INFORMATION (CONTINUED):                               
are based on different assumptions and reflect a different method of adoption,  
life insurance reserves are based on different assumptions and income tax       
expense reflects only taxes paid or currently payable.                          

For the year ended December 31, 1999, the Company filed its Annual Report on    
Form 10-K ("10-K") using audited statutory financial statements. The following  
information reconciles statutory net income and statutory surplus with net      
income and equity on a GAAP basis (in 000's):                                   

                                                        [Enlarge/Download Table]

                                                                  YEAR ENDED DECEMBER 31,      
                                                             --------------------------------- 
                                                               1999        1998        1997    
                                                               ----        ----        ----    
                                                                                               
Statutory net income........................................ $  90,358   $ 125,401   $ 129,242 

Adjustments to GAAP for life insurance companies:                                              
  Statutory interest maintenance reserve....................     3,956       2,925       1,867 
  Investment income and realized gains(losses)..............    13,803      (4,532)     14,186 
  Policyowner benefits......................................  (154,293)   (187,990)    (84,895)
  Deferred policy acquisition costs.........................    88,413      60,527      88,921 
  Deferred income taxes.....................................   (13,615)      8,886     (26,067)
  Other, net................................................    13,850       9,017       7,247 
                                                             ---------   ---------   --------- 
GAAP net income............................................. $  42,472   $  14,234   $ 130,501 
                                                             =========   =========   ========= 

                                                        [Enlarge/Download Table]

                                                          DECEMBER 31, 1999  DECEMBER 31, 1998
                                                          -----------------  -----------------
                                                                                              
Statutory capital stock and surplus......................     $ 886,342          $ 909,924    

Adjustments to GAAP for life insurance companies:                                             
  Valuation of investments...............................         3,697            139,826    
  Deferred policy acquisition costs......................       686,278            550,900    
  Future policy benefits and Contractholder deposit                                           
    funds................................................      (350,181)          (240,035)   
  Deferred income taxes..................................       (86,112)          (106,343)   
  Statutory interest maintenance reserve.................        42,325             44,668    
  Statutory asset valuation reserve......................        45,281             46,698    
  Surplus notes..........................................      (565,000)          (565,000)   
  Other, net.............................................         8,615             (3,038)   
                                                              ---------          ---------    
GAAP equity..............................................     $ 671,245          $ 777,600    
                                                              =========          =========    

The NAIC has codified statutory accounting practices, which are expected to     
constitute the only source of prescribed statutory accounting practices and are 
effective in 2001. Codification will change prescribed statutory accounting     
practices and may result in changes to the accounting practices that insurance  
enterprises use to prepare their statutory financial statements. The changes of 
codification will not have a material impact on statutory surplus.              

14. DIVIDEND RESTRICTIONS                                                       

The Company and its insurance subsidiary's ability to pay dividends are subject 
to certain restrictions. Delaware and New York have enacted laws governing the  
payment of dividends to stockholders by insurers. These laws affect the dividend
paying ability of the Company and Sun Life (N.Y.).                              

Pursuant to Delaware's statute, the maximum amount of dividends and other       
distributions that an insurer may pay in any twelve month period, without prior 
approval of the Delaware Commissioner of Insurance, is limited to the greater of
(i) 10% of its statutory surplus as of the preceding December 31st, or (ii) the 
individual company's statutory net gain from operations for the preceding       
calendar                                                                        

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                          
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                                    

14. DIVIDEND RESTRICTIONS (CONTINUED):                                          
year (if such insurer is a life company), or its net income (not including      
realized capital gains) for the preceding calendar year (if such insurer is not 
a life company). Any dividends to be paid by an insurer, whether or not in      
excess of the aforementioned threshold, from a source other than statutory      
surplus, would also require the prior approval of the Delaware Commissioner of  
Insurance. During 1997, the Company received approval from the Delaware         
Commissioner of Insurance and transferred all of its ownership in MFS valued at 
$68,951,000 as a dividend to Life Holdco. See Note 2 for additional information.
In 1998, a dividend in the amount of $50,000,000 was declared and paid by the   
Company to its parent, Life Holdco. During 1999, a dividend in the amount of    
$80,000,000 was declared and paid by the Company to Life Holdco. These dividends
were approved by the Board of Directors, but did not require prior approval of  
the Insurance Commissioner. The maximum dividend payable by the Company without 
prior approval of the Delaware Commissioner of Insurance at December 31, 1999   
was $8,000,000.                                                                 

Under New York statute, cash dividends may be paid out of that part of the      
Company's available and accumulated surplus funds, which was derived from       
realized net operating profits of its business and realized capital gains. A    
cash dividend otherwise lawful may be paid out of such earned surplus even      
though total surplus is at the time less than previously contributed or paid-in 
surplus. No cash dividend shall be paid to stockholder unless a notice of the   
intention of the Board of Directors to declare such dividend and the amount     
thereof shall have been filed with the Superintendent of Insurance of the State 
of New York not less than thirty days in advance of such proposed declaration,  
nor if the Superintendent within thirty days after such filing gives written    
notice to the Company of his disapproval of such payment. During 1999 and 1998, 
Sun (N.Y.) declared and paid dividends in the amounts of $6,500,000 and         
$3,000,000, respectively, to the Company.                                       

15. COMMITMENTS AND CONTINGENCIES                                               

REGULATORY AND INDUSTRY DEVELOPMENTS                                            

Unfavorable economic conditions may contribute to an increase in the number of  
insurance companies that are under regulatory supervision. This may result in an
increase in mandatory assessments by state guaranty funds, or voluntary payments
by solvent insurance companies to cover losses to policyholders of insolvent or 
rehabilitated companies. Mandatory assessments, which are subject to statutory  
limits, can be partially recovered through a reduction in future premium taxes  
in some states. The Company is not able to reasonably estimate the potential    
effect on it of any such future assessments.                                    

Under insurance guaranty fund laws in each state, the District of Columbia and  
Puerto Rico, insurers licensed to do business can be assessed by state insurance
guaranty associations for certain obligations of insolvent insurance companies  
to policyholders and claimants. Recent regulatory actions against certain large 
life insurers encountering financial difficulty have prompted various state     
insurance guaranty associations to begin assessing life insurance companies for 
the deemed losses. Most of these laws do provide, however, that an assessment   
may be excused or deferred if it would threaten an insurer's solvency and       
further provide annual limits on such assessments. Part of the assessments paid 
by the Company and its subsidiaries pursuant to these laws may be used as       
credits for a portion of the associated premium taxes. The Company incurred     
guaranty fund assessments of approximately $3,500,000, $3,500,000, and          
$3,083,000 in 1999, 1998 and 1997, respectively.                                

YEAR 2000                                                                       

The Year 2000 issue is the result of computer programs being written using two  
digits rather than four to define the applicable year. Any of the Company's     
computer programs that have date sensitive software may recognize a date using  
"00" as the year 1900 rather than the year 2000. This could result              

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(Wholly-owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)           

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                          
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997                                    

15. COMMITMENTS AND CONTINGENCIES (CONTINUED):                                  
in a system failure or miscalculations causing disruptions of operations,       
including among other things, a temporary inability to process transactions,    
send invoices, or engage in similar normal business activities. Although the    
Company does not believe that there is a material contingency associated with   
the Year 2000 project, there can be no assurance that exposure for material     
contingencies may not arise.                                                    

LITIGATION                                                                      

The Company is involved in pending and threatened litigation in the normal      
course of its business in which claims for monetary and punitive damages have   
been asserted. Although there can be no assurance, management, at the present   
time, does not anticipate that the ultimate liability arising from such pending 
and threatened litigation will have a material effect on the financial condition
or operating results of the Company.                                            

LEASE COMMITMENTS                                                               

The Company leases various facilities and equipment under operating leases with 
terms up to twenty-five years. As of December 31, 1999, minimum future lease    
payments under such leases are as follows (in 000's):                           

                                                                [Download Table]
                                                 
2000....................................  $ 4,354
2001....................................    4,354
2002....................................    4,407
2003....................................    3,378
Thereafter..............................    2,776
                                          =======
Total...................................  $19,269
                                          =======

Total rental expense for the years ended December 31, 1999, 1998 and 1997 was   
$4,656,000, $4,139,000, and $3,875,000 respectively.                            

16. DISCONTINUED OPERATIONS                                                     

During 1999, the Company discontinued its individual disability segment and its 
banking and trust segment. These segments were composed of MCIC and NLT which   
were both sold during 1999 to separate, unaffiliated parties. Net proceeds on   
the sale of MCIC were approximately $33,965,000 and the Company realized a net  
loss after taxes of $25,465,000. Net proceeds on the sale of NLT were           
approximately $30,000,000; the Company realized a net gain after taxes of       
$13,170,000. Immediately before the sale date of NLT, the Company received a $19
million dividend distribution from NLT.                                         

During 1997, the Company discontinued its investment management segment which   
was comprised of Massachusetts Financial Services Company, ("MFS"). As part of a
corporate restructuring at the end of 1997, MFS was transferred to Life Holdco  
in the form of a dividend valued at $68,951,000. MFS was then transferred to US 
Holdco and then to a newly formed holding company, Sun Life of Canada (U.S.)    
Financial Services Holdings, Inc.                                               

Income from discontinued operations (in 000's):                                 

                                                        [Enlarge/Download Table]

                                                               1999     1998       1997  
                                                               ----     ----       ----  
                                                                                         
Revenue..................................................... $22,667  $104,225   $691,348
Expenses....................................................  21,430   104,593    570,521
Provision for income taxes..................................     203      (445)    51,795
                                                             -------  --------   --------
Income from discontinued operations......................... $ 1,034  $     77   $ 69,032
                                                             =======  ========   ========

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INDEPENDENT AUDITORS' REPORT                                                    

[An auditors' letter and consent with respect to the Company's financial        
statements will be included in the Registration Statement prior to              
effectiveness.]                                                                 

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)         

CONSOLIDATED STATEMENTS OF INCOME (IN MILLIONS)                                 
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999                              

                                                                [Download Table]

                                                             UNAUDITED  UNAUDITED
                                                               2000       1999   
                                                             ---------  ---------
                                                                                 
REVENUES                                                                         
    Premiums and annuity considerations.....................   $14.6      $11.0  
    Net investment income...................................    79.9       98.4  
    Net realized investment gains...........................     0.2        4.5  
    Fee and other income....................................    66.6       49.9  
                                                               -----      -----  
    Total revenues..........................................   161.3      163.8  
                                                               -----      -----  
BENEFITS AND EXPENSES                                                            
    Policyowner benefits....................................    80.3       84.7  
    Underwriting, acquisition and other operating                                
      expenses..............................................    27.0       20.0  
    Amortization of deferred policy acquisition costs.......     0.6       24.4  
                                                               -----      -----  
    Total benefits and expenses.............................   107.9      129.1  
                                                               -----      -----  
    Income from operations..................................    53.4       34.7  
    Interest expense........................................    10.8       10.8  
                                                               -----      -----  
    Income before income tax expense and discontinued                            
      operations............................................    42.6       23.9  
    Income tax expense......................................    14.9        3.3  
                                                               -----      -----  
Net income from continuing operations.......................    27.7       20.6  
Net loss on disposal of subsidiary, after tax...............      --      (25.6) 
Net income from discontinued operations.....................      --        0.8  
                                                               -----      -----  
NET INCOME (LOSS)...........................................   $27.7      $(4.2) 
                                                               =====      =====  

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE UNAUDITED CONSOLIDATED 
FINANCIAL STATEMENTS. 

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)         

CONSOLIDATED BALANCE SHEETS (IN MILLIONS)                                       

                                                        [Enlarge/Download Table]

                                                                UNAUDITED                       
                                                             MARCH 31, 2000   DECEMBER 31, 1999 
                                                             ---------------  ------------------
                                                                                                
ASSETS                                                                                          
Investments                                                                                     
    Fixed maturities available-for-sale at fair value                                           
      (amortized cost of $2,843.5 and $2,685.4 in 2000 and                                      
      1999, respectively)...................................    $ 2,833.7         $ 2,677.3     
    Trading fixed maturities at fair value (amortized cost                                      
      of $1.0 and $1.0 in 2000 and 1999, respectively)......          1.0               1.0     
    Short-term investments..................................         85.5             177.2     
    Mortgage loans..........................................        898.1             931.4     
    Real estate.............................................         94.3              95.1     
    Policy loans............................................         40.4              40.7     
    Other invested assets...................................         68.3              67.9     
                                                                ---------         ---------     
    Total investments.......................................      4,021.3           3,990.6     
                                                                ---------         ---------     
    Cash and cash equivalents...............................        321.0             550.3     
    Accrued investment income...............................         52.4              50.5     
    Deferred policy acquisition costs.......................        728.1             686.3     
    Outstanding premiums....................................          2.0               2.7     
    Other assets............................................         62.2              81.2     
    Separate account assets.................................     17,298.8          16,123.3     
                                                                ---------         ---------     
    Total assets............................................    $22,485.8         $21,484.9     
                                                                =========         =========     
LIABILITIES                                                                                     
    Future contract and policy benefits.....................    $   727.4         $   729.3     
    Contractholder deposit funds and other policy                                               
      liabilities...........................................      2,945.3           3,144.8     
    Unearned revenue........................................          7.5               7.1     
    Accrued expenses and taxes..............................         93.4              98.8     
    Deferred federal income taxes...........................         90.2              77.7     
    Long-term debt payable to affiliates....................        565.0             565.0     
    Other liabilities.......................................         58.7              67.7     
    Separate account liabilities............................     17,298.8          16,123.3     
                                                                ---------         ---------     
    Total liabilities.......................................     21,786.3          20,813.7     
                                                                ---------         ---------     
STOCKHOLDER'S EQUITY                                                                            
    Common stock, $1,000 par value - 10,000 shares                                              
      authorized; 5,900 shares issued and outstanding.......          5.9               5.9     
    Additional paid-in capital..............................        199.4             199.4     
    Accumulated other comprehensive income..................          7.7               7.1     
    Retained earnings.......................................        486.5             458.8     
                                                                ---------         ---------     
    Total stockholder's equity..............................        699.5             671.2     
                                                                ---------         ---------     
    Total liabilities and stockholder's equity..............    $22,485.8         $21,484.9     
                                                                =========         =========     

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE UNAUDITED CONSOLIDATED 
FINANCIAL STATEMENTS. 

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)         

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (IN MILLIONS)                   
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999                              

                                                                [Download Table]

                                                             UNAUDITED  UNAUDITED
                                                               2000       1999   
                                                             ---------  ---------
                                                                                 
Net income (loss)...........................................   $27.7      $(4.2) 
Other comprehensive income:                                                      
    Net change in unrealized holding gains and losses on                         
      available-for-sale securities, net of tax.............     0.7       10.7  
    Currency translation....................................    (0.1)        --  
                                                               -----      -----  
                                                                 0.6       10.7  
                                                               -----      -----  
Comprehensive income........................................   $28.3      $ 6.5  
                                                               =====      =====  

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE UNAUDITED CONSOLIDATED 
FINANCIAL STATEMENTS. 

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)         

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY (IN MILLIONS)        
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999 (UNAUDITED)                  

                                                        [Enlarge/Download Table]

                                                           ACCUMULATED                          
                                              ADDITIONAL      OTHER                    TOTAL    
                                     COMMON    PAID-IN    COMPREHENSIVE  RETAINED  STOCKHOLDER'S
                                     STOCK     CAPITAL       INCOME      EARNINGS     EQUITY    
                                    --------  ----------  -------------  --------  -------------
                                                                                                
Balance at December 31, 1999.......   $5.9      $199.4        $ 7.1       $458.8       $671.2   
Comprehensive income:                                                                           
  Net income.......................     --          --           --         27.7         27.7   
  Other comprehensive income.......     --          --          0.6           --          0.6   
                                      ----      ------        -----       ------       ------   
Balance at March 31, 2000..........   $5.9      $199.4        $ 7.7       $486.5       $699.5   
                                      ====      ======        =====       ======       ======   
Balance at December 31, 1998.......   $5.9      $199.4        $75.9       $496.4       $777.6   
Comprehensive income:                                                                           
  Net income.......................     --          --           --         (4.2)        (4.2)  
  Other comprehensive income.......     --          --         10.7           --         10.7   
  Dividends to stockholder.........     --          --           --        (75.0)       (75.0)  
                                      ----      ------        -----       ------       ------   
Balance at March 31, 1999..........   $5.9      $199.4        $86.6       $417.2       $709.1   
                                      ====      ======        =====       ======       ======   

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE UNAUDITED CONSOLIDATED 
FINANCIAL STATEMENTS. 

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)         

CONSOLIDATED STATEMENTS OF CASH FLOWS (IN MILLIONS)                             
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999                              

                                                                [Download Table]

                                                             UNAUDITED  UNAUDITED
                                                               2000       1999   
                                                             ---------  ---------
                                                                                 
CASH FLOWS FROM OPERATING ACTIVITIES                                             
Net income from continuing operations.......................  $  27.7    $  20.6 
Adjustments to reconcile net income from continuing                              
  operations to net cash provided by operating activities:                       
  Amortization of discount and premiums.....................     (0.3)       0.0 
  Depreciation and amortization.............................      0.3        0.5 
  Net realized gains on investments.........................     (0.2)      (4.5)
  Tax benefit on disposal of subsidiary.....................       --       14.8 
  Interest credited to contractholder deposits..............     48.7       56.0 
  Deferred federal income taxes.............................     12.1       (5.9)
Changes in assets and liabilities:                                               
  Deferred acquisition costs................................    (39.0)     (16.6)
  Accrued investment income.................................     (1.9)       1.0 
  Other assets..............................................     13.1      (17.9)
  Future contract and policy benefits.......................     (1.4)      (4.1)
  Other, net................................................    (10.1)      12.7 
                                                              -------    ------- 
Net cash provided by operating activities...................     49.0       56.6 
                                                              -------    ------- 
CASH FLOWS FROM INVESTING ACTIVITIES:                                            
  Sales, maturities and repayments of:                                           
    Available-for-sale fixed maturities.....................    208.9      413.3 
    Subsidiary..............................................       --       33.6 
    Mortgage loans..........................................     50.1       24.0 
    Real estate.............................................      3.0         -- 
  Purchases of:                                                                  
    Available-for-sale fixed maturities.....................   (366.9)    (143.8)
    Other invested assets...................................       --       (1.0)
    Mortgage loans..........................................    (17.6)     (97.7)
    Real estate.............................................     (1.9)      (0.1)
  Changes in other investing activities, net................      0.3         -- 
  Net change in policy loans................................      0.3       (0.7)
  Net change in short term investments......................     94.6      (91.3)
                                                              -------    ------- 
Net cash provided by (used in) investing activities.........    (29.2)     136.4 
                                                              -------    ------- 
CASH FLOWS FROM FINANCING ACTIVITIES:                                            
  Deposits and interest credited to contractholder deposit                       
    funds...................................................    317.0      341.3 
  Withdrawals from contractholder deposit funds.............   (566.1)    (471.8)
                                                              -------    ------- 
Net cash used in financing activities.......................   (249.1)    (130.4)
                                                              -------    ------- 
Net change in cash and cash equivalents.....................   (229.3)      62.6 
  Cash and cash equivalents, beginning of period............    550.3      264.7 
  Cash and cash equivalents, end of period..................  $ 321.0    $ 327.3 
                                                              =======    ======= 
SUPPLEMENTAL CASH FLOW INFORMATION:                                              
  Income taxes paid, net of refunds.........................  $ (19.5)   $  13.3 

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE UNAUDITED CONSOLIDATED 
FINANCIAL STATEMENTS. 

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)         

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS                            

1.  DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:     

GENERAL                                                                         

Sun Life Assurance Company of Canada (U.S.) (the "Company") was incorporated in 
1970 as a life insurance company domiciled in the state of Delaware. The Company
and its subsidiaries are licensed in 49 states and certain other territories and
are engaged in the sale of individual variable life insurance, individual fixed 
and variable annuities, group fixed and variable annuities, group pension       
contracts, group life and disability insurance, and other asset management      
services.                                                                       

The Company is a wholly owned subsidiary of Sun Life of Canada (U.S.) Holdings, 
Inc. ("Life Holdco"), which is an indirect wholly owned subsidiary of Sun Life  
Assurance Company of Canada ("SLOC"), the Company's ultimate parent as of       
December 31, 1999. SLOC is a life insurance company domiciled in Canada which   
reorganized from a mutual life insurance company to a stock life insurance      
company on March 22, 2000. As a result of the demutualization, a new holding    
company, Sun Life Financial Services of Canada Inc. ("SLF"), is now the ultimate
parent of SLOC and the Company.                                                 

BASIS OF PRESENTATION                                                           

For the year ended December 31, 1999, the Company filed its Annual Report on    
Form 10-K using audited statutory financial statements. The Company prepared    
these financial statements using accounting practices prescribed or permitted by
the Insurance Department of the State of Delaware, which is a comprehensive     
basis of accounting other than generally accepted accounting principles. The    
Company has changed its basis of accounting for the three months ended          
March 31, 2000 to generally accepted accounting principles ("GAAP") and has     
restated the financial statements for the prior year ended December 31, 1999    
(Consolidated Balance Sheet) and for the period ended March 31, 1999            
(Consolidated Statement of Income, Consolidated Statement of Comprehensive      
Income, Consolidated Statement of Changes in Stockholder's Equity, and          
Consolidated Statement of Cash Flows) to conform with GAAP. See Note 5 for a    
reconciliation of statutory surplus to GAAP equity and statutory net income to  
GAAP net income.                                                                

The Company owns all of the outstanding shares of Sun Life Insurance and Annuity
Company of New York ("Sun Life (N.Y.)"), Sun Life of Canada (U.S.) Distributors,
Inc. ("Sundisco"), Sun Life Financial Services Limited ("SLFSL"), Sun Benefit   
Services Company, Inc. ("Sunbesco"), Sun Capital Advisers, Inc. ("Sun Capital"),
Sun Life Finance Corporation ("Sunfinco"), Sun Life of Canada (U.S.)            
SPE 97-1, Inc. ("SPE 97-1"), Clarendon Insurance Agency, Inc. ("Clarendon"), and
Sun Life Information Services Ireland Limited ("SLIRL"). All significant        
intercompany transactions have been eliminated in consolidation.                

Sun Life (N.Y.) is engaged in the sale of individual fixed and variable annuity 
contracts and group life and disability insurance contracts in its state of     
domicile, New York. Sundisco is a registered investment adviser and             
broker-dealer. SLFSL serves as the marketing administrator for the distribution 
of the offshore products of Sun Life Assurance Company of Canada (Bermuda), an  
affiliate. Sun Capital is a registered investment adviser. SPE 97-1 was         
organized for the purpose of engaging in activities incidental to securitizing  
mortgage loans. Clarendon is a registered broker-dealer that acts as the general
distributor of certain annuity and life insurance contracts issued by the       
Company and its affiliates. SLIRL provides information systems development      
services to the Company and its affiliates. Sunbesco and Sunfinco are currently 
inactive.                                                                       

During 1999, the Company sold two of its subsidiaries, Massachusetts Casualty   
Insurance Company ("MCIC") (sold February, 1999) and New London Trust F.S.B.    
("NLT") (sold October, 1999). MCIC is a life insurance company which issues only
individual disability income policies. NLT is a federally chartered savings     
bank, which grants commercial, residential real estate and installment loans.   
The results of operations of these subsidiaries are reported as discontinued    
operations.                                                                     

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)         

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                

1.  DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING               
POLICIES (CONTINUED):                                                           
USE OF ESTIMATES                                                                

The preparation of financial statements in conformity with generally accepted   
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of         
contingent assets and liabilities at the date of the financial statements and   
the reported amount of revenues and expenses during the reporting period. The   
most significant estimates are those used in determining deferred policy        
acquisition costs, investment allowances, and the liabilities for future        
policyholder benefits. Actual results could differ from those estimates.        

FINANCIAL INSTRUMENTS                                                           

In the normal course of business, the Company enters into transactions involving
various types of financial instruments, including cash and cash equivalents,    
investments such as fixed maturities, mortgage loans and equity securities, off 
balance sheet financial instruments, debt, loan commitments and financial       
guarantees. These instruments involve credit risk and also may be subject to    
risk of loss due to interest rate fluctuation. The Company evaluates and        
monitors each financial instrument individually and, when appropriate, obtains  
collateral or other security to minimize losses.                                

CASH AND CASH EQUIVALENTS                                                       

Cash and cash equivalents primarily include cash, commercial paper, money market
investments, and short term bank participations. All such investments have      
maturities of three months or less and are considered cash equivalents for      
purposes of reporting cash flows.                                               

INVESTMENTS                                                                     

The Company accounts for its investments in accordance with Statement of        
Financial Accounting Standards No. 115, Accounting for Certain Investments of   
Debt and Equity Securities. At the time of purchase, fixed maturity securities  
are classified based on intent, as held-to-maturity, available-for-sale, or     
trading. In order for the security to be classified as held-to-maturity, the    
Company must have positive intent and ability to hold the securities to         
maturity. Securities held-to-maturity are stated at cost, adjusted for          
amortization of premiums, and accretion of discounts. Trading securities are    
carried at estimated fair value with changes in unrealized gains or losses      
reported as a component of net investment income. Securities that do not meet   
this criterion are classified as available-for-sale. Available-for-sale         
securities are carried at estimated fair value with changes in unrealized gains 
or losses reported net of taxes in a separate component of stockholder's equity.
Fair values are obtained from external market quotations. All securities        
transactions are recorded on a trade date basis.                                

Mortgage loans are stated at unpaid principle balances, net of provisions for   
estimated losses. Mortgage loans acquired at a premium or discount are carried  
at amortized values net of provisions for estimated losses. Loans, which include
primarily commercial first mortgages, and real estate are diversified by        
property type and geographic area throughout the United States. Mortgage loans  
are collateralized by the related properties and generally are no more than 75% 
of the properties' value at the time that the original loan is made.            

A loan is recognized as impaired when it is probable that the principal or      
interest is not collectible in accordance with the contractual terms of the     
loan. Measurement of impairment is based on the present value of expected future
cash flows discounted at the loan's effective interest rate, or at the loan's   
observable market price. A specific valuation allowance is established if the   
fair value of the impaired loan is less than the recorded amount. Loans are also
charged against the allowance when determined to be uncollectible. The allowance
is based on a continuing review of the loan portfolio, past loss experience and 
current economic conditions, which may affect the borrower's ability to pay.    
While management believes                                                       

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)         

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                

1.  DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING               
POLICIES (CONTINUED):                                                           
that it uses the best information available to establish the allowance, future  
adjustments to the allowance may become necessary if economic conditions differ 
from the assumptions used in making the evaluation.                             

Real estate investments are held for the production of income or held-for-sale. 
Real estate investments held for the production of income are carried at the    
lower of cost adjusted for accumulated depreciation or fair value. Real estate  
investments held-for-sale are primarily acquired through foreclosure of mortgage
loans. The cost of real estate that has been acquired through foreclosure is the
estimated fair value at the time of foreclosure. Depreciation of buildings and  
improvements is calculated using the straight-line method over the estimated    
useful life of the property, generally 40 to 50 years.                          

Policy loans are carried at the amount of outstanding principal balance not in  
excess of net cash surrender values of the related insurance policies.          

Other invested assets consist primarily of leveraged leases and tax credit      
partnerships.                                                                   

The Company uses derivative financial instruments including financial futures   
contracts, equity options, interest rate swaps, foreign currency swaps and      
forward spread lock contracts as a means of hedging exposure to interest rate,  
currency and equity price risk. Hedge accounting is used to account for certain 
derivatives. To qualify for hedge accounting, the changes in fair value of the  
derivative must be expected to substantially offset the changes in the value of 
the hedged item. Hedges are monitored to ensure that there is a correlation     
between the derivative instrument and the hedged investment. Derivative         
instruments qualifying for hedge accounting treatment are marked to market and  
the related changes in fair value are included in a separate component of       
stockholder's equity. To the extent that the correlation of the derivative      
instrument and hedged item is not established, the derivative instrument is     
marked to market and the related change in fair value is recognized in the      
statement of operations as a component of net investment income.                

Investment income is recognized on an accrual basis. Realized gains and losses  
on the sales of investments are recognized in operations at the date of sale and
are determined using the specific cost identification method. When an impairment
of a specific investment or a group of investments is determined to be other    
than temporary, a realized investment loss is recorded. Changes in the provision
for estimated losses on mortgage loans and real estate are included in net      
realized investment gains and losses.                                           

Interest income on loans is recorded on the accrual basis. Loans are placed in a
non-accrual status when management believes that the borrower's financial       
condition, after giving consideration to economic and business conditions and   
collection efforts, is such that collection of principal and interest is        
doubtful. When a loan is placed in non-accrual status, all interest previously  
accrued is reversed against current period interest income. Interest accruals   
are resumed on such loans only when they are brought fully current with respect 
to principal and interest, have performed on a sustained basis for a reasonable 
period of time, and when, in the judgment of management, the loans are estimated
to be fully collectible as to both principal and interest.                      

DEFERRED POLICY ACQUISITION COSTS                                               

Acquisition costs consist of commissions, underwriting and other costs which    
vary with and are primarily related to the production of revenues. Acquisition  
costs related to investment-type contracts, primarily deferred annuity and      
guaranteed investment contracts, and universal and variable life products are   
deferred and amortized with interest in proportion to the present value of      
estimated gross profits to be realized over the estimated lives of the          
contracts. Estimated gross profits are composed of net investment income, net   
realized investment gains and losses, life and variable annuity fees, surrender 
charges and direct variable administrative expenses. This amortization is       
reviewed annually and adjusted retrospectively by a cumulative charge or credit 
to current operations when the Company revises its estimate of current or future
gross profits to be realized from this group of products, including realized and
unrealized gains and                                                            

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)         

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                

1.  DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING               
POLICIES (CONTINUED):                                                           
losses from investments. Acquisition costs related to fixed annuities and other 
life insurance products are deferred and amortized, generally in proportion to  
the ratio of annual revenue to the estimated total revenues over the contract   
periods based upon the same assumptions used in estimating the liability for    
future policy benefits.                                                         

Deferred acquisition costs for each life product are reviewed to determine if   
they are recoverable from future income, including investment income. If such   
costs are determined to be unrecoverable, they are expensed at the time of      
determination. Although realization of deferred policy acquisition costs is not 
assured, the Company believes it is more likely than not that all of these costs
will be realized. The amount of deferred policy acquisition costs considered    
realizable, however, could be reduced in the near term if the estimates of gross
profits or total revenues discussed above are reduced. The amount of            
amortization of deferred policy acquisition costs could be revised in the near  
term if any of the estimates discussed above are revised.                       

OTHER ASSETS                                                                    

Property, equipment, leasehold improvements, and capitalized software costs,    
which are included in other assets, are stated at cost, less accumulated        
depreciation and amortization. Depreciation is provided using the straight-line 
or accelerated method over the estimated useful lives of the related assets,    
which generally range from 3 to 30 years. Amortization of leasehold improvements
is provided using the straight-line method over the lesser of the term of the   
leases or the estimated useful life of the improvements. Reinsurance receivables
from reinsurance ceded are also included in other assets.                       

POLICY LIABILITIES AND ACCRUALS                                                 

Future contract and policy benefits are liabilities for life, health and annuity
products. Such liabilities are established in amounts adequate to meet the      
estimated future obligations of policies in force. Future policy benefits for   
individual life insurance and annuity policies are computed using interest rates
ranging from 4.5% to 5.5% for life insurance and 6% to 11.25% for annuities. The
liabilities associated with traditional life insurance, annuity and disability  
insurance products are computed using the net level premium method based on     
assumptions about future investment yields, mortality, morbidity and            
persistency. The assumptions used are based upon both the Company's and its     
affiliates' experience and industry standards. Estimated liabilities are        
established for group life and health policies that contain experience rating   
provisions.                                                                     

Policyholder contract deposits consist of policy values that accrue to the      
holders of universal life-type contracts and investment-related products such as
deferred annuities and guaranteed investment contracts. The liabilities are     
determined using the retrospective deposit method and consist of net deposits   
and investment earnings less administrative charges. The liability is before the
deduction of any applicable surrender charges.                                  

Other policy liabilities include liabilities for policy and contract claims.    
These amounts consist of the estimated amount payable for claims reported but   
not yet settled and an estimate of claims incurred but not reported. The amount 
reported is based upon historical experience, adjusted for trends and current   
circumstances. Management believes that the recorded liability is sufficient to 
provide for the associated claims adjustment expenses. Revisions to these       
estimates are included in operations in the year such refinements are made.     

REVENUE AND EXPENSES                                                            

Premiums for traditional individual life and annuity products are considered    
revenue when due. Premiums related to group life and group disability insurance 
are recognized as revenue pro-rata over the contract period. The unexpired      
portion of these premiums is recorded as unearned premiums. Revenue from        

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)         

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                

1.  DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING               
POLICIES (CONTINUED):                                                           
universal life-type products and investment-related products includes charges   
for cost of insurance (mortality), initiation and administration of the policy  
and surrender charges. Revenue is recognized when the charges are assessed      
except that any portion of an assessment that relates to services to be provided
in future years is deferred and recognized over the period during which the     
services are provided.                                                          

Benefits and expenses, other than deferred policy acquisition costs, related to 
traditional life, annuity, and disability contracts, including group policies,  
are recognized when incurred in a manner designed to match them with related    
premium revenue and spread income recognition over expected policy lives. For   
universal life-type and investment-type contracts, benefits include interest    
credited to policyholders' accounts and death benefits in excess of account     
values, which are recognized as incurred.                                       

INCOME TAXES                                                                    

The Company and its subsidiaries participate in a consolidated federal income   
tax return with Sun Life Assurance Company of Canada - U.S. Operations Holdings,
Inc., direct wholly owned subsidiary of SLOC and parent company of Life Holdco  
and other affiliates. Deferred income taxes are generally recognized when assets
and liabilities have different values for financial statement and tax reporting 
purposes, and for other temporary taxable and deductible differences as defined 
by Statement of Financial Accounting Standards No. 109, Accounting for Income   
Taxes. These differences result primarily from policy reserves, policy          
acquisition expenses and unrealized gains or losses on investments.             

SEPARATE ACCOUNTS                                                               

The Company has established separate accounts applicable to various classes of  
contracts providing for variable benefits. Contracts for which funds are        
invested in separate accounts include variable life insurance and individual and
group qualified and non-qualified variable annuity contracts. Assets and        
liabilities of the separate accounts, representing net deposits and accumulated 
net investment earnings less fees, held primarily for the benefit of contract   
holders, are shown as separate captions in the financial statements. Assets held
in the separate accounts are carried at market value and the investment risk of 
such securities is retained by the policyholder.                                

NEW ACCOUNTING PRONOUNCEMENTS                                                   

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities ("SFAS No. 133"), which establishes accounting and       
reporting standards for derivative instruments. SFAS No. 133 requires that an   
entity recognize all derivatives as either assets or liabilities at fair value  
in the balance sheet and establishes special accounting for the following three 
types of hedges: fair value hedges, cash flow hedges, and hedges of foreign     
currency exposures of net investments in foreign operations.                    

In June 1999, the FASB issued Statement of Financial Accounting Standards       
No. 137 ("SFAS No. 137"), "Accounting for Derivative Instruments and Hedging    
Activities - Deferral of the Effective Date of FASB SFAS No. 133." SFAS No. 137 
delays the effective date of SFAS No. 133 for all fiscal quarters until fiscal  
years beginning after June 15, 2000. The Company is evaluating SFAS No. 133 and 
has not determined its effect on the consolidated financial statements.         

On January 1, 1999, the Company adopted the American Institute of Certified     
Public Accountants (AICPA) Statement of Position (SOP) 97-3, "Accounting by     
Insurance and Other Enterprises for Insurance-Related Assessments." This        
statement provides guidance on when an insurance or other enterprise should     
recognize a liability for guaranty fund and other assessments and on how to     
measure such liability. The adoption of SOP 97-3 had no material impact on the  
financial position or results of operations of the Company.                     

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)         

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                

1.  DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING               
POLICIES (CONTINUED):                                                           
On January 1, 1999, the Company adopted AICPA SOP 98-1, "Accounting for the     
Costs of Computer Software Developed or Obtained for Internal Use." This SOP    
provides guidance for determining whether costs of software developed or        
obtained for internal use should be capitalized or expensed as incurred. In the 
past, the Company has expensed such costs as they were incurred. The adoption of
SOP 98-1, had no material impact on pre-tax income in either three month period.

2.  TRANSACTIONS WITH AFFILIATES                                                

The Company has an agreement with SLOC which provides that SLOC will furnish, as
requested, personnel as well as certain services and facilities on a            
cost-reimbursement basis. Expenses under this agreement amounted to             
approximately $7,374,000 and $6,798,000 for the three month period in 2000 and  
1999.                                                                           

The Company leases office space to SLOC under lease agreements with terms       
expiring in September, 2004 and options to extend the terms for each of twelve  
successive five-year terms at fair market rental not to exceed 125% of the fixed
rent for the term which is ending. Rent received by the Company under the leases
for the three month period amounted to approximately $1,994,000 in 2000 and     
$1,762,000 in 1999.                                                             

During January 2000, the Company purchased $200 million of term notes issued by 
an affiliate, Massachusetts Financial Services Company, maturing in 2003 and    
2004.                                                                           

3.  SEGMENT INFORMATION                                                         

The Company offers financial products and services such as fixed and variable   
annuities, retirement plan services, and life insurance on an individual and    
group basis, as well as disability insurance on a group basis. Within these     
areas, the Company conducts business principally in three operating segments and
maintains a corporate segment to provide for the capital needs of the three     
operating segments and to engage in other financing related activities.         

The Individual Protection segment markets and administers a variety of life     
insurance products sold to individuals and corporate owners of individual life  
insurance. The products include whole life, universal life and variable life    
products.                                                                       

The Group Protection segment markets and administers group life and long-term   
disability insurance to small and mid-size employers in the State of New York.  

The Wealth Management segment markets and administers individual and group      
variable annuity products, individual and group fixed annuity products which    
include market value adjusted annuities, and other retirement benefit products. 

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)         

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                

3.  SEGMENT INFORMATION (CONTINUED):                                            
Summarized unaudited financial information by segment is provided in the tables 
below:                                                                          

                                                        [Enlarge/Download Table]

                                                  PERIOD ENDED MARCH 31, 2000            MARCH 31,   
                                         ---------------------------------------------      2000     
                                          TOTAL        TOTAL        PRETAX      NET     ------------ 
                                         REVENUES   EXPENDITURES    INCOME     INCOME   TOTAL ASSETS 
                                         --------   ------------   --------   --------  ------------ 
                                                         (IN MILLIONS)                               
                                                                                                     
Individual Protection...................  $  3.1       $  3.2       $ (.1)     $ (.1)    $   325.0   
Group Protection........................     4.2          3.3          .9         .6          27.8   
Wealth Management.......................   146.9         99.3        47.6       32.6      21,903.1   
Corporate...............................     7.1         12.9        (5.8)      (5.4)        229.8   
                                          ======       ======       =====      =====     =========   
    Total...............................  $161.3       $118.7       $42.6      $27.7     $22,485.7   
                                          ======       ======       =====      =====     =========   


                                                                                        DECEMBER 31, 
                                                  PERIOD ENDED MARCH 31, 1999               1999     
                                         ---------------------------------------------  -------------
                                                         (IN MILLIONS)                               
Individual Protection.                   $    4.4   $        4.4   $     --   $     --  $       291.5
                                                                                                     
Group Protection........................     4.2          3.6          .6         .4           20.0  
Wealth Management.......................   146.3        120.5        25.8       18.1       20,534.2  
Corporate...............................     8.9         11.4        (2.5)       2.1          639.2  
                                          ======       ======       =====      =====      =========  
    Total...............................  $163.8       $139.9       $23.9      $20.6      $21,484.9  
                                          ======       ======       =====      =====      =========  

4.  DISCONTINUED OPERATIONS                                                     

In February 1999, the Company completed the sale of its wholly-owned subsidiary,
MCIC for approximately $34,000,000. The Company realized a loss of $25,600,000  
on the sale.                                                                    

In October 1999, the Company completed the sale of its wholly-owned subsidiary, 
NLT. A summary of the results of these discontinued operations follows:         

                                                                [Download Table]

                                                              MARCH 31, 1999
                                                              --------------
                                                              (IN MILLIONS) 
                                                                            
Revenue.....................................................       $7.5     
Expenses....................................................        6.2     
Provision for income taxes..................................         .5     
                                                                   ====     
Income from discontinued operations.........................       $ .8     
                                                                   ====     

5.  STATUTORY FINANCIAL INFORMATION                                             

For the year ended December 31, 1999, the Company filed its Annual Report on    
Form 10-K using audited statutory financial statements. The Company prepared    
these financial statements using accounting practices prescribed or permitted by
the Insurance Department of the State of Delaware, which is a comprehensive     
basis of accounting other than generally accepted accounting principles. The    
Company has changed its basis of accounting for the three months ended          
March 31, 2000 to generally accepted accounting principles ("GAAP") and has     
restated the financial statements for the prior year ended December 31, 1999    
(Consolidated Balance Sheet) and for the period ended March 31, 1999            
(Consolidated Statement of Income, Consolidated Statement of Comprehensive      
Income, Consolidated Statement of Changes in Stockholder's Equity, and          
Consolidated Statement of Cash Flows) to conform with GAAP. The Statutory       
Balance Sheet filed as part of the 1999 10-K is shown below:                    

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)         

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                

5.  STATUTORY FINANCIAL INFORMATION (CONTINUED):                                
STATUTORY STATEMENTS OF ADMITTED ASSETS, LIABILITIES AND                        
CAPITAL STOCK AND SURPLUS                                                       

                                                                [Download Table]

                                                              DECEMBER 31, 1999
                                                              -----------------
                                                                (IN MILLIONS)  
                                                                               
ADMITTED ASSETS                                                                
Bonds.......................................................     $ 1,221,970   
Common stocks...............................................          75,283   
Mortgage loans on real estate...............................         528,911   
Properties acquired in satisfaction of debt.................          15,641   
Investment real estate......................................          79,182   
Policy loans................................................          40,095   
Cash and short-term investments.............................         316,971   
Other invested assets.......................................          67,938   
Investment income due and accrued...........................          25,303   
Other assets................................................           5,807   
                                                                 -----------   
General account assets......................................       2,377,101   
Separate account assets                                                        
  Unitized..................................................      15,490,328   
  Non-unitized..............................................       2,080,726   
                                                                 -----------   
TOTAL ADMITTED ASSETS.......................................     $19,948,155   
                                                                 ===========   
LIABILITIES                                                                    
Aggregate reserve for life policies and contracts...........     $ 1,153,642   
Supplementary contracts.....................................           3,182   
Policy and contract claims..................................             962   
Liability for premium and other deposit funds...............         564,820   
Surrender values on cancelled policies......................              16   
Interest maintenance reserve................................          41,771   
Commissions to agents due or accrued........................           3,253   
General expenses due or accrued.............................          14,055   
Transfers from Separate Accounts due or accrued.............        (467,619)  
Taxes, licenses and fees due or accrued, excluding FIT......             379   
Federal income taxes due or accrued.........................          89,031   
Unearned investment income..................................              22   
Amounts withheld or retained by company as agent or                            
  trustee...................................................            (442)  
Remittances and items not allocated.........................           1,078   
Asset valuation reserve.....................................          44,071   
Payable to parent, subsidiaries, and affiliates.............          26,284   
Other liabilities...........................................          16,674   
                                                                 -----------   
General account liabilities 1,491,179 Separate account                         
  liabilities:                                                                 
  Unitized..................................................      15,489,908   
  Non-unitized..............................................       2,080,726   
                                                                 -----------   
TOTAL LIABILITIES...........................................      19,061,813   
                                                                 -----------   

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)         

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                

5.  STATUTORY FINANCIAL INFORMATION (CONTINUED):                                

                                                                [Download Table]

                                                              DECEMBER 31, 1999
                                                              -----------------
                                                                (IN MILLIONS)  
                                                                               
CAPITAL STOCK AND SURPLUS                                                      
Common capital stock........................................     $     5,900   
                                                                 -----------   
Surplus notes...............................................         565,000   
Gross paid in and contributed surplus.......................         199,355   
Unassigned funds............................................         116,087   
                                                                 -----------   
Surplus.....................................................         880,442   
Total common capital stock and surplus......................         886,342   
                                                                 -----------   
TOTAL LIABILITIES, CAPITAL STOCK AND SURPLUS................     $19,948,155   
                                                                 ===========   

The following information reconciles statutory net income and statutory surplus 
with net income and equity on a GAAP basis.                                     

                                                                [Download Table]

                                                                  THREE MONTHS      
                                                                 ENDED MARCH 31,    
                                                             -----------------------
                                                               2000           1999  
                                                             --------       --------
                                                                  (IN MILLIONS)     
                                                                                    
Statutory net income........................................  $ 21.4         $ 37.7 
Adjustments to GAAP for life insurance companies:                                   
  Statutory interest maintenance reserve....................     (.8)           (.9)
Investment income and realized gains (losses)...............     1.9          (14.5)
Policyowner benefits........................................   (24.4)         (35.4)
Deferred policy acquisition costs...........................    39.0           16.6 
Deferred income taxes.......................................   (11.1)          (9.0)
Other, net..................................................     1.7            1.3 
                                                              ------         ------ 
GAAP net income (loss)......................................  $ 27.7         $ (4.2)
                                                              ======         ====== 

                                                        [Enlarge/Download Table]

                                                             MARCH 31,   DECEMBER 31,
                                                               2000          1999    
                                                             ---------   ------------
                                                                  (IN MILLIONS)      
                                                                                     
Statutory surplus...........................................  $ 915.5      $ 886.3   
Adjustments to GAAP for life insurance companies:                                    
  Valuation of investments..................................      3.2          3.7   
  Deferred policy acquisition costs.........................    728.1        686.3   
  Future policy benefits and Contractholder deposit funds...   (386.4)      (350.2)  
  Deferred income taxes.....................................    (89.4)       (86.1)  
  Statutory interest maintenance reserve....................     41.3         42.3   
  Statutory asset valuation reserve.........................     42.4         45.3   
  Surplus notes.............................................   (565.0)      (565.0)  
  Other, net................................................      9.8          8.6   
                                                              -------      -------   
GAAP equity.................................................  $ 699.5      $ 671.2   
                                                              =======      =======   

The NAIC has codified statutory accounting practices, which are expected to     
constitute the only source of prescribed statutory accounting practices and are 
effective in 2001. Codification will change prescribed statutory accounting     
practices and may result in changes to the accounting practices that insurance  
enterprises use to prepare their statutory financial statements. The changes of 
codification will not have a material impact on statutory surplus.              

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SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)                                     
(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)         

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)                

6.  COMMITMENTS AND CONTINGENT LIABILITIES                                      

The Company is involved in pending and threatened litigation in the normal      
course of its business in which claims for monetary and punitive damages have   
been asserted. Although there can be no assurances, at the present time the     
Company does not anticipate that the ultimate liability arising from such       
pending or threatened litigation, after consideration of provisions made for    
potential losses and costs of defense, will have a material adverse effect on   
the financial condition of operating results of the Company.                    

Under insurance guaranty fund laws in each state, the District of Columbia and  
Puerto Rico, insurers licensed to do business can be assessed by state insurance
guaranty associations for certain obligations of insolvent insurance companies  
to policyholders and claimants. Recent regulatory actions against certain large 
life insurers encountering financial difficulty have prompted various state     
insurance guaranty associations to begin assessing life insurance companies for 
the deemed losses. Most of these laws do provide, however, that an assessment   
may be excused or deferred it would threaten an insurer's solvency and further  
provide annual limits on such assessments. Part of the assessments paid by the  
Company and its subsidiaries pursuant to these laws may be used as credits for a
portion of the associated premium taxes.                                        

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TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION

                                                                [Download Table]
                                                                 
Calculation of Performance Data                                  
Advertising and Sales Literature                                 
Calculations                                                     
  Example of Variable Accumulation Unit Value Calculation        
  Example of Variable Annuity Unit Calculation                   
  Example of Variable Annuity Payment Calculation                
Distribution of the Contracts                                    
Designation and Change of Beneficiary                            
Custodian                                                        
Financial Statements                                             

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      This Prospectus sets forth information about the Contract and the Variable
Account that a prospective purchaser should know before investing. Additional   
information about the Contract and the Variable Account has been filed with the 
Securities and Exchange Commission in a Statement of Additional Information     
dated _________, 2000 which is incorporated herein by reference. The Statement  
of Additional Information is available upon request and without charge from Sun 
Life Assurance Company of Canada (U.S.). To receive a copy, return this request 
form to the address shown below or telephone (800) 752-7215.                    

--------------------------------------------------------------------------------

                                                                [Download Table]
                                                                
To:     Sun Life Assurance Company of Canada (U.S.)             
        c/o Retirement Products and Services                    
        P.O. Box 1024                                           
        Boston, Massachusetts 02103                             

        Please send me a Statement of Additional Information for
        MFS Regatta Flex Four Variable and Fixed Annuity        
        Sun Life of Canada (U.S.) Variable Account F.           

                                                                [Download Table]
                                                                         
Name         ------------------------------------------------------------

Address      ------------------------------------------------------------

             ------------------------------------------------------------

                                                                [Download Table]
                                                                       
City  --------------------------  State  --------------  Zip  -------  

                                                                [Download Table]
                                                                       
Telephone  ------------------------------------------------------------

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APPENDIX A
GLOSSARY

The following terms as used in this Prospectus have the indicated   
meanings:                                                                       

ACCOUNT or PARTICIPANT ACCOUNT: An account established for each     
Participant to which Net Purchase Payments are credited.                        

  ACCOUNT VALUE: The Variable Accumulation Value, if any, plus the Fixed
Accumulation Value, if any, of your Account for any Valuation Period.           

ACCOUNT YEAR and ACCOUNT ANNIVERSARY: Your first Account Year is the
period 365 days from the date on which we issued your Contract. Your Account    
Anniversary is the last day of an Account Year. Each Account Year after the     
first is the 365-day period that begins on your Account Anniversary. For        
example, if the Contract Date is on March 12, the first Account Year is         
determined from the Contract Date and ends on March 12 of the following year.   
Your Account Anniversary is March 12 and all Account Years after the first are  
measured from March 12. (If the Anniversary Date falls on a non-business day,   
the previous business day will be used.)                                        

   ACCUMULATION PHASE: The period before the Annuity Commencement Date and
during the lifetime of the Annuitant during which you make Purchase Payments    
under the Contract. This is called the "Accumulation Period" in the Contract.   

  *ANNUITANT: The person or persons to whom the first annuity payment is
made. If the Annuitant dies prior to the Annuity Commencement Date, the         
Co-Annuitant will become the sole Annuitant. If the Co-Annuitant dies or if no  
Co-Annuitant is named, the Participant becomes the Annuitant upon the           
Annuitant's death prior to the Annuity Commencement Date. If you have not named 
a sole Annuitant on the 30th day before the Annuity Commencement Date and both  
the Annuitant and Co-Annuitant are living, the Co-Annuitant will be the sole    
Annuitant/Payee during the Income Phase.                                        

  ANNUITY COMMENCEMENT DATE: The date on which the first annuity payment
under each Contract is to be made.                                              

ANNUITY OPTION: The method you choose for making annuity payments.  

    ANNUITY UNIT: A unit of measure used in the calculation of the amount of
the second and each subsequent Variable Annuity payment from the Variable       
Account.                                                                        

      APPLICATION: The document signed by you or other evidence acceptable to us
that serves as your application for participation under a Group Contract or     
purchase of an Individual Contract.                                             

      *BENEFICIARY: Prior to the Annuity Commencement Date, the person or entity
having the right to receive the death benefit and, for Non-Qualified Contracts, 
who, in the event of the Participant's death, is the "designated beneficiary"   
for purposes of Section 72(s) of the Internal Revenue Code. After the Annuity   
Commencement Date, the person or entity having the right to receive any payments
due under the Annuity Option elected, if applicable, upon the death of the      
Payee.                                                                          

  BUSINESS DAY: Any day the New York Stock Exchange is open for trading.
Also, any day on which we make a determination of the value of a Variable       
Accumulation Unit.                                                              

CERTIFICATE: The document for each Participant which evidences the  
coverage of the Participant under a Group Contract.                             

COMPANY: Sun Life Assurance Company of Canada (U.S.).               

    CONTRACT: Any Individual Contract, Group Contract, or Certificate issued
under a Group Contract.                                                         

   CONTRACT DATE: The date on which we issue your Contract. This is called
the "Date of Coverage" in the Contract.                                         

* You specify these items on the Application, and may change them, as we        
describe in this Prospectus.                                                    

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  COVERED PERSON: The person(s) identified as such in the Contract whose
death will trigger the death benefit provisions of the Contract and whose       
medically necessary stay in a hospital or nursing facility may allow the        
Participant to be eligible for a waiver of the withdrawal charge. Unless        
otherwise noted, the the Participant/Owner is the Covered Person.               

  DEATH BENEFIT DATE: If you have elected a death benefit payment option
before the Annuitant's death that remains in effect, the date on which we       
receive Due Proof of Death. If your Beneficiary elects the death benefit payment
option, the later of (a) the date on which we receive the Beneficiary's election
and (b) the date on which we receive Due Proof of Death. If we do not receive   
the Beneficiary's election within 60 days after we receive Due Proof of Death,  
the Death Benefit Date will be the last day of the 60 day period and we will pay
the death benefit in one lump sum.                                              

DUE PROOF OF DEATH: An original certified copy of an official death 
certificate, an original certified copy of a decree of a court of competent     
jurisdiction as to the finding of death, or any other proof satisfactory to the 
Company.                                                                        

FIXED ACCOUNT: The general account of the Company, consisting of all
assets of the Company other than those allocated to a separate account of the   
Company.                                                                        

    FIXED ACCOUNT VALUE: The value of that portion of your Account allocated
to the Fixed Account.                                                           

  FIXED ANNUITY: An annuity with payments which do not vary as to dollar
amount.                                                                         

   FUND: A registered management investment company, or series thereof, in
which assets of a Sub-Account may be invested.                                  

GROUP CONTRACT: A Contract issued by the Company on a group basis.  

GUARANTEE AMOUNT: Each separate allocation of Account Value to a    
particular Guarantee Period (including interest earned thereon).                

GUARANTEE PERIOD: The period for which a Guaranteed Interest Rate is
credited.                                                                       

  GUARANTEED INTEREST RATE: The rate of interest we credit on a compound
annual basis during any Guarantee Period.                                       

   INCOME PHASE: The period on and after the Annuity Commencement Date and
during the lifetime of the Annuitant during which we make annuity payments under
the Contract.                                                                   

  INDIVIDUAL CONTRACT: A Contract issued by the Company on an individual
basis.                                                                          

NET INVESTMENT FACTOR: An index applied to measure the investment   
performance of a Sub-Account from one Valuation Period to the next. The Net     
Investment Factor may be greater or less than or equal to one.                  

  NET PURCHASE PAYMENT (NET PAYMENTS): The portion of a Purchase Payment
which remains after the deduction of any applicable premium tax or similar tax. 
This is also the term used to describe the total contribution made to the       
Contract minus the total withdrawals.                                           

   NON-QUALIFIED CONTRACT: A Contract used in connection with a retirement
plan that does not receive favorable federal income tax treatment under         
Sections 401, 403, 408, or 408A of the Internal Revenue Code. The Participant's 
interest in the Contract must be owned by a natural person or agent for a       
natural person for the Contract to receive income tax treatment as an annuity.  

  *OWNER: The person, persons or entity entitled to the ownership rights
stated in a Group Contract and in whose name or names the Group Contract is     
issued. The Owner may designate a trustee or custodian of a retirement plan     
which meets the requirements of Section 401, Section 408(c), Section 408(k),    
Section 408(p) or Section 408A of the Internal Revenue Code to serve as legal   
owner of assets of a retirement plan, but the term "Owner," as used herein,     
shall refer to the organization entering into the Group Contract.               

* You specify these items on the Application, and may change them, as we        
describe in this Prospectus.                                                    

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 *PARTICIPANT: In the case of an Individual Contract, the owner of the
Contract. In the case of a Group Contract, the person named in the Contract who 
is entitled to exercise all rights and privileges of ownership under the        
Contract, except as reserved by the Owner. If there are two Participants, the   
death benefit is paid upon the death of either Participant.                     

 PAYEE: A recipient of payments under a Contract. The term includes an
Annuitant or a Beneficiary who becomes entitled to benefits upon the death of   
the Participant, or on the Annuity Commencement Date.                           

      PURCHASE PAYMENT (PAYMENT): An amount paid to the Company as consideration
for the benefits provided by a Contract.                                        

    QUALIFIED CONTRACT: A Contract used in connection with a retirement plan
which may receive favorable federal income tax treatment under Sections 401,    
403, 408 or 408A of the Internal Revenue Code of 1986, as amended.              

