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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-LEFT: 11pt; MARGIN-TOP: 2.65pt; LINE-HEIGHT: 11.4pt">As filed with the Securities and Exchange Commission on August 15, 2016<font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 1px; WIDTH: 12pt; DISPLAY: inline-block">&#160;</font>Registration No. 333-</div>

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<div style="FONT-SIZE: 14pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-LEFT: 144.8pt; MARGIN-TOP: 2pt; LINE-HEIGHT: 19.6pt; MARGIN-RIGHT: 144.3pt; TEXT-INDENT: 67.35pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; FORM S-1 REGISTRATION STATEMENT</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: center; MARGIN-LEFT: 94.15pt; LINE-HEIGHT: 11.3pt; MARGIN-RIGHT: 91.85pt">(Exact name of Registrant as specified in its charter)</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt">New York</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt">13-3191369</div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center; LINE-HEIGHT: 9.1pt; MARGIN-RIGHT: 5.05pt">(I.R.S. Employer</div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center; LINE-HEIGHT: 9.1pt; MARGIN-RIGHT: 4.7pt">&#160;Identification No.)</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-LEFT: 11pt; MARGIN-TOP: 0.5pt; LINE-HEIGHT: 11.4pt">As soon as practicable after this registration statement becomes effective.</div>

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<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 10pt">Calculation of Registration Fee</div>
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<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 10pt">Title of each class of securities<font style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif"><br>
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<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 10pt">Amount to<font style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif"><br>
</font> be registered pursant to this Registration Statement</div>
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<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 10pt">Proposed maximum offering price per unit</div>
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<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 10pt">Proposed&#160; maximum aggregate offering price including previously registered securities</div>
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<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; LINE-HEIGHT: 10pt">Amount of aggregate<font style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif"><br>
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<div style="FONT-SIZE: 9pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center; LINE-HEIGHT: 10pt">Individual Flexible Purchase Payment</div>

<div style="FONT-SIZE: 9pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center; LINE-HEIGHT: 10pt">Index-Linked Deferred&#160; Annuity Contract</div>
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<div style="FONT-SIZE: 9pt; FONT-FAMILY: 'Arial Narrow', sans-serif; COLOR: #000000; TEXT-ALIGN: center; LINE-HEIGHT: 10pt">$1,000,000<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(1)</sup></div>
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<div style="FONT-SIZE: 9pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center; LINE-HEIGHT: 10pt"><font style="FONT-SIZE: 9pt; FONT-FAMILY: 'Arial Narrow', sans-serif; COLOR: #000000">NA</font><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(2)</sup></div>
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<div style="FONT-SIZE: 9pt; FONT-FAMILY: 'Arial Narrow', sans-serif; COLOR: #000000; TEXT-ALIGN: center; LINE-HEIGHT: 10pt">$300,000,000<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(1)</sup></div>
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<div style="FONT-SIZE: 9pt; FONT-FAMILY: 'Arial Narrow', sans-serif; COLOR: #000000; TEXT-ALIGN: center; LINE-HEIGHT: 10pt">$ 100.70<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(1)</sup></div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-TOP: 6pt; LINE-HEIGHT: 12pt">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 statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.</div>

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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 2pt">ALLIANZ INDEX ADVANTAGE<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#160;</sup>ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> NEW YORK VARIABLE ANNUITY CONTRACT</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center; MARGIN-TOP: 2pt">Issued by Allianz Life<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> of NY Variable Account C and Allianz Life Insurance Company of New York<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif"><br>
</font>(Allianz Life<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> of New York, we, us, our)</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 2pt">Prospectus Dated: November 14, 2016</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: left">The information in this prospectus is not complete and may be changed. We cannot sell Allianz Index Advantage ADV New York Variable Annuity pursuant to this prospectus until the Registration Statement containing this prospectus filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell the Contract and is not soliciting an offer to buy the Contract in any state where the offer or sale is not permitted.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">This prospectus describes an individual flexible purchase payment variable and index-linked deferred annuity contract (Contract). The Contract is designed to be used by purchasers who are working with a registered investment adviser. The Contract offers both variable investment options (Variable Options) and index-linked investment options (Index Options). (The Variable Options and the Index Options together are referred to as Allocation Options.) You can allocate your money (Purchase Payments) to any or all of the Variable Options or Index Options. The Contract also offers various standard annuity features, including multiple fixed annuitization options (Annuity Options), a free withdrawal privilege, and a guaranteed death benefit (Traditional Death Benefit). The Contract has a six-year withdrawal charge period.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If you allocate Purchase Payments to the Variable Options, the value of your investment (Variable Account Value) increases and decreases based on your selected Variable Options' performance. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">The Variable Options do not provide any protection against loss of principal. You can lose money you allocate to the Variable Options.</font></div>

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<div style="FONT-SIZE: 9pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Variable Options Currently Available</div>
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<div style="FONT-SIZE: 9pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">AZL<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> MVP Growth Index Strategy Fund</div>
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<div style="FONT-SIZE: 9pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">AZL<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> MVP Balanced Index Strategy Fund</div>
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<div style="FONT-SIZE: 9pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">AZL<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> Government Money Market Fund</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-TOP: 6pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">If you allocate Purchase Payments to the Index Options, you receive annual returns (Performance Credits) based on the performance of one or more third-party broad based securities indices (Index or Indices). Unlike the Variable Options, the Index Options do not involve an indirect investment by you in any underlying fund and do not participate directly in the equity market.</font> Instead, Performance Credits are an obligation of Allianz Life of New York, and are subject to the claims paying ability of Allianz Life of New York. Performance Credits are calculated by us based on annual changes in the Index's value.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We currently offer two Index credit calculation methods (Crediting Methods). These are the <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Index Performance Strategy</font> and <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Index Protection NY Strategy</font>. Both Crediting Methods provide a combination of a credit that is calculated by reference to Index performance, a level of protection against negative Index performance, and a limit or Cap on participation in positive Index performance.</div>

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<div style="FONT-SIZE: 9pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Indices Currently Available with Index Performance Strategy and Index Protection NY Strategy</div>
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<div style="FONT-SIZE: 9pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">S&amp;P 500<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> Index</div>
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<div style="FONT-SIZE: 9pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Russell 2000<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> Index</div>
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<div style="FONT-SIZE: 9pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Nasdaq-100<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> Index</div>
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<div style="FONT-SIZE: 9pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">EURO STOXX 50</font><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup></div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-TOP: 6pt">The <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Index Performance Strategy</font> and <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Index Protection NY Strategy</font> provide a positive Performance Credit based on positive Index Return (annual changes in Index value) subject to an upper limit called the Cap. If the Index Return is negative, you will receive a negative Performance Credit if the loss is greater than a specified percentage called the Buffer. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">A negative Performance Credit means that you can lose money. </font>We can change the Caps at the beginning of each Index Year, but we establish the Buffers at the beginning of the first Contract Year and we cannot change them. The Caps and Buffers can be different depending on the Index Options you select. The values allocated to an Index Option may fluctuate between Index Anniversaries. We base interim values on a calculation called the Daily Adjustment, which reflects changes in Index Option Value resulting from Index performance. An Index Anniversary is a twelve-month anniversary of the Index start date (Index Effective Date) and is the date we apply Performance Credits. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">You can lose money that you allocate to the Index Performance Strategy or the Index Protection NY Strategy if Index losses are greater than the Buffer. This loss could be significant. If money is withdrawn or removed from an Index Option before the Index Anniversary, you could lose principal even if the Index Return is positive on the date of withdrawal due to the application of the Daily Adjustment.</font></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The two Crediting Methods have different risk and return potentials. The Index Performance Strategy has higher Caps in exchange for lower Buffers (i.e., in exchange for higher risk). The Index Protection NY Strategy provides more protection and has higher Buffers in exchange for lower Caps.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: left">All guarantees under the Contract are the obligations of Allianz Life of New York and are subject to the claims paying ability of Allianz Life of New York.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: left">The Contract involves certain risks, as described in section 1, Risk Factors on page 17 of this prospectus.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Please read this prospectus before investing and keep it for future reference. It contains important information about your annuity and Allianz Life of New York that you ought to know before investing. This prospectus is not an offering in any state, country, or jurisdiction in which we are not authorized to sell the Contracts. You should rely only on the information contained in this prospectus. We have not authorized anyone to give you different information.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Allianz Life of NY Variable Account C is the Separate Account that holds the assets allocated to the Variable Options. Additional information about the Separate Account has been filed with the Securities and Exchange Commission (SEC) and is available upon written or oral request without charge, or on the EDGAR database on the SEC's website (www.sec.gov). A Statement of Additional Information (SAI) dated the same date as this prospectus includes additional information about the annuity offered by this prospectus. The SAI is incorporated by reference into this prospectus. The SAI is filed with the SEC on Form N-4 and is available without charge by contacting us at the telephone number or address listed at the back of this prospectus. The SAI's table of contents appears after the Privacy and Security Statement in this prospectus. The prospectus, SAI and other Contract information are also available on the EDGAR database.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">The SEC has not approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. An investment in this Contract is not a deposit of a bank or financial institution and is not federally insured or guaranteed by the Federal Deposit Insurance Corporation or any other federal government agency. An investment in this Contract involves investment risk including the possible loss of principal. Variable and index-linked annuity contracts are complex insurance and investment vehicles. Before you invest, be sure to ask your Financial Professional about the Contract's features, benefits, risks, and fees, and whether the Contract is appropriate for you based upon your financial situation and objectives.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
</div>

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<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 11pt; FONT-FAMILY: Arial, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 21.6pt; TEXT-INDENT: -21.6pt">TABLE OF CONTENTS</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Glossary</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">4</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Summary</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">8</div>
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<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: left">Who Should Consider Purchasing the Contract?</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">8</div>
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<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: left">What Are the Contract's Charges?</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">8</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: left">What Are the Contract's Benefits?</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">9</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: left">What Are the Index-Linked Crediting Methods and How Do They Work?</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">9</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: left">How Can I Allocate My Purchase Payments?</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">11</div>
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<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: left">What Are the Different Values Within the Contract?</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: left">How Do We Apply Performance Credits to the Index Options?</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: left">How Do the Caps and Buffers Affect My Contract's Potential Growth?</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: left">Can My Contract Lose Value Because of Negative Changes in an Index's Value?</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: left">Can I Transfer Index Option Value Between the Allocation Options?</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: left">How Can I Take Money Out of My Contract?</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: left">What Are My Annuity Options?</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: left">Does the Contract Provide a Death Benefit?</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: left">What If I Need Customer Service?</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Fee Tables</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Owner Transaction Expenses</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Owner Periodic Expenses</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Annual Operating Expenses of the Variable Options</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Examples</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Condensed Financial Information</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">1.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Risk Factors</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Liquidity Risk</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Risk of Investing in Securities</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Risk of Negative Returns</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Calculation of Performance Credits</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">18</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Substitution of an Index</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">18</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Changes to Caps and Notice of Buffers</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">19</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Investment in Derivative Securities</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">19</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Variable Option Risk</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">20</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Our Financial Strength and Claims-Paying Ability</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">20</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Regulatory Protections</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">20</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">2.</div>
</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">The Variable Annuity Contract</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">20</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">When The Contract Ends</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">21</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">3.</div>
</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Ownership, Annuitants, Determining Life, Beneficiaries, and Payees</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">21</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Owner</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">21</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Joint Owner</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">21</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Annuitant</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">21</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Determining Life (Lives)</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">22</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Beneficiary</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">22</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Payee</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">22</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Assignments, Changes of Ownership and Other Transfers of Contract Rights</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">23</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">4.</div>
</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Purchasing the Contract</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">23</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Purchase Requirements</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">23</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Applications Sent Electronically</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">24</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Allocation of Purchase Payments and Transfers Between the Allocation Options</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">24</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Automatic Investment Plan (AIP)</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">25</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Free Look/Right to Examine Period</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">25</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">5.</div>
</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Variable Options</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">26</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Substitution of Variable Options and Limitation on Further Investments</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">27</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Transfers Between Variable Options</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">28</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Electronic Transfer and Allocation Instructions</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">28</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Excessive Trading and Market Timing</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">29</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Financial Adviser Fees</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">30</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Voting Privileges</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">31</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">6.</div>
</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Valuing Your Contract</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">31</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Accumulation Units</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">31</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Computing Variable Account Value</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">32</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">7.</div>
</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Index Options</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">32</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Determining the Index Option Values</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">32</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Optional Rebalancing Program</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">34</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">8.</div>
</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Expenses</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">35</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Product Fee</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">35</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Contract Maintenance Charge</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">36</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Withdrawal Charge</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">36</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Transfer Fee</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">38</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Premium Tax</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">38</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Income Tax</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">38</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Variable Option Expenses</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">38</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">9.</div>
</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Access to Your Money</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">39</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Free Withdrawal Privilege</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">39</div>
</td>
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<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Systematic Withdrawal Program</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">40</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Minimum Distribution Program and Required Minimum Distribution (RMD) Payments</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">40</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Waiver of Withdrawal Charge Benefit</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">40</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Suspension of Payments or Transfers</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">41</div>
</td>
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<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">10.</div>
</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">The Annuity Phase</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">41</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Calculating Your Annuity Payments</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">41</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Annuity Payment Options</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">41</div>
</td>
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<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">When Annuity Payments Begin</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">42</div>
</td>
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<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">11.</div>
</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Death Benefit</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">42</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Death of the Owner and/or Annuitant</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">43</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Death Benefit Payment Options During the Accumulation Phase</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">44</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">12.</div>
</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Taxes</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">45</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Qualified and Non-Qualified Contracts</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">45</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Taxation of Annuity Contracts</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">45</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Tax-Free Section 1035 Exchanges</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">46</div>
</td>
</tr>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
</div>

<div id="DSPFPageNumberArea" style="TEXT-ALIGN: center"><font id="DSPFPageNumber" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', 'sans-serif'; FONT-WEIGHT: bold; FONT-STYLE: normal">3</font></div>

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<div><br>
</div>

<table id="zb47bccf94fd147998006ef55ee50d27d" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">13.</div>
</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Other Information</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">46</div>
</td>
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<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">The Registered Separate Account</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">46</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Our General Account</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">47</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Our Unregistered Separate Account</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">47</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Distribution</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">47</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Additional Credits for Certain Groups</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">48</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Administration/Allianz Service Center</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">48</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Legal Proceedings</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">49</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Status Pursuant to Securities Exchange Act of 1934</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">49</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">14.</div>
</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Information on Allianz Life of New York</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">50</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Directors, Executive Officers and Corporate Governance</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">50</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Executive Compensation</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">55</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Security Ownership of Certain Beneficial Owners and Management</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">71</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Transactions with Related Persons, Promoters and Certain Control Persons</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">71</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Risks Associated with the Financial Services Industry</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">71</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">15.</div>
</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Financial Statements</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">88</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">16.</div>
</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Privacy Notice</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">89</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">17.</div>
</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Table of Contents of the Statement of Additional Information (SAI)</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">90</div>
</td>
</tr>

<tr>
<td style="WIDTH: 95.72%; VERTICAL-ALIGN: top" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Appendix A &#8211; Available Indices</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">91</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Standard &amp; Poor's 500 Index</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">91</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Russell 2000<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> Index</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">92</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Nasdaq-100<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> Index</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">92</div>
</td>
</tr>

<tr>
<td style="WIDTH: 5.56%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 90.16%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">EURO STOXX 50<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup></div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">93</div>
</td>
</tr>

<tr>
<td style="WIDTH: 95.72%; VERTICAL-ALIGN: top" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Appendix B &#8211; Daily Adjustment</div>
</td>
<td style="WIDTH: 4.28%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">94</div>
</td>
</tr>

<tr>
<td style="WIDTH: 95.72%; VERTICAL-ALIGN: top" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Appendix C &#8211; Unaudited Selected Financial Data and Financial Statements</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left">Appendix D &#8211; Audited Selected Financial Data and Financial Statements</div>
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<div><!--Anchor--><!--Anchor-->GLOSSARY</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">This prospectus is written in plain English. However, there are some technical words or terms that are capitalized and are used as defined terms throughout the prospectus. For your convenience, we included this glossary to define these terms.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Accumulation Phase &#8211; </font>the initial phase of your Contract before you apply your Contract Value to Annuity Payments. The Accumulation Phase begins on the Issue Date.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Allocation Options &#8211; </font>the Variable Options and Index Options available to you under the Contract.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Annuitant &#8211; </font>the individual upon whose life we base the Annuity Payments. Subject to our approval, the Owner designates the Annuitant, and can add a joint Annuitant for the Annuity Phase.<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000"> There are restrictions on who can become an Annuitant.</font></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Annuity Date</font> &#8211; the date we begin making Annuity Payments to the Payee from the Contract.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Annuity Options &#8211; </font>the annuity income options available to you under the Contract.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Annuity Payments &#8211; </font>payments made by us to the Payee pursuant to the chosen Annuity Option.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Annuity Phase</font> &#8211; the phase the Contract is in once Annuity Payments begin.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Beneficiary</font> &#8211;the person(s) the Owner designates to receive any death benefit, unless otherwise required by the Contract or applicable law.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Buffer </font>&#8211; the negative Index Return that Allianz Life of New York absorbs before applying a negative Performance Credit. We declare Buffers for each Index Option on the Issue Date. Buffers do not change after the Issue Date.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Business Day</font> &#8211; each day on which the New York Stock Exchange is open for trading, except, with regard to a specific Variable Option, when that Variable Option does not value its shares. Allianz Life of New York is open for business on each day that the New York Stock Exchange is open. Our Business Day closes when regular trading on the New York Stock Exchange closes, which is usually at 4:00 p.m. Eastern Time.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Cap</font> &#8211; the maximum amount of positive Index Return that you can receive as a positive Performance Credit. We declare Caps for each Index Option on the Index Effective Date and each Index Anniversary. The Caps are shown on the Index Options Statement.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Charge Base</font> &#8211; the Contract Value on the preceding Quarterly Contract Anniversary (or the initial Purchase Payment received on the Issue Date if this is before the first Quarterly Contract Anniversary), adjusted for subsequent Purchase Payments and withdrawals. We use the Charge Base to determine the next product fee we deduct.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Contract</font> &#8211; the individual flexible purchase payment variable and index-linked deferred annuity contract described by this prospectus.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Contract Anniversary</font> &#8211; a twelve-month anniversary of the Issue Date or any subsequent Contract Anniversary.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Contract Value</font> &#8211; on any Business Day, the sum of your Index Option Value(s) and Variable Account Value. The Contract Value does not include any currently applicable withdrawal charge, final product fee, or final contract maintenance charge. The Variable Account Value component of the Contract Value fluctuates each Business Day. The Index Option Value component of the Contract Value is adjusted on each Index Anniversary to reflect Performance Credits, which can be negative. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">A negative Performance Credit means that you can lose money. </font>The Index Option Values also reflect the Daily Adjustment on every Business Day other than the Index Anniversary.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Contract Year</font> &#8211; any period of twelve months beginning on the Issue Date or a subsequent Contract Anniversary.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Crediting Method</font> &#8211; a method we use to calculate annual Performance Credits if you allocate money to an Index Option.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Daily Adjustment</font> &#8211; the change in the market value of an Index Option as discussed in section 7, Index Options and Appendix B. We use the Daily Adjustment to calculate the Index Option Values on each Business Day during the Index Year other than the Index Effective Date or Index Anniversary. The Daily Adjustment can affect the values available for withdrawals, annuitizations, death benefits, and the Contract Value used to determine the Charge Base and contract maintenance charge.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Determining Life (Lives)</font> &#8211; the person(s) designated at Contract issue and named in the Contract on whose life we base the guaranteed Traditional Death Benefit.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Financial Professional </font>&#8211; the person who advises you regarding the Contract. A Financial Professional may be a securities registered representative and/or a registered investment advisory representative.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Good Order &#8211; </font>a request is in "Good Order" if it contains all of the information we require to process the request. If we require information to be provided in writing, "Good Order" also includes providing information on the correct form, with any required certifications, guarantees and/or signatures, and received at our Service Center after delivery to the correct mailing, email, or website address, which are all listed at the back of this prospectus. If you have questions about the information we require, or whether you can submit certain information by fax, email or over the web, please contact our Service Center. If you send information by email or upload it to our website, we send you a confirmation number that includes the date and time we received your information.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Index (Indices)</font> &#8211; one (or more) of the third-party broad based securities indexes available to you under your Contract.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Index Anniversary</font> &#8211; a twelve-month anniversary of the Index Effective Date or any subsequent Index Anniversary. If an Index Anniversary does not occur on a Business Day, we consider it to occur on the next Business Day for the purposes of declaring Caps, determining Index values and Index Returns, and applying Performance Credits.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Index Effective Date</font> &#8211; the date shown on the Index Options Statement that starts the first Index Year. When you purchase this Contract you select the Index Effective Date as discussed in section 4, Purchasing the Contract &#8211; Allocation of Purchase Payments and Transfers Between the Allocation Options.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Index Option</font> &#8211; the combination of an Index and a Crediting Method to which you can allocate money.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Index Option Base</font> &#8211; an amount we use to calculate Performance Credits and the Daily Adjustment. The Index Option Base is equal to the amounts you allocate to an Index Option adjusted for withdrawals, Contract expenses, transfers into or out of the Index Option, and the application of any Performance Credits.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Index Option Value</font> &#8211; on any Business Day it is equal to the value in an Index Option. We establish an Index Option Value for each Index Option you select. Each Index Option Value includes any Performance Credits from previous Index Anniversaries and the deduction of any previously assessed contract maintenance charge, product fee, and withdrawal charge. On each Business Day during the Index Year other than the Index Effective Date or an Index Anniversary, each Index Option Value also includes the Daily Adjustment.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Index Options Statement</font> &#8211; an account statement we mail to you on the Index Effective Date and each Index Anniversary thereafter. On the Index Effective Date, the statement shows the Index values, and the Caps that are initially declared on the Index Effective Date. On each Index Anniversary, the statement shows the new Index values, and the Caps that are effective for the next year.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Index Performance Strategy </font>&#8211; one of the Index Crediting Methods available to you under the Contract described in section 7, Index Options. The Index Performance Strategy calculates Performance Credits based on Index Returns subject to a Cap and Buffer. You can receive negative Performance Credits, <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">which means you can lose principal</font>.<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000"> The Index Performance Strategy provides more performance potential than the Index Protection NY Strategy as it has higher Caps in exchange for lower Buffers.</font></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; COLOR: #000000">Index Protection NY Strategy </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">&#8211; one of the Index Crediting Methods available to you under the Contract </font>described in section 7, Index Options<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">. The Index Protection NY Strategy calculates Performance Credits based on Index Returns subject to a Cap and Buffer. You can receive negative Performance Credits under this Crediting Method, </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; COLOR: #000000">which means you can lose principal</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">. The Index Protection NY Strategy provides more protection than the Index Performance Strategy as it has higher Buffers in exchange for lower Caps.</font></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Index Return</font> &#8211; a calculation we use to determine the Performance Credits on each Index Anniversary. The Index Return is an Index's current value, minus its value on the last Index Anniversary (or the Index Effective Date if this is the first Index Anniversary), divided by the Index's value on the last Index Anniversary (or the Index Effective Date if this is the first Index Anniversary).</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Index Year</font> &#8211; any period of twelve months beginning on the Index Effective Date or a subsequent Index Anniversary.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Issue Date</font> &#8211; the date shown on the Contract that starts the first Contract Year. Contract Anniversaries and Contract Years are measured from the Issue Date. We must receive your initial Purchase Payment and all necessary information before we issue the Contract.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Joint Owners</font> &#8211; two Owners who own a Contract.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Lock Date </font>&#8211; the Business Day we process your request to lock in an Index Option Value (a Performance Lock) before the Index Anniversary.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Non-Qualified Contract</font> &#8211; a Contract that is not purchased under a pension or retirement plan qualified for special tax treatment under sections of the Internal Revenue Code.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Owner</font> &#8211; "you," "your" and "yours." The person(s) or entity designated at Contract issue and named in the Contract who may exercise all rights granted by the Contract.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Payee</font> &#8211; the person or entity who receives Annuity Payments during the Annuity Phase.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Performance Lock </font>&#8211; a feature that allows you to lock in each of your current Index Option Values before the Index Anniversary. A Performance Lock applies to the total Index Option Value in an Index Option, and not just a portion of that Index Option Value. After the Lock Date, Daily Adjustments do not apply for the remainder of the Index Year and the Index Option Value will not receive a Performance Credit on the next Index Anniversary.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Performance Credit</font> &#8211; the credit we apply on the Index Anniversary to each Index Option. We base Performance Credits on Index Returns limited by the Cap or Buffer. Performance Credits can be negative, <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">which means that you can lose money</font>.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Proxy Investment</font> &#8211; an investment tracking mechanism we establish that is structured as a hypothetical set of call and put options designed to provide the same returns as the Performance Credits on an Index Anniversary. We use the Proxy Investment to calculate the Daily Adjustment between Index Anniversaries. For more information, see Appendix B.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Proxy Value</font> &#8211; the value of the Proxy Investment for an Index Option used to calculate the Daily Adjustment as discussed in Appendix B.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Purchase Payment</font> &#8211; the money you put into the Contract.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Qualified Contract</font> &#8211; a Contract purchased under a pension or retirement plan qualified for special tax treatment under sections of the Internal Revenue Code (for example, 401(a) and 401(k) plans), Individual Retirement Annuities (IRAs), or Tax-Sheltered Annuities (referred to as TSA or 403(b) contracts). Currently, we issue Qualified Contracts that may include, but are not limited to Roth IRAs, Traditional IRAs and Simplified Employee Pension (SEP) IRAs. We may also issue an Inherited IRA and Inherited Roth IRA to make any required minimum distribution payments to a beneficiary of a previously held tax-qualified arrangement.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Quarterly Contract Anniversary &#8211;</font> the day that occurs three calendar months after the Issue Date or any subsequent Quarterly Contract Anniversary.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Separate Account</font> &#8211; Allianz Life of NY Variable Account C is the Separate Account that issues the variable investment portion of your Contract. It is a separate investment account of Allianz Life of New York. The Separate Account holds the Variable Options that underlie the Contracts. The Separate Account is divided into subaccounts, each of which invests exclusively in a single Variable Option. The Separate Account is registered with the SEC as a unit investment trust, and may be referred to as the Registered Separate Account.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Service Center</font> &#8211; the area of our company that issues Contracts and provides Contract maintenance and routine customer service. Our Service Center address and telephone number are listed at the back of this prospectus. The address for mailing applications and/or checks for Purchase Payments may be different and is also listed at the back of this prospectus.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Traditional Death Benefit </font>&#8211; the death benefit provided by the Contract that is equal to the greater of <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">Contract Value (after deduction of the final product fee), </font>or total Purchase Payments adjusted for withdrawals.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Valid Claim</font> &#8211; the documents we require to be received in Good Order at our Service Center before we pay any death claim. This includes the death benefit payment option, due proof of death, and any required governmental forms. Due proof of death includes a certified copy of the death certificate, a decree of court of competent jurisdiction as to the finding of death, or any other proof satisfactory to us.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Variable Account Value</font> &#8211; on any Business Day, the sum of the values in your selected Variable Options. The Variable Account Value includes the deduction of the Variable Option operating expenses, and any previously assessed transfer fee, contract maintenance charge, product fee, and withdrawal charge.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Variable Options</font> &#8211; the variable investments available to you under the Contract. Variable Option performance is based on the securities in which they invest.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Withdrawal Charge Basis</font> &#8211; the total amount under your Contract that is subject to a withdrawal charge as discussed in section 8, Expenses &#8211; Withdrawal Charge.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Allianz Index Advantage ADV New York Variable Annuity is a variable and index-linked annuity product. When you purchase a Contract, you tell us how to allocate your money. You can select any or all of the available Variable Options and Index Options. Your allocations must be in whole percentages and we only allow allocations to the Index Options once each Index Year. An Index Year is a twelve month-period beginning on the Index Effective Date and each subsequent Index Anniversary. You can only reallocate money from the Index Options to the Variable Options on every sixth Index Anniversary. If you allocate money to the Variable Options offered through the Contract, the value of your investment (Variable Account Value) increases and decreases based on your selected Variable Options performance.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If you allocate money to an Index Option, we calculate an annual return or Performance Credit, on each Index Anniversary. The Performance Credit is based on the change in value of one or more nationally recognized third-party broad based securities Indices. Performance Credits may be positive, zero, or, in some instances, negative. There is a Cap on positive Performance Credits, there is also a Buffer on negative Performance Credits, but there is no protection for negative Performance Credits for losses greater than the Buffer. Once we issue your Contract we can change the Caps annually. We establish the Buffers on the date we issue the Contract (Issue Date) and we cannot change them. For newly issued Contracts, we publish any changes to the Buffers and Caps at least seven calendar days before they take effect on our website at www.allianzlife.com/iaadvnyrates, or call (800) 624-0197.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">You can lose money that you allocate to the Index Options if Index losses are greater than the Buffer. The Index Performance Strategy and Index Protection NY Strategy include a risk of potential loss of principal and this loss could be significant. If money is withdrawn or removed from an Index Option before the Index Anniversary, you could lose principal even if the Index Return is positive on the date of withdrawal.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">On each Business Day during the Index Year other than the Index Effective Date or Index Anniversary, the Index Option Values change for Index performance through the Daily Adjustment. A Business Day is any day the New York Stock Exchange is open, except, with regard to a specific Variable Option, when that Variable Option does not value its shares. The Daily Adjustment is meant to approximate the Index Option Value on the next Index Anniversary, as adjusted for gains during the Index Year subject to the Cap and losses greater than the Buffer.<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold"> Even if the current Index Return during the Index Year is positive, or losses are within the Buffer, the Daily Adjustment may be negative until the Index Anniversary. This means you could receive reduced principal even if the Index Return is positive on that day.</font></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Contract has two phases: the Accumulation Phase and the Annuity Phase. During the Accumulation Phase your Contract Value (the total of your Variable Account Value and all Index Option Values) fluctuates based on the returns of your selected Variable Options and Index Options. During the Accumulation Phase you can add Purchase Payments to your Contract, take withdrawals, and we pay a death benefit if you die.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Accumulation Phase of your Contract ends and the Annuity Phase starts once you begin Annuity Payments. You can take Annuity Payments based on your Contract Value as discussed in section 10, The Annuity Phase.</div>

<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor--><!--Anchor--><!--Anchor--><!--Anchor--><!--Anchor-->Who Should Consider Purchasing the Contract?</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We designed the Contract for people who are looking for a level of protection for their principal while providing potentially higher returns than are available on traditional fixed annuities. This Contract is not intended for someone who is seeking complete protection from downside risk.</div>

<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor--><!--Anchor--><!--Anchor-->What Are the Contract's Charges?</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Contract includes a product fee, contract maintenance charge, transfer fee, and contingent withdrawal charge. These fees and charges are discussed in more detail in section 8, Expenses.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We assess a 0.25% annualized product fee. The fee is deducted quarterly during the Accumulation Phase while your Contract Value is positive. We calculate and accrue the fee on a daily basis as a percentage of the Charge Base. The Charge Base is the Contract Value on the preceding Quarterly Contract Anniversary (or the initial Purchase Payment received on the Issue Date if this is before the first Quarterly Contract Anniversary), adjusted for subsequent Purchase Payments and withdrawals. A Quarterly Contract Anniversary is the day that occurs three calendar months after the Issue Date or any subsequent Quarterly Anniversary.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We assess a $50 contract maintenance charge annually, but we waive this charge if your Contract Value is at least $100,000.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We assess a $25 transfer fee for each transfer in excess of 12 between the Variable Options in a Contract Year. A Contract Year is any period of twelve months beginning on the Issue Date or a subsequent Contract Anniversary (a twelve-month anniversary of the Issue Date).</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The withdrawal charge is calculated based upon Purchase Payments. The withdrawal charge period applies separately to each Purchase Payment. The withdrawal charge starts at 6.5% and decreases to zero after we have had a Purchase Payment for six complete years. During the period that the withdrawal charge applies, if you withdraw more than is allowed under the free withdrawal privilege, we may deduct a withdrawal charge. (See section 9, Access to Your Money &#8211; Free Withdrawal Privilege.)</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Contract charges and pro-rata fees are assessed on any full or partial withdrawal from either the Variable Options or the Index Options as discussed in more detail in section 8, Expenses.</div>

<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor--><!--Anchor--><!--Anchor-->What Are the Contract's Benefits?</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Contract offers a variety of variable and index-linked Allocation Options, each with different return and risk characteristics. The Contract has a free withdrawal privilege that allows you to withdraw up to 10% of your total Purchase Payments from your Contract each Contract Year during the Accumulation Phase without incurring a withdrawal charge. The Contract includes a waiver of withdrawal charge benefit that allows you to take money out of the Contract without incurring a withdrawal charge if you are confined to a nursing home for a period of time. Keep in mind that if you withdraw money from an Index Option on any day other than an Index Anniversary, we apply the Daily Adjustment when calculating your Index Option Value for the withdrawal, even if the withdrawal is not subject to a withdrawal charge. The Contract has several Annuity Options which can provide guaranteed income for life, or life and term certain. (For more information see section 9, Access to Your Money and section 10, The Annuity Phase.) We also pay a death benefit to your Beneficiary(s) if you die before Annuity Payments begin.</div>

<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor-->What Are the Index-Linked Crediting Methods and How Do They Work?</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Contract offers two Index Crediting Methods: the <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Index Performance Strategy</font> and <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Index Protection NY Strategy. </font>Both of these Crediting Methods are described in more detail in section 7, Index Options.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The two methods both provide a positive Performance Credit if the Index Return is positive, adjusted by an upper limit called the Cap. The Index Return is an Index's value on the current Index Anniversary, minus its value on the last Index Anniversary (or the Index Effective Date if this is the first Index Anniversary), divided by the Index's value on the last Index Anniversary (or the Index Effective Date if this is the first Index Anniversary). If the Index Return is negative, you will receive a negative Performance Credit if the loss is greater than a specified percentage called the Buffer. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">A negative Performance Credit means that you can lose money. </font>If the Index Return is negative, but the loss is less than or equal to the Buffer, your Performance Credit is zero. We can change the Caps annually, but we establish the Buffers on the Issue Date and we cannot change them. The Caps and Buffers can be different depending on the Index Options you select. Caps may change frequently, and may vary substantially based on market conditions.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">For information on the Caps and Buffers we currently offer for newly issued Contracts, see our website at www.allianzlife.com/iaadvnyrates, or call (800) 624-0197. For newly issued Contracts, we publish any changes to the Caps and Buffers on our website at least seven calendar days before they take effect. Buffers may change before we issue your Contract and Caps may change before your Index Effective Date. The minimum Cap is 1.5% for the entire time you own your Contract. The minimum Buffer is 5%. Your actual Buffers are stated in your Contract and cannot change after the Issue Date. We inform you of the initial Caps for your Contract in the Index Options Statement, which we mail to you on the Index Effective Date and each Index Anniversary. The Index Options Statement also includes the Index values on the Index Effective Date and each subsequent Index Anniversary. We use these Index values to determine the Index Return and Performance Credits.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Caps can be adjusted each year, in our discretion. We will send you a letter at least 30 days before each Index Anniversary. This letter advises you that your current Caps are expiring on the upcoming Index Anniversary, and the renewal Caps for the next Index Year will be available for your review in your account on our website at least seven calendar days before the upcoming Index Anniversary. We also have a link to your Contract information with your renewal Caps on our website at www.allianzlife.com/iaadvnyrates. Your Index Options Statement that we mail on each Index Anniversary will include the actual renewal Caps you received for the current Index Year. The Index Anniversary letter also reminds you of your opportunity to transfer Contract Value from the Variable Options to the Index Options, or rebalance your Index Option Values, on the upcoming anniversary. We must receive your transfer instructions in Good Order at our Service Center by the end of the last Business Day before your Index Anniversary. If we do not receive transfer instructions from you, your Index Option Value will remain allocated to your existing Index Options at the renewal Caps.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The two Crediting Methods have different risk and return potentials. The Index Performance Strategy provides more performance potential than the Index Protection NY Strategy as it has higher Caps in exchange for lower Buffers. The Index Protection NY Strategy provides more protection as it has higher Buffers in exchange for lower Caps. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">The Index Performance Strategy Caps will always be greater than the Index Protection NY Strategy Caps. The Index Performance Strategy Buffers will always be less than the Index Protection NY Strategy Buffers.</font></div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Caps may be different for newly issued Contracts and for inforce Contracts, even if the Contracts have Index Effective Dates with the same month and day. The initial Caps for newly issued Contracts may be higher or lower than the renewal Caps for inforce Contracts. However, all inforce Contracts with Index Effective Dates in the same date range will receive the same renewal Caps.</td>
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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-LEFT: 31.5pt; TEXT-INDENT: 0pt">For example, if on January 1, 2019 we declared initial and renewal Caps for the Index Performance Strategy Index Option using the S&amp;P 500<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> Index for Contracts with Index Effective Dates of January 7 through February 3, these Caps might hypothetically be as follows: 13% for newly issued Contracts, 14% for inforce Contracts issued in 2018, and 12% for inforce Contracts issued in 2017.</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">If your Contract is still within its Free Look/Right to Examine period, you may be able to take advantage of any increase in initial Caps for newly issued Contracts by cancelling your existing Contract and purchasing a new Contract.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Caps will vary depending upon a variety of factors, including our hedging strategies and investment performance, your Index Effective Date, and the level of interest rates and volatility on your Index Effective Date and on Index Anniversaries. Caps may be different for new Contracts and for inforce Contracts that have reached an Index Anniversary and are receiving a current renewal rate, and may also be different for Contracts with the same Index Anniversaries that were issued in different years. Caps are also higher for the Index Performance Strategy compared to the Index Protection NY Strategy.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">While initial and renewal Caps may be affected by a variety of factors including, for example, a change in the current level of interest rates, the effect of a change in interest rates or other market conditions on the Caps may not be direct or immediate. There may be a lag in changes to Caps. In a rising interest rate environment, increases in Caps, if any, may be substantially slower than increases in interest rates.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">(For more information see section 7, Index Options.)</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We cannot eliminate or modify the two Crediting Methods; however, we can adjust the amount of the Caps each Index Year. We can replace an Index as described in section 1, Risk Factors &#8211; Substitution of an Index. We can add new Crediting Methods to your Contract in the future, and you can select these Crediting Methods if they are made available to you.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">You can allocate your Purchase Payments to any or all of the available Allocation Options in whole percentages. We only allow allocations to the Index Options on the Index Effective Date and on subsequent Index Anniversaries. The Index Effective Date starts the first Index Year and is shown on the Index Options Statement. An Index Anniversary is a twelve-month anniversary of the Index Effective Date, or any subsequent Index Anniversary. An Index Year is any period of twelve months beginning on the Index Effective Date or a subsequent Index Anniversary. You can only reallocate money from the Index Options to the Variable Options on every sixth Index Anniversary.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; FONT-STYLE: italic">NOTE:</font> If you allocate an additional Purchase Payment to the Index Options, we place that allocation in the AZL Government Money Market Fund until the next Index Anniversary, when we transfer the allocations from the AZL Government Money Market Fund to the Index Options. Additional Purchase Payments that we receive after the Index Effective Date that you allocate to an Index Option are not eligible to receive Performance Credits until the second Index Anniversary after we receive them because they are not applied to the Index Option until the next Index Anniversary.</div>

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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><!--Anchor-->The Contract provides the following values.</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">The Contract Value is the sum of your Variable Account Value and total Index Option Values. Contract Value does not include any currently applicable withdrawal charge, final product fee, or final contract maintenance charge that we assess on a full withdrawal or when you request Annuity Payments.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">The Variable Account Value is the sum of the values in your selected Variable Options. It includes the deduction of Variable Option operating expenses, and any previously assessed transfer fee, contract maintenance charge, product fee, and withdrawal charge. Your Variable Account Value changes daily based on the performance of your selected Variable Options.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">The total Index Option Value is the sum of the values in each of your selected Index Options. Each Index Option Value includes any Performance Credits from previous Index Anniversaries and the deduction of any previously assessed contract maintenance charge, product fee, and withdrawal charge. On each Business Day during the Index Year other than the Index Effective Date or an Index Anniversary, we calculate the current Index Option Value for each Index Option by applying a Daily Adjustment to the Index Option Base (which is the amount you allocate to an Index Option adjusted for withdrawals, Contract expenses, transfers into or out of the Index Option, and the application of any Performance Credits). We calculate the Daily Adjustment before we process any partial withdrawal or deduct any Contract expenses, and the adjustment can be positive or negative. Any amounts removed from an Index Option during the Index Year <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold"><u>do not</u></font> receive a Performance Credit on the next Index Anniversary, but the amount remaining does receive a Performance Credit subject to the Cap and Buffer.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">On each Business Day during the Index Year other than the Index Effective Date or Index Anniversary, the Index Option Values change for Index performance through the Daily Adjustment. The Daily Adjustment is meant to approximate the Index Option Value on the next Index Anniversary, as adjusted for gains during the Index Year subject to the Cap and losses greater than the Buffer. The application of the Daily Adjustment is based on your agreement to be exposed to Index Anniversary gains in Index value subject to the Cap and losses in Index value greater than the Buffer. The Daily Adjustment does this by tracking the hypothetical value of a Proxy Investment (called the Proxy Value) each Business Day other than an Index Anniversary using the formula in Appendix B. The Proxy Investment is designed to return the same amount as the Index Option on an Index Anniversary (an amount equal to the Performance Credit as determined using the applicable Cap and Buffer). Between Index Anniversaries, the Proxy Investment provides a current estimate of what the Index value gain or loss would be if the investment were held until the Index Anniversary. The actual value of the relevant Index is not used in the Daily Adjustment calculation. The Daily Adjustment does not give you the actual Index return on the day of the calculation.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">When the Daily Adjustment is positive, your Index Option Value has increased since the beginning of the year; when it is negative, your Index Option Value has decreased (excluding the effect of any partial withdrawal or the deduction of Contract expenses). The Daily Adjustment is generally negatively affected by increases in the expected volatility of index prices, interest rate decreases, and by poor market performance. All other factors being equal, even if the current Index Return during the Index Year is greater than the Cap, the Daily Adjustment will be lower than the Cap during the Index Year and will not be equal to the Cap until the next Index Anniversary.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">For more information see section 6, Valuing Your Contract, section 7, Index Options, and Appendix B. The specific details of the Daily Adjustment formula are described in Appendix B and in Exhibit 99(a) of the Form S-1 Registration Statement filed with the SEC, of which this prospectus is a part. This information is incorporated by reference into this prospectus. You can obtain a copy of Exhibit 99(a) by calling (800) 624-0197.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We calculate and apply Performance Credits on the Index Anniversary based on the Index Returns. Positive Performance Credits are not guaranteed. Performance Credits can be zero or negative after application of the Buffer.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">You can lock in the current Index Option Value on any Business Day during the Index Year by requesting a Performance Lock. You can request a lock once each Index Year for each of your selected Index Options. A Performance Lock applies to the total Index Option Value (including any Daily Adjustment) in an Index Option, and not just a portion of that Index Option Value. After the Business Day we process your request to lock in an Index Option Value (Lock Date), Daily Adjustments do not apply for the remainder of the Index Year and the Index Option Value will not receive a Performance Credit on the next Index Anniversary.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: left; BACKGROUND-COLOR: #f3f3f3"><!--Anchor--><!--Anchor-->NOTE REGARDING WITHDRAWALS DURING THE INDEX YEAR:</div>

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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Amounts removed from the Index Options during the Index Year for partial withdrawals and Contract expenses receive the Daily Adjustment, but do not receive a Performance Credit on the next Index Anniversary. However, the remaining amount is eligible for a Performance Credit, subject to the Cap and Buffer. </font>Contract expenses include the product fee, the contract maintenance charge and any applicable withdrawal charge.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Index Performance Strategy and Index Protection NY Strategy involve both a Cap and a Buffer. The Cap limits your ability to receive positive index-linked returns, and the Buffer limits the impact of negative returns. We set the Buffers on the Issue Date and the initial Caps on the Index Effective Date. We declare new Caps on each Index Anniversary. The Caps do not change during the Index Year. The Caps cannot be less than 1.5% for the entire time you own your Contract. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">The Buffers do not change after the Issue Date. The Buffers cannot be less than 5%. </font>For newly issued Contracts, we publish any changes to the Buffers and Caps at least seven calendar days before they take effect on our website at www.allianzlife.com/iaadvnyrates, or call (800) 624-0197.</div>