RENEWAL DATE: The last day of a Guarantee Period.                   

SERIES FUND: MFS/Sun Life Series Trust.                             

     SUB-ACCOUNT: That portion of the Variable Account which invests in shares
of a specific Fund.                                                             

   VALUATION PERIOD: The period of time from one determination of Variable
Accumulation Unit or Annuity Unit values to the next subsequent determination of
these values. Value determinations are made as of the close of the New York     
Stock Exchange on each day that the Exchange is open for trading.               

    VARIABLE ACCOUNT: Variable Account F of the Company, which is a separate
account of the Company consisting of assets set aside by the Company, the       
investment performance of which is kept separate from that of the general assets
of the Company.                                                                 

    VARIABLE ACCUMULATION UNIT: A unit of measure used in the calculation of
Variable Account Value.                                                         

VARIABLE ACCOUNT VALUE: The value of that portion of your Account   
allocated to the Variable Account.                                              

     VARIABLE ANNUITY: An annuity with payments which vary as to dollar amount
in relation to the investment performance of the Variable Account.              

* You specify these items on the Application, and may change them, as we        
describe in this Prospectus.                                                    

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APPENDIX B
WITHDRAWALS, WITHDRAWAL CHARGES AND THE MARKET VALUE ADJUSTMENT 

PART 1: VARIABLE ACCOUNT (THE MARKET VALUE ADJUSTMENT DOES NOT APPLY TO THE     
VARIABLE ACCOUNT)                                                               
WITHDRAWAL CHARGE CALCULATION:                                                  
FULL WITHDRAWAL:                                                                

 Assume a Purchase Payment of $40,000 is made on the Contract Date, no
additional Purchase Payments are made and there are no partial withdrawals. The 
table below presents three examples of the withdrawal charge resulting from a   
full withdrawal of your Account, based on hypothetical Account Values.          

                                                                [Download Table]

                                             PAYMENT                            
                HYPOTHETICAL      FREE      SUBJECT TO   WITHDRAWAL   WITHDRAWAL
     ACCOUNT      ACCOUNT      WITHDRAWAL   WITHDRAWAL     CHARGE       CHARGE  
       YEAR        VALUE         AMOUNT       CHARGE     PERCENTAGE     AMOUNT  
     --------   ------------   ----------   ----------   ----------   ----------
                                                                                
(a)     1          $41,000      $ 4,000      $37,000       6.00%        $2,220  
        2          $44,200      $ 4,000      $40,000       6.00%        $2,400  
(b)     3          $47,700      $ 4,000      $40,000       5.00%        $2,000  
        4          $51,500      $ 4,000      $40,000       5.00%        $2,000  
(c)     5          $55,600      $55,600      $     0       0.00%        $    0  
        6          $60,000      $60,000      $     0       0.00%        $    0  

(a) The free withdrawal amount in any year is equal to 10% of all of the        
Purchase Payments you have made. In Account Year 1, the free withdrawal 
   amount is $4,000, which equals 10% of the Purchase Payment of $40,000. On a
full withdrawal of $41,000, the amount subject to a withdrawal charge is
    $37,000, which equals the Account Value of $41,000 minus the free withdrawal
amount of $4,000.                                                       

(b) In Account Year 3, the free withdrawal amount is $4,000, which equals 10% of
    the Purchase Payment of $40,000. The Account Value minus the free withdrawal
 amount is $47,700 minus $4,000, which equals $43,700; however, the amount
   subject to a withdrawal charge is capped at the amount of your unliquidated
  Purchase Payments. Therefore, the amount subject to a withdrawal charge is
$40,000, which is the amount of your unliquidated Purchase Payments.    

(c) In Account Year 5, you have passed your fourth Account Anniversary, so no   
withdrawal charges apply to any withdrawals you make.                   

PARTIAL WITHDRAWAL                                                              

     Assume a single Purchase Payment of $40,000 is made on the Contract Date,
no additional Purchase Payments are made, no partial withdrawals have been taken
prior to the fourth Account Year, and there is a series of 4 partial withdrawals
made during the fourth Account Year of $3,000, $8,000, $12,000, and $22,000.    

                                                        [Enlarge/Download Table]

                              REMAINING                                                        REMAINING               
                                FREE                    AMOUNT OF                                FREE      HYPOTHETICAL
                             WITHDRAWAL                WITHDRAWAL                             WITHDRAWAL     ACCOUNT   
               HYPOTHETICAL    AMOUNT                  SUBJECT TO   WITHDRAWAL   WITHDRAWAL     AMOUNT        VALUE    
     ACCOUNT     ACCOUNT       BEFORE      AMOUNT OF   WITHDRAWAL     CHARGE       CHARGE        AFTER        AFTER    
       YEAR       VALUE      WITHDRAWAL   WITHDRAWAL     CHARGE     PERCENTAGE     AMOUNT     WITHDRAWAL    WITHDRAWAL 
     --------  ------------  -----------  -----------  -----------  -----------  -----------  -----------  ------------
                                                                                                                       
        1        $41,000       $4,000       $     0      $     0       6.00%       $    0       $4,000       $41,000   
        2        $44,200       $4,000       $     0      $     0       6.00%       $    0       $4,000       $44,200   
        3        $47,700       $4,000       $     0      $     0       5.00%       $    0       $4,000       $47,700   
(a)     4        $48,200       $4,000       $ 3,000      $     0       5.00%       $    0       $1,000       $45,200   
(b)     4        $46,000       $1,000       $ 8,000      $ 7,000       5.00%       $  350       $    0       $37,650   
(c)     4        $38,250       $    0       $12,000      $12,000       5.00%       $  600       $    0       $25,650   
(d)     4        $26,050       $    0       $22,000      $21,000       5.00%       $1,050       $    0       $ 3,000   

      Totals     $26,050       $    0       $45,000      $40,000       5.00%       $2,000       $    0       $ 3,000   

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(a) In Account Year 4, the free withdrawal amount is $4,000, which equals 10% of
   the Purchase Payment of $40,000. The partial withdrawal amount of $3,000 is
less than the free withdrawal amount, so there is no withdrawal charge. 

(b) Since a partial withdrawal of $3,000 was taken, the remaining free          
   withdrawal amount in Account Year 4 is $4,000 - $3,000 = $1,000. Therefore,
  $1,000 of the $8,000 withdrawal is not subject to a withdrawal charge, and
   $7,000 is subject to a withdrawal charge. Of the $11,000 withdrawn to date,
$4,000 has been from the free withdrawal amount and $7,000 has been from
  Purchase Payments. Therefore, the amount of unliquidated Purchase Payments
is $33,000.                                                             

(c) Since $4,000 of the two prior Account Year 4 partial withdrawals was taken  
from the free withdrawal amount, the remaining free withdrawal amount in
Account year 4 is $4,000 - $4,000 = $0. Therefore, the entire $12,000   
 withdrawal is subject to a withdrawal charge. Of the $23,000 withdrawn to
  date, $4,000 has been from the free withdrawal amount and $19,000 has been
from Purchase Payments. Therefore, the amount of unliquidated Purchase  
Payments is $21,000.                                                    

(d) Since $4,000 of the three prior Account Year 4 partial withdrawals was taken
from the free withdrawal amount, the remaining free withdrawal amount in
   Account Year 4 is $4,000 - $4,000 = $0. The amount of unliquidated Purchase
   Payments remaining before this withdrawal is $21,000. Therefore, $21,000 of
  the $22,000 withdrawal is taken from Purchase Payments and is subject to a
  withdrawal charge, and $1,000 of the withdrawal is taken from earnings and
is not subject to a withdrawal charge. Of the $45,000 withdrawn to date,
$4,000 has been from the free withdrawal amount, $40,000 has been from  
Purchase Payments, and $1,000 has been from earnings. The amount of     
unliquidated Purchase Payments is now equal to $0.                      
Note that if the $3,000 remaining balance was withdrawn, it would all be
from earnings and not subject to a withdrawal charge. The total Account 
Year 4 withdrawal charges would then be $2,000, which is the same amount
    that was assessed for a full liquidation in Account Year 4 in the example on
the previous page.                                                      

PART 2 -- FIXED ACCOUNT -- EXAMPLES OF THE MARKET VALUE ADJUSTMENT ("MVA")      

The MVA Factor is:                                                  

                                                                [Download Table]
                             
                N/12         
    1 + I                    
( --------  )             -1 
  1 + J + b                  

These examples assume the following:                                

        (1) The Guarantee Amount was allocated to a 5-year Guarantee Period with
a Guaranteed Interest Rate of 6% or .06.                

       (2) The date of surrender is 2 years from the Expiration Date (N = 24).

 (3) The value of the Guarantee Amount on the date of surrender is
$11,910.16.                                             

(4) The interest earned in the current Account Year is $674.16. 

       (5) No transfers or partial withdrawals affecting this Guarantee Amount
have been made.                                         

    (6) Withdrawal charges, if any, are calculated in the same manner as
shown in the examples in Part 1.                        

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EXAMPLE OF A NEGATIVE MVA:                                                      

   Assume that on the date of surrender, the current rate (J) is 8% or .08
and the b factor is zero.                                                       

                                                                [Download Table]
                                                          
                                             N/12         
                                 1 + I                    
The MVA factor =           (   --------  )             -1 
                               1 + J + b                  

                                                                [Download Table]
                                         
                            24/12        
                1 + .06                  
=           (   ------  )             -1 
                1 + .08                  

=           (.981)TO THE POWER OF (2) -1 

=           .963 -1                      

=     -     .037                         

     The value of the Guarantee Amount less interest credited to the Guarantee
Amount in the current Account Year is multiplied by the MVA factor to determine 
the MVA:                                                                        

($11,910.16 - $674.16) X (-.037) = -$415.73 

   -$415.73 represents the MVA that will be deducted from the value of the
Guarantee Amount before the deduction of any withdrawal charge.                 

  For a partial withdrawal of $2,000 from this Guarantee Amount, the MVA
would be ($2,000.00 - $674.16) X (-.037) = -$49.06. -$49.06 represents the MVA  
that will be deducted from the partial withdrawal amount before the deduction of
any withdrawal charge.                                                          

EXAMPLE OF A POSITIVE MVA:                                                      

   Assume that on the date of surrender, the current rate (J) is 5% or .05
and the b factor is zero.                                                       

                                                                [Download Table]
                                                          
                                             N/12         
                                 1 + I                    
The MVA factor =           (   --------  )             -1 
                               1 + J + b                  

                                                                [Download Table]
                                         
                            24/12        
                1 + .06                  
=           (   ------  )             -1 
                1 + .05                  

=           (1.010)TO THE POWER OF (2) -1

=           1.019 -1                     

=           .019                         

     The value of the Guarantee Amount less interested credit to the Guarantee
Amount in the current Account Year is multiplied by the MVA factor to determine 
the MVA:                                                                        

($11,910.16 - $674.16) X .019 = $213.48 

$213.48 represents the MVA that would be added to the value of the  
Guarantee Amount before the deduction of any withdrawal charge.                 

  For a partial withdrawal of $2,000 from this Guarantee Amount, the MVA
would be ($2,000.00 - $674.16) X .019 = $25.19.                                 

     $25.19 represents the MVA that would be added to the value of the partial
withdrawal amount before the deduction of any withdrawal charge.                

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APPENDIX C
CALCULATION OF BASIC DEATH BENEFIT

EXAMPLE 1:                                                                      

    Assume a Purchase Payment of $60,000.00 is made on the Contract Date and
an additional Purchase Payment of $40,000.00 is made one year later. Assume that
all of the money is invested in the Sub-Accounts, that no Withdrawals are made  
and that the Account Value on the Death Benefit Date is $80,000.00. The         
calculation of the Death Benefit to be paid is as follows:                      

                                                                [Download Table]
                                                              
The Basic Death Benefit is the greatest of:                   
    Account Value                           =  $ 80,000.00    
    Cash Surrender Value                    =  $ 74,400.00    
    Purchase Payments                       =  $100,000.00    
The Basic Death Benefit would therefore be:    $100,000.00    

EXAMPLE 2:                                                                      

    Assume a Purchase Payment of $60,000.00 is made on the Contract Date and
an additional Purchase Payment of $40,000.00 is made one year later. Assume that
all of the money is invested in the Sub-Accounts and that the Account Value is  
$80,000.00 just prior to a $20,000.00 withdrawal. The Account Value on the Death
Benefit Date is $60,000.00.                                                     

                                                                [Download Table]
                                                                           
The Basic Death Benefit is the greatest of:                                
    Account Value                           =  $ 60,000.00                 
    Cash Surrender Value                    =  $ 55,200.00                 
    Adjusted Purchase Payments*             =  $ 75,000.00                 
The Basic Death Benefit would therefore be:    $ 75,000.00                 

*Adjusted Purchase Payments can be calculated as follows:                  
Payments X (Account Value after withdrawal  DIVIDED BY Account Value before
withdrawal)                                                                
$100,000.00 X ($60,000.00  DIVIDED BY $80,000.00)                          

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APPENDIX D
CALCULATION OF EARNINGS ENHANCEMENT OPTIONAL DEATH BENEFIT

EXAMPLE 1:                                                                      

    Assume a Purchase Payment of $60,000.00 is made on the Contract Date and
an additional Purchase Payment of $40,000.00 is made one year later. Assume that
all of the money is invested into the Sub-Accounts, no withdrawals are made and 
the Account Value on the Death Benefit Date is $150,000.00. In addition, this   
Contract was issued prior to the owner's 70th birthday. The calculation of the  
Basic Death Benefit to be paid is as follows:                                   

                                                        [Enlarge/Download Table]
                                                                                      
The Basic Death Benefit is the greatest of:                                           
    Account Value                                   =  $150,000.00                    
    Cash Surrender Value                            =  $145,000.00                    
    Adjusted Purchase Payments                      =  $100,000.00                    
The Basic Death Benefit would therefore             =  $150,000.00                    

The benefit under the optional death benefit rider                                    
can be calculated as follows:                                                         
The lesser of:                                                                        
    Adjusted Purchase Payments                      =  $100,000.00                    
    Account Value -- adjusted Purchase Payments     =  $ 50,000.00                    
Amount to use to determine rider benefit            =  $ 50,000.00                    
The amount to be paid on the rider benefit          =  $ 50,000.00  X 40% = $20,000.00

The total Death Benefit would be the amount paid on the Basic Death 
Benefit plus the amount paid on the Earnings Enhancement Optional Death Benefit 
Rider: $150,000.00 + $20,000.00 = $170,000.00                                   

EXAMPLE 2:                                                                      

    Assume a Purchase Payment of $60,000.00 is made on the Contract Date and
an additional Purchase Payment of $40,000.00 is made one year later. Assume that
all of the money is invested in the Sub-Accounts and that the Account Value is  
$150,000.00 just prior to a $20,000.00 withdrawal. The Account Value on the     
Death Benefit Date is $130,000.00.                                              

                                                        [Enlarge/Download Table]
                                                                                                    
The Basic Death Benefit is the greatest of:                                                         
    Account Value                                         =  $130,000.00                            
    Cash Surrender Value                                  =  $127,000.00                            
    Adjusted Purchase Payments*                           =  $ 86,666.67                            
The Basic Death Benefit would therefore                   =  $130,000.00                            

*Adjusted Purchase Payments can be calculated as follows:                                           
Payments X (Account Value after withdrawal  DIVIDED BY Account Value before withdrawal)             
$100,000.00 X ($130,000.00  DIVIDED BY $150,000.00)                                                 

The benefit under the optional death benefit rider                                                  
can be calculated as follows:                                                                       
The lesser of:                                                                                      
    Adjusted Purchase Payments                            =  $ 86,666.67                            
    Account Value -- adjusted Purchase Payments           =  $ 43,333.33                            
Amount to use to determine rider benefit:                 =  $ 43,333.33                            
The amount to be paid on the rider benefit                =  $ 43,333.33          X 40% = $17,333.33

The total Death Benefit would be the amount paid on the Basic Death 
Benefit plus the amount paid on the Earnings Enhancement Optional Death Benefit 
Rider: $130,000.00 + $17,333.33 = $147,333.33.                                  

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APPENDIX E
CALCULATION OF DEATH BENEFIT WHEN ALL THREE OPTIONAL DEATH BENEFITS RIDERS ARE
SELECTED

     Assume a Purchase Payment of $100,000.00 is made on the Contract Date, no
additional Purchase Payments or withdrawals are made and all of the money is    
invested in the Sub-Accounts. In addition, on the Death Benefit Date the Account
Value is $150,000.00, the value of the Purchase Payment accumulated at 5% until 
the Death Benefit Date is $160,000.00, and the Maximum Account Anniversary Value
is $170,000.00. The calculation of the death benefit to be paid is as follows:  

                                                                [Download Table]
                                                                                 
The Death Benefit Amount will be the greatest                                    
  of:                                                                            
    Account Value                              =  $150,000.00                    
    Cash Surrender Value                       =  $142,800.00                    
    Total of adjusted Purchase Payments        =  $100,000.00                    
    5% Premium Roll-Up Rider                   =  $160,000.00                    
    Maximum Account Anniversary Value Rider    =  $170,000.00                    
The Death Benefit Amount would therefore       =  $170,000.00                    

~ PLUS ~                                                                         

The Earnings Enhancement Rider benefit is calculated as                          
follows:                                                                         
The lesser of:                                                                   
    Adjusted Purchase Payments                 =  $100,000.00                    
    Account Value -- adjusted Purchase                                           
      Payments                                 =  $ 50,000.00                    
Amount to use to determine this rider                                            
benefit:                                       =  $ 50,000.00                    
The amount to be paid on the rider benefit     =  $ 50,000.00  X 40% = $20,000.00

   The total Death Benefit would be the amount paid on the Maximum Account
Anniversary Rider plus the amount paid on the Earnings Enhancement Rider:       
$170,000.00 + $20,000.00 = $190,000.00                                          

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                                                                [Download Table]
                                                             
                  SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
                  C/O RETIREMENT PRODUCTS AND SERVICES       
                  P.O. BOX 1024                              
                  BOSTON, MASSACHUSETTS 02103                

                  TELEPHONE:                                 
                  Toll Free (800) 752-7215                   

                  GENERAL DISTRIBUTOR                        
                  Clarendon Insurance Agency, Inc.           
                  One Sun Life Executive Park                
                  Wellesley Hills, Massachusetts 02481       

                  AUDITORS                                   
                  --------------------                       

FLEXFOUR-1 __/00                                             

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    PART B
    INFORMATION REQUIRED IN A STATEMENT OF
    ADDITIONAL INFORMATION

Attached hereto and made a part hereof is the Statement of Additional 
Information dated _________ __, 2000 for each of the following:                 

MFS Regatta Flex Four Variable and Fixed Annuity            
Futurity Select Four Variable and Fixed Annuity             

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                                                              _________ __, 2000

     MFS REGATTA FLEX FOUR

    VARIABLE AND FIXED ANNUITY

   STATEMENT OF ADDITIONAL INFORMATION

    SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F

   TABLE OF CONTENTS

Calculation of Performance Data .............................................. 2
Advertising and Sales Literature ............................................. 5
Calculations ................................................................. 9
     Example of Variable Accumulation Unit Value Calculation.................. 9
     Example of Variable Annuity Unit Calculation ............................ 9
     Example of Variable Annuity Payment Calculation ......................... 9
Distribution of the Contracts ................................................ 9
Designation and Change of Beneficiary ........................................10
Custodian ....................................................................10
Financial Statements .........................................................10

  The Statement of Additional Information sets forth information
which may be of interest to prospective purchasers of MFS Regatta Flex Four     
Variable and Fixed Annuity Contracts (the "Contracts") issued by Sun Life       
Assurance Company of Canada (U.S.) (the "Company") in connection with Sun       
Life of Canada (U.S.) Variable Account F (the "Variable Account") which is      
not included in the Prospectus dated _________ __, 2000.  This Statement of     
Additional Information should be read in conjunction with the Prospectus, a     
copy of which may be obtained without charge from the Company by writing to Sun 
Life Assurance Company of Canada (U.S.), c/o Retirement Products and Services,  
P.O. Box 1024, Boston, Massachusetts 02103, or by telephoning (800) 752-7215.   

       The terms used in this Statement of Additional Information have the
same meanings as in the Prospectus.                                             

--------------------------------------------------------------------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS AUTHORIZED  
FOR DISTRIBUTION TO PROSPECTIVE PURCHASERS ONLY IF PRECEDED OR ACCOMPANIED BY A 
CURRENT PROSPECTUS.                                                             

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     -2-

   CALCULATION OF PERFORMANCE DATA

STANDARDIZED AVERAGE ANNUAL TOTAL RETURN:                                       

The table below shows, for various Sub-Accounts of the Variable Account,
the Standardized Average Annual Total Return for the stated periods (or         
shorter period indicated in the note below), based upon a hypothetical          
initial Purchase Payment of $1,000, calculated in accordance with the formula   
set out below. For purposes of determining  these investment results, the       
actual investment performance of each Fund is reflected from the date the       
Variable Account was established, or such later date that the Fund commenced    
operations (the "Commencement Date"), although the Contracts have been          
offered only since _________ __, 2000. No information is shown for Funds that   
have not commenced operations or that had been in operation for less than one   
year as of December 31, 1999.                                                   

STANDARDIZED AVERAGE ANNUAL TOTAL RETURN
PERIOD ENDING DECEMBER 31, 1999 

1.35% M&E:                                                                      
----------                                                                      

                                                        [Enlarge/Download Table]

                                             1 YEAR       5 YEAR      10 YEAR                        COMMENCEMENT      
FUND                                         PERIOD       PERIOD       PERIOD        LIFE                 DATE         
----                                      -----------  ----------- ----------- ----------------  ----------------------
                                                                                                                       
 Bond Series.............................                                                            May 5, 1998       
 Capital Appreciation Series.............                                                          November 30, 1989   
 Capital Opportunities Series............                                                             June 3, 1996     
 Emerging Growth Series..................                                                             May 1, 1995      
 Emerging Markets Equity Series..........                                                            June 5, 1996      
 Equity Income Series....................                                                             May 1, 1998      
 Global Asset Allocation Series..........                                                          November 7, 1994    
 Global Governments Series...............                                                          November 30, 1989   
 Global Growth Series....................                                                          November 16, 1993   
 Global Total Return Series..............                                                          November 7, 1994    
 Government Securities Series............                                                          November 30, 1989   
 High Yield Series.......................                                                          November 30, 1989   
 International Growth Series.............                                                            June 3, 1996      
 International Growth and Income                                                                                       
  Series.................................                                                           October 2, 1995    
 Managed Sectors Series..................                                                          November 30, 1989   
 Massachusetts Investors Growth Stock                                                                                  
  Series.................................                                                             May 1, 1998      
 Massachusetts Investors Trust Series....                                                          November 30, 1989   
 Money Market Series.....................                                                          November 30, 1989   
 New Discovery Series....................                                                             May 5, 1998      
 Research Series.........................                                                          November 7, 1994    
 Research Growth and Income Series.......                                                            May 12, 1997      
 Research International Series...........                                                             May 5, 1998      
 Strategic Income Series.................                                                            May 5, 1998       
 Total Return Series.....................                                                          November 30, 1989   
 Utilities Series........................                                                          November 16, 1993   

1.50% M&E:                                                                      
----------                                                                      

                                                        [Enlarge/Download Table]

                                           1 YEAR       5 YEAR      10 YEAR                        COMMENCEMENT        
FUND                                       PERIOD       PERIOD       PERIOD        LIFE                 DATE           
----                                      -----------  ----------- ----------- ----------------  ----------------------
                                                                                                                       
 Bond Series.............................                                                             May 5, 1998      
 Capital Appreciation Series.............                                                           November 30, 1989  
 Capital Opportunities Series............                                                              June 3, 1996    
 Emerging Growth Series..................                                                              May 1, 1995     
 Emerging Markets Equity Series..........                                                             June 5, 1996     
 Equity Income Series....................                                                              May 1, 1998     
 Global Asset Allocation Series..........                                                           November 7, 1994   
 Global Governments Series...............                                                           November 30, 1989  
 Global Growth Series....................                                                           November 16, 1993  
 Global Total Return Series..............                                                           November 7, 1994   
 Government Securities Series............                                                           November 30, 1989  
 High Yield Series.......................                                                           November 30, 1989  
 International Growth Series.............                                                             June 3, 1996     
 International Growth and Income                                                                                       
  Series.................................                                                            October 2, 1995   
 Managed Sectors Series..................                                                           November 30, 1989  
 Massachusetts Investors Growth Stock                                                                                  
  Series.................................                                                              May 1, 1998     
 Massachusetts Investors Trust Series....                                                           November 30, 1989  
 Money Market Series.....................                                                           November 30, 1989  
 New Discovery Series....................                                                              May 5, 1998     
 Research Series.........................                                                           November 7, 1994   
 Research Growth and Income Series.......                                                             May 12, 1997     
 Research International Series...........                                                              May 5, 1998     
 Strategic Income Series.................                                                              May 5, 1998     
 Total Return Series.....................                                                           November 30, 1989  
 Utilities Series........................                                                           November 16, 1993  

1.60% M&E:                                                                      
----------                                                                      

                                                        [Enlarge/Download Table]

                                            1 YEAR       5 YEAR      10 YEAR                        COMMENCEMENT       
FUND                                        PERIOD       PERIOD       PERIOD        LIFE                 DATE          
----                                      -----------  ----------- ----------- ----------------  ----------------------
                                                                                                                       
 Bond Series.............................                                                            May 5, 1998       
 Capital Appreciation Series.............                                                          November 30, 1989   
 Capital Opportunities Series............                                                             June 3, 1996     
 Emerging Growth Series..................                                                             May 1, 1995      
 Emerging Markets Equity Series..........                                                            June 5, 1996      
 Equity Income Series....................                                                             May 1, 1998      
 Global Asset Allocation Series..........                                                          November 7, 1994    
 Global Governments Series...............                                                          November 30, 1989   
 Global Growth Series....................                                                          November 16, 1993   
 Global Total Return Series..............                                                          November 7, 1994    
 Government Securities Series............                                                          November 30, 1989   
 High Yield Series.......................                                                          November 30, 1989   
 International Growth Series.............                                                            June 3, 1996      
 International Growth and Income                                                                                       
  Series.................................                                                           October 2, 1995    
 Managed Sectors Series..................                                                          November 30, 1989   
 Massachusetts Investors Growth Stock                                                                                  
  Series.................................                                                             May 1, 1998      
 Massachusetts Investors Trust Series....                                                          November 30, 1989   
 Money Market Series.....................                                                          November 30, 1989   
 New Discovery Series....................                                                             May 5, 1998      
 Research Series.........................                                                          November 7, 1994    
 Research Growth and Income Series.......                                                            May 12, 1997      
 Research International Series...........                                                             May 5, 1998      
 Strategic Income Series.................                                                             May 5, 1998      
 Total Return Series.....................                                                          November 30, 1989   
 Utilities Series........................                                                          November 16, 1993   

1.75% M&E:                                                                      
----------                                                                      

                                                        [Enlarge/Download Table]

                                             1 YEAR       5 YEAR      10 YEAR                        COMMENCEMENT      
FUND                                         PERIOD       PERIOD       PERIOD        LIFE                 DATE         
----                                      -----------  ----------- ----------- ----------------  ----------------------
                                                                                                                       
 Bond Series.............................                                                              May 5, 1998     
 Capital Appreciation Series.............                                                            November 30, 1989 
 Capital Opportunities Series............                                                               June 3, 1996   
 Emerging Growth Series..................                                                               May 1, 1995    
 Emerging Markets Equity Series..........                                                              June 5, 1996    
 Equity Income Series....................                                                               May 1, 1998    
 Global Asset Allocation Series..........                                                            November 7, 1994  
 Global Governments Series...............                                                            November 30, 1989 
 Global Growth Series....................                                                            November 16, 1993 
 Global Total Return Series..............                                                            November 7, 1994  
 Government Securities Series............                                                            November 30, 1989 
 High Yield Series.......................                                                            November 30, 1989 
 International Growth Series.............                                                              June 3, 1996    
 International Growth and Income                                                                                       
  Series.................................                                                             October 2, 1995  
 Managed Sectors Series..................                                                            November 30, 1989 
 Massachusetts Investors Growth Stock                                                                                  
  Series.................................                                                               May 1, 1998    
 Massachusetts Investors Trust Series....                                                            November 30, 1989 
 Money Market Series.....................                                                            November 30, 1989 
 New Discovery Series....................                                                               May 5, 1998    
 Research Series.........................                                                            November 7, 1994  
 Research Growth and Income Series.......                                                              May 12, 1997    
 Research International Series...........                                                               May 5, 1998    
 Strategic Income Series.................                                                              May 5, 1998     
 Total Return Series.....................                                                            November 30, 1989 
 Utilities Series........................                                                            November 16, 1993 

    The length of the period and the last day of each period used in
the above table are set out in the table heading and in the footnotes above.    
The Average Annual Total Return for each period was determined by finding the   
average annual compounded rate of return over each period that would equate     
the initial amount invested to the ending redeemable value for that period,     
in accordance with the following formula:                                       
   n
 P(l + T)  = ERV

Where:    P = a hypothetical initial Purchase Payment of $1,000       
T = average annual total return for the period    
n = number of years                               
   ERV = redeemable value (as of the end of the period) of a
                hypothetical $1,000 Purchase Payment made at the beginning
             of the 1-year, 5-year, or 10-year period (or fractional
portion thereof)                          

The formula assumes that: 1) all recurring fees have been deducted from the     
Participant's Account; 2) all applicable non-recurring Contract charges are     
deducted at the end of the period, and 3) there will be a full surrender at the 
end of the period.                                                              

       The $50 annual Account Fee will be allocated among the Sub-Accounts
so that each Sub-Account's allocated portion of the Account Fee is              
proportional to the percentage of the number of Individual Contracts and        
Certificates that have amounts allocated to that Sub-Account. Because the       
impact of the Account Fee on a particular Contract may differ from those        
assumed in the computation due to differences between actual allocations and    
the assumed ones, the total return that would have been experienced by an       
actual Contract over these same time periods may have been different from       
that shown above.                                                               

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             -3-

NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN:                                   

The table below shows, for various Sub-Accounts of the Variable Account,
the Non-Standardized Average Annual Total Return for the stated periods (or     
shorter period indicated in the note below), based upon a hypothetical          
initial Purchase Payment of $1,000, calculated in accordance with the formula   
set out under "Standardized Average Annual Total Return." For purposes of       
determining these investment results, the actual investment performance of      
each Fund is reflected from the date such Fund commenced operations             
("Inception"), although the Contracts have been offered only since _________    
__, 2000. No information is shown for Funds that have not commenced             
operations or that had been in operation less than one year as of December      
31, 1999.                                                                       

NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN
PERIOD ENDING DECEMBER 31, 1999 

1.35% M&E                                                                       
---------                                                                       

                                                        [Enlarge/Download Table]

                                            1 YEAR       5 YEAR       10 YEAR                        DATE OF        
FUND                                        PERIOD       PERIOD       PERIOD        LIFE*           INCEPTION       
-----                                     -----------  -----------  -----------  -----------  ----------------------
                                                                                                                    
 Bond Series.............................                                                           May 5, 1998     
 Capital Appreciation Series.............                                                         August 13, 1985   
 Capital Opportunities Series............                                                          June 3, 1996     
 Emerging Growth Series..................                                                           May 1, 1995     
 Emerging Markets Equity Series(1).......                                                          June 5, 1996     
 Equity Income Series....................                                                           May 1, 1998     
 Global Asset Allocation Series..........                                                        November 7, 1994   
 Global Governments Series...............                                                          May 16, 1988     
 Global Growth Series....................                                                        November 16, 1993  
 Global Total Return Series..............                                                        November 7, 1994   
 Government Securities Series............                                                         August 12, 1985   
 High Yield Series.......................                                                         August 13, 1985   
 International Growth Series.............                                                          June 3, 1996     
 International Growth and Income                                                                                    
  Series.................................                                                         October 2, 1995   
 Managed Sectors Series..................                                                          May 27, 1988     
 Massachusetts Investors Growth Stock                                                                               
  Series.................................                                                           May 1, 1998     
 Massachusetts Investors Trust Series....                                                         December 5, 1986  
 Money Market Series.....................                                                         August 29, 1985   
 New Discovery Series....................                                                           May 5, 1998     
 Research Series.........................                                                         November 7, 1994  
 Research Growth and Income Series.......                                                          May 12, 1997     
 Research International Series...........                                                           May 5, 1998     
 Strategic Income Series.................                                                           May 5, 1998     
 Total Return Series.....................                                                          May 16, 1988     
 Utilities Series........................                                                        November 16, 1993  

------------------------                                                        
*From commencement of investment operations                                   

1.50% M&E                                                                       
---------                                                                       

                                                        [Enlarge/Download Table]

                                           1 YEAR       5 YEAR       10 YEAR                        DATE OF        
FUND                                       PERIOD       PERIOD       PERIOD        LIFE*           INCEPTION       
----                                      -----------  -----------  -----------  -----------  ---------------------
                                                                                                                   
 Bond Series.............................                                                           May 5, 1998    
 Capital Appreciation Series.............                                                         August 13, 1985  
 Capital Opportunities Series............                                                          June 3, 1996    
 Emerging Growth Series..................                                                           May 1, 1995    
 Emerging Markets Equity Series(1).......                                                          June 5, 1996    
 Equity Income Series....................                                                           May 1, 1998    
 Global Asset Allocation Series..........                                                        November 7, 1994  
 Global Governments Series...............                                                          May 16, 1988    
 Global Growth Series....................                                                        November 16, 1993 
 Global Total Return Series..............                                                        November 7, 1994  
 Government Securities Series............                                                         August 12, 1985  
 High Yield Series.......................                                                         August 13, 1985  
 International Growth Series.............                                                          June 3, 1996    
 International Growth and Income                                                                                   
  Series.................................                                                         October 2, 1995  
 Managed Sectors Series..................                                                          May 27, 1988    
 Massachusetts Investors Growth Stock                                                                              
  Series.................................                                                           May 1, 1998    
 Massachusetts Investors Trust Series....                                                         December 5, 1986 
 Money Market Series.....................                                                         August 29, 1985  
 New Discovery Series....................                                                           May 5, 1998    
 Research Series.........................                                                         November 7, 1994 
 Research Growth and Income Series.......                                                          May 12, 1997    
 Research International Series...........                                                           May 5, 1998    
 Strategic Income Series.................                                                           May 5, 1998    
 Total Return Series.....................                                                          May 16, 1988    
 Utilities Series........................                                                        November 16, 1993 

------------------------                                                        
*From commencement of investment operations                                   

1.60% M&E                                                                       
---------                                                                       

                                                        [Enlarge/Download Table]

                                           1 YEAR       5 YEAR       10 YEAR                        DATE OF         
FUND                                       PERIOD       PERIOD       PERIOD        LIFE*           INCEPTION        
-----                                     -----------  -----------  -----------  -----------  ----------------------
                                                                                                                    
 Bond Series.............................                                                            May 5, 1998    
 Capital Appreciation Series.............                                                          August 13, 1985  
 Capital Opportunities Series............                                                           June 3, 1996    
 Emerging Growth Series..................                                                            May 1, 1995    
 Emerging Markets Equity Series(1).......                                                           June 5, 1996    
 Equity Income Series....................                                                            May 1, 1998    
 Global Asset Allocation Series..........                                                         November 7, 1994  
 Global Governments Series...............                                                           May 16, 1988    
 Global Growth Series....................                                                         November 16, 1993 
 Global Total Return Series..............                                                         November 7, 1994  
 Government Securities Series............                                                          August 12, 1985  
 High Yield Series.......................                                                          August 13, 1985  
 International Growth Series.............                                                           June 3, 1996    
 International Growth and Income                                                                                    
  Series.................................                                                          October 2, 1995  
 Managed Sectors Series..................                                                           May 27, 1988    
 Massachusetts Investors Growth Stock                                                                               
  Series.................................                                                            May 1, 1998    
 Massachusetts Investors Trust Series....                                                          December 5, 1986 
 Money Market Series.....................                                                          August 29, 1985  
 New Discovery Series....................                                                            May 5, 1998    
 Research Series.........................                                                          November 7, 1994 
 Research Growth and Income Series.......                                                           May 12, 1997    
 Research International Series...........                                                            May 5, 1998    
 Strategic Income Series.................                                                            May 5, 1998    
 Total Return Series.....................                                                           May 16, 1988    
 Utilities Series........................                                                         November 16, 1993 

------------------------                                                        
*From commencement of investment operations                                   

1.75% M&E                                                                       
---------                                                                       

                                                        [Enlarge/Download Table]

                                            1 YEAR       5 YEAR       10 YEAR                        DATE OF        
FUND                                        PERIOD       PERIOD       PERIOD        LIFE*           INCEPTION       
----                                      -----------  -----------  -----------  -----------  ----------------------
                                                                                                                    
 Bond Series.............................                                                          May 5, 1998      
 Capital Appreciation Series.............                                                        August 13, 1985    
 Capital Opportunities Series............                                                         June 3, 1996      
 Emerging Growth Series..................                                                          May 1, 1995      
 Emerging Markets Equity Series(1).......                                                         June 5, 1996      
 Equity Income Series....................                                                          May 1, 1998      
 Global Asset Allocation Series..........                                                       November 7, 1994    
 Global Governments Series...............                                                         May 16, 1988      

 Global Growth Series....................                                                       November 16, 1993   
 Global Total Return Series..............                                                       November 7, 1994    
 Government Securities Series............                                                        August 12, 1985    
 High Yield Series.......................                                                        August 13, 1985    
 International Growth Series.............                                                         June 3, 1996      
 International Growth and Income                                                                                    
  Series.................................                                                        October 2, 1995    
 Managed Sectors Series..................                                                         May 27, 1988      
 Massachusetts Investors Growth Stock                                                                               
  Series.................................                                                          May 1, 1998      
 Massachusetts Investors Trust Series....                                                        December 5, 1986   
 Money Market Series.....................                                                        August 29, 1985    
 New Discovery Series....................                                                          May 5, 1998      
 Research Series.........................                                                        November 7, 1994   
 Research Growth and Income Series.......                                                         May 12, 1997      
 Research International Series...........                                                          May 5, 1998      
 Strategic Income Series.................                                                          May 5, 1998      
 Total Return Series.....................                                                         May 16, 1988      
 Utilities Series........................                                                       November 16, 1993   

------------------------                                                        
*From commencement of investment operations                                   

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NON-STANDARDIZED COMPOUND GROWTH RATE                                           

The table below shows, for various Sub-Accounts of the Variable Account,
the Non-Standardized Compound Growth Rate for the stated periods (or shorter    
period indicated in the note below), based upon a hypothetical investment,      
calculated in accordance with the formula set out under "Standardized Average   
Annual Return," except that no withdrawal charges or annual Account Fees have   
been deducted. If withdrawal charges or Account Fees were reflected, returns    
would be lower (see "Standardized Average Annual Total Return" and              
"Non-Standardized Average Annual Return"). For purposes of determining these    
investment results, the actual investment performance of each Fund is           
reflected from the date such Fund commenced operations ("Inception"),           
although the Contracts have been offered only since _________ __, 2000. No      
information is shown for Funds that have not commenced operations or that had   
been in operation for less than one year as of December 31, 1999.               

NON-STANDARDIZED COMPOUND GROWTH RATE   
PERIOD ENDING DECEMBER 31, 1999 

1.35% M&E:                                                                      
----------                                                                      

                                                        [Enlarge/Download Table]

                                            1 YEAR       5 YEAR      10 YEAR                        COMMENCEMENT       
FUND                                        PERIOD       PERIOD       PERIOD        LIFE                 DATE          
-----                                     -----------  ----------- ----------- ----------------  ----------------------
                                                                                                                       
 Bond Series.............................                                                               May 5, 1998    
 Capital Appreciation Series.............                                                             August 13, 1985  
 Capital Opportunities Series............                                                               June 3, 1996   
 Emerging Growth Series..................                                                               May 1, 1995    
 Emerging Markets Equity Series..........                                                              June 5, 1996    
 Equity Income Series....................                                                               May 1, 1998    
 Global Asset Allocation Series..........                                                            November 7, 1994  
 Global Governments Series...............                                                              May 16, 1988    
 Global Growth Series....................                                                            November 16, 1993 
 Global Total Return Series..............                                                            November 7, 1994  
 Government Securities Series............                                                             August 12, 1985  
 High Yield Series.......................                                                             August 13, 1985  
 International Growth Series.............                                                              June 3, 1996    
 International Growth and Income                                                                                       
  Series.................................                                                            October 2, 1995   
 Managed Sectors Series..................                                                              May 27, 1998    
 Massachusetts Investors Growth Stock                                                                                  
  Series.................................                                                               May 1, 1998    
 Massachusetts Investors Trust Series....                                                            December 5, 1986  
 Money Market Series.....................                                                             August 29, 1985  
 New Discovery Series....................                                                               May 5, 1998    
 Research Series.........................                                                            November 7, 1994  
 Research Growth and Income Series.......                                                              May 12, 1997    
 Research International Series...........                                                               May 5, 1998    
 Strategic Income Series.................                                                               May 5, 1998    
 Total Return Series.....................                                                              May 16, 1988    
 Utilities Series........................                                                            November 16, 1993 

1.50% M&E:                                                                      
----------                                                                      

                                                        [Enlarge/Download Table]

                                            1 YEAR       5 YEAR      10 YEAR                        COMMENCEMENT       
FUND                                        PERIOD       PERIOD       PERIOD        LIFE                 DATE          
-----                                     -----------  ----------- ----------- ----------------  ----------------------
                                                                                                                       
 Bond Series.............................                                                              May 5, 1998     
 Capital Appreciation Series.............                                                            August 13, 1985   
 Capital Opportunities Series............                                                              June 3, 1996    
 Emerging Growth Series..................                                                              May 1, 1995     
 Emerging Markets Equity Series..........                                                             June 5, 1996     
 Equity Income Series....................                                                              May 1, 1998     
 Global Asset Allocation Series..........                                                           November 7, 1994   
 Global Governments Series...............                                                             May 16, 1988     
 Global Growth Series....................                                                           November 16, 1993  
 Global Total Return Series..............                                                           November 7, 1994   
 Government Securities Series............                                                            August 12, 1985   
 High Yield Series.......................                                                            August 13, 1985   
 International Growth Series.............                                                             June 3, 1996     
 International Growth and Income                                                                                       
  Series.................................                                                           October 2, 1995    
 Managed Sectors Series..................                                                             May 27, 1998     
 Massachusetts Investors Growth Stock                                                                                  
  Series.................................                                                              May 1, 1998     
 Massachusetts Investors Trust Series....                                                           December 5, 1986   
 Money Market Series.....................                                                            August 29, 1985   
 New Discovery Series....................                                                              May 5, 1998     
 Research Series.........................                                                           November 7, 1994   
 Research Growth and Income Series.......                                                             May 12, 1997     
 Research International Series...........                                                              May 5, 1998     
 Strategic Income Series.................                                                              May 5, 1998     
 Total Return Series.....................                                                             May 16, 1988     
 Utilities Series........................                                                           November 16, 1993  

1.60% M&E:                                                                      
----------                                                                      

                                                        [Enlarge/Download Table]

                                            1 YEAR       5 YEAR      10 YEAR                        COMMENCEMENT       
FUND                                        PERIOD       PERIOD       PERIOD        LIFE                 DATE          
----                                      -----------  ----------- ----------- ----------------  ----------------------
                                                                                                                       
 Bond Series.............................                                                              May 5, 1998     
 Capital Appreciation Series.............                                                            August 13, 1985   
 Capital Opportunities Series............                                                              June 3, 1996    
 Emerging Growth Series..................                                                              May 1, 1995     
 Emerging Markets Equity Series..........                                                             June 5, 1996     
 Equity Income Series....................                                                              May 1, 1998     
 Global Asset Allocation Series.........                                                            November 7, 1994   
 Global Governments Series...............                                                             May 16, 1988     
 Global Growth Series....................                                                           November 16, 1993  
 Global Total Return Series..............                                                           November 7, 1994   
 Government Securities Series............                                                            August 12, 1985   
 High Yield Series.......................                                                            August 13, 1985   
 International Growth Series.............                                                             June 3, 1996     
 International Growth and Income                                                                                       
  Series.................................                                                           October 2, 1995    
 Managed Sectors Series..................                                                             May 27, 1998     
 Massachusetts Investors Growth Stock                                                                                  
  Series.................................                                                              May 1, 1998     
 Massachusetts Investors Trust Series....                                                           December 5, 1986   
 Money Market Series.....................                                                            August 29, 1985   
 New Discovery Series....................                                                              May 5, 1998     
 Research Series.........................                                                           November 7, 1994   
 Research Growth and Income Series.......                                                             May 12, 1997     
 Research International Series...........                                                              May 5, 1998     
 Strategic Income Series.................                                                              May 5, 1998     
 Total Return Series.....................                                                             May 16, 1988     
 Utilities Series........................                                                           November 16, 1993  

1.75% M&E:                                                                      
----------                                                                      

                                                        [Enlarge/Download Table]

                                           1 YEAR       5 YEAR      10 YEAR                        COMMENCEMENT        
FUND                                       PERIOD       PERIOD       PERIOD        LIFE                 DATE           
----                                      -----------  ----------- ----------- ----------------  ----------------------
                                                                                                                       
 FUNDS:                                                                                                                
 Bond Series.............................                                                              May 5, 1998     
 Capital Appreciation Series.............                                                            August 13, 1985   
 Capital Opportunities Series............                                                              June 3, 1996    
 Emerging Growth Series..................                                                              May 1, 1995     
 Emerging Markets Equity Series..........                                                             June 5, 1996     
 Equity Income Series....................                                                              May 1, 1998     
 Global Asset Allocation Series..........                                                           November 7, 1994   
 Global Governments Series...............                                                             May 16, 1988     
 Global Growth Series....................                                                           November 16, 1993  
 Global Total Return Series..............                                                           November 7, 1994   
 Government Securities Series............                                                            August 12, 1985   
 High Yield Series.......................                                                            August 13, 1985   
 International Growth Series.............                                                             June 3, 1996     
 International Growth and Income                                                                                       
  Series.................................                                                           October 2, 1995    
 Managed Sectors Series..................                                                             May 27, 1998     
 Massachusetts Investors Growth Stock                                                                                  
  Series.................................                                                              May 1, 1998     
 Massachusetts Investors Trust Series....                                                           December 5, 1986   
 Money Market Series.....................                                                            August 29, 1985   
 New Discovery Series....................                                                              May 5, 1998     
 Research Series.........................                                                           November 7, 1994   
 Research Growth and Income Series.......                                                             May 12, 1997     
 Research International Series...........                                                              May 5, 1998     
 Strategic Income Series.................                                                              May 5, 1998     
 Total Return Series.....................                                                             May 16, 1988     
 Utilities Series........................                                                           November 16, 1993  

------------------------                                                        
*From commencement of investment operations                                   

ADDITIONAL NON-STANDARDIZED INVESTMENT PERFORMANCE:                             

        The Variable Account may illustrate its results over various periods
and compare its results to indices and other variable annuities in sales        
materials including advertisements, brochures and sports.  Such results may be  
computed on a "cumulative" and/or "annualized" basis.                           

       "Cumulative" quotations are arrived at by calculating the change in
the Accumulation Unit value of a Sub-Account between the first and last day of  
the base period being measured, and expressing the difference as a percentage of
the Accumulation Unit value at the beginning of the base period.                

      "Annualized" quotations are calculated by applying a formula which
determines the level rate of return which, if earned over the entire base       
period, would produce the cumulative return.                                    

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      ADVERTISING AND SALES LITERATURE

          As set forth in the Prospectus, the Company may refer to the following
organizations (and others) in its marketing materials:                          

         A.M. BEST'S RATING SYSTEM is designed to evaluate the various factors
affecting the overall performance of an insurance company in order to provide an
opinion as to an insurance company's relative financial strength and ability to 
meet its contractual obligations. The procedure includes both a quantitative and
qualitative review of each company.                                             

         DUFF & PHELPS CREDIT RATING Company's Insurance Company Claims Paying
Ability Rating is an independent evaluation by a nationally accredited rating   
organization of an insurance company's ability to meet its future obligations   
under the contracts and products it sells. The rating takes into account both   
quantitative and qualitative factors.                                           

        LIPPER VARIABLE INSURANCE PRODUCTS PERFORMANCE ANALYSIS SERVICE is a
publisher of statistical data covering the investment company industry in the   
United States and overseas. Lipper is recognized as the leading source of data  
on open-end and closed-end funds. Lipper currently tracks the performance of    
over 5,000 investment companies and publishes numerous specialized reports,     
including reports on performance and portfolio analysis, fee and expense        
analysis.                                                                       

          STANDARD & POOR's insurance claims-paying ability rating is an opinion
of an operating insurance company's financial capacity to meet obligations of   
its insurance policies in accordance with their terms.                          

VARDS (Variable Annuity Research Data Service) provides a   
comprehensive guide to variable annuity contract features and historical fund   
performance. The service also provides a readily understandable analysis of the 
comparative characteristics and market performance of funds inclusive in        
variable contracts.                                                             

          MOODY'S Investors Services, Inc.'s insurance claims-paying rating is a
system of rating an insurance company's financial strength, market leadership,  
and ability to meet financial obligations. The purpose of Moody's ratings is to 
provide investors with a simple system of gradation by which the relative       
quality of insurance companies may be noted.                                    

   STANDARD & POOR'S INDEX - broad-based measurement of changes in
stock-market conditions based on the average performance of 500 widely held     
common stocks; commonly known as the Standard & Poor's 500 (S&P 500). The       
selection of stocks, their relative weightings to reflect differences in the    
number of outstanding shares, and publication of the index itself are services  
of Standard & Poor's Corporation, a financial advisory, securities rating, and  
publishing firm. The index tracks 400 industrial company stocks, 20             
transportation stocks, 40 financial company stocks, and 40 public utilities.    

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NASDAQ-OTC Price Index - this index is based on the National
Association of Securities Dealers Automated Quotations (NASDAQ) and represents  
all domestic over-the-counter stocks except those traded on exchanges and those 
having only one market maker, a total of some 3,500 stocks. It is market        
value-weighted and was introduced with a base of 100.00 on February 5, 1971.    

      DOW JONES INDUSTRIAL AVERAGE (DJIA) - price-weighted average of 30
actively traded blue chip stocks, primarily industrials, but including          
American Express Company and American Telephone and Telegraph Company.          
Prepared and Published by Dow Jones & Company, it is the oldest and most        
widely quoted of all the market indicators. The average is quoted in points,    
not dollars.                                                                    

    MORNINGSTAR, Inc. is an independent financial publisher offering
comprehensive statistical and analytical coverage of open-end and closed-end    
funds and variable annuities. This coverage for mutual funds includes, among    
other information, performance analysis rankings, risk rankings (e.g.           
aggressive, moderate or conservative), and "style box" matrices. Style box      
matrices display, for equity funds, the investment philosophy and size of the   
companies in which the fund invests and, for fixed-income funds, interest rate  
sensitivity and credit quality of the investment instruments.                   

          IBBOTSON ASSOCIATES, Inc. is a consulting firm that provides a variety
of historical data, including total return, capital appreciation and income, on 
the stock market as well as other investment asset classes, and inflation. This 
information will be used primarily for comparative purposes and to illustrate   
general financial planning principles.                                          

     In its advertisements and other sales literature for the Variable
Account and the Funds, the Company may illustrate the advantages of the         
Contracts in a number of ways:                                                  

 DOLLAR-COST AVERAGING ILLUSTRATIONS. These illustrations will
generally discuss the price-leveling effect of making regular investments in the
same Sub-Accounts over a period of time, to take advantage of the trends in     
market prices of the portfolio securities purchased by those Sub-Accounts.      

     SYSTEMATIC WITHDRAWAL PROGRAM. A service provided by the Company,
through which a Participant may take any distribution allowed by Internal       
Revenue Code Section 401 (a) (9) in the case of Qualified Contracts, or         
permitted under Internal Revenue Code Section 72 in the case of Non-Qualified   
Contracts, by way of a series of partial withdrawals. Withdrawals under this    
program may be fully or partially includible in income and may be subject to    
a 10% penalty tax. Consult your tax advisor.                                    

   THE COMPANY'S OR THE FUNDS' CUSTOMERS. Sales literature for the
Variable Account and the Funds may refer to the number of clients which they    
serve.                                                                          

   THE COMPANY'S ASSETS, SIZE. The Company may discuss its general
financial condition (see, for example, the references to Standard & Poor's,     
Duff & Phelps and A.M. Best Company above); it may refer to its assets; it      
may also discuss its                                                            

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relative size and/or ranking among companies in the industry or among any       
sub-classification of those companies, based upon recognized evaluation         
criteria. For example, at December 31, 1998 the Company was the 36th largest    
U.S. life insurance company based upon overall assets.                          

 COMPOUND INTEREST ILLUSTRATIONS. These will emphasize several
advantages of the variable annuity contract. For example, but not by way of     
limitation, the literature may emphasize the potential savings through tax      
deferral; the potential advantage of the Variable Account over the Fixed        
Account; and the compounding effect when a participant makes regular deposits to
his or her account.                                                             

         The Company may use hypothetical illustrations of the benefits of tax
deferral, including but not limited to the following chart:                     

          The chart below assumes an initial investment of $10,000 which remains
fully invested for the entire time period, an 8% annual return, and a 33%       
combined federal and state income tax rate. It compares how three different     
investments might fare over 10, 20, and 30 years. The first example illustrates 
an investment in a non-tax-deferred account and assumes that taxes are paid     
annually out of that account. The second example illustrates how the same       
investment would grow in a tax-deferred investment, such as an annuity. And the 
third example illustrates the net value of the tax-deferred investment after    
paying taxes on the full account value.                                         

                                                                [Download Table]

--------------------------------------------------------------------------------
                                      10 YEARS       20 YEARS       30 YEARS    
--------------------------------------------------------------------------------
                                                                                
 Non-Tax-Deferred Account              $16,856        $28,413       $ 47,893    
--------------------------------------------------------------------------------
 Tax-Deferred Account                  $21,589        $46,610       $100,627    
--------------------------------------------------------------------------------
 Tax-Deferred Account After            $17,765        $34,528       $ 70,720    
--------------------------------------------------------------------------------
 Paying Taxes                                                                   
--------------------------------------------------------------------------------

THIS ILLUSTRATION IS HYPOTHETICAL AND DOES NOT REPRESENT THE PROJECTED          
PERFORMANCE OF THE CONTRACTS OR ANY OF THE INVESTMENT OPTIONS THEREUNDER. THE   
ILLUSTRATION DOES NOT REFLECT THE DEDUCTION OF ANY CHARGES OR FEES RELATED TO   
PORTFOLIO MANAGEMENT, MORTALITY AND EXPENSE, OR ACCOUNT ADMINISTRATION. TAXES ON
EARNINGS WITHIN AN ANNUITY ARE DUE UPON WITHDRAWAL. WITHDRAWALS MAY ALSO BE     
SUBJECT TO SURRENDER CHARGES AND, IF MADE PRIOR TO AGE 59 1/2, A 10% FEDERAL    
PENALTY TAX.                                                                    

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TAX-DEFERRED ACCUMULATION:                                                      

In general, individuals who own annuity contracts are not taxed on    
increases in the value of their annuity contracts until some form of            
distribution is made under the contract. As a result, the annuity contract      
would benefit from tax deferral during the contract's accumulation phase;       
this would have the effect of permitting an investment in an annuity contract   
to grow more rapidly that a comparable investment under which increases in      
value are taxed on a current basis.                                             

In reports or other communications to you or in advertising or sales  
materials, we may also describe the effects of tax-deferred compounding on the  
Variable Account's investment returns. We may illustrate these effects in       
charts or graphs and from time to time may include comparisons of returns under 
the Contracts or in general on a tax-deferred basis, with the returns on a      
taxable basis. Different tax rates may be assumed. Any such illustrative chart  
or graph would show accumulations on an initial investment or Purchase Payment, 
assuming a given amount (including the applicable interest credit),             
hypothetical gross annual returns compounded annually, and a stated rate of     
return. The values shown for the taxable investment would not include any       
deduction for management fees or other expenses, but would assume the annual    
deduction of federal and state taxes from investment returns. The values shown  
for the Contracts in a chart would reflect the deduction of Contract expenses,  
such as the mortality and expense risk charge, the 0.15% administrative charge, 
and the $50 annual Account Fee. In addition, the values shown would assume that 
the Participant has not surrendered his or her Contract or made any partial     
surrenders until the end of the period shown. The chart would assume a full     
surrender at the end of the period shown and the payment of federal and state   
taxes, at a rate of not more than 33%, on the amount in excess of the Purchase  
Payments.                                                                       

In developing illustrative tax-deferral charts, we will observe these 
general principles:                                                             

-  The assumed rate of earnings will be realistic.            
    -  The illustrative chart will accurately depict the effect of all
          fees and charges or provide a narrative that prominently discloses
all fees and charges under the Contract.                
       -  Charts comparing accumulation values for tax-deferred and non-tax-
           deferred investments will depict the implications of any surrender.
      -  A narrative accompanying the chart will prominently disclose that
          there may be a 10% tax penalty on a surrender by a Participant who
has not reached age 59 1/2 at the time of surrender.    

The rates of return illustrated in any chart would be hypothetical and
are not an estimate or guaranty of performance. Actual tax returns may vary     
among Participants.                                                             

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    CALCULATIONS

EXAMPLE OF VARIABLE ACCUMULATION UNIT VALUE CALCULATION                         

Suppose the net asset value of a Fund share at the end of the current 
valuation period is $18.38; at the end of the immediately preceding valuation   
period was $18.32; the Valuation Period is one day; and no dividends or         
distributions caused Fund shares to go "ex-dividend" during the current         
Valuation Period. $18.38 divided by $18.32 is 1.00327511. Subtracting the one   
day risk factor for mortality and expense risks and the administrative          
expense charge of .00004837 (the daily equivalent of the current maximum        
charge of 1.75% on an annual basis) gives a net investment factor of            
1.00322674.  If the value of the variable accumulation unit for the             
immediately preceding valuation period had been 14.5645672, the value for the   
current valuation period would be 14.6115633 (14.5645672 X 1.00322674).         

EXAMPLE OF VARIABLE ANNUITY UNIT CALCULATION                                    

Suppose the circumstances of the first example exist, and the value of
an annuity unit for the immediately preceding valuation period had been         
12.3456789.  If the first variable annuity payment is determined by using an    
annuity payment based on an assumed interest rate of 3% per year, the value     
of the annuity unit for the current valuation period would be 12.3456496        
(12.3456789 X 1.00323787 (the Net Investment Factor (based on the daily         
equivalent of maximum annuity phase charge of 1.35% on an annual basis) X       
0.99991902). 0.99991902 is the factor, for a one day Valuation Period, that     
neutralizes the assumed interest rate of 3% per year used to establish the      
Annuity Payment Rates found in certain Contracts.                               

EXAMPLE OF VARIABLE ANNUITY PAYMENT CALCULATION                                 

Suppose that a Participant Account is credited with 8,765.4321 variable 
accumulation units of a particular Sub-Account but is not credited with         
any fixed accumulation units; that the variable accumulation unit value and     
the annuity unit value for the particular Sub-Account for the valuation         
period which ends immediately preceding the annuity commencement date are       
14.5645672 and 12.3456789 respectively; that the annuity payment rate for the   
age and option elected is $6.78 per $1,000; and that the annuity unit value     
on the day prior to the second variable annuity payment date is 12.3846496.     
The first variable annuity payment would be $865.57 (8,765.4321 X 14.5645672    
X 6.78 divided by 1,000).  The number of annuity units credited would be        
70.1112 ($865.57 divided by 12.3456789) and the second variable annuity         
payment would be $868.30 (70.1112 X 12.3846496).                                

  DISTRIBUTION OF THE CONTRACT

      We offer the Contract on a continuous basis. Contracts are sold by
licensed insurance agents in those states where the Contract may be lawfully    
sold. Such agents will be registered representatives of broker-dealers          
registered under the Securities Exchange Act of 1934 who are members of the     
National Association of Securities Dealers, Inc. and who have entered into      
distribution agreements with the Company and the general distributor and        
principal underwriter of the Contracts, Clarendon Insurance Agency, Inc.        
("Clarendon"), One Sun Life Executive Park, Wellesley Hills, Massachusetts      
02481.  Clarendon is a wholly-owned subsidiary of the Company.  Clarendon is    
registered with the SEC under the Securities Exchange Act of 1934 as            
broker-dealer and is a member of the National Association of Securities         
Dealers, Inc.  Clarendon also acts as the general distributor of certain        
other annuity contracts issued by the Company and its wholly-owned              
subsidiary, Sun Life Insurance and Annuity Company of New York, and variable    
life insurance contracts issued by the Company.                                 

       Commissions and other distribution compensation will be paid by the
Company to the selling agents and will not be more than 2.50% of Purchase       
Payments. In addition, after the first Account Year, broker-dealers who have    
entered into distribution agreements with the Company may receive an annual     
renewal commission of no more than 1.00% of the Participant's Account Value.    
In addition to commissions, the Company may, from time to time, pay or allow    
additional promotional incentives, in the form of cash or other compensation.   
The Company reserves the right to offer these additional incentives only to     
certain                                                                         

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      -10-

broker-dealers that sell or are expected to sell during specified time          
periods certain minimum amounts of Contracts or Certificates or other           
contracts offered by the Company. Promotional incentives may change at any      
time. Commissions will not be paid with respect to Participant Accounts         
established for the personal account of employees of the Company or any of      
its affiliates, or of persons engaged in the distribution of the Contract,      
or of immediate family members of such employees or persons. In addition,       
commissions may be waived or reduced in connection with certain transactions    
described in the Prospectus under the heading "Waivers; Reduced Charges;        
Special Guaranteed Interest Rates."                                             

   DESIGNATION AND CHANGE OF BENEFICIARY

        The Beneficiary designation in the Application will remain in effect
until changed.                                                                  

       Subject to the rights of an irrevocably designated Beneficiary, you
may change or revoke the designation of Beneficiary by filing the change or     
revocation with us in the form we require.  The change or revocation will not be
binding on us until we receive it.  When we receive it, the change or revocation
will be effective as of the date on which it was signed, but the change or      
revocation will be without prejudice to us on account of any payment we make or 
any action we take before receiving the change or revocation.                   

        Please refer to the terms of your particular retirement plan and any
applicable legislation for any restrictions on the beneficiary designation.     

   CUSTODIAN

   We are the Custodian of the assets of the Variable Account.  We
will purchase Fund shares at net asset value in connection with amounts         
allocated to the Sub-Accounts in accordance with your instructions, and we      
will redeem Fund shares at net asset value for the purpose of meeting the       
contractual obligations of the Variable Account, paying charges relative to     
the Variable Account or making adjustments for annuity reserves held in the     
Variable Account.                                                               

    FINANCIAL STATEMENTS

  The Financial Statements of Sun Life of Canada (U.S.) Variable
Account F for the year ended December 31, 1999 included in this Statement of    
Additional Information have been audited by ______________________, independent 
auditors, as stated in their report appearing herein, and are included in       
reliance upon the report of such firm given upon their authority as experts in  
accounting and auditing.                                                        

[An auditor's letter and consent will be included in the Registration       
Statement prior to effectiveness.]                                              

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REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENT OF CONDITION -- December 31, 1999                                     

                                                        [Enlarge/Download Table]

Assets:                                                                                                     
                                                                Shares           Cost            Value      
Investment in MFS/Sun Life Series Trust:                      -----------   --------------  --------------- 
                                                                                                            
    Bond Series ("BDS").....................................    5,032,859   $   52,850,279  $    52,118,351 
    Capital Appreciation Series ("CAS").....................   33,928,098    1,362,292,998    1,836,044,559 
    Capital Opportunities Series ("COS")....................   17,497,220      291,825,538      428,787,357 
    Massachusetts Investors Trust Series ("MIT")............   55,246,647    1,765,382,623    2,096,532,982 
    Emerging Growth Series ("EGS")..........................   33,617,464      657,067,915    1,354,009,677 
    Equity Income Series ("EIS")............................    3,651,313       40,120,260       40,936,224 
    Emerging Markets Equity                                                                                 
    Series ("FCE")..........................................    3,316,512       30,303,485       37,877,306 
    International Growth Series ("FCI").....................    5,055,030       52,026,378       66,223,206 
    International Growth and Income Series ("FCG")..........    5,403,493       69,153,828       80,909,710 
    Government Securities Series ("GSS")....................   35,624,961      457,676,007      444,492,495 
    High Yield Series ("HYS")...............................   34,025,742      315,462,174      306,781,605 
    Managed Sectors Series ("MSS")..........................   12,025,505      345,925,544      630,396,157 
    Massachusetts Investors Growth Stock Series ("MIS").....   32,967,162      416,945,277      531,800,703 
    Money Market Series ("MMS").............................  454,908,455      454,908,455      454,908,455 
    New Discovery Series ("NWD")............................    3,710,841       41,511,925       62,699,760 
    Research Series ("RES").................................   43,297,368      826,432,303    1,195,623,218 
    Research Growth and Income Series ("RGS")...............    5,206,053       69,608,597       75,161,248 
    Research International Series ("RSS")...................    2,045,281       23,798,520       29,839,876 
    Strategic Income Series ("SIS").........................    1,895,901       18,979,780       19,443,594 
    Total Return Series ("TRS").............................   93,947,109    1,777,124,893    1,762,378,532 
    Utilities Series ("UTS")................................   18,760,767      294,942,640      372,198,015 
    Global Asset Allocation Series ("GAA")..................    7,496,242      107,654,207      121,373,291 
    Global Governments Series ("GGS").......................    6,514,585       72,392,490       66,878,866 
    Global Growth Series ("GGR")............................   16,712,838      242,007,044      420,505,813 
    Global Total Return Series ("GTR")......................    6,153,538       90,512,865      102,431,102 
    Strategic Growth Series ("SGS").........................      755,126        8,085,971        9,158,291 
                                                                            --------------  --------------- 
                                                                            $9,884,991,996  $12,599,510,393 
                                                                            ==============                  
Liability:                                                                                                  
  Payable to Sponsor......................................................................         (788,789)
                                                                                            --------------- 
        Net Assets........................................................................  $12,598,721,604 
                                                                                            =============== 

                                                        [Enlarge/Download Table]

                                                   Applicable to Owners of                                  
                                             Deferred Variable Annuity Contracts   Reserve for              
                                            -------------------------------------   Variable                
                                              Units     Unit Value      Value       Annuities      Total    
NET ASSETS APPLICABLE TO CONTRACT OWNERS:   ----------  ----------  -------------  -----------  ------------
                                                                                                            
  MFS REGATTA CONTRACTS:                                                                                    
    CAS -- Level 1.........................    22,958    $49.8052   $  1,154,572   $   82,807   $  1,237,379
    CAS -- Level 2......................... 7,847,274     20.1338    157,816,394      969,593    158,785,987
    GSS -- Level 1.........................        --     17.3110         13,647       60,353         74,000
    GSS -- Level 2......................... 2,795,724     11.1316     31,105,411       89,576     31,194,987
    HYS -- Level 1.........................       165     23.0560         13,811        3,624         17,435
    HYS -- Level 2......................... 1,075,336     11.7136     12,598,381       70,200     12,668,581
    MSS -- Level 1.........................     5,113     55.3202        400,698       --            400,698
    MSS -- Level 2......................... 2,678,028     24.9629     66,652,102      199,948     66,852,050
    MMS -- Level 1.........................    16,140     14.0901        423,113       21,042        444,155
    MMS -- Level 2......................... 2,672,617     11.1554     29,564,107      218,878     29,782,985
    TRS -- Level 1.........................    31,742     26.9360        870,926       26,274        897,200
    TRS -- Level 2......................... 9,929,414     13.5253    134,236,171    1,163,409    135,399,580
    GGS -- Level 1.........................       495     17.4756         20,251           --         20,251
    GGS -- Level 2.........................   630,136     10.4903      6,597,561       77,362      6,674,923
                                                                    ------------   ----------   ------------
                                                                    $441,467,145   $2,983,066   $444,450,211
                                                                    ------------   ----------   ------------

See notes to financial statements 

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REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENT OF CONDITION -- December 31, 1999 -- continued                        

                                                        [Enlarge/Download Table]

                                                               Applicable to Owners of                                      
                                                         Deferred Variable Annuity Contracts     Reserve for                
                                                       ----------------------------------------   Variable                  
                                                         Units      Unit Value       Value        Annuities       Total     
NET ASSETS APPLICABLE TO CONTRACT OWNERS (CONTINUED):  ----------   ----------   --------------  -----------  --------------
                                                                                                                            
  MFS REGATTA GOLD CONTRACTS:                                                                                               
    BDS.............................................    2,085,322    $10.2650    $   21,422,675  $   196,994  $   21,619,669
    CAS.............................................   32,846,090     45.4986     1,494,201,625    8,076,446   1,502,278,071
    COS.............................................   12,845,672     25.0521       321,822,832      370,891     322,193,723
    MIT.............................................   49,201,899     33.5203     1,649,205,165    5,518,991   1,654,724,156
    EGS.............................................   28,061,821     39.9489     1,121,085,030    2,395,699   1,123,480,729
    EIS.............................................    1,301,166     10.9848        14,292,791      --           14,292,791
    FCE.............................................    2,761,034     11.2207        30,978,033       86,552      31,064,585
    FCI.............................................    3,187,799     12.6829        40,432,352       49,086      40,481,438
    FCG.............................................    4,509,596     15.2129        68,611,598      107,072      68,718,670
    GSS.............................................   23,230,411     14.5981       339,182,656    1,242,278     340,424,934
    HYS.............................................   12,537,119     18.9861       238,076,354      754,623     238,830,977
    MSS.............................................   11,032,465     46.5671       513,184,584    1,768,278     514,952,862
    MIS.............................................   11,985,320     16.0186       191,981,488      406,236     192,387,724
    MMS.............................................   28,447,843     12.6229       359,153,095    1,693,460     360,846,555
    NWD.............................................    1,599,416     16.6274        26,593,488       92,786      26,686,274
    RES.............................................   35,935,779     29.0316     1,042,604,864    3,075,481   1,045,680,345
    RGS.............................................    3,153,242     14.0374        44,265,738      118,955      44,384,693
    RSS.............................................    1,114,581     14.2620        15,897,340      --           15,897,340
    SIS.............................................      892,490     12.1979         9,166,122      --            9,166,122
    TRS.............................................   62,923,966     22.4371     1,411,666,379    4,695,525   1,416,361,904
    UTS.............................................    9,588,408     28.5407       273,652,266    1,182,207     274,834,473
    GAA.............................................    6,188,330     18.4932       114,469,945      607,231     115,077,176
    GGS.............................................    3,941,088     14.2506        56,177,676      377,322      56,554,998
    GGR.............................................   13,513,835     29.1523       393,951,878    1,153,770     395,105,648
    GTR.............................................    4,907,545     18.3636        90,121,960      555,833      90,677,793
    SGS.............................................      558,856     12.1979         6,814,708      --            6,814,708
                                                                                 --------------  -----------  --------------
                                                                                 $9,889,012,642  $34,525,716  $9,923,538,358
                                                                                 --------------  -----------  --------------

See notes to financial statements 

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REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENT OF CONDITION -- December 31, 1999 -- continued                        

                                                        [Enlarge/Download Table]

                                                                Applicable to Owners of                                  
                                                          Deferred Variable Annuity Contracts   Reserve for              
                                                         -------------------------------------   Variable                
                                                           Units     Unit Value      Value       Annuities      Total    
NET ASSETS APPLICABLE TO CONTRACT OWNERS (CONTINUED):    ---------   ----------   ------------  -----------  ------------
                                                                                                                         
  MFS REGATTA CLASSIC CONTRACTS:                                                                                         
    BDS.................................................    48,210    $10.1232    $    487,954     $--       $    487,954
    CAS.................................................   643,838     20.0351      12,896,639     --          12,896,639
    COS.................................................   450,750     23.3171      10,503,243     --          10,503,243
    MIT................................................. 1,467,541     16.6602      24,441,075        572      24,441,647
    EGS................................................. 1,130,669     26.4915      29,945,574     --          29,945,574
    EIS.................................................    74,460     11.2502         837,571     --             837,571
    FCE.................................................    72,781     11.8522         862,731     --             862,731
    FCI.................................................    98,698     13.1278       1,294,861     --           1,294,861
    FCG.................................................    89,652     14.7561       1,320,980     --           1,320,980
    GSS.................................................   282,054     11.1508       3,151,398     --           3,151,398
    HYS.................................................   312,392     11.8516       3,700,989     --           3,700,989
    MSS.................................................   305,995     24.2876       7,430,811     --           7,430,811
    MIS.................................................   501,609     16.0843       8,069,796     --           8,069,796
    MMS................................................. 1,078,121     11.1757      12,051,351     --          12,051,351
    NWD.................................................    99,057     16.6956       1,654,206     --           1,654,206
    RES.................................................   963,271     17.5948      16,945,380     --          16,945,380
    RGS.................................................    74,418     13.8731       1,032,103     --           1,032,103
    RSS.................................................    28,986     16.8662         488,903     --             488,903
    SIS.................................................    22,950     11.2108         234,390     --             234,390
    TRS................................................. 1,987,855     13.3948      26,626,717      1,085      26,627,802
    UTS.................................................   356,269     19.2810       6,862,785     --           6,862,785
    GAA.................................................    43,343     13.5725         588,958     --             588,958
    GGS.................................................    42,362     10.7398         454,905     --             454,905
    GGR.................................................   135,881     21.3313       2,897,127     --           2,897,127
    GTR.................................................   118,027     14.0077       1,652,891        597       1,653,488
    SGS.................................................     5,701     11.2108          63,889     --              63,889
                                                                                  ------------     ------    ------------
                                                                                  $176,497,227     $2,254    $176,499,481
                                                                                  ------------     ------    ------------

See notes to financial statements 

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REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENT OF CONDITION -- December 31, 1999 -- continued                        

                                                        [Enlarge/Download Table]

                                                                Applicable to Owners of                                       
                                                          Deferred Variable Annuity Contracts     Reserve for                 
                                                       -----------------------------------------   Variable                   
                                                         Units      Unit Value        Value        Annuities        Total     
NET ASSETS APPLICABLE TO CONTRACT OWNERS (CONTINUED):  ----------   ----------   ---------------  -----------  ---------------
                                                                                                                              
  MFS REGATTA PLATINUM CONTRACTS:                                                                                             
    BDS............................................     2,970,448    $10.0963    $    29,994,338  $     6,370  $    30,000,708
    CAS............................................    10,770,738     14.8295        159,713,722      855,329      160,569,051
    COS............................................     6,088,167     15.7265         95,743,651      288,540       96,032,191
    MIT............................................    36,443,681     11.4075        415,739,367    1,814,868      417,554,235
    EGS............................................     9,952,208     20.0771        199,806,631      871,934      200,678,565
    EIS............................................     2,322,545     11.1059         25,793,127       12,558       25,805,685
    FCE............................................       471,834     12.2711          5,788,888      156,525        5,945,413
    FCI............................................     1,960,439     12.4412         24,389,553       44,137       24,433,690
    FCG............................................       904,331     11.9538         10,809,507       47,556       10,857,063
    GSS............................................     6,917,529     10.0675         69,644,205      151,558       69,795,763
    HYS............................................     5,126,512     10.0101         51,279,436      228,601       51,508,037
    MSS............................................     2,096,399     19.3732         40,613,386       30,902       40,644,288
    MIS............................................    20,741,206     15.9430        330,672,742      615,728      331,288,470
    MMS............................................     4,848,739     10.5145         50,985,070      534,768       51,519,838
    NWD............................................     2,064,540     16.4450         33,951,877      358,408       34,310,285
    RES............................................     9,822,632     13.4883        132,488,128      436,882      132,925,010
    RGS............................................     2,692,647     11.0284         29,696,208       46,181       29,742,389
    RSS............................................       914,188     14.4906         13,247,136      206,497       13,453,633
    SIS............................................       987,192     12.0212         10,043,082      --            10,043,082
    TRS............................................    17,437,345     10.4327        181,919,827      855,857      182,775,684
    UTS............................................     6,397,913     14.1367         90,458,930       61,616       90,520,546
    GAA............................................       502,791     11.3461          5,704,516      --             5,704,516
    GGS............................................       301,714     10.5290          3,174,978       20,740        3,195,718
    GGR............................................     1,328,571     16.9623         22,535,111      --            22,535,111
    GTR............................................       901,334     11.1787         10,076,998       37,891       10,114,889
    SGS............................................       189,701     12.0212          2,279,694      --             2,279,694
                                                                                 ---------------  -----------  ---------------
                                                                                 $ 2,046,550,108  $ 7,683,446  $ 2,054,233,554
                                                                                 ---------------  -----------  ---------------
    Net Assets................................................................   $12,553,527,122  $45,194,482  $12,598,721,604
                                                                                 ===============  ===========  ===============

See notes to financial statements 

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INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENT OF OPERATIONS -- Year Ended December 31, 1999                         

                                                        [Enlarge/Download Table]

                                        BDS            CAS           COS            MIT           EGS            EIS     
                                    Sub-Account    Sub-Account   Sub-Account    Sub-Account   Sub-Account    Sub-Account 
                                    ------------  -------------  ------------  -------------  ------------  -------------
                                                                                                                         
INCOME AND EXPENSES:                                                                                                     
  Dividend income and capital gain                                                                                       
   distributions received.......... $   456,185   $ 165,042,350  $  5,266,720  $ 142,902,581  $ 12,001,599   $    47,820 
  Mortality and expense risk                                                                                             
   charges.........................    (464,791)    (18,362,496)   (3,268,957)   (23,586,223)  (10,306,327)     (282,553)
  Distribution expense charges.....     --               (5,941)      --            --             --            --      
  Administrative expense charges...     (55,942)     (2,200,044)     (394,335)    (2,836,395)   (1,242,331)      (34,088)
                                    -----------   -------------  ------------  -------------  ------------   ----------- 
      Net investment income                                                                                              
       (loss)...................... $   (64,548)  $ 144,473,869  $  1,603,428  $ 116,479,963  $    452,941   $  (268,821)
                                    -----------   -------------  ------------  -------------  ------------   ----------- 
REALIZED AND UNREALIZED GAINS                                                                                            
 (LOSSES):                                                                                                               
  Realized gains (losses) on                                                                                             
   investment transactions:                                                                                              
    Proceeds from sales............ $ 9,550,320   $ 450,572,346  $ 29,745,130  $ 233,601,157  $137,754,613   $ 9,351,165 
    Cost of investments sold.......  (9,570,915)   (344,857,604)  (19,530,316)  (117,395,546)  (77,682,913)   (8,400,487)
                                    -----------   -------------  ------------  -------------  ------------   ----------- 
      Net realized gains                                                                                                 
       (losses).................... $   (20,595)  $ 105,714,742  $ 10,214,814  $ 116,205,611  $ 60,071,700   $   950,678 
                                    -----------   -------------  ------------  -------------  ------------   ----------- 
  Net unrealized appreciation                                                                                            
   (depreciation) on investments:                                                                                        
    End of year.................... $  (731,928)  $ 473,751,561  $136,961,819  $ 331,150,359  $696,941,762   $   815,964 
    Beginning of year..............     286,002     287,338,195    32,482,750    452,834,707   194,893,156       595,356 
                                    -----------   -------------  ------------  -------------  ------------   ----------- 
      Change in unrealized                                                                                               
       appreciation                                                                                                      
       (depreciation).............. $(1,017,930)  $ 186,413,366  $104,479,069  $(121,684,348) $502,048,606   $   220,608 
                                    -----------   -------------  ------------  -------------  ------------   ----------- 
    Realized and unrealized gains                                                                                        
     (losses)...................... $(1,038,525)  $ 292,128,108  $114,693,883  $  (5,478,737) $562,120,306   $ 1,171,286 
                                    -----------   -------------  ------------  -------------  ------------   ----------- 
INCREASE (DECREASE) IN NET ASSETS                                                                                        
 FROM OPERATIONS................... $(1,103,073)  $ 436,601,977  $116,297,311  $ 111,001,226  $562,573,247   $   902,465 
                                    ===========   =============  ============  =============  ============   =========== 

See notes to financial statements 

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SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENT OF OPERATIONS -- Year Ended December 31, 1999 -- continued            

                                                        [Enlarge/Download Table]

                                        FCE           FCI            FCG            GSS      
                                    Sub-Account   Sub-Account    Sub-Account    Sub-Account  
                                    ------------  ------------  -------------  ------------- 
                                                                                             
INCOME AND EXPENSES:                                                                         
  Dividend income and capital gain                                                           
   distributions received.......... $    --       $    216,260  $   2,184,611  $  21,618,169 
  Mortality and expense risk                                                                 
   charges.........................     (298,005)     (549,216)      (885,975)    (5,311,042)
  Distribution expense charges.....      --            --            --               (1,545)
  Administrative expense charges...      (35,925)      (66,290)      (106,818)      (636,791)
                                    ------------  ------------  -------------  ------------- 
      Net investment income                                                                  
       (loss)...................... $   (333,930) $   (399,246) $   1,191,818  $  15,668,791 
                                    ------------  ------------  -------------  ------------- 
REALIZED AND UNREALIZED GAINS                                                                
 (LOSSES):                                                                                   
  Realized gains(losses) on                                                                  
   investment transactions:                                                                  
    Proceeds from sales............ $ 13,945,514  $ 30,960,149  $ 106,011,361  $ 115,563,467 
    Cost of investments sold.......  (15,674,700)  (29,356,563)  (100,713,204)  (118,246,571)
                                    ------------  ------------  -------------  ------------- 
      Net realized gains                                                                     
       (losses).................... $ (1,729,186) $  1,603,586  $   5,298,157  $  (2,683,104)
                                    ------------  ------------  -------------  ------------- 
  Net unrealized appreciation                                                                
   (depreciation) on investments:                                                            
    End of year.................... $  7,573,821  $ 14,196,828  $  11,755,882  $ (13,183,512)
    Beginning of year..............   (5,357,496)     (519,445)     6,495,614     14,106,863 
                                    ------------  ------------  -------------  ------------- 
      Change in unrealized                                                                   
       appreciation                                                                          
       (depreciation).............. $ 12,931,317  $ 14,716,273  $   5,260,268  $ (27,290,375)
                                    ------------  ------------  -------------  ------------- 
    Realized and unrealized gains                                                            
     (losses)...................... $ 11,202,131  $ 16,319,859  $  10,558,425  $ (29,973,479)
                                    ------------  ------------  -------------  ------------- 
INCREASE (DECREASE) IN NET ASSETS                                                            
 FROM OPERATIONS................... $ 10,868,201  $ 15,920,613  $  11,750,243  $ (14,304,688)
                                    ============  ============  =============  ============= 


                                         HYS            MSS                                  
                                     Sub-Account    Sub-Account                              
                                    -------------  --------------                            
                                                                                             
INCOME AND EXPENSES:                                                                         
  Dividend income and capital gain                                                           
   distributions received.......... $  24,714,357   $   --                                   
  Mortality and expense risk                                                                 
   charges.........................    (3,694,316)    (4,726,197)                            
  Distribution expense charges.....          (565)        (1,871)                            
  Administrative expense charges...      (443,843)      (566,272)                            
                                    -------------   ------------                             
      Net investment income                                                                  
       (loss)...................... $  20,575,633   $ (5,294,340)                            
                                    -------------   ------------                             
REALIZED AND UNREALIZED GAINS                                                                
 (LOSSES):                                                                                   
  Realized gains(losses) on                                                                  
   investment transactions:                                                                  
    Proceeds from sales............ $ 131,860,091   $ 88,894,001                             
    Cost of investments sold.......  (135,709,620)   (72,940,290)                            
                                    -------------   ------------                             
      Net realized gains                                                                     
       (losses).................... $  (3,849,529)  $ 15,953,711                             
                                    -------------   ------------                             
  Net unrealized appreciation                                                                
   (depreciation) on investments:                                                            
    End of year.................... $  (8,680,569)  $284,470,613                             
    Beginning of year..............    (7,980,287)    16,729,347                             
                                    -------------   ------------                             
      Change in unrealized                                                                   
       appreciation                                                                          
       (depreciation).............. $    (700,282)  $267,741,266                             
                                    -------------   ------------                             
    Realized and unrealized gains                                                            
     (losses)...................... $  (4,549,811)  $283,694,977                             
                                    -------------   ------------                             
INCREASE (DECREASE) IN NET ASSETS                                                            
 FROM OPERATIONS................... $  16,025,822   $278,400,637                             
                                    =============   ============                             

See notes to financial statements 

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REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENT OF OPERATIONS -- Year Ended December 31, 1999 -- continued            

                                                        [Enlarge/Download Table]

                                     MIS            MMS           NWD          RES      
                                 Sub-Account    Sub-Account   Sub-Account  Sub-Account  
                                 ------------  -------------  -----------  ------------ 
                                                                                        
INCOME AND EXPENSES:                                                                    
  Dividend income and capital                                                           
   gain distributions                                                                   
   received....................  $  3,086,853  $  20,077,131  $   133,721  $ 33,877,219 
  Mortality and expense risk                                                            
   charges.....................    (3,219,139)    (5,364,185)    (334,655)  (12,526,374)
  Distribution expense                                                                  
   charges.....................       --              (1,353)     --            --      
  Administrative expense                                                                
   charges.....................      (387,637)      (644,685)     (40,408)   (1,507,388)
                                 ------------  -------------  -----------  ------------ 
      Net investment income                                                             
       (loss)..................  $   (519,923) $  14,066,908  $  (241,342) $ 19,843,457 
                                 ------------  -------------  -----------  ------------ 
REALIZED AND UNREALIZED GAINS                                                           
 (LOSSES):                                                                              
  Realized gains (losses) on                                                            
   investment transactions:                                                             
    Proceeds from sales........  $ 28,678,591  $ 681,042,524  $ 7,761,195  $126,485,068 
    Cost of investments sold...   (22,458,189)  (681,042,524)  (6,405,814)  (74,939,328)
                                 ------------  -------------  -----------  ------------ 
      Net realized gains                                                                
       (losses)................  $  6,220,402  $    --        $ 1,355,381  $ 51,545,740 
                                 ------------  -------------  -----------  ------------ 
  Net unrealized appreciation                                                           
   (depreciation) on                                                                    
   investments:                                                                         
    End of year................  $114,855,426  $    --        $21,187,835  $369,190,915 
    Beginning of year..........    11,412,175       --          1,504,013   222,195,462 
                                 ------------  -------------  -----------  ------------ 
      Change in unrealized                                                              
       appreciation                                                                     
       (depreciation)..........  $103,443,251  $    --        $19,683,822  $146,995,453 
                                 ------------  -------------  -----------  ------------ 
    Realized and unrealized                                                             
     gains (losses)............  $109,663,653  $    --        $21,039,203  $198,541,193 
                                 ------------  -------------  -----------  ------------ 
INCREASE (DECREASE) IN NET                                                              
 ASSETS FROM OPERATIONS........  $109,143,730  $  14,066,908  $20,797,861  $218,384,650 
                                 ============  =============  ===========  ============ 


                                    RGS           RSS           SIS                     
                                Sub-Account   Sub-Account   Sub-Account                 
                                ------------  ------------  -----------                 
                                                                                        
INCOME AND EXPENSES:                                                                    
  Dividend income and capital                                                           
   gain distributions                                                                   
   received...................  $    184,713  $      1,911  $   271,924                 
  Mortality and expense risk                                                            
   charges....................      (718,747)     (128,399)    (168,321)                
  Distribution expense                                                                  
   charges....................       --            --           --                      
  Administrative expense                                                                
   charges....................       (86,537)      (15,455)     (20,234)                
                                ------------  ------------  -----------                 
      Net investment income                                                             
       (loss).................  $   (620,571) $   (141,943) $    83,369                 
                                ------------  ------------  -----------                 
REALIZED AND UNREALIZED GAINS                                                           
 (LOSSES):                                                                              
  Realized gains (losses) on                                                            
   investment transactions:                                                             
    Proceeds from sales.......  $ 13,728,018  $ 13,408,569  $ 2,528,947                 
    Cost of investments sold..   (11,746,493)  (11,896,704)  (2,439,032)                
                                ------------  ------------  -----------                 
      Net realized gains                                                                
       (losses)...............  $  1,981,525  $  1,511,865  $    89,915                 
                                ------------  ------------  -----------                 
  Net unrealized appreciation                                                           
   (depreciation) on                                                                    
   investments:                                                                         
    End of year...............  $  5,552,651  $  6,041,356  $   463,814                 
    Beginning of year.........     3,487,391       126,682      217,175                 
                                ------------  ------------  -----------                 
      Change in unrealized                                                              
       appreciation                                                                     
       (depreciation).........  $  2,065,260  $  5,914,674  $   246,639                 
                                ------------  ------------  -----------                 
    Realized and unrealized                                                             
     gains (losses)...........  $  4,046,785  $  7,426,539  $   336,554                 
                                ------------  ------------  -----------                 
INCREASE (DECREASE) IN NET                                                              
 ASSETS FROM OPERATIONS.......  $  3,426,214  $  7,284,596  $   419,923                 
                                ============  ============  ===========                 

See notes to financial statements 

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REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENT OF OPERATIONS -- Year Ended December 31, 1999 -- continued            

                                                        [Enlarge/Download Table]

                                         TRS            UTS           GAA           GGS      
                                     Sub-Account    Sub-Account   Sub-Account   Sub-Account  
                                    -------------  -------------  ------------  ------------ 
                                                                                             
INCOME AND EXPENSES:                                                                         
  Dividend income and capital gain                                                           
   distributions received.......... $ 269,625,863  $ 28,611,367   $  6,409,041  $  9,343,075 
  Mortality and expense risk                                                                 
   charges.........................   (22,286,255)   (3,306,043)    (1,427,773)     (953,326)
  Distribution expense charges.....       (10,220)      --             --               (422)
  Administrative expense charges...    (2,671,814)     (397,938)      (171,521)     (114,118)
                                    -------------  ------------   ------------  ------------ 
      Net investment income                                                                  
       (loss)...................... $ 244,657,574  $ 24,907,386   $  4,809,747  $  8,275,209 
                                    -------------  ------------   ------------  ------------ 
REALIZED AND UNREALIZED GAINS                                                                
 (LOSSES):                                                                                   
  Realized gains (losses) on                                                                 
   investment transactions:                                                                  
    Proceeds from sales............ $ 357,231,982  $ 34,366,900   $ 29,474,177  $ 26,696,851 
    Cost of investments sold.......  (313,675,798)  (23,665,238)   (26,588,874)  (28,476,289)
                                    -------------  ------------   ------------  ------------ 
      Net realized gains                                                                     
       (losses).................... $  43,556,184  $ 10,701,662   $  2,885,303  $ (1,779,438)
                                    -------------  ------------   ------------  ------------ 
  Net unrealized appreciation                                                                
   (depreciation) on investments:                                                            
    End of year.................... $ (14,746,361) $ 77,255,375   $ 13,719,084  $ (5,513,624)
    Beginning of year..............   247,870,707    34,293,510      3,446,679     6,569,807 
                                    -------------  ------------   ------------  ------------ 
      Change in unrealized                                                                   
       appreciation                                                                          
       (depreciation).............. $(262,617,068) $ 42,961,865   $ 10,272,405  $(12,083,431)
                                    -------------  ------------   ------------  ------------ 
    Realized and unrealized gains                                                            
     (losses)...................... $(219,060,884) $ 53,663,527   $ 13,157,708  $(13,862,869)
                                    -------------  ------------   ------------  ------------ 
INCREASE (DECREASE) IN NET ASSETS                                                            
 FROM OPERATIONS................... $  25,596,690  $ 78,570,913   $ 17,967,455  $ (5,587,660)
                                    =============  ============   ============  ============ 


                                        GGR            GTR             SGS                   
                                    Sub-Account    Sub-Account    Sub-Account(b)             
                                    ------------  --------------  --------------             
                                                                                             
INCOME AND EXPENSES:                                                                         
  Dividend income and capital gain                                                           
   distributions received.......... $ 10,725,752   $  7,230,240     $  --                    
  Mortality and expense risk                                                                 
   charges.........................   (3,549,051)    (1,188,320)        (7,136)              
  Distribution expense charges.....      --            --              --                    
  Administrative expense charges...     (426,441)      (143,007)          (858)              
                                    ------------   ------------     ----------               
      Net investment income                                                                  
       (loss)...................... $  6,750,260   $  5,898,913     $   (7,994)              
                                    ------------   ------------     ----------               
REALIZED AND UNREALIZED GAINS                                                                
 (LOSSES):                                                                                   
  Realized gains (losses) on                                                                 
   investment transactions:                                                                  
    Proceeds from sales............ $ 44,112,521   $ 16,770,599     $  151,707               
    Cost of investments sold.......  (31,638,209)   (13,273,072)      (493,571)              
                                    ------------   ------------     ----------               
      Net realized gains                                                                     
       (losses).................... $ 12,474,312   $  3,497,527     $ (341,864)              
                                    ------------   ------------     ----------               
  Net unrealized appreciation                                                                
   (depreciation) on investments:                                                            
    End of year.................... $178,498,769   $ 11,918,237     $1,072,320               
    Beginning of year..............   33,369,072     14,614,468        --                    
                                    ------------   ------------     ----------               
      Change in unrealized                                                                   
       appreciation                                                                          
       (depreciation).............. $145,129,697   $ (2,696,231)    $1,072,320               
                                    ------------   ------------     ----------               
    Realized and unrealized gains                                                            
     (losses)...................... $157,604,009   $    801,296     $  730,456               
                                    ------------   ------------     ----------               
INCREASE (DECREASE) IN NET ASSETS                                                            
 FROM OPERATIONS................... $164,354,269   $  6,700,209     $  722,462               
                                    ============   ============     ==========               

(b) For the period November 5, 1999 (commencement of operations of Sub-Account) 
through December 31, 1999.                                              

See notes to financial statements 

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REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENTS OF CHANGES IN NET ASSETS                                             

                                                        [Enlarge/Download Table]

                                               BDS                             CAS                              COS             
                                           Sub-Account                     Sub-Account                      Sub-Account         
                                  -----------------------------  -------------------------------   -----------------------------
                                   Year Ended      Year Ended      Year Ended       Year Ended      Year Ended      Year Ended  
                                  December 31,    December 31,    December 31,     December 31,    December 31,    December 31, 
                                      1999           1998(a)          1999             1998            1999            1998     
                                  -------------   -------------  --------------   --------------   -------------   -------------
                                                                                                                                
OPERATIONS:                                                                                                                     
  Net investment income                                                                                                         
   (loss).......................   $   (64,548)    $   (82,271)  $  144,473,869   $  128,215,244   $  1,603,428    $  3,637,491 
  Net realized gains (losses)...       (20,595)        216,410      105,714,742       66,702,495     10,214,814       5,170,487 
  Net unrealized gains                                                                                                          
   (losses).....................    (1,017,930)        286,002      186,413,366      121,369,200    104,479,069      20,631,668 
                                   -----------     -----------   --------------   --------------   ------------    ------------ 
      Increase (Decrease) in net                                                                                                
       assets from operations...   $(1,103,073)    $   420,141   $  436,601,977   $  316,286,939   $116,297,311    $ 29,439,646 
                                   -----------     -----------   --------------   --------------   ------------    ------------ 

CONTRACT OWNER TRANSACTIONS:                                                                                                    
  Accumulation Activity:                                                                                                        
    Purchase payments                                                                                                           
     received...................   $11,283,792     $ 9,875,456   $   76,869,793   $  107,933,141   $ 42,581,763    $ 38,230,487 
    Net transfers between                                                                                                       
     Sub-Accounts and Fixed                                                                                                     
     Account....................    26,002,672       9,534,568        2,132,992       47,848,492    100,363,903      40,051,430 
    Withdrawals, surrenders,                                                                                                    
     annuitizations and contract                                                                                                
     charges....................    (3,714,192)       (395,676)    (174,746,999)    (114,794,853)   (18,079,962)     (7,541,790)
                                   -----------     -----------   --------------   --------------   ------------    ------------ 
      Net accumulation                                                                                                          
       activity.................   $33,572,272     $19,014,348   $  (95,744,214)  $   40,986,780   $124,865,704    $ 70,740,127 
                                   -----------     -----------   --------------   --------------   ------------    ------------ 
  Annuitization Activity:                                                                                                       
    Annuitizations..............   $    79,698     $   164,170   $    1,893,718   $    1,220,067   $    359,014    $    142,386 
    Annuity payments and                                                                                                        
     contract charges...........       (25,302)         (3,903)      (1,271,221)      (1,025,009)      (143,073)        (46,545)
    Net Transfers between                                                                                                       
     Sub-Accounts...............       --              --               109,831          (41,318)        33,759          25,440 
    Adjustments to annuity                                                                                                      
     reserves...................         2,648         (12,668)        (272,714)         (88,123)       (43,544)        (10,400)
                                   -----------     -----------   --------------   --------------   ------------    ------------ 
      Net annuitization                                                                                                         
       activity.................   $    57,044     $   147,599   $      459,614   $       65,617   $    206,156    $    110,881 
                                   -----------     -----------   --------------   --------------   ------------    ------------ 
  Increase (Decrease) in net                                                                                                    
   assets from contract owner                                                                                                   
   transactions.................   $33,629,316     $19,161,947   $  (95,284,600)  $   41,052,397   $125,071,860    $ 70,851,008 
                                   -----------     -----------   --------------   --------------   ------------    ------------ 
    Increase (Decrease) in net                                                                                                  
     assets.....................   $32,526,243     $19,582,088   $  341,317,377   $  357,339,336   $241,369,171    $100,290,654 
NET ASSETS:                                                                                                                     
  Beginning of year.............    19,582,088         --         1,494,449,750    1,137,110,414    187,359,986      87,069,332 
                                   -----------     -----------   --------------   --------------   ------------    ------------ 
  End of year...................   $52,108,331     $19,582,088   $1,835,767,127   $1,494,449,750   $428,729,157    $187,359,986 
                                   ===========     ===========   ==============   ==============   ============    ============ 

(a) For the period May 6, 1998 (commencement of operations of Sub-Account)      
through December 31, 1998.                                              

See notes to financial statements 

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SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENTS OF CHANGES IN NET ASSETS -- continued                                

                                                        [Enlarge/Download Table]

                                                 MIT                              EGS                            EIS            
                                             Sub-Account                      Sub-Account                    Sub-Account        
                                   -------------------------------   -----------------------------   ---------------------------
                                     Year Ended       Year Ended       Year Ended      Year Ended     Year Ended     Year Ended 
                                    December 31,     December 31,     December 31,    December 31,   December 31,   December 31,
                                        1999             1998             1999            1998           1999         1998(a)   
                                   --------------   --------------   --------------   ------------   ------------   ------------
                                                                                                                                
OPERATIONS:                                                                                                                     
  Net investment income (loss).... $  116,479,963   $   74,447,584   $      452,941   $ 11,234,121   $  (268,821)    $  (31,884)
  Net realized gains (losses).....    116,205,611       33,652,751       60,071,700     22,519,902       950,678       (117,486)
  Net unrealized gains (losses)...   (121,684,348)     167,450,974      502,048,606    124,900,453       220,608        595,356 
                                   --------------   --------------   --------------   ------------   -----------     ---------- 
      Increase (Decrease) in net                                                                                                
       assets from operations..... $  111,001,226   $  275,551,309   $  562,573,247   $158,654,476   $   902,465     $  445,986 
                                   --------------   --------------   --------------   ------------   -----------     ---------- 

CONTRACT OWNER TRANSACTIONS:                                                                                                    
  Accumulation Activity:                                                                                                        
    Purchase payments received.... $  200,798,865   $  265,107,890   $   72,378,390   $ 90,838,283   $11,769,375     $4,758,335 
    Net transfers between                                                                                                       
     Sub-Accounts and Fixed                                                                                                     
     Account......................    215,949,849      206,082,223       80,609,004     40,488,353    22,083,804      3,493,264 
    Withdrawals, surrenders,                                                                                                    
     annuitizations and contract                                                                                                
     charges......................   (159,633,917)     (88,307,981)     (63,348,442)   (30,769,813)   (2,323,339)      (205,828)
                                   --------------   --------------   --------------   ------------   -----------     ---------- 
      Net accumulation activity... $  257,114,797   $  382,882,132   $   89,638,952   $100,556,823   $31,529,840     $8,045,771 
                                   --------------   --------------   --------------   ------------   -----------     ---------- 
  Annuitization Activity:                                                                                                       
    Annuitizations................ $    2,805,581   $    2,012,633   $    1,166,495   $    453,478   $    12,343     $  --      
    Annuity payments and contract                                                                                               
     charges......................       (993,419)        (713,563)        (240,170)      (113,219)         (181)       --      
    Net Transfers between                                                                                                       
     Sub-Accounts.................        (31,426)        (116,539)          24,221         (5,495)      --             --      
    Adjustments to annuity                                                                                                      
     reserves.....................        (68,461)         265,082           (5,370)       128,245          (177)       --      
                                   --------------   --------------   --------------   ------------   -----------     ---------- 
      Net annuitization                                                                                                         
       activity................... $    1,712,275   $    1,447,613   $      945,176   $    463,009   $    11,985     $  --      
                                   --------------   --------------   --------------   ------------   -----------     ---------- 
  Increase (Decrease) in net                                                                                                    
   assets from contract owner                                                                                                   
   transactions................... $  258,827,072   $  384,329,745   $   90,584,128   $101,019,832   $31,541,825     $8,045,771 
                                   --------------   --------------   --------------   ------------   -----------     ---------- 
  Increase (Decrease) in net                                                                                                    
   assets......................... $  369,828,298   $  659,881,054   $  653,157,375   $259,674,308   $32,444,290     $8,491,757 
NET ASSETS:                                                                                                                     
  Beginning of year...............  1,726,891,740    1,067,010,686      700,947,493    441,273,185     8,491,757        --      
                                   --------------   --------------   --------------   ------------   -----------     ---------- 
  End of year..................... $2,096,720,038   $1,726,891,740   $1,354,104,868   $700,947,493   $40,936,047     $8,491,757 
                                   ==============   ==============   ==============   ============   ===========     ========== 

(a) For the period May 6, 1998 (commencement of operations of Sub-Account)      
through December 31, 1998.                                              

See notes to financial statements 

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SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENTS OF CHANGES IN NET ASSETS -- continued                                

                                                        [Enlarge/Download Table]

                                                      FCE                          FCI                          FCG            
                                                  Sub-Account                  Sub-Account                  Sub-Account        
                                          ---------------------------  ---------------------------  ---------------------------
                                           Year Ended     Year Ended    Year Ended     Year Ended    Year Ended     Year Ended 
                                          December 31,   December 31,  December 31,   December 31,  December 31,   December 31,
                                              1999           1998          1999           1998          1999           1998    
                                          ------------   ------------  ------------   ------------  ------------   ------------
                                                                                                                               
OPERATIONS:                                                                                                                    
  Net investment income (loss)..........  $  (333,930)   $   467,717   $  (399,246)   $  (101,894)  $ 1,191,818    $ 1,045,909 
  Net realized gains (losses)...........   (1,729,186)    (4,423,657)    1,603,586       (134,106)    5,298,157      5,611,522 
  Net unrealized gains (losses).........   12,931,317     (3,684,076)   14,716,273       (101,433)    5,260,268      4,069,821 
                                          -----------    -----------   -----------    -----------   -----------    ----------- 
      Increase (Decrease) in net assets                                                                                        
       from operations..................  $10,868,201    $(7,640,016)  $15,920,613    $  (337,433)  $11,750,243    $10,727,252 
                                          -----------    -----------   -----------    -----------   -----------    ----------- 

CONTRACT OWNER TRANSACTIONS:                                                                                                   
  Accumulation Activity:                                                                                                       
    Purchase payments received..........  $ 2,257,666    $ 2,734,886   $ 7,721,195    $ 8,231,578   $ 4,415,080    $ 7,721,923 
    Net transfers between Sub-Accounts                                                                                         
     and Fixed Account..................   10,148,747     (1,032,098)   10,540,394      5,579,377    (1,761,772)     8,246,837 
    Withdrawals, surrenders,                                                                                                   
     annuitizations and contract                                                                                               
     charges............................   (2,575,449)      (897,534)   (3,292,901)    (1,479,723)   (5,447,333)    (4,121,150)
                                          -----------    -----------   -----------    -----------   -----------    ----------- 
      Net accumulation activity.........  $ 9,830,964    $   805,254   $14,968,688    $12,331,232   $(2,794,025)   $11,847,610 
                                          -----------    -----------   -----------    -----------   -----------    ----------- 
  Annuitization Activity:                                                                                                      
    Annuitizations......................  $   154,638    $     3,586   $    39,173    $     1,716   $    59,613    $    34,551 
    Annuity payments and contract                                                                                              
     charges............................       (8,635)        (7,084)       (9,967)        (5,621)      (14,579)       (28,601)
    Net transfers between                                                                                                      
     Sub-Accounts.......................       54,153        --            --             --            --             (17,030)
    Adjustments to annuity reserves.....       (3,330)           218       (15,216)         2,415        (4,391)       (10,148)
                                          -----------    -----------   -----------    -----------   -----------    ----------- 
      Net annuitization activity........  $   196,826    $    (3,280)  $    13,990    $    (1,490)  $    40,643    $   (21,228)
                                          -----------    -----------   -----------    -----------   -----------    ----------- 
  Increase (Decrease) in net assets from                                                                                       
   contract owner transactions..........  $10,027,790    $   801,974   $14,982,678    $12,329,742   $(2,753,382)   $11,826,382 
                                          -----------    -----------   -----------    -----------   -----------    ----------- 
  Increase (Decrease) in net assets.....  $20,895,991    $(6,838,042)  $30,903,291    $11,992,309   $ 8,996,861    $22,553,634 
NET ASSETS:                                                                                                                    
  Beginning of year.....................   16,976,738     23,814,780    35,306,698     23,314,389    71,899,852     49,346,218 
                                          -----------    -----------   -----------    -----------   -----------    ----------- 
  End of year...........................  $37,872,729    $16,976,738   $66,209,989    $35,306,698   $80,896,713    $71,899,852 
                                          ===========    ===========   ===========    ===========   ===========    =========== 

See notes to financial statements 

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REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENTS OF CHANGES IN NET ASSETS -- continued                                

                                                        [Enlarge/Download Table]

                                            GSS                               HYS                               MSS               
                                        Sub-Account                       Sub-Account                       Sub-Account           
                              -------------------------------   -------------------------------   ------------------------------- 
                                 Year Ended       Year Ended       Year Ended       Year Ended       Year Ended       Year Ended  
                                December 31,     December 31,     December 31,     December 31,     December 31,     December 31, 
                                    1999             1998             1999             1998             1999             1998     
                              ----------------   ------------   ----------------   ------------   ----------------   ------------ 
                                                                                                                                  
OPERATIONS:                                                                                                                       
  Net investment income                                                                                                           
   (loss)...................    $ 15,668,791     $ 15,055,335     $ 20,575,633     $ 13,760,883     $ (5,294,340)    $ 45,005,946 
  Net realized gains                                                                                                              
   (losses).................      (2,683,104)       7,944,827       (3,849,529)       4,744,016       15,953,711       11,481,102 
  Net unrealized gains                                                                                                            
   (losses).................     (27,290,375)       2,813,782         (700,282)     (20,640,207)     267,741,266      (23,796,460)
                                ------------     ------------     ------------     ------------     ------------     ------------ 
      Increase (Decrease) in                                                                                                      
       net assets from                                                                                                            
       operations...........    $(14,304,688)    $ 25,813,944     $ 16,025,822     $ (2,135,308)    $278,400,637     $ 32,690,588 
                                ------------     ------------     ------------     ------------     ------------     ------------ 

CONTRACT OWNER TRANSACTIONS:                                                                                                      
  Accumulation Activity:                                                                                                          
    Purchase payments                                                                                                             
     received...............    $ 26,767,871     $ 33,941,912     $ 20,195,648     $ 54,795,963     $ 16,920,035     $ 22,720,393 
    Net transfers between                                                                                                         
     Sub-Accounts and Fixed                                                                                                       
     Account................      91,170,433       49,410,266       20,734,522       20,587,340       52,096,752       (5,210,223)
    Withdrawals, surrenders,                                                                                                      
     annuitizations and                                                                                                           
     contract charges.......     (59,337,154)     (40,854,521)     (36,583,190)     (24,841,987)     (51,120,379)     (28,997,564)
                                ------------     ------------     ------------     ------------     ------------     ------------ 
      Net accumulation                                                                                                            
       activity.............    $ 58,601,150     $ 42,497,657     $  4,346,980     $ 50,541,316     $ 17,896,408     $(11,487,394)
                                ------------     ------------     ------------     ------------     ------------     ------------ 
  Annuitization Activity:                                                                                                         
    Annuitizations..........    $    665,654     $  1,080,791     $    333,040     $    514,021     $    135,661     $    360,666 
    Annuity payments and                                                                                                          
     contract charges.......        (452,725)        (563,274)        (295,312)        (301,855)        (320,573)        (278,169)
    Net transfers between                                                                                                         
     Sub-Accounts...........          (3,904)         (10,317)        --                --               118,980           (6,870)
    Adjustments to annuity                                                                                                        
     reserves...............          (4,610)          17,162          (22,546)          44,449          (51,415)          (3,336)
                                ------------     ------------     ------------     ------------     ------------     ------------ 
      Net annuitization                                                                                                           
       activity.............    $    204,415     $    524,362     $     15,182     $    256,615     $   (117,347)    $     72,291 
                                ------------     ------------     ------------     ------------     ------------     ------------ 
  Increase (Decrease) in net                                                                                                      
   assets from contract                                                                                                           
   owner transactions.......    $ 58,805,565     $ 43,022,019     $  4,362,162     $ 50,797,931     $ 17,779,061     $(11,415,103)
                                ------------     ------------     ------------     ------------     ------------     ------------ 
    Increase (Decrease) in                                                                                                        
     net assets.............    $ 44,500,877     $ 68,835,963     $ 20,387,984     $ 48,662,623     $296,179,698     $ 21,275,485 
NET ASSETS:                                                                                                                       
  Beginning of year.........     400,140,205      331,304,242      286,338,035      237,675,412      334,101,011      312,825,526 
                                ------------     ------------     ------------     ------------     ------------     ------------ 
  End of year...............    $444,641,082     $400,140,205     $306,726,019     $286,338,035     $630,280,709     $334,101,011 
                                ============     ============     ============     ============     ============     ============ 

See notes to financial statements 

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REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS        
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SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENTS OF CHANGES IN NET ASSETS -- continued                                

                                                        [Enlarge/Download Table]

                                                MIS                            MMS                             NWD             
                                            Sub-Account                    Sub-Account                     Sub-Account         
                                   -----------------------------  -----------------------------   -----------------------------
                                    Year Ended      Year Ended     Year Ended      Year Ended      Year Ended      Year Ended  
                                   December 31,    December 31,   December 31,    December 31,    December 31,    December 31, 
                                       1999           1998(a)         1999            1998            1999           1998(a)   
                                   -------------   -------------  -------------   -------------   -------------   -------------
                                                                                                                               
OPERATIONS:                                                                                                                    
  Net investment income (loss).... $   (519,923)    $  (277,915)  $  14,066,908   $  12,464,454    $  (241,342)    $   (55,628)
  Net realized gains (losses).....    6,220,402         290,620        --              --            1,355,381         (77,926)
  Net unrealized gains (losses)...  103,443,251      11,412,175        --              --           19,683,822       1,504,013 
                                   ------------     -----------   -------------   -------------    -----------     ----------- 
      Increase (Decrease) in net                                                                                               
       assets from operations..... $109,143,730     $11,424,880   $  14,066,908   $  12,464,454    $20,797,861     $ 1,370,459 
                                   ------------     -----------   -------------   -------------    -----------     ----------- 

CONTRACT OWNER TRANSACTIONS:                                                                                                   
  Accumulation Activity:                                                                                                       
    Purchase payments received.... $137,436,213     $42,898,409   $  77,465,420   $  84,539,955    $10,051,271     $ 5,928,260 
    Net transfers between                                                                                                      
     Sub-Accounts and Fixed                                                                                                    
     Account......................  223,731,514      27,944,745     176,379,832     205,348,459     20,319,479       6,269,724 
    Withdrawals, surrenders,                                                                                                   
     annuitizations and contract                                                                                               
     charges......................  (20,457,443)     (1,223,987)   (230,737,769)   (180,586,976)    (2,113,261)       (345,722)
                                   ------------     -----------   -------------   -------------    -----------     ----------- 
      Net accumulation activity... $340,710,284     $69,619,167   $  23,107,483   $ 109,301,438    $28,257,489     $11,852,262 
                                   ------------     -----------   -------------   -------------    -----------     ----------- 
  Annuitization Activity:                                                                                                      
    Annuitizations................ $    755,518     $   158,201   $   1,593,879   $   1,223,366    $   339,593     $    59,889 
    Annuity payments and contract                                                                                              
     charges......................      (48,148)        (10,253)       (347,973)       (267,886)       (15,934)         (3,118)
    Net transfers between                                                                                                      
     Sub-Accounts.................       47,324         --             (646,987)         (4,847)        41,259         --      
    Adjustments to annuity                                                                                                     
     reserves.....................      (53,623)         (1,090)        (33,773)        (38,667)       (46,627)         (2,368)
                                   ------------     -----------   -------------   -------------    -----------     ----------- 
      Net annuitization                                                                                                        
       activity................... $    701,071     $   146,858   $     565,146   $     911,966    $   318,291     $    54,403 
                                   ------------     -----------   -------------   -------------    -----------     ----------- 
  Increase (Decrease) in net                                                                                                   
   assets from contract owner                                                                                                  
   transactions................... $341,411,355     $69,766,025   $  23,672,629   $ 110,213,404    $28,575,780     $11,906,665 
                                   ------------     -----------   -------------   -------------    -----------     ----------- 
    Increase (Decrease) in net                                                                                                 
     assets....................... $450,555,085     $81,190,905   $  37,739,537   $ 122,677,858    $49,373,641     $13,277,124 
NET ASSETS:                                                                                                                    
  Beginning of year...............   81,190,905         --          416,905,347     294,227,489     13,277,124         --      
                                   ------------     -----------   -------------   -------------    -----------     ----------- 
  End of year..................... $531,745,990     $81,190,905   $ 454,644,884   $ 416,905,347    $62,650,765     $13,277,124 
                                   ============     ===========   =============   =============    ===========     =========== 