<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor--><!--Anchor--><!--Anchor-->Can My Contract Lose Value Because of Negative Changes in an Index's Value?</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If you select an Index Option your Contract can lose value due to negative Index Returns. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">These losses could be significant.</font></div>

<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor--><!--Anchor--><!--Anchor-->Can I Transfer Index Option Value Between the Allocation Options?</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">On each Index Anniversary you can transfer Variable Account Value to the available Index Options and you can reallocate your Index Option Values. On every sixth Index Anniversary you can transfer Index Option Value to the Variable Options. At the end of the six-year term, we allow you to transfer all of the money in the Index Options to the Variable Options, even if a portion of that money was added after the start of the six-year term, and has been allocated to the Index Options for less than six years.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">You can take money out of your Contract by taking withdrawals, required minimum distributions or Annuity Payments. You can withdraw money from either the Variable Options or the Index Options. Amounts withdrawn from an Index Option on any day other than an Index Anniversary do not receive a Performance Credit, but they do receive the Daily Adjustment on the day of the withdrawal.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">A withdrawal before an Index Anniversary from an Index Option may not receive the full benefit of the Cap or Buffer. This occurs because the Daily Adjustment calculation takes into account what may potentially happen between the withdrawal date and the next Index Anniversary. As a result, even if the Index Return is above the Cap, the Daily Adjustment may be less than the Cap, because there is a possibility that the Index Return could decrease before the end of the Index Year. Similarly, even though a negative Index Return may be within the amount of the Buffer, the Owner (person(s) designated at Contract issue who may exercise all rights granted by the Contract &#8211; "you," "your," and "yours"<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">) </font>still may receive a negative Daily Adjustment (i.e., lose money) because there is a possibility that the Index Return could decrease before the end of the Index Year.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If you withdraw more than is allowed by the free withdrawal privilege we may assess a withdrawal charge. Under the waiver of withdrawal charge benefit you can take a one-time withdrawal from your Contract after the first Contract Anniversary without incurring a withdrawal charge if you are confined to a nursing home for a period of at least 90 consecutive days. If you take required minimum distributions from a Contract that qualifies for special tax treatment under sections of the Internal Revenue Code (Qualified Contract) to pay required minimum distribution amounts owing with regard to the Contract, these distributions are not subject to a withdrawal charge. However, required minimum distributions reduce the amount available under the free withdrawal privilege.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">When we process a withdrawal from an Index Option on a day other than an Index Anniversary we determine the proper amount to deduct by calculating the Index Option Value using the Daily Adjustment. For more information see section 9, Access to Your Money.</div>

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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Contract includes several Annuity Options that can provide fixed life, or fixed life and term certain Annuity Payments. The designated individual(s) upon whose life we base Annuity Payments are the Annuitant(s). For more information see section 10, The Annuity Phase.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Contract provides a guaranteed Traditional Death Benefit based on the greater of Contract Value or total Purchase Payments adjusted for withdrawals. The Traditional Death Benefit is a first-to-die death benefit based on the life of the person(s) designated at Contract issue (Determining Life). The Determining Life (or Lives) is either the Owner(s) or the Annuitant if the Owner is a non-individual. We establish the Determining Lives at Contract issue and they generally do not change unless there is a divorce or you establish a Trust. If you change Owners or the Annuitant after the Issue Date, upon death of the Owner, the person(s) designated to receive the death benefit (Beneficiary(s)) may only receive the Contract Value. For more information see section 3, Ownership, Annuitants, Determining Life, Beneficiaries, and Payees and section 11, Death Benefit.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If you need customer service (for Contract changes, information on Contract Values, requesting a withdrawal or transfer, changing your allocation instructions, etc.) please contact our Service Center at (800) 624-0197. You can also contact us by mail at Allianz Life Insurance Company of New York, P.O. Box 561, Minneapolis, MN 55440-0561.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">These tables describe the fees and expenses you pay when purchasing, owning and taking a withdrawal from the Contract, or transferring Contract Value between Allocation Options. For more information, see section 8, Expenses.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">(as a percentage of each Purchase Payment withdrawn)<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(2)</sup></div>

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<td style="WIDTH: 50.35%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px solid">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Number of Complete Years Since Purchase Payment</div>
</td>
<td style="WIDTH: 49.65%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px solid">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Withdrawal Charge Amount</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50.35%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">0</div>
</td>
<td style="WIDTH: 49.65%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center; MARGIN-RIGHT: 28.8pt">6.5%</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50.35%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">1</div>
</td>
<td style="WIDTH: 49.65%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center; MARGIN-RIGHT: 28.8pt">6%</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50.35%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">2</div>
</td>
<td style="WIDTH: 49.65%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center; MARGIN-RIGHT: 28.8pt">5%</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50.35%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">3</div>
</td>
<td style="WIDTH: 49.65%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center; MARGIN-RIGHT: 28.8pt">4%</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50.35%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">4</div>
</td>
<td style="WIDTH: 49.65%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center; MARGIN-RIGHT: 28.8pt">2%</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50.35%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">5</div>
</td>
<td style="WIDTH: 49.65%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center; MARGIN-RIGHT: 28.8pt">1%</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50.35%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">6 years or more</div>
</td>
<td style="WIDTH: 49.65%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center; MARGIN-RIGHT: 28.8pt">0%</div>
</td>
</tr>
</table>

<div style="MARGIN-BOTTOM: 6pt"><br>
</div>

<table id="z2eaf03bfd82144838a85cf300cdc4442" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 80%" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 88%; VERTICAL-ALIGN: top" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left"><!--Anchor--><!--Anchor--><!--Anchor--><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold">Transfer Fee</font><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(3)</sup>&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.....................................................</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">25</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 88%; VERTICAL-ALIGN: top" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">(for each transfer between Variable Options after twelve in a Contract Year)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 88%; VERTICAL-ALIGN: top" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold">Premium Tax</font><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(4)</sup>&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.&#8230;</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">3.5</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">%</div>
</td>
</tr>

<tr>
<td style="WIDTH: 88%; VERTICAL-ALIGN: top" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">(as a percentage of each Purchase Payment)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>

<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 10pt"><!--Anchor--><!--Anchor-->OWNER PERIODIC EXPENSES</div>

<table id="z06387a9d59d342b1af46764a3971cd17" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 80%" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 88%; VERTICAL-ALIGN: top" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold">Contract Maintenance Charge</font><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(5)</sup>&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.....</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">50</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 88%; VERTICAL-ALIGN: top" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">(per Contract per year)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>

<div style="MARGIN-BOTTOM: 1pt; TEXT-ALIGN: left; MARGIN-TOP: 6pt">
<table id="zd0d2ab6f706c486db3981b605f300a45" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(1)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">The Contract provides a free withdrawal privilege that allows you to withdraw 10% of your total Purchase Payments annually without incurring a withdrawal charge, as discussed in section 9, Access to Your Money &#8211; Free Withdrawal Privilege.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 1pt; TEXT-ALIGN: left">
<table id="z46c9e171df984d71be1d44e5d549c459" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(2)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">The Withdrawal Charge Basis is the amount subject to a withdrawal charge, as discussed in section 8, Expenses &#8211; Withdrawal Charge.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 1pt; TEXT-ALIGN: left">
<table id="z2b18c398657144b6a89663b4edb2a8da" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(3)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">We count all transfers made in the same Business Day as one transfer, as discussed in section 8, Expenses &#8211; Transfer Fee. The transfer fee does not apply to transfers to or from the Index Options and these transfers do not count against your free transfers. Transfers are subject to the market timing policies discussed in section 5, Variable Options &#8211; Excessive Trading and Market Timing.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 1pt; TEXT-ALIGN: left">
<table id="zb4a5b7b7252e4e47a0a4791d4e209a10" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(4)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">New York does not currently impose this tax, but we reserve the right to deduct this charge if they do so in the future. This is the current maximum charge we would deduct, as discussed in section 8, Expenses &#8211; Premium Tax.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 6pt; TEXT-ALIGN: left">
<table id="zec6876f0b5334d07be4f8ed5a73408fa" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(5)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Waived if the Contract Value is at least $100,000, as discussed in section 8, Expenses &#8211; Contract Maintenance Charge.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">CONTRACT ANNUAL EXPENSES</div>

<table id="z8e4da40ce3204e02bf44e35e15006801" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 77.36%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left"><!--Anchor--><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold">Product Fee</font><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(6)</sup>&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.......</div>
</td>
<td style="WIDTH: 22.64%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">0.25%</div>
</td>
</tr>

<tr>
<td style="WIDTH: 77.36%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">(as a percentage of the Charge Base)</div>
</td>
<td style="WIDTH: 22.64%; VERTICAL-ALIGN: top">&#160;</td>
</tr>
</table>

<div style="MARGIN-BOTTOM: 6pt; TEXT-ALIGN: left; MARGIN-TOP: 6pt">
<table id="zbe2484bcdb21411d977d0cbf296fdfec" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(6)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">We do not assess the product fee during the Annuity Phase. See section 8, Expenses &#8211; Product Fee.</td>
</tr>
</table>
</div>

<div id="DSPFPageBreakArea" style="MARGIN-BOTTOM: 10pt; CLEAR: both; MARGIN-TOP: 10pt">
<div id="DSPFPageFooter" style="WIDTH: 100%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
</div>

<div id="DSPFPageNumberArea" style="TEXT-ALIGN: center"><font id="DSPFPageNumber" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', 'sans-serif'; FONT-WEIGHT: bold; FONT-STYLE: normal">14</font></div>

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<div id="DSPFPageHeader"></div>
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<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor-->ANNUAL OPERATING EXPENSES OF THE VARIABLE OPTIONS</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Following are the minimum and maximum total annual operating expenses charged by any of the Variable Options for the period ended December 31, 2015, before the effect of any contractual expense reimbursement or fee waiver. We show the expenses as a percentage of a Variable Option's average daily net assets. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; FONT-STYLE: italic">The Index Options do not assess any separate operating expenses, and are not included in the following chart.</font></div>

<table id="z5ea2da5042e441ddb2053b7abafbcbd5" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 74.31%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 12.84%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px solid">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Minimum</div>
</td>
<td style="WIDTH: 12.84%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px solid">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Maximum</div>
</td>
</tr>

<tr>
<td style="WIDTH: 74.31%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Total annual Variable Option operating expenses<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif"><br>
</font>(including management fees, distribution or 12b&#8209;1 fees, and other expenses)<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif"><br>
</font> before fee waivers and expense reimbursements</div>
</td>
<td style="WIDTH: 12.84%; VERTICAL-ALIGN: bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">0.65%</div>
</td>
<td style="WIDTH: 12.84%; VERTICAL-ALIGN: bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">0.73%</div>
</td>
</tr>
</table>

<div style="MARGIN-BOTTOM: 1pt"><br>
</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-TOP: 6pt">The table below describes, in detail, the annual expenses of the Variable Options before fee waivers and/or expense reimbursements. We show the expenses as a percentage of a Variable Option's average daily net assets for the most recent calendar year. Expenses may vary in current and future years. The investment advisers for the Variable Options provided the fee and expense information and we did not independently verify it. See the Variable Options' prospectuses for further information regarding the expenses you may expect to pay. Some of the Variable Options or their affiliates may also pay service fees to us or our affiliates. If these fees are deducted from Variable Option assets, they are reflected in the table below.</div>

<table id="z2dc00617d87045beba2ffdd05996a6cb" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 31.01%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Variable Option</div>
</td>
<td style="WIDTH: 11.81%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Management fees</div>
</td>
<td style="WIDTH: 11.81%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Rule 12b&#8209;1 fees</div>
</td>
<td style="WIDTH: 11.81%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Other expenses</div>
</td>
<td style="WIDTH: 11.81%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Acquired fund fees and expenses</div>
</td>
<td style="WIDTH: 21.76%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Total annual fund operating expenses before fee waivers and/or expense reimbursements</div>
</td>
</tr>

<tr>
<td style="BORDER-TOP: #000000 2px solid; WIDTH: 100%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9" colspan="6">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">BLACKROCK</div>
</td>
</tr>

<tr>
<td style="BORDER-TOP: #000000 2px solid; WIDTH: 31.01%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">AZL Government Money Market Fund</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; WIDTH: 11.81%; VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">.35</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; WIDTH: 11.81%; VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">.25</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; WIDTH: 11.81%; VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">.05</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; WIDTH: 11.81%; VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">&#8211;</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; WIDTH: 21.76%; VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">.65</div>
</td>
</tr>

<tr>
<td style="BORDER-TOP: #000000 2px solid; WIDTH: 100%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9" colspan="6">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">ALLIANZ FUND OF FUNDS</div>
</td>
</tr>

<tr>
<td style="BORDER-TOP: #000000 2px solid; WIDTH: 31.01%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">AZL MVP Balanced Index Strategy Fund<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(1)</sup></div>
</td>
<td style="BORDER-TOP: #000000 2px solid; WIDTH: 11.81%; VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">.10</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; WIDTH: 11.81%; VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">&#8211;</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; WIDTH: 11.81%; VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">.04</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; WIDTH: 11.81%; VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">.59</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; WIDTH: 21.76%; VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">.73</div>
</td>
</tr>

<tr>
<td style="BORDER-TOP: #000000 2px solid; WIDTH: 31.01%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">AZL MVP Growth Index Strategy Fund<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(1)</sup></div>
</td>
<td style="BORDER-TOP: #000000 2px solid; WIDTH: 11.81%; VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">.10</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; WIDTH: 11.81%; VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">&#8211;</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; WIDTH: 11.81%; VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">.02</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; WIDTH: 11.81%; VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">.57</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; WIDTH: 21.76%; VERTICAL-ALIGN: middle; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">.69</div>
</td>
</tr>
</table>

<div style="MARGIN-BOTTOM: 6pt; TEXT-ALIGN: left; MARGIN-TOP: 6pt">
<table id="zcebda4eec793472a9073ed2329ab11a7" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(1)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">The underlying funds may pay 12b&#8209;1 fees to the distributor of the Contracts for distribution and/or administrative services. The underlying funds do not pay service fees or 12b&#8209;1 fees to the Allianz Fund of Funds and the Allianz Fund of Funds do not pay service fees or 12b&#8209;1 fees. The underlying funds of the Allianz Fund of Funds may pay service fees to the insurance companies issuing variable contracts, or their affiliates, for providing customer service and other administrative services to contract purchasers. The amount of such service fees may vary depending on the underlying fund.</td>
</tr>
</table>
</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
</div>

<div id="DSPFPageNumberArea" style="TEXT-ALIGN: center"><font id="DSPFPageNumber" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', 'sans-serif'; FONT-WEIGHT: bold; FONT-STYLE: normal">15</font></div>

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<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor--><!--Anchor-->EXAMPLES</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">These examples are intended to help you compare the cost of investing in this Contract's Variable Options with the costs of other variable annuity contracts. These examples assume you make a $10,000 investment and your Variable Options earn a 5% annual return. They are not a representation of past or future expenses. Your Contract expenses may be more or less than the examples below, depending on the Variable Options you select and whether and when you take withdrawals.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We deduct the $50 contract maintenance charge in the examples on each Contract Anniversary during the Accumulation Phase (or the next Business Day if the Contract Anniversary is not a Business Day). We may waive this charge under certain circumstances, as described in section 8, Expenses &#8211; Contract Maintenance Charge. We deduct the annual product fee (maximum charge of 0.25%) in the examples on each Quarterly Contract Anniversary during the Accumulation Phase, as described in section 8, Expenses &#8211; Product Fee. A transfer fee may apply, but is not reflected in these examples (see section 8, Expenses &#8211; Transfer Fee).</div>

<div style="MARGIN-BOTTOM: 6pt; TEXT-ALIGN: left">
<table id="ze4080ef98c964488b92ee7821083b0f7" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 14.4pt"></td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">1)</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">If you surrender your Contract (take a full withdrawal) at the end of each time period.</td>
</tr>
</table>
</div>

<table id="z31da6ba2cf2d480e865c04259576f8fb" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 80%" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Total annual Variable Option operating expenses<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif"><br>
</font> before any fee waivers or expense reimbursements of:</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">1 Year</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">3 Years</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">5 Years</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">10 Years</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">0.73% (the maximum Variable Option operating expense)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">735</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">910</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">965</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">1,672</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">0.65% (the minimum Variable Option operating expense)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">727</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">885</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">922</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">1,581</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>

<div style="MARGIN-BOTTOM: 6pt; TEXT-ALIGN: left; MARGIN-TOP: 6pt">
<table id="zee026ffc24bb4335ba8bddc4a5d3e75c" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 14.4pt"></td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">2)</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">If you annuitize your Contract and begin Annuity Payments at the end of each time period. The earliest available Annuity Date (the date Annuity Payments begin) is 13 months after the Issue Date (the date we issue the Contract).</td>
</tr>
</table>
</div>

<table id="zbb12b310904746d9af9b75ceb31f90a8" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 80%" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Total annual Variable Option operating expenses<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif"><br>
</font> before any fee waivers or expense reimbursements of:</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">1 Year</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">3 Years</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">5 Years</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">10 Years</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">0.73% (the maximum Variable Option operating expense)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">-</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">410</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">735</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">1,622</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">0.65% (the minimum Variable Option operating expense)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">-</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">385</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">692</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">1,531</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>

<div><br>
</div>

<div style="MARGIN-BOTTOM: 6pt; TEXT-ALIGN: left; MARGIN-TOP: 6pt">
<table id="zb619768017834d678bfa732ec34582b4" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 14.4pt"></td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">3)</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">If you do not surrender your Contract.</td>
</tr>
</table>
</div>

<table id="zac2dfcb286264cfeb3fc964ad716176c" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 80%" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Total annual Variable Option operating expenses<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif"><br>
</font> before any fee waivers or expense reimbursements of:</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">1 Year</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">3 Years</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">5 Years</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">10 Years</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">0.73% (the maximum Variable Option operating expense)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">150</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">460</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">785</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">1,672</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 52%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">0.65% (the minimum Variable Option operating expense)</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">142</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">435</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">742</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">1,581</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-TOP: 6pt">As of December 31, 2015, no Contracts offered by this prospectus had been sold. Therefore, we have not included any condensed financial information for the Variable Options. We will provide condensed financial information when it becomes available.</div>

<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor--><!--Anchor--><!--Anchor-->CONDENSED FINANCIAL INFORMATION</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The financial statements of Allianz Life Insurance Company of New York are included in Appendix D of this prospectus, and the financial statements of Allianz Life of NY Variable Account C are included in Part C of the Form N-4 Registration Statement.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Accumulation unit value (AUV) information for the Contract offered by this prospectus, as of the end of December 31, 2015, is listed in the table below. This information should be read in conjunction with the financial statements and related notes of the Separate Account included in Part C of the Form N-4 Registration Statement.</div>
</div>

<table id="z4f3678c00efe4cc88727aaffe3ff55c1" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 26.33%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(Number of Accumulation Units in thousands)Period or Year Ended</div>
</td>
<td style="WIDTH: 20.13%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">AUV at Beginning of Period</div>
</td>
<td style="WIDTH: 19.24%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">AUV at End of Period</div>
</td>
<td style="WIDTH: 34.3%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Number of Accumulation Units Outstanding at End of Period</div>
</td>
</tr>

<tr>
<td style="WIDTH: 100%; VERTICAL-ALIGN: middle; BACKGROUND-COLOR: #d9d9d9" colspan="5">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">AZL Government Money Market Fund</div>
</td>
</tr>

<tr>
<td style="WIDTH: 26.33%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">12/31/2014</div>
</td>
<td style="WIDTH: 19.69%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">NA</div>
</td>
<td style="WIDTH: 19.67%; VERTICAL-ALIGN: middle" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">12.755</div>
</td>
<td style="WIDTH: 34.3%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">124</div>
</td>
</tr>

<tr>
<td style="WIDTH: 26.33%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">12/31/2015</div>
</td>
<td style="WIDTH: 19.69%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">12.755</div>
</td>
<td style="WIDTH: 19.67%; VERTICAL-ALIGN: middle" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">12.756</div>
</td>
<td style="WIDTH: 34.3%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">249</div>
</td>
</tr>

<tr>
<td style="WIDTH: 100%; VERTICAL-ALIGN: middle; BACKGROUND-COLOR: #d9d9d9" colspan="5">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">AZL MVP Balanced Index Strategy Fund</div>
</td>
</tr>

<tr>
<td style="WIDTH: 26.33%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">12/31/2014</div>
</td>
<td style="WIDTH: 19.69%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">NA</div>
</td>
<td style="WIDTH: 19.67%; VERTICAL-ALIGN: middle" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">12.956</div>
</td>
<td style="WIDTH: 34.3%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">13</div>
</td>
</tr>

<tr>
<td style="WIDTH: 26.33%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">12/31/2015</div>
</td>
<td style="WIDTH: 19.69%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">12.956</div>
</td>
<td style="WIDTH: 19.67%; VERTICAL-ALIGN: middle" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">12.927</div>
</td>
<td style="WIDTH: 34.3%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">60</div>
</td>
</tr>

<tr>
<td style="WIDTH: 100%; VERTICAL-ALIGN: middle; BACKGROUND-COLOR: #d9d9d9" colspan="5">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">AZL MVP Growth Index Strategy Fund</div>
</td>
</tr>

<tr>
<td style="WIDTH: 26.33%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">12/31/2014</div>
</td>
<td style="WIDTH: 19.69%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">NA</div>
</td>
<td style="WIDTH: 19.67%; VERTICAL-ALIGN: middle" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">14.280</div>
</td>
<td style="WIDTH: 34.3%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">8</div>
</td>
</tr>

<tr>
<td style="WIDTH: 26.33%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">12/31/2015</div>
</td>
<td style="WIDTH: 19.69%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">14.280</div>
</td>
<td style="WIDTH: 19.67%; VERTICAL-ALIGN: middle" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">14.165</div>
</td>
<td style="WIDTH: 34.3%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">29</div>
</td>
</tr>
</table>

<div><br>
</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
</div>

<div id="DSPFPageNumberArea" style="TEXT-ALIGN: center"><font id="DSPFPageNumber" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', 'sans-serif'; FONT-WEIGHT: bold; FONT-STYLE: normal">16</font></div>

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<div style="MARGIN-BOTTOM: 4pt; TEXT-ALIGN: left; MARGIN-TOP: 10pt">
<table id="zce18308216b14890b3794e4be73cb032" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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<td style="WIDTH: 21.6pt; VERTICAL-ALIGN: top; align: right"><!--Anchor--><font style="FONT-SIZE: 11pt; FONT-FAMILY: Arial, sans-serif">1.</font></td>
<td style="FONT-SIZE: 11pt; FONT-FAMILY: Arial, sans-serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">RISK FACTORS</td>
</tr>
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<div><br>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><!--Anchor--><!--Anchor--><!--Anchor--><!--Anchor--><!--Anchor-->The Contract involves certain risks that you should understand before purchasing. You should carefully consider your income needs and risk tolerance to determine whether the Contract is appropriate for you. The level of risk you bear and your potential investment performance will differ depending on the Allocation Options you choose.</div>

<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor--><!--Anchor--><!--Anchor--><!--Anchor-->LIQUIDITY RISK</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We designed the Contract to be a long-term investment that you can use to help build and provide income for retirement. The Contract is not suitable for short-term investment. If you need to take money from your Contract during the withdrawal charge period, we deduct a withdrawal charge unless the withdrawal is specifically not subject to this charge (for example, the amount allowed under the free withdrawal privilege). We calculate the withdrawal charge as a percentage of your Purchase Payments, not Contract Value. Consequently, if the Contract Value has declined since you made a Purchase Payment it is possible the percentage of Contract Value withdrawn to cover the withdrawal charge would be greater than the withdrawal charge percentage. For example, assume you buy the Contract with a single Purchase Payment of $1,000. If your Contract Value in the 5th year is $800 and you take a full withdrawal a 2% withdrawal charge applies. The total withdrawal charge would be $20 (2% of $1,000). This results in you receiving $780.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Deduction of the withdrawal charge, product fee, and contract maintenance charge may result in loss of principal and Performance Credits. We only apply Performance Credits once each Index Year on the Index Anniversary, rather than on a daily basis. In the interim, we calculate Index Option Values based on the Daily Adjustment, which may result in you not receiving the full benefit of the Index Returns, Caps and Buffers if, before the Index Anniversary, you take a withdrawal or annuitize the Contract, or if we pay a death benefit. While the free withdrawal privilege and required minimum distributions provide liquidity, they permit limited withdrawals and are designed to be used over a number of years. If you need to withdraw most or all of your Contract Value in a short period, this will exceed the charge-free amounts available to you and result in a withdrawal charge. Amounts withdrawn from this Contract may also be subject to a 10% additional federal tax if taken before age 59&#189;.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">You can transfer Contract Value from an Index Option to a Variable Option only on every sixth Index Anniversary. At other times, you can only withdraw money from an Index Option by taking partial withdrawals or surrendering the Contract. This may limit your ability to react to changes in market conditions. Amounts withdrawn from an Index Option before the Index Anniversary may not receive the full benefit of the Buffer. You should consider whether investing in an Index Option is consistent with your financial needs.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Returns on securities and securities Indexes can vary substantially, which may result in investment losses. The historical performance of the available Allocation Options does not guarantee future results. It is impossible to predict whether underlying investment values will fall or rise. Trading prices of the securities underlying the Allocation Options are influenced by economic, financial, regulatory, geographic, judicial, political and other complex and interrelated factors. These factors can affect capital markets generally and markets on which the underlying securities are traded and these factors can influence the performance of the underlying securities.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If you allocate money to the Variable Options, returns will fluctuate and may be negative. You can lose money.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If you allocate money to the Index Performance Strategy or Index Protection NY Strategy, Index fluctuations may cause Performance Credits to be negative after application of the Buffer. You can incur a loss, which could be significant. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">If money is withdrawn or removed from an Index Option before the Index Anniversary, you could lose principal even if the Index Return is positive on the date of withdrawal.</font></div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If you select the Index Performance Strategy or Index Protection NY Strategy we calculate each of your Index Option Values on each Business Day during the Index Year by applying the Daily Adjustment. The Daily Adjustment affects the calculation of Index Option Values we use to calculate Contract Value between Index Anniversaries, and it affects the Contract Value available for withdrawal, annuitization, death benefits, and the Contract Value used to determine the Charge Base and contract maintenance charge. The Daily Adjustment may result in a loss even if Index performance has been positive since the beginning of the Index Year. The Contract Value as adjusted by the Daily Adjustment may also be less than you would have received as a Performance Credit on the next Index Anniversary. The Daily Adjustment is generally negatively affected by increases in the expected volatility of Index prices, interest rate decreases, and by poor market performance. All other factors being equal, even if the current Index Return during the Index Year is greater than the Cap, the Daily Adjustment will be lower than the Cap during the Index Year and will not be equal to the Cap until the next Index Anniversary. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Even if the current Index Return during the Index Year is positive, or losses are within the Buffer, the Daily Adjustment may be negative until the Index Anniversary. This means you could receive reduced principal even if the Index Return is positive on that day.</font></div>

<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor--><!--Anchor-->CALCULATION OF PERFORMANCE CREDITS</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We calculate Performance Credits each Index Year on the Index Anniversary. The Caps on the Index Performance Strategy and Index Protection NY Strategy limit upward performance and could cause your returns to be lower than they would otherwise have been if you invested in a mutual fund or exchange traded fund designed to track the performance of the applicable Index, or if you allocated to the Variable Options.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Index Options do not directly participate in the returns of the Indices' underlying securities, and do not receive any dividends payable on these securities. Index returns would be higher if they included the dividends from the underlying securities. Over the past ten years the actual Index returns without dividends and the returns if dividends for the underlying securities had been included would have been as follows:</div>

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<td style="WIDTH: 23.15%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 76.85%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid" colspan="4">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">January 1, 2006 through December 31, 2015</div>
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<td style="BORDER-TOP: #000000 2px solid; WIDTH: 19.21%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 4px solid">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">S&amp;P 500<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> Index</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Nasdaq-100<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> Index</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Russell 2000<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> Index</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">EURO STOXX 50<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup></div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Returns without dividends</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">6.86%</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">13.72%</div>
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<td style="WIDTH: 19.21%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">7.40%</div>
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<td style="WIDTH: 19.22%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">1.26%</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Returns with dividends</div>
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<td style="BORDER-TOP: #000000 2px solid; WIDTH: 19.21%; VERTICAL-ALIGN: bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">9.11%</div>
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<td style="BORDER-TOP: #000000 2px solid; WIDTH: 19.22%; VERTICAL-ALIGN: bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">14.97%</div>
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<td style="BORDER-TOP: #000000 2px solid; WIDTH: 19.21%; VERTICAL-ALIGN: bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">8.82%</div>
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<td style="BORDER-TOP: #000000 2px solid; WIDTH: 19.22%; VERTICAL-ALIGN: bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">5.37%</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-TOP: 6pt">Caps may be adjusted annually on the Index Anniversary and may vary significantly from year to year. Changes to Caps may significantly affect the amount of Performance Credit you receive. (For more information, see the "Changes to Caps and Notice of Buffers" discussion later in this section.)</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Crediting Methods only capture Index values on one day each year, so you will bear the risk that the Index value might be abnormally low on these days.</div>

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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">There is no guarantee that the Indices will be available during the entire time that you own your Contract. If we substitute a new Index for an existing Index, the performance of the new Index may be different and this may affect your ability to receive positive Performance Credits. We may substitute a new Index for an existing Index if:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">the Index is discontinued,</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">we are unable to use the Index because, for example, changes to an Index make it impractical or expensive to purchase derivative securities to hedge the Index, or we are not licensed to use the Index, or</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">the method of calculation of the Index values changes substantially, resulting in significantly different values and performance results. This could occur, for example, if an Index altered the types of securities tracked, or the weighting of different categories of securities.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If we add or substitute an Index, unless the Index has been discontinued, we first seek regulatory approval (from each applicable state insurance regulator) and then provide you with written notice. We also provide you with written notice if an Index changes its name. Substitutions of an Index may occur during an Index Year. If we substitute an Index, this does not cause a change in the Buffers, current Charge Base, or current Caps. Changes, if any, occur at the next regularly scheduled Index Anniversary. Depending on the constitution of the substituted Index, the volatility of its investments, and our ability to hedge the Index's performance, we may determine for the next Index Year, in our discretion, that a higher or lower Cap may be appropriate. However, we would not implement any change to reflect this difference until the next Index Anniversary after the substitution. This may result in an abnormally large change in the Daily Adjustment on the day we substitute the Index.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The selection of a substitution Index is in our discretion; however, it is anticipated that any substitute Index will be substantially similar to the Index it is replacing and we will replace any equity Index with a broad-based equity index.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We determine the Buffers on the Issue Date. We determine the initial Caps on the Index Effective Date. We publish Buffers and Caps for newly issued Contracts at least seven calendar days before they take effect on our website at www.allianzlife.com/iaadvnyrates, or call (800) 624-0197.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We can change the renewal Caps as frequently as annually and they are effective on Index Anniversaries. The renewal Caps may be adjusted up or down, or they may stay the same. The Buffers you receive are stated in your Contract and do not change after the Issue Date. Renewal Caps are available for your review in your account on our website at least seven calendar days before each Index Anniversary. We send you a letter at least 30 days in advance of each Index Anniversary notifying you of your upcoming anniversary. When the renewal Caps are set on the Index Anniversary, you have the option of staying in your current Index Option or moving to another permitted Allocation Option, subject to the limitations on transferring from an Index Option to a Variable Option.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If you do not review information regarding renewal Caps when they are published, or take no action to move to another permitted Allocation Option, you stay in your current Index Options and automatically become subject to any new Caps. You will be subject to the new Caps until the next Index Anniversary.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">You risk the possibility that the renewal Caps you receive may be less than you would find acceptable. If you do not find the renewal Caps acceptable, you must give us notice no later than the Index Anniversary (or the next Business Day if the anniversary is not a Business Day) and request to move your money on the Index Anniversary or you will be subject to these renewal Caps for the next Index Year. Other than on a sixth Index Anniversary when you can move money from the Index Options to the Variable Options, when your Caps change the only option available to your is to move your money between the Index Options. We will inform you of the renewal Caps applicable to your Contract in your annual Index Options Statement.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Caps may vary significantly from year to year. There are a variety of factors that may affect Caps including market volatility, the price and availability of hedging instruments, the level of interest rates, utilization of Contract benefits by Owners, and our profitability goals.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We manage our obligation to provide Performance Credits in part by trading call and put options, and other derivatives on the available Indices. The costs of the call and put options and other derivatives vary based on market conditions, and we may adjust future renewal Caps to reflect these cost changes. The primary factor affecting the differences in the initial new business Caps and renewal Caps for inforce Contracts is the difference in what we can earn from these investments for new business versus what we are earning on the investments that were made, and are being held to maturity, for inforce Contracts. In some instances we may need to reduce the Caps for new business and inforce Contracts, or we may need to replace an Index on the Contract. You bear the risk that we may reduce the Caps, which reduces your opportunity to receive positive Performance Credits. You also bear the risk that the Buffers we declare on the Issue Date are small, which increases the risk that you could receive negative Performance Credits.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">For more information about how we set Buffers and Caps, see the "What Are the Index-Linked Crediting Methods and How Do They Work?" discussion in the Summary section of this prospectus.</div>

<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor-->INVESTMENT IN DERIVATIVE SECURITIES</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Index Options are supported by bonds and other fixed income securities used to support the Contract guarantees, cash, and derivative hedging instruments used to hedge the movements of the applicable Index.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">At Contract issue, we invest a substantial majority of the initial Contract Value allocated to the Index Options in fixed income securities, with most of the remainder invested in derivative hedging securities. The derivative securities are purchased to track and hedge Index movements and support our obligations with regard to the Index Options. The derivative securities we purchase include put options, call options, futures, swaps, and other derivatives.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Index Performance Strategy and Index Protection NY Strategy move assets in the unregistered separate account between a book value subaccount and a market value subaccount during the Index Year based on Index performance. We typically transfer assets between the subaccounts if there is a 10% incremental change in year-to-date Index performance. For the Index Performance Strategy this starts at a -10% decrease in the market; for the Index Protection NY Strategy, this starts at a -30% decrease in the market. We monitor year-to-date Index performance daily and change allocations daily if needed based on this 10% increment. For more information on our unregistered separate account backing the Index Performance Strategy and Index Protection NY Strategy, see section 13, Other Information &#8211; Our Unregistered Separate Account.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We currently limit our purchase of derivative securities to liquid securities. However, like many types of derivative securities, these securities may be volatile and their price may vary substantially. In addition, because we pay Performance Credits regardless of the performance of derivative securities we purchase, we may incur losses on hedging mismatches or errors in hedging. Our experience with hedging securities may affect new business rates for Buffers and Caps, and may also affect renewal Caps.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Certain Variable Options may also invest in derivative securities. For more information on these investments, see the Variable Option prospectuses.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Variable Options do not provide any protection against loss of principal. You can lose some or all of the money you allocate to the Variable Options.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We make Annuity Payments and apply Performance Credits from our general account. Our general account assets are subject to claims by our creditors, and any payment we make from our general account is subject to our financial strength and claims-paying ability. The assets in our unregistered separate account, Separate Account IANY, are also subject to claims by our creditors. You can obtain information on our financial condition by reviewing our financial statements in this prospectus.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Allianz Life of New York is not an investment company and therefore we are not registered as an investment company under the Investment Company Act of 1940, as amended, and the protections provided by this Act are not applicable to the guarantees we provide. The Separate Account is, however, registered as an investment company. Any allocations you make to an Index Option are not part of the Separate Account. Allianz Life of New York is not an investment adviser and so is not subject to the Investment Advisers Act of 1940, and does not provide investment advice to you in connection with your Contract.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Your Contract is registered in accordance with the Securities Act of 1933 and the offering of the Contract must be conducted in accordance with the requirements of this Act. In addition, the offer and sale of the Contract is subject to the provisions of the Securities Exchange Act of 1934.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Contract is filed with and approved by New York. State insurance laws provide a variety of regulatory protections.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">An annuity is a contract between you as the Owner, and an insurance company (in this case Allianz Life of New York), where you make payments to us and the money is invested in Allocation Options available through the Contract. Depending on market conditions, your Contract may gain or lose value based on the returns of your selected Allocation Options. When you are ready to take money out, we make payments to you according to your instructions and any restrictions associated with the payout option you select that is described in this prospectus. We do not make any changes to your Contract without your permission except as may be required by law.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Contract has an Accumulation Phase and an Annuity Phase.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; FONT-STYLE: italic">Accumulation Phase</font> is the first phase of your Contract, and it begins on the Issue Date. During the Accumulation Phase, your money is invested in the Allocation Options you select on a tax-deferred basis. Tax deferral means you are not taxed on any earnings or appreciation on the assets in your Contract until you take money out of your Contract. (For more information, see section 12, Taxes.)</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">During the Accumulation Phase you can take withdrawals (subject to any withdrawal charge) and you can make additional Purchase Payments subject to the restrictions set out in section 4, Purchasing the Contract &#8211; Purchase Requirements.</div>

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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Accumulation Phase ends upon the earliest of the following.</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">The Business Day before the Annuity Date.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">The Business Day we process your request for a full withdrawal.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Upon the death of any Owner (or the Annuitant if the Contract is owned by a non-individual), the Business Day we first receive the documents we require before we pay any death claim (Valid Claim) from any one Beneficiary, unless the surviving spouse/Beneficiary continues the Contract. If there are multiple Beneficiaries, the remaining Contract Value continues to fluctuate with the performance of the Allocation Options until the complete distribution of the death benefit.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If you request Annuity Payments, your Contract enters the <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; FONT-STYLE: italic">Annuity Phase</font>. During the Annuity Phase we make regular fixed periodic payments (Annuity Payments) based on the life of a person you choose (the Annuitant), or life and term certain. We send Annuity Payments to you (the Payee). You can choose when Annuity Payments begin (the Annuity Date), subject to certain restrictions. We base Annuity Payments on your Contract Value and the payout rates for the Annuity Option you select. Your Annuity Payments do not change unless an Annuitant dies. The Annuity Phase ends when we make the last Annuity Payment under your selected Annuity Option. For more information, see section 10, The Annuity Phase.</div>

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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">The Contract ends when:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">all applicable phases of the Contract (Accumulation Phase and/or Annuity Phase) have ended, and/or</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">if we received a Valid Claim, all applicable death benefit payments have been made.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">For example, if you purchase a Contract and later take a full withdrawal of the total Contract Value, both the Accumulation Phase and the Contract end even though the Annuity Phase never began and we did not make any death benefit payments.</div>

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<td style="FONT-SIZE: 11pt; FONT-FAMILY: Arial, sans-serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">OWNERSHIP, ANNUITANTS, DETERMINING LIFE, BENEFICIARIES, AND PAYEES</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">You, as the Owner, have all the rights under the Contract. The Owner is designated at Contract issue. The Owner may be a non-individual, which is anything other than an individual person, and could be a trust, qualified plan, or corporation. Qualified Contracts can only have one Owner.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">A Contract that is not qualified pursuant to a specialized provision of the Internal Revenue Code (Non-Qualified Contract) can be owned by up to two individual Owners (Joint Owners). We generally require the signature of both Joint Owners on any forms that are submitted to our Service Center.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Annuitant is the individual on whose life we base Annuity Payments. Subject to our approval, you designate an Annuitant when you purchase a Contract. For Qualified Contracts, before the Annuity Date the Owner must be the Annuitant unless the Contract is owned by a qualified plan or is part of a custodial arrangement. You can change the Annuitant on an individually owned Non-Qualified Contract at any time before the Annuity Date, but you cannot change the Annuitant if the Owner is a non-individual (for example, a qualified plan or trust). Subject to our approval, you can add a joint Annuitant on the Annuity Date. For Qualified Contracts, the ability to add a joint Annuitant is subject to any plan requirements associated with the Contract. For jointly owned Contracts, if an Annuitant who is not also an Owner dies before the Annuity Date, the younger Owner automatically becomes the new Annuitant, but the Owner can subsequently name another Annuitant.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><!--Anchor--><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Designating different persons as Owner(s) and Annuitant(s) can have important impacts on whether a death benefit is paid, and on who receives it as indicated below. </font>For more examples, please see the Appendix to the SAI. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Use care when designating Owners and Annuitants, and consult your Financial Professional if you have questions.</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">We pay a death benefit to the person you designate (the Beneficiary) unless the Beneficiary is the surviving spouse and continues the Contract.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">The Beneficiary becomes the Payee. If we are still required to make Annuity Payments under the selected Annuity Option, the Beneficiary also becomes the new Owner.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">If the deceased Owner was the Determining Life and the surviving spouse Beneficiary continues the Contract, we increase the Contract Value to equal total Purchase Payments adjusted for withdrawals (if greater), the Traditional Death Benefit ends, the surviving spouse becomes the new Owner, and the Accumulation Phase continues. If the deceased Owner was not the Determining Life the Traditional Death Benefit is not available.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">If the deceased was the only surviving Annuitant, Annuity Payments end or continue as follows.</div>

<div style="TEXT-ALIGN: left; MARGIN-LEFT: 18.8pt; TEXT-INDENT: -18.8pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Arial, sans-serif">&#8211;</font><font style="FONT-SIZE: 1px; WIDTH: 18.8pt; DISPLAY: inline-block">&#160;</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">Annuity Option 1&#160; or 3, payments end.</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">If the deceased was an Annuitant and there is a surviving joint Annuitant, Annuity Payments to the Payee continue during the lifetime of the surviving joint Annuitant. No death benefit is payable.</div>
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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Determining Life (Lives) are the individuals on whose life we base the guaranteed Traditional Death Benefit. We establish the Determining Life (Lives) at Contract issue and they generally do not change. For an individually owned Contract the Determining Life (Lives) are the Owner(s). For a non-individually owned Contract the Determining Life is the Annuitant. After the Issue Date the Determining Life (Lives) only change as follows:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">If you remove a Joint Owner due to divorce we also remove that person as a Determining Life, or</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">If you establish a jointly owned Non-Qualified Contract and change ownership to a Trust, we remove the prior Owner who is not the Annuitant as a Determining Life.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Beneficiary is the person(s) or entity you designate at Contract issue to receive any death benefit. You can change the Beneficiary or contingent Beneficiary at any time before your death unless you name an irrevocable Beneficiary. If a Beneficiary dies before you, or you and a Beneficiary die simultaneously, that Beneficiary's interest in this Contract ends unless your Beneficiary designation specifies otherwise. You and a Beneficiary are deemed to have died simultaneously if it is not established by clear and convincing evidence that either you or the Beneficiary survived the other by 120 hours. If there are no surviving Beneficiaries or if there is no named Beneficiary, we pay the death benefit to your estate or the Owner if the Owner is a non-individual.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><!--Anchor--><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; FONT-STYLE: italic">NOTE FOR JOINTLY OWNED CONTRACTS:</font> The sole primary Beneficiary is the surviving Joint Owner regardless of any other named Beneficiaries. If both Joint Owners die simultaneously, we pay the death benefit to the named contingent Beneficiaries, or equally to the estate of the Joint Owners if there are no named contingent Beneficiaries.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Payee is the person or entity who receives Annuity Payments during the Annuity Phase. The Owner receives tax reporting on those payments. Generally we require the Payee to be an Owner. However, you can name a charitable trust, financial institution, qualified plan, or an individual specified in a court order as a Payee. For Qualified Contracts owned by a qualified plan, the qualified plan must be the Payee.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">You can assign your rights under this Contract to someone else during the Accumulation Phase. An assignment may be absolute or limited, and includes changes of ownership, collateral assignments, or any other transfer of specific Contract rights. After an assignment, you may need the consent of the assignee of record to exercise certain Contract rights depending on the type of assignment and the rights assigned.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">You must submit your request to assign the Contract in writing to our Service Center and we must approve it in writing. Upon receipt of your request in Good Order, we record the assignment. We are not responsible for the validity or effect of the assignment. We are not liable for any actions we take or payments we make before we receive your request in Good Order and record it. A request is in "Good Order" when it contains all the information we require to process it. Assigning the Contract does not change, revoke or replace the originally named Annuitant or Beneficiary; if you also want to change the Annuitant or Beneficiary you must make a separate request.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">An assignment may be a taxable event.</font> In addition, there are other restrictions on changing the ownership of a Qualified Contract and Qualified Contracts generally cannot be assigned absolutely or on a limited basis. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; FONT-STYLE: italic">You should consult with your tax adviser before assigning this Contract.</font></div>