(a) For the period May 6, 1998 (commencement of operations of Sub-Account)      
through December 31, 1998.                                              

See notes to financial statements 

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REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENTS OF CHANGES IN NET ASSETS -- continued                                

                                                        [Enlarge/Download Table]

                                                     RES                            RGS                          RSS            
                                                 Sub-Account                    Sub-Account                  Sub-Account        
                                        -----------------------------   ---------------------------  ---------------------------
                                          Year Ended      Year Ended     Year Ended     Year Ended    Year Ended     Year Ended 
                                         December 31,    December 31,   December 31,   December 31,  December 31,   December 31,
                                             1999            1998           1999           1998          1999         1998(a)   
                                        --------------   ------------   ------------   ------------  ------------   ------------
                                                                                                                                
OPERATIONS:                                                                                                                     
  Net investment income (loss)........  $   19,843,457   $ 22,892,997   $  (620,571)   $  (196,955)  $  (141,943)    $  (15,398)
  Net realized gains (losses).........      51,545,740     21,973,914     1,981,525        513,010     1,511,865        (94,970)
  Net unrealized gains (losses).......     146,995,453    110,904,687     2,065,260      3,223,975     5,914,674        126,682 
                                        --------------   ------------   -----------    -----------   -----------     ---------- 
      Increase (Decrease) in net                                                                                                
       assets from operations.........  $  218,384,650   $155,771,598   $ 3,426,214    $ 3,540,030   $ 7,284,596     $   16,314 
                                        --------------   ------------   -----------    -----------   -----------     ---------- 

CONTRACT OWNER TRANSACTIONS:                                                                                                    
  Accumulation Activity:                                                                                                        
    Purchase payments received........  $   60,172,716   $103,921,694   $12,282,216    $13,378,132   $ 4,475,044     $2,275,775 
    Net transfers between Sub-Accounts                                                                                          
     and Fixed Account................      46,692,915     82,986,033    27,754,724     14,755,314    15,355,290      1,268,571 
    Withdrawals, surrenders,                                                                                                    
     annuitizations and contract                                                                                                
     charges..........................     (78,027,604)   (44,188,615)   (4,602,039)    (1,413,449)   (1,000,866)       (41,350)
                                        --------------   ------------   -----------    -----------   -----------     ---------- 
      Net accumulation activity.......  $   28,838,027   $142,719,112   $35,434,901    $26,719,997   $18,829,468     $3,502,996 
                                        --------------   ------------   -----------    -----------   -----------     ---------- 
  Annuitization Activity:                                                                                                       
    Annuitizations....................  $      727,314   $    452,588   $    45,656    $    73,112   $   206,502     $  --      
    Annuity payments and contract                                                                                               
     charges..........................        (340,066)      (211,454)      (22,411)       (12,398)      --             --      
    Net transfers between                                                                                                       
     Sub-Accounts.....................          45,500         34,374       --              58,620       --             --      
    Adjustments to annuity reserves...        (116,242)       (35,852)          646         (2,709)      --             --      
                                        --------------   ------------   -----------    -----------   -----------     ---------- 
      Net annuitization activity......  $      316,506   $    239,656   $    23,891    $   116,625   $   206,502     $  --      
                                        --------------   ------------   -----------    -----------   -----------     ---------- 
  Increase (Decrease) in net assets                                                                                             
   from contract owner transactions...  $   29,154,533   $142,958,768   $35,458,792    $26,836,622   $19,035,970     $3,502,996 
                                        --------------   ------------   -----------    -----------   -----------     ---------- 
  Increase (Decrease) in net assets...  $  247,539,183   $298,730,366   $38,885,006    $30,376,652   $26,320,566     $3,519,310 
NET ASSETS:                                                                                                                     
  Beginning of year...................     948,011,552    649,281,186    36,274,179      5,897,527     3,519,310        --      
                                        --------------   ------------   -----------    -----------   -----------     ---------- 
  End of year.........................  $1,195,550,735   $948,011,552   $75,159,185    $36,274,179   $29,839,876     $3,519,310 
                                        ==============   ============   ===========    ===========   ===========     ========== 

(a) For the period May 6, 1998 (commencement of operations of Sub-Account)      
through December 31, 1998.                                              

See notes to financial statements 

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SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENTS OF CHANGES IN NET ASSETS -- continued                                

                                                        [Enlarge/Download Table]

                                               SIS                             TRS                              UTS             
                                           Sub-Account                     Sub-Account                      Sub-Account         
                                  -----------------------------  -------------------------------   -----------------------------
                                   Year Ended      Year Ended      Year Ended       Year Ended      Year Ended      Year Ended  
                                  December 31,    December 31,    December 31,     December 31,    December 31,    December 31, 
                                      1999           1998(a)          1999             1998            1999            1998     
                                  -------------   -------------  --------------   --------------   -------------   -------------
                                                                                                                                
OPERATIONS:                                                                                                                     
  Net investment income                                                                                                         
   (loss).......................   $    83,369      $  (37,067)  $  244,657,574   $  163,419,988   $ 24,907,386    $ 15,309,048 
  Net realized gains (losses)...        89,915         (88,826)      43,556,184       51,696,637     10,701,662       3,138,939 
  Net unrealized gains                                                                                                          
   (losses).....................       246,639         217,175     (262,617,068)     (49,976,046)    42,961,865       5,912,858 
                                   -----------      ----------   --------------   --------------   ------------    ------------ 
      Increase (Decrease) in net                                                                                                
       assets from operations...   $   419,923      $   91,282   $   25,596,690   $  165,140,579   $ 78,570,913    $ 24,360,845 
                                   -----------      ----------   --------------   --------------   ------------    ------------ 

CONTRACT OWNER TRANSACTIONS:                                                                                                    
  Accumulation Activity:                                                                                                        
    Purchase payments                                                                                                           
     received...................   $ 3,507,488      $3,255,808   $   88,544,205   $  144,694,740   $ 34,302,650    $ 39,799,198 
    Net transfers between                                                                                                       
     Sub-Accounts and Fixed                                                                                                     
     Account....................     8,565,548       4,501,699       81,610,921       99,107,901     67,737,731      40,165,423 
    Withdrawals, surrenders,                                                                                                    
     annuitizations and contract                                                                                                
     charges....................      (830,463)        (67,691)    (250,384,445)    (174,048,588)   (19,915,248)    (10,679,491)
                                   -----------      ----------   --------------   --------------   ------------    ------------ 
      Net accumulation                                                                                                          
       activity.................   $11,242,573      $7,689,816   $  (80,229,319)  $   69,754,053   $ 82,125,133    $ 69,285,130 
                                   -----------      ----------   --------------   --------------   ------------    ------------ 
  Annuitization Activity:                                                                                                       
    Annuitizations..............   $   --           $  --        $    2,259,139   $    2,556,048   $    111,619    $    357,771 
    Annuity payments and                                                                                                        
     contract charges...........       --              --            (1,437,038)      (1,415,164)      (154,181)       (266,331)
    Net transfers between                                                                                                       
     Sub-Accounts...............       --              --               (39,113)         104,077        324,919          93,575 
    Adjustments to annuity                                                                                                      
     reserves...................       --              --              (169,445)         157,679        (15,579)        117,915 
                                   -----------      ----------   --------------   --------------   ------------    ------------ 
      Net annuitization                                                                                                         
       activity.................   $   --           $  --        $      613,543   $    1,402,640   $    266,778    $    302,930 
                                   -----------      ----------   --------------   --------------   ------------    ------------ 
  Increase (Decrease) in net                                                                                                    
   assets from contract owner                                                                                                   
   transactions.................   $11,242,573      $7,689,816   $  (79,615,776)  $   71,156,693   $ 82,391,911    $ 69,588,060 
                                   -----------      ----------   --------------   --------------   ------------    ------------ 
    Increase (Decrease) in net                                                                                                  
     assets.....................   $11,662,496      $7,781,098   $  (54,019,086)  $  236,297,272   $160,962,824    $ 93,948,905 
NET ASSETS:                                                                                                                     
  Beginning of year.............     7,781,098         --         1,816,081,256    1,579,783,984    211,254,980     117,306,075 
                                   -----------      ----------   --------------   --------------   ------------    ------------ 
  End of year...................   $19,443,594      $7,781,098   $1,762,062,170   $1,816,081,256   $372,217,804    $211,254,980 
                                   ===========      ==========   ==============   ==============   ============    ============ 

(a) For the period May 6, 1998 (commencement of operations of Sub-Account)      
through December 31, 1998.                                              

See notes to financial statements 

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SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENTS OF CHANGES IN NET ASSETS -- continued                                

                                                        [Enlarge/Download Table]

                                                GAA                            GGS                            GGR             
                                            Sub-Account                    Sub-Account                    Sub-Account         
                                   -----------------------------  -----------------------------  -----------------------------
                                    Year Ended      Year Ended     Year Ended      Year Ended     Year Ended      Year Ended  
                                   December 31,    December 31,   December 31,    December 31,   December 31,    December 31, 
                                       1999            1998           1999            1998           1999            1998     
                                   -------------   -------------  -------------   -------------  -------------   -------------
                                                                                                                              
OPERATIONS:                                                                                                                   
  Net investment income (loss).... $  4,809,747    $  7,482,682   $  8,275,209    $    (87,913)  $  6,750,260    $ 15,489,141 
  Net realized gains (losses).....    2,885,303       3,692,859     (1,779,438)       (498,522)    12,474,312      11,591,824 
  Net unrealized gains (losses)...   10,272,405      (6,039,574)   (12,083,431)     12,271,071    145,129,697       1,458,038 
                                   ------------    ------------   ------------    ------------   ------------    ------------ 
      Increase (Decrease) in net                                                                                              
       assets from operations..... $ 17,967,455    $  5,135,967   $ (5,587,660)   $ 11,684,636   $164,354,269    $ 28,539,003 
                                   ------------    ------------   ------------    ------------   ------------    ------------ 

CONTRACT OWNER TRANSACTIONS:                                                                                                  
  Accumulation Activity:                                                                                                      
    Purchase payments received.... $  2,661,148    $  8,860,816   $  1,751,874    $  3,786,224   $ 10,448,847    $ 15,688,080 
    Net transfers between                                                                                                     
     Sub-Accounts and Fixed                                                                                                   
     Account......................  (14,351,525)     (4,974,353)    (4,727,708)    (12,675,687)    11,508,041      (6,628,067)
    Withdrawals, surrenders,                                                                                                  
     annuitizations and contract                                                                                              
     charges......................   (8,142,859)     (6,184,345)   (14,312,841)    (11,908,423)   (26,312,080)    (14,148,887)
                                   ------------    ------------   ------------    ------------   ------------    ------------ 
      Net accumulation activity... $(19,833,236)   $ (2,297,882)  $(17,288,675)   $(20,797,886)  $ (4,355,192)   $ (5,088,874)
                                   ------------    ------------   ------------    ------------   ------------    ------------ 
  Annuitization Activity:                                                                                                     
    Annuitizations................ $     12,744    $    196,381   $    100,118    $    158,700   $    166,248    $    107,920 
    Annuity payments and contract                                                                                             
     charges......................     (102,934)        (88,583)      (114,238)       (130,085)      (116,958)       (104,706)
    Net transfers between                                                                                                     
     Sub-Accounts.................      (33,199)          1,087        --              --             (12,182)       (114,522)
    Adjustments to annuity                                                                                                    
     reserves.....................       14,208         (39,140)       (22,713)          3,766         22,465          (5,286)
                                   ------------    ------------   ------------    ------------   ------------    ------------ 
      Net annuitization                                                                                                       
       activity................... $   (109,181)   $     69,745   $    (36,833)   $     32,381   $     59,573    $   (116,594)
                                   ------------    ------------   ------------    ------------   ------------    ------------ 
    Increase (Decrease) in net                                                                                                
     assets from contract owner                                                                                               
     transactions................. $(19,942,417)   $ (2,228,137)  $(17,325,508)   $(20,765,505)  $ (4,295,619)   $ (5,205,468)
                                   ------------    ------------   ------------    ------------   ------------    ------------ 
    Increase (Decrease) in net                                                                                                
     assets....................... $ (1,974,962)   $  2,907,830   $(22,913,168)   $ (9,080,869)  $160,058,650    $ 23,333,535 
NET ASSETS:                                                                                                                   
  Beginning of year...............  123,345,612     120,437,782     89,813,963      98,894,832    260,479,236     237,145,701 
                                   ------------    ------------   ------------    ------------   ------------    ------------ 
  End of year..................... $121,370,650    $123,345,612   $ 66,900,795    $ 89,813,963   $420,537,886    $260,479,236 
                                   ============    ============   ============    ============   ============    ============ 

See notes to financial statements 

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REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENTS OF CHANGES IN NET ASSETS -- continued                                

                                                        [Enlarge/Download Table]

                                                                             GTR                        SGS       
                                                                         Sub-Account                Sub-Account   
                                                             -----------------------------------  ----------------
                                                                Year Ended         Year Ended        Year Ended   
                                                               December 31,       December 31,      December 31,  
                                                                   1999               1998            1999(b)     
                                                             ----------------   ----------------  ----------------
                                                                                                                  
OPERATIONS:                                                                                                       
  Net investment income (loss)..............................   $  5,898,913       $ 2,635,441        $   (7,994)  
  Net realized gains (losses)...............................      3,497,527         3,803,017          (341,864)  
  Net unrealized gains (losses).............................     (2,696,231)        6,391,001         1,072,320   
                                                               ------------       -----------        ----------   
      Increase (Decrease) in net assets from operations.....   $  6,700,209       $12,829,459        $  722,462   
                                                               ------------       -----------        ----------   

CONTRACT OWNER TRANSACTIONS:                                                                                      
  Accumulation Activity:                                                                                          
    Purchase payments received..............................   $  5,485,526       $ 8,845,349        $  421,107   
    Net transfers between Sub-Accounts and Fixed Account....      1,803,965         8,428,546         8,018,971   
    Withdrawals, surrenders, annuitizations and contract                                                          
     charges................................................     (6,850,689)       (4,603,063)           (4,249)  
                                                               ------------       -----------        ----------   
      Net accumulation activity.............................   $    438,802       $12,670,832        $8,435,829   
                                                               ------------       -----------        ----------   
  Annuitization Activity:                                                                                         
    Annuitizations..........................................   $    114,644       $   134,223        $ --         
    Annuity payments and contract charges...................        (78,129)          (61,120)         --         
    Net transfers between Sub-Accounts......................       --                --                --         
    Adjustments to annuity reserves.........................         (3,828)           16,790          --         
                                                               ------------       -----------        ----------   
      Net annuitization activity............................   $     32,687       $    89,893        $ --         
                                                               ------------       -----------        ----------   
    Increase (Decrease) in net assets from contract owner                                                         
     transactions...........................................   $    471,489       $12,760,725        $8,435,829   
                                                               ------------       -----------        ----------   
    Increase (Decrease) in net assets.......................   $  7,171,698       $25,590,184        $9,158,291   
NET ASSETS:                                                                                                       
  Beginning of year.........................................     95,274,472        69,684,288          --         
                                                               ------------       -----------        ----------   
  End of year...............................................   $102,446,170       $95,274,472        $9,158,291   
                                                               ============       ===========        ==========   

(b) For the period November 5, 1999 (commencement of operations of Sub-Account) 
through December 31, 1999.                                              

See notes to financial statements 

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REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

NOTES TO FINANCIAL STATEMENTS                                                   

(1) ORGANIZATION                                                                
Sun Life of Canada (U.S.) Variable Account F (the "Variable Account"), a        
separate account of Sun Life Assurance Company of Canada (U.S.) (the "Sponsor"),
was established on July 13, 1989 as a funding vehicle for the variable portion  
of Regatta contracts, Regatta Gold contracts, Regatta Classic contracts, Regatta
Platinum contracts (collectively, the "Contracts") and certain other fixed and  
variable annuity contracts issued by the Sponsor. The Variable Account is       
registered with the Securities and Exchange Commission under the Investment     
Company Act of 1940 as a unit investment trust.                                 

The assets of the Variable Account are divided into Sub-Accounts. Each          
Sub-Account attributable to the Contracts is invested in shares of a specific   
corresponding series of MFS/Sun Life Series Trust (the "Series Trust"), an      
open-end management investment company registered under the Investment Company  
Act of 1940. Massachusetts Financial Services Company ("MFS"), an affiliate of  
the Sponsor, is the investment adviser to the Series Trust.                     

(2) SIGNIFICANT ACCOUNTING POLICIES                                             
GENERAL                                                                         
The preparation of financial statements in conformity with generally accepted   
accounting principles requires the Sponsor's management to make estimates and   
assumptions that affect the reported amounts of assets and liabilities and      
disclosure of contingent assets and liabilities at the date of the financial    
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.                       

INVESTMENT VALUATIONS                                                           
Investments in shares of the Series Trust are recorded at their net asset value.
Realized gains and losses on sales of shares of the Series Trust are determined 
on the identified cost basis. Dividend income and capital gain distributions    
received by the Sub-Accounts are reinvested in additional Series Trust shares   
and are recognized on the ex-dividend date.                                     

Exchanges between Sub-Accounts requested by participants under the Contracts are
recorded in the new Sub-Account upon receipt of the redemption proceeds.        

FEDERAL INCOME TAX STATUS                                                       
The operations of the Variable Account are part of the operations of the Sponsor
and are not taxed separately. The Variable Account is not taxed as a regulated  
investment company. The Sponsor qualifies for the federal income tax treatment  
granted to life insurance companies under Subchapter L of the Internal Revenue  
Code. Under existing federal income tax law, investment income and capital gains
earned by the Variable Account on contract owner reserves are not taxable and,  
therefore, no provision has been made for federal income taxes.                 

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REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

NOTES TO FINANCIAL STATEMENTS -- continued                                      
(3) CONTRACT CHARGES                                                            
A mortality and expense risk charge based on the value of the Variable Account  
is deducted from the Variable Account at the end of each valuation period for   
the mortality and expense risks assumed by the Sponsor. The deductions are      
transferred periodically to the Sponsor. Currently, the deduction is at an      
effective annual rate of 1.25% for Regatta, Regatta Gold and Regatta Platinum   
contracts and 1.00% for Regatta Classic contracts.                              

Each year on the account anniversary, an account administration fee ("Account   
Fee") equal to the lesser of $30 or 2% of the participant's account value in the
case of Regatta and Regatta Gold contracts, $35 in the case of Regatta Platinum 
contracts and $50 in the case of Regatta Classic contracts (after account year  
5, the account fee, for Regatta Gold and Regatta Platinum contracts, may be     
changed annually, but it may not exceed the lesser of $50 or 2% of the          
participant's account value) is deducted from the participant's account to      
reimburse the Sponsor for certain administrative expenses. After the annuity    
commencement date, the Account Fee will be deducted pro rata from each variable 
annuity payment made during the year.                                           

The Sponsor does not deduct a sales charge from purchase payments. However, in  
the case of Regatta, Regatta Gold and Regatta Platinum contracts, a withdrawal  
charge (contingent deferred sales charge) of up to 6% of certain amounts        
withdrawn, when applicable, may be deducted to cover certain expenses relating  
to the sale of the contracts and certificates. In the case of Regatta Classic   
contracts, a withdrawal charge of 1% is applied to purchase payments withdrawn  
which have been credited to a participant's account for less than one year.     

For assuming the risk that withdrawal charges may be insufficient to compensate 
it for the costs of distributing the Regatta contracts, the Sponsor makes a     
deduction from the Variable Account at the end of each valuation period for the 
first seven account years at an effective annual rate of 0.15% of the net assets
attributable to such contracts. No deduction for the distribution expense charge
is made after the seventh account anniversary.                                  

As reimbursement for administrative expenses attributable to Regatta Gold,      
Regatta Classic and Regatta Platinum contracts, which exceed the revenues       
received from the Account Fees described above derived from such contracts, the 
Sponsor makes a deduction from the Variable Account at the end of each valuation
period at an effective annual rate of 0.15% of the net assets attributable to   
such contracts.                                                                 

(4) ANNUITY RESERVES                                                            
Annuity reserves are calculated using the 1983 Individual Annuitant Mortality   
Table and an assumed interest rate of at least 4% or 3%, as stated in each      
participant's contract or certificate, as applicable. Required adjustments to   
the reserves are accomplished by transfers to or from the Sponsor.              

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REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

NOTES TO FINANCIAL STATEMENTS -- continued                                      
(5) UNIT ACTIVITY FROM PARTICIPANT TRANSACTIONS                                 

                                                        [Enlarge/Download Table]

                                                                                                 Units Transferred      
                                                                                                Between Sub-Accounts    
                                                                                                        and             
                                     Units Outstanding                                           Fixed Accumulation     
                                     Beginning of Year              Units Purchased                   Account           
                                ----------------------------  ----------------------------  ----------------------------
                                    Year           Year           Year           Year           Year           Year     
                                    Ended          Ended          Ended          Ended          Ended          Ended    
                                December 31,   December 31,   December 31,   December 31,   December 31,   December 31, 
                                    1999           1998           1999           1998           1999           1998     
                                -------------  -------------  -------------  -------------  -------------  -------------
                                                                                                                        
MFS REGATTA                                                                                                             
CONTRACTS:                                                                                                              
------------------------------                                                                                          
CAS -- Level 1                       464,349    2,993,020          1,694          --            (403,678)    (2,286,027)
CAS -- Level 2                     9,053,993    5,390,680          6,466          --             841,337      5,658,421 
GSS -- Level 1                       325,241    1,462,222          1,870          --            (310,743)      (932,035)
GSS -- Level 2                     2,656,978    1,514,633         10,259          --           1,016,504      1,951,275 
HYS -- Level 1                        73,632      537,033            165          --             (69,249)      (384,324)
HYS -- Level 2                     1,320,379      975,126          --             --             160,884        742,028 
MSS -- Level 1                       196,463      941,686            719          --            (170,145)      (678,909)
MSS -- Level 2                     2,730,897    2,022,757          8,046          --             791,231      1,359,567 
MMS -- Level 1                       268,447    1,518,722          6,604         12,315          (78,142)     1,824,176 
MMS -- Level 2                     3,722,758    1,845,809         46,627          8,252        4,208,078      6,810,959 
TRS -- Level 1                       898,137    5,756,653            980          4,933         (753,744)    (4,180,220)
TRS -- Level 2                    12,506,430    7,838,741         12,834          2,056        1,380,346      8,389,482 
GGS -- Level 1                        89,328      700,338            762          --             (80,050)      (536,114)
GGS -- Level 2                       834,010      483,253          --             --              81,087        702,569 



                                      Units Withdrawn,                                                                  
                                      Surrendered, and             Units Outstanding                                    
                                         Annuitized                   End of Year                                       
                                ----------------------------  ----------------------------                              
                                    Year           Year           Year           Year                                   
                                    Ended          Ended          Ended          Ended                                  
                                December 31,   December 31,   December 31,   December 31,                               
                                    1999           1998           1999           1998                                   
                                -------------  -------------  -------------  -------------                              
                                                                                                                        
MFS REGATTA                                                                                                             
CONTRACTS:                                                                                                              
------------------------------                                                                                          
CAS -- Level 1                       (39,407)      (242,644)      22,958          464,349                               
CAS -- Level 2                    (2,054,522)    (1,995,108)   7,847,274        9,053,993                               
GSS -- Level 1                       (16,368)      (204,946)       --             325,241                               
GSS -- Level 2                      (888,017)      (808,930)   2,795,724        2,656,978                               
HYS -- Level 1                        (4,383)       (79,077)         165           73,632                               
HYS -- Level 2                      (405,927)      (396,775)   1,075,336        1,320,379                               
MSS -- Level 1                       (21,924)       (66,314)       5,113          196,463                               
MSS -- Level 2                      (852,146)      (651,427)   2,678,028        2,730,897                               
MMS -- Level 1                      (180,769)    (3,086,766)      16,140          268,447                               
MMS -- Level 2                    (5,304,846)    (4,942,262)   2,672,617        3,722,758                               
TRS -- Level 1                      (113,631)      (683,229)      31,742          898,137                               
TRS -- Level 2                    (3,970,196)    (3,723,849)   9,929,414       12,506,430                               
GGS -- Level 1                        (9,545)       (74,896)         495           89,328                               
GGS -- Level 2                      (284,961)      (351,812)     630,136          834,010                               

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REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

NOTES TO FINANCIAL STATEMENTS -- continued                                      

(5) UNIT ACTIVITY FROM PARTICIPANT TRANSACTIONS -- continued                    

                                                        [Enlarge/Download Table]

                                                                                                 Units Transferred      
                                                                                                Between Sub-Accounts    
                                                                                                        and             
                                     Units Outstanding                                           Fixed Accumulation     
                                     Beginning of Year              Units Purchased                   Account           
                                ----------------------------  ----------------------------  ----------------------------
                                    Year           Year           Year           Year           Year           Year     
                                    Ended          Ended          Ended          Ended          Ended          Ended    
                                December 31,   December 31,   December 31,   December 31,   December 31,   December 31, 
                                    1999           1998           1999           1998           1999           1998     
                                -------------  -------------  -------------  -------------  -------------  -------------
                                                                                                                        
MFS REGATTA GOLD                                                                                                        
CONTRACTS:                                                                                                              
------------------------------                                                                                          
BDS(a)........................     1,182,239        --           128,326        437,383        1,055,550        776,227 
CAS...........................    37,500,481     35,528,897      515,449      2,963,417       (1,432,874)     1,606,290 
COS...........................    10,262,282      6,175,224      317,640      2,085,178        3,084,055      2,487,753 
MIT...........................    51,880,765     40,709,531    1,104,376      7,531,155          814,616      6,682,559 
EGS...........................    28,900,957     25,039,986      564,144      3,519,560          856,790      1,929,406 
EIS(a)........................       528,238        --            96,901        235,337          840,387        312,512 
FCE...........................     2,147,348      2,159,228       49,578        203,168          814,122       (114,376)
FCI...........................     3,290,043      2,390,056      103,809        532,412           71,906        520,640 
FCG...........................     5,214,558      4,441,911       53,226        449,506         (373,297)       655,503 
GSS...........................    23,218,234     20,508,844      381,294      1,760,124        2,812,014      2,891,419 
HYS...........................    14,190,817     11,699,195      209,455      2,333,919         (264,388)     1,143,802 
MSS...........................    11,245,144     11,326,719      111,495        838,284          874,242       (135,303)
MIS(a)........................     4,121,518        --         1,179,064      2,049,150        7,769,109      2,166,812 
MMS...........................    29,387,086     21,463,139    1,347,998      5,295,611       10,642,975      9,723,034 
NWD(a)........................       794,859        --            99,202        252,432          818,140        573,525 
RES...........................    38,553,986     35,654,917      602,325      1,299,737         (220,117)     3,631,861 
RGS...........................     2,408,676        533,928      120,353        857,568          906,773      1,134,366 
RSS(a)........................       190,267        --            29,576         83,591          929,786        110,312 
SIS(a)........................       622,914        --            67,062        207,182          260,781        423,614 
TRS...........................    71,102,020     66,303,467      922,198      5,585,984         (771,786)     4,374,616 
UTS...........................     9,023,102      6,101,638      323,450      1,559,584          972,853      1,878,542 
GAA...........................     7,576,691      7,928,833       61,909        440,970         (972,115)      (400,015)
GGS...........................     5,048,219      6,127,641       51,599        199,740         (404,547)      (782,796)
GGR...........................    14,522,129     15,058,757      189,567        815,222           82,020       (504,727)
GTR...........................     5,354,633      4,676,853       80,538        458,384         (144,224)       506,340 
SGS(b)........................       --             --             4,006          --             555,135        --      



                                      Units Withdrawn,                                                                  
                                      Surrendered, and             Units Outstanding                                    
                                         Annuitized                   End of Year                                       
                                ----------------------------  ----------------------------                              
                                    Year           Year           Year           Year                                   
                                    Ended          Ended          Ended          Ended                                  
                                December 31,   December 31,   December 31,   December 31,                               
                                    1999           1998           1999           1998                                   
                                -------------  -------------  -------------  -------------                              
                                                                                                                        
MFS REGATTA GOLD                                                                                                        
CONTRACTS:                                                                                                              
------------------------------                                                                                          
BDS(a)........................      (280,793)       (31,371)     2,085,322      1,182,239                               
CAS...........................    (3,736,966)    (2,598,123)    32,846,090     37,500,481                               
COS...........................      (818,305)      (485,873)    12,845,672     10,262,282                               
MIT...........................    (4,597,858)    (3,042,480)    49,201,899     51,880,765                               
EGS...........................    (2,260,070)    (1,587,995)    28,061,821     28,900,957                               
EIS(a)........................      (164,360)       (19,611)     1,301,166        528,238                               
FCE...........................      (250,014)      (100,672)     2,761,034      2,147,348                               
FCI...........................      (277,959)      (153,065)     3,187,799      3,290,043                               
FCG...........................      (384,891)      (332,362)     4,509,596      5,214,558                               
GSS...........................    (3,181,131)    (1,942,153)    23,230,411     23,218,234                               
HYS...........................    (1,598,765)      (986,099)    12,537,119     14,190,817                               
MSS...........................    (1,198,416)      (784,556)    11,032,465     11,245,144                               
MIS(a)........................    (1,084,371)       (94,444)    11,985,320      4,121,518                               
MMS...........................   (12,930,216)    (7,094,698)    28,447,843     29,387,086                               
NWD(a)........................      (112,785)       (31,098)     1,599,416        794,859                               
RES...........................    (3,000,415)    (2,032,529)    35,935,779     38,553,986                               
RGS...........................      (282,560)      (117,186)     3,153,242      2,408,676                               
RSS(a)........................       (35,048)        (3,636)     1,114,581        190,267                               
SIS(a)........................       (58,267)        (7,882)       892,490        622,914                               
TRS...........................    (8,328,466)    (5,162,047)    62,923,966     71,102,020                               
UTS...........................      (730,997)      (516,662)     9,588,408      9,023,102                               
GAA...........................      (478,155)      (393,097)     6,188,330      7,576,691                               
GGS...........................      (754,183)      (496,366)     3,941,088      5,048,219                               
GGR...........................    (1,279,881)      (847,123)    13,513,835     14,522,129                               
GTR...........................      (383,402)      (286,944)     4,907,545      5,354,633                               
SGS(b)........................          (285)       --             558,856        --                                    

(a) For the period May 6, 1998 (commencement of operations of Sub-Account)      
through December 31, 1998.                                              
(b) For the period November 5, 1999 (commencement of operations of Sub-Account) 
through December 31, 1999.                                              

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REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

NOTES TO FINANCIAL STATEMENTS -- continued                                      

(5) UNIT ACTIVITY FROM PARTICIPANT TRANSACTIONS -- continued                    

                                                        [Enlarge/Download Table]

                                                                                                 Units Transferred      
                                                                                                Between Sub-Accounts    
                                                                                                        and             
                                     Units Outstanding                                           Fixed Accumulation     
                                     Beginning of Year              Units Purchased                   Account           
                                ----------------------------  ----------------------------  ----------------------------
                                    Year           Year           Year           Year           Year           Year     
                                    Ended          Ended          Ended          Ended          Ended          Ended    
                                December 31,   December 31,   December 31,   December 31,   December 31,   December 31, 
                                    1999           1998           1999           1998           1999           1998     
                                -------------  -------------  -------------  -------------  -------------  -------------
                                                                                                                        
MFS REGATTA CLASSIC                                                                                                     
CONTRACTS:                                                                                                              
------------------------------                                                                                          
BDS(a)........................      35,123          --            38,838        33,440           (23,411)         1,859 
CAS...........................     465,812       265,497          98,517       170,863           127,840         49,860 
COS...........................     277,518       160,778          98,185        98,617            94,668         29,367 
MIT...........................   1,213,193       554,216         343,708       449,788            47,381        267,481 
EGS...........................     959,802       318,028         206,621       613,049            (6,847)        55,590 
EIS(a)........................      12,113          --            36,114         9,590            28,711          2,523 
FCE...........................      43,654        40,698          14,933        16,413            17,553        (12,814)
FCI...........................      83,820        67,892          33,705        20,502            (6,058)        (3,210)
FCG...........................      90,582        51,038           5,230        34,300               289          8,318 
GSS...........................     297,310       113,243         100,923       139,510           (71,777)        51,253 
HYS...........................     342,363       155,306          64,265       224,640           (62,579)        (2,332)
MSS...........................     140,324       118,243          64,332        59,666           112,516        (29,055)
MIS(b)........................     232,788          --           298,311        78,233           (19,461)       156,319 
MMS...........................     270,417        77,105       1,348,530       733,426           (15,060)      (366,138)
NWD(b)........................      29,182          --            55,212        13,601            19,871         15,614 
RES...........................     872,289       553,996         161,577       279,626           (26,160)        85,963 
RGS...........................      33,882         6,085          40,357         9,086             2,489         19,504 
RSS(d)........................       2,234          --            11,775           942            15,565          1,292 
SIS(c)........................       2,577          --            17,748         1,726             2,629            851 
TRS...........................   1,731,292       951,205         455,454       681,412           (52,461)       155,997 
UTS...........................     178,136        77,009          90,782        97,613           119,327         15,497 
GAA...........................      53,167        50,531           1,943        16,112            (7,138)        (8,665)
GGS...........................      40,074        19,394          13,692        20,516            (7,500)           639 
GGR...........................     121,297        85,526          17,448        47,642             7,909         (2,579)
GTR...........................      91,253        45,122          35,847        38,335            (2,772)         8,687 
SGS(e)........................       --             --             --             --               5,701        --      



                                      Units Withdrawn,                                                                  
                                      Surrendered, and             Units Outstanding                                    
                                         Annuitized                   End of Year                                       
                                ----------------------------  ----------------------------                              
                                    Year           Year           Year           Year                                   
                                    Ended          Ended          Ended          Ended                                  
                                December 31,   December 31,   December 31,   December 31,                               
                                    1999           1998           1999           1998                                   
                                -------------  -------------  -------------  -------------                              
                                                                                                                        
MFS REGATTA CLASSIC                                                                                                     
CONTRACTS:                                                                                                              
------------------------------                                                                                          
BDS(a)........................        (2,340)          (176)      48,210         35,123                                 
CAS...........................       (48,331)       (20,408)     643,838        465,812                                 
COS...........................       (19,621)       (11,244)     450,750        277,518                                 
MIT...........................      (136,741)       (58,292)   1,467,541      1,213,193                                 
EGS...........................       (28,907)       (26,865)   1,130,669        959,802                                 
EIS(a)........................        (2,478)       --            74,460         12,113                                 
FCE...........................        (3,359)          (643)      72,781         43,654                                 
FCI...........................       (12,769)        (1,364)      98,698         83,820                                 
FCG...........................        (6,449)        (3,074)      89,652         90,582                                 
GSS...........................       (44,402)        (6,696)     282,054        297,310                                 
HYS...........................       (31,657)       (35,251)     312,392        342,363                                 
MSS...........................       (11,177)        (8,530)     305,995        140,324                                 
MIS(b)........................       (10,029)        (1,764)     501,609        232,788                                 
MMS...........................      (525,766)      (173,976)   1,078,121        270,417                                 
NWD(b)........................        (5,208)           (33)      99,057         29,182                                 
RES...........................       (44,435)       (47,296)     963,271        872,289                                 
RGS...........................        (2,310)          (793)      74,418         33,882                                 
RSS(d)........................          (588)       --            28,986          2,234                                 
SIS(c)........................            (4)       --            22,950          2,577                                 
TRS...........................      (146,430)       (57,322)   1,987,855      1,731,292                                 
UTS...........................       (31,976)       (11,983)     356,269        178,136                                 
GAA...........................        (4,629)        (4,811)      43,343         53,167                                 
GGS...........................        (3,904)          (475)      42,362         40,074                                 
GGR...........................       (10,773)        (9,292)     135,881        121,297                                 
GTR...........................        (6,301)          (891)     118,027         91,253                                 
SGS(e)........................       --             --             5,701          --                                    

(a) For the period June 22, 1998 (commencement of operations of Sub-Account)    
through December 31, 1998.                                                      
(b) For the period May 7, 1998 (commencement of operations of Sub-Account)      
through December 31, 1998.                                                      
(c) For the period June 26, 1998 (commencement of operations of Sub-Account)    
through December 31, 1998.                                                      
(d) For the period August 8, 1998 (commencement of operations of Sub-Account)   
through December 31, 1998.                                                      
(e) For the period November 24, 1999 (commencement of operations of Sub-Account)
through December 31, 1999.                                                      

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REGATTA, REGATTA GOLD, REGATTA CLASSIC AND REGATTA PLATINUM SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

NOTES TO FINANCIAL STATEMENTS -- continued                                      

(5) UNIT ACTIVITY FROM PARTICIPANT TRANSACTIONS -- continued                    

                                                        [Enlarge/Download Table]

                                                                                                 Units Transferred      
                                                                                                Between Sub-Accounts    
                                                                                                        and             
                                     Units Outstanding                                           Fixed Accumulation     
                                     Beginning of Year              Units Purchased                   Account           
                                ----------------------------  ----------------------------  ----------------------------
                                    Year           Year           Year           Year           Year           Year     
                                    Ended          Ended          Ended          Ended          Ended          Ended    
                                December 31,   December 31,   December 31,   December 31,   December 31,   December 31, 
                                    1999           1998           1999           1998           1999           1998     
                                -------------  -------------  -------------  -------------  -------------  -------------
                                                                                                                        
MFS REGATTA PLATINUM                                                                                                    
CONTRACTS:                                                                                                              
------------------------------                                                                                          
BDS(a)........................     628,000          --             941,360      491,319        1,491,043        143,015 
CAS(b)........................   1,683,164          --           4,849,607    1,489,422        4,545,428        215,237 
COS(d)........................     556,955          --           2,758,794      480,199        2,891,912         80,801 
MIT(b)........................   5,331,018          --          14,730,220    4,380,217       17,398,081      1,013,330 
EGS(b)........................   1,651,404          --           4,181,549    1,412,976        4,397,355        254,376 
EIS(c)........................     272,362          --             946,919      237,608        1,153,460         35,740 
FCE(c)........................      72,586          --             171,566       67,723          260,658          4,892 
FCI(c)........................     338,938          --             649,457      305,695        1,016,982         37,500 
FCG(d)........................     199,346          --             355,635      167,384          379,426         34,931 
GSS(d)........................     816,102          --           1,959,697      686,599        4,315,488        142,121 
HYS(c)........................   1,000,705          --           1,613,791      917,703        2,693,972         95,977 
MSS(e)........................     211,044          --             948,374      180,220          986,589         35,500 
MIS(b)........................   2,428,134          --           9,327,754    2,052,872        9,497,539        400,450 
MMS(c)........................     886,479          --           4,525,979    1,436,884          (51,593)      (492,250)
NWD(c)........................     436,178          --             750,621      366,459          945,469         75,832 
RES(e)........................   1,751,713          --           3,783,737    1,463,540        4,553,399        319,544 
RGS(a)........................     387,080          --             945,769      306,364        1,427,602         82,311 
RSS(f)........................     181,131          --             366,014      162,752          418,385         19,544 
SIS(g)........................     157,634          --             270,681      123,410          588,831         35,045 
TRS(c)........................   2,318,847          --           5,942,946    1,926,233        9,684,842        434,196 
UTS(e)........................     819,649          --           2,177,718      647,482        3,571,380        178,704 
GAA(d)........................     228,839          --             168,337      175,049          134,452         56,466 
GGS(c)........................      76,270          --              79,719       78,588          159,520         (2,199)
GGR(d)........................     162,856          --             536,984      125,715          661,623         37,960 
GTR(h)........................     152,857          --             356,243      116,666          417,027         37,792 
SGS(I)........................       --             --              32,991        --             156,786        --      



                                      Units Withdrawn,                                                                  
                                      Surrendered, and             Units Outstanding                                    
                                         Annuitized                   End of Year                                       
                                ----------------------------  ----------------------------                              
                                    Year           Year           Year           Year                                   
                                    Ended          Ended          Ended          Ended                                  
                                December 31,   December 31,   December 31,   December 31,                               
                                    1999           1998           1999           1998                                   
                                -------------  -------------  -------------  -------------                              
                                                                                                                        
MFS REGATTA PLATINUM                                                                                                    
CONTRACTS:                                                                                                              
------------------------------                                                                                          
BDS(a)........................       (89,955)        (6,334)     2,970,448      628,000                                 
CAS(b)........................      (307,461)       (21,495)    10,770,738    1,683,164                                 
COS(d)........................      (119,494)        (4,045)     6,088,167      556,955                                 
MIT(b)........................    (1,015,638)       (62,529)    36,443,681    5,331,018                                 
EGS(b)........................      (278,100)       (15,948)     9,952,208    1,651,404                                 
EIS(c)........................       (50,196)          (986)     2,322,545      272,362                                 
FCE(c)........................       (32,976)           (29)       471,834       72,586                                 
FCI(c)........................       (44,938)        (4,257)     1,960,439      338,938                                 
FCG(d)........................       (30,076)        (2,969)       904,331      199,346                                 
GSS(d)........................      (173,758)       (12,618)     6,917,529      816,102                                 
HYS(c)........................      (181,956)       (12,975)     5,126,512    1,000,705                                 
MSS(e)........................       (49,608)        (4,676)     2,096,399      211,044                                 
MIS(b)........................      (512,221)       (25,188)    20,741,206    2,428,134                                 
MMS(c)........................      (512,126)       (58,155)     4,848,739      886,479                                 
NWD(c)........................       (67,728)        (6,113)     2,064,540      436,178                                 
RES(e)........................      (266,217)       (31,371)     9,822,632    1,751,713                                 
RGS(a)........................       (67,804)        (1,595)     2,692,647      387,080                                 
RSS(f)........................       (51,342)        (1,165)       914,188      181,131                                 
SIS(g)........................       (29,954)          (821)       987,192      157,634                                 
TRS(c)........................      (509,290)       (41,582)    17,437,345    2,318,847                                 
UTS(e)........................      (170,834)        (6,537)     6,397,913      819,649                                 
GAA(d)........................       (28,837)        (2,676)       502,791      228,839                                 
GGS(c)........................       (13,795)          (119)       301,714       76,270                                 
GGR(d)........................       (32,892)          (819)     1,328,571      162,856                                 
GTR(h)........................       (24,793)        (1,601)       901,334      152,857                                 
SGS(I)........................           (76)       --             189,701        --                                    

(a) For the period June 30, 1998 (commencement of operations of Sub-Account)    
through December 31, 1998.                                                      
(b) For the period June 5, 1998 (commencement of operations of Sub-Account)     
through December 31, 1998.                                                      
(c) For the period June 18, 1998 (commencement of operations of Sub-Account)    
through December 31, 1998.                                                      
(d) For the period June 23, 1998 (commencement of operations of Sub-Account)    
through December 31, 1998.                                                      
(e) For the period June 16, 1998 (commencement of operations of Sub-Account)    
through December 31, 1998.                                                      
(f) For the period June 29, 1998 (commencement of operations of Sub-Account)    
through December 31, 1998.                                                      
(g) For the period June 26, 1998 (commencement of operations of Sub-Account)    
through December 31, 1998.                                                      
(h) For the period July 7, 1998 (commencement of operations of Sub-Account)     
through December 31, 1998.                                                      
(i) For the period November 5, 1999 (commencement of operations of Sub-Account) 
through December 31, 1999.                                                      

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OPINION OF AUDITORS                                                             

[An auditors' letter and consent with regards to the financial statements of    
the Variable Account will be included in the Registration Statement prior to    
effectiveness.]                                                                 

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      -33-

     SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
C/O RETIREMENT PRODUCTS AND SERVICES  
P.O. BOX 1024                         
BOSTON, MASSACHUSETTS  02103          

TELEPHONE:                            
Toll Free (800) 752-7215              

GENERAL DISTRIBUTOR                   
Clarendon Insurance Agency, Inc.      
One Sun Life Executive Park           
Wellesley Hills, Massachusetts  02481 

AUDITORS                              
_______________________________       

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                                                    _________ __, 2000

    FUTURITY SELECT FOUR

    VARIABLE AND FIXED ANNUITY

   STATEMENT OF ADDITIONAL INFORMATION

    SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F

   TABLE OF CONTENTS

Calculation of Performance Data ............................................. 2 
Advertising and Sales Literature ............................................ 9 
Calculations ................................................................13 
    Example of Variable Accumulation Unit Value Calculation.................13
    Example of Variable Annuity Unit Calculation ...........................13
    Example of Variable Annuity Payment Calculation ........................13
Distribution of the Contract ................................................13 
Designation and Change of Beneficiary .......................................14 
Custodian ...................................................................14 
Financial Statements ........................................................14 

        The Statement of Additional Information sets forth information which
may be of interest to prospective purchasers of Futurity Select Four Variable   
and Fixed Annuity Contracts (the "Contracts") issued by Sun Life Assurance      
Company of Canada (U.S.) (the "Company") in connection with Sun Life of Canada  
(U.S.) Variable Account F (the "Variable Account") which is not included in the 
Prospectus dated _________ __, 2000.  This Statement of Additional Information  
should be read in conjunction with the Prospectus, a copy of which may be       
obtained without charge from the Company by writing to Sun Life Assurance       
Company of Canada (U.S.), c/o Retirement Products and Services, P.O. Box 9133,  
Boston, Massachusetts 02117, or by telephoning (888) 786-2435.                  

       The terms used in this Statement of Additional Information have the
same meanings as in the Prospectus.                                             

--------------------------------------------------------------------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS AUTHORIZED  
FOR DISTRIBUTION TO PROSPECTIVE PURCHASERS ONLY IF PRECEDED OR ACCOMPANIED BY A 
CURRENT PROSPECTUS.                                                             

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     -2-

   CALCULATION OF PERFORMANCE DATA
    AVERAGE ANNUAL TOTAL RETURN:

   The table below shows, for various Sub-Accounts of the Variable
Account, the Average Annual Total Return for the stated periods (or shorter     
period indicated in the note below), based upon a hypothetical initial Purchase 
Payment of $1,000, calculated in accordance with the formula set out after the  
table. For purposes of determining the investment results in this table, the    
actual investment performance of each Fund is reflected from the date the Fund  
commenced operations ("Inception"), although the Contracts have been offered    
only since _________ __, 2000. No information is shown for the Funds that have  
not commenced operations or that have been in operation for less than one year. 

     AVERAGE ANNUAL TOTAL RETURN
     PERIOD ENDING DECEMBER 31, 1999

1.35% M&E:                                                                      
----------                                                                      

                                                        [Enlarge/Download Table]
                                                                                   10 YEAR         FUND        
                                                         1 YEAR  3 YEAR   5 YEAR     OR          INCEPTION     
FUND                                                     PERIOD  PERIOD   PERIOD   LIFE(1)         DATE        
----                                                     ------  ------   ------   -------  -------------------
                                                                                                               
AIM V.I. Capital Appreciation Fund                       36.39%     -        -      26.04%         May 5, 1993 
AIM V.I. Growth Fund                                     27.13%     -        -      28.69%         May 5, 1993 
AIM V.I. Growth and Income Fund                          26.13%     -        -      22.40%         May 2, 1994 
AIM V.I. International Equity Fund                       46.72%     -        -      29.26%         May 5, 1993 
Alger American Growth Portfolio                          25.66%     -        -      30.58%     January 1, 1989 
Alger American Income and Growth Portfolio               34.25%     -        -      30.35%   November 15, 1988 
Alger American Small Capitalization Portfolio            35.20%     -        -      21.12%  September 21, 1988 
Goldman Sachs VIT CORE-SM- Large Cap Growth Fund         27.31%     -        -      20.60%   February 13, 1998 
Goldman Sachs VIT CORE-SM- Small Cap Equity Fund          9.67%     -        -     (1.34)%   February 13, 1998 
Goldman Sachs VIT CORE-SM- U.S. Equity Fund              16.35%     -        -      16.02%   February 13, 1998 
Goldman Sachs VIT Growth and Income Fund                (1.91)%     -        -     (5.23)%    January 12, 1998 
Goldman Sachs VIT International Equity Fund              23.79%     -        -      15.73%    January 12, 1998 
J.P. Morgan International Opportunities Portfolio (2)    28.54%     -        -       9.78%     January 3, 1995 
J.P. Morgan Small Company Portfolio (2)                  36.17%     -        -       6.79%     January 3, 1995 
J.P. Morgan U.S. Disciplined Equity Portfolio (2)        10.67%     -        -      10.88%     January 3, 1995 
Lord Abbett Growth and Income Portfolio                   8.88%     -        -       5.26%    December 1, 1989 
MFS/Sun Life Capital Appreciation Series                 24.20%   24.78%   25.83%   16.87%       June 12, 1985 
MFS/Sun Life Emerging Growth Series                      67.09%   39.05%     -      34.34%         May 1, 1995 
MFS/Sun Life Government Securities Series               (8.69)%    1.81%    5.09%    5.47%       June 12, 1985 
MFS/Sun Life High Yield Series                          (0.41)%    3.66%    8.19%    8.74%       June 12, 1985 
MFS/Sun Life Massachusetts Investors Growth Series       27.66%     -        -      29.60%         May 1, 1998 
MFS/Sun Life Massachusetts Investors Trust Series       (0.28)%   17.49%   22.86%   15.56%    December 5, 1986 
MFS/Sun Life New Discovery Series                        51.75%     -        -      32.66%         May 5, 1998 
MFS/Sun Life Total Return Series                        (4.32)%    8.76%   13.41%   10.08%        May 16, 1988 
MFS/Sun Life Utilities Series                            23.42%   24.13%   24.91%   18.63%   November 16, 1993 
Sun Capital Blue Chip Mid Cap Fund                         -        -        -      18.20%  September 13, 1999 
Sun Capital Investment Grade Bond Fund                  (7.47)%     -        -     (7.34)%    December 7, 1998 
Sun Capital Investors Foundation Fund                      -        -        -       3.66%  September 13, 1999 
Sun Capital Money Market Fund                           (2.62)%     -        -     (2.37)%    December 7, 1998 
Sun Capital Real Estate Fund                           (10.55)%     -        -     (9.37)%    December 7, 1998 
Sun Capital Select Equity Fund                             -        -        -      17.79%  September 13, 1999 

1.50% M&E:                                                                      
----------                                                                      

                                                        [Enlarge/Download Table]
                                                                                   10 YEAR         FUND        
                                                         1 YEAR  3 YEAR   5 YEAR     OR          INCEPTION     
FUND                                                     PERIOD  PERIOD   PERIOD   LIFE(1)         DATE        
----                                                     ------  ------   ------   -------  -------------------
                                                                                                               
AIM V.I. Capital Appreciation Fund                       36.18%     -        -      25.84%         May 5, 1993 
AIM V.I. Growth Fund                                     26.93%     -        -      28.49%         May 5, 1993 
AIM V.I. Growth and Income Fund                          25.93%     -        -      22.21%         May 2, 1994 
AIM V.I. International Equity Fund                       46.50%     -        -      29.06%         May 5, 1993 
Alger American Growth Portfolio                          25.46%     -        -      30.37%     January 1, 1989 
Alger American Income and Growth Portfolio               34.04%     -        -      30.15%   November 15, 1988 
Alger American Small Capitalization Portfolio            34.99%     -        -      20.93%  September 21, 1988 
Goldman Sachs VIT CORE-SM- Large Cap Growth Fund         27.11%     -        -      20.41%   February 13, 1998 
Goldman Sachs VIT CORE-SM- Small Cap Equity Fund          9.50%     -        -     (1.49)%   February 13, 1998 
Goldman Sachs VIT CORE-SM- U.S. Equity Fund              16.16%     -        -      15.83%   February 13, 1998 
Goldman Sachs VIT Growth and Income Fund                (2.06)%     -        -     (5.37)%    January 12, 1998 
Goldman Sachs VIT International Equity Fund              23.60%     -        -      15.35%    January 12, 1998 
J.P. Morgan International Opportunities Portfolio (2)    28.34%     -        -       9.61%     January 3, 1995 
J.P. Morgan Small Company Portfolio (2)                  35.95%     -        -       6.62%     January 3, 1995 
J.P. Morgan U.S. Disciplined Equity Portfolio (2)        10.49%     -        -      10.70%     January 3, 1995 
Lord Abbett Growth and Income Portfolio                   8.71%     -        -       5.09%    December 1, 1989 
MFS/Sun Life Capital Appreciation Series                 24.01%   24.58%   25.64%   16.69%       June 12, 1985 
MFS/Sun Life Emerging Growth Series                      66.84%   38.84%     -      34.13%         May 1, 1995 
MFS/Sun Life Government Securities Series               (8.83)%    1.64%    4.93%    5.31%       June 12, 1985 
MFS/Sun Life High Yield Series                          (0.56)%    3.50%    8.03%    8.57%       June 12, 1985 
MFS/Sun Life Massachusetts Investors Growth Series       27.46%     -        -      29.40%         May 1, 1998 
MFS/Sun Life Massachusetts Investors Trust Series       (0.43)%   17.31%   22.68%   15.38%    December 5, 1986 
MFS/Sun Life New Discovery Series                        51.52%     -        -      32.46%         May 5, 1998 
MFS/Sun Life Total Return Series                        (4.46)%    8.58%   13.23%    9.91%        May 16, 1988 
MFS/Sun Life Utilities Series                            23.23%   23.94%   24.72%   18.45%   November 16, 1993 
Sun Capital Blue Chip Mid Cap Fund                         -        -        -      18.14%  September 13, 1999 
Sun Capital Investment Grade Bond Fund                  (7.61)%     -        -     (7.48)%    December 7, 1998 
Sun Capital Investors Foundation Fund                      -        -        -       3.62%  September 13, 1999 
Sun Capital Money Market Fund                           (2.77)%     -        -     (2.52)%    December 7, 1998 
Sun Capital Real Estate Fund                           (10.68)%     -        -     (9.50)%    December 7, 1998 
Sun Capital Select Equity Fund                             -        -        -      17.73%  September 13, 1999 

1.60% M&E:                                                                      
----------                                                                      

                                                        [Enlarge/Download Table]
                                                                                   10 YEAR         FUND        
                                                         1 YEAR  3 YEAR   5 YEAR     OR          INCEPTION     
FUND                                                     PERIOD  PERIOD   PERIOD   LIFE(1)         DATE        
----                                                     ------  ------   ------   -------  -------------------
                                                                                                               
AIM V.I. Capital Appreciation Fund                       36.04%     -        -      25.71%         May 5, 1993 
AIM V.I. Growth Fund                                     26.80%     -        -      28.35%         May 5, 1993 
AIM V.I. Growth and Income Fund                          25.80%     -        -      22.08%         May 2, 1994 
AIM V.I. International Equity Fund                       46.35%     -        -      28.92%         May 5, 1993 
Alger American Growth Portfolio                          25.33%     -        -      30.24%     January 1, 1989 
Alger American Income and Growth Portfolio               33.90%     -        -      30.02%   November 15, 1988 
Alger American Small Capitalization Portfolio            34.85%     -        -      20.81%  September 21, 1988 
Goldman Sachs VIT CORE-SM- Large Cap Growth Fund         26.98%     -        -      20.28%   February 13, 1998 
Goldman Sachs VIT CORE-SM- Small Cap Equity Fund          9.39%     -        -     (1.59)%   February 13, 1998 
Goldman Sachs VIT CORE-SM- U.S. Equity Fund              16.04%     -        -      15.71%   February 13, 1998 
Goldman Sachs VIT Growth and Income Fund                (2.16)%     -        -     (5.47)%    January 12, 1998 
Goldman Sachs VIT International Equity Fund              23.47%     -        -      15.42%    January 12, 1998 
J.P. Morgan International Opportunities Portfolio (2)    28.20%     -        -       9.49%     January 3, 1995 
J.P. Morgan Small Company Portfolio (2)                  35.81%     -        -       6.51%     January 3, 1995 
J.P. Morgan U.S. Disciplined Equity Portfolio (2)        10.37%     -        -      10.58%     January 3, 1995 
Lord Abbett Growth and Income Portfolio                   8.59%     -        -       4.98%    December 1, 1989 
MFS/Sun Life Capital Appreciation Series                 23.88%   24.45%   25.51%   16.57%       June 12, 1985 
MFS/Sun Life Emerging Growth Series                      66.67%   38.69%    -       34.00%         May 1, 1995 
MFS/Sun Life Government Securities Series               (8.92)%    1.54%    4.82%    5.20%       June 12, 1985 
MFS/Sun Life High Yield Series                          (0.66)%    3.39%    7.92%    8.46%       June 12, 1985 
MFS/Sun Life Massachusetts Investors Growth Series       27.32%     -        -      29.27%         May 1, 1998 
MFS/Sun Life Massachusetts Investors Trust Series       (0.53)%   17.19%   22.55%   15.26%    December 5, 1986 
MFS/Sun Life New Discovery Series                        51.36%     -        -      32.32%         May 5, 1998 
MFS/Sun Life Total Return Series                        (4.56)%    8.47%   13.12%    9.79%        May 16, 1988 
MFS/Sun Life Utilities Series                            23.10%   23.81%   24.59%   18.33%   November 16, 1993 
Sun Capital Blue Chip Mid Cap Fund                         -        -        -      18.11%  September 13, 1999 
Sun Capital Investment Grade Bond Fund                  (7.71)%     -        -     (7.58)%    December 7, 1998 
Sun Capital Investors Foundation Fund                      -        -        -       3.59%  September 13, 1999 
Sun Capital Money Market Fund                           (2.87)%     -        -     (2.62)%    December 7, 1998 
Sun Capital Real Estate Fund                           (10.77)%     -        -     (9.59)%    December 7, 1998 
Sun Capital Select Equity Fund                             -        -        -      17.70%  September 13, 1999 

1.75% M&E:                                                                      
----------                                                                      

                                                        [Enlarge/Download Table]
                                                                                   10 YEAR         FUND        
                                                         1 YEAR  3 YEAR   5 YEAR     OR          INCEPTION     
FUND                                                     PERIOD  PERIOD   PERIOD   LIFE(1)         DATE        
----                                                     ------  ------   ------   -------  -------------------
                                                                                                               
AIM V.I. Capital Appreciation Fund                       35.82%     -        -      25.52%         May 5, 1993 
AIM V.I. Growth Fund                                     26.60%     -        -      28.15%         May 5, 1993 
AIM V.I. Growth and Income Fund                          25.60%     -        -      21.89%         May 2, 1994 
AIM V.I. International Equity Fund                       46.12%     -        -      28.72%         May 5, 1993 
Alger American Growth Portfolio                          25.13%     -        -      30.03%     January 1, 1989 
Alger American Income and Growth Portfolio               33.69%     -        -      29.81%   November 15, 1988 
Alger American Small Capitalization Portfolio            34.64%     -        -      20.62%  September 21, 1988 
Goldman Sachs VIT CORE-SM- Large Cap Growth Fund         26.78%     -        -      20.09%   February 13, 1998 
Goldman Sachs VIT CORE-SM- Small Cap Equity Fund          9.21%     -        -     (1.74)%   February 13, 1998 
Goldman Sachs VIT CORE-SM- U.S. Equity Fund              15.85%     -        -      15.53%   February 13, 1998 
Goldman Sachs VIT Growth and Income Fund                (2.31)%     -        -     (5.61)%    January 12, 1998 
Goldman Sachs VIT International Equity Fund              23.27%     -        -      15.24%    January 12, 1998 
J.P. Morgan International Opportunities Portfolio (2)    28.00%     -        -       9.32%     January 3, 1995 
J.P. Morgan Small Company Portfolio (2)                  35.60%     -        -       6.34%     January 3, 1995 
J.P. Morgan U.S. Disciplined Equity Portfolio (2)        10.20%     -        -      10.41%     January 3, 1995 
Lord Abbett Growth and Income Portfolio                   8.42%     -        -       4.81%    December 1, 1989 
MFS/Sun Life Capital Appreciation Series                 23.68%   24.26%   25.32%   16.39%       June 12, 1985 
MFS/Sun Life Emerging Growth Series                      66.41%   38.48%     -      33.79%         May 1, 1995 
MFS/Sun Life Government Securities Series               (9.06)%    1.39%    4.66%    5.04%       June 12, 1985 
MFS/Sun Life High Yield Series                          (0.81)%    3.22%    7.75%    8.30%       June 12, 1985 
MFS/Sun Life Massachusetts Investors Growth Series       27.12%     -        -      29.06%         May 1, 1998 
MFS/Sun Life Massachusetts Investors Trust Series       (0.68)%   17.00%   22.36%   15.09%    December 5, 1986 
MFS/Sun Life New Discovery Series                        51.13%     -        -      32.11%         May 5, 1998 
MFS/Sun Life Total Return Series                        (4.70)%    8.30%   12.94%    9.63%        May 16, 1988 
MFS/Sun Life Utilities Series                            22.90%   23.62%   24.40%   18.15%   November 16, 1993 
Sun Capital Blue Chip Mid Cap Fund                         -        -        -      18.05%  September 13, 1999 
Sun Capital Investment Grade Bond Fund                  (7.85)%     -        -     (7.72)%    December 7, 1998 
Sun Capital Investors Foundation Fund                      -        -        -       3.54%  September 13, 1999 
Sun Capital Money Market Fund                           (3.02)%     -        -     (2.77)%    December 7, 1998 
Sun Capital Real Estate Fund                           (10.91)%     -        -     (9.73)%    December 7, 1998 
Sun Capital Select Equity Fund                             -        -        -      17.65%  September 13, 1999 

(1) From commencement of investment operations.                                 

(2) From January 3, 1995 (commencement of operations) to December 31, 1996,     
Chubb Investment Advisory Corporation ("Chubb Investment Advisory"), a  
wholly owned subsidiary of Chubb Life Insurance Company of America,     
served as each of these Fund's investment manager, and Morgan Guaranty  
Trust Company of New York, an affiliate of J.P. Morgan Investment       
Management Inc. ("J.P. Morgan") served as such Fund's sub-investment    
adviser. Effective January 1, 1997, J.P. Morgan began serving as each   
Fund's investment adviser.                                              

        The length of the period and the last day of each period used in the
above table are set out in the table heading and in the footnotes above. The    
Average Annual Total Return for each period was determined by finding the       
average annual compounded rate of return over each period that would equate the 
initial amount invested to the ending redeemable value for that period, in      
accordance with the following formula:                                          

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   n
 P(l + T)  = ERV
Where:    P = a hypothetical initial Purchase Payment of $1,000       
T = average annual total return for the period    
n = number of years                               
   ERV = redeemable value (as of the end of the period) of a
                   hypothetical $1,000 Purchase Payment made at the beginning of
                  the 1-year, 5-year, or 10-year period (or fractional portion
thereof)                                  

The formula assumes that: (1) all recurring fees have been deducted from the    
Participant's Account; (2) all applicable non-recurring Contract charges are    
deducted at the end of the period, and (3) there will be a full surrender at the
end of the period.                                                              

       The $50 annual Account Fee will be allocated among the Sub-Accounts
so that each Sub-Account's allocated portion of the Account Fee is              
proportional to the percentage of the number of Individual Contracts and        
Certificates that have amounts allocated to that Sub-Account. Because the       
impact of the Account Fee on a particular Contract may differ from those        
assumed in the computation due to differences between actual allocations and    
the assumed ones, the total return that would have been experienced by an       
actual Contract over these same time periods may have been different from       
that shown above.                                                               

ADDITIONAL NON-STANDARDIZED INVESTMENT PERFORMANCE:                             

        The Variable Account may illustrate its results over various periods
and compare its results to indices and other variable annuities in sales        
materials including advertisements, brochures and sports.  Such results may be  
computed on a "cumulative" and/or "annualized" basis.                           

       "Cumulative" quotations are arrived at by calculating the change in
the Accumulation Unit value of a Sub-Account between the first and last day of  
the base period being measured, and expressing the difference as a percentage of
the Accumulation Unit value at the beginning of the base period.                

"Annualized" quotations (described in the following table as
"Compound Growth Rate") are calculated by applying a formula which determines   
the level rate of return which, if earned over the entire base period, would    
produce the cumulative return.                                                  

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                                                        [Enlarge/Download Table]

                           NON-STANDARDIZED INVESTMENT PERFORMANCE*                                    
                                                                                                       
$10,000 invested in this Fund under a                                ...would have grown to this amount
Futurity Select Four Contract, this many years ago...                              on December 31, 1999

                                                        [Enlarge/Download Table]


1.35% M&E                                                                                                              
---------                                                                                                              
         AIM V.I. CAPITAL APPRECIATION FUND                                    AIM V.I. GROWTH FUND                    

Number                                Cumulative  Compound   Number                                Cumulative  Compound
  of                                    Growth     Growth      of                                    Growth     Growth 
Years       Periods          Amount      Rate       Rate     Years       Periods          Amount      Rate       Rate  
                                                                                                                       
  1    12/31/98-12/31/99                                       1    12/31/98-12/31/99                                  
  2    12/31/97-12/31/99                                       2    12/31/97-12/31/99                                  
  3    12/31/96-12/31/99                                       3    12/31/96-12/31/99                                  
  4    12/31/95-12/31/99                                       4    12/31/95-12/31/99                                  
  5    12/31/94-12/31/99                                       5    12/31/94-12/31/99                                  

Life   05/05/93-12/31/99                                     Life   05/05/93-12/31/99                                  


          AIM V.I. GROWTH AND INCOME FUND                                AIM V.I. INTERNATIONAL EQUITY FUND            

Number                                Cumulative  Compound   Number                                Cumulative  Compound
  of                                    Growth     Growth      of                                    Growth     Growth 
Years       Periods          Amount      Rate       Rate     Years       Periods          Amount      Rate       Rate  
                                                                                                                       
  1    12/31/98-12/31/99                                       1    12/31/98-12/31/99                                  
  2    12/31/97-12/31/99                                       2    12/31/97-12/31/99                                  
  3    12/31/96-12/31/99                                       3    12/31/96-12/31/99                                  
  4    12/31/95-12/31/99                                       4    12/31/95-12/31/99                                  
  5    12/31/94-12/31/99                                       5    12/31/94-12/31/99                                  

Life  05/02/94-12/31/99                                     Life   05/05/93-12/31/99                                   


          ALGER AMERICAN GROWTH PORTFOLIO                            ALGER AMERICAN INCOME AND GROWTH PORTFOLIO        

Number                                Cumulative  Compound   Number                                Cumulative  Compound
  of                                    Growth     Growth      of                                    Growth     Growth 
Years       Periods          Amount      Rate       Rate     Years       Periods          Amount      Rate       Rate  
                                                                                                                       
  1    12/31/98-12/31/99                                       1    12/31/98-12/31/99                                  
  2    12/31/97-12/31/99                                       2    12/31/97-12/31/99                                  
  3    12/31/96-12/31/99                                       3    12/31/96-12/31/99                                  
  4    12/31/95-12/31/99                                       4    12/31/95-12/31/99                                  
  5    12/31/94-12/31/99                                       5    12/31/94-12/31/99                                  
 10    12/31/89-12/31/99                                       10   12/31/89-12/31/99                                  

Life   01/09/89-12/31/99                                     Life   11/15/88-12/31/99                                  

* For periods of less than one year, the growth rates listed are not annualized.

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                                                        [Enlarge/Download Table]

                           NON-STANDARDIZED INVESTMENT PERFORMANCE*                                    
                                                                                                       
$10,000 invested in this Fund under a                                ...would have grown to this amount
Futurity Select Four Contract, this many years ago...                              on December 31, 1999

                                                        [Enlarge/Download Table]

    ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO                GOLDMAN SACHS VIT CORE-SM- LARGE CAP GROWTH FUND    

Number                              Cumulative  Compound     Number                              Cumulative  Compound
  of                                  Growth     Growth        of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate       Years       Periods        Amount      Rate       Rate  
                                                                                                                     
  1    12/31/98-12/31/99                                       1    12/31/98-12/31/99                                
  2    12/31/97-12/31/99                                                                                             
  3    12/31/96-12/31/99                                                                                             
  4    12/31/95-12/31/99                                                                                             
  5    12/31/94-12/31/99                                                                                             
 10    12/31/89-12/31/99                                                                                             

Life   09/21/88-12/31/99                                     Life   02/13/98-12/31/99                                


    GOLDMAN SACHS VIT CORE-SM- SMALL CAP EQUITY FUND                GOLDMAN SACHS VIT CORE-SM- U.S. EQUITY FUND      

Number                              Cumulative  Compound     Number                              Cumulative  Compound
  of                                  Growth     Growth        of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate       Years       Periods        Amount      Rate       Rate  
                                                                                                                     
  1    12/31/98-12/31/99                                       1    12/31/98-12/31/99                                

Life   02/13/98-12/31/99                                     Life   02/13/98-12/31/99                                


    GOLDMAN SACHS VIT CORE-SM- GROWTH AND INCOME FUND               GOLDMAN SACHS VIT INTERNATIONAL EQUITY FUND      

Number                              Cumulative  Compound     Number                              Cumulative  Compound
  of                                  Growth     Growth        of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate       Years       Periods        Amount      Rate       Rate  
                                                                                                                     
  1    12/31/98-12/31/99                                       1    12/31/98-12/31/99                                

Life   01/12/98-12/31/99                                     Life   01/12/98-12/31/99                                


             J.P. MORGAN U.S. DISCIPLINED EQUITY PORTFOLIO        J.P. MORGAN INTERNATIONAL OPPORTUNITIES PORTFOLIO  

Number                              Cumulative  Compound     Number                              Cumulative  Compound
  of                                  Growth     Growth        of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate       Years       Periods        Amount      Rate       Rate  
                                                                                                                     
  1    12/31/98-12/31/99                                      1    12/31/98-12/31/99                                 
  2    12/31/97-12/31/99                                      2    12/31/97-12/31/99                                 
  3    12/31/96-12/31/99                                      3    12/31/96-12/31/99                                 
  4    12/31/95-12/31/99                                      4    12/31/95-12/31/99                                 

Life   01/03/95-12/31/99                                    Life   01/03/95-12/31/99                                 

* For periods of less than one year, the growth rates listed are not annualized.

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                           NON-STANDARDIZED INVESTMENT PERFORMANCE*                                    
                                                                                                       
$10,000 invested in this Fund under a                                ...would have grown to this amount
Futurity Select Four Contract, this many years ago...                              on December 31, 1999

                                                        [Enlarge/Download Table]

         J.P. MORGAN SMALL COMPANY PORTFOLIO                          LORD ABBETT GROWTH AND INCOME PORTFOLIO      

Number                              Cumulative  Compound   Number                              Cumulative  Compound
  of                                  Growth     Growth      of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate     Years       Periods        Amount      Rate       Rate  
                                                                                                                   
  1    12/31/98-12/31/99                                     1    12/31/98-12/31/99                                
  2    12/31/97-12/31/99                                     2    12/31/97-12/31/99                                
  3    12/31/96-12/31/99                                     3    12/31/96-12/31/99                                
  4    12/31/95-12/31/99                                     4    12/31/95-12/31/99                                
                                                             5    12/31/94-12/31/99                                
                                                            10    12/31/89-12/31/99                                

Life   01/03/95-12/31/99                                  Life   12/11/89-12/31/99                                 


         MFS/SUN LIFE CAPITAL APPRECIATION SERIES                       MFS/SUN LIFE EMERGING GROWTH SERIES        

Number                              Cumulative  Compound   Number                              Cumulative  Compound
  of                                  Growth     Growth      of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate     Years       Periods        Amount      Rate       Rate  
                                                                                                                   
  1    12/31/98-12/31/99                                     1    12/31/98-12/31/99                                
  2    12/31/97-12/31/99                                     2    12/31/97-12/31/99                                
  3    12/31/96-12/31/99                                     3    12/31/96-12/31/99                                
  4    12/31/95-12/31/99                                     4    12/31/95-12/31/99                                
  5    12/31/94-12/31/99                                                                                           
 10    12/31/89-12/31/99                                                                                           

Life   06/12/85-12/31/99                                   Life   05/01/95-12/31/99                                


        MFS/SUN LIFE GOVERNMENT SECURITIES SERIES                        MFS/SUN LIFE HIGH YIELD SERIES            

Number                              Cumulative  Compound   Number                              Cumulative  Compound
  of                                  Growth     Growth      of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate     Years       Periods        Amount      Rate       Rate  
                                                                                                                   
  1    12/31/98-12/31/99                                     1    12/31/98-12/31/99                                
  2    12/31/97-12/31/99                                     2    12/31/97-12/31/99                                
  3    12/31/96-12/31/99                                     3    12/31/96-12/31/99                                
  4    12/31/95-12/31/99                                     4    12/31/95-12/31/99                                
  5    12/31/94-12/31/99                                     5    12/31/94-12/31/99                                
 10    12/31/89-12/31/99                                    10    12/31/89-12/31/99                                

Life   06/12/85-12/31/99                                   Life   06/12/85-12/31/99                                

* For periods of less than one year, the growth rates listed are not annualized.

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                           NON-STANDARDIZED INVESTMENT PERFORMANCE*                                    
                                                                                                       
$10,000 invested in this Fund under a                                ...would have grown to this amount
Futurity Select Four Contract, this many years ago...                              on December 31, 1999

                                                        [Enlarge/Download Table]


         MFS/SUN LIFE NEW DISCOVERY SERIES                    MFS/SUN LIFE TOTAL RETURN SERIES                    

Number                              Cumulative  Compound  Number                              Cumulative  Compound
  of                                  Growth     Growth     of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate    Years       Periods        Amount      Rate       Rate  
                                                                                                                  
  1    12/31/98-12/31/99                                     1    12/31/98-12/31/99                               
                                                             2    12/31/97-12/31/99                               
                                                             3    12/31/96-12/31/99                               
                                                             4    12/31/95-12/31/99                               
                                                             5    12/31/94-12/31/99                               
                                                            10    12/31/89-12/31/99                               

Life   05/05/98-12/31/99                                   Life   05/16/86-12/31/99                               


    MFS/SUN LIFE MASSACHUSETTS INVESTORS GROWTH SERIES        MFS/SUN LIFE MASSACHUSETTS INVESTORS TRUST SERIES   

Number                              Cumulative  Compound  Number                              Cumulative  Compound
  of                                  Growth     Growth     of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate    Years       Periods        Amount      Rate       Rate  
                                                                                                                  
  1    12/31/98-12/31/99                                    1    12/31/98-12/31/99                                
                                                            2    12/31/97-12/31/99                                
                                                            3    12/31/96-12/31/99                                
                                                            4    12/31/95-12/31/99                                
                                                            5    12/31/94-12/31/99                                
                                                           10    12/31/89-12/31/99                                

Life   05/05/98-12/31/99                                  Life   12/05/86-12/31/99                                

* For periods of less than one year, the growth rates listed are not annualized.

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                                                        [Enlarge/Download Table]

                           NON-STANDARDIZED INVESTMENT PERFORMANCE*                                    
                                                                                                       
$10,000 invested in this Fund under a                                ...would have grown to this amount
Futurity Select Four Contract, this many years ago...                              on December 31, 1999

                                                        [Enlarge/Download Table]

               MFS/SUN LIFE UTILITIES SERIES                              SUN CAPITAL BLUE CHIP MID CAP FUND             

Number                              Cumulative  Compound        Number                              Cumulative  Compound 
  of                                  Growth     Growth           of                                  Growth     Growth  
Years       Periods        Amount      Rate       Rate          Years       Periods        Amount      Rate       Rate*  
                                                                                                                         
  1    12/31/98-12/31/99                                                                                                 
  2    12/31/97-12/31/99                                                                                                 
  3    12/31/96-12/31/99                                                                                                 
  4    12/31/95-12/31/99                                                                                                 
  5    12/31/94-12/31/99                                                                                                 

Life   11/16/93-12/31/99                                        Life   09/01/99-12/31/99                                 



                SUN CAPITAL INVESTMENT GRADE BOND FUND                    SUN CAPITAL INVESTORS FOUNDATION FUND          

      Number                              Cumulative  Compound  Number                              Cumulative  Compound 
        of                                  Growth     Growth     of                                  Growth     Growth  
      Years       Periods        Amount      Rate       Rate    Years       Periods        Amount      Rate       Rate*  
                                                                                                                         
  1    12/31/98-12/31/99                                                                                                 

Life   12/07/98-12/31/99                                        Life   09/01/99-12/31/99                                 



           SUN CAPITAL MONEY MARKET FUND                                     SUN CAPITAL REAL ESTATE FUND                

Number                              Cumulative  Compound         Number                              Cumulative  Compound
  of                                  Growth     Growth            of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate           Years       Periods        Amount      Rate       Rate  
                                                                                                                         
  1    12/31/98-12/31/99                                           1    12/31/98-12/31/99                                

Life   12/07/98-12/31/99                                         Life   12/07/98-12/31/99                                



            SUN CAPITAL SELECT EQUITY FUND                                                                               

Number                              Cumulative  Compound                                                                 
  of                                  Growth     Growth                                                                  
Years       Periods        Amount      Rate       Rate*                                                                  
                                                                                                                         

Life   09/01/99-12/31/99                                                                                                 


* For periods of less than one year, the growth rates listed are not annualized.

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                                                        [Enlarge/Download Table]

                           NON-STANDARDIZED INVESTMENT PERFORMANCE*                                    
                                                                                                       
$10,000 invested in this Fund under a                                ...would have grown to this amount
Futurity Select Four Contract, this many years ago...                              on December 31, 1999

                                                        [Enlarge/Download Table]


1.50% M&E                                                                                                             
---------                                                                                                             
         AIM V.I. CAPITAL APPRECIATION FUND                                   AIM V.I. GROWTH FUND                    

Number                                Cumulative  Compound  Number                                Cumulative  Compound
  of                                    Growth     Growth     of                                    Growth     Growth 
Years       Periods          Amount      Rate       Rate    Years       Periods          Amount      Rate       Rate  
                                                                                                                      
  1    12/31/98-12/31/99                                      1    12/31/98-12/31/99                                  
  2    12/31/97-12/31/99                                      2    12/31/97-12/31/99                                  
  3    12/31/96-12/31/99                                      3    12/31/96-12/31/99                                  
  4    12/31/95-12/31/99                                      4    12/31/95-12/31/99                                  
  5    12/31/94-12/31/99                                      5    12/31/94-12/31/99                                  

Life   05/05/93-12/31/99                                    Life   05/05/93-12/31/99                                  


          AIM V.I. GROWTH AND INCOME FUND                               AIM V.I. INTERNATIONAL EQUITY FUND            

Number                                Cumulative  Compound  Number                                Cumulative  Compound
  of                                    Growth     Growth     of                                    Growth     Growth 
Years       Periods          Amount      Rate       Rate    Years       Periods          Amount      Rate       Rate  
                                                                                                                      
  1    12/31/98-12/31/99                                      1    12/31/98-12/31/99                                  
  2    12/31/97-12/31/99                                      2    12/31/97-12/31/99                                  
  3    12/31/96-12/31/99                                      3    12/31/96-12/31/99                                  
  4    12/31/95-12/31/99                                      4    12/31/95-12/31/99                                  
  5    12/31/94-12/31/99                                      5    12/31/94-12/31/99                                  

Life  05/02/94-12/31/99                                     Life   05/05/93-12/31/99                                  


          ALGER AMERICAN GROWTH PORTFOLIO                           ALGER AMERICAN INCOME AND GROWTH PORTFOLIO        

Number                                Cumulative  Compound  Number                                Cumulative  Compound
  of                                    Growth     Growth     of                                    Growth     Growth 
Years       Periods          Amount      Rate       Rate    Years       Periods          Amount      Rate       Rate  
                                                                                                                      
  1    12/31/98-12/31/99                                      1    12/31/98-12/31/99                                  
  2    12/31/97-12/31/99                                      2    12/31/97-12/31/99                                  
  3    12/31/96-12/31/99                                      3    12/31/96-12/31/99                                  
  4    12/31/95-12/31/99                                      4    12/31/95-12/31/99                                  
  5    12/31/94-12/31/99                                      5    12/31/94-12/31/99                                  
 10    12/31/89-12/31/99                                     10    12/31/89-12/31/99                                  

Life   01/09/89-12/31/99                                    Life   11/15/88-12/31/99                                  

* For periods of less than one year, the growth rates listed are not annualized.

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                                                        [Enlarge/Download Table]

                           NON-STANDARDIZED INVESTMENT PERFORMANCE*                                    
                                                                                                       
$10,000 invested in this Fund under a                                ...would have grown to this amount
Futurity Select Four Contract, this many years ago...                              on December 31, 1999

                                                        [Enlarge/Download Table]

    ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO               GOLDMAN SACHS VIT CORE-SM- LARGE CAP GROWTH FUND    

Number                              Cumulative  Compound    Number                              Cumulative  Compound
  of                                  Growth     Growth       of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate      Years       Periods        Amount      Rate       Rate  
                                                                                                                    
  1    12/31/98-12/31/99                                      1    12/31/98-12/31/99                                
  2    12/31/97-12/31/99                                                                                            
  3    12/31/96-12/31/99                                                                                            
  4    12/31/95-12/31/99                                                                                            
  5    12/31/94-12/31/99                                                                                            
 10    12/31/89-12/31/99                                                                                            

Life   09/21/88-12/31/99                                    Life   02/13/98-12/31/99                                


    GOLDMAN SACHS VIT CORE-SM- SMALL CAP EQUITY FUND               GOLDMAN SACHS VIT CORE-SM- U.S. EQUITY FUND      

Number                              Cumulative  Compound    Number                              Cumulative  Compound
  of                                  Growth     Growth       of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate      Years       Periods        Amount      Rate       Rate  
                                                                                                                    
  1    12/31/98-12/31/99                                      1    12/31/98-12/31/99                                

Life   02/13/98-12/31/99                                    Life   02/13/98-12/31/99                                


    GOLDMAN SACHS VIT CORE-SM- GROWTH AND INCOME FUND              GOLDMAN SACHS VIT INTERNATIONAL EQUITY FUND      

Number                              Cumulative  Compound    Number                              Cumulative  Compound
  of                                  Growth     Growth       of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate      Years       Periods        Amount      Rate       Rate  
                                                                                                                    
  1    12/31/98-12/31/99                                      1    12/31/98-12/31/99                                

Life   01/12/98-12/31/99                                    Life   01/12/98-12/31/99                                


             J.P. MORGAN U.S. DISCIPLINED EQUITY PORTFOLIO       J.P. MORGAN INTERNATIONAL OPPORTUNITIES PORTFOLIO  

Number                              Cumulative  Compound    Number                              Cumulative  Compound
  of                                  Growth     Growth       of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate      Years       Periods        Amount      Rate       Rate  
                                                                                                                    
  1    12/31/98-12/31/99                                      1    12/31/98-12/31/99                                
  2    12/31/97-12/31/99                                      2    12/31/97-12/31/99                                
  3    12/31/96-12/31/99                                      3    12/31/96-12/31/99                                
  4    12/31/95-12/31/99                                      4    12/31/95-12/31/99                                

Life   01/03/95-12/31/99                                    Life   01/03/95-12/31/99                                

* For periods of less than one year, the growth rates listed are not annualized.

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                           NON-STANDARDIZED INVESTMENT PERFORMANCE*                                    
                                                                                                       
$10,000 invested in this Fund under a                                ...would have grown to this amount
Futurity Select Four Contract, this many years ago...                              on December 31, 1999

                                                        [Enlarge/Download Table]

         J.P. MORGAN SMALL COMPANY PORTFOLIO                         LORD ABBETT GROWTH AND INCOME PORTFOLIO      

Number                              Cumulative  Compound  Number                              Cumulative  Compound
  of                                  Growth     Growth     of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate    Years       Periods        Amount      Rate       Rate  
                                                                                                                  
  1    12/31/98-12/31/99                                    1    12/31/98-12/31/99                                
  2    12/31/97-12/31/99                                    2    12/31/97-12/31/99                                
  3    12/31/96-12/31/99                                    3    12/31/96-12/31/99                                
  4    12/31/95-12/31/99                                    4    12/31/95-12/31/99                                
                                                            5    12/31/94-12/31/99                                
                                                           10    12/31/89-12/31/99                                

Life   01/03/95-12/31/99                                  Life   12/11/89-12/31/99                                


         MFS/SUN LIFE CAPITAL APPRECIATION SERIES                      MFS/SUN LIFE EMERGING GROWTH SERIES        

Number                              Cumulative  Compound  Number                              Cumulative  Compound
  of                                  Growth     Growth     of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate    Years       Periods        Amount      Rate       Rate  
                                                                                                                  
  1    12/31/98-12/31/99                                    1    12/31/98-12/31/99                                
  2    12/31/97-12/31/99                                    2    12/31/97-12/31/99                                
  3    12/31/96-12/31/99                                    3    12/31/96-12/31/99                                
  4    12/31/95-12/31/99                                    4    12/31/95-12/31/99                                
  5    12/31/94-12/31/99                                                                                          
 10    12/31/89-12/31/99                                                                                          

Life   06/12/85-12/31/99                                  Life   05/01/95-12/31/99                                


        MFS/SUN LIFE GOVERNMENT SECURITIES SERIES                       MFS/SUN LIFE HIGH YIELD SERIES            

Number                              Cumulative  Compound  Number                              Cumulative  Compound
  of                                  Growth     Growth     of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate    Years       Periods        Amount      Rate       Rate  
                                                                                                                  
  1    12/31/98-12/31/99                                    1    12/31/98-12/31/99                                
  2    12/31/97-12/31/99                                    2    12/31/97-12/31/99                                
  3    12/31/96-12/31/99                                    3    12/31/96-12/31/99                                
  4    12/31/95-12/31/99                                    4    12/31/95-12/31/99                                
  5    12/31/94-12/31/99                                    5    12/31/94-12/31/99                                
 10    12/31/89-12/31/99                                   10    12/31/89-12/31/99                                

Life   06/12/85-12/31/99                                  Life   06/12/85-12/31/99                                

* For periods of less than one year, the growth rates listed are not annualized.

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                           NON-STANDARDIZED INVESTMENT PERFORMANCE*                                    
                                                                                                       
$10,000 invested in this Fund under a                                ...would have grown to this amount
Futurity Select Four Contract, this many years ago...                              on December 31, 1999

                                                        [Enlarge/Download Table]


         MFS/SUN LIFE NEW DISCOVERY SERIES                    MFS/SUN LIFE TOTAL RETURN SERIES                    

Number                              Cumulative  Compound  Number                              Cumulative  Compound
  of                                  Growth     Growth     of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate    Years       Periods        Amount      Rate       Rate  
                                                                                                                  
  1    12/31/98-12/31/99                                     1    12/31/98-12/31/99                               
                                                             2    12/31/97-12/31/99                               
                                                             3    12/31/96-12/31/99                               
                                                             4    12/31/95-12/31/99                               
                                                             5    12/31/94-12/31/99                               
                                                            10    12/31/89-12/31/99                               

Life   05/05/98-12/31/99                                   Life   05/16/86-12/31/99                               


    MFS/SUN LIFE MASSACHUSETTS INVESTORS GROWTH SERIES        MFS/SUN LIFE MASSACHUSETTS INVESTORS TRUST SERIES   

Number                              Cumulative  Compound  Number                              Cumulative  Compound
  of                                  Growth     Growth     of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate    Years       Periods        Amount      Rate       Rate  
                                                                                                                  
  1    12/31/98-12/31/99                                    1    12/31/98-12/31/99                                
                                                            2    12/31/97-12/31/99                                
                                                            3    12/31/96-12/31/99                                
                                                            4    12/31/95-12/31/99                                
                                                            5    12/31/94-12/31/99                                
                                                           10    12/31/89-12/31/99                                

Life   05/05/98-12/31/99                                  Life   12/05/86-12/31/99                                

* For periods of less than one year, the growth rates listed are not annualized.

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                           NON-STANDARDIZED INVESTMENT PERFORMANCE*                                    
                                                                                                       
$10,000 invested in this Fund under a                                ...would have grown to this amount
Futurity Select Four Contract, this many years ago...                              on December 31, 1999

                                                        [Enlarge/Download Table]

               MFS/SUN LIFE UTILITIES SERIES                              SUN CAPITAL BLUE CHIP MID CAP FUND            

Number                              Cumulative  Compound        Number                              Cumulative  Compound
  of                                  Growth     Growth           of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate          Years       Periods        Amount      Rate       Rate* 
                                                                                                                        
  1    12/31/98-12/31/99                                                                                                
  2    12/31/97-12/31/99                                                                                                
  3    12/31/96-12/31/99                                                                                                
  4    12/31/95-12/31/99                                                                                                
  5    12/31/94-12/31/99                                                                                                

Life   11/16/93-12/31/99                                         Life   09/01/99-12/31/99                               



                SUN CAPITAL INVESTMENT GRADE BOND FUND                    SUN CAPITAL INVESTORS FOUNDATION FUND         

      Number                              Cumulative  Compound  Number                              Cumulative  Compound
        of                                  Growth     Growth     of                                  Growth     Growth 
      Years       Periods        Amount      Rate       Rate    Years       Periods        Amount      Rate       Rate* 
                                                                                                                        
  1    12/31/98-12/31/99                                                                                                

Life   12/07/98-12/31/99                                         Life  09/01/99-12/31/99                                



           SUN CAPITAL MONEY MARKET FUND                                    SUN CAPITAL REAL ESTATE FUND                

Number                              Cumulative  Compound        Number                              Cumulative  Compound
  of                                  Growth     Growth           of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate          Years       Periods        Amount      Rate       Rate  
                                                                                                                        
  1    12/31/98-12/31/99                                          1    12/31/98-12/31/99                                

Life   12/07/98-12/31/99                                        Life   12/07/98-12/31/99                                



            SUN CAPITAL SELECT EQUITY FUND                                                                              

Number                              Cumulative  Compound                                                                
  of                                  Growth     Growth                                                                 
Years       Periods        Amount      Rate       Rate*                                                                 
                                                                                                                        

Life   09/01/99-12/31/99                                                                                                


* For periods of less than one year, the growth rates listed are not annualized.

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                                                        [Enlarge/Download Table]

                           NON-STANDARDIZED INVESTMENT PERFORMANCE*                                    
                                                                                                       
$10,000 invested in this Fund under a                                ...would have grown to this amount
Futurity Select Four Contract, this many years ago...                              on December 31, 1999

                                                        [Enlarge/Download Table]


1.60% M&E                                                                                                             
---------                                                                                                             
         AIM V.I. CAPITAL APPRECIATION FUND                                   AIM V.I. GROWTH FUND                    

Number                                Cumulative  Compound  Number                                Cumulative  Compound
  of                                    Growth     Growth     of                                    Growth     Growth 
Years       Periods          Amount      Rate       Rate    Years       Periods          Amount      Rate       Rate  
                                                                                                                      
  1    12/31/98-12/31/99                                      1    12/31/98-12/31/99                                  
  2    12/31/97-12/31/99                                      2    12/31/97-12/31/99                                  
  3    12/31/96-12/31/99                                      3    12/31/96-12/31/99                                  
  4    12/31/95-12/31/99                                      4    12/31/95-12/31/99                                  
  5    12/31/94-12/31/99                                      5    12/31/94-12/31/99                                  

Life   05/05/93-12/31/99                                    Life   05/05/93-12/31/99                                  


          AIM V.I. GROWTH AND INCOME FUND                               AIM V.I. INTERNATIONAL EQUITY FUND            

Number                                Cumulative  Compound  Number                                Cumulative  Compound
  of                                    Growth     Growth     of                                    Growth     Growth 
Years       Periods          Amount      Rate       Rate    Years       Periods          Amount      Rate       Rate  
                                                                                                                      
  1    12/31/98-12/31/99                                      1    12/31/98-12/31/99                                  
  2    12/31/97-12/31/99                                      2    12/31/97-12/31/99                                  
  3    12/31/96-12/31/99                                      3    12/31/96-12/31/99                                  
  4    12/31/95-12/31/99                                      4    12/31/95-12/31/99                                  
  5    12/31/94-12/31/99                                      5    12/31/94-12/31/99                                  

Life  05/02/94-12/31/99                                     Life   05/05/93-12/31/99                                  


          ALGER AMERICAN GROWTH PORTFOLIO                           ALGER AMERICAN INCOME AND GROWTH PORTFOLIO        

Number                                Cumulative  Compound  Number                                Cumulative  Compound
  of                                    Growth     Growth     of                                    Growth     Growth 
Years       Periods          Amount      Rate       Rate    Years       Periods          Amount      Rate       Rate  
                                                                                                                      
  1    12/31/98-12/31/99                                      1    12/31/98-12/31/99                                  
  2    12/31/97-12/31/99                                      2    12/31/97-12/31/99                                  
  3    12/31/96-12/31/99                                      3    12/31/96-12/31/99                                  
  4    12/31/95-12/31/99                                      4    12/31/95-12/31/99                                  
  5    12/31/94-12/31/99                                      5    12/31/94-12/31/99                                  
 10    12/31/89-12/31/99                                     10    12/31/89-12/31/99                                  

Life   01/09/89-12/31/99                                    Life   11/15/88-12/31/99                                  

* For periods of less than one year, the growth rates listed are not annualized.

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                                                        [Enlarge/Download Table]

                           NON-STANDARDIZED INVESTMENT PERFORMANCE*                                    
                                                                                                       
$10,000 invested in this Fund under a                                ...would have grown to this amount
Futurity Select Four Contract, this many years ago...                              on December 31, 1999

                                                        [Enlarge/Download Table]

    ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO               GOLDMAN SACHS VIT CORE-SM- LARGE CAP GROWTH FUND    

Number                              Cumulative  Compound    Number                              Cumulative  Compound
  of                                  Growth     Growth       of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate      Years       Periods        Amount      Rate       Rate  
                                                                                                                    
  1    12/31/98-12/31/99                                      1    12/31/98-12/31/99                                
  2    12/31/97-12/31/99                                                                                            
  3    12/31/96-12/31/99                                                                                            
  4    12/31/95-12/31/99                                                                                            
  5    12/31/94-12/31/99                                                                                            
 10    12/31/89-12/31/99                                                                                            

Life   09/21/88-12/31/99                                    Life   02/13/98-12/31/99                                


    GOLDMAN SACHS VIT CORE-SM- SMALL CAP EQUITY FUND               GOLDMAN SACHS VIT CORE-SM- U.S. EQUITY FUND      

Number                              Cumulative  Compound    Number                              Cumulative  Compound
  of                                  Growth     Growth       of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate      Years       Periods        Amount      Rate       Rate  
                                                                                                                    
  1    12/31/98-12/31/99                                      1    12/31/98-12/31/99                                

Life   02/13/98-12/31/99                                    Life   02/13/98-12/31/99                                


    GOLDMAN SACHS VIT CORE-SM- GROWTH AND INCOME FUND              GOLDMAN SACHS VIT INTERNATIONAL EQUITY FUND      

Number                              Cumulative  Compound    Number                              Cumulative  Compound
  of                                  Growth     Growth       of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate      Years       Periods        Amount      Rate       Rate  
                                                                                                                    
  1    12/31/98-12/31/99                                      1    12/31/98-12/31/99                                

Life   01/12/98-12/31/99                                    Life   01/12/98-12/31/99                                


             J.P. MORGAN U.S. DISCIPLINED EQUITY PORTFOLIO       J.P. MORGAN INTERNATIONAL OPPORTUNITIES PORTFOLIO  

Number                              Cumulative  Compound    Number                              Cumulative  Compound
  of                                  Growth     Growth       of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate      Years       Periods        Amount      Rate       Rate  
                                                                                                                    
  1    12/31/98-12/31/99                                      1    12/31/98-12/31/99                                
  2    12/31/97-12/31/99                                      2    12/31/97-12/31/99                                
  3    12/31/96-12/31/99                                      3    12/31/96-12/31/99                                
  4    12/31/95-12/31/99                                      4    12/31/95-12/31/99                                

Life   01/03/95-12/31/99                                     Life  01/03/95-12/31/99                                

* For periods of less than one year, the growth rates listed are not annualized.

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                           NON-STANDARDIZED INVESTMENT PERFORMANCE*                                    
                                                                                                       
$10,000 invested in this Fund under a                                ...would have grown to this amount
Futurity Select Four Contract, this many years ago...                              on December 31, 1999

                                                        [Enlarge/Download Table]

         J.P. MORGAN SMALL COMPANY PORTFOLIO                         LORD ABBETT GROWTH AND INCOME PORTFOLIO      

Number                              Cumulative  Compound  Number                              Cumulative  Compound
  of                                  Growth     Growth     of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate    Years       Periods        Amount      Rate       Rate  
                                                                                                                  
  1    12/31/98-12/31/99                                    1    12/31/98-12/31/99                                
  2    12/31/97-12/31/99                                    2    12/31/97-12/31/99                                
  3    12/31/96-12/31/99                                    3    12/31/96-12/31/99                                
  4    12/31/95-12/31/99                                    4    12/31/95-12/31/99                                
                                                            5    12/31/94-12/31/99                                
                                                           10    12/31/89-12/31/99                                

Life   01/03/95-12/31/99                                  Life   12/11/89-12/31/99                                


         MFS/SUN LIFE CAPITAL APPRECIATION SERIES                      MFS/SUN LIFE EMERGING GROWTH SERIES        

Number                              Cumulative  Compound  Number                              Cumulative  Compound
  of                                  Growth     Growth     of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate    Years       Periods        Amount      Rate       Rate  
                                                                                                                  
  1    12/31/98-12/31/99                                    1    12/31/98-12/31/99                                
  2    12/31/97-12/31/99                                    2    12/31/97-12/31/99                                
  3    12/31/96-12/31/99                                    3    12/31/96-12/31/99                                
  4    12/31/95-12/31/99                                    4    12/31/95-12/31/99                                
  5    12/31/94-12/31/99                                                                                          
 10    12/31/89-12/31/99                                                                                          

Life   06/12/85-12/31/99                                  Life   05/01/95-12/31/99                                


        MFS/SUN LIFE GOVERNMENT SECURITIES SERIES                       MFS/SUN LIFE HIGH YIELD SERIES            

Number                              Cumulative  Compound  Number                              Cumulative  Compound
  of                                  Growth     Growth     of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate    Years       Periods        Amount      Rate       Rate  
                                                                                                                  
  1    12/31/98-12/31/99                                    1    12/31/98-12/31/99                                
  2    12/31/97-12/31/99                                    2    12/31/97-12/31/99                                
  3    12/31/96-12/31/99                                    3    12/31/96-12/31/99                                
  4    12/31/95-12/31/99                                    4    12/31/95-12/31/99                                
  5    12/31/94-12/31/99                                    5    12/31/94-12/31/99                                
 10    12/31/89-12/31/99                                   10    12/31/89-12/31/99                                

Life   06/12/85-12/31/99                                  Life   06/12/85-12/31/99                                

* For periods of less than one year, the growth rates listed are not annualized.

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                                                        [Enlarge/Download Table]

                           NON-STANDARDIZED INVESTMENT PERFORMANCE*                                    
                                                                                                       
$10,000 invested in this Fund under a                                ...would have grown to this amount
Futurity Select Four Contract, this many years ago...                              on December 31, 1999

                                                        [Enlarge/Download Table]


         MFS/SUN LIFE NEW DISCOVERY SERIES                    MFS/SUN LIFE TOTAL RETURN SERIES                    

Number                              Cumulative  Compound  Number                              Cumulative  Compound
  of                                  Growth     Growth     of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate    Years       Periods        Amount      Rate       Rate  
                                                                                                                  
  1    12/31/98-12/31/99                                    1    12/31/98-12/31/99                                
                                                            2    12/31/97-12/31/99                                
                                                            3    12/31/96-12/31/99                                
                                                            4    12/31/95-12/31/99                                
                                                            5    12/31/94-12/31/99                                
                                                           10    12/31/89-12/31/99                                

Life   05/05/98-12/31/99                                  Life   05/16/86-12/31/99                                


    MFS/SUN LIFE MASSACHUSETTS INVESTORS GROWTH SERIES        MFS/SUN LIFE MASSACHUSETTS INVESTORS TRUST SERIES   

Number                              Cumulative  Compound  Number                              Cumulative  Compound
  of                                  Growth     Growth     of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate    Years       Periods        Amount      Rate       Rate  
                                                                                                                  
  1    12/31/98-12/31/99                                    1    12/31/98-12/31/99                                
                                                            2    12/31/97-12/31/99                                
                                                            3    12/31/96-12/31/99                                
                                                            4    12/31/95-12/31/99                                
                                                            5    12/31/94-12/31/99                                
                                                           10    12/31/89-12/31/99                                

Life   05/05/98-12/31/99                                  Life   12/05/86-12/31/99                                

* For periods of less than one year, the growth rates listed are not annualized.

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                                                        [Enlarge/Download Table]

                           NON-STANDARDIZED INVESTMENT PERFORMANCE*                                    
                                                                                                       
$10,000 invested in this Fund under a                                ...would have grown to this amount
Futurity Select Four Contract, this many years ago...                              on December 31, 1999

                                                        [Enlarge/Download Table]

               MFS/SUN LIFE UTILITIES SERIES                              SUN CAPITAL BLUE CHIP MID CAP FUND            

Number                              Cumulative  Compound        Number                              Cumulative  Compound
  of                                  Growth     Growth           of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate          Years       Periods        Amount      Rate       Rate* 
                                                                                                                        
  1    12/31/98-12/31/99                                                                                                
  2    12/31/97-12/31/98                                                                                                
  3    12/31/96-12/31/98                                                                                                
  4    12/31/95-12/31/98                                                                                                
  5    12/31/94-12/31/98                                                                                                

Life   11/16/93-12/31/99                                        Life   09/01/99-12/31/99                                



                SUN CAPITAL INVESTMENT GRADE BOND FUND                    SUN CAPITAL INVESTORS FOUNDATION FUND         

      Number                              Cumulative  Compound  Number                              Cumulative  Compound
        of                                  Growth     Growth     of                                  Growth     Growth 
      Years       Periods        Amount      Rate       Rate    Years       Periods        Amount      Rate       Rate* 
                                                                                                                        
  1    12/31/98-12/31/99                                                                                                

Life   12/07/98-12/31/99                                        Life   09/01/99-12/31/99                                



           SUN CAPITAL MONEY MARKET FUND                                    SUN CAPITAL REAL ESTATE FUND                

Number                              Cumulative  Compound        Number                              Cumulative  Compound
  of                                  Growth     Growth           of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate          Years       Periods        Amount      Rate       Rate  
                                                                                                                        
  1    12/31/98-12/31/99                                          1    12/31/98-12/31/99                                

Life   12/07/98-12/31/99                                        Life   12/07/98-12/31/99                                



            SUN CAPITAL SELECT EQUITY FUND                                                                              

Number                              Cumulative  Compound                                                                
  of                                  Growth     Growth                                                                 
Years       Periods        Amount      Rate       Rate*                                                                 
                                                                                                                        

Life   09/01/99-12/31/99                                                                                                


* For periods of less than one year, the growth rates listed are not annualized.

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                                                        [Enlarge/Download Table]

                           NON-STANDARDIZED INVESTMENT PERFORMANCE*                                    
                                                                                                       
$10,000 invested in this Fund under a                                ...would have grown to this amount
Futurity Select Four Contract, this many years ago...                              on December 31, 1999

                                                        [Enlarge/Download Table]


1.75% M&E                                                                                                              
---------                                                                                                              
         AIM V.I. CAPITAL APPRECIATION FUND                                    AIM V.I. GROWTH FUND                    

Number                                Cumulative  Compound   Number                                Cumulative  Compound
  of                                    Growth     Growth      of                                    Growth     Growth 
Years       Periods          Amount      Rate       Rate     Years       Periods          Amount      Rate       Rate  
                                                                                                                       
  1    12/31/98-12/31/99                                       1    12/31/98-12/31/99                                  
  2    12/31/97-12/31/99                                       2    12/31/97-12/31/99                                  
  3    12/31/96-12/31/99                                       3    12/31/96-12/31/99                                  
  4    12/31/95-12/31/99                                       4    12/31/95-12/31/99                                  
  5    12/31/94-12/31/99                                       5    12/31/94-12/31/99                                  

Life   05/05/93-12/31/99                                     Life   05/05/93-12/31/99                                  


          AIM V.I. GROWTH AND INCOME FUND                                AIM V.I. INTERNATIONAL EQUITY FUND            

Number                                Cumulative  Compound   Number                                Cumulative  Compound
  of                                    Growth     Growth      of                                    Growth     Growth 
Years       Periods          Amount      Rate       Rate     Years       Periods          Amount      Rate       Rate  
                                                                                                                       
  1    12/31/98-12/31/99                                       1    12/31/98-12/31/99                                  
  2    12/31/97-12/31/99                                       2    12/31/97-12/31/99                                  
  3    12/31/96-12/31/99                                       3    12/31/96-12/31/99                                  
  4    12/31/95-12/31/99                                       4    12/31/95-12/31/99                                  
  5    12/31/94-12/31/99                                       5    12/31/94-12/31/99                                  

Life  05/02/94-12/31/99                                      Life   05/05/93-12/31/99                                  


          ALGER AMERICAN GROWTH PORTFOLIO                            ALGER AMERICAN INCOME AND GROWTH PORTFOLIO        

Number                                Cumulative  Compound   Number                                Cumulative  Compound
  of                                    Growth     Growth      of                                    Growth     Growth 
Years       Periods          Amount      Rate       Rate     Years       Periods          Amount      Rate       Rate  
                                                                                                                       
  1    12/31/98-12/31/99                                       1    12/31/98-12/31/99                                  
  2    12/31/97-12/31/99                                       2    12/31/97-12/31/99                                  
  3    12/31/96-12/31/99                                       3    12/31/96-12/31/99                                  
  4    12/31/95-12/31/99                                       4    12/31/95-12/31/99                                  
  5    12/31/94-12/31/99                                       5    12/31/94-12/31/99                                  
 10    12/31/89-12/31/99                                      10    12/31/89-12/31/99                                  

Life   01/09/89-12/31/99                                    Life    11/15/88-12/31/99                                  

* For periods of less than one year, the growth rates listed are not annualized.

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                                                        [Enlarge/Download Table]

                           NON-STANDARDIZED INVESTMENT PERFORMANCE*                                    
                                                                                                       
$10,000 invested in this Fund under a                                ...would have grown to this amount
Futurity Select Four Contract, this many years ago...                              on December 31, 1999

                                                        [Enlarge/Download Table]

    ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO               GOLDMAN SACHS VIT CORE-SM- LARGE CAP GROWTH FUND    

Number                              Cumulative  Compound    Number                              Cumulative  Compound
  of                                  Growth     Growth       of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate      Years       Periods        Amount      Rate       Rate  
                                                                                                                    
  1    12/31/98-12/31/99                                      1    12/31/98-12/31/99                                
  2    12/31/97-12/31/99                                                                                            
  3    12/31/96-12/31/99                                                                                            
  4    12/31/95-12/31/99                                                                                            
  5    12/31/94-12/31/99                                                                                            
 10    12/31/89-12/31/99                                                                                            

Life   09/21/88-12/31/99                                    Life   02/13/98-12/31/99                                


    GOLDMAN SACHS VIT CORE-SM- SMALL CAP EQUITY FUND               GOLDMAN SACHS VIT CORE-SM- U.S. EQUITY FUND      

Number                              Cumulative  Compound    Number                              Cumulative  Compound
  of                                  Growth     Growth       of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate      Years       Periods        Amount      Rate       Rate  
                                                                                                                    
  1    12/31/98-12/31/99                                      1    12/31/98-12/31/99                                

Life   02/13/98-12/31/99                                    Life   02/13/98-12/31/99                                


    GOLDMAN SACHS VIT CORE-SM- GROWTH AND INCOME FUND              GOLDMAN SACHS VIT INTERNATIONAL EQUITY FUND      

Number                              Cumulative  Compound    Number                              Cumulative  Compound
  of                                  Growth     Growth       of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate      Years       Periods        Amount      Rate       Rate  
                                                                                                                    
  1    12/31/98-12/31/99                                      1    12/31/98-12/31/99                                

Life   01/12/98-12/31/99                                    Life   01/12/98-12/31/99                                


             J.P. MORGAN U.S. DISCIPLINED EQUITY PORTFOLIO       J.P. MORGAN INTERNATIONAL OPPORTUNITIES PORTFOLIO  

Number                              Cumulative  Compound    Number                              Cumulative  Compound
  of                                  Growth     Growth       of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate      Years       Periods        Amount      Rate       Rate  
                                                                                                                    
  1    12/31/98-12/31/99                                      1    12/31/98-12/31/99                                
  2    12/31/97-12/31/99                                      2    12/31/97-12/31/99                                
  3    12/31/96-12/31/99                                      3    12/31/96-12/31/99                                
  4    12/31/95-12/31/99                                      4    12/31/95-12/31/99                                

Life   01/03/95-12/31/99                                    Life   01/03/95-12/31/99                                

* For periods of less than one year, the growth rates listed are not annualized.

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                                                        [Enlarge/Download Table]

                           NON-STANDARDIZED INVESTMENT PERFORMANCE*                                    
                                                                                                       
$10,000 invested in this Fund under a                                ...would have grown to this amount
Futurity Select Four Contract, this many years ago...                              on December 31, 1999

                                                        [Enlarge/Download Table]

         J.P. MORGAN SMALL COMPANY PORTFOLIO                         LORD ABBETT GROWTH AND INCOME PORTFOLIO      

Number                              Cumulative  Compound  Number                              Cumulative  Compound
  of                                  Growth     Growth     of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate    Years       Periods        Amount      Rate       Rate  
                                                                                                                  
  1    12/31/98-12/31/99                                    1    12/31/98-12/31/99                                
  2    12/31/97-12/31/99                                    2    12/31/97-12/31/99                                
  3    12/31/96-12/31/99                                    3    12/31/96-12/31/99                                
  4    12/31/95-12/31/99                                    4    12/31/95-12/31/99                                
                                                            5    12/31/94-12/31/99                                
                                                           10    12/31/89-12/31/99                                

Life   01/03/95-12/31/99                                  Life   12/11/89-12/31/99                                


         MFS/SUN LIFE CAPITAL APPRECIATION SERIES                      MFS/SUN LIFE EMERGING GROWTH SERIES        

Number                              Cumulative  Compound  Number                              Cumulative  Compound
  of                                  Growth     Growth     of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate    Years       Periods        Amount      Rate       Rate  
                                                                                                                  
  1    12/31/98-12/31/99                                    1    12/31/98-12/31/99                                
  2    12/31/97-12/31/99                                    2    12/31/97-12/31/99                                
  3    12/31/96-12/31/99                                    3    12/31/96-12/31/99                                
  4    12/31/95-12/31/99                                    4    12/31/95-12/31/99                                
  5    12/31/94-12/31/99                                                                                          
 10    12/31/89-12/31/99                                                                                          

Life   06/12/85-12/31/99                                  Life   05/01/95-12/31/99                                


        MFS/SUN LIFE GOVERNMENT SECURITIES SERIES                       MFS/SUN LIFE HIGH YIELD SERIES            

Number                              Cumulative  Compound  Number                              Cumulative  Compound
  of                                  Growth     Growth     of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate    Years       Periods        Amount      Rate       Rate  
                                                                                                                  
  1    12/31/98-12/31/99                                    1    12/31/98-12/31/99                                
  2    12/31/97-12/31/99                                    2    12/31/97-12/31/99                                
  3    12/31/96-12/31/99                                    3    12/31/96-12/31/99                                
  4    12/31/95-12/31/99                                    4    12/31/95-12/31/99                                
  5    12/31/94-12/31/99                                    5    12/31/94-12/31/99                                
 10    12/31/89-12/31/99                                   10    12/31/89-12/31/99                                

Life   06/12/85-12/31/99                                  Life   06/12/85-12/31/99                                

* For periods of less than one year, the growth rates listed are not annualized.