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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; FONT-STYLE: italic; BACKGROUND-COLOR: #f3f3f3">NOTE: </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">An assignment does not change the Determining Life (Lives), but it may remove a person as a Determining Life. </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; BACKGROUND-COLOR: #f3f3f3">The Traditional Death Benefit is only available on the death of a Determining Life. If you assign the Contract and the Determining Life (Lives) are no longer an Owner (or Annuitant if the Owner is a non-individual) the Traditional Death Benefit may not be available to your Beneficiary(s).</font></div>

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<td style="FONT-SIZE: 11pt; FONT-FAMILY: Arial, sans-serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">PURCHASING THE CONTRACT</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">To purchase this Contract, all Owners and the Annuitant must be age 80 or younger on the Issue Date.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Purchase Payment requirements for this Contract are as follows.</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">The minimum initial Purchase Payment due on the Issue Date is $10,000.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">You can make additional Purchase Payments of $50 or more during the Accumulation Phase.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">We do not accept additional Purchase Payments on or after the Annuity Date.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">The maximum total Purchase Payments we accept is $1 million.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We may, at our sole discretion, waive the minimum Purchase Payment requirements.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Once we receive your initial Purchase Payment and all necessary information in Good Order at our Service Center, we issue the Contract within two Business Days and allocate your payment to your selected Allocation Options. If you do not give us all of the information we need, we contact you or your Financial Professional. If for some reason we are unable to complete this process within five Business Days, we either send back your money or get your permission to keep it until we get all of the necessary information. If you make additional Purchase Payments, we add this money to your Contract on the Business Day we receive it in Good Order. Our Business Day closes when regular trading on the New York Stock Exchange closes.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If you submit a Purchase Payment and/or application to your Financial Professional, we do not begin processing the payment and/or application until we receive it. A Purchase Payment is "received" when it arrives at our Service Center from the address for mailing checks listed at the back of this prospectus regardless of how or when you submitted them. We forward Purchase Payments we receive at the wrong address to the last address listed at the back of this prospectus, which may delay processing.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We can only decline a Purchase Payment if it would cause total Purchase Payments to be more than $1 million, or if it would otherwise violate the Purchase Payment restrictions of your Contract (for example, we do not allow additional Purchase Payments on or after the Annuity Date). If mandated under applicable law, we may be required to reject a Purchase Payment.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We accept manually signed applications that are in Good Order and are sent by fax, or email, or uploaded to our website. It is important to verify receipt of any faxed application, or to receive a confirmation number when using email or the web. We are not liable for applications that we do not receive. A manually signed application sent by fax, email or over the web is considered the same as an application delivered by mail. Our electronic systems (fax, email or website) may not always be available; any electronic system can experience outages or slowdowns which may delay application processing. Although we have taken precautions to help our system handle heavy use, we cannot promise complete reliability. If you experience problems, please submit your written application by mail to our Service Center. <!--Anchor-->We<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">&#160;</font>reserve<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">&#160;</font>the right to discontinue or modify our electronic application policy at any time and for any reason.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">You can allocate your Purchase Payments to the available Allocation Options. At issue we collect Index Effective Date allocation instructions. You must allocate your money to the Allocation Options in whole percentages. If an Index Option is chosen at issue, then the future Purchase Payment allocation instructions for the portion allocated to the Index Options will be to the AZL Government Money Market Fund until the next Index Anniversary unless you give us alternate instructions.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We only allow allocations (both Purchase Payments and transfers of Contract Value) into the Index Options on the Index Effective Date and on subsequent Index Anniversaries. We only allow you to move money between Index Options on an Index Anniversary. You cannot move money from one Index Option to another mid-year. When you purchase this Contract you select the Index Effective Date. The Index Effective Date can be any Business Day from the Issue Date up to and including the first Quarterly Anniversary. However, it cannot be the 29th, 30th or 31st of a month, and it must be a Business Day. If the Index Effective Date would occur on the 29th, 30th or 31st of a month, or on a day that is not a Business Day, we change the Index Effective Date to be the next available Business Day.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">On each Index Anniversary, if we have not received new allocation instructions from you, all monies invested in an Index Option continue to be invested in that option at the renewal Caps.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We place any Purchase Payments you allocate to an Index Option that we receive before the Index Effective Date or the next Index Anniversary, as applicable, in the AZL Government Money Market Fund. Then on the Index Effective Date, we rebalance your Contract Value among your selected Allocation Options according to your Index Effective Date allocation instructions. We only allow transfers of Index Option Value from the Index Options to the Variable Options on every sixth Index Anniversary. At the end of the six-year term, we allow you to transfer all of the money in the Index Options to the Variable Options, even if a portion of that money was added after the start of the six-year term, and has been allocated to the Index Options for less than six years. A request to transfer Index Option Value to the Variable Options on a sixth Index Anniversary will automatically cancel any prior transfer instructions you gave to us regarding moving Variable Account Value to the Index Options. We must receive all transfer instructions in Good Order at our Service Center by 4 p.m. Eastern Time on the Index Anniversary (or the next Business Day if the Index Anniversary is not a Business Day).</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">You can instruct us on how to allocate additional Purchase Payments, but we do not allow you to invest additional Purchase Payments in Index Options until the next Index Anniversary. If you do not instruct us on how to allocate an additional Purchase Payment, we allocate it according to your future Purchase Payment allocation instructions. The allocation instructions you provide us at issue automatically become your future Purchase Payment allocation instructions until you give us different instructions. However, <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; FONT-STYLE: italic">if those instructions include allocations to the Index Options, we place those allocations in the AZL Government Money Market Fund until the next Index Anniversary, when we transfer the allocations from the AZL Government Money Market Fund to the Index Option.</font> We notify you at least 30 days in advance of each Index Anniversary as a reminder that you may transfer Contract Value from the Variable Options to the Index Options on the upcoming anniversary. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">Contract Value transfers between Allocation Options do not change your future allocation instructions. </font>For more information, see section 5, Variable Options &#8211; Electronic Transfer and Allocation Instructions.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">You can change your future allocation instructions at any time without fee or penalty. Future allocation instruction changes are effective on the Business Day we receive them in Good Order at our Service Center.</font> We accept changes to future allocation instructions from any Owner unless you instruct otherwise. We may allow you to authorize someone else to change allocation instructions on your behalf.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 11pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; FONT-STYLE: italic">NOTE:</font> Variable Options are subject to market risk and money allocated to them may lose value before it can be transferred into the Index Options. Additional Purchase Payments that we receive after the Index Effective Date that you allocate to an Index Option are not eligible to receive Performance Credits until the second Index Anniversary after we receive them because they are not applied to the Index Option until the next Index Anniversary.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><!--Anchor-->The AIP makes additional Purchase Payments to the Variable Options during the Accumulation Phase on a monthly or quarterly basis by electronic money transfer from your savings, checking or brokerage account. You can participate in AIP by completing our AIP form. Our Service Center must receive your form in Good Order by the 15th of the month (or the next Business Day if the 15th is not a Business day) in order for AIP to begin that same month. We process AIP Purchase Payments on the 20th of the month, or the next Business Day if the 20th is not a Business Day. We allocate AIP Purchase Payments according to your future allocation instructions which must comply with the allocation requirements and restrictions stated in this section. AIP has a maximum of $1,000 per month. We must receive your request to stop or change AIP at our Service Center by 4 p.m. Eastern Time on the Business Day immediately before the Business Day we process AIP to make the change that month. If you choose to begin Annuity Payments, AIP ends automatically on the Business Day before the Annuity Date. We reserve the right to discontinue or modify<font style="FONT-SIZE: 12pt; FONT-FAMILY: 'Times New Roman', serif">&#160;</font>AIP at any time and for any reason.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If you change your mind about owning the Contract, you can cancel it within ten days after receiving it. We return your Contract Value as of the day we receive your cancellation request. This may be more or less than your initial Purchase Payment. If you have an IRA Qualified Contract, we refund your Purchase Payments less withdrawals, or Contract Value less withdrawal charges, if greater. For IRA Qualified Contracts, we reserve the right to allocate your initial Purchase Payment to the AZL Government Money Market Fund until the free look period ends, and then re-allocate your money, less fees and charges, according to your future Purchase Payment allocation instructions. If we do this, we return the greater of Purchase Payments less withdrawals, or Contract Value. In the Contract, the free look provision is also called the right to examine.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The following table lists this Contract's Variable Options and their associated investment advisers and subadvisers, investment objectives, and primary investments. Depending on market conditions, you can gain or lose value by investing in the Variable Options. In the future, we may add, eliminate or substitute Variable Options to the extent permitted by the federal securities laws and, when required, the SEC.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">You should read the Variable Options' prospectuses carefully.</font> The Variable Options invest in different types of securities and follow varying investment strategies. There are potential risks associated with each of these types of securities and investment strategies. The operation of the Variable Options and their various risks and expenses are described in the Variable Options' prospectuses. We send you the current copy of the Variable Options' prospectus when we issue the Contract. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">(You can also obtain the current Variable Options' prospectus by contacting your Financial Professional or calling us at the toll-free telephone number listed at the back of this prospectus.)</font><!--Anchor--></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Currently, the Variable Options are not publicly traded mutual funds. They are available only as Variable Options in variable annuity contracts or variable life insurance policies issued by life insurance companies or in some cases, through participation in certain qualified pension or retirement plans. A material conflict of interest may arise between insurance companies, owners of different types of contracts, and retirement plans or their participants. Each Variable Option's Board of Directors monitors for material conflicts, and determines what action, if any, should be taken.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The names, investment objectives and policies of certain Variable Options may be similar to the names, investment objectives and policies of other portfolios managed by the same investment advisers. Although the names, objectives and policies may be similar, the Variable Options' investment results may be higher or lower than these other portfolios' results. The investment advisers cannot guarantee, and make no representation, that these similar funds' investment results will be comparable even though the Variable Options have the same names, investment advisers, objectives, and policies.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Each Variable Option offered by the Allianz Variable Insurance Products Fund of Funds Trust (Allianz VIP Fund of Funds Trust) is a "fund of funds" and diversifies its assets by investing primarily in shares of several other affiliated mutual funds.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Variable Options may pay 12b&#8209;1 fees to the Contracts' distributor, our affiliate, Allianz Life Financial Services, LLC, for distribution and/or administrative services. In addition, we may enter into certain arrangements under which we, or Allianz Life Financial Services, LLC, are compensated by the Variable Options' advisers, distributors and/or affiliates for administrative services and benefits we provide to the Variable Options. The compensation amount usually is based on the Variable Options' aggregate assets purchased through contracts we issue or administer. Some advisers may pay us more or less than others. The maximum service fee we currently receive from any Variable Option in any Contract is 0.35% annually of the average aggregate amount invested by us in the Variable Options.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Allianz VIP Fund of Funds Trust underlying funds do not pay 12b&#8209;1 fees or service fees to the Trust, and the Trust does not charge 12b&#8209;1 fees or service fees. The Allianz VIP Fund of Funds Trust underlying funds or their advisers may pay service fees to us and our affiliates for providing customer service and other administrative services to you. Service fees may vary depending on the underlying fund.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We offer other variable annuity contracts that may invest in these Variable Options. These contracts may have different charges and may offer different benefits more appropriate to your needs. For more information about these contracts, please contact our Service Center.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Allianz Investment Management LLC is an adviser/subadviser that is a subsidiary of Allianz Life.</div>

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<div style="FONT-SIZE: 9pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Principal Investment Strategies</div>

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<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">AZL MVP Balanced Index Strategy Fund</div>
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<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">A "Fund of Funds" Model Portfolio</div>
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<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Long-term capital appreciation with preservation of capital as an important consideration</div>
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<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Invests primarily (approximately 80% to 100%) in a combination of five underlying index funds (generally allocated 40% to 60% to underlying equity index funds and 40% to 60% to underlying bond index funds), combined with the MVP (Managed Volatility Portfolio) risk management process intended to adjust the risk of the portfolio based on quantitative indicators of market risk. May invest up to 20% of the Fund's assets in a combination of derivative and fixed income instruments.</div>
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<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">AZL MVP Growth Index Strategy Fund</div>
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<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">A "Fund of Funds" Model Portfolio</div>
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<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Invests primarily (approximately 80% to 100%) in a combination of five underlying index funds (generally allocated 65% to 85% to underlying equity index funds and 15% to 35% to underlying bond index funds), combined with the MVP (Managed Volatility Portfolio) risk management process intended to adjust the risk of the portfolio based on quantitative indicators of market risk. May invest up to 20% of the Fund's assets in a combination of derivative and fixed income instruments.</div>
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<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">BLACKROCK</div>
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<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Allianz Investment Management LLC/BlackRock Advisors, LLC</div>
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<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Current income consistent with stability of principal</div>
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<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Invests at least 99.5% of its total assets in cash, government securities, or repurchase agreements that are collateralized fully. Invests at least 80% in government securities or in repurchase agreements collateralized by government securities. Investments include U.S. Treasury bills, notes and other obligations issued or guaranteed as to principal and interest by the U.S. Government, its agencies or instrumentalities, and repurchase agreements secured by such obligations. In addition, the Fund may invest in variable and floating rate instruments. During extended periods of low interest rates, and due in part to contract fees and expenses, the yield of the AZL Government Money Market Fund may also become extremely low and possibly negative.</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We may substitute another Variable Option for one of your selected Variable Options, for any reason in our sole discretion. To the extent required by the Investment Company Act of 1940 or other applicable law, we do not substitute any shares without SEC approval and providing you notice. We may make substitutions with respect to your existing allocations, future Purchase Payment allocations, or both. New or substitute Variable Options may have different fees and expenses, and their availability may be limited to certain purchaser classes. We may limit further Variable Option allocations if marketing, tax or investment considerations warrant, or for any reason in our sole discretion. We may also close Variable Options to additional allocations. The fund companies that sell Variable Option shares to us, pursuant to participation agreements, may end those agreements and discontinue offering us their shares.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">You can make transfers between Variable Options. Transfers may be subject to a transfer fee, see section&#160;8, Expenses.</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Your request for a transfer must clearly state the Variable Options involved and how much to transfer.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Your right to make transfers is subject to the Excessive Trading and Market Timing policy discussed later in this section.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Variable Account Value transfers between Variable Options do not change your future Purchase Payment allocation instructions.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We process transfer requests based on prices next determined after we receive your request in Good Order at our Service Center. If we do not receive your transfer request <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">before</font> the end of the<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold"> current</font> Business Day, even if due to our delay in answering your call or a delay caused by our electronic systems, you receive the <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">next</font> Business Day's prices. For jointly owned Contracts, unless you require us to obtain signatures from both Joint Owners, we accept transfer instructions from any Joint Owner. We may also allow you to authorize someone else to request transfers on your behalf.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We use reasonable procedures to confirm that electronic transfer and allocation instructions given to us are genuine. If we do not use such procedures, we may be liable for any losses due to unauthorized or fraudulent instructions. We record all telephone instructions and log all fax, email and website instructions. We reserve the right to deny any transfer request or allocation instruction change, and to discontinue or modify our electronic instruction privileges at any time for any reason.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Please note that telephone, fax, email and/or the website may not always be available. Any electronic system, whether it is ours, yours, your service provider's, or your Financial Professional's, can experience outages or slowdowns for a variety of reasons, which may delay or prevent our processing of your transfer request or allocation instruction change. Although we have taken precautions to help our systems handle heavy use, we cannot promise complete reliability. If you are experiencing problems, you should submit your instructions in writing to our Service Center.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">By authorizing electronic instructions, you authorize us to accept and act upon these instructions for your Contract. There are risks associated with electronic communications that do not occur with a written request. Anyone authorizing or making such requests bears those risks. You should protect your website password, because the website is available to anyone with your password; we cannot verify that the person providing instructions on the website is you, or is authorized by you.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We may restrict or modify your right to make transfers to prevent any use that we consider to be part of a market timing program.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Frequent transfers, programmed transfers, transfers into and then out of a Variable Option in a short period of time, and transfers of large amounts at one time (collectively referred to as "potentially disruptive trading") may have harmful effects for other Owners, Annuitants and Beneficiaries. These risks and harmful effects include the following.</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">&#183;</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Dilution of the interests of long-term investors in a Variable Option, if market timers or others transfer into a Variable Option at prices that are below their true value, or transfer out at prices above their true value.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">&#183;</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">An adverse effect on portfolio management, such as causing a Variable Option to maintain a higher level of cash or causing a Variable Option to liquidate investments prematurely.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Increased brokerage and administrative expenses.</td>
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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We attempt to protect our Owners and the Variable Options from potentially disruptive trading through our excessive trading and market timing policies and procedures. Under these policies and procedures, we could modify your transfer privileges for some or all of the Variable Options. Unless prohibited by your Contract or applicable state law, we may:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">&#183;</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Limit transfer frequency (for example, prohibit more than one transfer a week, or more than two a month, etc.).</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Restrict the transfer method (for example, requiring all transfers be sent by first-class U.S. mail and rescinding electronic transfer privileges).</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">&#183;</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Require a minimum time period between each transfer into or out of the same Variable Option. Our current policy, which is subject to change without notice, prohibits "round trips" within 14 calendar days. We do not include transfers into and/or out of the AZL Government Money Market Fund when available in your Contract. Round trips are transfers into and back out of the same Variable Option, or transfers out of and back into the same Variable Option.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Refuse transfer requests made on your behalf by an asset allocation and/or market timing service.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Limit the dollar amount of any single Purchase Payment or transfer request to a Variable Option.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Prohibit transfers into specific Variable Options.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">&#183;</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Impose other limitations or restrictions to the extent permitted by federal securities laws.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We also reserve the right to reject any specific Purchase Payment allocation or transfer request from any person if in the investment adviser's, subadviser's or our judgment, a Variable Option may be unable to invest effectively in accordance with its investment objectives and policies. This could occur, for example, where frequent or rapid trading causes the investment adviser to hold an excess of uninvested cash to meet redemption requests, or to sell investment positions to fund redemptions, thereby affecting Variable Option returns. Similarly, rapid or frequent trading may cause a Variable Option to incur excessive transaction fees, which also could affect performance.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Currently, we attempt to <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">deter</font> disruptive trading as follows. If a transfer(s) <!--Anchor-->is/are<!--Anchor--> identified as potentially disruptive trading, we may (bu<!--Anchor-->t are not required to) send a warning letter. If the conduct continues and we determine it constitutes disruptive trading, we also impose transfer restrictions. Transfer restrictions may include refusing electronic transfers and requiring all transfers be sent by first-class U.S. mail. We do not enter into agreements permitting market timing and would not permit activities determined to be disruptive trading to continue. We also reserve the right to impose transfer restrictions if we determine, in our sole discretion, that transfers disadvantage other Owners. We notify you in writing if we impose transfer restrictions on you.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We do not include automatic transfers made under any of our programs or Contract features when applying our market timing policy.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We adopted these policies and procedures as a preventative measure to protect all Owners from the potential effects of disruptive trading, while also abiding by your legitimate interest in diversifying your investment and making periodic asset re-allocations based on your personal situation or overall market conditions. We attempt to protect your interests in making legitimate transfers by providing reasonable and convenient transfer methods that do not harm other Owners.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We may make exceptions when imposing transfer restrictions if we determine a transfer is appropriate, although it may technically violate our policies and procedures discussed here. In determining if a transfer is appropriate, we may, but are not required to, take into consideration its relative size, whether it was purely a defensive transfer into the AZL Government Money Market Fund, and whether it involved an error or similar event. We may also reinstate electronic transfer privileges after we revoke them, but we do not reinstate these privileges if we believe they might be used for future disruptive trading.</div>

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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We cannot guarantee the following.</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Our monitoring will be 100% successful in detecting all potentially disruptive trading activity.</td>
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<table id="z9609d5e5a36d4cf794928dc417f6d955" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">&#183;</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Revoking electronic transfer privileges will successfully deter all potentially disruptive trading.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">In addition, some of the Variable Options are available to other insurance companies and we do not know if they adopted policies and procedures to detect and deter potentially disruptive trading, or what their policies and procedures might be. Because we may not be completely successful at detecting and preventing market timing activities, and other insurance companies that offer the Variable Options may not have adopted adequate market timing procedures, there is some risk that market timing activity may occur and negatively affect other Owners.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We may, without prior notice to any party, take whatever action we deem appropriate to comply with any state or federal regulatory requirement. In addition, purchase orders for a Variable Option's shares are subject to acceptance by that Variable Option's manager. We reserve the right to reject, without prior notice, any Variable Option transfer request or Purchase Payment if the purchase order is rejected by the investment manager. We have entered into agreements required under SEC Rule&#160;22c-2 (Rule&#160;22c-2 agreements) whereby, upon request by an underlying fund or its designee, we must provide information about you and your trading activities<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000"> to the underlying fund or its designee. Under the terms of the Rule&#160;22c-2 agreements, we are required to: (1) provide details concerning every purchase, redemption, transfer, or exchange of Variable Options during a specified period; and (2) restrict your trading activity if the party receiving the information so requests. Under certain Rule 22c-2 agreements, if we fail to comply with a request to restrict trading activity, the underlying fund or its designee may refuse to accept buy orders from us until we comply.</font></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Variable Options may add or change policies designed to restrict market timing activities. For example, Variable Options may impose restrictions on transfers between Variable Options in an affiliated group if the investment adviser to one or more of the Variable Options determines that the person requesting the transfer has engaged, or is engaging in, market timing or other abusive trading activities. In addition, a Variable Option may impose a short-term trading fee on purchases and sales within a specified period. You should review the Variable Options' prospectuses regarding any applicable transfer restrictions and the imposition of any fee to discourage short-term trading.<!--Anchor--> The imposition of these restrictions would occur as a result of Variable Option restrictions and actions taken by the Variable Options' managers.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; FONT-STYLE: italic">NOTE:</font> This Contract is not designed for professional market timing organizations, or other persons using programmed, large, or frequent transfers, and we may restrict excessive or inappropriate transfer activity.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We retain some discretion in determining what actions constitute potentially disruptive trading and in determining when and how to impose trading restrictions. Therefore, persons engaging in potentially disruptive trading may be subjected to some uncertainty as to when and how we apply trading restrictions, and persons not engaging in potentially disruptive trading may not know precisely what actions will be taken against a person engaging in potentially disruptive trading.<!--Anchor--> For example, if we determine a person is engaging in potentially disruptive trading, we may revoke that person's electronic transfer privileges and require all future requests to be sent by first-class U.S. mail. In the alternative, if the disruptive trading affects only a single Variable Option, we may prohibit transfers into or Purchase Payment allocations to that Variable Option. We notify the person or entity making the potentially disruptive trade when we revoke any transfer privileges.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The retention of some level of discretion by us may result in disparate treatment among persons engaging in potentially disruptive trading, and it is possible that some persons could experience adverse consequences if others are able to engage in potentially disruptive trading practices that have negative effects.</div>

<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor--><!--Anchor-->FINANCIAL ADVISER FEES</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If you have an investment adviser and want to pay their fees from this Contract, you can submit a written request to our Service Center on a form satisfactory to us. If we approve your request, we withdraw the fee and pay it to your adviser. <!--Anchor--><!--Anchor--><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">We</font>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">treat this fee payment as a withdrawal.</font></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Financial adviser fees paid from a Non-Qualified Contract will be a taxable withdrawal to the extent that gain exists within the Contract. If any Owner is under age 59&#189;, withdrawals may be subject to a 10% additional federal tax.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Financial adviser fees paid from an IRA will not be treated as a taxable withdrawal as long as the annuity contract is solely liable for the payment of the fee. You should consult a tax adviser regarding the tax treatment of adviser fee payments.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Your investment adviser acts on your behalf, not ours. We are not party to your advisory agreement or responsible for your adviser's actions. We do not set your adviser's fee or receive any part of it. Any adviser fee you pay is in addition to this Contract's fees and expenses. You should ask your adviser about compensation they receive for this Contract.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">You can submit a written request to our Service Center on a form satisfactory to us to allow your adviser to make Variable Option transfers on your behalf. However, we reserve the right to review an adviser's trading history before allowing him or her to make transfers. If, in our sole discretion, we believe the adviser's trading history indicates excessive trading, we can deny your request. If we approve it, your adviser is subject to the same trading restrictions that apply to Owners. We can deny or revoke trading authority in our sole discretion.</div>

<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor--><!--Anchor-->VOTING PRIVILEGES</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We legally own the Variable Option shares. However, when a Variable Option holds a shareholder vote that affects your investment, we ask you to give us voting instructions. We then vote all of our shares, including any we own on our behalf, in proportion to those instructions. Because most Owners do not give us instructions and we vote shares proportionally, a small number of Owners may determine a vote's outcome. If we determine we no longer need to get your voting instructions, we will decide how to vote the shares. Only Owners have voting privileges. Annuitants, Beneficiaries, Payees and other persons have no voting privileges unless they are also Owners.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We determine your voting interest in a Variable Option as follows.</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">&#183;</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">You can provide voting instructions based on the dollar value of the Variable Option's shares in your Contract's subaccount. We calculate this value based on the number and value of accumulation units for your Contract on the record date. We count fractional units.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">&#183;</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">You receive proxy materials and a voting instruction form.</td>
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<td style="WIDTH: 21.6pt; VERTICAL-ALIGN: top; align: right"><!--Anchor--><!--Anchor--><!--Anchor--><font style="FONT-SIZE: 11pt; FONT-FAMILY: Arial, sans-serif">6.</font></td>
<td style="FONT-SIZE: 11pt; FONT-FAMILY: Arial, sans-serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">VALUING YOUR CONTRACT</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Your Contract Value increases and decreases based on Purchase Payments, transfers, withdrawals, deduction of fees and charges, and the performance of your selected Allocation Options. Your Contract Value is the total of the Variable Account Value (if you allocate to the Variable Options) and the total Index Option Value (if you allocate to the Index Options). For information on how we calculate your Index Option Values see section 7, Index Options.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">When we receive a Purchase Payment that you allocate to the Variable Options at our Service Center, we credit your Contract with accumulation units based on the Purchase Payment amount and daily price (accumulation unit value) for the subaccount of your selected Variable Option. A subaccount's accumulation unit value is based on the price (net asset value) of the underlying Variable Option. A Variable Option's net asset value is typically determined at the end of each Business Day, and any Purchase Payment received at or after the end of the current Business Day receives the next Business Day's price.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We arbitrarily set the initial accumulation unit value for each subaccount. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">On the Issue Date, the number of accumulation units in each subaccount is equal to the initial Purchase Payment amount allocated to a subaccount, divided by that subaccount's accumulation unit value.</font></div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left"><u>Example</u></div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">On Wednesday, we receive at our Service Center an additional Purchase Payment of $3,000 from you before the end of the Business Day.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">When the New York Stock Exchange closes on that Wednesday, we determine that the accumulation unit value is $13.25 for your selected Variable Option.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We then divide $3,000 by $13.25 and credit your Contract on Wednesday night with 226.415094 subaccount accumulation units for your selected Variable Option.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">At the end of each Business Day, w<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">e adjust the number of </font>accumulation units in each subaccount as follows. Additional Purchase Payments and transfers into a subaccount increase the number of accumulation units. Withdrawals, transfers out of a subaccount, and the deduction of any Contract charge decrease the number of accumulation units.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">At the end of each Business Day for each subaccount, we multiply the accumulation unit value at the end of the prior Business Day by the percentage change in value of a Variable Option since the prior Business Day. The percentage change includes the market performance of the Variable Option.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We calculate your Variable Account Value at the end of each Business Day by multiplying each subaccount's accumulation unit value by its number of accumulation units, and then adding those results together for all subaccounts. Allocations (additional Purchase Payments and transfers of Index Option Value to the Variable Options) increase your Variable Account Value, withdrawals and Contract expenses reduce your Variable Account Value.</div>

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<td style="WIDTH: 21.6pt; VERTICAL-ALIGN: top; align: right"><!--Anchor--><!--Anchor--><!--Anchor--><font style="FONT-SIZE: 11pt; FONT-FAMILY: Arial, sans-serif">7.</font></td>
<td style="FONT-SIZE: 11pt; FONT-FAMILY: Arial, sans-serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">INDEX OPTIONS</td>
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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">When you allocate money to the Index Options you earn Performance Credits based on the Index Option you select. Each Index Option is the combination of a Crediting Method and an Index.</div>

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<div style="FONT-SIZE: 9pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Indices Currently Available with Index Performance Strategy and Index Protection NY Strategy</div>
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<div style="FONT-SIZE: 9pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">S&amp;P 500<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> Index</div>
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<div style="FONT-SIZE: 9pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Russell 2000<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> Index</div>
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<div style="FONT-SIZE: 9pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Nasdaq-100<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> Index</div>
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<div style="FONT-SIZE: 9pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">EURO STOXX 50</font><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup></div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-TOP: 6pt">For more information on the Indices, see Appendix A.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The two Crediting Methods have different risk and return potentials. The Index Performance Strategy provides more performance potential than the Index Protection NY Strategy as it has higher Caps in exchange for lower Buffers. The Index Protection NY Strategy provides more protection as it has higher Buffers in exchange for lower Caps. However, you can lose money that you allocate to these Crediting Methods due to negative Index performance <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">and these losses could be significant</font>.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The total Index Option Value is the sum of the values in each of your selected Index Options. Each Index Option Value includes any Performance Credits from previous Index Anniversaries, and the deduction of any previously assessed contract maintenance charge, product fee, and withdrawal charge during the Index Year. Positive Performance Credits are not guaranteed, and Performance Credits can be zero or negative after application of the Buffer. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">A negative Performance Credit means that you can lose money. </font>We apply Performance Credits on Index Anniversaries. On Index Anniversaries each Index Option Value also increases with any additional Purchase Payment allocated or Contract Value transferred into an Index Option, and decreases with any transfer out of an Index Option.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">On each Business Day during the Index Year other than the Index Effective Date or an Index Anniversary, each Index Option Value is valued by using the Daily Adjustment. The Daily Adjustment estimates the present value of positive or negative Performance Credits on the next Index Anniversary. The Daily Adjustment is based on your agreement to be exposed to gains in Index value subject to the Cap and losses in the Index value greater than the Buffer on the next Index Anniversary. The Daily Adjustment is a calculation mechanism by which Index Option Values are established each Business Day for purposes of computing amounts available for full or partial withdrawals, an annuitization, death benefits, and the Contract Value used to determine the Charge Base and contract maintenance charge. The Daily Adjustment may result in an adjustment up or down from the preceding Index Anniversary or Index Effective Date.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; BACKGROUND-COLOR: #f3f3f3"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-STYLE: italic">NOTE REGARDING WITHDRAWALS DURING THE INDEX YEAR:&#160; </font>Amounts removed from the Index Options during the Index Year for partial withdrawals and Contract expenses do not receive a Performance Credit on the next Index Anniversary. However, the remaining amount in the Index Options is eligible for a Performance Credit on the next Index Anniversary subject to the Cap and Buffer.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We use the Index Option Base to determine the Index Option Value. On each Index Anniversary we determine each of your selected Index Option Values by applying its associated Performance Credit to its Index Option Base. On any day other than an Index Anniversary each Index Option Value is equal to the Index Option Base plus the Daily Adjustment as discussed later in this section.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">On the Index Effective Date both the Index Option Value and the Index Option Base for each of your selected Index Options are equal to either:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">the amount of your initial Purchase Payment you allocated to that Index Option if the Index Effective Date is the Issue Date, or</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">the percentage of Variable Account Value you allocated to that Index Option.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">At the end of each Business Day during the Index Year <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">other than the Index Effective Date or Index Anniversary</font> we first add each Index Option's Daily Adjustment to its Index Option Base and determine its Index Option Value (as discussed later in this section) before we process any partial withdrawal or deduct any Contract expenses.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">At the end of each Business Day during the Index Year we reduce each Index Option Value by the dollar amount withdrawn from the Index Option for partial withdrawals you request and Contract expenses we deduct (any withdrawal charge, product fee and/or contract maintenance charge).</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">We deduct partial withdrawals and Contract expenses from the Allocation Options proportionately based on the percentage of Contract Value in each Allocation Option.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">The percentage is equal to each Index Option Value divided by the Contract Value using values determined at the end of the Business Day before we process the withdrawal or deduct the Contract expense.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">However, if you specifically direct us to take a partial withdrawal from an Index Option we reduce that Index Option Value by the dollar amount you specify, including any applicable withdrawal charge.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">We then reduce each Index Option Base by the same percentage that the amount withdrawn reduced its associated Index Option Value.</td>
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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">On each Index Anniversary we first determine your Performance Credit. If you select the EURO STOXX 50<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup>, Performance Credits are based on the Index Returns without any exchange rate adjustment.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If the Index Return is positive, you receive a positive Performance Credit limited by the Cap. For example if the Cap is 8% and the Index Return is 10%, you receive a 8% Performance Credit. If the Index Return is zero, the Performance Credit is zero. If the Index Return is negative we apply the Buffer and determine if you receive a negative Performance Credit. For example:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">if you selected the Index Performance Strategy and the Buffer is 10% and the Index Return is -8%, we apply a Performance Credit of zero to your Index Option Base. If instead the Index Return is -12%, we apply a -2% Performance Credit to your Index Option Base.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">if you selected the Index Protection NY Strategy and the Buffer is 30% and the Index Return is -28%, we apply a Performance Credit of zero to your Index Option Base. If instead the Index Return is -32%, we apply a -2% Performance Credit to your Index Option Base.</td>
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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We then apply the Performance Credit to the Index Option as follows:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">We multiply each Index Option Base by its Performance Credit and add this amount to its Index Option Base.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Then we set each Index Option Value equal to its Index Option Base.</td>
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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Then we increase and/or decrease each Index Option Base and Index Option Value on the Index Anniversary for additional Purchase Payments, transfers into or out of the Index Option, partial withdrawals and the deduction of any Contract expenses.</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Additional Purchase Payments received and allocated to this Index Option and transfers of Variable Account Value or Index Option Value into this Index Option increase these values by the dollar amount allocated to this Index Option.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Transfers out of this Index Option reduce these values by the dollar amount removed from the Index Option.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Partial withdrawals and Contract expenses reduce these values as on any other Business Day.</td>
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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 2pt">Index Option Value Daily Adjustment</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">We designed the Daily Adjustment to provide an Index Option Value during the Accumulation Phase on days other than the Index Effective Date or an Index Anniversary. The Daily Adjustment generally reflects the change in market value of your allocation to an Index Option. We apply a Daily Adjustment to the Index Option Values for purposes of computing amounts available for withdrawal, annuitization, </font>death benefits, and the Contract Value used to determine the Charge Base and contract maintenance charge.<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000"> The Daily Adjustment directly increases or decreases your Index Option Values. </font>The Daily Adjustment is different from the method we use to apply Performance Credits to an Index Option on an Index Anniversary. The Daily Adjustment is meant to approximate the Index Option Value on the next Index Anniversary, as adjusted for gains during the Index Year subject to the Cap and losses greater than the Buffer. The application of the Daily Adjustment is based on your agreement to be exposed to Index Anniversary gains in Index value subject to the Cap and losses in Index value greater than the Buffer. The Daily Adjustment does this by using a Black Scholes model to track the hypothetical value of a Proxy Investment (called the Proxy Value) each Business Day other than an Index Anniversary. The Proxy Investment is designed to return the same amount as the Index Option on an Index Anniversary (an amount equal to the Performance Credit as determined using the applicable Cap and Buffer). Between Index Anniversaries, the Proxy Investment provides a current estimate of what the Index value gain or loss would be if the investment were held until the Index Anniversary. The actual value of the relevant Index is not used in the Daily Adjustment calculation. The Daily Adjustment does not give you the actual Index return on the day of the calculation.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Daily Adjustment can be positive or negative. When the Daily Adjustment is positive, an Index Option Value is higher than the Index Option Base. When the Daily Adjustment is negative, an Index Option Value is lower than the Index Option Base. The Daily Adjustment will differ from the Index Return. The Daily Adjustment is affected by the length of time until the next Index Anniversary and it is generally negatively affected by increases in the expected volatility of index prices, interest rate decreases, and by poor market performance. All other factors being equal, even if the current Index Return during the Index Year is greater than the Cap, the Daily Adjustment will be lower than the Cap during the Index Year and will not be equal to the Cap until the next Index Anniversary. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Even if the current Index Return during the Index Year is positive, or losses are within the Buffer, the Daily Adjustment may be negative until the next Index Anniversary.</font></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">At the end of each Business Day during the Index Year (other than the Index Effective Date or Index Anniversary) we add each Daily Adjustment to its Index Option Base to calculate each Index Option Value before we process any partial withdrawal or deduct any Contract expenses. If there is a system error in calculating your Daily Adjustment, or if the Index value for a Business Day is not received, we will calculate the Daily Adjustment when corrected or other required information is received, effective as of the original pricing date.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">For more information on how we calculate the Daily Adjustment see Appendix B.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 2pt"><!--Anchor-->Index Option Value Performance Locks</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">You can lock in a current Index Option Value by requesting a Performance Lock. You can request a lock once each Index Year for each of your selected Index Options. A Performance Lock applies to the total Index Option Value in an Index Option, and not just a portion of that Index Option Value. After the Lock Date Daily Adjustments do not apply for the remainder of the Index Year and the Index Option Value will not receive a Performance Credit on the next Index Anniversary. However, the Index Option Value does decrease during the remainder of the Index Year for any partial withdrawals and the deduction of any Contract expenses. Beginning on the next Index Anniversary, your locked Index Options will no longer be locked and Daily Adjustments will again apply.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">A Performance Lock can help eliminate doubt about future Index performance and possibly limit the impact, or avoid receiving, a negative Performance Credit. The disadvantage of taking a Performance Lock is that the relevant Index value may increase until the next Index Anniversary, and you will not participate in that increase. In addition, if you exercise a Performance Lock, you may receive less than the full Cap or less than the full protection of the Buffer that you would have received if you waited for us to apply the Performance Credit on the next Index Anniversary.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Your selected Index Options' performance may cause the percentage of total Index Option Value in each Index Option to change. Rebalancing can help you maintain your selected Index Option allocation percentages. You can direct us to automatically adjust your Index Option Value on each Index Anniversary (or on the next Business Day if the Index Anniversary is not a Business Day) according to your instructions. We must receive your optional rebalancing program form in Good Order at our Service Center by 4 p.m. Eastern Time on the Business Day we rebalance. We reserve the right to discontinue or modify the optional rebalancing program at any time and for any reason. To end this program, we must receive your request at our Service Center by 4 p.m. Eastern Time on the Business Day immediately before the Index Anniversary.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Contract fees and expenses reduce your investment return and are described here in detail.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We deduct a product fee from your Contract Value during the Accumulation Phase, under death benefit payment Option&#160;B, and with optional payments under death benefit payment Option&#160;C as noted in section 11, Death Benefit. The product fee is an annualized rate of 0.25% that is calculated and accrued on a daily basis as a percentage of the Charge Base.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Charge Base is initially equal to the Purchase Payment received on the Issue Date. At the end of each Business Day, we adjust the Charge Base as follows.</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">We increase it by the amount of any additional Purchase Payments.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">We reduce it by the percentage of any Contract Value withdrawn. Withdrawals include all Contract expenses (withdrawal charge, product fee, contract maintenance charge, and transfer fee).</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">On each Quarterly Contract Anniversary (or on the next Business Day if the Quarterly Contract Anniversary is not on a Business Day) the Charge Base is equal to the Contract Value determined at the end of the Business Day.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We begin calculating and accruing the daily product fee amount on the day after the Issue Date. We deduct the product fee on each Quarterly Contract Anniversary (or the next Business Day if the Quarterly Contract Anniversary is not a Business Day) with the following exceptions.</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">If you withdraw the total Contract Value, we deduct the final product fee (the total of all daily product fees we calculated for the current Contract quarter) before processing the withdrawal.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">If you annuitize the Contract, we deduct the final product fee before calculating Annuity Payments.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Upon the death of an Owner (or Annuitant if the Owner is a non-individual), we deduct the final product fee before calculating the death benefit if death benefit payment Option A or Annuity Payments under death benefit payment Option&#160;C is selected.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We deduct the product fee on a dollar for dollar basis from the Contract Value and we deduct it proportionately from each Allocation Option.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We do not treat the deduction of the product fee as a withdrawal when computing total Purchase Payments adjusted for withdrawals under the Traditional Death Benefit (see section 11). If on a Quarterly Contract Anniversary (or the next Business Day if the Quarterly Contract Anniversary is not a Business Day) the Contract Value is less than the product fee, we deduct your total remaining Contract Value to cover the final product fee and reduce your Contract Value to zero. If the deduction of the final product fee reduces your Contract Value to zero and the Traditional Death Benefit has ended, we treat this as a full withdrawal and your Contract ends.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Changes to the Charge Base change the product fee amount. For example, if you make an additional Purchase Payment both your Charge Base and daily product fee amount also increase. Similarly, a withdrawal decreases both your Charge Base and daily product fee amount.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-TOP: 6pt">The product fee compensates us for all your Contract's benefits, including our contractual obligation to make Annuity Payments, certain Contract expenses, and assuming the expense risk that the current charges are less than future Contract administration costs. If the product fee covers these costs and risks, any excess is profit to us. We anticipate making such a profit.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Your annual contract maintenance charge is $50. This charge is for Contract administration and maintenance expenses. We waive this charge as follows:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">During the Accumulation Phase, if the total Contract Value for all Index Advantage ADV New York Contracts you own is at least $100,000 at the end of the last Business Day before the Contract Anniversary, or if the Contract Value for this single Index Advantage ADV New York Contract is at least $100,000 on the Contract Anniversary. We determine the total Contract Value for all individually owned Index Advantage ADV New York Contracts by using the Owner's social security number, and for non-individually owned Index Advantage ADV New York Contracts we use the Annuitant's social security number.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">During the Annuity Phase.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">When paying death benefits under death benefit payment options A, B, or C.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We deduct the contract maintenance charge on a dollar for dollar basis from the Contract Value on the Contract Anniversary and we deduct it proportionately from each Allocation Option. If you take a full withdrawal from your Contract (other than on a Contract Anniversary), we deduct the full contract maintenance charge. We do not treat the deduction of the contract maintenance charge as a withdrawal when computing total Purchase Payments adjusted for withdrawals under the Traditional Death Benefit.</div>

<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor--><!--Anchor-->WITHDRAWAL CHARGE</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">You can take withdrawals during the Accumulation Phase. A withdrawal charge applies if any part of a withdrawal comes from a Purchase Payment that is still within the withdrawal charge period. We assess the withdrawal charge against the Withdrawal Charge Basis, which is equal to total Purchase Payments, less any Purchase Payments withdrawn (including any penalty-free withdrawals) and less any applicable withdrawal charge. We do not reduce the Withdrawal Charge Basis for any amounts we deduct to pay other Contract expenses.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">We do not assess a withdrawal charge on penalty-free withdrawals or amounts we deduct to pay Contract expenses, other than the withdrawal charge. However, any amounts used to pay a withdrawal charge are subject to a withdrawal charge. </font>Amounts withdrawn to pay investment adviser fees are subject to a withdrawal charge if they exceed the free withdrawal privilege. Penalty-free withdrawals include: withdrawals under the free withdrawal privilege and waiver of withdrawal charge benefit and; payments under our minimum distribution program.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">For purposes of calculating any withdrawal charge, we withdraw Purchase Payments on a "first-in-first-out" (FIFO) basis and we process withdrawal requests as follows.</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">1.</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">First we withdraw from Purchase Payments that we have had for six or more complete years, which is your Contract's withdrawal charge period. This withdrawal is not subject to a withdrawal charge and it reduces the Withdrawal Charge Basis.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Then, if this is a partial withdrawal, we withdraw from the free withdrawal privilege (see section 9, Access to Your Money &#8211; Free Withdrawal Privilege). This withdrawal is not subject to a withdrawal charge, it reduces the Withdrawal Charge Basis, and is withdrawn from Purchase Payments on a FIFO basis.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Next, on a FIFO basis, we withdraw from Purchase Payments within your Contract's withdrawal charge period and assess a withdrawal charge. Withdrawing payments on a FIFO basis may help reduce the total withdrawal charge because the charge declines over time. We determine your total withdrawal charge by multiplying each payment by its applicable withdrawal charge percentage and then totaling the charges. This withdrawal reduces the Withdrawal Charge Basis.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">4.</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Finally we withdraw any Contract earnings. This withdrawal is not subject to a withdrawal charge and it does not reduce the Withdrawal Charge Basis.</td>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
</div>

<div id="DSPFPageNumberArea" style="TEXT-ALIGN: center"><font id="DSPFPageNumber" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', 'sans-serif'; FONT-WEIGHT: bold; FONT-STYLE: normal">36</font></div>

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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The withdrawal charge as a percentage of each Purchase Payment withdrawn is as follows.</div>

<table id="zc27f36ce29e64a1abda364fa6c68c7ef" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0">
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<td style="WIDTH: 50.35%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px solid">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Number of Complete Years Since Purchase Payment</div>
</td>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Withdrawal Charge Amount</div>
</td>
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<td style="WIDTH: 50.35%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">0</div>
</td>
<td style="WIDTH: 49.65%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center; MARGIN-RIGHT: 28.8pt">6.5%</div>
</td>
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<tr>
<td style="WIDTH: 50.35%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">1</div>
</td>
<td style="WIDTH: 49.65%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center; MARGIN-RIGHT: 28.8pt">6%</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50.35%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">2</div>
</td>
<td style="WIDTH: 49.65%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center; MARGIN-RIGHT: 28.8pt">5%</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50.35%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">3</div>
</td>
<td style="WIDTH: 49.65%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center; MARGIN-RIGHT: 28.8pt">4%</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50.35%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">4</div>
</td>
<td style="WIDTH: 49.65%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center; MARGIN-RIGHT: 28.8pt">2%</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50.35%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">5</div>
</td>
<td style="WIDTH: 49.65%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center; MARGIN-RIGHT: 28.8pt">1%</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50.35%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">6 years or more</div>
</td>
<td style="WIDTH: 49.65%; VERTICAL-ALIGN: middle">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center; MARGIN-RIGHT: 28.8pt">0%</div>
</td>
</tr>
</table>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-TOP: 6pt">Upon a full withdrawal, we first deduct any applicable product fee and contract maintenance charge before we calculate the withdrawal charge. We deduct any applicable withdrawal charge from the total Contract Value and send you the remaining amount. For a partial withdrawal we deduct the amount you request, plus any applicable withdrawal charge from the total Contract Value. We apply the withdrawal charge to this total amount and we pay you the amount you requested. We deduct any partial withdrawal (including any withdrawal charge) proportionately from each Allocation Option unless you provide us with alternate instructions. If a partial withdrawal occurs on a day that we also assess the product fee and/or contract maintenance charge, we assess these charges in this order after we deduct the withdrawal and any applicable withdrawal charge from the Contract Value.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The withdrawal charge compensates us for expenses associated with selling the Contract.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Example:</font> You make an initial Purchase Payment of $30,000 and make another Purchase Payment in the first month of the second Contract Year of $70,000. In the third month of the third Contract Year, your Contract Value is $110,000 and you request a $52,000 withdrawal. We withdraw money and compute the withdrawal charge as follows.</div>

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<table id="z5564918e586f48c4b32f872e3849b7aa" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">1)</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Purchase Payments beyond the withdrawal charge period.</font> All payments are still within the withdrawal charge period, so this does not apply.</td>
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<table id="z2c0a065d5ee140bfbbf126bba078e83d" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">2)</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Amounts available under the free withdrawal privilege.</font> You did not take any other withdrawals this year, so you can withdraw up to 10% of your total payments (or $10,000) without incurring a withdrawal charge. We also deduct this $10,000 from the first Purchase Payment.</td>
</tr>
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<table id="zc02e7b5e970842e3be326d2fe843913a" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">3)</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Purchase Payments within the withdrawal charge period on a FIFO basis.</font> The total amount we withdraw from the first Purchase Payment is the remaining $20,000, which is subject to a 5% withdrawal charge, and you receive $19,000. We determine this amount as follows:</td>
</tr>
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</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-LEFT: 14.4pt; TEXT-INDENT: 0pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">(amount withdrawn) x (1 &#8211; withdrawal charge) = the amount you receive, or:</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif"><br>
</font> $20,000 x 0.95 = $19,000.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-LEFT: 14.4pt; MARGIN-TOP: 6pt; TEXT-INDENT: 0pt">Next we withdraw from the second Purchase Payment. So far, you received $29,000 ($10,000 under the free withdrawal privilege and $19,000 from the first Purchase Payment), so we withdraw $23,000 from the second Purchase Payment to equal the $52,000 you requested. The second Purchase Payment is subject to a 6% withdrawal charge. We calculate the total amount withdrawn and its withdrawal charge as follows:</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-LEFT: 14.4pt; TEXT-INDENT: 0pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">(the amount you receive) &#247; (1 &#8211; withdrawal charge) = amount withdrawn, or:</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif"><br>
</font> $23,000 &#247; 0.94 = $24,468.</div>

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<table id="zbea27df9447d4ead9774098dfb189926" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">4)</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Contract earnings.</font> We already withdrew your requested amount, so this does not apply.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">In total we withdrew $54,468 from your Contract, of which you received $52,000 and paid a withdrawal charge of $2,468.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
</div>

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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 2pt">Reduction or Elimination of the Withdrawal Charge</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We may reduce or eliminate the withdrawal charge when the Contract is sold under circumstances that reduce its sales expenses. For example, if a large group of individuals purchases Contracts or if a prospective purchaser already has a relationship with us. We may choose not to deduct a withdrawal charge under a Contract issued to an officer, director, or employee of Allianz Life of New York or any of its affiliates. Also, we may reduce or eliminate the withdrawal charge when a Contract is sold by a Financial Professional appointed with Allianz Life of New York to any members of his or her immediate family and the Financial Professional waives their commission. We must pre-approve any withdrawal charge reduction or elimination. Keep in mind that if you withdraw money from an Index Option on any day other than an Index Anniversary, we apply the Daily Adjustment when calculating your Index Option Value for the withdrawal, even if the withdrawal is not subject to a withdrawal charge.</div>

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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: left">NOTE:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">&#183;</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; FONT-WEIGHT: bold; TEXT-ALIGN: left">Because we do not reduce the Withdrawal Charge Basis for Contract expenses other than the withdrawal charge, we may assess a withdrawal charge on more than the amount you are withdrawing upon a full withdrawal of the total Contract Value. Also, upon full withdrawal, if the Contract Value has declined due to poor performance, the withdrawal charge may be greater than the total Contract Value and you will not receive any money.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">&#183;</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; COLOR: #000000">Withdrawals</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold"> may have tax consequences and, if taken before age 59&#189;, may be subject to a 10% additional federal tax. For tax purposes in most instances, withdrawals from Non-Qualified Contracts are considered to come from earnings first, not Purchase Payments</font>.</td>
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<div><br>
</div>
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<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor--><!--Anchor--><!--Anchor-->TRANSFER FEE</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The first twelve transfers between Variable Options every Contract Year are free. After that, we deduct a $25 transfer fee for each additional transfer. We count all transfers made in the same Business Day as one transfer. We do not count transfers between the Variable Options and Index Options or reallocation of Index Option Value among the Index Options against the free transfers we allow and these transfers are not subject to a transfer fee. The transfer fee continues to apply under death benefit payment Option&#160;B, and with optional payments under death benefit payment Option&#160;C as noted in section 11, Death Benefit.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We deduct the transfer fee on a dollar for dollar basis from the amount of Variable Account Value being transferred before allocating the remaining Variable Account Value to your selected Variable Options. We do not treat the deduction of the transfer fee as a withdrawal when computing total Purchase Payments adjusted for withdrawals under the Traditional Death Benefit.</div>

<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor--><!--Anchor--><!--Anchor-->PREMIUM TAX</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Premium tax is based on your state of residence at the time you make each Purchase Payment. In states that assess a premium tax, we do not currently deduct it from the Contract, although we reserve the right to do so in the future. Premium tax normally ranges from 0% to 3.5% of the Purchase Payment, depending on the state or governmental entity. New York does not currently assess a premium tax.</div>

<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor--><!--Anchor-->INCOME TAX</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Currently, we do not deduct any Contract related income tax we incur, although we reserve the right to do so in the future.</div>

<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor--><!--Anchor--><!--Anchor-->VARIABLE OPTION EXPENSES</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Variable Options' assets are subject to operating expenses (including management fees). These expenses are described in the Fee Tables and in the Variable Options' prospectuses. These expenses reduce the Variable Options' performance and, therefore, negatively affect your Contract Value and any payments based on Contract Value. The Variable Options' investment advisers provided us with the expense information in this prospectus and we did not independently verify it.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
</div>

<div id="DSPFPageNumberArea" style="TEXT-ALIGN: center"><font id="DSPFPageNumber" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', 'sans-serif'; FONT-WEIGHT: bold; FONT-STYLE: normal">38</font></div>

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<td style="WIDTH: 21.6pt; VERTICAL-ALIGN: top; align: right"><!--Anchor--><!--Anchor--><!--Anchor--><font style="FONT-SIZE: 11pt; FONT-FAMILY: Arial, sans-serif">9.</font></td>
<td style="FONT-SIZE: 11pt; FONT-FAMILY: Arial, sans-serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">ACCESS TO YOUR MONEY</td>
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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The money in your Contract is available under the following circumstances:</div>

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<table id="z8aeabb34481946f896ea18912db74aea" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">&#183;</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">by withdrawing your Contract Value;</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">&#183;</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">by taking required minimum distributions (Qualified Contracts only) as discussed in "Minimum Distribution Program and Required Minimum Distribution (RMD) Payments" later in this section;</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">&#183;</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">by taking Annuity Payments; or</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">&#183;</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">when we pay a death benefit.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">You can take withdrawals<!--Anchor--> during the Accumulation Phase. We process withdrawal requests based on values next determined after receipt of the request in Good Order at our Service Center. Values are normally determined at the end of each Business Day. Any withdrawal request received at or after the end of the current Business Day receives the next Business Day's values.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><!--Anchor-->Any partial withdrawal must be for at least $100.* The Contract Value after a partial withdrawal must be at least $2,000.* <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">We reserve the right to treat a partial withdrawal that reduces the Contract Value below this minimum as a full withdrawal.</font></div>

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<table id="z73cd7d1dd0714555be732d4bebef8c33" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">*</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Does not apply to required minimum distributions.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We deduct any partial withdrawal (including any withdrawal charge) proportionately from each Allocation Option unless you provide us with alternate instructions.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">When you take a full withdrawal, <!--Anchor-->we<!--Anchor-->&#160;<!--Anchor-->process<!--Anchor-->&#160;<!--Anchor-->your request on the Business Day we receive it in Good Order at our Service Center as follows:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">&#183;</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">total Contract Value,</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">&#183;</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">less any final product fee and final contract maintenance charge, and</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">less any withdrawal charge.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">See the Fee Tables and section 8, Expenses for a discussion of these charges.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We pay withdrawals promptly, but in no event later than seven days after receipt of your request in Good Order at our Service Center, unless the suspension of payments or transfers provision is in effect (see the discussion later in this section).</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; FONT-WEIGHT: bold; TEXT-ALIGN: left">Ordinary income taxes and tax penalties may apply to any withdrawal you take.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">&#183;</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">We may be required to provide information about you or your Contract to government regulators. We may also be required to stop Contract disbursements and thereby refuse any transfer requests, and refuse to pay any withdrawals, surrenders, or death benefits until we receive instructions from the appropriate regulator. If, pursuant to SEC rules, the AZL Government Money Market Fund suspends payment of redemption proceeds in connection with a fund liquidation, we will delay payment of any transfer, partial withdrawal, surrender, or death benefit from the AZL Government Money Market Fund subaccount until the fund is liquidated.</td>
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<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor--><!--Anchor-->FREE WITHDRAWAL PRIVILEGE</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">Each Contract Year, you can withdraw up to 10% of your total Purchase Payments without incurring a withdrawal charge (the free withdrawal privilege). Any unused free withdrawal privilege in one Contract Year is not added to the amount available next year.</font> Withdrawals of Purchase Payments that are beyond the withdrawal charge period are not subject to a withdrawal charge and do not reduce your free withdrawal privilege. Required minimum distribution payments are not subject to a withdrawal charge, but do reduce your free withdrawal privilege.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; FONT-STYLE: italic">NOTE:</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000"> The free withdrawal privilege is not available upon a full withdrawal</font>.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div id="DSPFPageNumberArea" style="TEXT-ALIGN: center"><font id="DSPFPageNumber" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', 'sans-serif'; FONT-WEIGHT: bold; FONT-STYLE: normal">39</font></div>

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<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor--><!--Anchor-->SYSTEMATIC WITHDRAWAL PROGRAM</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If your Contract Value is at least $25,000, the systematic withdrawal program can provide automatic withdrawal payments to you. You can request to receive these withdrawal payments monthly, quarterly, semi-annually or annually. <!--Anchor--><!--Anchor-->The minimum amount you can withdraw under this program is $100 and there is no maximum. During the withdrawal charge period (if applicable), systematic withdrawals in excess of the free withdrawal privilege are subject to <!--Anchor-->a withdrawal charge. We make systematic withdrawals on the ninth of the month, or the next Business Day if the ninth is not a Business Day. We must receive your systematic withdrawal program form instructions in Good Order at our Service Center by 4 p.m. Eastern Time on the Business Day before we process these withdrawals, or your program does not begin until the next month. This program ends at your request or when you withdraw your total Contract Value. However, we reserve the right to discontinue or modify the systematic withdrawal program at any time and for any reason.</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; FONT-WEIGHT: bold; TEXT-ALIGN: left">Ordinary income taxes and tax penalties may apply to systematic withdrawals.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; FONT-WEIGHT: bold; align: right">&#183;</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; FONT-WEIGHT: bold; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">The systematic withdrawal program is not</font> available while you are receiving required minimum distribution payments.</td>
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<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor--><!--Anchor--><!--Anchor--><!--Anchor-->MINIMUM DISTRIBUTION PROGRAM AND REQUIRED MINIMUM DISTRIBUTION (RMD) PAYMENTS</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If you own an IRA or SEP IRA Qualified Contract, you can participate in the minimum distribution program during the Accumulation Phase. If you purchase this Contract as an Inherited IRA Qualified Contract, we generally require you to participate in the minimum distribution program when you purchase this Contract. Under this program, we make payments to you designed to meet the applicable minimum distribution requirements imposed by the Internal Revenue Code for this Qualified Contract. RMD payments are not subject to a withdrawal charge, but they reduce the free withdrawal privilege amount during the Contract Year. We can make payments to you on a monthly, quarterly, semi-annual or annual basis. However, if your Contract Value is less than $25,000, we only make annual payments. You cannot aggregate RMD payments between this Contract and other qualified contracts that you own. We make RMD payments on the ninth of the month, or the next Business Day if the ninth is not a Business Day. We must receive your program form instructions in Good Order at our Service Center by 4 p.m. Eastern Time on the Business Day before we process these payments, or your program does not begin until the next month.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Inherited IRA Contracts. </font>If you (the Owner) were the spouse of the deceased owner of a previous tax-qualified investment and your spouse had not yet reached the date at which he/she was required to begin receiving RMD payments, then you can wait to begin receiving RMD payments until the year that your deceased spouse would have reached age 70&#189;. Alternately, if your deceased spouse had already reached the date at which he/she was required to begin receiving RMD payments, you can begin RMD payments based on your single life expectancy in the year following your deceased spouse's death, or (if longer) your deceased spouse's life expectancy in the year of his/her death&#160; reduced by one. You must begin to receive these RMD payments by December 31 of the year following the year of your deceased spouse's death.</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; FONT-WEIGHT: bold; TEXT-ALIGN: left">You should consult a tax adviser before purchasing a Qualified Contract that is subject to RMD payments.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; FONT-WEIGHT: bold; align: right">&#183;</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; FONT-WEIGHT: bold; TEXT-ALIGN: left">The minimum distribution program is not available while you are receiving systematic withdrawals.</td>
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<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor-->WAIVER OF WITHDRAWAL CHARGE BENEFIT</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">After the first Contract Year, if any Owner becomes confined to a nursing home for a period of at least 90 consecutive days and a physician certifies that continued confinement is necessary, you can take a withdrawal and we waive the withdrawal charge. This waiver is not available if any Owner was confined to a nursing home on the Issue Date. We base this benefit on the Annuitant for non-individually owned Contracts. We must receive proof of confinement in Good Order before we waive the withdrawal charge.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div id="DSPFPageNumberArea" style="TEXT-ALIGN: center"><font id="DSPFPageNumber" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', 'sans-serif'; FONT-WEIGHT: bold; FONT-STYLE: normal">40</font></div>

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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We may be required to suspend or postpone transfers or payments for withdrawals for any period when:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">the New York Stock Exchange is closed (other than customary weekend and holiday closings);</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">trading on the New York Stock Exchange is restricted;</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">an emergency (as determined by the SEC) exists as a result of which disposal of the Variable Option shares is not reasonably practicable or we cannot reasonably value the Variable Option shares; or</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">during any other period when the SEC, by order, so permits for the protection of Owners.</td>
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<td style="WIDTH: 21.6pt; VERTICAL-ALIGN: top; align: right"><!--Anchor--><!--Anchor--><!--Anchor--><font style="FONT-SIZE: 11pt; FONT-FAMILY: Arial, sans-serif">10.</font></td>
<td style="FONT-SIZE: 11pt; FONT-FAMILY: Arial, sans-serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">THE ANNUITY PHASE</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Prior to annuitization, you can surrender your Contract and receive your total Contract Value (less the final product fee, final contract maintenance charge, and any applicable withdrawal charge).</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Annuity Payments offer a guaranteed income stream with certain tax advantages and are designed for Owners who are not concerned with continued access to Contract Value.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">You can apply your Contract Value to regular periodic fixed annuity payments (Annuity Payments). The Payee receives the Annuity Payments. You receive tax reporting on the payments, whether or not you are the Payee. We may require proof of the Annuitant(s)' age before we make any life contingent Annuity Payment. If you misstate the Annuitant(s)' age or gender, we recalculate the Annuity Payments based on the correct age or gender.</div>

<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor-->CALCULATING YOUR ANNUITY PAYMENTS</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We base Annuity Payments upon the following:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">The Contract Value on the Annuity Date.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">The age of the Annuitant and any joint Annuitant on the Annuity Date.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">The gender of the Annuitant and any joint Annuitant where permitted.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">The Annuity Option you select.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Your Contract's interest rate (or current rates, if higher) and mortality table.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If the Annuity Date is not an Index Anniversary and you selected an Index Option, Contract Value includes the Daily Adjustment. We guarantee the dollar amount of Annuity Payments and this amount remains fixed and does not change during the entire annuity payout option period that you selected, except as provided under Annuity Option 3.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">You can choose one of the Annuity Options described below or any other payment option to which we agree. Before the Annuity Date, you can select and/or change the Annuity Option with at least 30 days written notice to us. After Annuity Payments begin, you cannot change the Annuity Option.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Option 1. Life Annuity.</font> We make Annuity Payments during the life of the Annuitant, and the last payment is the one that is due before the Annuitant's death. If the Annuitant dies shortly after the Annuity Date, the Payee may receive less than your investment in the Contract.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Option 2. Life Annuity with Payments Over 5, 10, 15 or 20 Years Guaranteed.</font> We make Annuity Payments during the life of the Annuitant, with payments for a guaranteed minimum period that you select.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Option 3. Joint and Last Survivor Annuity. </font>We make Annuity Payments during the lifetimes of the Annuitant and the joint Annuitant. Upon the death of one Annuitant, Annuity Payments to the Payee continue during the lifetime of the surviving joint Annuitant, at a level of 100%, 75% or 50% selected by the Owner when he or she chose this Annuity Payment option. If both Annuitants die shortly after the Annuity Date, the Payee may receive less than your investment in the Contract.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Option 4. Joint and Last Survivor Annuity with Payments Over 5, 10, 15 or 20 Years Guaranteed.</font> We make Annuity Payments during the lifetimes of the Annuitant and the joint Annuitant, with payments for a minimum guaranteed period that you select.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Option 5. Refund Life Annuity.</font> We make Annuity Payments during the lifetime of the Annuitant, and the last payment is the one that is due before the Annuitant's death. After the Annuitant's death, the Payee may receive a lump sum refund. The amount of the refund equals the amount applied to this Annuity Option minus the total paid under this option.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">After the Annuitant's death under Option 2, or the last surviving joint Annuitant's death under Option 4, we make Annuity Payments during the remaining guaranteed period in the following order based on who is still alive: the Payee, any surviving original Owner, the last surviving Owner's Beneficiaries, or to the last surviving Owner's estate if there are no remaining or named Beneficiaries.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Annuity Payments are usually lower if you select an Annuity Option that requires us to make more frequent Annuity Payments or to make payments over a longer period of time. If you choose life contingent Annuity Payments, payout rates for a younger Annuitant are lower than the payout rates for an older Annuitant and payout rates for life with a guaranteed period are typically lower than life only payments. Monthly payout rates are lower than annual payout rates, payout rates for a 20-year guaranteed period are less than payout rates for a 10-year guaranteed period, and payout rates for a 50-year-old Annuitant are less than payout rates for a 70-year-old Annuitant.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; FONT-STYLE: italic">NOTE:</font>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">If you do not choose an Annuity Option before the Annuity Date, we make Annuity Payments to the Payee under Annuity Option 2 with ten years of guaranteed monthly payments.</font></div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Annuity Payments begin on the Annuity Date. Your scheduled Annuity Date is the maximum permitted date allowed for your Contract, which is the first day of the calendar month following the Annuitant's 90th birthday. An earlier Annuity Date or a withdrawal may be required to satisfy minimum required distribution rules under certain Qualified Contracts. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; FONT-STYLE: italic">You can make an authorized request for a different, earlier or later Annuity Date after the Issue Date, but any such request is subject to applicable law and our approval. </font>An earlier or later Annuity Date may not be available to you depending on the Financial Professional you purchase your Contract through and your state of residence. Your Annuity Date must be at least 13 months after the Issue Date. The Annuity Date cannot be later than what is permitted under applicable law.</div>

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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; FONT-STYLE: italic; BACKGROUND-COLOR: #f3f3f3">NOTE: </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; BACKGROUND-COLOR: #f3f3f3">If on the maximum permitted Annuity Date </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">(which is generally age 95 or 100) </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; BACKGROUND-COLOR: #f3f3f3">your Contract Value is greater than zero, you must annuitize the Contract.</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; BACKGROUND-COLOR: #f3f3f3"> We notify you </font>of your available options <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; BACKGROUND-COLOR: #f3f3f3">in writing 60 days in advance. </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; BACKGROUND-COLOR: #f3f3f3">If you have not selected an Annuity Option, we make payments under Annuity Option 2 with ten years of guaranteed monthly payments. Upon annuitization you no longer have Contract Value or a death benefit, </font>and you cannot receive<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; BACKGROUND-COLOR: #f3f3f3"> any other periodic withdrawals or payments other than Annuity Payments.</font></div>

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<td style="FONT-SIZE: 11pt; FONT-FAMILY: Arial, sans-serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">DEATH BENEFIT</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">"You" in this section refers to the Owner, or the Annuitant if the Contract is owned by a non-individual.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">The death benefit is only available during the Accumulation Phase. </font>If you or the Determining Life (Lives) die during the Accumulation Phase, we process the death benefit using prices determined after we receive the required information, which is either a Valid Claim or due proof of death as stated here. (For information on due proof of death see the Glossary &#8211; Valid Claim). If we receive this information after the end of the current Business Day, we use the next Business Day's prices. We will not accept additional Purchase Payments after receipt of the first Valid Claim from any Beneficiary. We also will not allow any partial or full withdrawals after receipt of a Valid Claim.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">If </font>there are multiple Beneficiaries, each Beneficiary receives the portion of the death benefit he or she is entitled to when we receive his or her Valid Claim. If a Beneficiary dies before you or the Designated Life, that Beneficiary's interest in this Contract ends unless your Beneficiary designation specifies otherwise. If there are no remaining Beneficiaries, or no named Beneficiaries, we pay the death benefit to your estate, or if the Owner is a non-individual, to the Owner. Unless you instruct us to pay Beneficiaries a specific percentage of the death benefit, he or she each receives an equal share. Any part of the death benefit that is in the Allocation Options remains there until distribution begins. From the time we determine the death benefit until we make a complete distribution, any amount in the Allocation Options continues to be subject to investment risk that is borne by the recipient(s). Once we receive notification of death, we no longer accept additional Purchase Payments or process transfer requests.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Contract provides the Traditional Death Benefit based on the greater of:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Contract Value, or</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">total of all Purchase Payments received, reduced by the percentage of Contract Value withdrawn, determined at the end of each Business Day. Withdrawals include withdrawal charges, but not amounts we withdraw for other Contract expenses.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If the date we are determining the death benefit is not an Index Anniversary, Contract Value includes the Daily Adjustment.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If you are the Determining Life, or if you and the Determining Life (Lives) are different individuals and die simultaneously as described in the discussion of Beneficiaries in section 3, Ownership, Annuitants, Determining Life, Beneficiaries and Payees, we determine the Traditional Death Benefit <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">at the end of the Business Day </font>we receive a Valid Claim. For multiple Beneficiaries, each surviving Beneficiary receives the greater of their portion of total Purchase Payments adjusted for withdrawals determined <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">at the end of the Business Day </font>we receive the first Valid Claim from any one Beneficiary, or their portion of the Contract Value determined at the end of the Business Day during which we receive his or her Valid Claim.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If you and the Determining Life (Lives) are different individuals and do not die simultaneously, the death benefit is as follows. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; FONT-STYLE: italic">This can only occur if you change the Owner after the Issue Date.</font></div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">&#183;</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">If a Determining Life dies before you we do not pay a death benefit to the Beneficiary(s), but we may increase the Contract Value.</font> We compare the Contract Value and total Purchase Payments adjusted for withdrawals determined at the end of Business Day we receive due proof of a Determining Life's death. If your Contract Value is less than total Purchase Payments adjusted for withdrawals, we increase your Contract Value to equal total Purchase Payments adjusted for withdrawals. The Traditional Death Benefit becomes the Contract Value, <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; FONT-STYLE: italic">and the Traditional Death Benefit ends</font>. We allocate any Contract Value increase to the Variable Options according to future Purchase Payment allocation instructions.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Upon your death your Beneficiary(s) receive the Contract Value determined at the end of the Business Day during which we receive each Beneficiary's Valid Claim.</td>
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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">The Traditional Death Benefit ends upon the earliest of the following.</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">The Business Day before the Annuity Date.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">The Business Day that total Purchase Payments adjusted for withdrawals and Contract Value are both zero.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Upon the death of a Determining Life, the end of the Business Day we receive a Valid Claim from all Beneficiaries if you and the Determining Life are the same individuals, or if you and the Determining Life (Lives) are different individuals and die simultaneously as defined by applicable state law or regulation.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Upon the death of a Determining Life, the end of the Business Day we receive due proof of the Determining Life's death if you and the Determining Life (Lives) are different individuals and do not die simultaneously.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Upon the death of an Owner (or Annuitant if the Owner is a non-individual), the end of the Business Day we receive the first Valid Claim from any one Beneficiary, if the Owner (or Annuitant) is no longer a Determining Life.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">The Business Day the Contract ends.</td>
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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; FONT-STYLE: italic">NOTE: </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">The Traditional Death Benefit is a first-to-die benefit based on the Determining Life.</font> This means that upon the death of an Owner (or Annuitant if the Owner is a non-individual), if a surviving spouse continues the Contract the Traditional Death Benefit is no longer available. Also, if you and the Determining Life (Lives) are different individuals and you die first, the Traditional Death Benefit is not available to your Beneficiary(s).</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Appendix to the Statement of Additional Information includes tables that are intended to help you better understand what happens upon the death of any Owner and/or Annuitant under the different portions of the Contract.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If you do not designate a death benefit payment option, a Beneficiary must select one of the options listed below. If no death benefit payment option is selected, we default payment to Option B. If a Beneficiary requests a lump sum payment under Option&#160;A, we pay that Beneficiary within seven days of receipt of his or her Valid Claim, unless the suspension of payments or transfers provision is in effect. Payment of the death benefit may be delayed, pending receipt of any state forms. For Contracts issued or delivered in New York, if Option A is selected and we do not pay the claim within seven days, we pay interest on the death benefit amount beginning on the eighth calendar day at the greater of the current settlement rate which we declare annually, or 3%. You can contact our Service Center at the address or phone number listed at the back of this prospectus for information on the current settlement rate.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Spousal Continuation:</font> If the Beneficiary is the deceased Owner's spouse, he or she can choose to continue the Contract with the portion of the death benefit the spouse is entitled to in his or her own name. For non-individually owned Contracts, spousal continuation is only available to Qualified Contracts. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Spouses must qualify as such under federal law to continue the Contract. </font>Individuals who have entered into a registered domestic partnership, civil union, or other similar relationship that is not considered to be a marriage under state law are also not considered to be married under federal law. An election by the spouse to continue the Contract must be made on the death claim form before we pay the death benefit. If the surviving spouse continues the Contract, at the end of the Business Day we receive his or her Valid Claim, we increase the Contract Value to equal total Purchase Payments adjusted for withdrawals, if applicable. If the surviving spouse continues the Contract:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">he or she may exercise all of the Owner's rights, including naming a new Beneficiary or Beneficiaries;</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">he or she is subject to any remaining withdrawal charge; and</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">upon the surviving spouse's death their Beneficiary(s) receive the Contract Value, determined at the end of the Business Day during which we receive a Valid Claim from each Beneficiary.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Option A: </font>Lump sum payment of the death benefit.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Option B: </font>Payment of the entire death benefit within five years of the date of any Owner's death. The Beneficiary can continue to make transfers between Allocation Options and is subject to a transfer fee and the product fee.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Option C: </font>If the Beneficiary is an individual,<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">&#160;</font>payment of the death benefit as Annuity Payments under Annuity Options 1, 2 or 5. With our written consent, other options may be available for payment over a period not extending beyond the Beneficiary's life expectancy under which the Beneficiary can continue to make transfers between Allocation Options and is subject to a transfer fee and the product fee. Distribution must begin within one year of the date of the Owner's death.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Any portion of the death benefit not applied to Annuity Payments within one year of the date of the Owner's death must be distributed within five years of the date of death.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If the Contract is owned by a non-individual, then we treat the death of an Annuitant as the death of an Owner for purposes of the Internal Revenue Code's distribution at death rules, which are set forth in Section 72(s) of the Code.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">In all events, notwithstanding any provision to the contrary in the Contract or this prospectus, the Contract is interpreted and administered in accordance with Section 72(s) of the Internal Revenue Code.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Other rules may apply to Qualified Contracts.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">This section provides a summary explanation of the tax ramifications of purchasing a Contract. More detailed information about product taxation is contained in the Statement of Additional Information, which is available by <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">calling the toll-free telephone number at the back of this prospectus.</font>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">We do not provide individual tax advice. You should contact your tax adviser to discuss this Contract's effects on your personal tax situation.</font></div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">You can purchase either a Qualified Contract or a Non-Qualified Contract. A Qualified Contract is purchased pursuant to a specialized provision of the Internal Revenue Code (Code). For example, a Contract may be purchased pursuant to Section 408 of the Code as an Individual Retirement Annuity (IRA).</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Qualified Contracts are subject to certain restrictions, including restrictions on the amount of annual contributions, restrictions on how much you can earn and still be able to contribute to a Qualified Contract, and specialized restrictions on withdrawals. Qualified Contracts must be purchased from earned income from the relevant year or years, or from a rollover or transfer from a qualified contract. An IRA to IRA indirect rollover can occur only once in any twelve month period from all of the IRAs you currently own. Purchase Payments to Qualified Contracts other than from a qualified transfer may be restricted once the Owner reaches age 70&#189;.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Currently, we offer the following types of Qualified Contracts.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Must have the same individual as Owner and Annuitant.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Roth IRA</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Must have the same individual as Owner and Annuitant.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Simplified Employee Pension (SEP) IRA</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Must have the same individual as Owner and Annuitant.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">A qualified retirement plan is the Owner and the Annuitant must be an individual.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">We may determine which types of qualified retirement plans are eligible to purchase this Contract.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Inherited IRA and Inherited Roth IRA</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Must have the same individual as Owner and Annuitant. The deceased owner of the previously held tax&#8209;qualified arrangement will also be listed in the titling of the Contract.</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-TOP: 6pt">If you purchase a Qualified Contract, you already receive the benefit of tax deferral through the qualified plan, and so you should purchase this Contract for purposes other than tax deferral.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">You can instead purchase a Non-Qualified Contract, which is not qualified pursuant to a specialized provision of the Code. There are no Code restrictions on annual contributions to a Non-Qualified Contract or how much you can earn and still contribute to a Contract.</div>

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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Contract has the following tax characteristics.</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Taxes on earnings are deferred until you take money out. Non-Qualified Contracts owned by corporations or partnerships do not receive income tax deferral on earnings.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">When you take money out of a Non-Qualified Contract, earnings are generally subject to federal income tax and applicable state income tax. All pre-tax money distributed from Qualified Contracts are subject to federal and state income tax, but qualified distributions from Roth IRA Contracts are not subject to federal income tax. This prospectus does not address specific state tax laws. You should discuss state taxation with your tax adviser.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Taxable distributions are subject to an ordinary income tax rate, rather than a capital gains rate.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Distributions from Non-Qualified Contracts are considered investment income for purposes of the Medicare tax on investment income. Thus, in certain circumstances, a 3.8% tax may apply to some or all of the taxable portion of distributions (e.g. earnings) to individuals whose income exceeds certain threshold amounts ($200,000 for filing single, $250,000 for married filing jointly and $125,000 for married filing separately.) Please consult a tax advisor for more information.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">If you take partial withdrawals from your Non-Qualified Contract, the withdrawals are generally taxed as though you were paid taxable earnings first, and then as a non-taxable return of Purchase Payments.</td>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">If you annuitize your Non-Qualified Contract and receive a stream of Annuity Payments, you receive the benefit of the exclusion ratio. The exclusion ratio is a calculation that causes a portion of each Annuity Payment to be non-taxable, based upon the percentage of your Contract Value that is from Purchase Payments. Purchase Payments are treated as a non-taxable return of principal, whereas earnings are taxable.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">If you take partial withdrawals or annuitize a Qualified Contract, you will be responsible for determining what portion, if any, of the distribution consists of after-tax money.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">If you take out earnings before age 59&#189;, you may be subject to a 10% additional federal tax, unless you take a lifetime annuitization of your Contract or you take money out in a stream of substantially equal payments over your expected life in accordance with the requirements of the Code.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">A pledge, assignment, or ownership change of a Contract may be treated as a taxable event. You should discuss any pledge, assignment, or ownership change of a Contract with your tax adviser.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">If you purchase multiple non-qualified deferred annuity contracts from an affiliated group of companies in one calendar year, these contracts are treated as one contract for purposes of determining the tax consequences of any distribution.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Death benefit proceeds from Non-Qualified Contracts are taxable to the beneficiary as ordinary income to the extent of any earnings. Death benefit proceeds must be paid out in accordance with the requirements of the Code.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Depending upon the type of Qualified Contract you own, required minimum distributions (RMDs) must be satisfied when you reach a certain age. If you enroll in our minimum distribution program, we make RMD payments to you that are designed to meet this Contract's RMD requirements.</td>
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<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor--><!--Anchor--><!--Anchor--><!--Anchor-->TAX-FREE SECTION 1035 EXCHANGES</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Subject to certain restrictions, you can make a "tax-free" exchange under Section 1035 of the Internal Revenue Code for all or a portion of one annuity contract for another, or all of a life insurance policy for an annuity contract. Before making an exchange, you should compare both contracts carefully. Remember that if you exchange a life insurance policy or annuity contract for the Contract described in this prospectus:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">you might have to pay a withdrawal charge on your previous contract,</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">there is a new withdrawal charge period for this Contract,</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">other charges under this Contract may be higher (or lower),</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">the benefits may be different, and</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">you no longer have access to any benefits from your previous contract.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If the exchange does not qualify for Section 1035 treatment, you also may have to pay federal income tax<!--Anchor-->, including a possible additional federal tax,<!--Anchor--> on the exchange. You should not exchange an existing life insurance policy or another annuity contract for this Contract unless you determine the exchange is in your best interest<!--Anchor--> and not just better for the person selling you the Contract who generally earns a commission on each sale. You should consult a tax adviser to discuss the potential tax effects before making a 1035 exchange.</div>

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<td style="FONT-SIZE: 11pt; FONT-FAMILY: Arial, sans-serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">OTHER INFORMATION</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We established Allianz Life of NY Variable Account C (the Separate Account, formerly Preferred Life Variable Account C), as a separate account under New York insurance law on February 26, 1988. The Separate Account is registered with the SEC as a unit investment trust under the Investment Company Act of 1940. The SEC does not supervise our management of the Separate Account.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Separate Account holds the shares of the Variable Options that have been purchased with Contract assets. We keep the Separate Account assets separate from the assets of our general account and other separate accounts, including the non-unitized separate accounts we established in connection with the Index Options. The Separate Account is divided into subaccounts, each of which invests exclusively in a single Variable Option.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We own the assets of the Separate Account. We credit gains to or charge losses against the Separate Account, whether or not realized, without regard to the performance of other investment accounts. The Separate Account's assets are insulated, so that the assets cannot be used to pay any of our liabilities, other than those arising from the investment of Contract assets in the Variable Options.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If the Separate Account's assets exceed the required reserves and other liabilities, we may transfer the excess to our general account, to the extent of seed money invested by us or earned fees and charges. The obligations under the Contracts are obligations of Allianz Life of New York.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Our general account holds all our assets other than assets in our separate accounts. We own our general account assets, and, subject to applicable law, have sole investment discretion over them. The assets are subject to our general business operation liabilities and claims of our creditors and may lose value. We have not registered our general account as an investment company under the Investment Company Act of 1940.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Our general account assets fund guarantees provided in the Contracts. Contract Value that you apply to Annuity Payments becomes part of our general account.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We allocate all assets backing the Index Options to an unregistered, non-unitized, non-insulated separate account (Separate Account IANY), which we established under New York Insurance Law solely for the purpose of supporting our obligations to pay Performance Credits associated with the Index Options. Separate Account IANY has two subaccounts: Subaccount IABV (which is a book value subaccount) and Subaccount IAMV (which is a market value subaccount).</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Initially, a substantial majority of the aggregate assets backing the Index Options are allocated to Subaccount IABV. We place all other assets that you allocate to the Index Options that are not invested in Subaccount IABV in Subaccount IAMV. Subsequently, there may be significant transfer of assets between Subaccount IABV and Subaccount IAMV in response to Index performance during the then-current Index Year. We typically transfer assets between these subaccounts if there is a 10% incremental change in year-to-date Index performance. We examine year-to-date Index performance daily and change the subaccount allocations daily if needed based on this 10% increment.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We invest the assets in Subaccount IAMV in hedging instruments, including derivative investments such as put and call options, as well as cash and fixed income securities. Like our general account, the assets in Separate Account IANY are subject to our general business operation liabilities and the claims of our creditors.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">An Owner who allocates Contract Value to an Index Option does not have any interest in or claim on the assets in Separate Account IANY. In addition, neither the Owner nor the Index Options participate in any way in the performance of assets held in Separate Account IANY.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Allianz Life Financial Services, LLC (Allianz Life Financial), a wholly owned subsidiary of Allianz Life Insurance Company of North America, serves as principal underwriter for the Contracts. Allianz Life Financial is a limited liability company organized in Minnesota, and is located at 5701 Golden Hills Drive, Minneapolis, MN 55416. Allianz Life Financial is registered as a broker/dealer with the SEC under the Securities Exchange Act of 1934, as well as with the securities commissions in the states in which it operates, and is a member of the Financial Industry Regulatory Authority (FINRA). Allianz Life Financial is not a member of Securities Investors Protection Corporation. More information about Allianz Life Financial is available at www.finra.org or by calling 1-800-289-9999. You also can obtain an investor brochure from FINRA describing its Public Disclosure Program.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We have entered into a distribution agreement with Allianz Life Financial for the distribution of the Contracts. Allianz Life Financial also may perform various administrative services on our behalf.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We may fund Allianz Life Financial's operating and other expenses, including: overhead; legal and accounting fees; Financial Professional training; compensation for the Allianz Life Financial management team; and other expenses associated with the Contracts. Financial Professionals and their managers are also eligible for various benefits, such as production incentive bonuses, insurance benefits, and non-cash compensation items that we may provide jointly with Allianz Life Financial. Non-cash items include conferences, seminars and trips (including travel, lodging and meals in connection therewith), entertainment, awards, merchandise and other similar items.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Allianz Life Financial does not itself sell the Contracts to customers. Rather, customers typically are working with a Financial Professional acting as an investment adviser, who advises the customer to purchase a Contract through a third-party broker-dealer. Investment advisers and broker-dealers involved in selling the Contracts may include Questar Asset Management, Inc., an affiliated investment adviser, or Questar Capital Corporation, an affiliated broker/dealer.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We do not pay sales commissions in connection with sales of the Contracts. Rather, the Contract Owner pays an investment advisory fee to his or her Financial Professional.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Investment Options may assess a Rule 12b&#8209;1 fee. These fees are paid to Allianz Life Financial as consideration for providing certain services and incurring certain expenses permitted under the Investment Option's plan. These fees typically equal 0.25% of an Investment Option's average daily net assets for the most recent calendar year.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">In certain instances, an investment adviser and/or subadviser (and/or their affiliates) of an Investment Option may make payments for administrative services to Allianz Life Financial or its affiliates.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Broker-dealers and investment advisers&#160; involved in sales of the Contracts may receive payments from us for administrative and other services that do not directly involve the sale of the Contracts, including payments made for recordkeeping, the recruitment and training of personnel, production of promotional literature and similar services.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We and/or Allianz Life Financial may pay certain broker-dealer and investment advisory firms additional marketing support allowances for:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">marketing services and increased access to their Financial Professionals;</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">sales promotions relating to the Contracts;</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">costs associated with sales conferences and educational seminars;</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We retain substantial discretion in determining whether to grant a marketing support payment to a particular firm and the amount of any such payment.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We may also make payments for marketing and wholesaling support to broker/dealer affiliates of Variable Options that are available through the variable annuities we offer.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Additional information regarding marketing support payments can be found in the Distributor section of the Statement of Additional Information.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">A portion of the payments made to broker-dealer and investment advisory firms may be passed on to their Financial Professionals. Financial Professionals may receive cash and non-cash compensation and other benefits. Ask your Financial Professional for further information about what they and their firm may receive in connection with your purchase of a Contract.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We offer the Contracts to the public on a continuous basis. We anticipate continuing to offer the Contracts but reserve the right to discontinue the offering.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We may credit additional amounts to a Contract instead of modifying charges because of special circumstances that result in lower sales or administrative expenses or better than expected mortality or persistency experience.</div>

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<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Allianz Service Center performs certain administrative services regarding the Contracts and is located at 5701 Golden Hills Drive, Minneapolis, Minnesota. The Service Center mailing address and telephone number are listed at the back of this prospectus. The administrative and routine customer services performed by our Service Center include processing and mailing of account statements and other mailings to Owners, responding to Owner correspondence and inquiries. Allianz Life Insurance Company of North America also contracts with Tata Consultancy Services (Tata) located at #42(P) &amp; 45(P), Think Campus, Electronic City, Phase II, Bangalore, Karnataka 560100, India, to perform certain administrative services including:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">issuance and maintenance of the Contracts,</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">processing withdrawal requests (both partial and total) and</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Services performed by Tata are overseen and quality control checked by our Service Center.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">To reduce expenses, only one copy of most financial reports and prospectuses, including reports and prospectuses for the Variable Options, may be mailed to your household, even if you or other persons in your household have more than one contract issued by us or our affiliate. Call our Service Center at the toll-free telephone number listed at the back of this prospectus if you need additional copies of financial reports, prospectuses, or annual and semiannual reports, or if you would like to receive one copy for each contract in future mailings.</div>