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                                                        [Enlarge/Download Table]

                           NON-STANDARDIZED INVESTMENT PERFORMANCE*                                    
                                                                                                       
$10,000 invested in this Fund under a                                ...would have grown to this amount
Futurity Select Four Contract, this many years ago...                              on December 31, 1999

                                                        [Enlarge/Download Table]


         MFS/SUN LIFE NEW DISCOVERY SERIES                    MFS/SUN LIFE TOTAL RETURN SERIES                    

Number                              Cumulative  Compound  Number                              Cumulative  Compound
  of                                  Growth     Growth     of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate    Years       Periods        Amount      Rate       Rate  
                                                                                                                  
  1    12/31/98-12/31/99                                    1    12/31/98-12/31/99                                
                                                            2    12/31/97-12/31/99                                
                                                            3    12/31/96-12/31/99                                
                                                            4    12/31/95-12/31/99                                
                                                            5    12/31/94-12/31/99                                
                                                           10    12/31/89-12/31/99                                

Life   05/05/98-12/31/99                                   Life  05/16/86-12/31/99                                


    MFS/SUN LIFE MASSACHUSETTS INVESTORS GROWTH SERIES        MFS/SUN LIFE MASSACHUSETTS INVESTORS TRUST SERIES   

Number                              Cumulative  Compound  Number                              Cumulative  Compound
  of                                  Growth     Growth     of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate    Years       Periods        Amount      Rate       Rate  
                                                                                                                  
  1    12/31/98-12/31/99                                    1    12/31/98-12/31/99                                
                                                            2    12/31/97-12/31/99                                
                                                            3    12/31/96-12/31/99                                
                                                            4    12/31/95-12/31/99                                
                                                            5    12/31/94-12/31/99                                
                                                           10    12/31/89-12/31/99                                

Life   05/05/98-12/31/99                                   Life  12/05/86-12/31/99                                

* For periods of less than one year, the growth rates listed are not annualized.

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                                                        [Enlarge/Download Table]

                           NON-STANDARDIZED INVESTMENT PERFORMANCE*                                    
                                                                                                       
$10,000 invested in this Fund under a                                ...would have grown to this amount
Futurity Select Four Contract, this many years ago...                              on December 31, 1999

                                                        [Enlarge/Download Table]

               MFS/SUN LIFE UTILITIES SERIES                              SUN CAPITAL BLUE CHIP MID CAP FUND            

Number                              Cumulative  Compound        Number                              Cumulative  Compound
  of                                  Growth     Growth           of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate          Years       Periods        Amount      Rate       Rate* 
                                                                                                                        
  1    12/31/98-12/31/99                                                                                                
  2    12/31/97-12/31/98                                                                                                
  3    12/31/96-12/31/98                                                                                                
  4    12/31/95-12/31/98                                                                                                
  5    12/31/94-12/31/98                                                                                                

Life   11/16/93-12/31/99                                         Life   09/01/99-12/31/99                               



                SUN CAPITAL INVESTMENT GRADE BOND FUND                    SUN CAPITAL INVESTORS FOUNDATION FUND         

      Number                              Cumulative  Compound  Number                              Cumulative  Compound
        of                                  Growth     Growth     of                                  Growth     Growth 
      Years       Periods        Amount      Rate       Rate    Years       Periods        Amount      Rate       Rate* 
                                                                                                                        
  1    12/31/98-12/31/99                                                                                                

Life   12/07/98-12/31/99                                          Life   09/01/99-12/31/99                              



           SUN CAPITAL MONEY MARKET FUND                                    SUN CAPITAL REAL ESTATE FUND                

Number                              Cumulative  Compound        Number                              Cumulative  Compound
  of                                  Growth     Growth           of                                  Growth     Growth 
Years       Periods        Amount      Rate       Rate          Years       Periods        Amount      Rate       Rate  
                                                                                                                        
  1    12/31/98-12/31/99                                          1    12/31/98-12/31/99                                

Life   12/07/98-12/31/99                                        Life   12/07/98-12/31/99                                



            SUN CAPITAL SELECT EQUITY FUND                                                                              

Number                              Cumulative  Compound                                                                
  of                                  Growth     Growth                                                                 
Years       Periods        Amount      Rate       Rate*                                                                 
                                                                                                                        

Life   09/01/99-12/31/99                                                                                                


* For periods of less than one year, the growth rates listed are not annualized.

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      ADVERTISING AND SALES LITERATURE

          As set forth in the Prospectus, the Company may refer to the following
organizations (and others) in its marketing materials:                          

         A.M. BEST'S RATING SYSTEM is designed to evaluate the various factors
affecting the overall performance of an insurance company in order to provide an
opinion as to an insurance company's relative financial strength and ability to 
meet its contractual obligations. The procedure includes both a quantitative and
qualitative review of each company.                                             

         DUFF & PHELPS CREDIT RATING Company's Insurance Company Claims Paying
Ability Rating is an independent evaluation by a nationally accredited rating   
organization of an insurance company's ability to meet its future obligations   
under the contracts and products it sells. The rating takes into account both   
quantitative and qualitative factors.                                           

        LIPPER VARIABLE INSURANCE PRODUCTS PERFORMANCE ANALYSIS SERVICE is a
publisher of statistical data covering the investment company industry in the   
United States and overseas. Lipper is recognized as the leading source of data  
on open-end and closed-end funds. Lipper currently tracks the performance of    
over 5,000 investment companies and publishes numerous specialized reports,     
including reports on performance and portfolio analysis, fee and expense        
analysis.                                                                       

          STANDARD & POOR'S insurance claims-paying ability rating is an opinion
of an operating insurance company's financial capacity to meet obligations of   
its insurance policies in accordance with their terms.                          

VARDS (Variable Annuity Research Data Service) provides a   
comprehensive guide to variable annuity contract features and historical fund   
performance. The service also provides a readily understandable analysis of the 
comparative characteristics and market performance of funds inclusive in        
variable contracts.                                                             

          MOODY'S Investors Services, Inc.'s insurance claims-paying rating is a
system of rating an insurance company's financial strength, market leadership,  
and ability to meet financial obligations. The purpose of Moody's ratings is to 
provide investors with a simple system of gradation by which the relative       
quality of insurance companies may be noted.                                    

   STANDARD & POOR'S INDEX - broad-based measurement of changes in
stock-market conditions based on the average performance of 500 widely held     
common stocks; commonly known as the Standard & Poor's 500 (S&P 500). The       
selection of stocks, their relative weightings to reflect differences in the    
number of outstanding shares, and publication of the index itself are services  
of Standard & Poor's Corporation, a financial advisory, securities rating, and  
publishing firm. The index tracks 400 industrial company stocks, 20             
transportation stocks, 40 financial company stocks, and 40 public utilities.    

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NASDAQ-OTC Price Index - this index is based on the National
Association of Securities Dealers Automated Quotations (NASDAQ) and represents  
all domestic over-the-counter stocks except those traded on exchanges and those 
having only one market maker, a total of some 3,500 stocks. It is market        
value-weighted and was introduced with a base of 100.00 on February 5, 1971.    

      DOW JONES INDUSTRIAL AVERAGE (DJIA) - price-weighted average of 30
actively traded blue chip stocks, primarily industrials, but including American 
Express Company and American Telephone and Telegraph Company. Prepared and      
Published by Dow Jones & Company, it is the oldest and most widely quoted of all
the market indicators. The average is quoted in points, not dollars.            

    MORNINGSTAR, Inc. is an independent financial publisher offering
comprehensive statistical and analytical coverage of open-end and closed-end    
funds and variable annuities. This coverage for mutual funds includes, among    
other information, performance analysis rankings, risk rankings (e.g.           
aggressive, moderate or conservative), and "style box" matrices. Style box      
matrices display, for equity funds, the investment philosophy and size of the   
companies in which the fund invests and, for fixed-income funds, interest rate  
sensitivity and credit quality of the investment instruments.                   

          IBBOTSON ASSOCIATES, Inc. is a consulting firm that provides a variety
of historical data, including total return, capital appreciation and income, on 
the stock market as well as other investment asset classes, and inflation. This 
information will be used primarily for comparative purposes and to illustrate   
general financial planning principles.                                          

     In its advertisements and other sales literature for the Variable
Account and the Funds, the Company intends to illustrate the advantages of the  
Contracts in a number of ways:                                                  

 DOLLAR-COST AVERAGING ILLUSTRATIONS. These illustrations will
generally discuss the price-leveling effect of making regular investments in the
same Sub-Accounts over a period of time, to take advantage of the trends in     
market prices of the portfolio securities purchased by those Sub-Accounts.      

     SYSTEMATIC WITHDRAWAL PROGRAM. A service provided by the Company,
through which a Participant may take any distribution allowed by Internal       
Revenue Code Section 401 (a) (9) in the case of Qualified Contracts, or         
permitted under Internal Revenue Code Section 72 in the case of Non-Qualified   
Contracts, by way of a series of partial withdrawals. Withdrawals under this    
program may be fully or partially includible in income and may be subject to    
a 10% penalty tax. Consult your tax advisor.                                    

    THE COMPANY'S AND THE FUNDS' CUSTOMERS. Sales literature for the
Variable Account and the Funds may refer to the number of clients which they    
serve.                                                                          

THE COMPANY'S  ASSETS, SIZE. The Company may discuss its    
general financial condition (see, for example, the references to Standard &     
Poor's, Duff & Phelps and A.M. Best Company above); it may refer to its assets; 
it may also discuss its                                                         

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relative size and/or ranking among companies in the industry or among any       
sub-classification of those companies, based upon recognized evaluation         
criteria. For example, at December 31, 1998, the Company was the 36th largest   
U.S. life insurance company based upon overall assets.                          

 COMPOUND INTEREST ILLUSTRATIONS. These will emphasize several
advantages of the variable annuity contract. For example, but not by way of     
limitation, the literature may emphasize the potential savings through tax      
deferral; the potential advantage of the Variable Account over the Fixed        
Account; and the compounding effect when a participant makes regular deposits to
his or her account.                                                             

         The Company may use hypothetical illustrations of the benefits of tax
deferral, including but not limited to the following chart:                     

          The chart below assumes an initial investment of $10,000 which remains
fully invested for the entire time period, an 8% annual return, and a 33%       
combined federal and state income tax rate. It compares how three different     
investments might fare over 10, 20, and 30 years. The first example illustrates 
an investment in a non-tax-deferred account and assumes that taxes are paid     
annually out of that account. The second example illustrates how the same       
investment would grow in a tax-deferred investment, such as an annuity. And the 
third example illustrates the net value of the tax-deferred investment after    
paying taxes on the full account value.                                         

                                                                [Download Table]

--------------------------------------------------------------------------------
                                      10 YEARS       20 YEARS       30 YEARS    
--------------------------------------------------------------------------------
                                                                                
 Non-Tax-Deferred Account              $16,856        $28,413       $ 47,893    
--------------------------------------------------------------------------------
 Tax-Deferred Account                  $21,589        $46,610       $100,627    
--------------------------------------------------------------------------------
 Tax-Deferred Account After            $17,765        $34,528       $ 70,720    
--------------------------------------------------------------------------------
 Paying Taxes                                                                   
--------------------------------------------------------------------------------

THIS ILLUSTRATION IS HYPOTHETICAL AND DOES NOT REPRESENT THE PROJECTED          
PERFORMANCE OF THE CONTRACTS OR ANY OF ITS INVESTMENT OPTIONS. THE ILLUSTRATION 
DOES NOT REFLECT THE DEDUCTION OF ANY CHARGES OR FEES RELATED TO PORTFOLIO      
MANAGEMENT, MORTALITY AND EXPENSE, OR ACCOUNT ADMINISTRATION. TAXES ON EARNINGS 
WITHIN AN ANNUITY ARE DUE UPON WITHDRAWAL. WITHDRAWALS MAY ALSO BE SUBJECT TO   
SURRENDER CHARGES AND, IF MADE PRIOR TO AGE 59 1/2, A 10% FEDERAL PENALTY TAX.  

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TAX-DEFERRED ACCUMULATION:                                                      

In general, individuals who own annuity contracts are not taxed on    
increases in the value of their annuity contracts until some form of            
distribution is made under the contract. As a result, the annuity contract      
would benefit from tax deferral during the contract's accumulation phase;       
this would have the effect of permitting an investment in an annuity contract   
to grow more rapidly that a comparable investment under which increases in      
value are taxed on a current basis.                                             

In reports or other communications to you or in advertising or sales  
materials, we may also describe the effects of tax-deferred compounding on the  
Variable Account's investment returns. We may illustrate these effects in       
charts or graphs and from time to time may include comparisons of returns under 
the Contracts or in general on a tax-deferred basis, with the returns on a      
taxable basis. Different tax rates may be assumed. Any such illustrative chart  
or graph would show accumulations on an initial investment or Purchase Payment, 
assuming a given amount (including the applicable interest credit),             
hypothetical gross annual returns compounded annually, and a stated rate of     
return. The values shown for the taxable investment would not include any       
deduction for management fees or other expenses, but would assume the annual    
deduction of federal and state taxes from investment returns. The values shown  
for the Contracts in a chart would reflect the deduction of Contract expenses,  
such as the mortality and expense risk charge, the 0.15% administrative charge, 
and the $50 annual Account Fee. In addition, the values shown would assume that 
the Participant has not surrendered his or her Contract or made any partial     
surrenders until the end of the period shown. The chart would assume a full     
surrender at the end of the period shown and the payment of federal and state   
taxes, at a rate of not more than 33%, on the amount in excess of the Purchase  
Payments.                                                                       

In developing illustrative tax deferral charts, we will observe these 
general principles:                                                             

-  The assumed rate of earnings will be realistic.            
    -  The illustrative chart will accurately depict the effect of all
          fees and charges or provide a narrative that prominently discloses
all fees and charges under the Contract.                
       -  Charts comparing accumulation values for tax-deferred and non-tax-
           deferred investments will depict the implications of any surrender.
      -  A narrative accompanying the chart will prominently disclose that
          there may be a 10% tax penalty on a surrender by a Participant who
has not reached age 59 1/2 at the time of surrender.    

The rates of return illustrated in any chart would be hypothetical and
are not an estimate or guaranty of performance. Actual tax returns may vary     
among Participants.                                                             

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      CALCULATIONS

EXAMPLE OF VARIABLE ACCUMULATION UNIT VALUE CALCULATION                         

Suppose the net asset value of a Fund share at the end of the current 
valuation period is $18.38; at the end of the immediately preceding valuation   
period was $18.32; the Valuation Period is one day; and no dividends or         
distributions caused Fund shares to go "ex-dividend" during the current         
Valuation Period. $18.38 divided by $18.32 is 1.00327511. Subtracting the one   
day risk factor for mortality and expense risks and the administrative          
expense charge of .00004837 (the daily equivalent of the current maximum        
charge of 1.75% on an annual basis) gives a net investment factor of            
1.00322674.  If the value of the variable accumulation unit for the             
immediately preceding valuation period had been 14.5645672, the value for the   
current valuation period would be 14.6115633 (14.5645672 X 1.00322674).         

EXAMPLE OF VARIABLE ANNUITY UNIT CALCULATION                                    

Suppose the circumstances of the first example exist, and the value of
an annuity unit for the immediately preceding valuation period had been         
12.3456789.  If the first variable annuity payment is determined by using an    
annuity payment based on an assumed interest rate of 3% per year, the value     
of the annuity unit for the current valuation period would be 12.3846496        
(12.3456789 X 1.00323787 (the Net Investment Factor) (based on the daily        
equivalent of maximum annuity phase charge of 1.35% on an annual basis) X       
0.99991902). 0.99991902 is the factor, for a one day Valuation Period, that     
neutralizes the assumed interest rate of 3% per year used to establish the      
Annuity Payment Rates found in certain Contracts.                               

EXAMPLE OF VARIABLE ANNUITY PAYMENT CALCULATION                                 

Suppose that a Participant Account is credited with 8,765.4321 variable 
accumulation units of a particular Sub-Account but is not credited with any     
fixed accumulation units; that the variable accumulation unit value and the     
annuity unit value for the particular Sub-Account for the valuation period      
which ends immediately preceding the annuity commencement date are 14.5645672   
and 12.3456789 respectively; that the annuity payment rate for the age and      
option elected is $6.78 per $1,000; and that the annuity unit value on the      
day prior to the second variable annuity payment date is 12.3846496.  The       
first variable annuity payment would be $865.57 (8,765.4321 X 14.5645672 X      
6.78 divided by 1,000).  The number of annuity units credited would be          
70.1112 ($865.57 divided by 12.3456789) and the second variable annuity         
payment would be $868.30 (70.1112 X 12.3846496).                                

  DISTRIBUTION OF THE CONTRACT

      We offer the Contract on a continuous basis. Contracts are sold by
licensed insurance agents in those states where the Contract may be lawfully    
sold. Such agents will be registered representatives of broker-dealers          
registered under the Securities Exchange Act of 1934 who are members of the     
National Association of Securities Dealers, Inc. and who have entered into      
distribution agreements with the Company and the general distributor and        
principal underwriter of the Contracts, Clarendon Insurance Agency, Inc.        
("Clarendon"), One Sun Life Executive Park, Wellesley Hills, Massachusetts      
02481.  Clarendon is a wholly-owned subsidiary of the Company.  Clarendon is    
registered with the SEC under the Securities Exchange Act of 1934 as            
broker-dealer and is a member of the National Association of Securities         
Dealers, Inc.  Clarendon also acts as the general distributor of certain        
other annuity contracts issued by the Company and its wholly-owned              
subsidiary, Sun Life Insurance and Annuity Company of New York, and variable    
life insurance contracts issued by the Company.                                 

       Commissions and other distribution compensation will be paid by the
Company to the selling agents and will not be more than 2.50% of Purchase       
Payments. In addition, after the first Account Year, broker-dealers who have    
entered into distribution agreements with the Company may receive an annual     
renewal commission of no more than 0.50% of the Participant's Account Value. In 
addition to commissions, the Company may, from time to time, pay or allow       
additional promotional incentives, in the form of cash or other compensation.   
The Company reserves the right to offer these additional incentives only to     
certain                                                                         

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      -14-

broker-dealers that sell or are expected to sell during specified time          
periods certain minimum amounts of Contracts or Certificates or other           
contracts offered by the Company.  Promotional incentives may change at any     
time.  Commissions will not be paid with respect to Participant Accounts        
established for the personal account of employees of the Company or any of      
its affiliates, or of persons engaged in the distribution of the Contract, or   
of immediate family members of such employees or persons. In addition,          
commissions may be waived or reduced in connection with certain transactions    
described in the Prospectus under the heading "Waivers; Reduced Charges;        
Credits; Special Guaranteed Interest Rates."                                    

   DESIGNATION AND CHANGE OF BENEFICIARY

        The Beneficiary designation in the Application will remain in effect
until changed.                                                                  

       Subject to the rights of an irrevocably designated Beneficiary, you
may change or revoke the designation of Beneficiary by filing the change or     
revocation with us in the form we require.  The change or revocation will not be
binding on us until we receive it.  When we receive it, the change or revocation
will be effective as of the date on which it was signed, but the change or      
revocation will be without prejudice to us on account of any payment we make or 
any action we take before receiving the change or revocation.                   

        Please refer to the terms of your particular retirement plan and any
applicable legislation for any restrictions on the beneficiary designation.     

   CUSTODIAN

   We are the Custodian of the assets of the Variable Account.  We
will purchase Fund shares at net asset value in connection with amounts         
allocated to the Sub-Accounts in accordance with your instructions, and we      
will redeem Fund shares at net asset value for the purpose of meeting the       
contractual obligations of the Variable Account, paying charges relative to     
the Variable Account or making adjustments for annuity reserves held in the     
Variable Account.                                                               

    FINANCIAL STATEMENTS

  The Financial Statements of Sun Life of Canada (U.S.) Variable
Account F for the year ended December 31, 1999 included in this Statement of    
Additional Information have been audited by ____________________, independent   
auditors, as stated in their report appearing herein, and are included in       
reliance upon the report of such firm given upon their authority as experts in  
accounting and auditing.                                                        

[An auditor's letter and consent will be included in the Registration       
Statement prior to effectiveness.]                                              

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FUTURITY, FUTURITY II, FUTURITY FOCUS AND FUTURITY ACCOLADE SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENT OF CONDITION -- December 31, 1999                                     

                                                                [Download Table]

ASSETS:                                       Shares        Cost         Value    
Investments in:                             ----------  ------------  ------------
                                                                                  
    AIM Variable Insurance Fund, Inc.                                             
      V.I. Capital Appreciation Fund                                              
       ("AIM1")...........................     255,687  $  6,981,155  $  9,097,348
      V.I. Growth Fund ("AIM2")...........     741,254    20,293,321    23,905,448
      V.I. Growth and Income Fund                                                 
       ("AIM3")...........................     981,255    25,698,056    30,997,847
      V.I. International Equity Fund                                              
       ("AIM4")...........................     663,340    14,275,089    19,429,224
    The Alger American Fund                                                       
      Growth Portfolio ("AL1")............     591,197    33,048,256    38,061,287
      Income and Growth Portfolio                                                 
       ("AL2")............................   1,129,592    15,318,235    19,858,219
      Small Capitalization Portfolio                                              
       ("AL3")............................     119,865     5,181,035     6,610,539
    Goldman Sachs Variable Insurance Trust                                        
      VIT CORE(SM) Large Cap Growth Fund                                          
       ("GS1")............................     985,947    12,493,582    15,577,956
      VIT CORE(SM) Small Cap Equity Fund                                          
       ("GS2")............................     169,591     1,540,419     1,797,668
      VIT CORE(SM) U.S. Equity Fund                                               
       ("GS3")............................   1,288,723    16,049,358    18,016,345
      VIT Growth and Income Fund                                                  
       ("GS4")............................     498,885     5,372,735     5,432,857
      VIT International Equity Fund                                               
       ("GS5")............................     188,532     2,450,696     2,728,066
    J.P. Morgan Series Trust II                                                   
      U.S. Disciplined Equity Portfolio                                           
       ("JP1")............................     887,236    14,979,632    15,393,540
      International Opportunities                                                 
       Portfolio ("JP2")..................     238,484     2,857,497     3,298,239
      Small Company Portfolio ("JP3").....      89,517     1,161,883     1,497,621
    Lord Abbett Series Fund, Inc.                                                 
      Growth and Income Portfolio                                                 
       ("LA1")............................     946,232    21,136,754    20,968,509
    MFS/Sun Life Series Trust                                                     
      Capital Appreciation                                                        
       Series ("CAS").....................     277,227    12,143,992    15,002,355
      Emerging Growth Series ("EGS")......     772,757    19,942,257    31,124,303
      High Yield Series ("HYS")...........   1,387,022    12,467,981    12,505,613
      Money Market ("MMS")................   7,058,196     7,058,196     7,058,196
      Utilities Series ("UTS")............     949,600    16,114,520    18,839,274
      Government Securities                                                       
       Series ("GSS").....................   1,192,434    15,134,821    14,877,998
      Total Return Series ("TRS").........     142,102     2,643,887     2,665,736
      Massachusetts Investors Trust                                               
       Series ("MIT").....................     206,245     7,440,462     7,826,694
      New Discovery Series ("NWD")........     116,796     1,515,491     1,973,431
      Massachusetts Investors Growth Stock                                        
       Series ("MIS").....................     517,193     7,122,612     8,342,950
    OCC Accumulation Trust                                                        
      Equity Portfolio ("OP1")............     332,052    12,587,611    12,471,865
      Mid Cap Portfolio ("OP2")...........     360,177     3,599,355     4,188,853
      Small Cap Portfolio ("OP3").........     125,799     2,848,635     2,832,996
      Managed Portfolio ("OP4")...........      56,761     2,479,633     2,477,620
    Salomon Brothers Variable                                                     
     Series Funds, Inc.                                                           
      Variable Capital Fund ("SB1").......      28,306       318,508       386,941
      Variable Investors Fund ("SB2").....      54,050       608,228       661,035
      Variable Strategic Bond Fund                                                
       ("SB3")............................     701,256     7,086,047     6,774,136
      Variable Total Return Fund                                                  
       ("SB4")............................     649,718     6,792,139     6,646,615
    Sun Capital Advisers Trust                                                    
      Sun Capital Money Market Fund                                               
       ("SCA1")...........................  11,347,946    11,347,946    11,347,946
      Sun Capital Investment Grade Bond                                           
       Fund ("SCA2")......................     882,011     8,403,348     8,236,211
      Sun Capital Real Estate Fund                                                
       ("SCA3")...........................     146,885     1,384,282     1,313,801
      Sun Capital Select Equity Fund                                              
       ("SCA4")...........................     106,584     1,129,237     1,346,991
      Sun Capital Blue Chip Mid Cap Fund                                          
       ("SCA5")...........................     241,145     2,528,473     2,966,087
      Sun Capital Investors Foundation                                            
       Fund ("SCA6")......................      44,737       446,889       500,802
    Warburg Pincus Trust                                                          
      Emerging Markets Portolio ("WP1")...     156,084     1,879,019     2,213,268
      International Equity Portfolio                                              
       ("WP2")............................      72,377       925,062     1,208,689
      Post-Venture Capital Portfolio                                              
       ("WP3")............................      39,356       555,678       757,995
      Small Company Growth Portfolio                                              
       ("WP4")............................     142,923     2,639,880     3,744,591
                                                        ------------  ------------
                                                        $367,981,892  $422,963,705
                                                        ============              
OTHER ASSETS:                                                                     
  Receivable from sponsor...........................................           313
                                                                      ------------
        Net assets..................................................  $422,964,018
                                                                      ============

See notes to financial statements 

                                                                            30

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FUTURITY, FUTURITY II, FUTURITY FOCUS AND FUTURITY ACCOLADE SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENT OF CONDITION -- December 31, 1999 -- continued                        

                                                        [Enlarge/Download Table]

                                                     Applicable to Owners of                                  
                                               Deferred Variable Annuity Contracts   Reserve for              
                                              -------------------------------------   Variable                
                                                Units     Unit Value      Value       Annuities      Total    
                                              ----------  ----------  -------------  -----------  ------------
                                                                                                              
NET ASSETS APPLICABLE CONTRACT OWNERS:                                                                        
  FUTURITY CONTRACTS:                                                                                         
  AIM Variable Insurance Fund, Inc                                                                            
    V.I. Capital Appreciation Fund...........  227,735     $16.0639   $  3,658,220    $ 20,442    $  3,678,662
    V.I. Growth Fund.........................  442,430      16.6782      7,378,831      15,694       7,394,525
    V.I. Growth and Income Fund..............  799,385      14.9550     11,954,650      --          11,954,650
    V.I. International Equity Fund...........  458,813      16.8153      7,714,633      18,492       7,733,125
  The Alger American Fund                                                                                     
    Growth Portfolio.........................  755,329      16.6799     12,598,909      19,591      12,618,500
    Income and Growth Portfolio..............  434,832      16.6354      7,233,458      --           7,233,458
    Small Capitalization Portfolio...........  182,220      14.6937      2,677,436      --           2,677,436
  Goldman Sachs Variable Insurance Trust                                                                      
    VIT CORE(SM) Large-Cap Growth Fund.......  423,081      14.6906      6,215,258      30,248       6,245,506
    VIT CORE(SM) Small Cap Equity Fund.......   80,363      10.3704        833,389      21,975         855,364
    VIT CORE(SM) U.S. Equity Fund............  575,303      13.8599      7,973,615       1,746       7,975,361
    VIT Growth and Income Fund...............  301,072       9.6158      2,895,047      --           2,895,047
    VIT International Equity Fund............   62,975      13.6576        860,104      14,975         875,079
  J.P. Morgan Series Trust II                                                                                 
    U.S. Disciplined Equity Portfolio........  568,955      12.6575      7,200,012      16,167       7,216,179
    International Opportunities Portfolio....  105,324      12.4536      1,311,641      14,966       1,326,607
    Small Company Portfolio..................   41,135      11.8980        488,979      --             488,979
  Lord Abbett Series Fund, Inc.                                                                               
    Growth and Income Portfolio..............  681,170      11.6064      7,905,869      --           7,905,869
  MFS/Sun Life Series Trust                                                                                   
    Capital Appreciation Series..............  490,436      14.8787      7,297,103      18,186       7,315,289
    Emerging Growth Series...................  644,429      21.1132     13,605,969      24,357      13,630,326
    High Yield Series........................  581,114      10.1846      5,918,296      30,070       5,948,366
    Money Market.............................  663,091      10.6449      7,058,196      --           7,058,196
    Utilities Series.........................  762,245      13.4418     10,246,498      38,625      10,285,123
    Government Securities Series.............  635,712      10.2352      6,507,038      38,668       6,545,706
  OCC Accumulation Trust                                                                                      
    Equity Portfolio.........................  770,005      10.6854      8,228,328       1,399       8,229,727
    Mid Cap Portfolio........................  208,499      11.6402      2,426,934      16,257       2,443,191
    Small Cap Portfolio......................  235,529       7.9927      1,882,593      12,267       1,894,860
  Salomon Brothers Variable                                                                                   
   Series Funds, Inc.                                                                                         
    Variable Capital Fund....................   29,639      13.0553        386,941      --             386,941
    Variable Investors Fund..................   58,715      11.2585        661,035      --             661,035
    Variable Strategic Bond Fund.............  649,260      10.3875      6,743,944      29,428       6,773,372
    Variable Total Return Fund...............  657,323      10.0870      6,630,414      15,568       6,645,982
  Warburg Pincus Trust                                                                                        
    Emerging Markets Portfolio...............   68,070      13.1613        895,490      19,339         914,829
    International Equity Portfolio...........   52,931      13.7221        726,022      --             726,022
    Post-Venture Capital Portfolio...........   21,318      14.8836        317,283      22,511         339,794
    Small Company Growth Portfolio...........  153,457      14.7515      2,263,671      --           2,263,671
                                                                      ------------    --------    ------------
                                                                      $170,695,806    $440,971    $171,136,777
                                                                      ------------    --------    ------------

See notes to financial statements 

31                                                                              

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FUTURITY, FUTURITY II, FUTURITY FOCUS AND FUTURITY ACCOLADE SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENT OF CONDITION -- December 31, 1999 -- continued                        

                                                        [Enlarge/Download Table]

                                                  Applicable to Owners of                                  
                                            Deferred Variable Annuity Contracts   Reserve for              
                                            ------------------------------------   Variable                
                                              Units     Unit Value     Value       Annuities      Total    
                                            ----------  ----------  ------------  -----------  ------------
                                                                                                           
FUTURITY II CONTRACTS:                                                                                     
AIM Variable Insurance Fund, Inc.                                                                          
  V.I. Capital Appreciation Fund...........    299,649   $16.1116   $  4,827,802  $    8,726   $  4,836,528
  V.I. Growth Fund.........................    997,502    15.1070     15,069,053      79,067     15,148,120
  V.I. Growth and Income Fund..............  1,213,444    14.6474     17,773,822       7,527     17,781,349
  V.I. International Equity Fund...........    659,564    16.1369     10,643,339     105,296     10,748,635
The Alger American Fund                                                                                    
  Growth Portfolio.........................  1,620,151    14.7688     23,927,733       7,327     23,935,060
  Income and Growth Portfolio..............    755,933    15.4887     11,708,323     129,522     11,837,845
  Small Capitalization Portfolio...........    221,946    16.0647      3,565,453      62,046      3,627,499
Goldman Sachs Variable Insurance Trust.....                                                                
  VIT CORE(SM) Large Cap Growth Fund.......    610,853    14.6991      8,978,980      81,371      9,060,351
  VIT CORE(SM) Small Cap Equity Fund.......     71,821    12.5954        904,609      --            904,609
  VIT CORE(SM) U.S. Equity Fund............    714,634    13.2821      9,491,693      37,088      9,528,781
  VIT Growth and Income Fund...............    202,285    10.7721      2,179,037      --          2,179,037
  VIT International Equity Fund............    119,879    13.7806      1,651,950      10,048      1,661,998
J.P. Morgan Series Trust II                                                                                
  U.S. Disciplined Equity Portfolio........    625,004    12.5201      7,825,090       2,878      7,827,968
  International Opportunities Portfolio....    118,543    14.1565      1,678,149       8,055      1,686,204
  Small Company Portfolio..................     57,635    15.4528        890,606      --            890,606
Lord Abbett Series Fund, Inc.                                                                              
  Growth and Income Portfolio..............    982,146    12.1973     11,979,747      --         11,979,747
MFS/Sun Life Series Trust                                                                                  
  Capital Appreciation Series..............    500,296    14.5469      7,277,799      46,064      7,323,863
  Emerging Growth Series...................    804,467    19.5404     15,719,228      66,614     15,785,842
  High Yield Series........................    554,000    10.5249      5,830,887      47,861      5,878,748
  Utilities Series.........................    552,461    13.6365      7,533,885     151,724      7,685,609
  Government Securities Series.............    807,566     9.6303      7,777,300      22,972      7,800,272
  Total Return Series......................    211,045     9.7515      2,058,019      79,388      2,137,407
  Massachusetts Investors Trust Series.....    629,184    10.3311      6,499,923       3,822      6,503,745
  New Discovery Series.....................     99,212    15.7992      1,567,598      --          1,567,598
  Massachusetts Investors Growth Stock                                                                     
   Series..................................    554,180    12.7880      7,086,871      70,749      7,157,620
OCC Accumulation Trust                                                                                     
  Equity Portfolio.........................    388,617    10.6953      4,156,707       9,385      4,166,092
  Mid Cap Portfolio........................    108,852    12.7334      1,386,020      31,822      1,417,842
  Small Cap Portfolio......................     88,598    10.0200        887,738       6,663        894,401
  Managed Portfolio........................    196,817    10.9043      2,146,181      --          2,146,181
Sun Capital Advisers Trust                                                                                 
  Sun Capital Money Market Fund............    699,550    10.3353      7,227,674      --          7,227,674
  Sun Capital Investment Grade Bond Fund...    768,145     9.7835      7,513,643     272,953      7,786,596
  Sun Capital Real Estate Fund.............    131,848     9.5549      1,260,492      10,151      1,270,643
  Sun Capital Select Equity Fund...........     96,820    12.4016      1,200,685      --          1,200,685
  Sun Capital Blue Chip Mid Cap Fund.......    217,115    12.4368      2,700,610      --          2,700,610
  Sun Capital Investors Foundation Fund....     43,869    10.9954        482,321       5,356        487,677
Warburg Pincus Trust                                                                                       
  Emerging Markets Portfolio...............     67,177    18.7689      1,260,819      --          1,260,819
  International Equity Portfolio...........     29,939    15.6899        469,714      --            469,714
  Post-Venture Capital Portfolio...........     22,526    18.1439        408,703      --            408,703
  Small Company Growth Portfolio...........     79,878    18.4977      1,477,493      --          1,477,493
                                                                    ------------  ----------   ------------
                                                                    $227,025,696  $1,364,475   $228,390,171
                                                                    ------------  ----------   ------------

See notes to financial statements 

                                                                            32

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FUTURITY, FUTURITY II, FUTURITY FOCUS AND FUTURITY ACCOLADE SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENT OF CONDITION -- December 31, 1999 -- continued                        

                                                        [Enlarge/Download Table]

                                                  Applicable to Owners of                                 
                                            Deferred Variable Annuity Contracts   Reserve for             
                                            ------------------------------------   Variable               
                                              Units     Unit Value     Value       Annuities      Total   
                                            ----------  ----------  ------------  -----------  -----------
                                                                                                          
FUTURITY FOCUS CONTRACTS:                                                                                 
AIM Variable Insurance Fund, Inc.                                                                         
  V.I. Capital Appreciation Fund...........   13,617     $14.5809    $  198,546    $ --        $  198,546 
  V.I. Growth Fund.........................   35,873      12.6718       454,575      --           454,575 
  V.I. Growth and Income Fund..............   54,107      12.3530       668,377      72,072       740,449 
  V.I. International Equity Fund...........   25,337      15.4607       391,699      --           391,699 
The Alger American Fund                                                                                   
  Growth Portfolio.........................   38,842      11.9744       465,098      71,015       536,113 
  Income and Growth Portfolio..............   32,436      13.3063       431,600      --           431,600 
  Small Capitalization Portfolio...........    9,175      14.3935       132,059      --           132,059 
Goldman Sachs Variable Insurance Trust                                                                    
  VIT CORE(SM) Large Cap Growth Fund.......    4,085      12.6110        51,512      --            51,512 
  VIT CORE(SM) Small Cap Equity Fund.......    1,112      12.6115        14,026      --            14,026 
  VIT CORE(SM) U.S. Equity Fund............   20,598      11.4782       236,356      --           236,356 
  VIT Growth and Income Fund...............   29,257      10.2122       298,780      --           298,780 
  VIT International Equity Fund............    8,621      12.8408       110,689      --           110,689 
J.P. Morgan Series Trust II                                                                               
  U.S. Disciplined Equity Portfolio........   18,690      11.3541       212,214      62,890       275,104 
  International Opportunities Portfolio....   12,234      12.9528       158,454      --           158,454 
  Small Company Portfolio..................    2,709      15.2351        41,270      --            41,270 
Lord Abbett Series Fund, Inc.                                                                             
  Growth and Income Portfolio..............   40,278      11.1378       448,597      --           448,597 
MFS/Sun Life Series Trust                                                                                 
  Capital Appreciation Series..............   23,051      13.0937       301,818      --           301,818 
  Emerging Growth Series...................   41,308      16.8156       694,593      98,890       793,483 
  High Yield Series........................   21,929      10.1744       223,107      --           223,107 
  Utilities Series.........................   20,685      12.9391       267,628      --           267,628 
  Government Securities Series.............   42,930       9.8048       420,940      --           420,940 
  Total Return Series......................    8,841       9.7678        86,296      --            86,296 
  Massachusetts Investors Trust Series.....   74,478      10.3484       770,599      --           770,599 
  New Discovery Series.....................    7,128      15.8255       112,755      --           112,755 
  Massachusetts Investors Growth Stock                                                                    
   Series..................................   29,925      12.8093       383,253      75,517       458,770 
OCC Accumulation Trust                                                                                    
  Equity Portfolio.........................    7,388      10.1788        75,201      --            75,201 
  Mid Cap Portfolio........................    6,976      12.5548        87,586      --            87,586 
  Small Cap Portfolio......................    3,882      10.7094        41,574      --            41,574 
  Managed Portfolio........................    5,669      10.3195        58,501      --            58,501 
Sun Capital Advisers Trust                                                                                
  Sun Capital Money Market Fund............   41,528      10.2760       426,574      --           426,574 
  Sun Capital Investment Grade Bond Fund...   34,584       9.8082       339,122      --           339,122 
  Sun Capital Real Estate Fund.............    2,642      10.1759        26,874      --            26,874 
  Sun Capital Select Equity Fund...........    1,940      12.4115        24,085      --            24,085 
  Sun Capital Blue Chip Mid Cap Fund.......    2,350      12.4467        29,268      --            29,268 
  Sun Capital Investors Foundation Fund....    1,253      11.0042        13,784      --            13,784 
Warburg Pincus Trust                                                                                      
  Emerging Markets Portfolio...............    1,472      18.4283        27,121      --            27,121 
  International Equity Portfolio...........      861      15.0418        12,953      --            12,953 
  Post-Venture Capital Portfolio...........      100      16.0808         1,609      --             1,609 
  Small Company Growth Portfolio...........      194      17.6963         3,427      --             3,427 
                                                                     ----------    --------    ---------- 
                                                                     $8,742,520    $380,384    $9,122,904 
                                                                     ----------    --------    ---------- 

See notes to financial statements 

33                                                                              

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FUTURITY, FUTURITY II, FUTURITY FOCUS AND FUTURITY ACCOLADE SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENT OF CONDITION -- December 31, 1999 -- continued                        

                                                        [Enlarge/Download Table]

                                                      Applicable to Owners of                                  
                                                Deferred Variable Annuity Contracts   Reserve for              
                                               -------------------------------------   Variable                
                                                 Units     Unit Value      Value       Annuities      Total    
                                               ----------  ----------  -------------  -----------  ------------
                                                                                                               
  FUTURITY ACCOLADE CONTRACTS:                                                                                 
  AIM Variable Insurance Fund, Inc.                                                                            
    V.I. Capital Appreciation Fund...........    27,793     $13.7461   $    382,040   $   --       $    382,040
    V.I. Growth Fund.........................    71,866      12.6219        907,075       --            907,075
    V.I. Growth and Income Fund..............    41,234      12.7245        524,675       --            524,675
    V.I. International Equity Fund...........    40,021      13.8416        553,946       --            553,946
  The Alger American Fund                                                                                      
    Growth Portfolio.........................    77,992      12.4941        974,439       --            974,439
    Income and Growth Portfolio..............    25,358      13.9651        354,123       --            354,123
    Small Capitalization Portfolio...........    12,969      13.3871        173,611       --            173,611
  Goldman Sachs Variable Insurance Trust                                                                       
    VIT CORE(SM) Large Cap Growth Fund.......    17,289      12.6147        218,093       --            218,093
    VIT CORE(SM) Small Cap Equity Fund.......     1,775      12.0375         21,362       --             21,362
    VIT CORE(SM) U.S. Equity Fund............    23,427      11.7733        275,804       --            275,804
    VIT Growth and Income Fund...............     5,354      11.2057         59,993       --             59,993
    VIT International Equity Fund............     6,582      12.0983         79,626       --             79,626
  J.P. Morgan Series Trust II                                                                                  
    U.S. Disciplined Equity Portfolio........     6,455      11.5320         74,439       --             74,439
    International Opportunities Portfolio....    10,730      11.7681        126,274       --            126,274
    Small Company Portfolio..................     5,598      13.7122         76,766       --             76,766
  Lord Abbett Series Fund, Inc.                                                                                
    Growth and Income Portfolio..............    55,559      11.4167        634,296       --            634,296
  MFS/Sun Life Series Trust                                                                                    
    Capital Appreciation Series..............     4,427      13.4436         59,522       --             59,522
    Emerging Growth Series...................    58,261      15.8653        924,342       --            924,342
    High Yield Series........................    44,229      10.2886        455,044       --            455,044
    Utilities Series.........................    49,859      12.0305        599,829       --            599,829
    Government Securities Series.............    11,012       9.9962        110,071       --            110,071
    Total Return Series......................    42,271      10.4572        442,050       --            442,050
    Massachusetts Investors Trust Series.....    48,386      11.4114        552,168       --            552,168
    New Discovery Series.....................    18,482      15.8588        293,078       --            293,078
    Massachusetts Investors Growth Stock                                                                       
     Series..................................    55,773      13.1026        730,733       --            730,733
  OCC Accumulation Trust                                                                                       
    Equity Portfolio.........................       102      10.7137          1,093       --              1,093
    Mid Cap Portfolio........................    19,070      12.5624        239,567       --            239,567
    Small Cap Portfolio......................       102      10.5551          1,076       --              1,076
    Managed Portfolio........................    25,785      10.5852        272,938       --            272,938
  Sun Capital Advisers Trust                                                                                   
    Sun Capital Money Market Fund............   366,623      10.0779      3,693,698       --          3,693,698
    Sun Capital Investment Grade Bond Fund...    11,553      10.0222        115,768       --            115,768
    Sun Capital Real Estate Fund.............     2,281      10.3018         23,500       --             23,500
    Sun Capital Select Equity Fund...........     9,027      13.5393        122,221       --            122,221
    Sun Capital Blue Chip Mid Cap Fund.......    17,878      13.2132        236,209       --            236,209
    Sun Capital Investors Foundation Fund....       394      11.9051          4,697       --              4,697
                                                                       ------------   ----------   ------------
                                                                       $ 14,314,166   $   --       $ 14,314,166
                                                                       ------------   ----------   ------------
Net Assets...........................................................  $420,778,188   $2,185,830   $422,964,018
                                                                       ============   ==========   ============

See notes to financial statements 

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FUTURITY, FUTURITY II, FUTURITY FOCUS AND FUTURITY ACCOLADE SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENT OF OPERATIONS -- Year Ended December 31, 1999                         

                                                        [Enlarge/Download Table]

                                             AIM1          AIM2           AIM3          AIM4          AL1           AL2     
                                         Sub-Account    Sub-Account   Sub-Account   Sub-Account   Sub-Account   Sub-Account 
                                         ------------  -------------  ------------  ------------  ------------  ------------
                                                                                                                            
INCOME AND EXPENSES:                                                                                                        
  Dividend income and capital gain                                                                                          
   distributions received...............  $  218,016    $  805,064    $   256,606   $    629,298  $ 1,046,126   $   318,108 
  Mortality and expense risk charges....     (48,238)     (126,456)      (171,308)      (105,490)    (209,904)     (105,710)
  Distribution expense charges..........      (5,788)      (15,175)       (20,557)       (12,659)     (25,189)      (12,685)
                                          ----------    ----------    -----------   ------------  -----------   ----------- 
      Net investment income (loss)......  $  163,990    $  663,433    $    64,741   $    511,149  $   811,033   $   199,713 
                                          ----------    ----------    -----------   ------------  -----------   ----------- 
REALIZED AND UNREALIZED GAINS (LOSSES):                                                                                     
  Realized gains (losses) on investment                                                                                     
   transactions:                                                                                                            
    Proceeds from sales.................  $  942,663    $  926,603    $ 2,322,201   $ 15,601,048  $ 3,351,107   $ 1,963,780 
    Cost of investments sold............    (859,926)     (793,451)    (1,853,865)   (15,068,813)  (2,750,587)   (1,604,550)
                                          ----------    ----------    -----------   ------------  -----------   ----------- 
      Net realized gains (losses).......  $   82,737    $  133,152    $   468,336   $    532,235  $   600,520   $   359,230 
                                          ----------    ----------    -----------   ------------  -----------   ----------- 
  Net unrealized appreciation                                                                                               
   (depreciation) on investments:                                                                                           
    End of year.........................  $2,116,193    $3,612,127    $ 5,299,791   $  5,154,135  $ 5,013,031   $ 4,539,984 
    Beginning of year...................     128,463       230,796        401,885        135,808      496,292       271,924 
                                          ----------    ----------    -----------   ------------  -----------   ----------- 
      Change in unrealized appreciation                                                                                     
       (depreciation)...................  $1,987,730    $3,381,331    $ 4,897,906   $  5,018,327  $ 4,516,739   $ 4,268,060 
                                          ----------    ----------    -----------   ------------  -----------   ----------- 
    Realized and unrealized gains                                                                                           
     (losses)...........................  $2,070,467    $3,514,483    $ 5,366,242   $  5,550,562  $ 5,117,259   $ 4,627,290 
                                          ----------    ----------    -----------   ------------  -----------   ----------- 
INCREASE (DECREASE) IN NET ASSETS FROM                                                                                      
 OPERATIONS.............................  $2,234,457    $4,177,916    $ 5,430,983   $  6,061,711  $ 5,928,292   $ 4,827,003 
                                          ==========    ==========    ===========   ============  ===========   =========== 


                                             AL3            GS1           GS2           GS3           GS4           GS5     
                                         Sub-Account    Sub-Account   Sub-Account   Sub-Account   Sub-Account   Sub-Account 
                                         ------------  -------------  ------------  ------------  ------------  ------------
INCOME AND EXPENSES:                                                                                                        
                                                                                                                            
  Dividend income and capital gain                                                                                          
   distributions received...............  $  217,832    $   15,486    $     3,930   $    258,153  $    57,072   $   200,160 
  Mortality and expense risk charges....     (33,658)      (91,000)       (10,149)      (117,224)     (42,948)      (15,062)
  Distribution expense charges..........      (4,039)      (10,920)        (1,218)       (14,067)      (5,154)       (1,807)
                                          ----------    ----------    -----------   ------------  -----------   ----------- 
      Net investment income (loss)......  $  180,135    $  (86,434)   $    (7,437)  $    126,862  $     8,970   $   183,291 
                                          ----------    ----------    -----------   ------------  -----------   ----------- 
REALIZED AND UNREALIZED GAINS (LOSSES):                                                                                     
  Realized gains (losses) on investment                                                                                     
   transactions:                                                                                                            
    Proceeds from sales.................  $  439,108    $  837,389    $    78,779   $  3,216,353  $   734,160   $ 3,021,499 
    Cost of investments sold............    (412,110)     (718,251)       (84,883)    (2,852,418)    (783,265)   (2,936,829)
                                          ----------    ----------    -----------   ------------  -----------   ----------- 
      Net realized gains (losses).......  $   26,998    $  119,138    $    (6,104)  $    363,935  $   (49,105)  $    84,670 
                                          ----------    ----------    -----------   ------------  -----------   ----------- 
  Net unrealized appreciation                                                                                               
   (depreciation) on investments:                                                                                           
    End of year.........................  $1,429,504    $3,084,374    $   257,249   $  1,966,987  $    60,122   $   277,370 
    Beginning of year...................      96,395       229,353         10,059        296,953      (71,917)       16,662 
                                          ----------    ----------    -----------   ------------  -----------   ----------- 
      Change in unrealized appreciation                                                                                     
       (depreciation)...................  $1,333,109    $2,855,021    $   247,190   $  1,670,034  $   132,039   $   260,708 
                                          ----------    ----------    -----------   ------------  -----------   ----------- 
    Realized and unrealized gains                                                                                           
     (losses)...........................  $1,360,107    $2,974,159    $   241,086   $  2,033,969  $    82,934   $   345,378 
                                          ----------    ----------    -----------   ------------  -----------   ----------- 
INCREASE (DECREASE) IN NET ASSETS FROM                                                                                      
 OPERATIONS.............................  $1,540,242    $2,887,725    $   233,649   $  2,160,831  $    91,904   $   528,669 
                                          ==========    ==========    ===========   ============  ===========   =========== 

See notes to financial statements 

35                                                                              

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FUTURITY, FUTURITY II, FUTURITY FOCUS AND FUTURITY ACCOLADE SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENT OF OPERATIONS -- Year Ended December 31, 1999 -- continued            

                                                        [Enlarge/Download Table]

                                              JP1            JP2           JP3           LA1           CAS           EGS        
                                          Sub-Account    Sub-Account   Sub-Account   Sub-Account   Sub-Account   Sub-Account    
                                          ------------  -------------  ------------  ------------  ------------  ------------   
                                                                                                                                
INCOME AND EXPENSES:                                                                                                            
  Dividend income and capital gain                                                                                              
   distributions received...............  $ 1,037,611   $    115,004   $    27,796   $ 1,617,324   $   810,381   $   139,054    
  Mortality and expense risk charges....     (108,647)       (19,007)       (7,179)     (127,444)     (105,003)     (153,257)   
  Distribution expense charges..........      (13,038)        (2,281)         (861)      (15,293)      (12,600)      (18,391)   
                                          -----------   ------------   -----------   -----------   -----------   -----------    
      Net investment income (loss)......  $   915,926   $     93,716   $    19,756   $ 1,474,587   $   692,778   $   (32,594)   
                                          -----------   ------------   -----------   -----------   -----------   -----------    
REALIZED AND UNREALIZED GAINS (LOSSES):                                                                                         
  Realized gains (losses) on investment                                                                                         
   transactions:                                                                                                                
    Proceeds from sales.................  $ 2,008,957   $  8,056,697   $   236,007   $ 2,008,566   $ 3,044,424   $ 3,055,305    
    Cost of investments sold............   (1,837,516)    (7,969,726)     (235,835)   (1,834,115)   (2,819,552)   (2,405,896)   
                                          -----------   ------------   -----------   -----------   -----------   -----------    
      Net realized gains (losses).......  $   171,441   $     86,971   $       172   $   174,451   $   224,872   $   649,409    
                                          -----------   ------------   -----------   -----------   -----------   -----------    
  Net unrealized appreciation                                                                                                   
   (depreciation) on investments:                                                                                               
    End of year.........................  $   413,908   $    440,742   $   335,738   $  (168,245)  $ 2,858,363   $11,182,046    
    Beginning of year...................       73,661          7,372        (1,240)       21,161       629,805       777,281    
                                          -----------   ------------   -----------   -----------   -----------   -----------    
      Change in unrealized appreciation                                                                                         
       (depreciation)...................  $   340,247   $    433,370   $   336,978   $  (189,406)  $ 2,228,558   $10,404,765    
                                          -----------   ------------   -----------   -----------   -----------   -----------    
    Realized and unrealized gains                                                                                               
     (losses)...........................  $   511,688   $    520,341   $   337,150   $   (14,955)  $ 2,453,430   $11,054,174    
                                          -----------   ------------   -----------   -----------   -----------   -----------    
INCREASE (DECREASE) IN NET ASSETS FROM                                                                                          
 OPERATIONS.............................  $ 1,427,614   $    614,057   $   356,906   $ 1,459,632   $ 3,146,208   $11,021,580    
                                          ===========   ============   ===========   ===========   ===========   ===========    


                                             HYS            MMS           UTS           GSS            TRS             MIT      
                                         Sub-Account    Sub-Account   Sub-Account   Sub-Account   Sub-Account(a)  Sub-Account(a)
                                         ------------  -------------  ------------  ------------  --------------  --------------
INCOME AND EXPENSES:                                                                                                            
                                                                                                                                
  Dividend income and capital gain                                                                                              
   distributions received..............  $   363,601   $    253,987   $   752,022   $   261,157     $  --           $  --       
  Mortality and expense risk charges...      (76,999)       (68,431)     (113,609)      (95,492)         (6,958)        (18,755)
  Distribution expense charges.........       (9,240)        (8,212)      (13,633)      (11,459)           (833)         (2,448)
                                         -----------   ------------   -----------   -----------     -----------     ----------- 
      Net investment income (loss).....  $   277,362   $    177,344   $   624,780   $   154,206     $    (7,791)    $   (21,203)
                                         -----------   ------------   -----------   -----------     -----------     ----------- 
REALIZED AND UNREALIZED GAINS (LOSSES):                                                                                         
  Realized gains (losses) on investment                                                                                         
   transactions:                                                                                                                
    Proceeds from sales................  $ 1,826,492   $ 10,080,035   $ 1,851,082   $ 1,930,639     $   222,400     $   246,755 
    Cost of investments sold...........   (1,925,559)   (10,080,035)   (1,695,734)   (2,001,852)       (227,128)       (250,495)
                                         -----------   ------------   -----------   -----------     -----------     ----------- 
      Net realized gains (losses)        $   (99,067)  $    --        $   155,348   $   (71,213)    $    (4,728)    $    (3,740)
                                         -----------   ------------   -----------   -----------     -----------     ----------- 
  Net unrealized appreciation                                                                                                   
   (depreciation) on investments:                                                                                               
    End of year........................  $    37,632   $    --        $ 2,724,754   $  (256,823)    $    21,849     $   386,232 
    Beginning of year..................       (2,792)       --            203,450        13,091        --              --       
                                         -----------   ------------   -----------   -----------     -----------     ----------- 
      Change in unrealized appreciation                                                                                         
       (depreciation)..................  $    40,424   $    --        $ 2,521,304   $  (269,914)    $    21,849     $   386,232 
                                         -----------   ------------   -----------   -----------     -----------     ----------- 
    Realized and unrealized gains                                                                                               
     (losses)..........................  $   (58,643)  $    --        $ 2,676,652   $  (341,127)    $    17,121     $   382,492 
                                         -----------   ------------   -----------   -----------     -----------     ----------- 
INCREASE (DECREASE) IN NET ASSETS FROM                                                                                          
 OPERATIONS............................  $   218,719   $    177,344   $ 3,301,432   $  (186,921)    $     9,330     $   361,289 
                                         ===========   ============   ===========   ===========     ===========     =========== 

(a) For the period May 17, 1999 (commencement of operations) through            
December 31, 1999.                                                              

See notes to financial statements 

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INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENT OF OPERATIONS -- Year Ended December 31, 1999 -- continued            

                                                        [Enlarge/Download Table]

                                          NWD             MIS            OP1           OP2            OP3             OP4      
                                     Sub-Account(a)  Sub-Account(a)  Sub-Account   Sub-Account   Sub-Account(a)  Sub-Account(a)
                                     --------------  --------------  ------------  ------------  --------------  --------------
                                                                                                                               
INCOME AND EXPENSES:                                                                                                           
  Dividend income and capital gain                                                                                             
   distributions received...........    $ --           $  --         $   269,757   $    97,793    $      6,172      $   7,352  
  Mortality and expense risk                                                                                                   
   charges..........................       (5,882)        (18,211)      (109,530)      (30,634)        (22,359)       (13,016) 
  Distribution expense charges......         (510)         (2,185)       (13,144)       (3,677)         (2,683)        (1,562) 
                                        ---------      ----------    -----------   -----------    ------------      ---------  
      Net investment income                                                                                                    
       (loss).......................    $  (6,392)     $  (20,396)   $   147,083   $    63,482    $    (18,870)     $  (7,226) 
                                        ---------      ----------    -----------   -----------    ------------      ---------  
REALIZED AND UNREALIZED GAINS                                                                                                  
 (LOSSES):                                                                                                                     
  Realized gains (losses) on                                                                                                   
   investment transactions:                                                                                                    
    Proceeds from sales.............    $ 167,789      $  221,950    $ 2,741,376   $ 2,320,501    $  1,102,903      $ 479,527  
    Cost of investments sold........     (142,292)       (191,232)    (2,691,665)   (2,304,988)     (1,068,470)      (477,589) 
                                        ---------      ----------    -----------   -----------    ------------      ---------  
      Net realized gains (losses)...    $  25,497      $   30,718    $    49,711   $    15,513    $     34,433      $   1,938  
                                        ---------      ----------    -----------   -----------    ------------      ---------  
  Net unrealized appreciation                                                                                                  
   (depreciation) on investments:                                                                                              
    End of year.....................    $ 457,940      $1,220,338    $  (115,746)  $   589,498    $    (15,639)     $  (2,013) 
    Beginning of year...............      --              --             201,803        41,964          28,952             54  
                                        ---------      ----------    -----------   -----------    ------------      ---------  
      Change in unrealized                                                                                                     
       appreciation (depreciation)..    $ 457,940      $1,220,338    $  (317,549)  $   547,534    $    (44,591)     $  (2,067) 
                                        ---------      ----------    -----------   -----------    ------------      ---------  
    Realized and unrealized gains                                                                                              
     (losses).......................    $ 483,437      $1,251,056    $  (267,838)  $   563,047    $    (10,158)     $    (129) 
                                        ---------      ----------    -----------   -----------    ------------      ---------  
INCREASE (DECREASE) IN NET ASSETS                                                                                              
 FROM OPERATIONS....................    $ 477,045      $1,230,660    $  (120,755)  $   626,529    $    (29,028)     $  (7,355) 
                                        =========      ==========    ===========   ===========    ============      =========  