<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor--><!--Anchor--><!--Anchor-->LEGAL PROCEEDINGS</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><!--Anchor--><!--Anchor-->Like other life insurance companies, we from time to time are involved in legal proceedings of various kinds, including regulatory proceedings and individual and class action lawsuits. In some legal proceedings involving insurers, substantial damages have been sought and/or material settlement payments have been made. Although the outcome of any such proceedings cannot be predicted with certainty, we believe that, at the present time, there<!--Anchor--> are no pending <!--Anchor-->or threatened legal proceedings <!--Anchor-->to which we, the <!--Anchor-->Separate Account, or Allianz Life Financial is a party that are reasonably likely to materially affect the Separate Account, our ability to meet our obligations under the Contracts, or Allianz Life Financial's ability to perform its obligations.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Allianz Life of New York hereby relies on the exemption provided by Rule 12h-7 under the Securities Exchange Act of 1934 from the requirement to file reports pursuant to Section 15(d) of that Act.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<td style="FONT-SIZE: 11pt; FONT-FAMILY: Arial, sans-serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">INFORMATION ON ALLIANZ LIFE OF NEW YORK</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Allianz Life of New York is a stock life insurance company organized under the laws of the State of New York on September 21, 1982. Our address is 28 Liberty Street, 38th Floor, New York, NY 10005-1422. Before January 1, 2003, Allianz Life of New York was known as Preferred Life Insurance Company of New York. We are a subsidiary of Allianz Life Insurance Company of North America (Allianz Life), which is also a stock life insurance company. Allianz Life is a subsidiary of Allianz of America, Inc. (AZOA), a financial holding company. AZOA is a wholly owned subsidiary of Allianz Europe, B.V., which in turn is a wholly owned subsidiary of Allianz SE, which is registered in Munich, Germany. We currently offer variable annuities and registered index-linked annuities and are licensed to do direct business in six states, including New York and the District of Columbia.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Board currently consists of nine members, including our Chairman and Chief Executive Officer, our President, our Chief Financial Officer and Treasurer, our Vice President, Appointed Actuary, and five independent members.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Board holds regular semi-annual meetings, generally in April and November of each year, and holds special meetings or takes action by unanimous written consent as circumstances warrant. The Board has standing Executive, Audit and Evaluation, Conflict of Interest, and Finance Committees, each of which is described in further detail below. All directors attended 100% of the Board and committee meetings to which he or she was assigned during 2015. In 2015, the Board acted twice by unanimous written action.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The current members of our Board are as follows:</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Walter R. White<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif"><br>
</font> Chairman, Director, and Chief Executive Officer</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Walter R. White, age 59, joined Allianz Life in 2009, and became President and Chief Executive Officer of Allianz Life and Chairman and Chief Executive Officer of Allianz Life of New York on January 1, 2012. In this role Mr. White is responsible for leading and overseeing Allianz Life of New York and Allianz Life and providing strategic management and direction. Mr. White served as Chief Administrative Officer of Allianz Life from 2009 to 2011. Prior to joining Allianz Life, Mr. White held executive roles at Woodbury Financial Services from 2001 to 2009, serving as Chief Operating Officer from 2003 to 2007 and President from 2007 to 2009. Prior to that, Mr. White held senior management roles at Fortis from 1994 to 2001, serving as Senior Vice President of Fortis Investors from 1998 to 2001. Mr. White also held senior management roles at the MONY Group from 1988 to 1994, serving as the President of MONY Brokerage from 1991 to 1994<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">.</font></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Mr.&#160;White brings to the Board extensive financial services and brokerage experience as well as key strategic planning and leadership skills developed as the Chief Executive Officer of Allianz Life of New York and President of Woodbury Financial.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Thomas P. Burns<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif"><br>
</font> Director and President</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Thomas P. Burns, age 60, joined Allianz Life of New York's Board of Directors on April 3, 2007. Mr. Burns currently serves as President of Allianz Life of New York. He also serves as Senior Vice President, Chief Distribution Officer of Allianz Life. Mr. Burns is responsible for the development, design and implementation of Allianz Life of New York's and Allianz Life's sales and distribution strategies. Prior to joining Allianz Life, Mr. Burns served as Senior Vice President, Distribution of Securian from 2002 to 2006. Prior to joining Securian, Mr. Burns worked for Prudential for 24 years, from 1978 to 2002, in various managerial capacities.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Mr. Burns brings to the Board extensive knowledge of Allianz Life of New York 's sales and distribution strategies as well as over 35 years of experience in insurance and annuity products.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Ronald M. Clark<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif"><br>
</font> Director</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">Ronald M. Clark, age 68, joined </font>Allianz Life of New York<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">'s Board of Directors on March 31, 2013. Mr. Clark has over 40 years of experience in investments, having served as the President of Allianz Investment Corporation from 1980 to 1990, Chief Operating </font>Officer<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000"> of Allianz of America, Inc. ("AZOA") from 1990 to 2001, and Chief Investment Officer of AZOA from 2002 to 2011. </font>Mr. Clark retired as of December 31, 2011. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">Mr. Clark also serves on the Board of Directors of Allianz Life and serves as a director and Chair of the </font>Compensation<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000"> Committee of Manitex International, Inc. Manitex is a leading provider of engineered lifting solutions, including cranes, forklifts and reach stackers.</font></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Mr. Clark brings to the Board extensive experience in the financial services and insurance industries as well as extensive experience with investment matters. The Board also benefits from his perspective as a current and former director of other companies.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Kevin J. Doyle<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif"><br>
</font> Director</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Kevin J. Doyle, age 59, joined Allianz Life of New York's Board of Directors on January 20, 2014. In addition to serving on the Board of Directors of Allianz Life of NY, Mr. Doyle serves as a director of ACA Financial Guaranty Insurance Company where he is Chairman of the Corporate Governance Committee and a member of the Audit Committee. From 2000 through 2011, Mr. Doyle served as the Senior Vice President and General Counsel of Ambac Financial Group, Inc., where he was responsible for legal, regulatory and governance affairs of an SEC-registered, NYSE-listed holding company and 50 state-licensed financial guarantee insurance company, including securities laws compliance, insurance regulatory compliance, corporate governance, litigation management and management of legal aspects of a $700 billion financial guaranty insurance portfolio. Prior to that, Mr. Doyle served in various capacities for Ambac from 1991 to 2000, including Vice President and Assistant General Counsel from 1991 to 1995 and Managing Director and General Counsel of Specialized Finance from 1995 to 2000. Prior to joining Ambac, Mr. Doyle was an associate attorney at the law firm of LeBoeuf, Lamb, Greene &amp; MacRae from 1986 to 1991 and an associate attorney at the law firm of Peck, Shaffer &amp; Williams from 1983 to 1985. Mr. Doyle received his Bachelor of Arts degree from Yale University in 1979 and received his J.D. degree from the University of Washington in 1983.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Mr. Doyle brings to the Board extensive experience in the insurance and financial services industry, including extensive legal and regulatory experience for</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Martha Clark Goss<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif"><br>
</font> Director</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Martha<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; BACKGROUND-COLOR: #ffffff"> Clark Goss,</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000"> age 66</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; BACKGROUND-COLOR: #ffffff">, joined </font>Allianz Life of New York<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; BACKGROUND-COLOR: #ffffff">'s Board of Directors on October 15, 2005. Ms. Goss has more than 35 years of executive experience, primarily in finance and investments and risk management. Since 1992 she has served on a number of public and private company boards, has provided independent consulting services to various companies and serves as an instructor for executive leadership training for Deloitte. From 1999 to 2001, she served as the Chief Financial Officer of Capital Markets Company and from 1995 to 1999 was Chief Financial Officer and Vice President of Booz Allen Hamilton Holding Corporation (formerly Booz-Allen Hamilton Inc.). Previously, she served as Senior Vice President of Enterprise Integrated Risk Management and Control of Prudential Insurance Company of America from 1994 to 1995, President of Prudential Asset Management Company from 1992 to 1994, President of Prudential Power Funding from 1989 to 1992 and Corporate Treasurer of Prudential from 1983 to 1989. She joined Prudential in 1983 in the Corporate Finance Department after spending eight years at The Chase Manhattan Bank in credit and lending.</font></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; BACKGROUND-COLOR: #ffffff">Ms. Goss has served as a director of numerous corporations, including, currently, American Water Works Company, Inc., Neuberger Berman Mutual Funds and Berger Group Holdings, Inc. Previously, she served on the boards of Ocwen Financial Corp., Parsons Brinckerhoff Group Inc. (also known as Parsons Brinckerhoff, Inc.), Channel Reinsurance Ltd., Claire's Stores, Inc., Bank Leumi USA, Foster Wheeler Corporation, IBJ Whitehall Business Credit Corporation and Dexter Corporation and was on the Metropolitan Regional Board of The Chase Manhattan Bank.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; BACKGROUND-COLOR: #ffffff">Ms. Goss brings to the Board extensive experience in the financial services industry as well as expertise on corporate governance and enterprise risk management matters. </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">The Board also benefits from her perspective as a current and former director of other companies.</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Stephen R. Herbert<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif"><br>
</font> Director</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Steven R. Herbert, <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">age 66, </font>joined Allianz Life of New York's Board of Directors on April 11, 1997 and also serves as Chair of Allianz Life of New York's Audit and Evaluation Committee. Mr. Herbert is a partner of Locke &amp; Herbert LLP and Of Counsel with Sutherland Asbill &amp; Brennan LLP. Mr. Herbert counsels insurance and financial services companies and various insurance distributors, including life, annuity (fixed and variable) and health insurance providers, on state insurance regulatory law. Mr. Herbert focuses on regulatory matters, including sales and market conduct; product development; policy form preparation and filing; producer licensing and appointment; agent compensation; corporate governance; corporate transactions; business agreements; investments; claims and litigation; and reinsurance. Mr. Herbert also advises in matters relating to forming, licensing, regulating and operating life insurance and annuity companies and their products, with a heavy concentration on New York law.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Mr. Herbert has been in private practice for more than 30 years. He previously served as vice president, general counsel and secretary at a New York-based, 50-state licensed life insurance company. Mr. Herbert also was general counsel for a New York state life insurance company trade association and assistant general counsel for a New York life insurance and financial services company.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Mr. Herbert brings to the Board extensive legal and regulatory experience in the financial services industry, including extensive experience with New York laws and regulations.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Gary A. Smith<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif"><br>
</font> Director</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Gary A. Smith, age 56, joined Allianz Life of New York's Board of Directors on May 10, 2005. Mr. Smith is Co-Founder and Senior Partner of Ivy Planning Group (Ivy), a 22-year-old management consulting and training company specializing in strategy, diversity, leadership and change management. Ivy is recognized as one of the Top 50 minority-owned companies by DiversityBusiness.com and received the Working Woman magazine Entrepreneurial Excellence Award. Mr. Smith has over 25 years of strategy, technology, management consulting and executive coaching to large private sector and government organizations. He has successfully developed and implemented strategies, led teams, and served the needs of a wide spectrum of clients, experiencing best practices in management consulting in multiple venues.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Mr. Smith co-founded Ivy after a successful career managing sales, marketing, and technical organizations, including IBM, where he held Marketing and Technical positions; Amdahl Corporation, where he served as an Account Executive; Masstor Systems, where he served as Director of U.S. Operations; Comdisco Inc., where he served as Director of Federal Marketing; and Technical Software Services, where he served as Vice President and Chief Operating Officer.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Mr. Smith has served on the Boards of the Capital Chapter of Strategic Leadership Forum, The International Society for Strategic Management, the Strategic Planning Board and Lakewood Country Club. Mr. Smith received his Bachelor of Arts degree in political science from Yale University.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Mr. Smith brings to the Board extensive experience in management consulting and diversity initiatives. The Board also benefits from his perspective as a current and former director of other companies<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">.</font></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">William E. Gaumond<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif"><br>
</font> Director, Chief Financial Officer and Treasurer</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">William E. Gaumond, age 42, joined Allianz Life of New York in 2016 and currently serves as Director, Chief Financial Officer and Treasurer. Mr. Gaumond joined Allianz Life in 2004 and currently serves as Senior Vice President, Chief Financial Officer and Treasurer and as a member of the Board of Directors. Mr. Gaumond is responsible for all finance and risk management functions, with oversight of the controller, financial planning, treasury and corporate risk management areas. Prior to his current role, Mr. Gaumond spent 12 years in a number of finance and investment-related positions at Allianz Life, including Senior Vice President of the Asset Liability Management and Investment Risk Management department. During this time, Mr. Gaumond also served for two years as a senior member of the Group Planning and Controlling department for Allianz SE in Munich, Germany. Before joining Allianz Life, Mr. Gaumond worked for nine years at PricewaterhouseCoopers LLP. Mr. Gaumond received his Bachelor of Business Administration degree in accounting from the University of Notre Dame, where he graduated summa cum laude.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Mr. Gaumond brings to the Board extensive financial services, investment and insurance industry experience, including serving as Chief Financial Officer and Treasurer of Allianz Life of New York and Allianz Life.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Steven J. Thiel<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif"><br>
</font> Director and Vice President, Appointed Actuary</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Steven J. Thiel, age 46, joined Allianz Life of New York's Board of Directors on November 13, 2012 and serves as Vice President, Appointed Actuary of Allianz Life of New York. He also serves as Vice President, Actuarial Reporting and Analysis of Allianz Life. Mr. Thiel leads a team responsible for accurate and timely reporting of the actuarial balances for Allianz Life and Allianz Life of New York. He is accountable for analyzing aspects of the financial performance and delivering key projects that drive financial strength and stability</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Mr. Thiel joined Allianz Life in 2008. Prior to joining Allianz Life, Mr. Thiel was assistant vice president of reinsurance for Sun Life Financial, where he directed the financial reporting and analysis function of the reinsurance business group. Prior to that, he served as an actuary for Allstate Life Insurance Company, where he was accountable for providing financial analysis and oversight for activities involving a captive distribution channel. Mr. Thiel earned a Bachelor of Business Administration degree with double major in Actuarial Science and Risk Management and Insurance from the University of Wisconsin-Madison. He is a fellow in the Society of Actuaries and a member of the American Academy of Actuaries.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Mr. Thiel brings to the Board extensive experience in actuarial and financial performance matters.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 2pt">EXECUTIVE OFFICERS</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The current executive officers (other than Messrs. White, Gaumond and Burns, whose biographies are included above in the Board of Directors information) are as follows:</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Gretchen Cepek<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif"><br>
</font> Chief Legal Officer and Secretary</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Gretchen Cepek, age 48, joined Allianz Life in 2009, and currently serves as Senior Vice President, General Counsel and Secretary of Allianz Life She is also Chief Legal Officer and Secretary of Allianz Life of New York. Ms. Cepek is responsible for the legal and compliance departments as well as government relations and the special investigations unit. Prior to her current role, Ms. Cepek served as Vice President, <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">Legal Business Operations, Distribution and Product Development</font> of Allianz Life from 2009 to February 2012. Prior to joining Allianz Life, Ms. Cepek served as Counsel at Woodbury Financial Services from 2005 to 2009. Prior to joining Woodbury Financial, Ms. Cepek spent 13 years with the law firm of Querrey &amp; Harlow, Ltd. from 1992 to 2005, where she served as a law clerk, associate attorney and then as a shareholder. Ms. Cepek received her J.D. from Valparaiso University School of Law in 1993.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Cathy A. Mahone<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif"><br>
</font> Chief Administrative Officer</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Cathy Mahone, age 51, serves as the Senior Vice President, Chief Administrative Officer of Allianz Life and Chief Administrative Officer of Allianz Life of New York. Ms. Mahone is responsible for enterprise operations, information technology, and other strategic corporate initiatives. Previously, Ms. Mahone served as Senior Vice President, Enterprise Operations for Allianz Life, a position she held until assuming her current role in 2012.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Prior to joining Allianz Life, Ms. Mahone had approximately 20 years of financial services experience with Ameriprise Financial (formerly American Express), where she served in several leadership roles, including Vice President of the Operations Project Management Office. In her more than 20-year career with Ameriprise, Ms. Mahone held a variety of leadership positions in operations, distribution and marketing. Ms. Mahone earned a Bachelor of Arts degree in mass communications from the University of Minnesota and a Master's degree in business communications from the University of St. Thomas. Ms. Mahone also holds her FINRA Series 7 and 24 securities registrations.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Neil H. McKay<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif"><br>
</font> Chief Actuary</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Neil H. McKay, age 54, joined Allianz Life of New York and Allianz Life in 1999 and currently serves as Senior Vice President, Chief Actuary of Allianz Life, and Chief Actuary of Allianz Life of New York. Mr. McKay is responsible for all of the actuarial functions of Allianz Life of New York and Allianz Life, including the actuarial assumptions underlying their products and the rate setting associated with existing and new products. Prior to joining Allianz Life, Mr. McKay served in a variety of roles at LifeUSA Holding Company (prior to its merger with Allianz Life) from 1990 to 1999, culminating in the position of Vice President of Finance. Prior to that, Mr. McKay held the position of Assistant Product Actuary from 1984 to 1990 for Security Life of Denver, in Denver, Colorado.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Todd M. Hedtke<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif"><br>
</font> Chief Investment Officer</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Todd M. Hedtke, age 43, joined Allianz Life of New York in 2011 and currently serves as Chief Investment Officer. He also currently serves as Senior Vice President, Chief Investment Officer of Allianz Life. Mr. Hedtke leads the investment management, liquidity planning, hedging, and trading functions at Allianz Life. He is also a member of the global Allianz Investment Management Board, which services the Allianz Group insurance companies. Prior to his current role, Mr. Hedtke spent 15 years in a number of investment-related positions at Allianz Life and its affiliate Allianz Investment Management, LLC, including his prior role as Vice President, Investment Management from October 2010 until August 2015. Prior to joining Allianz Life, Mr. Hedtke held various finance and investment positions at Cargill, EBF &amp; Associates, and American Express. Mr. Hedtke earned his BA from Hamline University and MBA from the University of Minnesota Carlson School of Management. In addition to being a Chartered Financial Analyst, he holds designations as a financial risk manager and Fellow of the Life Management Institute.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Robert DeChellis<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif"><br>
</font> Field Vice President, Broker Dealer Distribution</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Robert DeChellis, age 49, joined Allianz Life in 2006 and currently serves as Field Senior Vice President, Broker Dealer Distribution of Allianz Life, and Field Vice President, Broker Dealer Distribution of Allianz Life of New York. He also serves as President of Allianz Life Financial Services, LLC. As President, Mr. DeChellis is responsible for sales and distribution of Allianz Life's and Allianz Life of New York's products, including variable annuities, fixed indexed annuities, and life insurance through broker-dealers and various financial institutions. In this role, he is also responsible for expanding the company's wholesale annuity distribution network. Prior to joining Allianz Life, Mr. DeChellis served as Executive Vice President of the Retail Annuities Division of Travelers Life &amp; Annuity. Prior to that, Mr. DeChellis served as Executive Vice President and national sales manager for Jackson National Life Distributors, Inc. Before joining the annuity industry, Mr. DeChellis spent 13 years in asset management, holding positions with firms including Goldman Sachs and Lord Abbett.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 2pt">CORPORATE GOVERNANCE</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Committees of the Board</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Executive Committee of the Board ("Executive Committee") is currently composed of Messrs.&#160;White (Chair), Gaumond and Herbert. The function of the Executive Committee is to exercise the authority of the Board between meetings of the Board, with the exceptions set forth in Allianz Life of New York's By-Laws. The Executive Committee <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">did not meet</font> in 2015.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">The Audit and Evaluation Committee of the Board is currently composed of Messrs. Herbert (Chair), Clark and Smith. The Audit and Evaluation Committee is responsible for </font>recommending the selection of independent certified public accountants, reviewing Allianz Life of New York's financial condition and the scope and results of the independent audit and any internal audit, nominating candidates for director, evaluating the performance of principal officers deemed by the Audit and Evaluation Committee to be principal officers of Allianz Life of New York and recommending to the Board of Directors the selection and compensation of such principal officers and any plan to issue options to its officers and employees for the purchase of shares of stock.<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000"> The Audit and Evaluation Committee met </font>twice in 2015, and acted once by written action<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000">.</font></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Conflict of Interest Committee of the Board is currently composed of Messrs. White (Chair), Herbert and Ms. Cepek. The Conflict of Interest Committee assists Allianz Life of New York in addressing ethics and conflict of interest matters. The Conflict of Interest Committee met one time in 2015.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Finance Committee of the Board is currently composed of Messrs. Hedtke, (Chair), Clark and Thiel. The Finance Committee is responsible for exercising all the powers of the Board of Directors with respect to the investments of the funds of Allianz Life of New York. The Finance Committee met twice in 2015, and acted three times by written action.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Independence of Certain Directors</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Allianz Life of New York is not subject to the independence standards of the New York Stock Exchange or any other national securities exchange, but is subject to the independence standards set out in New York Insurance laws and the Model Audit Rule. Applying the independence standards of the Model Audit Rule to the current members of Allianz Life of New York's Board of Directors, the Board of Directors has determined that Ms. Goss and Messrs. Clark, Doyle, Herbert and Smith are "independent" under those standards.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Code of Ethics</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">All of our officers and employees, including our Chief Executive Officer, President, Chief Financial Officer and Controller, are subject to Allianz Life of New York's Code of Ethics.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Section&#160;16(a) Beneficial Ownership Reporting Compliance</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Not applicable.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left"><u>Compensation Discussion and Analysis</u></div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">In this section, we provide an overview of the goals and principal components of our executive compensation program and describe how we determine the compensation of our "Named Executive Officers" or "NEOs." Allianz Life of New York is a subsidiary of Allianz Life. Each of our NEOs is employed by both Allianz Life of New York and Allianz Life.&#160; Our NEOs are compensated directly by Allianz Life. Allianz Life charges Allianz Life of New York an allocated percentage of each of our NEO's compensation. The allocated percentages of the New York principal officers is reviewed and recommended by our Audit and Evaluation Committee. The "NY Principal Officers" are the Chief Executive Officer, President, Chief Legal Officer and Secretary, Chief Administrative Officer and Chief Financial Officer and Treasurer.<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #ff0000">&#160;</font>The allocated percentage of compensation charged to Allianz Life of New York for our NEO's during the year ended December 31, 2015 is set forth below and hereafter referred to as the "Allocation Percentages." For 2015, our NEOs were:</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allocation Percentages</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Walter White</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Chairman and Chief Executive Officer</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">4.00%</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Giulio Terzariol</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Chief Financial Officer and Treasurer</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">2.50%</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Thomas Burns</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">President</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">8.00%</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Neil McKay</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Chief Actuary</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">8.00%</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Robert DeChellis</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Field Vice President, Broker Dealer Distribution</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">14.50%</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-TOP: 6pt">The details of each NEO's compensation may be found in the Summary Compensation Table and other compensation tables included in this Executive Compensation section. Mr. Terzariol resigned his position as Chief Financial Officer and Treasurer effective December 31, 2015 to take on the role of Head of Group Planning and Controlling with Allianz SE. He was replaced effective January 1, 2016 by Mr. Gaumond who was promoted from Senior Vice President, ALM &amp; Investment Risk Management.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left"><u>Executive Summary</u></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Our NEOs are also officers of Allianz Life, our parent company, and are not paid additional compensation for serving as executive officers of Allianz Life of New York. Instead, our NEOs are paid directly by Allianz Life with a certain portion of their Allianz Life compensation allocated to Allianz Life of New York, which is reviewed and approved by our Audit and Evaluation Committee with respect to the NY Principal Officers. Therefore, our parent company, Allianz Life, establishes our NEOs compensation programs with our Audit and Evaluation Committee reviewing and approving the actual compensation allocated to Allianz Life of New York with respect to our NY Principal Officers. Allianz Life's compensation programs are intended to align our NEOs' interests with those of our ultimate stockholder. Our indirect stockholder is Allianz SE, the ultimate parent company of Allianz Life and Allianz Life of New York. Allianz Life's compensation programs are designed to reward performance that meets or exceeds the goals established by the Compensation Committee, a management committee of Allianz Life, which is an indirect subsidiary of Allianz SE. Allianz Life is tasked with establishing the executive compensation philosophy. In line with Allianz Life's compensation philosophy described below, the total compensation received by our NEOs will vary based on individual and corporate performance in light of annual and long-term performance goals. Our NEOs' total compensation is composed of a mix of annual base salary, annual cash awards based on corporate objectives and executive performance factors and long-term equity incentive awards in the form of restricted stock units of the equity securities of Allianz SE.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left"><u>Compensation Philosophy and Strategy</u></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-STYLE: italic; TEXT-ALIGN: left">Overview</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The overriding goal of Allianz Life's executive compensation programs is to attract, retain and motivate top-performing executive officers who will dedicate themselves to long-term financial and operational success. To this end, Allianz Life has structured the executive compensation programs to foster a pay-for-performance management culture by:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">providing total compensation opportunities that are competitive with the levels of total compensation available at the large diversified financial services companies with which Allianz Life most directly competes in the marketplace;</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">setting performance metrics and objectives for variable compensation arrangements that reward executives for attaining both annual targets and medium-range and long-term business objectives, thereby providing individual executives with the opportunity to earn above-average compensation by achieving above-average results;</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">establishing equity-based arrangements that align executives' financial interests with those of Allianz SE by ensuring executives have a material financial stake in the equity value of Allianz SE and the business success of its affiliates; and</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">structuring compensation packages and outcomes to foster internal pay equity.</td>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-STYLE: italic; TEXT-ALIGN: left">&#160;Compensation Components</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">To support this pay-for-performance strategy, Allianz Life's total compensation program provides a mix of compensation components that bases the majority of each executive's compensation on their success and on an assessment of each executive's overall contribution to that success.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Compensation&#160;Element</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Description</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Objective</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Base Salary</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Fixed rate of pay that compensates employees for fulfilling their basic job responsibilities. For NEOs, increases are generally provided in the case of a significant increase in responsibilities or a significant discrepancy versus the market.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Attract&#160;and&#160;retain high-caliber leadership.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Annual&#160;Incentive Plan</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Incentive compensation that promotes and rewards the achievement of annual performance objectives through awards under the Allianz Life Annual Incentive Plan ("AIP"), (formerly known as AZOA Services Corporation Annual Incentive Plan).</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 11.5pt; TEXT-INDENT: -9pt">&#9642;&#160; Link compensation to annual performance results.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 11.5pt; TEXT-INDENT: -9pt">&#9642;&#160; Attract and motivate high-caliber leadership.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 11.5pt; TEXT-INDENT: -9pt">&#9642;&#160; Align the interests of NEOs and our stockholder.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Variable Compensation Plan</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Variable compensation that promotes and rewards the achievement of annual performance objectives through awards under the Variable Compensation Immediate and Deferred Plan.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 11.5pt; TEXT-INDENT: -9pt">&#9642;&#160; Link compensation to annual performance results.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 11.5pt; TEXT-INDENT: -9pt">&#9642;&#160; Motivate and retain high-caliber leadership with long-term vesting.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Long-Term Incentives</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Incentive compensation that promotes and rewards the achievement of long-term performance objectives through awards under the Allianz Life Long-Term Performance Unit Plan ("ALTPUP"), (formerly known as AZOA Services Corporation Long-Term Performance Unit Plan).</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">In the case of Allianz Life's Chief Executive Officer, Walter White, he is eligible to receive annual awards through the Allianz SE Mid-Term Bonus Plan instead of the ALTPUP.</div>
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<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; WIDTH: 24.68%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 11.5pt; TEXT-INDENT: -9pt">&#9642;&#160; Link compensation to annual and multi-year performance results.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 11.5pt; TEXT-INDENT: -9pt">&#9642;&#160; Motivate and retain high-caliber leadership with multi-year vesting.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 11.5pt; TEXT-INDENT: -9pt">&#9642;&#160; Align the interests of NEOs and our stockholder.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Performance-Based Equity Incentives</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Incentive compensation through restricted stock unit awards made under the Allianz Equity Incentive Plan ("AEI") that promotes and rewards the achievement of&#160; senior executive officers. The AEI replaced the Allianz Group Equity Incentives Plan 2007 ("GEI").</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 11.5pt; TEXT-INDENT: -9pt">&#9642;&#160; Retain high-caliber leadership with multi-year vesting.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 11.5pt; TEXT-INDENT: -9pt">&#9642;&#160; Align the interests of NEOs and our stockholder.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Severance Arrangements</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Severance payments to employees, including NEOs, under certain company-initiated termination events.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Compensate employees for situations where the employee's position is eliminated as a result of outsourcing, merger or other corporate transaction.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Perquisites-Benefits</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Perquisites provided to our NEOs include employer matching contributions to the NEOs' 401(k) plans and may also include the payment of life insurance premiums, relocation reimbursements, reimbursements for financial planning and tax preparation services and reimbursements of spousal travel expenses.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Provide market competitive total compensation package.</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-TOP: 6pt">In addition, Allianz Life offers all employees, including our NEOs, broad-based benefits, including comprehensive medical, dental and vision insurance, group term life insurance and participation in a 401(k) plan.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left"><u>How Compensation Decisions Are Made</u></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-STYLE: italic; TEXT-ALIGN: left">Role of the Board of Directors and Compensation Committee</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The framework governing the executive compensation policies for Allianz Life, which directly compensates the executives of Allianz Life of New York, except as such policies relate to the compensation for the Chief Executive Officer, is set through the Compensation Committee of Allianz Life. Decisions affecting the compensation of the Chief Executive Officer are outside the scope of the Allianz Life Compensation Committee. Any such decisions are made by Allianz SE, subject to review by the Nomination, Evaluation and Compensation Committee of the Allianz Life Board of Directors (the "NEC Committee"), and final approval by Allianz Life's Board. With respect to the compensation of other "principal officers" selected by the Board for purposes of the duties of the NEC Committee under Minn. Stat. &#167; 60D.20, subd. 3(d), the Compensation Committee's decision are similarly subject to review by the NEC Committee and final approval by Allianz Life's Board. The "principal officers" include the Chief Executive Officer, Chief Financial Officer and General Counsel. Further, with respect to the compensation paid by Allianz Life that is allocated to the NY Principal Officers, the Audit and Evaluation Committee of Allianz Life of New York reviews and approves the Allocation Percentages. Allianz Life's Board has delegated the following responsibilities to the Compensation Committee:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">In general, establish the compensation philosophy and strategy of Allianz Life and oversee the development and implementation of compensation, benefit and perquisite programs for corporate executives consistent with the principles of ensuring that leadership is compensated effectively in a manner consistent with the stated compensation strategy, internal equity considerations, competitive practices, shareholder interests, and the requirements of any applicable regulatory bodies in order to attract and retain high-quality leadership.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Review and approve the establishment of, or material modification to, any executive incentive compensation plans or programs for Allianz Life.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Review and approve any special benefits, perquisites or compensation contracts in effect for, or offered to, any prospective, current or former Allianz Life employee, regardless of the employee's level or assignment within Allianz Life. Such benefits and perquisites are those that are unusual or different than the benefits offered to all similarly-situated employees.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Review and approve any employment agreements or any severance, change in control or similar termination arrangements or agreements proposed to be made with any prospective, current or former employee of Allianz Life. This does not include special termination agreements, separation or settlement agreements negotiated in connection with and at the time of termination of an executive's employment.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Review and approve compensation decisions.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Oversee Allianz Life's compliance with regulations with respect to compensation matters and ensure adherence to the set principles and standards of the Allianz Group Rewards Framework and German regulations.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Compensation Committee will at all times be composed of at least five members who are appointed by the full Board of Directors of Allianz Life. The Compensation Committee currently consists of the following members: the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the General Counsel, and the Chief Human Resources Officer. The Compensation Committee also utilizes internal personnel to provide advice to the Compensation Committee regarding market trends in compensation policies at competing companies and on a more macro level.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Following its review and decision, the Compensation Committee produces and submits a report on executive compensation to Allianz Life's Board of Directors at its request. With respect to the compensation of "principal officers" selected by Allianz Life's Board for purposes of the duties of the NEC Committee under Minnesota Statutes &#167; 60D.20, subd. 3(d), the Compensation Committee produces and submits a report on executive compensation proposed for the designated "principal officers", to the NEC Committee for its review and recommendation to Allianz Life's Board for final approval. Once Allianz Life's Board approves the compensation for executives, with respect to the compensation of Allianz Life executives who also serve as NY Principal Officers, the Audit and Evaluation Committee of Allianz Life of New York reviews and approves the Allocation Percentages of the compensation to be allocated to Allianz Life of New York.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-STYLE: italic; TEXT-ALIGN: left">Role of the Chief Executive Officer</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Allianz Life of New York's Chief Executive Officer assists the Compensation Committee in its review of the total compensation of all the NEOs except himself. He provides the Compensation Committee with his assessment of their performances relative to the corporate and individual goals and other expectations set for them for the preceding year. He then provides his recommendations for each NEO's total compensation and the appropriate goals for each in the year to come. However, the Compensation Committee is not bound by his recommendations.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-STYLE: italic; TEXT-ALIGN: left">Role of Allianz Life's Human Resources</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Allianz Life's Human Resources supports the Compensation Committee on executive compensation matters by being responsible for many of the organizational and administrative tasks that underlie the compensation review and determination process and making presentations on various topics. Allianz Life's Human Resources' efforts include, among other things:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">evaluating the compensation data from industry groups, national executive pay surveys and other sources for the NEOs and other executive officers as appropriate;</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">gathering and correlating performance ratings and reviews for individual executive officers, including the NEOs;</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">reviewing executive compensation recommendations against appropriate market data and for internal consistency and equity; and</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">reporting to, and answering requests for, information from the Compensation Committee.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Allianz Life's Human Resources officers also coordinate and share information with their counterparts at Allianz SE.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left"><u>Use of Competitive Compensation Data</u></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Because Allianz Life competes most directly for executive talent with other large diversified financial services companies, they regard it as essential to regularly review the competitiveness of the total compensation programs for executives to ensure that Allianz Life provides compensation opportunities that compare favorably with the levels of total compensation offered to similarly situated executives by other companies that participate in the compensation surveys with which it participates. Allianz Life relies primarily on external market surveys of corporate compensation and benefits published by various national compensation consulting firms, especially salary surveys focusing on insurance companies. In addition, other factors taken into account include the average revenues and number of employees of companies that participate in such surveys.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">All these information sources are employed to measure and compare actual pay levels not only on an aggregate, total compensation basis but by breaking down the total compensation program component by component to review and compare specific compensation elements as well as the particular mixes of fixed versus variable, short-term versus long-term and cash versus equity-based compensation at the surveyed companies. This information, as collected and reviewed by Allianz Life's Human Resources, is submitted to the Compensation Committee for review and discussion.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-STYLE: italic; TEXT-ALIGN: left">Internal Pay Equity Analysis</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Allianz Life's compensation programs are designed with the goal of providing compensation to our NEOs that is fair, reasonable, and competitive. To achieve this goal, Allianz Life believes it is important to compare compensation paid to each NEO not only with compensation paid by the surveyed companies, as discussed above, but also with compensation paid to each of our other NEOs. Such an internal comparison is important to ensure that compensation is equitable among our NEOs.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left"><u>Components of Total Compensation For Our NEOs</u></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Allianz Life provides total compensation to our NEOs that consists of several components. These components include the three components of the total compensation program (i.e., base salary, annual and multi-year incentives and equity) as well as: (i)&#160;retirement, health and other benefit programs, (ii)&#160;severance benefits and (iii)&#160;perquisites.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-STYLE: italic; TEXT-ALIGN: left">Base Salary</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Allianz Life's philosophy is to make base salary a relatively small portion of the overall compensation package for our NEOs, which it believes is common in the industry in which we operate. The amount of the base salary awarded to NEOs is based on the position held, the NEO's career experience, the scope of the position's responsibilities and the NEO's own performance, all of which are reviewed with the aid of market survey data. Using this data, Allianz Life maintains a 50th percentile pricing philosophy, comparing base salaries against the median for comparable salaries at surveyed companies, unless exceptional conditions require otherwise.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">NEO compensation is determined based on the achievement of specific corporate and individual performance objectives. In determining the amount of each NEO's base salary, the Compensation Committee considers the scope of their responsibilities, taking into account available competitive market compensation paid by other companies for similar positions. With respect to the base salary of our Chief Executive Officer, the Chairman of the Board considered the Chief Executive Officer's experience, performance, and contribution to overall corporate performance when determining his base salary for 2015 for recommendation to the NEC Committee. Base salaries for our other NEOs for 2015 were also set by the Compensation Committee based upon each NEO's individual experience and contribution to the overall performance of Allianz Life, and subject to Allianz SE Compensation Committee reviews and, with respect to the base salaries of "principal officers" selected by Allianz Life's Board of Directors for purposes of the duties of the NEC Committee under Minnesota Statutes &#167; 60D.20, subd. 3(d), subject to NEC Committee review and recommendation to Allianz Life's Board for final approval. Following Allianz Life's Board approval of the base salary for executives, with respect to the compensation of Allianz Life executives who also serve as NY Principal Officers, the Audit and Evaluation Committee of Allianz Life of New York reviews and approves the percentage of base salary to be allocated to Allianz Life of New York.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-STYLE: italic; TEXT-ALIGN: left">AIP</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Allianz Life offers annual cash bonuses to certain executive officers under the AIP. The AIP is designed to improve performance and profitability by motivating employees to accomplish organizational objectives and financial goals. Bonus awards that may be paid pursuant to the AIP are within the sole discretion of the Compensation Committee and are intended to:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">reward the performance of participants who have made significant contributions to the achievement of annual goals and objectives;</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">provide an incentive that will encourage future superior individual performance; and</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">encourage the retention of employees who have demonstrated exceptional performance and/or are anticipated to significantly contribute to the long-term success of Allianz Life.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Over the course of the year, the Compensation Committee developed a specific amount of cash awards to be made pursuant to the AIP to executive officers, including our NEOs, for the 2015 operating year. The amount determined to be available for such awards was at the discretion of the Compensation Committee and was dependent upon many factors as outlined previously, including, but not limited to, current financial performance and contributions of our NEOs in achieving performance objectives, and with respect to the awards to the "principal officers" selected by Allianz Life's Board for purposes of the duties of the NEC Committee under Minnesota Statutes &#167; 60D.20, subd. 3(d), subject to NEC Committee review and recommendation to Allianz Life's Board for final approval. Following Board approval of the AIP for executives, with respect to the compensation of Allianz Life executives who also serve as NY Principal Officers, the Audit and Evaluation Committee of Allianz Life of New York reviews and approves the percentage of AIP to be allocated to Allianz Life of New York.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-STYLE: italic; TEXT-ALIGN: left">Variable Compensation</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Our Field Vice President, Broker Dealer Distribution participates in Variable Compensation. The purpose of Variable Compensation is to reward Allianz Life employees that have a significant influence over the sales objectives of the business for their contributions. Sales objectives are defined along with payout targets for various levels of performance against those objectives. The total payout is calculated based on the full year performance of the defined sales objectives. There are two components to this payment, a portion that is paid on March 31st following the calendar year for the sales objectives and a portion that is subject to mandatory deferral.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-STYLE: italic; TEXT-ALIGN: left">Long-Term Incentives</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The purpose of the ALTPUP is to advance the interests of Allianz Life, including Allianz Life of New York, and our indirect stockholder. The ALTPUP seeks to accomplish this purpose by providing an incentive in addition to current compensation to certain individuals within designated classes of employees of Allianz Life who contribute significantly to their company's long-term performance. Such incentive shall be in the form of Long-Term Performance Units ("ALTPUP Units"), which are contingent awards, subject to the terms, conditions and restrictions described in the ALTPUP and the Award Agreement under which such awards are made, by which participants in the ALTPUP may become entitled to receive cash upon the redemption of the ALTPUP Units on the valuation date. The award of ALTPUP Units is discretionary and any payments from the ALTPUP are intended to:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">reward the performance of participants who have made significant contributions to the achievement of their company's annual goals and objectives,</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">&#183;</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">provide an incentive that will encourage future superior individual performance, and</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">&#183;</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">encourage the retention of employees who have demonstrated exceptional performance and/or are anticipated to significantly contribute to the long-term success of their company.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Compensation Committee (and, with respect to those NEOs that are "principal officers" for purposes of the NEC Committee's duties, the NEC Committee with final approval of Allianz Life's Board of Directors, followed by with respect to the Allocation Percentages of those Allianz Life executives who also serve as NY Principal Officers, the Audit and Evaluation Committee of Allianz Life of New York) reviewed the performance of our NEOs following the end of our 2015 fiscal year relative to the long-term equity incentive and retention awards program the Compensation Committee administers.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Targeted levels of bonus awards made pursuant to the ALTPUP for our NEOs were established by the Compensation Committee (or, in the case of those NEOs that are "principal officers" for purposes of the NEC Committee's duties, the NEC Committee with final approval of Allianz Life's Board followed by with respect to the Allocation Percentages of those Allianz Life executives who also serve as NY Principal Officers, the Audit and Evaluation Committee of Allianz Life of New York) based on a number of factors related to the performance of Allianz Life and Allianz Life of New York, and the performance of the NEO. Maximum bonus awards made to our NEOs pursuant to the ALTPUP are set to two times the target amount for each NEO. See footnote (2) to the Summary Compensation Table for the specific amounts awarded to each NEO for the year ended December 31, 2015.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Our Chief Executive Officer receives cash awards pursuant to the terms of the Allianz SE Mid-Term Bonus Plan instead of the ALTPUP. The Allianz SE Mid-Term Bonus Plan covers business performance over a non-rolling three-year period. The minimum payout is zero and the maximum payout is 165% of the target amount set by the Compensation Committee. Target award amounts generally focus on performance of Allianz Life and Allianz Life of New York, including the growth and operating profit and achievement of goals set by Allianz Life. At the end of each three-year period, the performance of Allianz Life is assessed, along with relevant comparable company comparisons. Proposed incentive awards are endorsed by the Allianz SE Board of Management and approved by the respective Compensation Committee and with respect to the "principal officers" for purposes of the NEC Committee's duties, by the NEC Committee for final approval by Allianz Life's Board. Following Allianz Life's Board approval of the incentive awards for executives, with respect to the compensation of Allianz Life executives who also serve as NY Principal Officers, the Audit and Evaluation Committee of Allianz Life of New York reviews and approves the percentage of the incentive award to be allocated to Allianz Life of New York.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-STYLE: italic; TEXT-ALIGN: left">AEI</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The AEI is (a) one part of the variable compensation element for senior executives and provided under the Allianz Sustained Performance Plan ("ASPP") or (b) offered by Allianz Life to selected senior employees as an additional part of their variable compensation on a case to case basis. The AEI is granted in the form of restricted stock units of Allianz SE ("RSUs").</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-STYLE: italic; TEXT-ALIGN: left">Benefit Perquisites</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Allianz Life provides our NEOs with certain limited perquisites. All of our employees, including our NEOs, may participate in the qualified 401(k) plan. Allianz Life and Allianz Life of New York generally provide our executive officers, including our NEOs, with a matching contribution up to $19,875 annually. In addition Allianz Life and Allianz Life of New York provide excess liability insurance coverage to all of our NEOs and provide financial planning and tax preparation services, relocation reimbursements and reimbursements of spousal travel expenses to certain of our NEOs. The incremental costs of perquisites for the NEOs during 2015 are included in the column entitled "All Other Compensation" in the Summary Compensation Table included in this section.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-STYLE: italic; TEXT-ALIGN: left">Severance Arrangements</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Allianz Life has entered into an Executive Severance Agreement with our Chairman and Chief Executive Officer, Walter White, which is described in the "Allianz Life Executive Severance Agreement" discussion later in this section. We have not entered into any other specific severance agreements with any of our NEOs.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The remainder of our NEOs are subject to severance payments under either the Executive Severance Plan or the Severance Allowance Plan. If an NEO is eligible to receive severance payments pursuant to the Executive Severance Plan, he or she is not eligible to receive severance payments under the Severance Allowance Plan.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Other than the Executive Severance Plan and the Severance Allowance Plan, which are described later in this section, our NEOs (except for Walter White) are not eligible for severance payments. Certain of our executive officers receive offer letters which set forth the terms relating to base salary, sign-on incentives and equity compensation. However, Allianz Life does not view these offer letters as employment agreements as each offer letter states that employment with Allianz Life is "at will."</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left"><u>Other Compensation Policies</u></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-STYLE: italic; TEXT-ALIGN: left">Tax and Accounting Implications</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif"><u>Stock-Based Compensation.</u></font> Stock-based compensation, including Allianz SE stock appreciation rights (SARs) and Allianz SE restricted stock units (RSUs) granted pursuant to the AEI, are accounted for in accordance with the requirements of Financial Accounting Standards Board Accounting Standards Codification ("FASB ASC") Topic 718. Under the FASB ASC Topic 718, the fair value of the SARs is estimated at the date of grant using the Black-Scholes-Merton option-pricing model, which requires the use of certain subjective assumptions. The most significant of these assumptions are the estimates on the expected term, volatility and forfeiture rates of the awards. Forfeitures are not estimated due to the limited history but are reversed in the period in which forfeiture occurs. As required under the accounting rules, valuation assumptions are reviewed at each grant date and, as a result, are likely to change the valuation assumptions used to value stock-based awards granted in future periods. The fair value of the RSUs at grant is the arithmetic average of the closing prices of an Allianz SE share in the electronic cash market trading system Xetra (or any successor system) on that day and the nine immediately preceding trading days, less the present value of dividends expected to be paid on one Allianz SE share over the vesting period.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif"><u>Deductibility of Executive Compensation.</u></font> When analyzing both total compensation and individual elements of compensation paid to our NEOs, the Compensation Committee considers the income tax consequences of compensation policies and procedures. In particular, the Compensation Committee considers Section 162(m) of the Internal Revenue Code, which limits the deductibility of non-performance-based compensation paid to certain of the NEOs to $1,000,000 per affected NEO. The Compensation Committee intends to balance its objective of providing compensation to our NEOs that is fair, reasonable, and competitive with the capability to take an immediate compensation expense deduction. The Board of Directors believes that the best interests of Allianz Life, Allianz Life of New York and their stockholder are served by executive compensation programs that encourage and promote their principal compensation philosophy, enhancement of stockholder value, and permit the Compensation Committee to exercise discretion in the design and implementation of compensation packages. Accordingly, Allianz Life and Allianz Life of New York may from time to time pay compensation to its NEOs that may not be fully tax deductible, including certain bonuses and RSUs. Units granted under the ALTPUP are intended to qualify as performance-based compensation under Section 162(m) and are generally fully deductible. Allianz Life will continue to review its executive compensation plans periodically to determine what changes, if any, should be made as a result of the limitation on deductibility.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left"><u>Summary Compensation Table</u></div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The following table sets forth the compensation paid by Allianz Life during the year ended December&#160;31, 2015 to our principal executive officer, our principal financial officer and each of the three highest paid NEOs who are involved in the management and operations of Allianz Life of New York, that was charged to Allianz Life of New York, based on the Allocation Percentage assigned to each NEO. The executive compensation information in this prospectus is shown for a one-year period, in accordance with Regulation S-K Item 402, Instruction 1 to Item 402(c).</div>

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<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
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<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Bonus</div>
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<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Stock</div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Awards</div>
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<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Option Awards</div>
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<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Non-Equity Incentive Plan Compensation</div>
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<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Change in Pension Value and</div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Nonqualified Deferred Compensation Earnings</div>
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<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">All Other Compensation</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
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<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(a)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(b)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(c)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(d)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(e)<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(1)</sup></div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(f)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(g)<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(2)</sup></div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(h)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(i)<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(5)</sup></div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(j)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom" rowspan="3">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Walter White</div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Chairman and Chief Executive Officer</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 20%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">2015</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">33,760</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">47,525</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">83,050</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">859</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">165,193</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 20%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom" rowspan="3">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Giulio Terzariol<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(4)</sup></div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Chief Financial Officer and Treasurer</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
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<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 20%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">2015</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">12,875</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">11,875</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">19,600</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">738</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">45,088</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 20%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom" rowspan="3">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Thomas Burns</div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">President</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 20%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">2015</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">47,200</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">34,960</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">63,280</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">2,770</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">148,210</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 20%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom" rowspan="3">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Neil McKay</div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Chief Actuary</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 20%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">2015</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">39,600</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">33,280</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">57,040</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">2,749</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">132,669</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 20%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom" rowspan="3">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Robert DeChellis</div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Field Vice President, Broker Dealer Distribution</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 20%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">2015</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">58,000</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">12,486</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">93,364</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">2,975</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">166,826</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 20%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>

<div style="MARGIN-BOTTOM: 1pt; TEXT-ALIGN: left; MARGIN-TOP: 6pt">
<table id="z9d5c5fc0c773495e936dc2c7e59c2ce9" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(1)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Represents the grant date fair value of the RSUs issued pursuant to the AEI. The RSUs vest over a four-year period. The RSUs issued in 2016 for the 2015 performance year have a March 2020 exercise date. The grant price of the RSUs was the arithmetic average of the closing prices of an Allianz SE share in the electronic cash market trading system Xetra (or any successor system) on that day and the nine immediately preceding trading days, less the present value of dividends expected to be paid on one Allianz SE share over the vesting period. These numbers show the amount realized for financial reporting purposes as calculated in accordance with the FASB ASC Topic 718. Under FASB ASC Topic 718, the grant date fair value is calculated using the closing market price of the common stock of Allianz SE on the date of grant, which is then recognized over the requisite service period of the award.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 6pt; TEXT-ALIGN: left">
<table id="z47a4cdeeb4584374b204d577e991f894" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(2)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Includes the following payments and grants made pursuant to the AIP, ALTPUP and the Variable Compensation Immediate and Deferred Plan.</td>
</tr>
</table>
</div>

<div id="DSPFPageBreakArea" style="MARGIN-BOTTOM: 10pt; CLEAR: both; MARGIN-TOP: 10pt">
<div id="DSPFPageFooter" style="WIDTH: 100%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
</div>

<div id="DSPFPageNumberArea" style="TEXT-ALIGN: center"><font id="DSPFPageNumber" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', 'sans-serif'; FONT-WEIGHT: bold; FONT-STYLE: normal">63</font></div>

<div id="DSPFPageBreak" style="PAGE-BREAK-AFTER: always">
<hr style="BORDER-LEFT-WIDTH: 0px; HEIGHT: 2px; BORDER-RIGHT-WIDTH: 0px; WIDTH: 100%; BORDER-BOTTOM-WIDTH: 0px; COLOR: #000000; CLEAR: both; MARGIN: 4px 0px; BORDER-TOP-WIDTH: 0px; BACKGROUND-COLOR: #000000" noshade="noshade">
</div>

<div id="DSPFPageHeader"></div>
</div>

<div style="MARGIN-BOTTOM: 6pt"><br>
</div>

<table id="z5741abfaa61249108832543073c5b668" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 80%" cellspacing="0" cellpadding="0">
<tr>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Name</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Year</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Payments made pursuant to the AIP</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Grants made pursuant to the ALTPUP</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Payments made pursuant to the Variable Compensation Immediate &amp; Deferred Plan</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 32%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Walter White</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 32%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">2015</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">41,525</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">41,525</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">0</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 32%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Giulio Terzariol</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 32%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">2015</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">11,875</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">7,725</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">0</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 32%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Thomas Burns</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 32%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">2015</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">34,960</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">28,320</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">0</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 32%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Neil McKay</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 32%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">2015</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">33,280</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">23,760</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">0</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 32%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Robert DeChellis</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 32%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">2015</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">28,094</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">20,300</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">44,971</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>

<div style="MARGIN-BOTTOM: 1pt; TEXT-ALIGN: left; MARGIN-TOP: 6pt">
<table id="z0ce48a7dc2e948158476af064c4df133" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(3)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Walter White, as Chief Executive Officer, participates in the global Allianz SE Mid-Term Bonus Program rather than the ALTPUP.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 1pt; TEXT-ALIGN: left">
<table id="zaa052c1b4bbd4b7ca8b0ce9a84bd0646" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(4)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Mr. Terzariol also participates in certain plans maintained by Allianz SE that are not part of Allianz Life's compensation program.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 6pt; TEXT-ALIGN: left">
<table id="z6e19c2928d35480888423af227aed2ed" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(5)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">The following table provides additional details regarding compensation found in the "All Other Compensation" column.</td>
</tr>
</table>
</div>

<table id="z12c316fabfc2495387ef3bd0d7e4f506" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 80%" cellspacing="0" cellpadding="0">
<tr>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; BACKGROUND-COLOR: #ffffff" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Name</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Year</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Spousal Travel<font style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif"><br>
</font><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(6)</sup></div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Relocation<font style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif"><br>
</font><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(7)</sup></div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Tax Services<font style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif"><br>
</font><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(8)</sup></div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Life Insurance Premiums</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Employer Match to 401(k) Plan</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">ASAAP Cont-ribution<font style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif"><br>
</font><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(9)</sup></div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">ESPP Imputed Income<font style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif"><br>
</font><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(10)</sup></div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Total</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Walter White</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">2015</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">18</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">--</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">--</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">46</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">795</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">--</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">--</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">859</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Giulio Terzariol</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">2015</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">--</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">59</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">156</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">23</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">450</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">50</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">--</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">738</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Thomas Burns</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">2015</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">1,132</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">--</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">--</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">47</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">1,590</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">--</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">--</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">2,770</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Neil McKay</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">2015</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">662</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">--</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">--</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">73</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">1,590</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">--</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">424</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">2,749</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Robert DeChellis</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">2015</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">--</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">--</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">--</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">75</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">2,610</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">290</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">--</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">2,975</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>

<div style="MARGIN-BOTTOM: 1pt; TEXT-ALIGN: left; MARGIN-TOP: 6pt">
<table id="z5b87ff3e12ac41eb86ae352b4a1de6f4" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(6)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Represents reimbursement or payments made to defray the costs of a spouse's travel.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 1pt; TEXT-ALIGN: left">
<table id="zdcbe7cda795c40a89e130aa59b2e59e5" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(7)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Represents reimbursement or payments made to defray the cost of relocation expenses.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 1pt; TEXT-ALIGN: left">
<table id="zb6da6f5ff8624eab84737e649b25d1eb" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(8)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Represents reimbursements or payments made to defray the cost of tax related services.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 1pt; TEXT-ALIGN: left">
<table id="z60d6c2ae9b4c46d893842fe8a8faa65f" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(9)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Represents company matching contribution to the Allianz Supplemental Asset Accumulation Plan for deferrals in excess of IRS compensation limit.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 6pt; TEXT-ALIGN: left">
<table id="z28d4b07f589b40a0a4836dba5e67f406" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(10)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Represents value of the discount associated with stock purchases in the Employee Stock Purchase Plan.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left"><u>Performance-Based Incentive Compensation Plans</u></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">AIP</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The AIP is intended to provide an incentive that will encourage superior individual performance and encourage retention of employees who are anticipated to significantly contribute to future success. The AIP seeks to accomplish this purpose by providing a bonus opportunity to eligible employees who have made significant contributions during the plan year to the achievement of annual goals and objectives.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Compensation Committee or other duly authorized committee determines allocation of bonus awards to employees. With respect to "principal officers" for purposes of the NEC Committee's duties, the NEC Committee recommends to Allianz Life's Board of Directors awards for final approval. Following Allianz Life's Board approval of the AIP for executives, with respect to the compensation of Allianz Life executives who also serve as NY Principal Officers, the Audit and Evaluation Committee of Allianz Life of New York reviews and approves the percentage of AIP to be allocated to Allianz Life of New York. The guidelines for target awards are meant to be illustrative of competitive market bonuses for similar job levels in the marketplace. While the target awards may be used for illustrative, budget planning or distribution scenarios, all bonus awards are discretionary and are in no way guaranteed.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Variable Compensation</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Variable Compensation is intended to reward the Field Vice President, Broker Dealer Distribution for attainment of various sales objectives. The minimum payout is zero and the maximum payout is 200% of the target amount. Once the total Variable Compensation has been determined, the payout is then split into a portion that is paid immediately (each year on March 31st) and a portion that is subject to a mandatory deferral period. These two portions are called Variable Compensation &#8211; Immediate, and Variable Compensation &#8211; Deferred respectively. The Variable Compensation &#8211; Deferred portion is subject to a 3-year cliff vesting schedule where Variable Compensation &#8211; Deferred payments are not eligible for withdrawal until January 1st three full years following the year for which the calculated compensation pertains. Payments pertaining to the 2015 calendar year will become eligible for withdrawal on January 1, 2019.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
</div>

<div id="DSPFPageNumberArea" style="TEXT-ALIGN: center"><font id="DSPFPageNumber" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', 'sans-serif'; FONT-WEIGHT: bold; FONT-STYLE: normal">64</font></div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">ALTPUP</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">In order to be eligible for ALTPUP awards, individuals must be nominated by the business unit and approved by the Compensation Committee and with respect to "principal officers" for purposes of the NEC Committee's duties, by the NEC Committee with final approval by the Board. Following Allianz Life's Board approval of the ALTPUP for executives, with respect to the compensation of Allianz Life executives who also serve as NY Principal Officers, the Audit and Evaluation Committee of Allianz Life of New York reviews and approves the percentage of the ALTPUP award to be allocated to Allianz Life of New York. Receipt of an ALTPUP award one year is not a guarantee that an ALTPUP award will be granted in subsequent years. The ALTPUP incentive is in the form of ALTPUP Units, which have a target value of $10.00. The threshold value is $5.00 and the maximum value is $20.00.&#160; The ALTPUP consists of three-year award periods, and one-third of the ALTPUP Units pay out each year over the three-year award period. The valuation date is December 31 at the end of each performance year, unless the Compensation Committee in its discretion selects an earlier date.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Allianz SE Mid-Term Bonus Plan</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Our Chief Executive Officer receives cash awards pursuant to the terms of the Allianz SE Mid-Term Bonus Plan instead of the ALTPUP. The Allianz SE Mid-Term Bonus Plan covers business performance over a non-rolling three-year period. The minimum payout is zero and the maximum payout is 165% of the target amount set by the Compensation Committee. Target award amounts generally focus on company performance, including growth and operating profit and achievement of goals set by Allianz Life. At the end of each three-year period, the performance of Allianz Life is assessed, along with relevant company comparisons. Proposed incentive awards are endorsed by the Allianz SE Board of Management and approved by the Compensation Committee and with respect to the "principal officers" for purposes of the NEC Committee's duties, by the NEC Committee for final approval by the Board. Following Allianz Life's Board approval of the incentive award for executives, with respect to the compensation of Allianz Life executives who also serve as NY Principal Officers, the Audit and Evaluation Committee of Allianz Life of New York reviews and approves the percentage of the incentive award to be allocated to Allianz Life of New York.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">AEI</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The AEI is designed to recognize the participant's continuous employment with Allianz Life over the relevant period and shall be an incentive to continue in employment. Grants and payments under the AEI will only be made if the participant (i) is employed with Allianz Life at the date of grant, (ii) remains employed with Allianz Life during the vesting period of the RSU, and (iii) has not voluntarily left employment prior to retirement or been terminated for cause. The securities issuable under the AEI are RSUs. An RSU constitutes the right to receipt of the market value of Allianz SE common stock at the time of exercise. This amount will be paid in cash, Allianz SE stock, or other consideration at the sole discretion of Allianz Life. RSUs are subject to a&#160; four-year vesting period. At the end of the four-year period, the RSUs are exercised uniformly for all participants, provided they remain employed by Allianz Life or are pensioners. The grant at fair value cannot be greater than 165% of a participant's target amount. The maximum value of an exercise is an increase of 200% over the grant value (i.e., 300% of the grant value).</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
</div>

<div id="DSPFPageNumberArea" style="TEXT-ALIGN: center"><font id="DSPFPageNumber" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', 'sans-serif'; FONT-WEIGHT: bold; FONT-STYLE: normal">65</font></div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left"><u>Grants of Plan-Based Awards</u></div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The following table provides additional information about plan-based compensation disclosed in the Summary Compensation Table. This table includes both equity and non-equity awards granted during the year ended December 31, 2015, and charged to Allianz Life of New York based on the Allocation Percentage assigned to each NEO.</div>

<table id="zb594e01a9df344239972adcc87fdaa84" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 80%" cellspacing="0" cellpadding="0">
<tr>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9" valign="bottom"></td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9" valign="bottom"></td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9" valign="bottom" colspan="10">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Estimated Future Payouts Under Non-Equity Incentive Plan Awards<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(1)(2)</sup></div>
</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #d9d9d9" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9" valign="bottom" colspan="10">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Estimated Future Payouts Under Equity Incentive Plan Awards<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(3)(4)</sup></div>
</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #d9d9d9" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Name</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Grant Date</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #d9d9d9" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Threshold ($)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #d9d9d9" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #d9d9d9" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Target ($)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #d9d9d9" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #d9d9d9" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Maximum ($)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #d9d9d9" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #d9d9d9" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Threshold ($)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #d9d9d9" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #d9d9d9" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Target ($)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #d9d9d9" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #d9d9d9" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Maximum ($)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #d9d9d9" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(a)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(b)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(c)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #d9d9d9" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(d)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #d9d9d9" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(e)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #d9d9d9" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(f)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #d9d9d9" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(g)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #d9d9d9" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(h)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #d9d9d9" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Walter White</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">3/4/2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; TEXT-INDENT: 11.3pt">RSUs (under AEI)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">0</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">33,760</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">167,112</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; TEXT-INDENT: 11.3pt">AIP Award</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">0</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">33,760</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">55,704</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; TEXT-INDENT: 11.3pt">Midterm Bonus Plan</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">0</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">33,760</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">55,704</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Giulio Terzariol</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">3/4/2016</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; TEXT-INDENT: 15.8pt">RSUs (under AEI)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">0</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">7,725</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">38,239</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; TEXT-INDENT: 15.8pt">AIP Award</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">0</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">7,725</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">15,450</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; TEXT-INDENT: 15.8pt">ALTPUP Award</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">0</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">7,725</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">15,450</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Thomas Burns</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">3/4/2016</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; TEXT-INDENT: 15.8pt">RSUs (under AEI)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">0</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">28,320</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">140,184</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; TEXT-INDENT: 15.8pt">AIP Award</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">0</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">28,320</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">56,640</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; TEXT-INDENT: 15.8pt">ALTPUP Award</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">0</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">28,320</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">56,640</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Neil McKay</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">3/4/2016</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; TEXT-INDENT: 15.8pt">RSUs (under AEI)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">0</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">23,760</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">117,612</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; TEXT-INDENT: 15.8pt">AIP Award</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">0</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">23,760</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">47,520</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; TEXT-INDENT: 15.8pt">ALTPUP Award</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">0</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">23,760</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">47,520</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Robert DeChellis</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">3/4/2016</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; TEXT-INDENT: 15.8pt">RSUs (under AEI)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">0</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">11,600</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">57,420</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; TEXT-INDENT: 15.8pt">AIP Award</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">0</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">26,100</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">52,200</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; TEXT-INDENT: 15.8pt">ALTPUP Award</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">0</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">20,300</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">40,600</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; TEXT-INDENT: 15.8pt">Variable Compensation</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 14%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">0</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">56,260</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">112,520</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>

<div style="MARGIN-BOTTOM: 1pt; TEXT-ALIGN: left; MARGIN-TOP: 6pt">
<table id="ze84d6a501d0b408c809b32a5d2404d34" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(1)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">The target and maximum columns show the target award and maximum award for 2015 for each NEO under the AIP. There is no threshold amount for any participant in the AIP. The actual 2015 awards granted to the NEOs are listed in the Non-Equity Incentive Compensation column of the Summary Compensation Table. AIP target and maximum awards are a pre-designated percentage of base salary determined at the executive's level.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 1pt; TEXT-ALIGN: left">
<table id="z6f1a0112bec648b3b1ec8fb9edfb8fa2" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(2)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">The target and maximum columns show the target award and maximum award for 2015 for each NEO under the ALTPUP. Under the ALTPUP, all awards are discretionary. To the extent that awards are made, the minimum amount of an award will equal at least 50% of the target amount as determined by the Compensation Committee (or with respect to "principal officers" for purposes of the NEC Committee's duties, the NEC Committee with final approval of Allianz Life's Board, followed by with respect to the Allocation Percentages of those Allianz Life executives who also serve as NY Principal Officers, the Audit and Evaluation Committee of Allianz Life of New York). The actual 2015 awards granted to the NEOs are listed in the Non-Equity Incentive Compensation column of the Summary Compensation Table. ALTPUP target and maximum awards are a pre-designated percentage of base salary determined at the executive's level.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 1pt; TEXT-ALIGN: left">
<table id="z89536d00a5ac4281836fda70e91c96f8" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(3)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">RSUs have a vesting schedule as disclosed in the footnotes to the Summary Compensation Table. See "Outstanding Equity Awards at December 31, 2015" for disclosure regarding the number of RSUs that are unvested as of December 31, 2015.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 6pt; TEXT-ALIGN: left">
<table id="z6c013345caf849978ae14bbfee852e1d" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(4)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">The target and maximum columns show the target award and maximum award for 2015 for each NEO under the AEI. There is no threshold amount for any participant in the AEI. The actual 2015 awards granted to the NEOs are listed in the Stock Awards column of the Summary Compensation Table.</td>
</tr>
</table>
</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
</div>

<div id="DSPFPageNumberArea" style="TEXT-ALIGN: center"><font id="DSPFPageNumber" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', 'sans-serif'; FONT-WEIGHT: bold; FONT-STYLE: normal">66</font></div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left"><u>Outstanding Equity Awards at December 31, 2015</u></div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The following table sets forth the outstanding equity awards at the December&#160;31, 2015 fiscal year-end. The table shows SARs and RSUs, granted pursuant to the AEI, based on the Allocation Percentage assigned to each NEO.</div>

<table id="za9ee882e26244313b9f21e96931d8484" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 80%" cellspacing="0" cellpadding="0">
<tr>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="18">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">SARs</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="14">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">RSUs</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Name</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Number of Securities Underlying Unexercised SARs</div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Exercisable</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Number of Securities Underlying Unexercised SARs</div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Unexercisable</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned SARs</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">SAR</div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Base</div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Price</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">SAR Expiration Date</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Number of RSUs That Have Not Vested</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Market Value of RSUs That Have Not Vested</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Equity Incentive Plan Awards: Number of Unearned RSUs That Have Not Vested</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Equity Incentive Plan Awards: Market or Payout Value of Unearned RSUs That Have Not Vested</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(a)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(b)<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(1)</sup></div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(c)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(d)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(e)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(f)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(g)<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(2)(3)</sup></div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(h)<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(4)</sup></div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(i)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(j)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Walter</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">166.400</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: center">3/10/2017</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">White</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">151.520</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">27,046</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">317.200</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">56,620</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top" valign="bottom" colspan="2">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">317.080</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">56,599</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">254.560</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">45,439</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Giulio</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">--</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">--</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Terzariol</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">121.325</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">21,657</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">94.800</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">16,922</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">87.725</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">15,659</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">77.150</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">13,771</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Thomas</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">--</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">--</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Burns</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">416.080</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">74,270</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">282.080</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">50,351</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">297.840</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">53,164</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">252.080</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">44,996</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Neil McKay</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">--</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">--</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">348.560</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">62,218</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">261.120</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">46,610</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">254.400</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">45,410</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">206.880</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">36,928</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Robert</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">--</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">--</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">DeChellis</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">204.015</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">36,417</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">166.315</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">29,687</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">132.675</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">23,682</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 10%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">120.640</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">21,534</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 7%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">&#160;</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>

<div style="MARGIN-BOTTOM: 1pt; TEXT-ALIGN: left; MARGIN-TOP: 6pt">
<table id="zf89efb0c653942b4837af26af331cdc2" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(1)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">There is a two-year vesting period for exercisable securities underlying unexercised SARs.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 1pt; TEXT-ALIGN: left">
<table id="z1fb7c5cf65ab4fa4bcb6475d2b40181e" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(2)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Represents unvested RSUs issued pursuant to the AEI. RSUs issued under the AEI during 2015 are subject to a four-year vesting period from the grant date. At the end of the respective vesting period, the RSUs are exercised uniformly for all participants, provided they remain employed by the Allianz Life or are pensioners.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 1pt; TEXT-ALIGN: left">
<table id="zb2ef42a306cf459280a4dc4cfa7d875e" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(3)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">For each of the NEOs, the number of RSUs listed on the first line expired 2016, the RSUs listed on the second line expire 2017, the RSUs listed on the third line expire 2018, and the RSUs listed on the fourth line expire 2019.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 6pt; TEXT-ALIGN: left">
<table id="z57365ce06bd64bfe8b3ab758b3bf4306" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(4)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Based on an assumed stock price of $178.50 per share, which was the closing stock price of Allianz SE common stock on December 31, 2015, converted from Euros into U.S. dollars.</td>
</tr>
</table>
</div>

<div id="DSPFPageBreakArea" style="MARGIN-BOTTOM: 10pt; CLEAR: both; MARGIN-TOP: 10pt">
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
</div>

<div id="DSPFPageNumberArea" style="TEXT-ALIGN: center"><font id="DSPFPageNumber" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', 'sans-serif'; FONT-WEIGHT: bold; FONT-STYLE: normal">67</font></div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left"><u>Allianz SE Option Exercises and Stock Grants Vested in 2015</u></div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The following table summarizes the value received from Allianz SE stock option exercises and stock grants vested during the year ended December 31, 2015, that were charged to Allianz Life of New York based on the Allocation Percentage assigned to each NEO.</div>

<table id="z51c72436bb3f4a9aabd8ad6d6a106e24" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 80%" cellspacing="0" cellpadding="0">
<tr>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9" valign="bottom" colspan="6">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Option Awards</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #d9d9d9" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9" valign="bottom" colspan="6">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Stock Awards</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #d9d9d9" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Name</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Number of</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Shares</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Acquired</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">on Exercise (#)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #d9d9d9" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Value Realized</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">on Exercise ($)<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(1)</sup></div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #d9d9d9" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Number of</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Shares</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Acquired</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">on Vesting (#)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #d9d9d9" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Value Realized</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">on Vesting ($)<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(2)</sup></div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #d9d9d9" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 52%; VERTICAL-ALIGN: middle; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Walter White</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">--</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">0</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">221.480</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">35,595</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 52%; VERTICAL-ALIGN: middle; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Giulio Terzariol</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">129.800</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">8,697</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">177.350</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">28,503</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 52%; VERTICAL-ALIGN: middle; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Thomas Burns</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">274.080</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">7,916</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">570.480</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">91,685</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 52%; VERTICAL-ALIGN: middle; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Neil McKay</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">531.280</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">29,840</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">511.440</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">82,196</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 52%; VERTICAL-ALIGN: middle; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Robert DeChellis</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">271.005</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">7,827</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">402.810</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">64,738</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>

<div style="MARGIN-BOTTOM: 1pt; TEXT-ALIGN: left; MARGIN-TOP: 6pt">
<table id="z7d9215a9a89d4545865e850c06b10f4c" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(1)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Represents Allianz SE SARs that were exercised during 2015 pursuant to the GEI. Amounts realized were paid in cash.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 6pt; TEXT-ALIGN: left">
<table id="z0928f69e17db408e90222dbf8f777f06" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(2)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Represents Allianz SE RSUs that were exercised during 2015 pursuant to the GEI and AEI. Amounts realized were paid in cash.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left"><u>Allianz Life Executive Severance Agreement</u></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Allianz Life entered into an Executive Severance Agreement with its Chief Executive Officer, Walter White, with an expiration date of December 31, 2018. The severance arrangements for Mr. White as Chairman and Chief Executive Officer of Allianz Life of New York are prescribed by the Executive Severance Agreement.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Pursuant to the Executive Severance Agreement, Mr. White is entitled to lump sum cash payments upon separation of&#160;$1,648,000 in the event he is terminated without "cause" as defined in the Executive Severance Agreement. In addition, pursuant to the Executive Severance Agreement, Mr. White is also bound by other restrictive covenants, including covenants relating to confidentiality and non-disparagement. Mr. White would also be entitled to continuation of medical and dental benefits at the employee premium rates for a period of 18 months following termination.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The remainder of our NEOs are subject to severance payments under either the Executive Severance Plan or the Severance Allowance Plan. If an NEO is eligible to receive severance payments pursuant to the Executive Severance Plan, he or she is not eligible to receive severance payments under the Severance Allowance Plan. The terms of each of these plans are set forth below.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left"><u>Executive Severance Plan</u></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Executive officers who have the title of Senior Vice President or above and report directly to a senior executive officer at a specific level are eligible to receive severance allowance benefits under the Executive Severance Plan. For the year ended December 31, 2015, the NEOs eligible for severance benefits under this plan were Giulio Terzariol, Thomas Burns and Neil McKay. The purpose of the Executive Severance Plan is to provide severance benefits to executive officers whose employment is involuntarily terminated in order to assist with job transition. Pursuant to the Executive Severance Plan, eligible executive officers who are involuntarily terminated will receive a lump sum cash payment equal to one and one-half times their "annual base pay" in effect at the time of termination. Annual base pay, for purposes of this agreement, equals base salary and excludes special payments, such as bonuses, expense reimbursements, living or other allowances.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
</div>

<div id="DSPFPageNumberArea" style="TEXT-ALIGN: center"><font id="DSPFPageNumber" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', 'sans-serif'; FONT-WEIGHT: bold; FONT-STYLE: normal">68</font></div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left"><u>Severance Allowance Plan</u></div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">All employees, including our NEOs, who are not eligible to receive severance benefits under the Executive Severance Plan, are subject to severance payments under the Severance Allowance Plan. For the year ended December 31, 2015, the NEO eligible for severance benefits under this plan was Robert DeChellis. The Severance Allowance Plan provides that employees who are terminated for certain company-initiated reasons are eligible to receive a severance payment in an amount based on the employee's weekly base pay multiplied by the number of weeks set forth in the Severance Allowance Plan. Employees are generally eligible for severance payments if they are terminated for the following reasons:</div>

<div style="MARGIN-BOTTOM: 2pt; TEXT-ALIGN: left">
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<tr>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">&#183;</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">employee's position is eliminated;</td>
</tr>
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<table id="zb640ae42470248589241ebe8edc34e91" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">&#183;</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">employee's position is outsourced; or</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 6pt; TEXT-ALIGN: left">
<table id="z0f28c2537efe424d989a88077b979d77" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">&#183;</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">employee's position is eliminated in connection with a sale or merger or other corporate transaction.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The following table shows the portion of the lump sum payments that would have been allocated to Allianz Life of New York based on each NEO's Allocation Percentage and payable to each of our NEOs had they been terminated on December 31, 2015 and been eligible for severance payments pursuant to the Executive Severance Plan or the Severance Allowance Plan, as the case may be.</div>

<table id="zb69d05f892de4489bc0f5a492d8e4674" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 80%" cellspacing="0" cellpadding="0">
<tr>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">NEOs</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #d9d9d9" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Lump Sum Payment</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #d9d9d9" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 88%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Walter White</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(1)</sup>&#160;</div>
</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 88%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Giulio Terzariol</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">19,313</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 88%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Thomas Burns</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">70,800</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 88%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Neil McKay</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">59,400</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 88%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Robert DeChellis</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">51,308</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>

<div style="MARGIN-BOTTOM: 6pt; TEXT-ALIGN: left; MARGIN-TOP: 6pt">
<table id="zc7666e80aedb4103b2902619eb9ae2a5" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 28.8pt; VERTICAL-ALIGN: top; align: right">(1)</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Mr. White is not eligible to receive payments pursuant to the Severance Allowance Plan. See "Allianz Life Executive Severance Agreement" for information regarding severance payments that Mr. White is eligible to receive upon termination of service.</td>
</tr>
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</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
</div>

<div id="DSPFPageNumberArea" style="TEXT-ALIGN: center"><font id="DSPFPageNumber" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', 'sans-serif'; FONT-WEIGHT: bold; FONT-STYLE: normal">69</font></div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left"><u>Director Compensation</u></div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The following table provides information on compensation paid to the directors of Allianz Life of New York for the year ended December 31, 2015.</div>

<table id="z8b96199755f24a44b1cdb5723f1f3ee4" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 80%" cellspacing="0" cellpadding="0">
<tr>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Name</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Fees Earned or Paid in Cash</div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">($)<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(1)</sup></div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Stock Awards</div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">($)</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Option Awards</div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">($)</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Non-Equity Incentive Plan Compensation</div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">($)</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Change in Pension Value and</div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Nonqualified Deferred Compensation Earnings</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">All Other Compensation</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="BORDER-TOP: #000000 2px solid; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Total</div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">($)</div>
</td>
<td style="BORDER-TOP: #000000 2px solid; BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(a)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(b)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(c)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(d)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(e)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(f)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(g)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; BACKGROUND-COLOR: #e6e6e6" valign="bottom" colspan="2">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">(h)</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #e6e6e6" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 16%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold">Walter White</font><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(2)</sup></div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Chairman and Chief Executive Officer</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 16%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold">Giulio Terzariol</font><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(2,3)</sup></div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Chief Financial Officer and Treasurer</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 16%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold">Thomas Burns</font><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(2)</sup></div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">President</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 16%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold">Steven J. Thiel</font><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(2)</sup></div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Vice President, Appointed Actuary</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 16%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold">Marc B. Olson</font><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(2,4)</sup></div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Vice President, Financial Consulting</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 16%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold">Nicole Scanlon</font><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">(2,4)</sup></div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Vice President, Financial Consulting</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 16%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Ronald M. Clark</div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Independent Director</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">13,000</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">13,000</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 16%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Martha Clark Goss</div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Independent Director</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">13,000</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">13,000</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 16%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Stephen R. Herbert</div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Independent Director</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">13,000</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">13,000</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 16%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Gary A. Smith</div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Independent Director</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">3,000</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">3,000</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 16%; VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Kevin J. Doyle</div>

<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Independent Director</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">13,000</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">&#160;</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">N/A</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; BORDER-LEFT: #000000 2px solid" valign="bottom">&#160;</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">$</div>
</td>
<td style="WIDTH: 9%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom">
<div style="FONT-SIZE: 8pt; FONT-FAMILY: 'Arial Narrow', sans-serif">13,000</div>
</td>
<td style="BORDER-RIGHT: #000000 2px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left" valign="bottom" nowrap="nowrap">&#160;</td>
</tr>
</table>

<div style="MARGIN-BOTTOM: 1pt; TEXT-ALIGN: left; MARGIN-TOP: 6pt">
<table id="z3b64dc4224e74438855b26bd7ac07ca9" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right"><!--Anchor--><font style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif">1</font></td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Represents cash compensation provided to our independent directors for the year ended December 31, 2015.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 1pt; TEXT-ALIGN: left">
<table id="z36125ae6e10e450db750722c84c01c32" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">2</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">As employee directors, Messrs. White, Terzariol, Burns, Thiel and Olson and Ms. Scanlon do not receive any compensation for their service as directors. The compensation Messrs. White, Terzariol and Burns receive as executive officers of Allianz Life of New York is disclosed in the Summary Compensation Table as set forth herein.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 1pt; TEXT-ALIGN: left">
<table id="z56c618f5ae064984b44dea36637864f8" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">3</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Mr. Terzariol resigned his position as Chief Financial Officer and Treasurer effective December 31, 2015. He was replaced effective January 1, 2016 by Mr. Gaumond.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 6pt; TEXT-ALIGN: left">
<table id="za4362b8ec31b47408ccda3e3587468bd" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">4</td>
<td style="FONT-SIZE: 8pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Mr. Olson was a director from January 1, 2015 to July 1, 2015. He was replaced, effective July 2, 2015, by Ms. Scanlon. Ms. Scanlon resigned her position as director effective December 31, 2015.</td>
</tr>
</table>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
</div>