                                          SB1             SB2            SB3           SB4            SCA1            SCA2     
                                      Sub-Account     Sub-Account    Sub-Account   Sub-Account    Sub-Account     Sub-Account  
                                     --------------  --------------  ------------  ------------  --------------  --------------
INCOME AND EXPENSES:                                                                                                           
                                                                                                                               
  Dividend income and capital gain                                                                                             
   distributions received...........    $  12,405      $    3,356    $   338,324   $   159,436    $    168,701      $ 184,000  
  Mortality and expense risk                                                                                                   
   charges..........................       (3,905)         (7,109)       (64,914)      (64,618)        (42,246)       (37,321) 
  Distribution expense charges......         (468)           (853)        (7,789)       (7,754)         (5,069)        (4,479) 
                                        ---------      ----------    -----------   -----------    ------------      ---------  
      Net investment income                                                                                                    
       (loss).......................    $   8,032      $   (4,606)   $   265,621   $    87,064    $    121,386      $ 142,200  
                                        ---------      ----------    -----------   -----------    ------------      ---------  
REALIZED AND UNREALIZED GAINS                                                                                                  
 (LOSSES):                                                                                                                     
  Realized gains (losses) on                                                                                                   
   investment transactions:                                                                                                    
    Proceeds from sales.............    $  60,590      $  179,526    $ 1,625,079   $ 1,052,022    $ 37,206,979      $ 767,441  
    Cost of investments sold........      (52,391)       (157,572)    (1,668,046)   (1,022,206)    (37,206,979)      (795,277) 
                                        ---------      ----------    -----------   -----------    ------------      ---------  
      Net realized gains (losses)...    $   8,199      $   21,954    $   (42,967)  $    29,816    $   --            $ (27,836) 
                                        ---------      ----------    -----------   -----------    ------------      ---------  
  Net unrealized appreciation                                                                                                  
   (depreciation) on investments:                                                                                              
    End of year.....................    $  68,433      $   52,807    $  (311,911)  $  (145,524)   $   --            $(167,137) 
    Beginning of year...............       23,271          19,454        (66,852)       64,469        --                   21  
                                        ---------      ----------    -----------   -----------    ------------      ---------  
      Change in unrealized                                                                                                     
       appreciation (depreciation)..    $  45,162      $   33,353    $  (245,059)  $  (209,993)   $   --            $(167,158) 
                                        ---------      ----------    -----------   -----------    ------------      ---------  
    Realized and unrealized gains                                                                                              
     (losses).......................    $  53,361      $   55,307    $  (288,026)  $  (180,177)   $   --            $(194,994) 
                                        ---------      ----------    -----------   -----------    ------------      ---------  
INCREASE (DECREASE) IN NET ASSETS                                                                                              
 FROM OPERATIONS....................    $  61,393      $   50,701    $   (22,405)  $   (93,113)   $    121,386      $ (52,794) 
                                        =========      ==========    ===========   ===========    ============      =========  

(a) For the period May 17, 1999 (commencement of operations) through            
December 31, 1999.                                                              

See notes to financial statements 

37                                                                              

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INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENT OF OPERATIONS -- Year Ended December 31, 1999 -- continued            

                                                        [Enlarge/Download Table]

                                             SCA3           SCA4            SCA5            SCA6     
                                         Sub-Account   Sub-Account(b)  Sub-Account(b)  Sub-Account(b)
                                         ------------  --------------  --------------  --------------
                                                                                                     
INCOME AND EXPENSES:                                                                                 
  Dividend income and capital gain                                                                   
   distributions received...............  $  69,130     $   --            $ 85,814       $      960  
  Mortality and expense risk charges....     (6,505)         (2,734)        (6,615)          (1,219) 
  Distribution expense charges..........       (781)           (328)          (794)            (146) 
                                          ---------     -----------       --------       ----------  
      Net investment income (loss)......  $  61,844     $    (3,062)      $ 78,405       $     (405) 
                                          ---------     -----------       --------       ----------  
REALIZED AND UNREALIZED GAINS (LOSSES):                                                              
  Realized gains (losses) on investment                                                              
   transactions:                                                                                     
    Proceeds from sales.................  $ 208,090     $    48,920       $ 66,470       $   16,985  
    Cost of investments sold............   (210,500)        (42,939)       (62,839)         (16,088) 
                                          ---------     -----------       --------       ----------  
      Net realized gains (losses).......  $  (2,410)    $     5,981       $  3,631       $      897  
                                          ---------     -----------       --------       ----------  
  Net unrealized appreciation                                                                        
   (depreciation) on investments:                                                                    
    End of year.........................  $ (70,481)    $   217,754       $437,614       $   53,913  
    Beginning of year...................         97         --             --               --       
                                          ---------     -----------       --------       ----------  
      Change in unrealized appreciation                                                              
       (depreciation)...................  $ (70,578)    $   217,754       $437,614       $   53,913  
                                          ---------     -----------       --------       ----------  
    Realized and unrealized gains                                                                    
     (losses)...........................  $ (72,988)    $   223,735       $441,245       $   54,810  
                                          ---------     -----------       --------       ----------  
INCREASE (DECREASE) IN NET ASSETS FROM                                                               
 OPERATIONS.............................  $ (11,144)    $   220,673       $519,650       $   54,405  
                                          =========     ===========       ========       ==========  


                                             WP1            WP2             WP3             WP4      
                                         Sub-Account    Sub-Account     Sub-Account     Sub-Account  
                                         ------------  --------------  --------------  --------------
INCOME AND EXPENSES:                                                                                 
                                                                                                     
  Dividend income and capital gain                                                                   
   distributions received...............  $  82,166     $    10,813       $     90       $   99,138  
  Mortality and expense risk charges....     (6,943)         (7,972)        (3,107)         (14,040) 
  Distribution expense charges..........       (833)           (956)          (372)          (1,685) 
                                          ---------     -----------       --------       ----------  
      Net investment income (loss)......  $  74,390     $     1,885       $ (3,389)      $   83,413  
                                          ---------     -----------       --------       ----------  
REALIZED AND UNREALIZED GAINS (LOSSES):                                                              
  Realized gains (losses) on investment                                                              
   transactions:                                                                                     
    Proceeds from sales.................  $ 365,750     $ 8,522,934       $ 85,336       $  382,926  
    Cost of investments sold............   (283,628)     (8,396,121)       (78,855)        (325,671) 
                                          ---------     -----------       --------       ----------  
      Net realized gains (losses).......  $  82,122     $   126,813       $  6,481       $   57,255  
                                          ---------     -----------       --------       ----------  
  Net unrealized appreciation                                                                        
   (depreciation) on investments:                                                                    
    End of year.........................  $ 334,249     $   283,627       $202,317       $1,104,711  
    Beginning of year...................     (3,352)         (1,858)         7,438           29,531  
                                          ---------     -----------       --------       ----------  
      Change in unrealized appreciation                                                              
       (depreciation)...................  $ 337,601     $   285,485       $194,879       $1,075,180  
                                          ---------     -----------       --------       ----------  
    Realized and unrealized gains                                                                    
     (losses)...........................  $ 419,723     $   412,298       $201,360       $1,132,435  
                                          ---------     -----------       --------       ----------  
INCREASE (DECREASE) IN NET ASSETS FROM                                                               
 OPERATIONS.............................  $ 494,113     $   414,183       $197,971       $1,215,848  
                                          =========     ===========       ========       ==========  

(b) For the period September 13, 1999 (commencement of operations) through      
December 31, 1999.                                                              

See notes to financial statements 

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FUTURITY, FUTURITY II, FUTURITY FOCUS AND FUTURITY ACCOLADE SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENTS OF CHANGES IN NET ASSETS                                             

                                                        [Enlarge/Download Table]

                                               AIM1                           AIM2                           AIM3             
                                            Sub-Account                    Sub-Account                    Sub-Account         
                                   -----------------------------  -----------------------------  -----------------------------
                                    Year Ended      Year Ended     Year Ended      Year Ended     Year Ended      Year Ended  
                                   December 31,    December 31,   December 31,    December 31,   December 31,    December 31, 
                                       1999          1998 (a)         1999          1998 (a)         1999          1998 (b)   
                                   -------------   -------------  -------------   -------------  -------------   -------------
                                                                                                                              
OPERATIONS:                                                                                                                   
  Net investment income (loss)....   $  163,990      $     (159)   $   663,433      $  144,861    $    64,741      $   32,869 
  Net realized gains (losses).....       82,737          (6,126)       133,152           2,691        468,336            (547)
  Net unrealized gains (losses)...    1,987,730         128,463      3,381,331         230,796      4,897,906         401,885 
                                     ----------      ----------    -----------      ----------    -----------      ---------- 
      Increase (Decrease) in net                                                                                              
       assets from operations.....   $2,234,457      $  122,178    $ 4,177,916      $  378,348    $ 5,430,983      $  434,207 
                                     ----------      ----------    -----------      ----------    -----------      ---------- 
PARTICIPANT TRANSACTIONS:                                                                                                     
  Accumulation activity:                                                                                                      
    Purchase payments received....   $3,190,508      $1,229,109    $ 8,313,278      $2,015,774    $ 8,663,899      $2,099,297 
    Net transfers between                                                                                                     
     Sub-Accounts and Fixed                                                                                                   
     Account......................    2,389,362         212,774      9,156,077         193,750       13,693,105     1,293,608 
    Withdrawals, surrenders,                                                                                                  
     annuitizations and contract                                                                                              
     charges......................     (291,401)        (10,395)      (396,819)        (18,667)      (634,386)        (50,636)
                                     ----------      ----------    -----------      ----------    -----------      ---------- 
      Net accumulation activity...   $5,288,469      $1,431,488    $17,072,536      $2,190,857    $21,722,618      $3,342,269 
                                     ----------      ----------    -----------      ----------    -----------      ---------- 
  Annuitization activity:                                                                                                     
    Annuitizations................   $   21,703      $   --        $    88,023      $   --        $    68,415      $   --     
    Annuity payments..............         (947)         --             (2,232)         --               (645)         --     
    Adjustments to annuity                                                                                                    
     reserve......................       (1,572)         --             (1,153)         --              3,276          --     
                                     ----------      ----------    -----------      ----------    -----------      ---------- 
      Net annuitization                                                                                                       
       activity...................   $   19,184      $   --        $    84,638      $   --        $    71,046      $   --     
                                     ----------      ----------    -----------      ----------    -----------      ---------- 
  Increase (Decrease) in net                                                                                                  
   assets from participant                                                                                                    
   transactions...................   $5,307,653      $1,431,488    $17,157,174      $2,190,857    $21,793,664      $3,342,269 
                                     ----------      ----------    -----------      ----------    -----------      ---------- 
    Increase (Decrease) in net                                                                                                
     assets.......................   $7,542,110      $1,553,666    $21,335,090      $2,569,205    $27,224,647      $3,776,476 
NET ASSETS:                                                                                                                   
  Beginning of year...............    1,553,666          --          2,569,205          --          3,776,476          --     
                                     ----------      ----------    -----------      ----------    -----------      ---------- 
  End of year.....................   $9,095,776      $1,553,666    $23,904,295      $2,569,205    $31,001,123      $3,776,476 
                                     ==========      ==========    ===========      ==========    ===========      ========== 

(a) For the period February 20, 1998 (commencement of operations) through       
December 31, 1998.                                                              
(b) For the period March 27, 1998 (commencement of operations) through          
December 31, 1998.                                                              

See notes to financial statements 

39                                                                              

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FUTURITY, FUTURITY II, FUTURITY FOCUS AND FUTURITY ACCOLADE SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENTS OF CHANGES IN NET ASSETS -- continued                                

                                                        [Enlarge/Download Table]

                                               AIM4                            AL1                            AL2             
                                            Sub-Account                    Sub-Account                    Sub-Account         
                                   -----------------------------  -----------------------------  -----------------------------
                                    Year Ended      Year Ended     Year Ended      Year Ended     Year Ended      Year Ended  
                                   December 31,    December 31,   December 31,    December 31,   December 31,    December 31, 
                                       1999          1998 (a)         1999          1998 (b)         1999          1998 (b)   
                                   -------------   -------------  -------------   -------------  -------------   -------------
                                                                                                                              
OPERATIONS:                                                                                                                   
  Net investment income (loss)....  $   511,149      $    8,211    $   811,033      $    6,203    $   199,713      $    6,890 
  Net realized gains (losses).....      532,235         (51,782)       600,520         (18,561)       359,230          (5,236)
  Net unrealized gains (losses)...    5,018,327         135,808      4,516,739         496,292      4,268,060         271,924 
                                    -----------      ----------    -----------      ----------    -----------      ---------- 
      Increase (Decrease) in net                                                                                              
       assets from operations.....  $ 6,061,711      $   92,237    $ 5,928,292      $  483,934    $ 4,827,003      $  273,578 
                                    -----------      ----------    -----------      ----------    -----------      ---------- 
PARTICIPANT TRANSACTIONS:                                                                                                     
  Accumulation activity:                                                                                                      
    Purchase payments received....  $ 4,140,973      $1,910,796    $12,748,856      $2,399,047    $ 5,097,716      $1,751,908 
    Net transfers between                                                                                                     
     Sub-Accounts and Fixed                                                                                                   
     Account......................    7,199,126         416,832     16,707,964         768,779      8,333,556         350,911 
    Withdrawals, surrenders,                                                                                                  
     annuitizations and contract                                                                                              
     charges......................     (465,245)         (8,627)    (1,047,363)        (12,258)      (821,155)        (47,719)
                                    -----------      ----------    -----------      ----------    -----------      ---------- 
      Net accumulation activity...  $10,874,854      $2,319,001    $28,409,457      $3,155,568    $12,610,117      $2,055,100 
                                    -----------      ----------    -----------      ----------    -----------      ---------- 
  Annuitization activity:                                                                                                     
    Annuitizations................  $    87,014      $   --        $    85,342      $   --        $    99,349      $   --     
    Annuity payments..............       (5,593)         --             (1,306)         --             (6,928)         --     
    Adjustments to annuity                                                                                                    
     reserve......................       (1,819)         --              2,825          --             (1,193)         --     
                                    -----------      ----------    -----------      ----------    -----------      ---------- 
      Net annuitization                                                                                                       
       activity...................  $    79,602      $   --        $    86,861      $   --        $    91,228      $   --     
                                    -----------      ----------    -----------      ----------    -----------      ---------- 
  Increase (Decrease) in net                                                                                                  
   assets from participant                                                                                                    
   transactions...................  $10,954,456      $2,319,001    $28,496,318      $3,155,568    $12,701,345      $2,055,100 
                                    -----------      ----------    -----------      ----------    -----------      ---------- 
    Increase (Decrease) in net                                                                                                
     assets.......................  $17,016,167      $2,411,238    $34,424,610      $3,639,502    $17,528,348      $2,328,678 
NET ASSETS:                                                                                                                   
  Beginning of year...............    2,411,238          --          3,639,502          --          2,328,678          --     
                                    -----------      ----------    -----------      ----------    -----------      ---------- 
  End of year.....................  $19,427,405      $2,411,238    $38,064,112      $3,639,502    $19,857,026      $2,328,678 
                                    ===========      ==========    ===========      ==========    ===========      ========== 

(a) For the period February 20, 1998 (commencement of operations) through       
December 31, 1998.                                                              
(b) For the period March 27, 1998 (commencement of operations) through          
December 31, 1998.                                                              

See notes to financial statements 

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INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENTS OF CHANGES IN NET ASSETS -- continued                                

                                                        [Enlarge/Download Table]

                                                AL3                            GS1                            GS2             
                                            Sub-Account                    Sub-Account                    Sub-Account         
                                   -----------------------------  -----------------------------  -----------------------------
                                    Year Ended      Year Ended     Year Ended      Year Ended     Year Ended      Year Ended  
                                   December 31,    December 31,   December 31,    December 31,   December 31,    December 31, 
                                       1999          1998 (b)         1999          1998 (c)         1999          1998 (a)   
                                   -------------   -------------  -------------   -------------  -------------   -------------
                                                                                                                              
OPERATIONS:                                                                                                                   
  Net investment income (loss)....   $  180,135       $ (1,923)    $   (86,434)     $   (6,002)    $   (7,437)      $   (383) 
  Net realized gains (losses).....       26,998         (3,015)        119,138          (6,745)        (6,104)        (5,269) 
  Net unrealized gains (losses)...    1,333,109         96,395       2,855,021         229,353        247,190         10,059  
                                     ----------       --------     -----------      ----------     ----------       --------  
      Increase (Decrease) in net                                                                                              
       assets from operations.....   $1,540,242       $ 91,457     $ 2,887,725      $  216,606     $  233,649       $  4,407  
                                     ----------       --------     -----------      ----------     ----------       --------  
PARTICIPANT TRANSACTIONS:                                                                                                     
  Accumulation activity:                                                                                                      
    Purchase payments received....   $2,088,417       $437,232     $ 4,819,708      $1,763,717     $  314,158       $258,204  
    Net transfers between                                                                                                     
     Sub-Accounts and Fixed                                                                                                   
     Account......................    2,244,048        285,561       5,800,687         357,499        981,739         20,679  
    Withdrawals, surrenders,                                                                                                  
     annuitizations and contract                                                                                              
     charges......................     (126,620)        (8,294)       (346,821)         (8,712)       (33,270)          (614) 
                                     ----------       --------     -----------      ----------     ----------       --------  
      Net accumulation activity...   $4,205,845       $714,499     $10,273,574      $2,112,504     $1,262,627       $278,269  
                                     ----------       --------     -----------      ----------     ----------       --------  
  Annuitization activity:                                                                                                     
    Annuitizations................   $   59,038       $  --        $    93,264      $   --         $   19,466       $  --     
    Annuity payments..............         (542)         --             (5,717)         --               (750)         --     
    Adjustments to annuity                                                                                                    
     reserve......................           66          --             (2,494)         --             (2,307)         --     
                                     ----------       --------     -----------      ----------     ----------       --------  
      Net annuitization                                                                                                       
       activity...................   $   58,562       $  --        $    85,053      $   --         $   16,409       $  --     
                                     ----------       --------     -----------      ----------     ----------       --------  
  Increase (Decrease) in net                                                                                                  
   assets from participant                                                                                                    
   transactions...................   $4,264,407       $714,499     $10,358,627      $2,112,504     $1,279,036       $278,269  
                                     ----------       --------     -----------      ----------     ----------       --------  
    Increase (Decrease) in net                                                                                                
     assets.......................   $5,804,649       $805,956     $13,246,352      $2,329,110     $1,512,685       $282,676  
NET ASSETS:                                                                                                                   
  Beginning of year...............      805,956          --          2,329,110          --            282,676          --     
                                     ----------       --------     -----------      ----------     ----------       --------  
  End of year.....................   $6,610,605       $805,956     $15,575,462      $2,329,110     $1,795,361       $282,676  
                                     ==========       ========     ===========      ==========     ==========       ========  

(a) For the period February 20, 1998 (commencement of operations) through       
December 31, 1998.                                                              
(b) For the period March 27, 1998 (commencement of operations) through          
December 31, 1998.                                                              
(c) For the period March 12, 1998 (commencement of operations) through          
December 31, 1998.                                                              

See notes to financial statements 

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INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENTS OF CHANGES IN NET ASSETS -- continued                                

                                                        [Enlarge/Download Table]

                                                GS3                            GS4                            GS5             
                                            Sub-Account                    Sub-Account                    Sub-Account         
                                   -----------------------------  -----------------------------  -----------------------------
                                    Year Ended      Year Ended     Year Ended      Year Ended     Year Ended      Year Ended  
                                   December 31,    December 31,   December 31,    December 31,   December 31,    December 31, 
                                       1999          1998 (a)         1999          1998 (a)         1999          1998 (b)   
                                   -------------   -------------  -------------   -------------  -------------   -------------
                                                                                                                              
OPERATIONS:                                                                                                                   
  Net investment income (loss)....  $   126,862      $     (858)    $    8,970      $    6,362     $  183,291       $    866  
  Net realized gains (losses).....      363,935          (9,820)       (49,105)         (8,821)        84,670         (2,816) 
  Net unrealized gains (losses)...    1,670,034         296,953        132,039         (71,917)       260,708         16,662  
                                    -----------      ----------     ----------      ----------     ----------       --------  
      Increase (Decrease) in net                                                                                              
       assets from operations.....  $ 2,160,831      $  286,275     $   91,904      $  (74,376)    $  528,669       $ 14,712  
                                    -----------      ----------     ----------      ----------     ----------       --------  
PARTICIPANT TRANSACTIONS:                                                                                                     
  Accumulation activity:                                                                                                      
    Purchase payments received....  $ 4,503,362      $2,581,300     $1,294,500      $1,443,172     $  840,435       $238,188  
    Net transfers between                                                                                                     
     Sub-Accounts and Fixed                                                                                                   
     Account......................    8,595,492         407,943      2,400,908         493,897      1,051,801         72,560  
    Withdrawals, surrenders,                                                                                                  
     annuitizations and contract                                                                                              
     charges......................     (498,099)        (56,166)      (203,335)        (13,813)       (37,988)           (76) 
                                    -----------      ----------     ----------      ----------     ----------       --------  
      Net accumulation activity...  $12,600,755      $2,933,077     $3,492,073      $1,923,256     $1,854,248       $310,672  
                                    -----------      ----------     ----------      ----------     ----------       --------  
  Annuitization activity:                                                                                                     
    Annuitizations................  $    37,472      $   --         $   --          $   --         $   20,676       $  --     
    Annuity payments..............       (2,065)         --             --              --               (911)         --     
    Adjustments to annuity                                                                                                    
     reserve......................          (43)         --             --              --               (674)         --     
                                    -----------      ----------     ----------      ----------     ----------       --------  
      Net annuitization                                                                                                       
       activity...................  $    35,364      $   --         $   --          $   --         $   19,091       $  --     
                                    -----------      ----------     ----------      ----------     ----------       --------  
  Increase (Decrease) in net                                                                                                  
   assets from participant                                                                                                    
   transactions...................  $12,636,119      $2,933,077     $3,492,073      $1,923,256     $1,873,339       $310,672  
                                    -----------      ----------     ----------      ----------     ----------       --------  
    Increase (Decrease) in net                                                                                                
     assets.......................  $14,796,950      $3,219,352     $3,583,977      $1,848,880     $2,402,008       $325,384  
NET ASSETS:                                                                                                                   
  Beginning of year...............    3,219,352          --          1,848,880          --            325,384          --     
                                    -----------      ----------     ----------      ----------     ----------       --------  
  End of year.....................  $18,016,302      $3,219,352     $5,432,857      $1,848,880     $2,727,392       $325,384  
                                    ===========      ==========     ==========      ==========     ==========       ========  

(a) For the period February 20, 1998 (commencement of operations) through       
December 31, 1998.                                                              
(b) For the period March 17, 1998 (commencement of operations) through          
December 31, 1998.                                                              

See notes to financial statements 

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INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENTS OF CHANGES IN NET ASSETS -- continued                                

                                                        [Enlarge/Download Table]

                                                JP1                            JP2                            JP3             
                                            Sub-Account                    Sub-Account                    Sub-Account         
                                   -----------------------------  -----------------------------  -----------------------------
                                    Year Ended      Year Ended     Year Ended      Year Ended     Year Ended      Year Ended  
                                   December 31,    December 31,   December 31,    December 31,   December 31,    December 31, 
                                       1999          1998 (a)         1999          1998 (a)         1999          1998 (a)   
                                   -------------   -------------  -------------   -------------  -------------   -------------
                                                                                                                              
OPERATIONS:                                                                                                                   
  Net investment income (loss)....  $   915,926      $  232,080     $   93,716       $  2,468      $   19,756       $  3,318  
  Net realized gains (losses).....      171,441         (42,054)        86,971         (1,892)            172         (3,060) 
  Net unrealized gains (losses)...      340,247          73,661        433,370          7,372         336,978         (1,240) 
                                    -----------      ----------     ----------       --------      ----------       --------  
      Increase (Decrease) in net                                                                                              
       assets from operations.....  $ 1,427,614      $  263,687     $  614,057       $  7,948      $  356,906       $   (982) 
                                    -----------      ----------     ----------       --------      ----------       --------  
PARTICIPANT TRANSACTIONS:                                                                                                     
  Accumulation activity:                                                                                                      
    Purchase payments received....  $ 4,908,483      $1,481,091     $1,032,722       $401,185      $  556,222       $126,177  
    Net transfers between                                                                                                     
     Sub-Accounts and Fixed                                                                                                   
     Account......................    6,352,530       1,474,721      1,243,965         78,547         412,896         65,945  
    Withdrawals, surrenders,                                                                                                  
     annuitizations and contract                                                                                              
     charges......................     (556,977)        (33,652)      (95,728)        (2,264)         (18,773)          (770) 
                                    -----------      ----------     ----------       --------      ----------       --------  
      Net accumulation activity...  $10,704,036      $2,922,160     $2,180,959       $477,468      $  950,345       $191,352  
                                    -----------      ----------     ----------       --------      ----------       --------  
  Annuitization activity:                                                                                                     
    Annuitizations................  $    77,078      $   --         $   18,651       $  --         $   --           $  --     
    Annuity payments..............       (1,035)         --               (844)         --             --              --     
    Adjustments to annuity                                                                                                    
     reserve......................          150          --               (700)         --             --              --     
                                    -----------      ----------     ----------       --------      ----------       --------  
      Net annuitization                                                                                                       
       activity...................  $    76,193      $   --         $   17,107       $  --         $   --           $  --     
                                    -----------      ----------     ----------       --------      ----------       --------  
  Increase (Decrease) in net                                                                                                  
   assets from participant                                                                                                    
   transactions...................  $10,780,229      $2,922,160     $2,198,066       $477,468      $  950,345       $191,352  
                                    -----------      ----------     ----------       --------      ----------       --------  
    Increase (Decrease) in net                                                                                                
     assets.......................  $12,207,843      $3,185,847     $2,812,123       $485,416      $1,307,251       $190,370  
NET ASSETS:                                                                                                                   
  Beginning of year...............    3,185,847          --            485,416          --            190,370          --     
                                    -----------      ----------     ----------       --------      ----------       --------  
  End of year.....................  $15,393,690      $3,185,847     $3,297,539       $485,416      $1,497,621       $190,370  
                                    ===========      ==========     ==========       ========      ==========       ========  

(a) For the period March 27, 1998 (commencement of operations) through          
December 31, 1998.                                                              

See notes to financial statements 
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FUTURITY, FUTURITY II, FUTURITY FOCUS AND FUTURITY ACCOLADE SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENTS OF CHANGES IN NET ASSETS -- continued                                

                                                        [Enlarge/Download Table]

                                                LA1                            CAS                            EGS             
                                            Sub-Account                    Sub-Account                    Sub-Account         
                                   -----------------------------  -----------------------------  -----------------------------
                                    Year Ended      Year Ended     Year Ended      Year Ended     Year Ended      Year Ended  
                                   December 31,    December 31,   December 31,    December 31,   December 31,    December 31, 
                                       1999          1998 (b)         1999          1998 (c)         1999          1998 (a)   
                                   -------------   -------------  -------------   -------------  -------------   -------------
                                                                                                                              
OPERATIONS:                                                                                                                   
  Net investment income (loss)....  $ 1,474,587      $  193,351    $   692,778      $   (9,437)   $   (32,594)     $   (9,825)
  Net realized gains (losses).....      174,451          (3,464)       224,872         (34,447)       649,409         (43,942)
  Net unrealized gains (losses)...     (189,406)         21,161      2,228,558         629,805     10,404,765         777,281 
                                    -----------      ----------    -----------      ----------    -----------      ---------- 
      Increase (Decrease) in net                                                                                              
       assets from operations.....  $ 1,459,632      $  211,048    $ 3,146,208      $  585,921    $11,021,580      $  723,514 
                                    -----------      ----------    -----------      ----------    -----------      ---------- 
PARTICIPANT TRANSACTIONS:                                                                                                     
  Accumulation activity:                                                                                                      
    Purchase payments received....  $ 6,119,781      $2,829,156    $ 3,621,357      $1,880,023    $ 7,852,516      $3,011,641 
    Net transfers between                                                                                                     
     Sub-Accounts and Fixed                                                                                                   
     Account......................   10,627,992         363,979      3,950,702       2,200,342      8,176,327       1,178,725 
    Withdrawals, surrenders,                                                                                                  
     annuitizations and contract                                                                                              
     charges......................     (621,174)        (21,905)      (385,338)        (47,046)      (925,614)        (36,641)
                                    -----------      ----------    -----------      ----------    -----------      ---------- 
      Net accumulation activity...  $16,126,599      $3,171,230    $ 7,186,721      $4,033,319    $15,103,229      $4,153,725 
                                    -----------      ----------    -----------      ----------    -----------      ---------- 
  Annuitization activity:                                                                                                     
    Annuitizations................  $   --           $   --         $   53,269      $   --        $   126,228      $   --     
    Annuity payments..............      --               --             (3,083)         --             (3,973)         --     
    Adjustments to annuity                                                                                                    
     reserve......................      --               --             (1,863)         --              9,690          --     
                                    -----------      ----------    -----------      ----------    -----------      ---------- 
      Net annuitization                                                                                                       
       activity...................  $   --           $   --        $    48,323      $   --        $   131,945      $   --     
                                    -----------      ----------    -----------      ----------    -----------      ---------- 
  Increase (Decrease) in net                                                                                                  
   assets from participant                                                                                                    
   transactions...................  $16,126,599      $3,171,230    $ 7,235,044      $4,033,319    $15,235,174      $4,153,725 
                                    -----------      ----------    -----------      ----------    -----------      ---------- 
    Increase (Decrease) in net                                                                                                
     assets.......................  $17,586,231      $3,382,278    $10,381,252      $4,619,240    $26,256,754      $4,877,239 
NET ASSETS:                                                                                                                   
  Beginning of year...............    3,382,278          --          4,619,240          --          4,877,239          --     
                                    -----------      ----------    -----------      ----------    -----------      ---------- 
  End of year.....................  $20,968,509      $3,382,278    $15,000,492      $4,619,240    $31,133,993      $4,877,239 
                                    ===========      ==========    ===========      ==========    ===========      ========== 

(a) For the period February 20, 1998 (commencement of operations) through       
December 31, 1998.                                                              
(b) For the period March 27, 1998 (commencement of operations) through          
December 31, 1998.                                                              
(c) For the period February 26, 1998 (commencement of operations) through       
December 31, 1998.                                                              

See notes to financial statements 

                                                                              44

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FUTURITY, FUTURITY II, FUTURITY FOCUS AND FUTURITY ACCOLADE SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENTS OF CHANGES IN NET ASSETS -- continued                                

                                                        [Enlarge/Download Table]

                                                HYS                            MMS                            UTS             
                                            Sub-Account                    Sub-Account                    Sub-Account         
                                   -----------------------------  -----------------------------  -----------------------------
                                    Year Ended      Year Ended     Year Ended      Year Ended     Year Ended      Year Ended  
                                   December 31,    December 31,   December 31,    December 31,   December 31,    December 31, 
                                       1999          1998 (c)         1999          1998 (a)         1999          1998 (b)   
                                   -------------   -------------  -------------   -------------  -------------   -------------
                                                                                                                              
OPERATIONS:                                                                                                                   
  Net investment income (loss)....  $   277,362      $    (239)     $  177,344      $   48,895    $   624,780      $   (7,859)
  Net realized gains (losses).....      (99,067)       (17,756)        --               --            155,348          (1,131)
  Net unrealized gains (losses)...       40,424         (2,792)        --               --          2,521,304         203,450 
                                    -----------      ----------     ----------      ----------    -----------      ---------- 
      Increase (Decrease) in net                                                                                              
       assets from operations.....  $   218,719      $  (20,787)    $  177,344      $   48,895    $ 3,301,432      $  194,460 
                                    -----------      ----------     ----------      ----------    -----------      ---------- 
PARTICIPANT TRANSACTIONS:                                                                                                     
  Accumulation activity:                                                                                                      
    Purchase payments received....  $ 3,074,357      $1,355,408     $  308,389      $5,275,423    $ 4,077,024      $1,634,726 
    Net transfers between                                                                                                     
     Sub-Accounts and Fixed                                                                                                   
     Account......................    7,484,053         786,221      4,197,928      (1,482,996)     9,168,485       1,078,739 
    Withdrawals, surrenders,                                                                                                  
     annuitizations and contract                                                                                              
     charges......................     (462,273)         (6,849)    (1,455,384)        (11,403)      (781,083)        (10,177)
                                    -----------      ----------     ----------      ----------    -----------      ---------- 
      Net accumulation activity...  $10,096,137      $2,134,780     $3,050,933      $3,781,024    $12,464,426      $2,703,288 
                                    -----------      ----------     ----------      ----------    -----------      ---------- 
  Annuitization activity:                                                                                                     
    Annuitizations................  $    80,858      $   --         $   --          $   --        $   179,007      $   --     
    Annuity payments..............       (4,094)         --             --              --             (3,339)         --     
    Adjustments to annuity                                                                                                    
     reserve......................         (348)         --             --              --             (1,085)         --     
                                    -----------      ----------     ----------      ----------    -----------      ---------- 
      Net annuitization                                                                                                       
       activity...................  $    76,416      $   --         $   --          $   --        $   174,583      $   --     
                                    -----------      ----------     ----------      ----------    -----------      ---------- 
  Increase (Decrease) in net                                                                                                  
   assets from participant                                                                                                    
   transactions...................  $10,172,553      $2,134,780     $3,050,933      $3,781,024    $12,639,009      $2,703,288 
                                    -----------      ----------     ----------      ----------    -----------      ---------- 
    Increase (Decrease) in net                                                                                                
     assets.......................  $10,391,272      $2,113,993     $3,228,277      $3,829,919    $15,940,441      $2,897,748 
NET ASSETS:                                                                                                                   
  Beginning of year...............    2,113,993          --          3,829,919          --          2,897,748         --      
                                    -----------      ----------     ----------      ----------    -----------      ---------- 
  End of year.....................  $12,505,265      $2,113,993     $7,058,196      $3,829,919    $18,838,189      $2,897,748 
                                    ===========      ==========     ==========      ==========    ===========      ========== 

(a) For the period February 20, 1998 (commencement of operations) through       
December 31, 1998.                                                              
(b) For the period March 27, 1998 (commencement of operations) through December 
31, 1998.                                                                       
(c) For the period February 26, 1998 (commencement of operations) through       
December 31, 1998.                                                              

See notes to financial statements 

45                                                                              

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FUTURITY, FUTURITY II, FUTURITY FOCUS AND FUTURITY ACCOLADE SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENTS OF CHANGES IN NET ASSETS -- continued                                

                                                        [Enlarge/Download Table]

                                                GSS                    TRS            MIT            NWD            MIS     
                                            Sub-Account            Sub-Account    Sub-Account    Sub-Account    Sub-Account 
                                   -----------------------------  -------------  -------------  -------------  -------------
                                    Year Ended      Year Ended     Year Ended     Year Ended     Year Ended     Year Ended  
                                   December 31,    December 31,   December 31,   December 31,   December 31,   December 31, 
                                       1999          1998 (a)       1999 (b)       1999 (b)       1999 (b)       1999 (b)   
                                   -------------   -------------  -------------  -------------  -------------  -------------
                                                                                                                            
OPERATIONS:                                                                                                                 
  Net investment income (loss)....  $   154,206      $ (5,092)      $ (7,791)      $(21,203)       $ (6,392)      $(20,396) 
  Net realized gains (losses).....      (71,213)       23,326         (4,728)        (3,740)         25,497         30,718  
  Net unrealized gains (losses)...     (269,914)       13,091         21,849        386,232         457,940      1,220,338  
                                    -----------      ----------     ----------     ----------     ----------     ---------- 
      Increase (Decrease) in net                                                                                            
       assets from operations.....  $  (186,921)     $ 31,325       $  9,330       $361,289        $477,045     $1,230,660  
                                    -----------      ----------     ----------     ----------     ----------     ---------- 
PARTICIPANT TRANSACTIONS:                                                                                                   
  Accumulation activity:                                                                                                    
    Purchase payments received....  $ 3,214,716     $1,300,822     $1,944,130     $3,992,136       $720,822     $4,452,860  
    Net transfers between                                                                                                   
     Sub-Accounts and Fixed                                                                                                 
     Account......................   10,679,042        323,387        749,019      3,540,232        782,394      2,713,276  
    Withdrawals, surrenders,                                                                                                
     annuitizations and contract                                                                                            
     charges......................     (493,591)       (92,714)      (116,117)       (70,811)        (6,830)      (187,257) 
                                    -----------      ----------     ----------     ----------     ----------     ---------- 
      Net accumulation activity...  $13,400,167     $1,531,495     $2,577,032     $7,461,557     $1,496,386     $6,978,879  
                                    -----------      ----------     ----------     ----------     ----------     ---------- 
  Annuitization activity:                                                                                                   
    Annuitizations................  $    26,994      $ 40,389        $ 79,374       $  4,029       $  --           $133,744 
    Annuity payments..............       (4,351)       (1,490)          --              (181)         --               (333)
    Annuity transfers.............      --             40,390           --             --             --             --     
    Adjustments to annuity                                                                                                  
     reserve......................         (534)         (475)             17           (182)         --              4,173 
                                    -----------      ----------     ----------     ----------     ----------     ---------- 
      Net annuitization                                                                                                     
       activity...................  $    22,109      $ 78,814        $ 79,391       $  3,666       $  --           $137,584 
                                    -----------      ----------     ----------     ----------     ----------     ---------- 
  Increase (Decrease) in net                                                                                                
   assets from participant                                                                                                  
   transactions...................  $13,422,276     $1,610,309     $2,656,423     $7,465,223     $1,496,386     $7,116,463  
                                    -----------      ----------     ----------     ----------     ----------     ---------- 
    Increase (Decrease) in net                                                                                              
     assets.......................  $13,235,355     $1,641,634     $2,665,753     $7,826,512     $1,973,431     $8,347,123  
NET ASSETS:                                                                                                                 
  Beginning of year...............    1,641,634         --             --             --             --             --      
                                    -----------      ----------     ----------     ----------     ----------     ---------- 
  End of year.....................  $14,876,989     $1,641,634     $2,665,753     $7,826,512     $1,973,431     $8,347,123  
                                    ===========      ==========     ==========     ==========     ==========     ========== 

(a) For the period February 20, 1998 (commencement of operations) through       
December 31, 1998.                                                              
(b) For the period May 17, 1999 (commencement of operations) through December   
31, 1999.                                                                       

See notes to financial statements 

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FUTURITY, FUTURITY II, FUTURITY FOCUS AND FUTURITY ACCOLADE SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENTS OF CHANGES IN NET ASSETS -- continued                                

                                                        [Enlarge/Download Table]

                                                OP1                            OP2                            OP3             
                                            Sub-Account                    Sub-Account                    Sub-Account         
                                   -----------------------------  -----------------------------  -----------------------------
                                    Year Ended      Year Ended     Year Ended      Year Ended     Year Ended      Year Ended  
                                   December 31,    December 31,   December 31,    December 31,   December 31,    December 31, 
                                       1999          1998 (a)         1999          1998 (a)         1999          1998 (b)   
                                   -------------   -------------  -------------   -------------  -------------   -------------
                                                                                                                              
OPERATIONS:                                                                                                                   
  Net investment income (loss)....  $   147,083       $(13,451)      $ 63,482         $  235        $(18,870)       $(1,846   
  Net realized gains (losses).....       49,711        (15,929)        15,513        (19,298)         34,433         (7,219)  
  Net unrealized gains (losses)...     (317,549)       201,803        547,534         41,964         (44,591)        28,952   
                                    -----------      ----------     ----------       --------      ----------       --------  
      Increase (Decrease) in net                                                                                              
       assets from operations.....  $  (120,755)      $172,423       $626,529        $22,901        $(29,028)       $19,887   
                                    -----------      ----------     ----------       --------      ----------       --------  
PARTICIPANT TRANSACTIONS:                                                                                                     
  Accumulation activity:                                                                                                      
    Purchase payments received....  $ 2,729,165     $2,532,266     $1,550,529       $772,014        $485,930       $507,596   
    Net transfers between                                                                                                     
     Sub-Accounts and Fixed                                                                                                   
     Account......................    6,567,188      1,176,486      1,198,601        114,451       1,779,308        197,133   
    Withdrawals, surrenders,                                                                                                  
     annuitizations and contract                                                                                              
     charges......................     (574,346)       (21,619)      (132,625)        (3,783)       (129,696)        (8,885)  
                                    -----------      ----------     ----------       --------      ----------       --------  
      Net accumulation activity...  $ 8,722,007     $3,687,133     $2,616,505       $882,682      $2,135,542       $695,844   
                                    -----------      ----------     ----------       --------      ----------       --------  
  Annuitization activity:                                                                                                     
    Annuitizations................  $    11,643      $  --           $ 42,401         $ --          $ 11,596         $ --     
    Annuity payments..............         (586)        --             (2,165)          --              (845)          --     
    Adjustments to annuity                                                                                                    
     reserve......................          248         --               (667)          --            (1,085)          --     
                                    -----------      ----------     ----------       --------      ----------       --------  
      Net annuitization                                                                                                       
       activity...................  $    11,305      $  --           $ 39,569         $ --          $  9,666         $ --     
                                    -----------      ----------     ----------       --------      ----------       --------  
  Increase (Decrease) in net                                                                                                  
   assets from participant                                                                                                    
   transactions...................  $ 8,733,312     $3,687,133     $2,656,074       $882,682      $2,145,208       $695,844   
                                    -----------      ----------     ----------       --------      ----------       --------  
    Increase (Decrease) in net                                                                                                
     assets.......................  $ 8,612,557     $3,859,556     $3,282,603       $905,583      $2,116,180       $715,731   
NET ASSETS:                                                                                                                   
  Beginning of year...............    3,859,556         --            905,583          --            715,731          --      
                                    -----------      ----------     ----------       --------      ----------       --------  
  End of year.....................  $12,472,113     $3,859,556     $4,188,186       $905,583      $2,831,911       $715,731   
                                    ===========      ==========     ==========       ========      ==========       ========  

(a) For the period February 20, 1998 (commencement of operations) through       
December 31, 1998.                                                              
(b) For the period March 27, 1998 (commencement of operations) through December 
31, 1998.                                                                       

See notes to financial statements 

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FUTURITY, FUTURITY II, FUTURITY FOCUS AND FUTURITY ACCOLADE SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENTS OF CHANGES IN NET ASSETS -- continued                                

                                                        [Enlarge/Download Table]

                                                OP4                            SB1                            SB2             
                                            Sub-Account                    Sub-Account                    Sub-Account         
                                   -----------------------------  -----------------------------  -----------------------------
                                    Year Ended      Year Ended     Year Ended      Year Ended     Year Ended      Year Ended  
                                   December 31,    December 31,   December 31,    December 31,   December 31,    December 31, 
                                       1999          1998 (b)         1999          1998 (a)         1999          1998 (a)   
                                   -------------   -------------  -------------   -------------  -------------   -------------
                                                                                                                              
OPERATIONS:                                                                                                                   
  Net investment income (loss)....   $  (7,226)         $ (1)         $8,032          $3,553        $(4,606)        $  (252)  
  Net realized gains (losses).....       1,938           --            8,199          (1,757)        21,954            (857)  
  Net unrealized gains (losses)...      (2,067)           54          45,162          23,271         33,353          19,454   
                                     ----------        ------        --------        --------       --------        --------  
      Increase (Decrease) in net                                                                                              
       assets from operations.....   $  (7,355)         $ 53         $61,393         $25,067        $50,701         $18,345   
                                     ----------        ------        --------        --------       --------        --------  
PARTICIPANT TRANSACTIONS:                                                                                                     
  Accumulation activity:                                                                                                      
    Purchase payments received....  $1,632,027        $1,000         $21,563        $200,980       $119,751        $263,704   
    Net transfers between                                                                                                     
     Sub-Accounts and Fixed                                                                                                   
     Account......................     883,782           --          101,209           8,030        188,767          49,888   
    Withdrawals, surrenders,                                                                                                  
     annuitizations and contract                                                                                              
     charges......................     (31,887)          --          (28,493)         (2,808)       (28,268)         (1,853)  
                                     ----------        ------        --------        --------       --------        --------  
      Net accumulation activity...  $2,483,922        $1,000         $94,279        $206,202       $280,250        $311,739   
                                     ----------        ------        --------        --------       --------        --------  
  Annuitization activity:                                                                                                     
    Annuitizations................   $  --             $--           $ --            $ --           $ --            $ --      
    Annuity payments..............      --              --             --              --             --              --      
    Adjustments to annuity                                                                                                    
     reserve......................      --              --             --              --             --              --      
                                     ----------        ------        --------        --------       --------        --------  
      Net annuitization                                                                                                       
       activity...................   $  --             $--           $ --            $ --           $ --            $ --      
                                     ----------        ------        --------        --------       --------        --------  
  Increase (Decrease) in net                                                                                                  
   assets from participant                                                                                                    
   transactions...................  $2,483,922        $1,000         $94,279        $206,202       $280,250        $311,739   
                                     ----------        ------        --------        --------       --------        --------  
    Increase (Decrease) in net                                                                                                
     assets.......................  $2,476,567        $1,053        $155,672        $231,269       $330,951        $330,084   
NET ASSETS:                                                                                                                   
  Beginning of year...............       1,053           --          231,269            --          330,084            --     
                                     ----------        ------        --------        --------       --------        --------  
  End of year.....................  $2,477,620        $1,053        $386,941        $231,269       $661,035        $330,084   
                                     ==========        ======        ========        ========       ========        ========  

(a) For the period March 27, 1998 (commencement of operations) through December 
31, 1998.                                                                       
(b) For the period December 15, 1998 (commencement of operations) through       
December 31, 1998.                                                              

See notes to financial statements 

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INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENTS OF CHANGES IN NET ASSETS -- continued                                

                                                        [Enlarge/Download Table]

                                                SB3                            SB4                           SCA1             
                                            Sub-Account                    Sub-Account                    Sub-Account         
                                   -----------------------------  -----------------------------  -----------------------------
                                    Year Ended      Year Ended     Year Ended      Year Ended     Year Ended      Year Ended  
                                   December 31,    December 31,   December 31,    December 31,   December 31,    December 31, 
                                       1999          1998 (a)         1999          1998 (b)         1999          1998 (d)   
                                   -------------   -------------  -------------   -------------  -------------   -------------
                                                                                                                              
OPERATIONS:                                                                                                                   
  Net investment income (loss)....    $265,621        $121,348       $ 87,064        $ 39,286      $ 121,386        $    3    
  Net realized gains (losses).....     (42,967)          9,630         29,816          (1,146)         --              --     
  Net unrealized gains (losses)...    (245,059)        (66,852)      (209,993)         64,469          --              --     
                                     ----------      ----------     ----------      ----------    -----------        ------   
      Increase (Decrease) in net                                                                                              
       assets from operations.....    $(22,405)       $ 64,126       $(93,113)       $102,609      $ 121,386        $    3    
                                     ----------      ----------     ----------      ----------    -----------        ------   
PARTICIPANT TRANSACTIONS:                                                                                                     
  Accumulation activity:                                                                                                      
    Purchase payments received....    $186,390      $2,139,351       $ 31,408      $1,946,618     $9,316,611        $2,000    
    Net transfers between                                                                                                     
     Sub-Accounts and Fixed                                                                                                   
     Account......................   4,084,937         722,156      4,100,758         945,488       2,207,048         --      
    Withdrawals, surrenders,                                                                                                  
     annuitizations and contract                                                                                              
     charges......................    (416,075)        (13,933)      (391,898)        (11,783)       (299,102)        --      
                                     ----------      ----------     ----------      ----------    -----------        ------   
      Net accumulation activity...  $3,855,252      $2,847,574     $3,740,268      $2,880,323     $11,224,557       $2,000    
                                     ----------      ----------     ----------      ----------    -----------        ------   
  Annuitization activity:                                                                                                     
    Annuitizations................    $ 30,708        $  --          $ 16,929        $  --         $   --             $--     
    Annuity payments..............      (1,119)          --              (401)          --             --              --     
    Adjustments to annuity                                                                                                    
     reserve......................        (764)          --              (633)          --             --              --     
                                     ----------      ----------     ----------      ----------    -----------        ------   
      Net annuitization                                                                                                       
       activity...................    $ 28,825        $  --          $ 15,895        $  --         $   --             $--     
                                     ----------      ----------     ----------      ----------    -----------        ------   
  Increase (Decrease) in net                                                                                                  
   assets from participant                                                                                                    
   transactions...................  $3,884,077      $2,847,574     $3,756,163      $2,880,323     $11,224,557       $2,000    
                                     ----------      ----------     ----------      ----------    -----------        ------   
    Increase (Decrease) in net                                                                                                
     assets.......................  $3,861,672      $2,911,700     $3,663,050      $2,982,932     $11,345,943       $2,003    
NET ASSETS:                                                                                                                   
  Beginning of year...............   2,911,700           --         2,982,932           --              2,003         --      
                                     ----------      ----------     ----------      ----------    -----------        ------   
  End of year.....................  $6,773,372      $2,911,700     $6,645,982      $2,982,932     $11,347,946       $2,003    
                                     ==========      ==========     ==========      ==========    ===========        ======   

(a) For the period February 20, 1998 (commencement of operations) through       
December 31, 1998.                                                              
(b) For the period March 27, 1998 (commencement of operations) through December 
31, 1998.                                                                       
(d) For the period December 15, 1998 (commencement of operations) through       
December 31, 1998.                                                              

See notes to financial statements 

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FUTURITY, FUTURITY II, FUTURITY FOCUS AND FUTURITY ACCOLADE SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENTS OF CHANGES IN NET ASSETS -- continued                                

                                                        [Enlarge/Download Table]

                                               SCA2                           SCA3                   SCA4           SCA5     
                                            Sub-Acount                     Sub-Acount             Sub-Acount     Sub-Acount  
                                   -----------------------------  -----------------------------  -------------  -------------
                                    Year Ended      Year Ended     Year Ended      Year Ended     Year Ended     Year Ended  
                                   December 31,    December 31,   December 31,    December 31,   December 31,   December 31, 
                                       1999          1998 (a)         1999          1998 (a)       1999 (b)       1999 (b)   
                                   -------------   -------------  -------------   -------------  -------------  -------------
                                                                                                                             
OPERATIONS:                                                                                                                  
  Net investment income (loss)....    $142,200        $    13        $ 61,844          $ (1)        $ (3,062)      $ 78,405  
  Net realized gains (losses).....     (27,836)            (1)         (2,410)          --             5,981          3,631  
  Net unrealized gains (losses)...    (167,158)            21         (70,578)           97          217,754        437,614  
                                     ----------       -------       ----------        ------       ----------     ---------- 
      Increase (Decrease) in net                                                                                             
       assets from operations.....    $(52,794)       $    33        $(11,144)         $ 96         $220,673       $519,650  
                                     ----------       -------       ----------        ------       ----------     ---------- 
PARTICIPANT TRANSACTIONS:                                                                                                    
  Accumulation activity:                                                                                                     
    Purchase payments received....  $2,424,622        $18,000        $407,264         $7,000        $278,857       $398,676  
    Net transfers between                                                                                                    
     Sub-Accounts and Fixed                                                                                                  
     Account......................   5,953,092           --           942,992           --           863,821      2,064,556  
    Withdrawals, surrenders,                                                                                                 
     annuitizations and contract                                                                                             
     charges......................    (374,597)          --           (35,618)          --           (16,360)       (16,795) 
                                     ----------       -------       ----------        ------       ----------     ---------- 
      Net accumulation activity...  $8,003,117        $18,000      $1,314,638        $7,000       $1,126,318     $2,446,437  
                                     ----------       -------       ----------        ------       ----------     ---------- 
  Annuitization activity:                                                                                                    
    Annuitizations................    $278,695         $ --          $  3,427          $--          $  --          $  --     
    Annuity payments..............     (10,840)          --              (216)          --             --             --     
    Adjustments to annuity                                                                                                   
     reserve......................       5,275           --             7,216           --             --             --     
                                     ----------       -------       ----------        ------       ----------     ---------- 
      Net annuitization                                                                                                      
       activity...................    $273,130         $ --          $ 10,427          $--          $  --          $  --     
                                     ----------       -------       ----------        ------       ----------     ---------- 
  Increase (Decrease) in net                                                                                                 
   assets from participant                                                                                                   
   transactions...................  $8,276,247        $18,000      $1,325,065        $7,000       $1,126,318     $2,446,437  
                                     ----------       -------       ----------        ------       ----------     ---------- 
    Increase (Decrease) in net                                                                                               
     assets.......................  $8,223,453        $18,033      $1,313,921        $7,096       $1,346,991     $2,966,087  
NET ASSETS:                                                                                                                  
  Beginning of year...............      18,033           --             7,096           --             --             --     
                                     ----------       -------       ----------        ------       ----------     ---------- 
  End of year.....................  $8,241,486        $18,033      $1,321,017        $7,096       $1,346,991     $2,966,087  
                                     ==========       =======       ==========        ======       ==========     ========== 

(a) For the period December 15, 1998 (commencement of operations) through       
December 31, 1998.                                                              
(b) For the period May 17, 1999 (commencement of operations) through December   
31, 1999.                                                                       

See notes to financial statements 

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INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENTS OF CHANGES IN NET ASSETS -- continued                                

                                                        [Enlarge/Download Table]

                                                      SCA6                    WP1                            WP2             
                                                   Sub-Acount             Sub-Acount                     Sub-Acount          
                                                  -------------  -----------------------------  -----------------------------
                                                   Year Ended     Year Ended      Year Ended     Year Ended      Year Ended  
                                                  December 31,   December 31,    December 31,   December 31,    December 31, 
                                                    1999 (c)         1999          1998 (a)         1999          1998 (b)   
                                                  -------------  -------------   -------------  -------------   -------------
                                                                                                                             
OPERATIONS:                                                                                                                  
  Net investment income (loss)..................     $ (405)       $ 74,390         $ (679)       $  1,885         $(1,361)  
  Net realized gains (losses)...................        897          82,122         (4,817)        126,813        (33,030)   
  Net unrealized gains (losses).................     53,913         337,601         (3,352)        285,485         (1,858)   
                                                     --------      ----------       --------      ----------       --------  
      Increase (Decrease) in net assets from                                                                                 
       operations...............................     $54,405       $494,113         $(8,848)      $414,183        ($36,249)  
                                                     --------      ----------       --------      ----------       --------  
  Accumulation activity:                                                                                                     
    Purchase payments received..................     $41,486       $444,605        1$33,941       $260,046        1$69,921   
    Net transfers between Sub-Accounts and Fixed                                                                             
     Account....................................     406,855      1,127,692          40,476        446,267          32,859   
    Withdrawals, surrenders, annuitizations and                                                                              
     contract charges...........................      (1,944)       (34,519)           (742)       (77,459)           (879)  
                                                     --------      ----------       --------      ----------       --------  
      Net accumulation activity.................    $446,397     $1,537,778        $173,675       $628,854        $201,901   
                                                     --------      ----------       --------      ----------       --------  
  Annuitization activity:                                                                                                    
    Annuitizations..............................     $ --          $ 17,475         $ --          $  --            $ --      
    Annuity payments............................       --              (925)          --             --              --      
    Adjustments to annuity reserve..............      5,356         (10,499)          --             --              --      
                                                     --------      ----------       --------      ----------       --------  
      Net annuitization activity................     $5,356        $  6,051         $ --          $  --            $ --      
                                                     --------      ----------       --------      ----------       --------  
  Increase (Decrease) in net assets from                                                                                     
   participant transactions.....................    $451,753      $1,543,829       $173,675       $628,854        $201,901   
                                                     --------      ----------       --------      ----------       --------  
    Increase (Decrease) in net assets...........    $506,158      $2,037,942       $164,827      $1,043,037       $165,652   
NET ASSETS:                                                                                                                  
  Beginning of year.............................       --           164,827           --           165,652           --      
                                                     --------      ----------       --------      ----------       --------  
  End of year...................................    $506,158      $2,202,769       $164,827      $1,208,689       $165,652   
                                                     ========      ==========       ========      ==========       ========  

(a) For the period February 20, 1998 (commencement of operations) through       
December 31, 1998.                                                              
(b) For the period March 27, 1998 (commencement of operations) through December 
31, 1998.                                                                       
(c) For the period May 17, 1999 (commencement of operations) through December   
31, 1999.                                                                       

See notes to financial statements 

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FUTURITY, FUTURITY II, FUTURITY FOCUS AND FUTURITY ACCOLADE SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    

STATEMENTS OF CHANGES IN NET ASSETS -- continued                                

                                                        [Enlarge/Download Table]

                                                                          WP3                            WP4             
                                                                      Sub-Account                    Sub-Account         
                                                             -----------------------------  -----------------------------
                                                              Year Ended      Year Ended     Year Ended      Year Ended  
                                                             December 31,    December 31,   December 31,    December 31, 
                                                                 1999          1998 (a)         1999          1998 (a)   
                                                             -------------   -------------  -------------   -------------
                                                                                                                         
OPERATIONS:                                                                                                              
  Net investment income (loss)..............................    $(3,389)        $ (535)       $ 83,413         $(2,271)  
  Net realized gains (losses)...............................      6,481           (239)         57,255         (26,102)  
  Net unrealized gains (losses).............................    194,879          7,438       1,075,180          29,531   
                                                                --------        --------      ----------       --------  
      Increase (Decrease) in net assets from operations.....   $197,971         $6,664       $1,215,848         $1,158   
                                                                --------        --------      ----------       --------  
PARTICIPATION TRANSACTIONS:                                                                                              
  Accumulation activity:                                                                                                 
    Purchase payments received..............................   $118,924        $113,755       $528,621        $378,201   
    Net transfers between Sub-Accounts and Fixed Account....    322,835          17,358      1,685,706          (5,371)  
    Withdrawals, surrenders, annuitizations and contract                                                                 
     charges................................................    (36,788)           (830)       (56,865)         (2,707)  
                                                                --------        --------      ----------       --------  
      Net accumulation activity.............................   $404,971        $130,283     $2,157,462        $370,123   
                                                                --------        --------      ----------       --------  
  Annuitization activity:                                                                                                
    Annuitizations..........................................    $18,900         $ --          $  --            $ --      
    Annuity payments........................................       (794)          --             --              --      
    Annuity transfers.......................................      --              --             --              --      
                                                                --------        --------      ----------       --------  
    Adjustments to annuity reserve..........................     (7,889)          --             --              --      
                                                                --------        --------      ----------       --------  
      Net annuitization activity............................    $10,217         $ --          $  --            $ --      
                                                                --------        --------      ----------       --------  
  Increase (Decrease) in net assets from participant                                                                     
   transactions.............................................   $415,188        $130,283      $2,157,462       $370,123   
    Increase (Decrease) in net assets.......................   $613,159        $136,947      $3,373,310       $371,281   
NET ASSETS:                                                                                                              
  Beginning of year.........................................    136,947            --           371,281           --     
                                                                --------        --------      ----------       --------  
  End of year...............................................   $750,106        $136,947      $3,744,591       $371,281   
                                                                ========        ========      ==========       ========  

(a) For the period March 27, 1998 (commencement of operations) through          
December 31, 1998.                                                              

See notes to financial statements 

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FUTURITY, FUTURITY II, FUTURITY FOCUS AND FUTURITY ACCOLADE SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    
NOTES TO FINANCIAL STATEMENTS                                                   

(1) ORGANIZATION                                                                
Sun Life of Canada (U.S.) Variable Account F (the "Variable Account") is a      
separate account of Sun Life Assurance Company of Canada (U.S.), (the           
"Sponsor"), and was established on July 13, 1989 as a funding vehicle for the   
variable portion of Futurity contracts, Futurity II contracts, Futurity Focus   
contracts and Futurity Accolade contracts (collectively, the "Contracts") and   
certain other group and individual fixed and variable annuity contracts issued  
by the Sponsor. The Variable Account is registered with the Securities and      
Exchange Commission under the Investment Company Act of 1940 as a unit          
investment trust.                                                               

The assets of the Variable Account are divided into Sub-Accounts. Each          
Sub-Account is invested in shares of a single corresponding investment portfolio
of certain registered open-end mutual funds. With respect to the Futurity       
contracts, the Funds are: AIM Variable Insurance Funds, Inc., The Alger American
Fund, Goldman Sachs Variable Insurance Trust, J.P. Morgan Series Trust II, Lord 
Abbett Series Fund, Inc., MFS/ Sun Life Series Trust, OCC Accumulation Trust,   
Salomon Brothers Variable Series Funds Inc. and Warburg Pincus Trust. With      
respect to the Futurity II contracts, the Funds are: AIM Variable Insurance     
Funds, Inc., The Alger American Fund, Goldman Sachs Variable Insurance Trust,   
J.P. Morgan Series Trust II, Lord Abbett Series Fund, Inc., MFS/Sun Life Series 
Trust, OCC Accumulation Trust, Sun Capital Advisers Trust and Warburg Pincus    
Trust. With respect to the Futurity Focus contracts, the Funds are: AIM Variable
Insurance Funds, Inc., The Alger American Fund, Goldman Sachs Variable Insurance
Trust, J.P. Morgan Series Trust II, Lord Abbett Series Fund, Inc., MFS/Sun Life 
Series Trust, OCC Accumulation Trust, Sun Capital Advisers Trust and Warburg    
Pincus Trust. With respect to the Futurity Accolade contracts, the Funds are:   
AIM Variable Insurance Funds, Inc., The Alger American Fund, Goldman Sachs      
Variable Insurance Trust, J.P. Morgan Series Trust II, Lord Abbet               
Series Fund, Inc., MFS/Sun Life Series Trust, OCC Accumulation Trust and Sun    
Capital Advisers Trust (collectively, "the Funds"). Massachusetts Financial     
Services Company, an affiliate of the Sponsor, is the investment adviser to     
MFS/Sun Life Series Trust. Sun Capital Advisers Inc., an affiliate of the       
Sponsor, is the investment adviser to Sun Capital Advisers Trust.               