<div id="DSPFPageNumberArea" style="TEXT-ALIGN: center"><font id="DSPFPageNumber" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', 'sans-serif'; FONT-WEIGHT: bold; FONT-STYLE: normal">70</font></div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We are an indirect wholly owned subsidiary of Allianz SE. Allianz SE's principal executive offices are located at K&#246;niginstrasse 28, 80802 Munich, Germany. As of March 31, 2016, the directors and executive officers of the Allianz Life of New York held less than 1% of Allianz SE's ordinary shares issued and outstanding.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We are not aware of any arrangements that may at a later date result in a change in control of Allianz Life of New York.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We are a wholly owned subsidiary of Allianz Life, which is a wholly owned subsidiary of AZOA, which in turn is a wholly owned subsidiary of Allianz Europe, B.V. Allianz Europe, B.V. is a wholly owned subsidiary of Allianz SE, our ultimate parent, which is registered in Munich, Germany.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Transactions with affiliates may not be on an arm's-length<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #0000ff">&#160;</font>basis and may present the potential for conflicts<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #0000ff">.</font></div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">There are a number of risks associated with the financial services industry including the insurance industry.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left"><u>Legal, Regulatory and Tax Risks</u></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">We are heavily regulated by the New York Department of Financial Services and other regulators, and changes in existing or new laws and regulations may reduce our profitability and limit our growth.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We are subject to detailed and comprehensive regulation and supervision in New York by the New York Department of Financial Services ("NYDFS") in jurisdictions in which we operate. The NYDFS has broad administrative powers with respect to all aspects of the insurance business and, in particular, monitors the manner in which an insurance company offers, sells and administers its products. Therefore, we may from time to time be subject to a variety of legal and regulatory actions relating to our current and past business operations and practices. In addition, our insurance operations are subject to insurance laws and regulations, which are generally intended to protect policyholders, not our stockholders or creditors. Changes in existing insurance laws and regulations may materially affect the way in which we conduct our business and the products we offer.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The NYDFS regulates most aspects of our insurance business. State laws in the United States grant insurance regulatory authorities broad administrative powers with respect to, among other things:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">calculating the value of assets to determine compliance with statutory requirements;</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">regulating unfair trade and claims practices, including through the imposition of restrictions on marketing and sales practices, distribution arrangements and payment of inducements;</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">establishing statutory capital and reserve requirements and solvency standards;</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">fixing maximum interest rates on insurance policy loans and minimum rates for guaranteed crediting rates on life insurance policies and annuity contracts;</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">restricting the payment of dividends and other transactions between insurance subsidiaries and affiliates; and</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">regulating the types, amounts, concentrations and valuation of investments.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Our asset management operations are also subject to extensive regulation. These regulations are primarily intended to protect investors in the securities markets or investment advisory clients and generally grant supervisory authorities broad regulatory powers. Changes to these laws and regulations may adversely affect our asset management operations. We are also subject to increasing regulation under various laws and regulations governing the solvency of insurers and other financial institutions. We are also increasingly subject to detailed and comprehensive regulations governing such matters as money laundering, "know your customer," prohibited transactions with countries or counterparties subject to sanctions, and bribery and other anti-corruption measures.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We are faced with significant challenges due to the fact that our regulatory environment is evolving rapidly and supervisory authorities around the country are assuming an increasingly active and aggressive role in interpreting and enforcing regulations governing a variety of business practices, such as the escheatment of unclaimed property, in the jurisdictions where we do business. We have been and may become in the future subject to regulatory investigations and/or examinations which, together with civil actions often following these investigations, may affect our image, brand, relations with regulators and/or results of operations. We cannot predict with any certainty the potential effects that any change in applicable laws or regulations, their interpretation or enforcement, or any enactment of new regulation or legislation in the future may have on our business, consolidated results of operations and financial condition.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Our products are heavily regulated and must be approved by the individual state regulators where such products are sold. <!--Anchor-->However, our products are only currently offered in New York. The NYDFS and the National Association of Insurance Commissioners ("NAIC") regularly reexamine existing laws and regulations applicable to insurance companies and their products. Changes in these laws and regulations, or in interpretations thereof, <!--Anchor-->could have a material adverse effect on our financial condition and consolidated results of operations. The NAIC continues to change and modernize its financial and solvency requirements and regulations. These changes could have a material adverse effect on our business, consolidated results of operations and financial condition.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">In December 2014, the NAIC adopted Actuarial Guideline 48 ("AG 48") which established a new regulatory requirement applicable to XXX and AXXX reserve financing transactions ceded to reinsurers, including affiliated reinsurers. AG 48 is an important part of the implementation of the XXX and AXXX framework the NAIC adopted in June 2014. As adopted, AG 48 limits the type of assets that may be used as collateral to cover the XXX and AG 38 statutory reserves. In January 2016, the NAIC adopted changes to the model law, giving regulators the authority to pass regulations. The NAIC has charged multiple working groups with the responsibility to prepare regulations that would codify this regulatory framework as set forth in AG 48, which is expected in 2016. In May 2015, the NAIC adopted proposed revisions to the preamble to the NAIC accreditation standards, which&#160; would require states to apply NAIC accreditation standards to captive reinsurers. The revisions would add captive insurance companies that assume XXX or AXXX business, variable annuities, and long-term care. A state will be deemed in compliance as it relates to XXX or AXXX captives if the applicable reinsurance transaction satisfies AG 48.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">In June 2013, the NYDFS released a report critical of certain captive reinsurance structures and calling, in part, for other state regulators to adopt a moratorium on approving such structures pending further review by state and federal regulators. Insurance regulators in a few states, including New York and California, have imposed a moratorium on new reinsurance transactions between life insurers domiciled in those states and captive reinsurers. Allianz Life, which owns Allianz Life of New York, has two Missouri captive reinsurance subsidiaries. We cannot predict what actions and regulatory changes will result from the NAIC revisions or the NYDFS report, whether additional state insurance regulators will restrict the use of captive reinsurers or what impact such changes will have on our business, consolidated results of operations and financial condition.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">In 2015, the NAIC established a variable annuity issues working group to study and address regulatory issues resulting in variable annuity captive reinsurance transactions. The working group developed a draft report that suggests numerous changes to current NAIC rules and regulations that would be designed to decrease incentives for insurers to establish variable annuity captives. This report proposes adoption of changes to current rules and regulations with an anticipated effective date in January 2017. If adopted, the changes could have a material adverse effect on our business, consolidated results of operations and financial condition.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">State insurance guaranty associations have the right to assess insurance companies doing business in their state for funds to help pay the obligations of insolvent insurance companies to policyholders and claimants. Because the amount and timing of an assessment is beyond our control, the liabilities that we have currently established for these potential liabilities may not be adequate.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Recently, certain states have adopted new laws and regulations that require life insurers to search for unreported deaths. The National Conference of Insurance Legislators ("NCOIL") has adopted the Model Unclaimed Life Insurance Benefits Act (the "Unclaimed Benefits Act") and various states have enacted similar legislation. The Unclaimed Benefits Act would require the implementation of procedures imposing, among other things, the following actions: (i) comparison of accounts against a Death Database; (ii) investigation of any potential matches to confirm a death; (iii) determination whether benefits are due and attempt to locate the beneficiaries of any benefits that are due; and (iv) escheatment of the benefit to the state as unclaimed property if no beneficiary can be located. States in which we conduct business may also consider adopting similar legislation. Additionally, a NAIC working group is also developing a model unclaimed property law. We cannot predict what impact such changes could have on our business, consolidated results of operations and financial condition.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">A number of treasury departments and administrators of unclaimed property have audited life insurance companies for compliance with unclaimed property laws. The audits have focused on maturities of policies or contracts, policies that have exceeded limiting age with respect to death benefits that companies should treat as unclaimed property and should escheat to the state. There is no clear basis in previously existing law for treating an unreported death as giving rise to a policy benefit that would be subject to unclaimed property procedures. A number of life insurers have entered into resolution agreements with state treasury departments in which the insurers agree to procedures imposing, among other things, the following actions: (i) comparison of accounts against a Death Database; (ii) investigation of any potential matches to confirm a death; (iii) determination whether benefits are due and attempt to locate the beneficiaries of any benefits that are due; and (iv) escheatment of the benefit to the state as unclaimed property if no beneficiary can be located. States in which we conduct business may also consider adopting similar legislation. We could become subject to a state audit regarding unclaimed property and we cannot predict what impact such an audit could have on our business, consolidated results of operations and financial condition.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Our business is subject to significant litigation risks in the various states in which we operate; changes in existing or new laws and government regulations in these states and/or an adverse outcome in any significant pending or future litigation or regulatory investigation may have an adverse effect on our business, financial condition, results of operations, reputation or image in the marketplace.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We have been involved in various regulatory investigations and examinations and may be involved in more in the future. We may also be named as defendants in individual lawsuits in the future. These actions arise in various contexts, including in connection with our activities as an insurer, securities issuer, employer, investment adviser, investor and taxpayer. We cannot predict what impact certain lawsuits or regulatory investigations could have on our business, consolidated results of operations and financial condition.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Certain of these lawsuits and investigations seek significant or unspecified amounts of damages, including punitive damages, and certain of the regulatory authorities involved in these proceedings have substantial powers over the conduct and operations of our business. Due to the nature of certain of these lawsuits and investigations, we cannot make an estimate of loss or predict with any certainty the potential impact of these suits or investigations on our business, financial condition or results of operations.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Our products are subject to extensive regulation and failure to meet any of the complex product requirements may reduce profitability.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Our products are subject to a complex and extensive array of state and federal tax, securities, insurance and employee benefit plan laws and regulations, which are administered and enforced by a number of different governmental and self-regulatory authorities, including, among others, state insurance regulators, state securities administrators, state banking authorities, the SEC, FINRA, the Department of Labor and the IRS.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">For example, U.S. federal income tax law imposes requirements relating to insurance and annuity product design, administration and investments that are conditions for beneficial tax treatment of such products under the Internal Revenue Code. Additionally, state and federal securities and insurance laws impose requirements relating to insurance and annuity product design, offering and distribution and administration. Failure to administer product features in accordance with contract provisions or applicable law, or to meet any of these complex tax, securities, or insurance requirements could subject us to administrative penalties imposed by a particular governmental or self-regulatory authority, unanticipated costs associated with remedying such failure or other claims, litigation, harm to our reputation or interruption of our operations. If this were to occur, it could adversely impact our profitability, business, consolidated results of operations and financial condition.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Laws and regulations aimed at bank and financial institutions, including the Dodd-Frank Act, could have an adverse impact on our business, financial condition and results of operations.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Currently, the U.S. federal government does not directly regulate the business of insurance. While the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") does not remove primary responsibility for the supervision and regulation of insurance from the states, Title V of the Dodd-Frank Act establishes a Federal Insurance Office ("FIO") within the U.S. Treasury Department. The FIO has authority that extends to a wide variety of lines of insurance, including life insurance and annuities. Under the Dodd-Frank Act, the FIO is charged with monitoring all aspects of the insurance industry (including identifying gaps in regulation that could contribute to a systemic crisis), recommending to the Financial Stability Oversight Council the designation of any insurer and its affiliates as a non-bank systemically important financial institution subject to oversight by the Board of Governors of the Federal Reserve System (including the administration of stress testing on capital), assisting the Treasury Secretary in negotiating "covered agreements" with non-U.S. governments or regulatory authorities, and, with respect to state insurance laws and regulation, determining whether such state insurance measures are pre-empted by such covered agreements.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Under the so-called Volcker Rule, the Board of Governors of the Federal Reserve System could impose additional capital requirements and quantitative limits on certain trading and investment activities of a non-bank systemically important financial institution.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Nonbank financial companies such as Allianz Life and Allianz Life of New York that are not affiliates with an insured depository institution or otherwise brought within the definition of "banking entity" generally will not be subject to the Volcker Rule's prohibitions. However, the prohibitions of the Volcker Rule could impact financial markets generally, for example, through reduced liquidity in certain markets or the exiting of positions by banking entities as the end of the conformance period approaches.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><!--Anchor-->Non-bank systemically important financial institutions and certain other large financial companies can be assessed under Dodd-Frank for any uncovered costs arising in connection with the resolution of a systemically important financial company and to cover the expenses of the Office of Financial Research, an agency established by Dodd-Frank to improve the quality of financial data available to policymakers and facilitate more robust and sophisticated analysis of the financial system. To date, Allianz Life has not been designated a non-bank systemically important financial institution.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">On December 12, 2013, the FIO released a study required by Title V of the Dodd-Frank Act entitled "How to Modernize and Improve the System of Insurance Regulation in the United States" (the "Report"). While the Report reflects extensive study and analysis of the broader issue of the appropriate regulatory framework for insurance, it also reviews some narrower regulatory issues that are current topics of discussion. The Report does not recommend direct federal regulation of insurance, but does recommend significantly greater federal involvement in a number of areas. Some of the recommendations outlined in the Report have been implemented. President Obama has signed the National Association of Registered Agents and Brokers Reform Act into law in January 2015, which simplifies the agent and broker licensing process across state lines. The FIO has also engaged with the supervisory colleges to monitor financial stability and identify regulatory gaps for large national and internationally active insurers. We cannot predict what impact these or any other recommendations that stem from the Report could have on our business, consolidated results of operations and financial condition.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Other aspects of our operations could also be affected by the Dodd-Frank Act. For example, the Dodd-Frank Act also includes a new framework of regulation of the Over-The-Counter ("OTC") derivatives markets that requires clearing of certain types of transactions currently traded over-the-counter must be traded on swaps execution facilities. This imposes additional costs, including transaction costs, new capital and margin requirements, and additional regulation as well as changing the market structure for the trading of these types of derivatives. Increased margin requirements on our part could reduce our liquidity and narrow the range of securities in which we invest. However, increased margin requirements on counterparties could reduce our exposure to counterparties' default. We use derivatives to mitigate the impact of increased benefit exposures from annuity products we sold that offer guaranteed benefits. The derivative clearing requirements of the Dodd-Frank Act could increase the cost of such mitigation.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">In addition, the Dodd-Frank Act provides that the SEC may promulgate rules to provide that the standard of conduct for all broker-dealers, when providing personalized investment advice about securities to retail customers (and any other customers as the SEC may by rule provide) will be the same as the standard of conduct applicable to an investment adviser under the Investment Advisers Act of 1940. Although the full impact of such a provision can only be measured when the implementing regulations are adopted, the intent of this provision is to authorize the SEC to impose on broker-dealers fiduciary duties to their customers, similar to the duties applicable to investment advisers under existing law. FINRA has also issued a report addressing how its member firms might identify and address conflicts of interest including related to the introduction of new products and services and the compensation of associated persons. We cannot predict what impact these regulatory initiatives could have on our business, consolidated results of operations and financial condition.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The sales of insurance products could also be adversely affected to the extent that some or all of the third-party firms that distribute our products face heightened regulatory scrutiny and/or increased regulation that causes them to de-emphasize sales of the types of products issued by our insurance companies.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">In addition, regulators and lawmakers in non-U.S. jurisdictions are engaged in addressing the causes of the financial crisis and means of avoiding such crises in the future. <!--Anchor-->On July 18, 2013, the Financial Stability Board<!--Anchor--> ("FSB") published its initial list of nine <!--Anchor-->global systematically important insurers ("G-SIIs"), based on the IAIS' assessment methodology, which includes Allianz SE, our ultimate parent company. <!--Anchor-->For G-SIIs which engage in activities deemed to be systemically risky, the framework of policy measures calls for imposition of additional capital (higher loss absorbency ("HLA")) requirements on those activities. On July 9, 2014, the IAIS issued a second exposure draft of the basic capital requirements ("BCR") that the FSB has directed the IAIS to develop. The BCR provides a basis for the calculation of the HLA requirements. In October 2014, the IAIS concluded the development of its initial BCR framework.&#160; Depending on the directions of domestic group wide supervisors, G-SIIs will be required to report their BCR results beginning in 2014 on a confidential basis. The BCR will continue to be revised by the IAIS once the confidential reporting period begins, and a final capital framework for G-SIIs is anticipated by 2019. In October 2015, the IAIS released the new HLA requirements that will apply to G-SIIs. HLA requirements are to be applied in 2019 to companies designated as G-SIIs in 2017. In addition, the IAIS proposes to develop a risk-based global insurance company standard by 2016 which will apply to all internationally active insurance groups, including G-SIIs, with implementation to begin in 2019 after two years of testing and refinement, and in December 2014 it published a proposed standard for public comment. The IAIS policy measures would need to be implemented by legislation or regulation in each applicable jurisdiction and the precise implications of being designated a G-SII are not yet clear<!--Anchor-->; however, <!--Anchor-->they could have far-reaching regulatory and competitive implications for Allianz SE and adversely impact its capital requirements, profitability, ability to provide capital/financial support for its affiliates, ability to grow through future acquisitions, ability to conduct its business and overall competitive position compared to insurance groups that are not designated G-SIIs. In November 2015, the IAIS released a public consultation document on the first step of a three-step consultation process related to requirements for non-traditional non-insurance activities and products, which focused on finalizing the analytical framework based on existing product features. All of these possibilities, if they occurred, could affect the way we conduct our business (including, for example, which products we offer) and manage our capital, and could require us to satisfy increased capital requirements, which could materially affect our business, consolidated results of operations and financial condition.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Additionally, Dodd-Frank created the Consumer Financial Protection Bureau ("CFPB"), an independent division of the Department of Treasury with jurisdiction over credit, savings, payment and other consumer financial products and services other than what is already regulated by the SEC or the U.S. Commodity Futures Trading Commission. The CFPB has issued a rule to bring under its supervisory authority certain non-banks whose activities or products it determines pose risks to consumers. Additionally, the CFPB is exploring the possibility of helping Americans manage their retirement savings and is considering the extent of its authority in that area. We are unable to predict the impact of these activities.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">In addition, on April 6, 2016, the Department of Labor issued a final rule that will significantly expand the definition of "investment advice" and increase the circumstances in which companies and broker-dealers, insurance agencies and other financial institutions that sell our products could be deemed a fiduciary when providing investment advice with respect to plans under the Employee Retirement Income Security Act of 1974 ("ERISA") or individual retirement accounts ("IRAs"). We are not yet certain how, if at all, the implementation of this rule will change our business, results of operations or financial condition. The Department of Labor has extended the implementation of the rule until April&#160;2017. The department also introduced amendments to longstanding exemptions from the prohibited transaction provisions under ERISA that would increase fiduciary requirements in connection with transactions involving ERISA plans, plan participants and IRAs, and that would apply more onerous disclosure and contract requirements to such transactions. The Department of Labor has introduced an additional transition period for these amendments until January 2018. We may find it necessary to change sales representative and/or broker compensation, limit the assistance or advice we provide to owners of our annuities, or otherwise change the manner in which we design and support sales of our annuities. These changes could have an adverse impact on the level and type of services we could provide and compliance with the rule could also increase our overall operational costs for providing some of the services we currently provide.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Changes in tax laws and regulations, including elimination of tax benefits for our products, may adversely affect sales of our insurance and investment advisory products, and also impact our deferred tax assets.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Changes to tax laws may affect the attractiveness of certain of our products, which currently have beneficial tax treatment. From time to time, governments have considered or implemented proposals for changes in tax law that could adversely affect our products. These proposals have included proposals to levy tax on the undistributed increase in value of life insurance policies or annuities or similar proposals that affect the tax-favored status of life insurance products and annuities in certain jurisdictions as well as other changes that could adversely affect the attractiveness of our products. The enactment of these or other similar types of legislation in the various countries where we operate, including proposals in the U.S. to create or favor alternative tax-favored long-term savings vehicles, could result in a significant decrease in sales of our currently tax-favored products.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">In addition, changes in tax laws or regulations or an operating performance below currently anticipated levels may lead to a significant impairment of deferred tax assets, in which case we could be obligated to write off certain tax assets. Tax assets may also need to be written down if certain assumptions of profitability prove to be incorrect, as losses incurred for longer than expected will make it more unlikely that we would be able to use our tax assets. We cannot predict what impact any such development could have on our business, consolidated results of operations and financial condition.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left"><u>Capital, Credit and Investment Risks</u></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">The amount of statutory capital that we have and the amount of statutory capital we must hold to meet our statutory capital requirements and our financial strength and credit ratings can vary significantly from time to time.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Statutory accounting standards and capital and reserve requirements are prescribed by the NYDFS and the NAIC. The NYDFS has established regulations that govern reserving requirements and provide minimum capitalization requirements based on risk-based capital ("RBC") ratios for life insurance companies. This RBC formula establishes capital requirements relating to insurance, business, asset and market risks including equity and interest rate risks associated with variable annuities, fixed annuities, life insurance and other insurance businesses. In any particular year, statutory surplus amounts and RBC ratios may increase or decrease depending on a variety of factors, including but not limited to the amount of statutory income or losses we generate (which itself is sensitive to equity market and credit market conditions), changes in reserves, the amount of additional capital we must hold to support business growth, changes in equity market levels, the value of certain fixed-income and equity securities in our investment portfolio, changes in interest rates, and changes to existing RBC formulas. Additionally, state insurance regulators have significant leeway in interpreting existing regulations, which could further impact the amount of statutory capital or reserves that we must maintain. If the NYDFS were to take more stringent positions than other state insurance regulators on matters affecting, among other things, statutory capital and/or reserves, the effect of these more stringent positions may be that our financial condition appears to be worse than competitors who are not subject to the same stringent standards, which could have a material adverse impact on our competitiveness, results of operations and/or financial condition. Moreover, rating agencies may implement changes to their internal models that have the effect of increasing or decreasing the amount of capital we must hold in order to maintain our current ratings. To the extent that our statutory capital resources are deemed to be insufficient to maintain a particular rating by one or more rating agencies, our financial strength and credit ratings might be downgraded by one or more rating agencies. There can be no assurance that we will be able to maintain our current</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">RBC ratio in the future or that our RBC ratio will not fall to a level that could have a material adverse effect on our business and consolidated results of operations or financial condition.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Changes in statutory reserve or other requirements and/or the impact of adverse market conditions could result in changes to our product offerings that could negatively impact our business.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Changes in statutory reserve or other requirements, increased costs of hedging, other risk mitigation techniques and financing, and other adverse market conditions could result in certain products becoming less profitable or unprofitable. These circumstances could cause modifications and/or the cessation of sales of certain products in the future. Modifications to products that we have made (or make in the future) may result in certain of our products being less attractive and/or competitive. This may adversely impact sales, which could negatively impact our ability to retain our sales personnel and maintain our distribution relationships. This, in turn, may negatively impact our business and our results of operations and financial condition.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Our reserves could be inadequate due to differences between our actual experience and management's estimates and assumptions.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We establish and carry reserves to pay future policyholder benefits and claims. Our reserve requirements for our business are calculated based on a number of estimates and assumptions, including estimates and assumptions related to future mortality, morbidity, interest rates, future equity performance, reinvestment rates, persistency, claims experience, and policyholder elections (i.e., the exercise or non-exercise of rights by policyholders under the contracts). Examples of policyholder elections include, but are not limited to, lapses and surrenders, withdrawals and amounts of withdrawals, and contributions and the allocation thereof. The assumptions and estimates used in connection with the reserve estimation process are inherently uncertain, involve the exercise of significant judgment, and reflect evolving information. <!--Anchor-->For example, the current rates of mortality and morbidity may continue to improve in the future due to medical and technological advancements that have resulted in policyholders living longer than anticipated. We periodically review the adequacy of reserves and the underlying assumptions and make adjustments when appropriate. We cannot, however, determine with precision the amounts that we will pay for, or the timing of payment of, actual benefits and claims or whether the assets supporting the policy liabilities will grow to the level assumed prior to payment of benefits or claims. Our claim costs could increase significantly and our reserves could be inadequate if actual results differ significantly from our estimates and assumptions. If so, we will be required to increase reserves or accelerate amortization of deferred acquisition costs ("DAC"), which could adversely impact our earnings and/or capital.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Our investments are subject to several market risks, including interest rate risk, market price fluctuation risk and counterparty credit risk. These factors may have a material effect on the fair values of our investments.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The fair values of our investments are subject to market risks, including credit risk, interest rate risk and equity price risk.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-STYLE: italic">Credit Risk.</font> Counterparty credit risk is defined as the risk that a third party in a transaction will default on its commitments. Investment portfolios held by our insurance operations (excluding assets backing unit-linked products where the financial risk is borne by policyholders) could give rise to counterparty credit risk through the bonds and derivative products held within them. Credit risk diversification and analysis policies, particularly using credit ratings, are implemented by our investment group and monitored by our risk management group, but these policies may be inadequate or ineffective in protecting us against credit risk.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-STYLE: italic">Interest Rate Risk</font>. The fair values of our fixed maturity investments will fluctuate in response to changes in market interest rates. Increases and decreases in prevailing interest rates generally result in decreases and increases in fair values of those instruments.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-STYLE: italic">Equity Price Risk.</font> The carrying values of investments subject to equity price risk are, in almost all instances, based on quoted market prices as of the balance sheet dates. Market prices are subject to fluctuation and, consequently, the amount realized in the subsequent sale of an investment may differ significantly from the reported market value. Fluctuation in the market price of a security may result from, among other things, perceived changes in the underlying economic characteristics of the investee, the relative price of comparable investments and general market conditions.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Losses due to defaults by financial institution counterparties and other third parties and affiliates, impairment of our investment assets and unrealized losses all could negatively affect the value of our investments and reduce our profitability.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Third parties and affiliates that owe us money, securities or other assets may not perform under their obligations. These parties include issuers whose securities we may hold in our investment portfolios (including mortgage-backed, asset-backed and other types of securities), borrowers under mortgages and other loans that we may hold or extend, customers, trading counterparties, counterparties under swap and other derivative contracts, other counterparties (including brokers and dealers, commercial and investment banks), other investment funds, clearing agents, exchanges, clearing houses and other financial institutions. Many of our transactions with these third parties and affiliates expose us to credit risk in the event of default of our counterparty. In addition, with respect to secured transactions, our credit risk may be exacerbated when the collateral held by us cannot be realized upon or is liquidated at prices not sufficient to cover the full amount of the loan, derivative or other secured obligation. Also, defaults by parties with which we have no direct contractual relation, such as a default by a credit insurer that has insured bonds, structured finance products or other securities we may hold in our investment portfolios, may adversely impact the value of those securities and potentially adversely affect the financial markets more generally. These parties may default on their obligations due to bankruptcy, lack of liquidity, downturns in the economy or real estate market, operational failure or other reasons. Negative trends and investment climates in our major markets may result in an increase in investment impairments on our investment assets. There can be no assurance that any such losses or impairments to the carrying value of these assets would not materially and adversely affect our business and results of operations. The default of a major market participant could disrupt the securities markets or clearance and settlement systems in our major markets, which could in turn cause market declines or volatility. A failure of a major market participant could also cause some clearance and settlement systems to assess members of that system or could lead to a chain of defaults that could adversely affect us.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Some of our investments are relatively illiquid. If we are forced to liquidate these investments, we may be unable to sell them at prices that reflect fair value.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We hold certain investments that may lack liquidity, such as privately placed fixed maturity securities, mortgage loans, collateralized debt obligations, commercial mortgage-backed securities, equity real estate and limited partnership interests. Although we seek to adjust our cash and short-term investment positions to minimize the likelihood that we would need to sell illiquid investments, if we were required to liquidate these investments on short notice, we may have difficulty doing so and be forced to sell them for less than we otherwise would have been able to realize.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Our performance is currently based solely on the success or failure of variable annuity and variable and index-linked annuity products which are the only products we sell in New York. If we are unsuccessful in selling these products, or these products do not perform as anticipated, our financial condition and results of operations will be adversely affected.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Because we currently only offer a single type of product in New York, our type of business is not diversified, and we rely exclusively on sales of this product in order to be successful.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">In addition, we compete with other insurance companies that offer a wider range of products in New York which may make it more difficult for us to succeed. If we are unsuccessful in selling our variable annuity and variable and index-linked annuity products in New York, our financial condition and results of operations will be materially and adversely affected.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Interest rate and credit spread volatility may adversely affect our profitability.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Our exposure to interest rate risk relates primarily to the market price and cash flow variability associated with changes in interest rates.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">During periods of declining interest rates, life insurance and annuity products may be relatively more attractive to consumers, resulting in increased premium payments on products with flexible premium features, and a higher percentage of insurance policies remaining in force from year-to-year, creating asset-liability duration mismatches. During a low interest rate period, our investment earnings may be lower because the interest earnings on our fixed income investments will likely have declined in parallel with market interest rates, which would also cause unrealized gains on our assets recorded at fair value under GAAP. In addition, mortgages and fixed maturity securities in our investment portfolios will be more likely to be prepaid or redeemed as borrowers seek to borrow at lower interest rates. Consequently, we may be required to reinvest the proceeds in securities bearing lower interest rates. Accordingly, during periods of declining interest rates, our profitability may suffer as the result of a decrease in the spread between interest rates credited to policyholders and returns on our investment portfolios.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Conversely, in periods of increasing interest rates, surrenders of life insurance policies and fixed annuity contracts may increase as policyholders choose to forgo insurance protection and seek higher investment returns. Obtaining cash to satisfy these obligations may require us to liquidate fixed maturity investments at a time when market prices for those assets are depressed because of increases in interest rates. This may result in realized investment losses. Regardless of whether we realize an investment loss, these cash payments would result in a decrease in total invested assets, and may decrease our net income. Premature withdrawals may also cause us to accelerate amortization of DAC, which would also reduce our net income.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Our mitigation efforts with respect to interest rate risk are primarily focused towards maintaining an investment portfolio with diversified maturities that has a weighted average duration that is approximately equal to the duration of our estimated liability cash flow profile. However, our estimate of the liability cash flow profile may be inaccurate and we may be forced to liquidate investments prior to maturity at a loss in order to cover the liability. Although we take measures to manage the economic risks of investing in a changing interest rate environment, we may not be able to fully mitigate the interest rate risk of our assets relative to our liabilities.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Our exposure to credit spreads primarily relates to market variability associated with changes in credit spreads. A widening of credit spreads will increase the net unrealized loss position of the investment portfolio. Credit spread tightening will reduce net investment income associated with new purchases of fixed maturity securities. Ongoing volatility in interest rates and credit spreads, individually or in tandem with other factors such as lack of pricing transparency, market illiquidity and declines in equity prices could have a material adverse effect on our consolidated results of operations, financial condition or cash flows through realized losses, impairments, and changes in unrealized loss positions.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Recent periods have been characterized by low interest rates, and the Federal Reserve Board has committed to keeping interest rates low until there is substantial improvement in the labor market. Although the Federal Reserve recently moved to marginally increase short-term interest rates, medium and long-term interest rates have remained at historically low levels. A prolonged period during which interest rates remain at levels lower than those anticipated may result in (1) greater costs associated with certain of our product features that guarantee death benefits or income streams for stated periods or for life, (2) higher costs for derivative instruments used to hedge certain of our product risks or (3) shortfalls in investment income on assets supporting policy obligations as our portfolio earnings decline over time, each of which may require us to record charges to increase reserves. In addition to compressing spreads and reducing net investment income, such an environment may cause policies to remain in force for longer periods than we anticipated in our pricing, potentially resulting in greater claims costs than we expected and resulting in lower overall returns on business in force.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Our hedging and reinsurance programs may be inadequate to protect us against the full extent of the exposure or losses we seek to mitigate.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Changes in equity markets, increased equity volatility, or reduced interest rates could result in an increase in the valuation of liabilities associated with our products, resulting in increases in reserves and reductions in net income. In the normal course of business, we seek to mitigate some of these risks through hedging programs and reinsurance programs. Growth in the underlying indices may result in an increase in reserves and a corresponding reduction in net income. However, these programs cannot eliminate all of these risks, and no assurance can be given as to the extent to which such programs will be effective in reducing such risks.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif"><u>Reinsurance</u></font>. We utilize reinsurance to mitigate a portion of the risks that we face, principally in certain of our in-force life insurance and annuity products with regard to mortality, and in certain of our annuity products with regard to a portion of the enhanced guarantee features. Under our reinsurance arrangements, other insurers assume a portion of the obligation to pay claims and related expenses to which we are subject. However, we remain liable as the direct insurer on all risks we reinsure and, therefore, are subject to the risk that our reinsurer is unable or unwilling to pay or reimburse claims at the time demand is made. Although we evaluate periodically the financial condition (including the applicable capital requirements) of our reinsurers, the inability or unwillingness of a reinsurer to meet its obligations to us (or the inability to collect under our reinsurance treaties for any other reason) could have a material adverse impact on our business, consolidated results of operations and financial condition.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We are continuing to utilize reinsurance to mitigate a portion of our risk on certain new annuity sales. Prolonged or severe adverse mortality or morbidity experience could result in increased reinsurance costs, and ultimately may reduce the availability of reinsurance for future sales. If, for new sales, we are unable to maintain our current level of reinsurance or purchase new reinsurance protection in amounts that we consider sufficient, we would either have to be willing to accept an increase in our net exposures, revise our pricing to reflect higher reinsurance premiums, or limit the amount of new business written on any individual life. If this were to occur, we may be exposed to reduced profitability and cash flow strain, or we may not be able to price new business at competitive rates.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif"><u>Hedging Programs</u></font>. We utilize hedging programs to mitigate a portion of the unreinsured risks we face in, among other areas, the guarantee features of our annuity products from unfavorable changes in benefit exposures due to movements in the equity markets and interest rates. In certain cases, however, we may not be able to apply these techniques to hedge these risks effectively because the derivative market(s) in question may not be of sufficient size or liquidity or there could be an operational error in the application of our hedging strategy or for other reasons. The operation of our hedging programs is based on models involving numerous estimates and assumptions, including, among others, mortality, lapse, surrender and withdrawal rates and amounts of withdrawals, election rates, market volatility, interest rates and correlation among various market movements. There can be no assurance that ultimate actual experience will not differ materially from our assumptions, particularly (but not only) during periods of high market volatility, which could adversely impact consolidated results of operations and financial condition. If results from our hedging programs in the future do not correlate with the economic effect of changes in benefit exposures to customers, we could experience economic losses which could have a material adverse impact on our business, consolidated results of operations and financial condition.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Our hedging programs do not fully hedge our statutory capital position. In addition, we may choose to hedge these risks on a basis that does not correspond to their anticipated or actual impact upon our results of operations or financial position under U.S. GAAP, which may decrease our earnings or increase the volatility of our results of operations or financial position. If the hedging instruments we use do not perform as intended, we could realize losses and have unanticipated cash needs to collateralize or settle such transactions. In addition, adverse market conditions can limit the availability and increase the costs associated with hedging instruments, and we may not be able to recover those costs in the pricing of the underlying products being hedged. Finally, hedging counterparties may fail to perform their obligations, thereby resulting in unhedged exposures and losses on positions that are not fully collateralized.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Reinsurance may not be available, affordable or adequate to protect us against losses.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">As part of our overall risk management strategy, we purchase reinsurance for certain risks underwritten by our various business segments. While reinsurance agreements generally bind the reinsurer for the life of the business reinsured at generally fixed pricing, market conditions beyond our control can determine the availability and cost of the reinsurance protection for new business. In certain circumstances, the price of reinsurance for business already reinsured may also increase. Any decrease in the amount of reinsurance will increase our risk of loss and any increase in the cost of reinsurance will reduce our earnings. Accordingly, we may be forced to incur additional expenses for reinsurance, may not be able to obtain sufficient reinsurance on acceptable terms or may not be able to obtain reinsurance coverage, which could adversely affect our ability to write future business, offer new products or enter new markets, or result in the assumption of more risk with respect to those policies we issue.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Our business is subject to fluctuations in financial markets and our hedging programs may be inadequate to protect us.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Certain types of insurance and investment products that we offer expose us to risks associated with fluctuations in financial markets, including certain types of interest sensitive or variable products such as guaranteed annuities or variable annuities, which have crediting or other guaranteed rates or guaranteed minimum benefits not necessarily related to prevailing market interest rates or investment returns on underlying assets. Although we use hedging techniques to manage our exposure under certain of these guarantees, increased volatility in the financial markets, combined with unanticipated policyholder behavior, may increase the cost of these hedges and/or negatively affect our ability to hedge certain of these risks, which may adversely affect our profitability. Our hedging programs may be inadequate to protect us against the full extent of the exposure or losses we seek to mitigate, which in turn may negatively impact our business, consolidated results of operations and financial condition.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Poor investment performance in our variable products could adversely affect our financial condition and results of operations.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Poor investment performance could result in a reduction in fee income received from our variable annuity products since these products generate fees primarily related to the value of our assets under management. Poor performance also could impair our prospects for growth, because our ability to attract funds from existing and new clients might diminish and existing clients might withdraw assets from our variable products in favor of better performing products of other companies, which would result in lower revenues.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">The determination of the amount of allowances and impairments taken on our investments requires use of significant management judgment in certain cases, particularly for debt instruments, and could materially impact our results of operations or financial position.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The determination of the amount of allowances and impairments vary by investment type and is based upon our periodic evaluation and assessment of known and inherent risks associated with each asset class. Such evaluations and assessments are revised as conditions change and new information becomes available. In considering impairments, management considers a wide range of factors and uses its best judgment in evaluating the cause of the decline in the estimated fair value of the security and the prospects for near-term recovery. For certain asset classes, particularly debt instruments, management's evaluation involves a variety of assumptions and estimates about the operations of the issuer and its future earnings potential. Management updates its evaluations regularly and reflects changes in allowances and impairments as such evaluations are revised. There can be no assurance, however, that management has accurately assessed the level of impairments taken and allowances reflected in our financial statements, and any additional impairments and/or allowances may have a material adverse effect on our business, consolidated results of operations and financial condition.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">A downgrade or potential downgrade in our financial strength ratings could result in a loss of business.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Claims-paying and financial strength ratings, which various ratings organizations publish as measures of an insurance company's ability to meet contract holder and policyholder obligations, are important to maintaining public confidence in our Company and our products, and the ability to market our products and our competitive position. A downgrade in our financial strength ratings, or the announced potential for a downgrade, could have an adverse effect on our financial condition, results of operations and cash flows in several ways, including:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">reducing new sales of insurance products, annuities and other investment products;</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">increasing our cost of capital or limiting our access to sources of capital;</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">adversely affecting our relationships with our field marketing organizations, agents and other sales specialists;</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">materially increasing the number or amount of policy surrenders and withdrawals by contract holders and policyholders;</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">requiring us to reduce prices or increase crediting rates for many of our products and services to remain competitive; and</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">adversely affecting our ability to obtain reinsurance or obtain reasonable pricing on reinsurance.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">The impairment or negative performance of other financial institutions could adversely affect our business.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We have exposure to many different industries and counterparties, and routinely execute transactions with counterparties in the financial services industry, including broker-dealers, commercial banks, investment banks, insurers, reinsurers and other investment and financial institutions. The operations of U.S. and global financial services institutions are interconnected, and a decline in the financial condition of one or more financial services institutions, or the perceived lack of creditworthiness of such financial institutions, may expose us to credit losses or defaults, limit access to liquidity or otherwise disrupt the operations of our business. While we regularly assess our exposure to different industries and counterparties, the performance and financial strength of specific institutions are subject to rapid change, the timing and extent of which cannot be known.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Many transactions with and investments in the products and securities of other financial institutions expose us to credit risk in the event of default of our counterparty. With respect to secured transactions, our credit risk may be exacerbated when the collateral we hold cannot be realized upon or is liquidated at prices insufficient to recover the full amount of the loan or derivative exposure. We also have exposure to financial institutions in the form of unsecured debt instruments, derivative transactions, repurchase and underwriting arrangements and equity investments. There can be no assurance that any such losses or impairments to the carrying value of these assets would not materially and adversely impact our business, consolidated results of operations and financial condition.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Downgrades in the credit or financial strength ratings assigned to the counterparties with whom we transact business or other adverse reputational impacts to such counterparties could create the perception that our financial condition will be adversely impacted as a result of potential future defaults by such counterparties. Additionally, we could be adversely affected by a general, negative perception of financial institutions caused by the downgrade or other adverse impact to the reputation of other financial institutions.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left"><u>Business and Operational Risks</u></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Difficult conditions in the global capital markets and the economy could materially adversely affect our business, consolidated results of operations and financial condition.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Our business, consolidated results of operations and financial condition are materially affected by conditions in the global capital markets and the economy generally. We have been affected by the financial crisis and its aftermath since 2008. While financial markets generally stabilized and performed well in 2015, a wide variety of factors continue to negatively impact economic conditions and consumer confidence. These factors include, among others, concerns over the pace of the economic recovery, the U.S. Federal Reserve's tapering of its bond buying program, the level of U.S. national debt, the European sovereign debt crisis, unemployment, the availability and cost of credit and hedging instruments, the U.S. housing market, oil and commodity prices, inflation levels, and geopolitical issues. Additionally, the U.S. Federal Reserve, through the Federal Open Market Committee, has begun to slowly raise interest rates. Given our interest rate and equity market exposure, these events have had and may in the future have an adverse effect on us. Our revenues may decline, our profit margins could erode and we could incur significant losses.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Factors such as consumer spending, business investment, government spending, the volatility and strength of the equity markets, interest rates, deflation and inflation all affect the business and economic environment and, ultimately, the profitability of our business. In an economic downturn characterized by higher unemployment, lower family income, lower corporate earnings, lower business investment and lower consumer spending, the demand for our financial and insurance products could be adversely affected. In addition, the levels of surrenders and withdrawals of our annuity contracts we face may be adversely impacted. Our policyholders may choose to defer paying insurance premiums or stop paying insurance premiums altogether. Adverse changes in the economy could affect earnings negatively and could have a material adverse effect on our business, consolidated results of operations and financial condition.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">We use numerous assumptions to determine the appropriate level of insurance reserves and DAC and to calculate certain widely used industry measures of value, which involve a significant degree of management judgment and predictions about the future that are inherently uncertain; if these assumptions are not correct, it may have an adverse impact on our results of operations and/or performance indicators.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The establishment of insurance reserves, including the impact of minimum guarantees which are contained within certain of our variable annuity products, the adequacy test performed on the reserves for life and annuity policies and the establishment of DAC, are inherently uncertain processes involving assumptions about factors such as policyholder behavior (e.g., lapses, persistency and mortality), court decisions, changes in laws and regulations, social, economic and demographic trends, inflation, investment returns and other factors, and, in the life insurance and annuity business, assumptions concerning mortality and morbidity trends. The use of different assumptions about these factors could have a material effect on our reserves and underwriting expenses as well as on our DAC. In addition, insurance reserves for minimum guarantees contained within certain of our variable annuity products may be significantly impacted by the state of the financial markets and significant declines could have a material adverse effect on our business, consolidated results of operations and financial condition.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">We face competition from other insurance companies, banks and other financial institutions, which may adversely impact our market share and profitability.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">There is strong competition among insurers, banks, brokerage firms and other financial institutions and providers seeking clients for the types of products and services we provide, including insurance, annuity and other investment products and services. Competition is intense among a broad range of financial institutions and other financial service providers for retirement and other savings dollars. This competition makes it especially difficult to provide unique insurance products since, once such products are made available to the public, they often are reproduced and offered by our competitors. In addition, this competition may adversely impact our market share and profitability.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Our ability to compete is dependent on numerous factors, including, among others, the successful implementation of our strategy; our financial strength as evidenced, in part, by our financial and claims-paying ratings; our access to diversified sources of distribution; our size and scale; our product quality, range, features/functionality and price; our ability to bring customized products to the market quickly; our ability to explain complicated products and features to our distribution channels and customers; the visibility, recognition and understanding of our brands in the marketplace; our reputation and quality of service; and (with respect to variable insurance and annuity products, mutual funds and other investment products) our investment options, flexibility and investment management performance.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Consolidation of distributors of insurance products may adversely affect the insurance industry and the profitability of our business.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The insurance industry distributes many of its products through other financial institutions such as banks, broker-dealers and field marketing organizations. Over the last several years, there has been substantial consolidation of these financial institutions, particularly between and among banks and other financial services companies. An increase in consolidation activity with banks and other financial services companies affecting insurance distributors may create firms with even stronger competitive positions and negatively impact the industry's sales. Such consolidation could increase competition for access to distributors, result in greater distribution expenses and impair our ability to market insurance products to our current customer base or expand our customer base. Consolidation of distributors and/or other industry changes may also increase the likelihood that distributors will try to renegotiate the terms of any existing selling agreements to terms less favorable to us.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Inadequate or failed processes or systems, human factors or external events may adversely affect our profitability, reputation or operational effectiveness.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Operational risk is inherent in our business and can manifest itself in various ways, including business interruption, poor vendor performance, information systems malfunctions or failures, regulatory breaches, human errors, employee misconduct, and external fraud. These events can potentially result in financial loss, harm to our reputation and/or hinder our operational effectiveness. Management attempts to control these risks and keep operational risk at low levels by maintaining a sound and well controlled environment in light of the characteristics of our business, markets and regulatory environment in which we operate. Notwithstanding these measures, operational risk is part of the business environment in which we operate, and we may incur losses from time to time due to these types or risks.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">The failure to maintain and modernize our information systems could adversely affect our business.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Our business depends significantly on effective information systems, and we have different information systems for our various lines of business. We must commit significant resources to maintain and enhance our existing information systems, and develop new ones in order to keep pace with the evolving information technology, industry and regulatory standards and customer preferences. If we do not maintain adequate information systems, we may not be able to gather and rely on adequate information to base our pricing, underwriting and reserving decisions. We may also have difficulties in attracting new customers and preserving our existing customer base. In addition, underperforming information systems could cause us to become subject to a higher number of customer, provider and agent disputes, may increase our litigation and regulatory exposure and may make us incur higher administrative expenses, including remediation costs.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">We may not be able to protect our intellectual property and may be subject to infringement claims by a third party.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We rely on a combination of contractual rights, copyright, trademark, and trade secret laws to establish and protect our intellectual property. Although we use a broad range of measures to protect our intellectual property rights, third parties may infringe or misappropriate our intellectual property. The loss of intellectual property protection or the inability to secure or enforce the protection of our intellectual property assets could have a material adverse effect on our business and our ability to compete.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Third parties may have, or may eventually be issued, patents or other protections that could be infringed by our products, methods, processes or services or could limit our ability to offer certain product features. In recent years, there has been increasing intellectual property litigation in the financial services industry challenging, among other things, product designs and business processes. If a third party were to successfully assert an intellectual property infringement claim against us, or if we were otherwise precluded from offering certain features or designs, or utilizing certain processes, it could have a material adverse effect on our business, consolidated results of operations and financial condition.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Changes in and the adoption of accounting standards could have a material impact on our financial statements.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We prepare our financial statements in accordance with U.S. GAAP. From time to time, the Financial Accounting Standards Board ("FASB"), the SEC, and other regulators change the financial accounting and reporting standards governing the preparation of our financial statements. In some cases, we could be required to apply a new or revised standard retrospectively, resulting in the restating of prior period financial statements. The FASB and International Accounting Standards Board ("IASB") have ongoing projects to revise accounting standards for insurance contracts. The FASB has focused on disclosures for short-duration insurance contracts and on targeted improvements to accounting measurements and disclosures for long-duration insurance contracts. The IASB continues to contemplate significant changes to accounting measurements for both short and long duration insurance contracts. While the final resolution of changes to U.S. GAAP and International Financial Reporting Standards pursuant to these projects remains unclear, changes to the manner in which we account for insurance products could have a significant impact on our future financial reports, business, consolidated results of operations and financial condition. Further, the adoption of a new insurance contracts standard as well as other future accounting standards could have a material effect on our business, consolidated results of operations and financial condition.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Our risk management policies and procedures may not be fully effective in identifying or mitigating our risk exposure in all market environments or against all types of risk, including employee misconduct.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We have devoted significant resources to develop our risk management policies and procedures and will continue to do so. Nonetheless, our policies and procedures to identify, monitor and manage risks may not be fully effective in mitigating our risk exposure in all market environments or against all types of risk. Many of our methods of managing risk and exposures are based upon our use of observed historical market behavior or statistics based on historical models. During periods of market volatility or due to unforeseen events, the historically derived correlations upon which these methods are based may not be valid. As a result, these methods may not predict future exposures accurately, which could be significantly greater than what our models indicate. This could cause us to incur investment losses or cause our hedging and other risk management strategies to be ineffective.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Other risk management methods depend upon the evaluation of information regarding markets, clients, catastrophe occurrence or other matters that are publicly available or otherwise accessible to us, which may not always be accurate, complete, up-to-date or properly evaluated. Moreover, we are subject to the risks of errors and misconduct by our employees, such as fraud, non-compliance with policies, recommending transactions that are not suitable, and improperly using or disclosing confidential information. These risks are difficult to detect in advance and deter, and could harm our business, consolidated results of operations and financial condition.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We are also subject to the risk of nonperformance or inadequate performance of contractual obligations by third-party vendors of products and services that are used in our business as well as misconduct by our employees. Past or future misconduct by our employees or employees of our vendors could result in violations of law by us, regulatory sanctions and/or serious reputational or financial harm and the precautions we take to prevent and detect this activity may not be effective in all cases. Policies and procedures designed to mitigate operational, legal and regulatory risks may not be fully effective in mitigating our risk exposure in all market environments or against all types of risk. Insurance and other traditional risk-shifting tools may be held by or available to us in order to manage certain exposures, but they are subject to terms such as deductibles, coinsurance, limits and policy exclusions, as well as risk of counterparty denial of coverage, default or insolvency. We also review our compensation policies and practices as part of our overall risk management program, but it is possible that our compensation policies and practices could inadvertently incentivize excessive or inappropriate risk taking. If our associates take excessive or inappropriate risks, those risks could harm our reputation and have a material adverse effect on our business, consolidated results of operations and financial condition.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Breaches of security, or interference with our technology infrastructure, could harm our business.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Our business is reliant upon technology systems and networks, including systems and networks managed by third parties to process, transmit and store information and to conduct business activities and transactions with clients, distributors, vendors and other third parties. We are also subject to certain federal and state regulations that require us to establish and maintain policies and procedures designed to protect sensitive client information. Maintaining the integrity of our systems is critical to the success of our business operations, including the retention of clients, and to the protection of our clients' personal information. To date, we have not experienced any material breaches of or interference with our systems and networks; however, we routinely encounter and address such threats, including an increasing frequency of phishing scams, introductions of malware and unauthorized payment requests. Any such breaches or interference by third parties or by our employees that may in the future occur could have a material adverse impact on our business, consolidated results of operations and financial condition.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We have implemented and maintain security measures designed to protect against breaches of security and other interference with systems and networks resulting from attacks by third parties, including hackers, and from employee error or malfeasance. We also require third party vendors who, in the provision of services to us, are provided with or process information pertaining to our business or our clients to meet certain information security standards. Changes in our technology platforms, such as an evolution to accommodate mobile computing, may also require corresponding changes in our systems, networks and data security measures. In addition, the increasing reliance on technology systems and networks and the occurrence and potential adverse impact of attacks on such systems and networks, both generally and in the financial services industry, have enhanced government and regulatory scrutiny of the measures taken by companies to protect against cyber-security threats. As these threats, and government and regulatory oversight of associated risks, continue to evolve, we may be required to expend additional resources to enhance or expand upon the security measures we currently maintain. Despite the measures we have taken and may in the future take to address and mitigate these risks, we cannot ensure that our systems and networks will not be subject to breaches or interference. Any such event may result in operational disruptions as well as unauthorized access to or the disclosure or loss of our</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">proprietary information or our clients' personal information, which in turn may result in legal claims, regulatory scrutiny and liability, reputational damage, the incurrence of costs to eliminate or mitigate further exposure, the loss of clients or other damage to our business. In addition, the trend toward broad consumer and general public notification of such incidents could exacerbate the harm to our business, financial condition, or results of operations. Even if we successfully protected our technology infrastructure and the confidentiality of sensitive data, we may incur significant expenses in responding to any such attacks as well as the adoption and maintenance of appropriate security measures. We could also suffer harm to our business and reputation if attempted security breaches are publicized. We cannot be certain that advances in criminal capabilities, discovery of new vulnerabilities, attempts to exploit vulnerabilities in our systems, data thefts, physical system or network break-ins or inappropriate access, or other developments will not compromise or breach the technology or other security measures protecting our networks and systems used in connection with our products and services.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">The failure to protect our clients' confidential information and privacy could adversely affect our business.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">A number of our businesses are subject to privacy regulations and confidentiality obligations. For example, certain of the activities conducted by our businesses are subject to the privacy regulations of the Gramm-Leach-Bliley Act and state privacy laws and regulations. We also have contractual obligations to protect certain confidential information we obtain from our existing vendors and clients. These obligations generally include protecting such confidential information in the same manner and to the same extent as we protect our own confidential information. The actions we take to protect confidential information vary by business segment and may include, among other things:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">training and educating our employees regarding our obligations relating to confidential information;</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">monitoring changes in state or federal privacy and compliance requirements;</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">drafting appropriate contractual provisions into any contract that raises proprietary and confidentiality issues;</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">maintaining secure storage facilities for tangible records;</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">limiting access to electronic information; and</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">in the event of a security breach, providing credit monitoring or other services to affected customers.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">In addition, we must develop, implement and maintain a comprehensive written information security program with appropriate administrative, technical and physical safeguards to protect such confidential information. If we do not properly comply with privacy regulations and protect confidential information, we could experience adverse consequences, including regulatory sanctions, such as penalties, fines and loss of license, as well as loss of reputation and possible litigation. This could have an adverse impact on our Company's image and, therefore, result in lower sales or lapses of existing business.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">We face intense competition in attracting and retaining key talent.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Our continued success depends to a substantial degree on our ability to attract and retain qualified people. The market for qualified talent is extremely competitive, and we may not be able to attract and retain the employees we need to sustain and grow our business and operations. If we are unable to attract and retain qualified individuals or our recruiting and retention costs increase significantly, our financial condition and results of operations could be materially adversely impacted.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Third-party defaults, bankruptcy filings, legal actions and other events may limit the value of or restrict our access to cash and investments.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Capital and credit market volatility can exacerbate, and has exacerbated, the risk of third-party defaults, bankruptcy filings, foreclosures, legal actions and other events that may limit the value of or restrict our access to cash and investments.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">We may have contingent liabilities from discontinued, divested and run-off businesses and may incur other off-balance sheet liabilities that could result in charges to the income statement.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We may, from time to time, retain insurance obligations and other contingent liabilities in connection with our liquidation or run-off of various businesses. Our reserves for these types of obligations and liabilities may be inadequate, which could cause us to take additional charges that could be material to our results of operations. We may also, from time to time and in the course of our business, provide guarantees and enter into derivative and other types of off-balance sheet transactions that could result in income statement charges.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Protection from system interruptions and operating errors is important to our business. If we were to experience a sustained interruption to our telecommunications or data processing systems or other failure in operational execution, these events could harm our business.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Operating errors and system or network interruptions could delay and disrupt our ability to develop, deliver or maintain our products and services, causing harm to our business and reputation and resulting in loss of customers or revenue. Interruptions could be caused by operational failures arising from employee error or malfeasance, interference by third parties (including hackers and other cyber-attacks), implementation of new technology, and maintenance of existing technology. Our financial, accounting, data processing or other operating systems and facilities may fail to operate or report data properly, experience connectivity disruptions or otherwise become disabled as a result of events that are wholly or partially beyond our control, adversely affecting our ability to process transactions or provide products and services to customers. The cause of these interruptions can include fires, floods, earthquakes and other natural disasters, power losses, equipment failures, attacks by third parties, failures of internal or vendor software or systems and other events beyond our control.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We rely on third party service providers and vendors for certain communications, technology and business functions and face the risk of operational failure (including, without limitation, failure caused by an inaccuracy, untimeliness or other deficiency in data reporting), termination or capacity constraints of any of the clearing agents, exchanges, clearing houses or other third party service providers that we use to facilitate or are component providers to our transactions and other product manufacturing and distribution activities. These risks are heightened by the evolution in the financial markets of increasingly sophisticated products, by business-driven hedging, by compliance issues and by other risk management or investment or by financial management strategies. Any such failure, termination or constraint could adversely impact our ability to implement transactions, service our clients, manage our exposure to risk or otherwise achieve desired outcomes.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Failures elsewhere in the insurance industry could obligate us to pay assessments through guaranty associations.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">When an insurance company becomes insolvent, state insurance guaranty associations have the right to assess other insurance companies doing business in their state for funds to pay obligations to policyholders of the insolvent company, up to the state-specified limit of coverage. The total amount of the assessment is typically based on the number of insured residents in each state, and each company's portion is based on its proportionate share of premium volume in the relevant lines of business. The future failure of a large life, health or annuity insurer could trigger assessments which we would be obligated to pay. Further, amounts for historical insolvencies may be assessed over many years, and there can be significant uncertainty around the total obligation for a given insolvency. In addition, certain states allow us to offset future assessments with premium tax offsets which are estimated and recorded as a corresponding asset. Existing liabilities may not be sufficient to fund the ultimate obligations of a historical insolvency, and we may be required to increase our liability, which could have an adverse effect on our results of operations. In addition, future premium tax offsets may not be realized and we may be required to decrease our assets, which could also have an adverse effect on our business, consolidated results of operations and financial condition.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">The occurrence of natural or man-made disasters and catastrophes could adversely affect our financial condition and results of operations.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The occurrence of natural disasters and catastrophes, including acts of terrorism, pandemics, industrial accident, blackout, cyber-attack, computer virus, insider threat, insurrections and military actions, unanticipated problems with our disaster recovery systems, or a support failure from external providers, could adversely affect our financial condition or results of operations particularly if those events affect our computer-based data processing, transmission, storage, and retrieval systems or destroy data. Such disasters and catastrophes may also impact us indirectly by changing the condition and behaviors of our customers, business counterparties and regulators, as well as by causing declines or volatility in the economic and financial markets.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The financial statements of Allianz Life of NY Variable Account C as of and for the year or period ended December&#160;31,&#160;2015 (including the statements of changes in net assets for each of the years or periods in the two year period then ended and the financial highlights for each of the periods presented), are included in Part C of the Registration Statement filed with the SEC on Form N-4 in reliance upon the report of KPMG LLP, independent registered public accounting firm, and upon the authority of said firm as experts in accounting and auditing.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The unaudited consolidated financial statements of Allianz Life Insurance Company of New York as of June 30, 2016 and December 31, 2015 and for the six month periods ended June 30, 2016 and June 30, 2015 are included in Appendix C of this prospectus.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The financial statements and supplemental schedules of Allianz Life Insurance Company of New York as of December 31, 2015 and 2014, and for each of the years in the three-year period ended December 31, 2015, are included in Appendix&#160;D of this prospectus, in reliance upon the report of KPMG LLP, independent registered public accounting firm, and upon the authority of said firm as experts in accounting and auditing.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>
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<td style="FONT-SIZE: 11pt; FONT-FAMILY: Arial, sans-serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">PRIVACY NOTICE</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Your privacy is a high priority for Allianz Life Insurance Company of New York (Allianz Life&#174; of NY). ("we" or "our"). Our pledge to protect your privacy is reflected in our Privacy Notice. This notice outlines our principles for collecting, using and protecting information that we maintain about you.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">Information about you that Allianz Life</font><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#160;</sup><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">of NY collects</font></div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We collect information about you so that we can process the insurance transactions you request. We limit the amount of your information collected to what we feel is needed to maintain your account. We may collect your information from the following sources:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">From you, either directly or through your agent. This may include information on your insurance application or other forms you may complete.&#160; The information we collect includes, but is not limited to, your name, social security number, address and telephone number.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">From others, through the process of handling a claim. This may include information from medical or accident reports.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">From your doctor or during a home visit by a health assessment professional. This may include medical information about you gathered with your written authorization.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">From your relationship with us, such as the number of years you have been a customer or the types of insurance products you purchased.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">From a consumer reporting agency such as a medical, credit, or motor vehicle report. The information in these reports may be kept by the agency and shared with others.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Information about you that Allianz Life of NY shares</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We do not share information about current or former customers with anyone, except as allowed by law. "Allowed by law" means that we may share your information, such as your name, address, and policy information, as follows:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">With affiliates and other third parties in order to administer or service your policy.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">With consumer reporting agencies to obtain a medical report, credit report, or motor vehicle report. These reports are used to determine eligibility for coverage or to process your requested transactions.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">With your insurance agent so that they can perform services for you.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">With medical professionals in order to process your claim.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">With a state Department of Insurance in order to examine our records or business practices.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">With state or federal law enforcement agency, as required by law or to report suspected fraud activities.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">With research groups to conduct studies on claims results. No individual is identified in any study or report.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We advise the vendors with whom we legally share your information of our privacy policy. We make every effort to use vendors whose privacy policy reflects our own.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Allianz Life of NY does not sell your information to anyone</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We do not sell your information to anyone for their own marketing purposes. For this reason, we are not required to obtain an "opt-in election," an "opt-out election" or an authorization from you.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Allianz Life of NY policies and practices regarding security of your information</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We limit access to your information to those employees, affiliates, and service providers who need it to administer or service your policy.&#160; We use computer hardware and software tools to maintain physical and electronic safeguards. These safeguards comply with applicable federal and state regulations. We use state of the art technology to secure our websites and protect the information that may be shared over these sites. We restrict access to information about you to those employees who need the information to service your policy.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If you visit one of our websites, we may use "cookies" (small text files sent from our site to your hard drive). These cookies help us to recognize repeat visitors and allow easy access to and use of the site. We do not use cookies to gather your information. The cookies only enable you to use our website more easily.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Your ability to access and correct your information</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">You have the right to access and obtain a copy of your information.&#160; You may write to us and also ask for a record of any disclosure of your medical information made within the last three (3) years. This does not include the right to access and copy your information related to a claim or civil or criminal proceeding.&#160; If you wish to review your information, please write us at the address below.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Provide your full name, address and policy number(s). For your protection, please have your request notarized.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Within 30 working days of our receipt of your written request, you may see and get a copy of your information in person. If you prefer, we will send you a copy of your information.&#160; If medical information is contained in your file, we may request that you name a medical professional to whom we will send your information.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If you believe any of your information is incorrect, notify us in writing at the address below. Within 30 working days, we will let you know if our review has resulted in a correction of your information. If we do not agree there is an error, you may file a statement disputing our finding. We will attach the statement to your file. We will send any corrections we make, or your statement, to anyone we shared your information with over the past two years, and to anyone who may receive your information from us in the future. We do not control the information about you obtained from a consumer reporting agency or a Department of Motor Vehicles. We will provide you with the names and addresses of these agencies so that you can contact them directly.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Notification of change</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Your trust is one of our most important assets. If we revise our privacy practices in the future, we will notify you prior to introducing any changes. This Privacy Notice is also displayed on our website at www. https://www.allianzlife.com/new-york.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">For more information or if you have questions</div>