(2) SIGNIFICANT ACCOUNTING POLICIES                                             

GENERAL                                                                         

The preparation of financial statements in conformity with generally accepted   
accounting principles requires the Sponsor's management to make estimates and   
assumptions that affect the reported amounts of assets and liabilities and      
disclosure of contingent assets and liabilities at the date of the financial    
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.                       

INVESTMENT VALUATIONS                                                           

Investments in shares of the Funds are recorded at their net asset value.       
Realized gains and losses on sales of shares of the Funds are determined on the 
identified cost basis. Dividend income and capital gain distributions received  
by the Sub-Accounts are reinvested in additional Fund shares and are recognized 
on the ex-dividend date.                                                        

Exchanges between Sub-Accounts requested by contract participants are recorded  
in the new Sub-Account upon receipt of the redemption proceeds.                 

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FUTURITY, FUTURITY II, FUTURITY FOCUS AND FUTURITY ACCOLADE SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    
NOTES TO FINANCIAL STATEMENTS -- continued                                      

(2) SIGNIFICANT ACCOUNTING POLICIES                                             

FEDERAL INCOME TAX STATUS                                                       

The operations of the Variable Account are part of the operations of the Sponsor
and are not taxed separately. The Variable Account is not taxed as a regulated  
investment company. The Sponsor qualifies for the federal income tax treatment  
granted to life insurance companies under Subchapter L of the Internal Revenue  
Code. Under existing federal income tax law, investment income and capital gains
earned by the Variable Account on contract owner reserves are not taxable and,  
therefore, no provision has been made for federal income taxes.                 

(3) CONTRACT CHARGES                                                            
A mortality and expense risk charge based on the value of the Sub-Accounts      
included in the Variable Account is deducted from the Variable Account at the   
end of each valuation period for the mortality and expense risks assumed by the 
Sponsor. The deductions are transferred periodically to the Sponsor. Currently, 
the deduction is at an effective annual rate of 1.25% for Futurity and Futurity 
II contracts, 1.00% for Futurity Focus contracts and 1.30% for Futurity Accolade
contracts.                                                                      

Each year on the account anniversary, an account administration fee ("Account   
Fee") equal to the lesser of $30 in the case of Futurity contracts, $35 in the  
case of Futurity II contracts and Futurity Accolade contracts and $50 in the    
case of Futurity Focus contracts or 2% of the participant's account value in    
Account Years one through five (thereafter, the Account Fee may be changed      
annually, but it may not exceed the lesser of $50 or 2% of the participant's    
account value) is deducted from the participant's account to reimburse the      
Sponsor for certain administrative expenses. After the annuity commencement     
date, the Account Fee will be deducted pro rata from each variable annuity      
payment made during the year. As reimbursement for administrative expenses      
attributable to contracts which exceed the revenues received from the Account   
Fees, the Sponsor makes a deduction from the Variable Account at the end of each
valuation period at an effective annual rate of 0.15% of the net assets         
attributable to such Contracts.                                                 

The Sponsor does not deduct a sales charge from purchase payments. However, a   
withdrawal charge (contingent deferred sales charge) of up to 8% of certain     
amounts withdrawn, when applicable, may be deducted to cover certain expenses   
relating to the sale of the Futurity, Futurity II, and Futurity Focus Contracts,
including commissions paid to sales personnel, the costs of preparation of sales
literature, and other promotional costs and acquisition expenses.               

(4) ANNUITY RESERVES                                                            
Annuity reserves are calculated using the 1983 Individual Annuitant Mortality   
Table and an assumed interest rate of 3% per year. Required adjustments to the  
reserves are accomplished by transfers to or from the Sponsor.                  

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INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    
NOTES TO FINANCIAL STATEMENTS -- continued                                      

(5) UNIT ACTIVITY FROM PARTICIPANT TRANSACTIONS                                 

                                                        [Enlarge/Download Table]


                                       Units Outstanding                                                               
                                       Beginning of Year                  Units Purchased                              
                                 ------------------------------    ------------------------------                      
                                  Year Ended       Year Ended       Year Ended       Year Ended                        
                                 December 31,     December 31,     December 31,     December 31,                       
                                     1999             1998             1999             1998                           
                                 -------------    -------------    -------------    -------------                      
                                                                                                                       
FUTURITY CONTRACTS:                                                                                                    
AIM1                 (a)            141,292          --                37,449          120,297                         
AIM2                 (a)            204,502          --                28,920          188,055                         
AIM3                 (b)            332,662          --                43,138          211,522                         
AIM4                 (a)            216,812          --                22,277          175,562                         
AL1                  (b)            285,990          --                96,119          220,381                         
AL2                  (b)            194,995          --                37,009          166,134                         
AL3                  (b)             77,472          --                12,426           46,464                         
GS1                  (c)            210,952          --                34,405          174,066                         
GS2                  (a)             31,476          --                   556           28,820                         
GS3                  (a)            282,488          --                25,986          245,810                         
GS4                  (a)            199,770          --                10,206          146,654                         
GS5                  (d)             30,394          --                 2,948           22,922                         
JP1                  (b)            293,787          --                83,392          153,409                         
JP2                  (b)             52,419          --                 9,614           43,568                         
JP3                  (b)             22,655          --                 8,150           14,226                         
LA1                  (b)            333,805          --                61,424          295,576                         
CAS                  (e)            403,733          --                35,843          182,671                         
EGS                  (a)            397,132          --                60,135          286,458                         
HYS                  (e)            217,924          --                27,858          136,139                         
MMS                  (a)            371,404          --                29,531          520,396                         
UTS                  (b)            278,221          --                49,525          168,365                         
GSS                  (a)            150,350          --                31,435          124,697                         
OP1                  (a)            363,748          --                45,042          249,514                         
OP2                  (a)             93,160          --                19,463           80,719                         
OP3                  (b)             86,567          --                11,061           62,966                         
SB1                  (b)             21,329          --                 1,994           20,954                         
SB2                  (b)             32,282          --                11,451           27,151                         
SB3                  (a)            277,473          --                17,918          208,817                         
SB4                  (b)            293,921          --                 4,406          199,267                         
WP1                  (a)             22,480          --                 9,591           17,004                         
WP2                  (b)             18,253          --                 5,461           17,656                         
WP3                  (b)             14,715          --                 4,811           12,602                         
WP4                  (b)             41,843          --                 2,953           42,727                         


                           Units Transferred                                                                           
                          Between Sub-Accounts                                                                         
                                  and                         Units Withdrawn,                                         
                           Fixed Accumulation                 Surrendered, and                 Units Outstanding       
                                Account                          Annuitized                       End of Year          
                     ------------------------------    ------------------------------    ------------------------------
                      Year Ended       Year Ended       Year Ended       Year Ended       Year Ended       Year Ended  
                     December 31,     December 31,     December 31,     December 31,     December 31,     December 31, 
                         1999             1998             1999             1998             1999             1998     
                     -------------    -------------    -------------    -------------    -------------    -------------
                                                                                                                       
FUTURITY CONTRACTS:                                                                                                    
AIM1                     68,417            21,989          (19,423)           (994)         227,735          141,292   
AIM2                    219,720            18,286          (10,712)         (1,839)         442,430          204,502   
AIM3                    451,578           126,191          (27,993)         (5,051)         799,385          332,662   
AIM4                    238,494            42,064          (18,770)           (814)         458,813          216,812   
AL1                     424,506            66,702          (51,286)         (1,093)         755,329          285,990   
AL2                     249,731            33,387          (46,903)         (4,526)         434,832          194,995   
AL3                      96,080            31,855           (3,758)           (847)         182,220           77,472   
GS1                     194,122            37,773          (16,398)           (887)         423,081          210,952   
GS2                      51,143             2,730           (2,812)            (74)          80,363           31,476   
GS3                     289,621            41,721          (22,792)         (5,043)         575,303          282,488   
GS4                     109,158            54,644          (18,062)         (1,528)         301,072          199,770   
GS5                      31,634             7,479           (2,001)             (7)          62,975           30,394   
JP1                     220,364           143,890          (28,588)         (3,512)         568,955          293,787   
JP2                      50,228             9,107           (6,937)           (256)         105,324           52,419   
JP3                      11,780             8,529           (1,450)           (100)          41,135           22,655   
LA1                     328,125            40,527          (42,184)         (2,298)         681,170          333,805   
CAS                      74,342           225,749          (23,482)         (4,687)         490,436          403,733   
EGS                     231,410           114,747          (44,248)         (4,073)         644,429          397,132   
HYS                     363,603            82,554          (28,271)           (769)         581,114          217,924   
MMS                     399,896          (145,427)        (137,740)         (3,565)         663,091          371,404   
UTS                     482,058           110,939          (47,559)         (1,083)         762,245          278,221   
GSS                     482,313            30,755          (28,386)         (5,102)         635,712          150,350   
OP1                     407,891           116,381          (46,676)         (2,147)         770,005          363,748   
OP2                     104,339            12,844           (8,463)           (403)         208,499           93,160   
OP3                     152,550            24,744          (14,649)         (1,143)         235,529           86,567   
SB1                       8,915               660           (2,599)           (285)          29,639           21,329   
SB2                      17,512             5,324           (2,530)           (193)          58,715           32,282   
SB3                     394,310            69,996          (40,441)         (1,340)         649,260          277,473   
SB4                     398,605            95,844          (39,609)         (1,190)         657,323          293,921   
WP1                      37,994             5,576           (1,995)           (100)          68,070           22,480   
WP2                      36,942               697           (7,725)           (100)          52,931           18,253   
WP3                       5,081             2,213           (3,289)           (100)          21,318           14,715   
WP4                     114,098               (84)          (5,437)           (800)         153,457           41,843   

(a) For the period February 20, 1998 (commencement of operations) through       
December 31, 1998.                                                      
(b) For the period March 27, 1998 (commencement of operations) through December 
31, 1998.                                                               
(c) For the period March 12, 1998 (commencement of operations) through December 
31, 1998.                                                               
(d) For the period March 17, 1998 (commencement of operations) through December 
31, 1998.                                                               
(e) For the period February 26, 1998 (commencement of operations) through       
December 31, 1998.                                                      

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INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    
NOTES TO FINANCIAL STATEMENTS -- continued                                      

(5) UNIT ACTIVITY FROM PARTICIPANT TRANSACTIONS -- continued                    

                                                        [Enlarge/Download Table]


                                          Units Outstanding                                                               
                                          Beginning of Year                  Units Purchased                              
                                    ------------------------------    ------------------------------                      
                                     Year Ended       Year Ended       Year Ended       Year Ended                        
                                    December 31,     December 31,     December 31,     December 31,                       
                                        1999             1998             1999             1998                           
                                    -------------    -------------    -------------    -------------                      
                                                                                                                          
FUTURITY II CONTRACTS:                                                                                                    
AIM1                    (a)               100           --               181,039              100                         
AIM2                    (a)             1,049           --               538,285            1,049                         
AIM3                    (a)             1,704           --               573,115            1,704                         
AIM4                    (b)             2,553           --               277,892            2,553                         
AL1                     (a)             2,044           --               798,097            2,044                         
AL2                     (b)             1,785           --               330,958            1,785                         
AL3                     (a)               100           --               134,245              100                         
GS1                     (c)               786           --               340,043              786                         
GS2                     (a)               100           --                26,340              100                         
GS3                     (b)             2,341           --               322,630            2,341                         
GS4                     (a)               100           --                78,401              100                         
GS5                     (c)               578           --                58,284              578                         
JP1                     (a)               474           --               315,983              474                         
JP2                     (a)               100           --                57,728              100                         
JP3                     (a)               100           --                39,434              100                         
LA1                     (b)             1,763           --               389,191            1,763                         
CAS                     (a)             2,367           --               251,500            2,367                         
EGS                     (c)             3,662           --               455,194            3,662                         
HYS                     (b)               729           --               199,927              729                         
UTS                     (c)               821           --               237,960              821                         
GSS                     (b)             1,027           --               236,734            1,027                         
TRS                     (d)            --               --               145,867           --                             
MIT                     (d)            --               --               274,552           --                             
NWD                     (d)            --               --                31,539           --                             
MIS                     (d)            --               --               314,530           --                             
OP1                     (b)             1,517           --               196,083            1,517                         
OP2                     (a)               150           --                95,779              150                         
OP3                     (a)               100           --                36,287              100                         
OP4                     (a)               100           --               120,357              100                         
SCA1                    (a)               200           --               516,555              200                         
SCA2                    (a)             1,806           --               212,361            1,806                         
SCA3                    (a)               705           --                40,953              705                         
SCA4                    (e)            --               --                14,166           --                             
SCA5                    (e)            --               --                17,823           --                             
SCA6                    (e)            --               --                 3,004           --                             
WP1                     (a)               100           --                24,172              100                         
WP2                     (a)               100           --                17,409              100                         
WP3                     (a)               100           --                 5,483              100                         
WP4                     (a)               100           --                41,639              100                         


                              Units Transferred                                                                           
                             Between Sub-Accounts                                                                         
                                     and                         Units Withdrawn,                                         
                              Fixed Accumulation                 Surrendered, and                 Units Outstanding       
                                   Account                          Annuitized                       End of Year          
                        ------------------------------    ------------------------------    ------------------------------
                         Year Ended       Year Ended       Year Ended       Year Ended       Year Ended       Year Ended  
                        December 31,     December 31,     December 31,     December 31,     December 31,     December 31, 
                            1999             1998             1999             1998             1999             1998     
                        -------------    -------------    -------------    -------------    -------------    -------------
                                                                                                                          
FUTURITY II CONTRACTS:                                                                                                    
AIM1                       123,465          --                (4,955)         --                299,649            100    
AIM2                       482,701          --               (24,533)         --                997,502          1,049    
AIM3                       656,563          --               (17,938)         --              1,213,444          1,704    
AIM4                       405,813          --               (26,694)         --                659,564          2,553    
AL1                        841,456          --               (21,446)         --              1,620,151          2,044    
AL2                        441,029          --               (17,839)         --                755,933          1,785    
AL3                         93,499          --                (5,898)         --                221,946            100    
GS1                        282,453          --               (12,429)         --                610,853            786    
GS2                         46,936          --                (1,555)         --                 71,821            100    
GS3                        417,400          --               (27,737)         --                714,634          2,341    
GS4                        126,524          --                (2,740)         --                202,285            100    
GS5                         62,982          --                (1,965)         --                119,879            578    
JP1                        321,619          --               (13,072)         --                625,004            474    
JP2                         63,482          --                (2,767)         --                118,543            100    
JP3                         18,564          --                  (463)         --                 57,635            100    
LA1                        607,156          --               (15,964)         --                982,146          1,763    
CAS                        255,332          --                (8,903)         --                500,296          2,367    
EGS                        370,763          --               (25,152)         --                804,467          3,662    
HYS                        365,635          --               (12,291)         --                554,000            729    
UTS                        334,919          --               (21,239)         --                552,461            821    
GSS                        591,096          --               (21,291)         --                807,566          1,027    
TRS                         76,462          --               (11,284)         --                211,045         --        
MIT                        361,529          --                (6,897)         --                629,184         --        
NWD                         67,961          --                  (288)         --                 99,212         --        
MIS                        250,304          --               (10,654)         --                554,180         --        
OP1                        198,204          --                (7,187)         --                388,617          1,517    
OP2                         17,112          --                (4,189)         --                108,852            150    
OP3                         54,017          --                (1,806)         --                 88,598            100    
OP4                         78,975          --                (2,615)         --                196,817            100    
SCA1                       220,638          --               (37,843)         --                699,550            200    
SCA2                       603,561          --               (49,583)         --                768,145          1,806    
SCA3                        98,307          --                (8,117)         --                131,848            705    
SCA4                        84,139          --                (1,485)         --                 96,820         --        
SCA5                       202,111          --                (2,819)         --                217,115         --        
SCA6                        41,050          --                  (185)         --                 43,869         --        
WP1                         44,318          --                (1,413)         --                 67,177            100    
WP2                         12,438          --                    (8)         --                 29,939            100    
WP3                         17,472          --                  (529)         --                 22,526            100    
WP4                         39,443          --                (1,304)         --                 79,878            100    

(a) For the period December 15, 1998 (commencement of operations) through       
December 31, 1998.                                                      
(b) For the period December 17, 1998 (commencement of operations) through       
December 31, 1998.                                                      
(c) For the period December 29, 1998 (commencement of operations) through       
December 31, 1998.                                                      
(d) For the period May 17, 1999 (commencement of operations) through December   
31, 1999.                                                               
(e) For the period September 13, 1999 (commencement of operations) through      
December 31, 1999.                                                      

                                                                              56

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FUTURITY, FUTURITY II, FUTURITY FOCUS AND FUTURITY ACCOLADE SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    
NOTES TO FINANCIAL STATEMENTS -- continued                                      

(5) UNIT ACTIVITY FROM PARTICIPANT TRANSACTIONS -- continued                    

                                                        [Enlarge/Download Table]


                                             Units Outstanding                                                               
                                             Beginning of Year                  Units Purchased                              
                                       ------------------------------    ------------------------------                      
                                        Year Ended       Year Ended       Year Ended       Year Ended                        
                                       December 31,     December 31,     December 31,     December 31,                       
                                           1999             1998             1999             1998                           
                                       -------------    -------------    -------------    -------------                      
                                                                                                                             
FUTURITY FOCUS CONTRACTS:                                                                                                    
AIM1                       (a)            --               --                13,472          --                              
AIM2                       (a)            --               --                34,933          --                              
AIM3                       (a)            --               --                60,253          --                              
AIM4                       (a)            --               --                26,210          --                              
AL1                        (a)            --               --                44,079          --                              
AL2                        (a)            --               --                34,264          --                              
AL3                        (a)            --               --                 9,602          --                              
GS1                        (a)            --               --                 4,016          --                              
GS2                        (a)            --               --                 1,112          --                              
GS3                        (a)            --               --                20,053          --                              
GS4                        (a)            --               --                29,333          --                              
GS5                        (a)            --               --                 7,451          --                              
JP1                        (a)            --               --                24,288          --                              
JP2                        (a)            --               --                12,279          --                              
JP3                        (a)            --               --                 2,178          --                              
LA1                        (b)            --               --                38,221          --                              
CAS                        (a)            --               --                21,046          --                              
EGS                        (a)            --               --                46,092          --                              
HYS                        (a)            --               --                25,654          --                              
UTS                        (a)            --               --                21,976          --                              
GSS                        (a)            --               --                48,404          --                              
TRS                        (b)            --               --                 8,393          --                              
MIT                        (b)            --               --                74,974          --                              
NWD                        (b)            --               --                 7,662          --                              
MIS                        (b)            --               --                34,173          --                              
OP1                        (a)            --               --                10,772          --                              
OP2                        (a)            --               --                10,112          --                              
OP3                        (a)            --               --                 3,882          --                              
OP4                        (a)            --               --                 4,578          --                              
SCA1                       (a)            --               --               252,106          --                              
SCA2                       (a)            --               --                34,864          --                              
SCA3                       (a)            --               --                 2,727          --                              
SCA4                       (c)            --               --                   319          --                              
SCA5                       (c)            --               --                   100          --                              
SCA6                       (c)            --               --                   578          --                              
WP1                        (a)            --               --                   989          --                              
WP2                        (a)            --               --                   100          --                              
WP3                        (a)            --               --                   100          --                              
WP4                        (a)            --               --                   123          --                              


                                 Units Transferred                                                                           
                                Between Sub-Accounts                                                                         
                                        and                         Units Withdrawn,                                         
                                 Fixed Accumulation                 Surrendered, and                 Units Outstanding       
                                      Account                          Annuitized                       End of Year          
                           ------------------------------    ------------------------------    ------------------------------
                            Year Ended       Year Ended       Year Ended       Year Ended       Year Ended       Year Ended  
                           December 31,     December 31,     December 31,     December 31,     December 31,     December 31, 
                               1999             1998             1999             1998             1999             1998     
                           -------------    -------------    -------------    -------------    -------------    -------------
                                                                                                                             
FUTURITY FOCUS CONTRACTS:                                                                                                    
AIM1                              181          --                    (36)        --                13,617          --        
AIM2                            1,199          --                   (259)        --                35,873          --        
AIM3                            2,227          --                 (8,373)        --                54,107          --        
AIM4                             (398)         --                   (475)        --                25,337          --        
AL1                             2,632          --                 (7,869)        --                38,842          --        
AL2                              (404)         --                 (1,424)        --                32,436          --        
AL3                              (382)         --                    (45)        --                 9,175          --        
GS1                                76          --                     (7)        --                 4,085          --        
GS2                            --              --                --              --                 1,112          --        
GS3                               950          --                   (405)        --                20,598          --        
GS4                            --              --                    (76)        --                29,257          --        
GS5                             1,193          --                    (23)        --                 8,621          --        
JP1                               676          --                 (6,274)        --                18,690          --        
JP2                                29          --                    (74)        --                12,234          --        
JP3                               541          --                    (10)        --                 2,709          --        
LA1                             3,486          --                 (1,429)        --                40,278          --        
CAS                             2,087          --                    (82)        --                23,051          --        
EGS                             1,755          --                 (6,539)        --                41,308          --        
HYS                             1,092          --                 (4,817)        --                21,929          --        
UTS                               121          --                 (1,412)        --                20,685          --        
GSS                            (5,086)         --                   (388)        --                42,930          --        
TRS                               489          --                    (41)        --                 8,841          --        
MIT                             1,759          --                 (2,255)        --                74,478          --        
NWD                              (525)         --                     (9)        --                 7,128          --        
MIS                             1,363          --                 (5,611)        --                29,925          --        
OP1                            (3,121)         --                   (263)        --                 7,388          --        
OP2                            (2,840)         --                   (296)        --                 6,976          --        
OP3                            --              --                --              --                 3,882          --        
OP4                             1,122          --                    (31)        --                 5,669          --        
SCA1                            9,073          --               (219,651)        --                41,528          --        
SCA2                              796          --                 (1,076)        --                34,584          --        
SCA3                              289          --                   (374)        --                 2,642          --        
SCA4                            1,839          --                   (218)        --                 1,940          --        
SCA5                            2,630          --                   (380)        --                 2,350          --        
SCA6                              675          --                --              --                 1,253          --        
WP1                               483          --                --              --                 1,472          --        
WP2                               761          --                --              --                   861          --        
WP3                            --              --                --              --                   100          --        
WP4                                71          --                --              --                   194          --        

(a) For the period May 15, 1999 (commencement of operations) through December   
31, 1999.                                                               
(b) For the period May 17, 1999 (commencement of operations) through December   
31, 1999.                                                               
(c) For the period September 13, 1999 (commencement of operations) through      
December 31, 1999.                                                      

57                                                                              

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FUTURITY, FUTURITY II, FUTURITY FOCUS AND FUTURITY ACCOLADE SUB-ACCOUNTS        
INCLUDED IN                                                                     
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F                                    
NOTES TO FINANCIAL STATEMENTS -- continued                                      

(5) UNIT ACTIVITY FROM PARTICIPANT TRANSACTIONS -- continued                    

                                                        [Enlarge/Download Table]

                                                                                                    Units Transferred      
                                                                                                  Between Sub-Accounts     
                                                                                                           and             
                                      Units Outstanding                                            Fixed Accumulation      
                                      Beginning of Year               Units Purchased                    Account           
                                -----------------------------  -----------------------------  -----------------------------
                                 Year Ended      Year Ended     Year Ended      Year Ended     Year Ended      Year Ended  
                                December 31,    December 31,   December 31,    December 31,   December 31,    December 31, 
                                    1999            1998           1999            1998           1999            1998     
                                -------------   -------------  -------------   -------------  -------------   -------------
                                                                                                                           
FUTURITY ACCOLADE CONTRACTS (A):                                                                                           
AIM1                               --              --              28,060         --                 (36)        --        
AIM2                               --              --              71,949         --                 184         --        
AIM3                               --              --              41,491         --                  64         --        
AIM4                               --              --              40,241         --                (216)        --        
AL1                                --              --              78,117         --                 248         --        
AL2                                --              --              25,632         --                  82         --        
AL3                                --              --              12,969         --                   7         --        
GS1                                --              --              17,566         --                 (22)        --        
GS2                                --              --               1,535         --                 244         --        
GS3                                --              --              23,176         --                 253         --        
GS4                                --              --               5,354         --              --             --        
GS5                                --              --               6,485         --                 236         --        
JP1                                --              --               6,364         --                  91         --        
JP2                                --              --              10,762         --                 (25)        --        
JP3                                --              --                 228         --               5,370         --        
LA1                                --              --              55,648         --                 333         --        
CAS                                --              --               4,427         --              --             --        
EGS                                --              --              54,055         --               4,868         --        
HYS                                --              --              44,529         --                 279         --        
UTS                                --              --              49,738         --                 573         --        
GSS                                --              --              10,569         --                 448         --        
TRS                                --              --              42,576         --                 259         --        
MIT                                --              --              48,217         --                 174         --        
NWD                                --              --              18,756         --                 (74)        --        
MIS                                --              --              55,995         --                  35         --        
OP1                                --              --                 102         --              --             --        
OP2                                --              --              19,553         --                 (99)        --        
OP3                                --              --                 102         --              --             --        
OP4                                --              --              25,960         --                 158         --        
SCA1                               --              --             380,262         --             (13,639)        --        
SCA2                               --              --              11,119         --                 434         --        
SCA3                               --              --               2,115         --                 166         --        
SCA4                               --              --               9,040         --                 (13)        --        
SCA5                               --              --              17,605         --                 277         --        
SCA6                               --              --                 410         --                 (16)        --        



                                      Units Withdrawn,                                                                     
                                      Surrendered, and               Units Outstanding                                     
                                         Annuitized                     End of Year                                        
                                -----------------------------  -----------------------------                               
                                 Year Ended      Year Ended     Year Ended      Year Ended                                 
                                December 31,    December 31,   December 31,    December 31,                                
                                    1999            1998           1999            1998                                    
                                -------------   -------------  -------------   -------------                               
                                                                                                                           
FUTURITY ACCOLADE CONTRACTS (A                                                                                             
AIM1                                 (231)         --              27,793         --                                       
AIM2                                 (267)         --              71,866         --                                       
AIM3                                 (321)         --              41,234         --                                       
AIM4                                   (4)         --              40,021         --                                       
AL1                                  (373)         --              77,992         --                                       
AL2                                  (356)         --              25,358         --                                       
AL3                                    (7)         --              12,969         --                                       
GS1                                  (255)         --              17,289         --                                       
GS2                                    (4)         --               1,775         --                                       
GS3                                    (2)         --              23,427         --                                       
GS4                                --              --               5,354         --                                       
GS5                                  (139)         --               6,582         --                                       
JP1                                --              --               6,455         --                                       
JP2                                    (7)         --              10,730         --                                       
JP3                                --              --               5,598         --                                       
LA1                                  (422)         --              55,559         --                                       
CAS                                --              --               4,427         --                                       
EGS                                  (662)         --              58,261         --                                       
HYS                                  (579)         --              44,229         --                                       
UTS                                  (452)         --              49,859         --                                       
GSS                                    (5)         --              11,012         --                                       
TRS                                  (564)         --              42,271         --                                       
MIT                                    (5)         --              48,386         --                                       
NWD                                  (200)         --              18,482         --                                       
MIS                                  (257)         --              55,773         --                                       
OP1                                --              --                 102         --                                       
OP2                                  (384)         --              19,070         --                                       
OP3                                --              --                 102         --                                       
OP4                                  (333)         --              25,785         --                                       
SCA1                               --              --             366,623         --                                       
SCA2                               --              --              11,553         --                                       
SCA3                               --              --               2,281         --                                       
SCA4                               --              --               9,027         --                                       
SCA5                                   (4)         --              17,878         --                                       
SCA6                               --              --                 394         --                                       

(a) For the period October 15, 1999 (commencement of operations) through        
December 31, 1999.                                                      

                                                                              58

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AUDITORS' OPINION                                                               

[An auditors' letter and consent with regards to the financial statements of    
the Variable Account will be included in the Registration Statement prior to    
effectiveness.]                                                                 

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      -15-

     SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
C/O RETIREMENT PRODUCTS AND SERVICES  
P.O. BOX 9133                         
BOSTON, MASSACHUSETTS  02117          

TELEPHONE:                            
Toll Free (888) 786-2435              

GENERAL DISTRIBUTOR                   
Clarendon Insurance Agency, Inc.      
One Sun Life Executive Park           
Wellesley Hills, Massachusetts  02481 

AUDITORS                              
__________________________            

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    PART C

   OTHER INFORMATION

Item 24. FINANCIAL STATEMENTS AND EXHIBITS                                      

(a)   The following Financial Statements are included in the  
Registration Statement:                           

Included in Part A:                                         

           A.     Condensed Financial Information - Accumulation Unit Values

B.     Financial Statements of the Depositor          

Audited:                                

                   1.     Consolidated Statements of Income, Years Ended
             December 31, 1999, 1998 and 1997;
                   2.     Consolidated Balance Sheets, December 31, 1999
and 1998,           
                     3.     Consolidated Statements of Comprehensive Income,
                         Years Ended December 31, 1999, 1998 and 1997;
                     4.     Consolidated Statements of Stockholder's Equity,
                         Years Ended December 31, 1999, 1998 and 1997;
                 5.     Consolidated Statements of Cash Flows, Years
                   Ended December 31, 1999, 1998 and 1997;
                    6.     Notes to Consolidated Financial Statements; and
                 7.     Independent Auditors' Report [To be filed by
amendement].        

Unaudited:                              

                    1.     Consolidated Statements of Income (unaudited) -
                       Three Months Ended March 31, 2000 and
March 31, 1999

              2.     Consolidated Balance Sheets (unaudited) -
                      March 31, 2000 and December 31, 1999

                    3.     Consolidated Statements of Comprehensive Income
                                (unaudited)- Three Months Ended March 31, 2000
      and March 31, 1999

          4.     Consolidated Statements of Changes in
                   Stockholder's Equity (unaudited)-
                       Three Months Ended March 31, 2000 and
March 31, 1999

                       5.     Consolidated Statements of Cash Flows (unaudited)-
                   Three Months Ended March 31, 2000
   and March 31,1999

              6.     Notes to Unaudited Consolidated Financial
Statements    

Included in Part B                                            

A.     Financial Statements of the Registrant         

               1.     Statement of Condition, December 31, 1999;
                     2.     Statement of Operations, Year Ended December 31,
1999;               
                     3.     Statements of Changes in Net Assets, Years Ended
                    December 31, 1999 and December 31, 1998;
       4.     Notes to Financial Statements; and
                 5.     Independent Auditors' Report [To be filed by
amendement].        

   (b)   The following Exhibits are incorporated in the Registration
Statement by reference unless otherwise indicated:

             (1)             Resolution of Board of Directors of the depositor
                  dated December 3, 1985 authorizing the
                         establishment of the Registrant (Incorporated
                   herein by reference to Exhibit 1 to the
                            Registration Statement of the Registrant on Form
                         N-4, File No. 333-37907, filed on October 14,
1997);              

(2)             Not Applicable;                     

         (3)(a)          Distribution Agreement between the Depositor,
                        Massachusetts Financial Services Company and
                          Clarendon Insurance Agency, Inc. (Incorporated
                  herein by reference to Exhibit 3(a) to
                             Pre-Effective Amendment No. 1 to the Registration
                             Statement of the Registrant on Form N-4, File No.
                  333-37907, filed on January 16, 1998);

          (b)(i)       Specimen Sales Operations and General Agent
                          Agreement (Incorporated herein by reference to
                            Exhibit 3(b)(i) to Pre-Effective Amendment No. 1
                              to the Registration Statement of the Registrant on
                              Form N-4, File No. 333-37907, filed on January 16,
1998);              

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             (b)(ii)      Specimen Broker-Dealer Supervisory and Service
                          Agreement (Incorporated herein by reference to
                             Exhibit 3(b)(ii) to Pre-Effective Amendment No. 1
                              to the Registration Statement of the Registrant on
                              Form N-4, File No. 333-37907, filed on January 16,
1998); and          

        (b)(iii)     Specimen Registered Representatives Agent
                          Agreement (Incorporated herein by reference to
                            Exhibit 3(b)(iii) to Pre-Effective Amendment No.
                             1 to the Registration Statement of the Registrant
                             on Form N-4, File No. 333-37907, filed on January
16, 1998);          

       (4)(a)          Form of Flexible Payment Combination Fixed/
                           Variable Group Annuity Contract [To be filed by
amendment];         

             (b)          Form of Certificate to be issued in connection
                            with Contract filed as Exhibit 4(a) [To be filed
by amendment];      

          (c)          Form of Flexible Payment Combination Fixed/
                             Variable Individual Annuity Contract [To be filed
by amendment];      

         (5)             Form of Application to be used with Contracts
                              filed as Exhibits 4(a), 4(b) and 4(c) [To be filed
by amendment];      

           (6)(a)          Certificate of Incorporation and By-laws of the
                          Depositor (Incorporated herein by reference to
                        Exhibits 3(a) and 3(b), respectively, to the
                           Registration Statement of the Depositor on Form
                         S-1, File No. 333-37907, filed on October 14,
1997);              

             (b)          By-Laws of the Depositor, as amended effective
                           as of January 1, 2000 (Filed as Exhibit 6(b) to
                Pre-Effective Amendment No. 1 to the
                          Registration Statement of the Registrant, File
                  No. 333-05846, filed on June 9, 2000);

(7)             Not Applicable;                     

          (8)(a)          Form of Participation Agreement by and between
                       The Alger American Fund, the Depositor, and
                          Fred Alger and Company, Incorporated (Filed as
                           Exhibit 8(a) to Post-Effective Amendment No. 13
                           to the Registration Statement of the Registrant
                           on Form N-4, File No. 33-41628, filed April 26,
1999);              

                 (b)(i)       Form of Participation Agreement dated February 17,
                       1998 by and between Goldman Sachs Variable,
                        Insurance Trust, Goldman Sachs & Co. and the
                  Depositor (Filed as Exhibit 8(b)(i) to
                           Post-Effective Amendment No. 13 to Registrant's
                        Registration Statement on Form N-4, File No.
            33-41628, filed April 26, 1999);

                    (ii)      Form of Amendment No. 1 dated December 14, 1998 to
                            Participation Agreement filed as Exhibit 8(b)(i)
                        (Filed as Exhibit 8(b)(ii) to Post-Effective
                         Amendment No. 13 to Registrant's Registration
                           Statement on Form N-4, File No. 33-41628, filed
April 26, 1999);    

                    (iii)     Form of Amendment No. 2 dated as of March 15, 1999
               to Participation Agreement filed as
                          Exhibit 8(b)(i) (Filed as Exhibit 8(b)(iii) to
                           Post-Effective Amendment No. 13 to Registrant's
                        Registration Statement on Form N-4, File No.
            33-41628, filed April 26, 1999);

           (c)          Form of Fund Participation Agreement between
                       Depositor and J.P. Morgan Services Trust II
                    (Filed as Exhibit 8(c) to Post-Effective
                         Amendment No. 13 to Registrant's Registration
                           Statement on Form N-4, File No. 33-41628, filed
April 26, 1999);    

                 (d)          Form of Participation Agreement dated February 17,
                              1998 by and among MFS/Sun Life Services Trust, the
                          Depositor and Massachusetts Financial Services
                            Company (Filed as Exhibit 8(d) to Post-Effective
                         Amendment No. 13 to Registrant's Registration
                           Statement on Form N-4, File No. 33-41628, filed
April 26, 1999);    

                 (e)          Form of Participation Agreement dated February 17,
                         1998 by and among OCC Accumulation Trust, the
                            Depositor and OCC Distributors (Filed as Exhibit
                      8(e) to Post-Effective Amendment No. 13 to
                            Registrant's Registration Statement on Form N-4,
                     File No. 33-41628, filed April 26, 1999);

              (f)          Form of Participation Agreement dated February,
                           1998 by and among the Depositor, Warburg Pincus
                            Trust, Warburg Pincus Asset Management, Inc. and
                          Counsellors Securities, Inc. (Filed as Exhibit
                      8(f) to Post-Effective Amendment No. 13 to
                            Registrant's Registration Statement on Form N-4,
                     File No. 33-41628, filed April 26, 1999);

                 (g)          Form of Participation Agreement dated February 17,
                         1998 by and among the Depositor, AIM Variable
                          Insurance Funds, Inc., AIM Distributors, Inc.,
                          and Clarendon Insurance Agency, Inc. (Filed as
                             Exhibit 8(g) to Post-Effective Amendment No. 1 to
                            Registrant's Registration Statement on Form N-4,
                           File No. 333-82957, filed on February 3, 2000);

               (h)          Form of Participation Agreement dated August 18,
                        1999 by and among the Depositor, Sun Capital
                         Advisers Trust and Sun Capital Advisers, Inc.
                              (Filed as Exhibit 8(h) to Post-Effective Amendment
                           No. 1 to Registrant's Registration Statement on
                              Form N-4, File No. 333-82957, filed on February 3,
2000);              

        (9)             Opinion of Counsel as to the legality of the
                          securities being registered and Consent to its
use*;               

          (10)             Consent of Independent Auditors [To be filed by
amendment];         

 (11)             Financial Statement Schedules I and VI
                    (Incorporated herein by reference to the
                       Depositor's Form 10-K Annual Report for the
                         fiscal year ended December 31, 1999, filed on
March 22, 2000);    

(12)             Not Applicable;                      

  (13)             Schedule for Computation of Performance
                    Quotations (Incorporated by reference to
                         Exhibit 13 to Post-Effective Amendment No. 10
                           to the Registration Statement of the Registrant
                    on Form N-4, File No. 33-41628, filed on
April 29, 1998);    

(14)             Not Applicable;                      

           (15)(a)          Powers of Attorney (Incorporated by reference to
                           the Registration Statement on Form S-6 File No.
               333-94359, filed January 10, 2000);

               (b)          Power of Attorney of David D. Horn (Incorporated
                             by reference to Post-Effective Amendment No. 1 to
                            the Registration Statement on Form N-4, File No.
               333-82957, filed February 3, 2000);

     (c)          Power of Attorney of Richard B. Bailey
                        (Incorporated by reference to Post-Effective
                            Amendment No. 6 to the Registration Statement in
                        Form N-4, File No. 333-05227, filed April 5,
2000);              

      (d)          Power of Attorney of William W. Stinson
                        (Incorporated by reference to Post-Effective
                          Amendment No. 23 to the Registration Statement
                          on Form N-4, File No. 2-78738, filed April 20,
2000); and          

       (16)             Organizational Chart (Filed as Exhibit 16 to
                         Pre-Effective Amendment No. 1 to Registration
                      Statement on Form N-4, File No. 333-30844,
  filed on June 9, 2000)

* Filed herewith                                                                

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Item 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR                                

        Name and                             Principal Positions and Offices
Business Address                     with Depositor         
----------------                     --------------         

Donald A. Stewart                    Chairman and Director  
150 King Street West                                        
Toronto, Ontario                                            
Canada M5H 1J9                                              

   C. James Prieur                      Vice Chairman and Director
150 King Street West                                        
Toronto, Ontario                                            
Canada M5H 1J9                                              

James A. McNulty, III                President and Director 
One Sun Life Executive Park                                 
Wellesley Hills, MA 02481                                   

Richard B. Bailey                    Director               
63 Atlantic Avenue                                          
Boston, MA 02110                                            

Gregory W. Gee                       Director               
150 King Street West                                        
Toronto, Ontario                                            
Canada M5H 1J9                                              

David D. Horn                        Director               
Strong Road                                                 
New Vineyard, ME 04956                                      

Angus A. MacNaughton                 Director               
Genstar Investment Corporation                              
555 California Street, Suite 4850                           
San Francisco, CA 94104                                     

S. Caesar Raboy                      Director               
220 Boylston Street                                         
Boston, MA 02110                                            

William W. Stinson                   Director               
Canadian Pacific Limited                                    
1800 Bankers Hall, East Tower                               
855 - 2nd Street S.W.                                       
Calgary, Alberta                                            
Canada T2P 4ZS                                              

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      Name and                           Principal Positions and Offices
Business Address                   with Depositor           
----------------                   --------------           

  James M.A. Anderson                Vice President, Investments
One Sun Life Executive Park                                 
Wellesley Hills, MA 02481                                   

       Peter F. Demuth                    Vice President and Chief Counsel
One Sun Life Executive Park        and Assistant Secretary  
Wellesley Hills, MA 02481                                   

 Ronald J. Fernandes                Vice President, Retirement
One Sun Life Executive Park        Products and Services    
Wellesley Hills, MA 02481                                   

Ellen B. King                      Counsel and Secretary    
One Sun Life Executive Park                                 
Wellesley Hills, MA 02481                                   

  Davey S. Scoon                     Vice President, Finance and
One Sun Life Executive Park        Treasurer                
Wellesley Hills, MA 02481                                   

Robert P. Vrolyk                   Vice President and       
One Sun Life Executive Park        Actuary                  
Wellesley Hills, MA 02481                                   

Item 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR    
REGISTRANT                                                    

No person is directly or indirectly controlled by the Registrant. The 
Registrant is a separate account of Sun Life Assurance Company of Canada        
(U.S.), a wholly-owned subsidiary of Sun Life of Canada (U.S.) Holdings,        
Inc., a wholly-owned subsidiary of Sun Life Assurance Company of Canada -       
U.S. Operations Holdings, Inc., which is in turn a wholly-owned subsidiary of   
Sun Life Assurance Company of Canada.                                           

The organization chart of Sun Life Assurance Company of Canada is     
incorporated herein by reference to Exhibit 16 to Pre-Effective Amendment       
No. 1 to Registrant's Registration Statement on Form N-4, File No. 333-30844,   
filed June 9, 2000.                                                             

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  None of the companies listed in such Exhibit 16 is a subsidiary of the
Registrant; therefore, the only financial statements being filed are those of   
Sun Life Assurance Company of Canada (U.S.).                                    

Item 27. NUMBER OF CONTRACT OWNERS                                              

No Contracts have been issued by the Depositor with respect to the    
Securities registered pursuant to this Registration Statement.                  

Item 28. INDEMNIFICATION                                                        

Pursuant to Section 145 of the Delaware Corporation Law, Article 8 of 
the By-laws of Sun Life Assurance Company of Canada (U.S.), as amended (a       
copy of which was filed as Exhibit 6(b) to Pre-Effective Amendment No. 1 to     
the Registration Statement on Form N-4, File No. 333-30844) provides for the    
indemnification of directors, officers and employees of Sun Life Assurance      
Company of Canada (U.S.).                                                       

Insofar as indemnification for liability arising under the Securities 
Act of 1933 may be permitted to directors, officers and controlling persons     
of Sun Life Assurance Company of Canada (U.S.) pursuant to the certificate of   
incorporation, by-laws, or otherwise, Sun Life (U.S.) has been advised that     
in the opinion of the Securities and Exchange Commission such indemnification   
is against public policy as expressed in the Act and is, therefore,             
unenforceable. In the event that a claim for indemnification against such       
liabilities (other than the payment by Sun Life (U.S.) of expenses incurred     
or paid by a director, officer, controlling person of Sun Life (U.S.) in the    
successful defense of any action, suit or proceeding) is asserted by such       
director, officer or controlling person in connection with the securities       
being registered, Sun Life (U.S.) will submit to a court of appropriate         
jurisdiction the question whether such indemnification by them is against       
public policy as expressed in the Act, unless in the opinion of their counsel   
the matter has been settled by controlling precedent, and will be governed by   
the final adjudication of such issue.                                           

Item 29. PRINCIPAL UNDERWRITERS                                                 

(a) Clarendon Insurance Agency, Inc., a wholly-owned subsidiary of Sun
Life Assurance Company of Canada (U.S.), acts as general distributor for the    
Registrant, Sun Life of Canada (U.S.) Variable Accounts C, D, E, G, H and I,    
Sun Life (N.Y.) Variable Accounts A, B and C, and Money Market Variable         
Account, High Yield Variable Account, Capital Appreciation Variable Account,    
Government Securities Variable Account, World Governments Variable Account,     
Total Return Variable Account, and Managed Sectors Variable Account.            

                                                                [Download Table]

Name and Principal                      Positions and Offices   
Business Address*                       with Underwriter        
----------------                        ----------------        
                                                                
William Franca.....................     Managing Principal      
Michael M. Senning.................     Managing Principal      
Davey S. Scoon.....................     Treasurer and Director  
James M.A. Anderson................     Director                
Ronald J. Fernandes................     Director                
James A. McNulty, III..............     Director                
George E. Maden....................     Secretary               
Brian A. Krivitsky.................     Vice President          
Cynthia M. Orcutt..................     Vice President          
Norton A. Goss, II.................     Assistant Vice President

-------------                                                                   
*    The principal business address of all directors and officers of the        
principal underwriter except Messrs. Fernandes, Goss and Krivitsky is One       
Sun Life Executive Park, Wellesley Hills, Massachusetts 02481. The principal    
business address of Messrs. Fernandes, Goss and Krivitsky is One Copley         
Place, Boston, Massachusetts 02116.                                             

(a)  Inapplicable.                                                              

Item 30. LOCATION OF ACCOUNTS AND RECORDS                                       

  Accounts, books and other documents required to be maintained by Section
31(a) of the Investment Company Act of 1940 and the Rules promulgated thereunder
are maintained, in whole or in part, by Sun Life Assurance Company of Canada    
(U.S.) at its offices at One Sun Life Executive Park, Wellesley Hills,          
Massachusetts 02481, and One Copley Place, Boston, Massachusetts 02116, or at   
the offices of Clarendon Insurance Agency, Inc., at One Sun Life Executive Park,
Wellesley Hills, Massachusetts 02481.                                           

Item 31. MANAGEMENT SERVICES                                                    

Not Applicable.                                                       

Item 32. UNDERTAKINGS                                                           

The Registrant hereby undertakes:                                     

  (a) To file a post-effective amendment to this Registration Statement as
frequently as is necessary to ensure that the audited financial statements in   
the Registration Statement are never more than 16 months old for so long as     
payments under the variable annuity Contracts may be accepted;                  

     (b) To include either (1) as part of any application to purchase a Contract
offered by the prospectus, a space that an Applicant can check to request a     
Statement of Additional Information, or (2) a post card or simiilar written     
communication affixed to or included in the prospectus that the Applicant can   
remove to send for a Statement of Additional Information;                       

  (c) To deliver any Statement of Additional Information and any financial
statements required to be made available under SEC Form N-4 promptly upon       
written or oral request.                                                        

   (d) Representation with respect to Section 26(e)of the Investment Company
Act of 1940: Sun Life Assurance Company of Canada (U.S.) represents that the    
fees and charges deducted under the Contracts, in the aggregate, are            
reasonable in relation to the services rendered, the expenses expected to be    
incurred, and the risks assumed by the insurance company.                       

  The Registrant is relying on the no-action letter issued by the Division
of Investment Management of the Securities and Exchange Commission to           
American Council of Life Insurance, Ref. No. IP-6-88, dated November 28,        
1988, the requirements for which have been complied with by the Registrant.     

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SIGNATURES

As required by the Securities Act of 1933 and the Investment Company
Act of 1940, the Registrant has caused this Registration Statement to be        
signed on its behalf, in the Town of Wellesley Hills, and Commonwealth of       
Massachusetts on this 14th day of July, 2000.                                   

                                                                [Download Table]
                                            
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT F
(Registrant)                                

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) 
(Depositor)                                 

By:  /s/  JAMES A. McNULTY, III             
     ----------------------------           
     James A. McNulty, III                  
     President                              

Attest: /s/ SANDRA M. DaDALT                                                    
----------------------------                                                    
Sandra M. DaDalt                                                      
Senior Counsel                                                        

  As required by the Securities Act of 1933, this Registration Statement
has been signed below by the following persons in the capacities with the       
Depositor, Sun Life Assurance Company of Canada (U.S.), and on the dates        
indicated.                                                                      

                                                        [Enlarge/Download Table]

SIGNATURE                              TITLE                                         DATE          
-------------------------------------  ------------------------------------          --------------
                                                                                                   
/s/ JAMES A. McNULTY, III              President and Director                        July 14, 2000 
-------------------------------------  (Principal Executive Officer)                               
James A. McNulty, III                                                                              

/s/ DAVEY S. SCOON                     Vice President, Finance                       July 14, 2000 
-------------------------------------  and Treasurer                                               
Davey S. Scoon                         (Principal Financial and Accounting Officer)                

* /s/ DONALD A. STEWART                Chairman and Director                         July 14, 2000 
-------------------------------------                                                              
Donald A. Stewart                                                                                  

* /s/ C. JAMES PRIEUR                  Vice Chairman and Director                    July 14, 2000 
-------------------------------------                                                              
C. James Prieur                                                                                    

** /s/ RICHARD B. BAILEY               Director                                      July 14, 2000 
-------------------------------------                                                              
Richard B. Bailey                                                                                  

* By Sandra M. DaDalt pursuant to Power of Attorney filed as Exhibit 8 to the   
Registration Statement on Form S-6 (File No. 333-94359), filed January 10,      
2000.                                                                           

**  By Sandra M. DaDalt pursuant to Power of Attorney filed as an Exhibit to    
Post-Effective Amendment No. 6 to the Registration Statement on Form N-4,       
File No. 333-05227, filed April 5, 2000.                                        

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                                                        [Enlarge/Download Table]


SIGNATURE                              TITLE                                 DATE          
-------------------------------------  ------------------------------------  --------------
                                                                                           

* /s/ GREGORY W. GEE                   Director                              July 14, 2000 
-------------------------------------                                                      
Gregory W. Gee                                                                             

*** /s/ DAVID D. HORN                  Director                              July 14, 2000 
-------------------------------------                                                      
David D. Horn                                                                              

* /s/ ANGUS A. MACNAUGHTON             Director                              July 14, 2000 
-------------------------------------                                                      
Angus A. MacNaughton                                                                       

* /s/ S. CAESAR RABOY                  Director                              July 14, 2000 
-------------------------------------                                                      
S. Caesar Raboy                                                                            

**** /s/ WILLIAM W. STINSON            Director                              July 14, 2000 
-------------------------------------                                                      
William W. Stinson                                                                         

* By Sandra M. DaDalt pursuant to Power of Attorney filed as Exhibit 8 to       
Registration Statement on Form S-6 (File No. 333-94359), filed January 10,      
2000.                                                                           

*** By Sandra M. DaDalt pursuant to Power of Attorney filed as Exhibit 15(b) to 
Post-Effective Amendment No. 1 to Registrant's Registration Statement on        
Form N-4 (File No. 333-82957), filed February 3, 2000.                          

**** By Sandra M. DaDalt pursuant to Power of Attorney filed as an Exhibit to   
Post-Effective Amendment No. 23 to the Registration Statement on Form N-4,      
File No. 2-78738, filed April 20, 2000.                                         

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   EXHIBIT INDEX

9        Opinion of Counsel as to the legality of the securities being          
registered and Consent to its use