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<td style="FONT-SIZE: 11pt; FONT-FAMILY: Arial, sans-serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION (SAI)</td>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 9.6pt">Partial 1035 Exchanges&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 9.6pt">Assignments, Pledges and Gratuitous Transfers&#8230;&#8230;&#8230;&#8230;.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The S&amp;P 500<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> Index is comprised of 500 stocks representing major U.S. industrial sectors.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">S&amp;P<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> is a registered trademark of Standard &amp; Poor's Financial Services LLC ("S&amp;P"). This trademark has been licensed for use by S&amp;P Dow Jones Indices LLC. S&amp;P marks are trademarks of S&amp;P. This trademark has been sublicensed for certain purposes by Allianz Life Insurance Company of New York ("Allianz Life of NY"). The S&amp;P 500<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> Index ("the Index") is a product of S&amp;P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Allianz Life of NY.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Allianz Life of NY products are not sponsored, endorsed, sold, or promoted by S&amp;P Dow Jones Indices LLC, Dow Jones, S&amp;P, or any of their respective affiliates (collectively, "S&amp;P Dow Jones Indices"). S&amp;P Dow Jones Indices make no representation or warranty, express or implied, to the owners of the Allianz Life of NY products or any member of the public regarding the advisability of investments generally or in Allianz Life of NY products particularly or the ability of the Index to track general market performance. S&amp;P Dow Jones Indices' only relationship to Allianz Life of NY with respect to the Index is the licensing of the Index and certain trademarks, service marks, and/or trade names of S&amp;P Dow Jones Indices and/or its third-party licensors. The Index is determined, composed, and calculated by S&amp;P Dow Jones Indices without regard to Allianz Life of NY or the products. S&amp;P Dow Jones Indices have no obligation to take the needs of Allianz Life of NY or the owners of the products into consideration in determining, composing, or calculating the Index. S&amp;P Dow Jones Indices are not responsible for and have not participated in the design, development, pricing, and operation of the products, including the calculation of any interest payments or any other values credited to the products. S&amp;P Dow Jones Indices have no obligation or liability in connection with the administration, marketing, or trading of products. There is no assurance that investment products based on the Index will accurately track index performance or provide positive investment returns. S&amp;P Dow Jones Indices LLC and its subsidiaries are not investment advisors. Inclusion of a security or futures contract within an index is not a recommendation by S&amp;P Dow Jones Indices to buy, sell, or hold such security or futures contract, nor is it considered to be investment advice. Notwithstanding the foregoing, CME Group Inc. and its affiliates may independently issue and/or sponsor financial products unrelated to products currently being issued by Allianz Life of NY, but which may be similar to and competitive with Allianz Life of NY products. In addition, CME Group Inc., an indirect minority owner of S&amp;P Dow Jones Indices LLC, and its affiliates may trade financial products which are linked to the performance of the Index. It is possible that this trading activity will affect the value of the products.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">S&amp;P DOW JONES INDICES DO NOT GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS, AND/OR THE COMPLETENESS OF THE INDEX OR ANY DATA RELATED THERETO OR ANY COMMUNICATION, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. S&amp;P DOW JONES INDICES SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN. S&amp;P DOW JONES INDICES MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY ALLIANZ LIFE OF NY, OWNERS OF THE PRODUCTS, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDEX OR WITH RESPECT TO ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL S&amp;P DOW JONES INDICES BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME, OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE. THERE ARE NO THIRD-PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN S&amp;P DOW JONES INDICES AND ALLIANZ LIFE OF NY OTHER THAN THE LICENSORS OF S&amp;P DOW JONES INDICES.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Russell 2000<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> Index is an equity index that measures the performance of the 2,000 smallest companies in the Russell 3000<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> Index, which is made up of 3,000 of the biggest U.S. stocks. The Russell 2000<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> Index is constructed to provide a comprehensive and unbiased small-cap barometer and is completely reconstituted annually to ensure larger stocks do not affect the performance and characteristics of the true small-cap index.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Allianz Life<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> of NY products are not sponsored, endorsed, sold or promoted by Frank Russell Company (""Russell""). Russell makes no representation or warranty, express or implied, to the owners of Allianz Life of NY products or any member of the public regarding the advisability of investing in securities generally or in Allianz Life of NY products particularly or the ability of the Russell 2000<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> Index to track general stock market performance or a segment of the same. Russell's publication of the Russell 2000<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> Index in no way suggests or implies an opinion by Russell as to the advisability of investment in any or all of the securities upon which the Russell 2000<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> Index is based. Russell's only relationship to Allianz Life Insurance Company of New York ("Allianz Life of NY") is the licensing of certain trademarks and trade names of Russell and of the Russell 2000<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> Index which is determined, composed and calculated by Russell without regard to Allianz Life of NY or Allianz Life of NY products. Russell is not responsible for and has not reviewed the Allianz Life of NY products nor any associated literature or publications and Russell makes no representation or warranty express or implied as to their accuracy or completeness, or otherwise. Russell reserves the right, at any time and without notice, to alter, amend, terminate or in any way change the Russell 2000<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> Index. Russell has no obligation or liability in connection with the administration, marketing or trading of Allianz Life of NY products.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">RUSSELL DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE RUSSELL 2000<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> INDEX OR ANY DATA INCLUDED THEREIN AND RUSSELL SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. RUSSELL MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY ALLIANZ LIFE OF NY, INVESTORS, OWNERS OF ALLIANZ LIFE OF NY PRODUCTS, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE RUSSELL 2000<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> INDEX OR ANY DATA INCLUDED THEREIN. RUSSELL MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE RUSSELL 2000<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL RUSSELL HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.</div>

<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor-->NASDAQ-100<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> INDEX</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The NASDAQ-100 Index<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> includes 100 of the largest domestic and international non-financial securities listed on The NASDAQ Stock Market<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> based on market capitalization. Allianz Life<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> of NY products are not sponsored, endorsed, sold or promoted by The NASDAQ OMX Group, Inc. or its affiliates (NASDAQ OMX, with its affiliates, are referred to as the "Corporations"). The Corporations have not passed on the legality or suitability of, or the accuracy or adequacy of descriptions and disclosures relating to, Allianz Life of NY products. The Corporations make no representation or warranty, express or implied to the owners of Allianz Life of NY products or any member of the public regarding the advisability of investing in securities generally or in Allianz Life of NY products particularly, or the ability of the NASDAQ-100 Index<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> to track general stock market performance. The Corporations' only relationship to Allianz Life Insurance Company of New York ("Licensee") is in the licensing of the NASDAQ<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup>, NASDAQ OMX<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup>, NASDAQ-100<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup>, and NASDAQ-100 Index<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> registered trademarks, and certain trade names of the Corporations and the use of the NASDAQ-100 Index<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> which is determined, composed and calculated by NASDAQ OMX without regard to Licensee or Allianz Life of NY products. NASDAQ OMX has no obligation to take the needs of the Licensee or the owners of Allianz Life of NY products into consideration in determining, composing or calculating the NASDAQ-100 Index<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup>. The Corporations are not responsible for and have not participated in the determination of the timing of, prices at, or quantities of Allianz Life of NY products to be issued or in the determination or calculation of the equation by which Allianz Life of NY products are to be converted into cash. The Corporations have no liability in connection with the administration, marketing or trading of the Allianz Life of NY products.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">THE CORPORATIONS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED CALCULATION OF THE NASDAQ-100 INDEX<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> OR ANY DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF ALLIANZ LIFE OF NY PRODUCTS, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE NASDAQ-100 INDEX<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> OR ANY DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE NASDAQ-100 INDEX<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL THE CORPORATIONS HAVE ANY LIABILITY FOR ANY LOST PROFITS OR SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.</div>

<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor-->EURO STOXX 50<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The EURO STOXX 50<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> provides a blue-chip representation of supersector leaders in the Eurozone. The index covers 50 stocks from 12 Eurozone countries: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. STOXX has no relationship to Allianz Life Insurance Company of New York ("Allianz Life<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> of NY"), other than the licensing of the EURO STOXX 50<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> and the related trademarks for use in connection with Allianz Life of NY products.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">STOXX does </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold"><u>not</u></font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">:</font>&#160; sponsor, endorse, sell or promote Allianz Life of NY products, recommend that any person invest in Allianz Life of NY products or any other securities, have any responsibility or liability for or make any decisions about the timing, amount or pricing of Allianz Life of NY products, have any responsibility or liability for the administration, management or marketing of Allianz Life of NY products, consider the needs of Allianz Life of NY products or the owners of Allianz Life of NY products in determining, composing or calculating the EURO STOXX 50 or have any obligation to do so.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">STOXX will not have any liability in connection with Allianz Life of NY products. Specifically, STOXX does not make any warranties, express or implied and disclaims any and all warranties about:&#160; the results to be obtained by Allianz Life of NY products, the owner of Allianz Life of NY products or any other person in connection with the use of the EURO STOXX 50 and the data included in the EURO STOXX 50<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup>; the accuracy or completeness of the EURO STOXX 50 and its data; the merchantability and the fitness for a particular purpose or use of the EURO STOXX 50<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> and its data; STOXX has no liability for any errors, omissions or interruptions in the EURO STOXX 50<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">&#174;</sup> or its data; under no circumstances will STOXX be liable for any lost profits or indirect, punitive, special or consequential damages or losses, even if STOXX knows that they might occur.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">The licensing agreement between Allianz Life of NY and STOXX is solely for their benefit and not for the benefit of the owners of Allianz Life of NY products or any other third parties.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We designed the Daily Adjustment to provide an Index Option Value on days other than the Index Effective Date or an Index Anniversary.<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; COLOR: #000000"> The Daily Adjustment is meant to approximate the Index Option Value on the next Index Anniversary, as adjusted for gains during the Index Year subject to the Cap and losses greater than the Buffer. The application of the Daily Adjustment is based on your agreement to be exposed to these Index Anniversary gains subject to the Cap and losses greater than the Buffer. </font>The Daily Adjustment in essence is a proxy for the performance of the Index Performance Strategy and Index Protection NY Strategy accomplished by investing a portion of the Index Option Value in a set of options and the remaining balance in an interest bearing asset.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Daily Adjustment has two components, the change in Proxy Value and accumulated proxy interest, both multiplied by the Index Option Base. The change in Proxy Value represents the current market value of the Proxy Investment ("current Proxy Value"), less the cost of the Proxy Investment at the beginning of the Index Year ("beginning Proxy Value"). The proxy interest is an amount of interest that is earned to provide compensation for the cost of the Proxy Investment at the beginning of the Index Year. The proxy interest is approximated by the value of amortizing the cost of the Proxy Investment over the Index Year to zero. The proxy interest may be significantly different from current interest rates available on interest bearing investments. The change in Proxy Value and the proxy interest estimates the present value of positive or negative Performance Credits on the next Index Anniversary. You should note that even if your selected Index(s) experience positive growth, their Daily Adjustments may be negative because of other market conditions, such as the expected volatility of Index prices and interest rates.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The formula for the calculation of the Daily Adjustment is as follows:</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Daily Adjustment = (a) change in Proxy Value plus (b) proxy interest</div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 14.4pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif">(a)</font><font style="FONT-SIZE: 1px; WIDTH: 28.8pt; DISPLAY: inline-block">&#160;</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif">change in Proxy Value = (current Proxy Value &#8211; beginning Proxy Value) x Index Option Base</font></div>

<div style="TEXT-ALIGN: left; TEXT-INDENT: 14.4pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif">(b)</font><font style="FONT-SIZE: 1px; WIDTH: 28.8pt; DISPLAY: inline-block">&#160;</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif">proxy interest = proxy interest rate x (1 - time remaining) x Index Option Base</font></div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; TEXT-INDENT: 28.8pt">proxy interest rate = beginning Proxy Value</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The current Proxy Value is the Proxy Value calculated on the same day as the Daily Adjustment. The beginning Proxy Value is the Proxy Value calculated on the first day of the current Index Year. The time remaining is equal to the number of days remaining in the Index Year divided by 365.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Proxy Value tracks three hypothetical derivative investments (call and put options) that we designed to mimic the market value of your allocation to an Index Performance Strategy or an Index Protection NY Strategy Index Option. We calculate a Proxy Value for each of your selected Index Options.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The Proxy Value has three components:</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">an at-the-money call;</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">an out-of-the-money call; and</td>
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<div style="MARGIN-BOTTOM: 6pt; TEXT-ALIGN: left">
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<tr>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: Symbol, serif; WIDTH: 14.4pt; VERTICAL-ALIGN: top; align: right">&#183;</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">an out-of-the-money put.</td>
</tr>
</table>
</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">An Index Option's Proxy Value = (at-the-money call) &#8211; (out-of-the-money call) &#8211; (out-of-the-money put)</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">We designed the two call options to value the potential for Index gains up to the Cap. We designed the put option to value the potential for Index losses greater than the Buffer. It is important to note that the put option will almost always reduce the Daily Adjustment, even when the current Index value is higher than it was at the beginning of the Index Year. This is because the risk that the Index value could be lower on the next Index Anniversary is present to some extent whether or not the Index value is lower than it was at the beginning of the Index Year.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">On the Index Anniversary, the current Proxy Value for an Index Option is equal to its Performance Credit as discussed in section 7, Index Options &#8211; Determining the Index Option Values.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-TOP: 6pt">You can find a more detailed explanation of the calculation of the Proxy Value, including examples, at Exhibit 99(a) of the Form S-1 Registration Statement filed with the SEC, of which this prospectus is a part. This Exhibit is incorporated by reference into this prospectus. You can obtain a copy of this Exhibit by calling (800) 624-0197.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Appendix B</div>
</div>

<div style="FONT-SIZE: 9pt; FONT-FAMILY: Arial, sans-serif; FONT-WEIGHT: bold; COLOR: #ffffff; TEXT-ALIGN: center; BACKGROUND-COLOR: #ffffff"></div>
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<div><br>
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<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor-->MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (FOR THE 12&#160;MONTH PERIOD ENDING JUNE 30, 2016)</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-STYLE: italic; TEXT-ALIGN: left; MARGIN-TOP: 6pt">The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and notes to those statements included in this Appendix. The discussion and analysis in this Appendix includes certain forward-looking statements that are subject to risks, uncertainties and other factors, as described in "Risk Factors" and elsewhere in this prospectus, that could cause our actual growth, results of operations, performance, financial position and business prospects and opportunities in the remainder of 2016 and beyond to differ materially from those expressed in, or implied by, those forward-looking statements. See "Forward-Looking Statements."</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; COLOR: #ff0000; TEXT-ALIGN: left">[TO BE UPDATED UPON AMENDMENT]</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The following unaudited consolidated financial statements of Allianz Life Insurance Company of New York and subsidiaries as of June 30, 2016 and December 31, 2015 and for the six month periods ended June 30, 2016 and June 30, 2015 are included in this Appendix.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; COLOR: #ff0000; TEXT-ALIGN: left">[TO BE UPDATED UPON AMENDMENT]</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Appendix C</div>
</div>

<div style="FONT-SIZE: 9pt; FONT-FAMILY: Arial, sans-serif; FONT-WEIGHT: bold; COLOR: #ffffff; TEXT-ALIGN: center; BACKGROUND-COLOR: #ffffff"></div>
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<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor--><!--Anchor--><!--Anchor--><!--Anchor-->MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (FOR THE 12&#160;MONTH PERIOD ENDING DECEMBER 31, 2015)</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-STYLE: italic; TEXT-ALIGN: left; MARGIN-TOP: 6pt">The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and notes to those statements included in this Appendix. The discussion and analysis in this Appendix includes certain forward-looking statements that are subject to risks, uncertainties and other factors, as described in "Risk Factors" and elsewhere in this prospectus, that could cause our actual growth, results of operations, performance, financial position and business prospects and opportunities in 2016 and beyond to differ materially from those expressed in, or implied by, those forward-looking statements. See "Forward-Looking Statements."</div>

<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor-->FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The following financial statements and supplemental schedules of Allianz Life Insurance Company of New York as of December 31, 2015 and 2014 and for each of the years in the three-year period ended December 31, 2015, are included in this Appendix in reliance upon the report of KPMG LLP, independent registered public accounting firm, and upon the authority of said experts in accounting and auditing. The principal business address of KPMG LLP is 4200 Wells Fargo Center, 90 South Seventh Street, Minneapolis, MN.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Appendix D</div>
</div>

<div style="FONT-SIZE: 9pt; FONT-FAMILY: Arial, sans-serif; FONT-WEIGHT: bold; COLOR: #ffffff; TEXT-ALIGN: center; BACKGROUND-COLOR: #ffffff"></div>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Part I </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 12pt">Item&#160;11(e). </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 6pt">Financial Statements meeting the requirements of S-X Item </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 6pt">11(f). </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 6pt">Selected Financial Data </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-STYLE: italic; MARGIN-TOP: 6pt">(dollars in thousands, unless otherwise stated) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">The following table sets forth the Company&#8217;s selected historical financial data. The selected financial data has been derived from the audited Financial Statements included elsewhere in this prospectus, and should be read in conjunction with &#8220;Management&#8217;s Discussion and Analysis of Financial Condition and Results of Operations&#8221; and the Company&#8217;s Financial Statements and related notes. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">These historical results are not necessarily indicative of results to be expected for any future period. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zf39815f8225d4525992fd514c9599294" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 44%"></td>
<td style="WIDTH: 5%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 5%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 5%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 5%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 5%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="18" align="center">Year Ended December&#160;31,</td>
<td valign="bottom">&#160;</td>
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<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" nowrap="nowrap">
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 0pt">Selected income data</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2015</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2014</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2013</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2012</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2011</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Net premiums and policy fees</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">68,870</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">61,716</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">50,733</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">40,192</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">30,891</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Interest and similar income, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">27,387</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">28,859</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">29,635</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">30,834</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">32,587</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Change in fair value of assets and liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,373</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">66,806</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(78,944</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(14,672</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(8,119</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Realized investment gains, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">583</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">77</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">829</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">14,514</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,605</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Fee, commission, and other revenue</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7,221</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,864</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5,904</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,698</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,642</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Total revenue</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">115,434</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">164,322</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">8,157</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">75,566</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">60,606</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Benefits and expenses</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">121,138</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">168,618</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(8,747</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">63,140</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">86,492</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Income tax (benefit) expense</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(4,441</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(3,133</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,425</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,321</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(10,626</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Net (loss) income</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(1,263</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(1,163</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">12,479</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">9,105</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(15,260</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 1pt">
<td style="HEIGHT: 16px"></td>
<td style="HEIGHT: 16px" colspan="20"></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="18" align="center">As of December 31,</td>
<td valign="bottom">&#160;</td>
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<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" nowrap="nowrap">
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 0pt">Selected balance sheet data</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2015</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2014</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2013</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2012</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2011</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Total Investments</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">694,269</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">675,496</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">651,641</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">713,946</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">691,339</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Receivables and reinsurance recoverables</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">16,798</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">10,130</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,661</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,706</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">13,688</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Deferred acquisition costs</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">134,374</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">118,319</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">104,002</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">92,245</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">91,187</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Separate account assets</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;2,205,548</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;2,214,422</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;1,986,039</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;1,577,274</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;1,182,126</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Total assets</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,158,655</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,088,150</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,808,350</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,480,862</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,049,887</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Policyholder liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">769,888</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">697,519</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">583,008</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">699,081</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">721,901</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Separate account liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,205,548</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,214,422</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,986,039</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,577,274</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,182,126</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Total liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,010,167</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,926,743</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,652,089</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,313,382</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,921,080</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Stockholder&#8217;s equity</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">148,488</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">161,407</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">156,261</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">167,480</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">128,807</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 18pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Selected Financial Data and Management&#8217;s Discussion and Analysis </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 1 of 24 </p>

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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 18pt">Item&#160;11(h). </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 6pt">Management&#8217;s Discussion and Analysis of Financial Condition and Results of Operations </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">The following discussion and analysis provides an assessment by management of the Company&#8217;s financial condition as of December&#160;31, 2015, compared with December&#160;31, 2014, and its results of operations for each of the three years ended December&#160;31. The information contained herein should be read in conjunction with the Company&#8217;s audited U.S.&#160;generally accepted accounting principles (GAAP) Financial Statements and schedules. The information contained</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 0pt">below includes certain forward-looking statements that are subject to risks, uncertainties and other factors, as described in &#8220;Risk Factors&#8221; and elsewhere in this prospectus, that could cause actual growth, results of operations, performance, financial position and business prospects and opportunities in 2015 and beyond to differ materially from those expressed in, or implied by, those forward-looking statements. See &#8220;Forward-Looking Statements.&#8221; </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 18pt">Company Overview </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">Allianz Life Insurance Company of New York (hereafter referred to as &#8220;the Company&#8221;, &#8220;we&#8221;, &#8220;our&#8221; and &#8220;us&#8221;) is a life insurance company domiciled in New York and is licensed to sell annuity, individual life, group and traditional life and group accident and health policies in six U.S. states and the District of Columbia. We offer a portfolio of individual variable annuities, which are sold through licensed registered representatives contracted with a broker/dealer. We also maintain a legacy portfolio of individual fixed deferred and fixed-indexed annuities, individual and group life policies, and individual and group accident and health policies, but do not actively issue new policies related to these products. Product sales of our individual fixed deferred and individual fixed-indexed annuities were discontinued late in 2011. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">The Company is a wholly owned subsidiary of Allianz Life Insurance Company of North America (Allianz Life). Allianz Life is a wholly owned subsidiary of Allianz of America, Inc. (AZOA), which is a subsidiary of Allianz Europe, B.V.. Allianz Europe, B.V. is a wholly owned subsidiary of Allianz SE, which is incorporated in Munich, Germany, and is our ultimate parent. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-TOP: 12pt">Our business is classified into two operating segments: Individual Annuities and Other. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-STYLE: italic; MARGIN-TOP: 18pt">Individual Annuity </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">The Individual Annuity segment provides tax-deferred investment growth and lifetime income opportunities for our customers through variable, variable-indexed, fixed deferred and fixed-indexed annuities. The &#8220;fixed&#8221; and &#8220;variable&#8221; classifications describe whether we or the contractholders bear the investment risk of the assets supporting the contract. Variable annuities allow the contractholder to make deposits into various investment options and also have unique product features that allow for guaranteed minimum income benefits, guaranteed minimum accumulation benefits, guaranteed minimum death benefits, and guaranteed minimum withdrawal benefits. The variable annuity products with guaranteed minimum benefits, which provide a minimum return based on their initial deposit may be increased by additional deposits, bonus amounts, or other account crediting features. The income and accumulation benefits shift a portion of the investment risk from the contractholder back to the Company. In 2015, the variable-indexed annuity which was introduced to the market in 2014, continued to gain momentum. This product has characteristics similar to our fixed-indexed annuities but allows contractholders to invest a portion of the funds into a variety of variable investment options and stock indexes. Our Individual Annuity products are sold through independent distribution channels made up of registered representatives contracted with a broker dealer. As previously noted, we discontinued selling individual fixed deferred and fixed-indexed annuities in 2011; however, it continues to be a significant portion of our in-force volume. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-STYLE: italic; MARGIN-TOP: 18pt">Other </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">Our Other business consists of life insurance products and closed blocks of Long-Term Care (LTC) and Special Markets products. The Special Markets products consist of closed blocks of individual and group whole life and term insurance. Although our Other product lines are part of the combined results, we do not focus additional resources in this area, other than to maintain the operational support to our current customers. The performance of these product lines is not material enough to warrant discussion as separate operating segments. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">Refer to Application of Critical Accounting Policies below for information related to the allocation of income and expense to our segments. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 18pt">Basis of Presentation </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">The Financial Statements have been prepared in accordance with GAAP, which vary in certain respects from accounting practices prescribed or permitted by state insurance regulatory authorities. The preparation of Financial Statements in conformance with GAAP requires us to make certain estimates and assumptions that affect reported assets and liabilities, including reporting or disclosure of contingent assets and liabilities as of the balance sheet date and the reported revenues and expenses during the reporting period. Future events, including changes in mortality, morbidity, interest rates, capital </p>

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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 0pt">markets, and asset valuations could cause actual results to differ from the estimates used in the Financial Statements. Such changes in estimates are recorded in the period they are determined. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 18pt">Application of Critical Accounting Policies </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">The preparation of the financial statements in conformance with GAAP requires us to adopt accounting policies and make certain estimates and assumptions, which affect amounts reported in the Financial Statements. Our critical accounting policies are summarized in &#8220;Summary of Significant Accounting Policies&#8221; included in the accompanying notes to the Financial Statements and require the use of judgments related to a variety of assumptions and estimates, in particular expectations of current and future mortality, persistency, investment returns, equity market performance, expenses, and interest rates. Our most critical accounting policies include those policies related to the Company&#8217;s accounting for (i)&#160;Valuation of Investments, (ii)&#160;Derivatives and Hedging, (iii)&#160;Deferred Acquisition Costs (DAC) and Deferred Sales Inducements (DSI), (iv)&#160;Account Balances and Future Policy Benefit Reserves (v)&#160;Other than Temporary Impairments (OTTI), and (vi)&#160;Income Taxes. Due to the inherent uncertainty of assumptions and estimates, the effect of certain accounting policies under different conditions or assumptions could be materially different from that reported in the Financial Statements. A discussion of the various critical accounting policies is presented below. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-STYLE: italic; MARGIN-TOP: 18pt">Valuation of Investments </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">We have portfolios of <font style="WHITE-SPACE: nowrap">fixed-maturity</font> securities classified as <font style="WHITE-SPACE: nowrap">&#8220;available-for-sale.&#8221;</font> Accordingly, the securities are carried at fair value, and related unrealized gains and losses are credited or charged directly to accumulated other comprehensive income in stockholder&#8217;s equity, net of tax and related adjustments to DAC, DSI, and reserves (commonly referred to as shadow adjustments). The adjustments to DAC and DSI represent the change in amortization that would have been required as a charge or credit to operations had such unrealized amounts been realized. The adjustment to reserves represents the increase or decrease in the reserve balance that would have been required had such unrealized amounts been realized. We use a significant amount of judgment to determine the fair value of these investments. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">The Fair Value Measurements and Disclosures Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) establishes a fair value hierarchy that prioritizes the inputs used in the valuation techniques to measure fair value. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">Level 1 &#8211; Unadjusted quoted prices for identical assets or liabilities in active markets that we have the ability to access at the measurement date. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">Level 2 &#8211; Valuations derived from techniques that utilize observable inputs, other than quoted prices included in Level 1, which are observable for the asset or liability either directly or indirectly, such as: </p>

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<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">quoted prices for similar assets or liabilities in active markets; </p>
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<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">quoted prices for identical or similar assets or liabilities in markets that are not active; </p>
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<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">inputs that are derived principally from or corroborated by observable market data by correlation or other means. </p>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">Level 3 &#8211; Valuations derived from techniques in which the significant inputs are unobservable. Level 3 fair values reflect our own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">The fair value of <font style="WHITE-SPACE: nowrap">fixed-maturity</font> securities are based on quoted market prices in active markets when available. Based on the market data, the securities are categorized by asset class, and based on the asset class of the security, appropriate pricing applications, models and related methodology, and standard inputs are utilized to determine what a buyer in the marketplace would pay for the security in a current sale. When quoted prices are not readily available or in an inactive market, standard inputs used in the valuation models, listed in approximate order of priority, include, but are not limited to, benchmark yields, reported trades, Municipal Securities Rulemaking Board (MSRB) reported trades, Nationally Recognized Municipal Securities Information Repository (NRMSIR) material event notices, <font style="WHITE-SPACE: nowrap">broker-dealer</font> quotes, issuer spreads, <font style="WHITE-SPACE: nowrap">two-sided</font> markets, benchmark securities, bids, offers, reference data, and industry and economic events. In some </p>

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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Selected Financial Data and Management&#8217;s Discussion and Analysis </p>

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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 0pt">cases, including private placement securities and certain <font style="WHITE-SPACE: nowrap">difficult-to-price</font> securities, internal pricing models may be used that are based on market proxies. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">Generally, U.S. Treasury securities and exchange-traded stocks are included in Level&#160;1. Most bonds for which prices are provided by <font style="WHITE-SPACE: nowrap">third-party</font> pricing sources are included in Level&#160;2, because the inputs used are market observable. Bonds for which prices were obtained from broker quotes and private placement securities that are internally priced are included in Level&#160;3. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">See Note 6 of the Notes to the Financial Statements for additional information regarding fair value of investments, including management&#8217;s process related to review of third-party pricing services. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-STYLE: italic; MARGIN-TOP: 18pt">Derivatives and Hedging </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">We utilize derivatives within certain actively managed investment portfolios to manage the risk associated with variability in cash flows related to financial assets and liabilities. Within these portfolios, derivatives can be used for hedging, replication, and income generation only. The financial instruments are carried at fair value and the unrealized gains and losses on the derivatives are reflected in Change in fair value of assets and liabilities within the Statements of Operations. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">We utilize over the counter (OTC) and exchange traded interest rate swaps to economically hedge certain variable annuity guarantee benefits. We can receive the fixed or variable rate. The interest rate swaps are traded in varying maturities. We will only enter into OTC interest rate swap contracts with counterparties rated BBB+ or better. The interest rate swaps are subject to the rules of the International Swaps and Derivatives Association, Inc. and associated Credit Support Annex (CSA) agreements. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">We utilize OTC options with the objective to economically hedge certain variable annuity guaranteed benefits. These options are not used for speculative or income generating purposes. These options are cleared through the Options Clearing Corporation (OCC), which operates under the jurisdiction of both the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC). The credit rating on the OCC is currently AA+ from S&amp;P. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">We utilize futures to economically hedge fixed-indexed annuity and variable annuity guarantees. Future contracts do not require an initial cash outlay and we have agreed to daily net settlement based on changes in fair value. Therefore, no asset or liability is recorded on the Balance Sheets except for the outstanding unpaid variation margin representing market movements on the last trading day of the year and cash posted as initial margin. Gains or losses on future contracts are included in the Change in fair value of assets and liabilities on the Statements of Operations as of December&#160;31, 2015 and 2014. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">We issue certain variable annuity products with guaranteed minimum benefit riders, including guaranteed minimum withdrawal benefit (GMWB) and guaranteed minimum accumulation benefit (GMAB), which are measured at fair value separately from the host variable annuity contract, with changes in fair value reported in Change in fair value of annuity and life embedded derivatives on the Statements of Operations. These embedded derivatives are classified within Account balances and future policy benefit reserves on the Balance Sheets. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">Certain <font style="WHITE-SPACE: nowrap">fixed-indexed</font> annuity products include a market value liability option (MVLO), which is essentially an embedded derivative with <font style="WHITE-SPACE: nowrap">equity-indexed</font> features. This embedded derivative is reported within account balances and future policy benefit reserves on the Balance Sheets with changes in fair value reported in Change in fair value of annuity and life embedded derivatives on the Statements of Operations. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">See Note 5 of the Notes to the Financial Statements for additional information regarding derivatives and hedging instruments. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-STYLE: italic; MARGIN-TOP: 18pt">Deferred Acquisition Costs and Deferred Sales Inducements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">We capitalize costs which consist of commissions and other incremental costs that are directly related to the successful acquisition of insurance contracts. For interest sensitive products and variable annuity contracts issued in 2010 and after, acquisition costs are amortized in relation to the present value of estimated future gross profits from investment and mortality, morbidity, and expense charges. For variable annuity contracts issued prior to 2010, acquisition costs are amortized in relation to the present value of estimated gross revenues from investment and mortality, morbidity, and </p>

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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Selected Financial Data and Management&#8217;s Discussion and Analysis </p>

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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 0pt">expense charges. Acquisition costs for accident and health insurance policies are deferred and amortized over the lives of the policies in the same manner as premiums are earned. For traditional life and group life products, such costs are amortized over the projected earnings pattern of the related policies using the same actuarial assumptions used in computing future policy benefit reserves. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">DAC is reviewed for recoverability, at least annually, and adjusted when necessary. Recoverability is evaluated separately for fixed deferred annuities, variable annuities, and life insurance products. The evaluation is a <font style="WHITE-SPACE: nowrap">two-step</font> process where current policy year issues are evaluated for recoverability, and then <font style="WHITE-SPACE: nowrap">in-force</font> policies are evaluated for loss recognition. Before assessing recoverability and loss recognition, DAC is capped, if necessary, such that the balance cannot exceed the original capitalized costs plus interest. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">Changes in assumptions can have an impact on the amount of DAC reported for annuity and life insurance products and their related amortization patterns. In the event experience differs from assumptions or assumptions are revised, we are required to record an increase or decrease in DAC amortization expense (DAC unlocking). In general, increases in the estimated investment spreads and fees result in increased expected future profitability and may decrease the rate of DAC amortization, while increases in costs of product guarantees, and lapse/surrender and mortality assumptions reduce the expected future profitability of the underlying business and may increase the rate of DAC amortization. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">We formally evaluate the appropriateness of the best estimate assumptions at least on an annual basis. If the economic environment or policyholder behavior changes quickly and substantially, assumptions will be reviewed more frequently to affirm best estimates. Any resulting DAC unlocking is reflected prospectively as a Change in deferred acquisition costs, net on the Statements of Operations. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">Sales inducements are product features that enhance the investment yield to the contractholder on the contract. We offer two types of sales inducements on certain annuity contracts. The first type, an immediate bonus, increases the account value at inception, and the second type, a persistency bonus, increases the account value at the end of a specified period. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">Annuity sales inducements are deferred when credited to contractholders. DSI is reported in Other assets in the Balance Sheets. They are amortized over the expected life of the contract in a manner similar to DAC and are reviewed annually for recoverability. DSI capitalization and amortization is recorded in Policyholder benefits on the Statements of Operations. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">The impact of unlocking during 2015 was a $2,641 decrease in amortization of DAC and $337 decrease in amortization of DSI primarily due to adjustments made to future period assumptions for interest margins, mortality, policyholder behavior (including surrender, annuitization and lifetime income benefit utilization), separate account returns and maintenance expenses. In 2014, the impact of unlocking was a $856 decrease in DAC amortization and a $356 decrease in DSI amortization due to similar assumption changes. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">On April&#160;1, 2014, we applied a prospective change to our method of calculating DAC amortization for variable annuity policies issued prior to 2010. This was a change in estimate that is inseparable from the effect of a related change in accounting principle. For these annuities, acquisition costs are now amortized in relation to the present value of estimated gross revenues, whereas previously were amortized using expected future gross profits. The implementation of the new DAC amortization will better reflect the revenue pattern of the pre-2010 variable block of business, which is currently in run-off. The implementation of this change resulted in a decrease in income from operations before income taxes of $8,820 for the year ended December&#160;31, 2014. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">On December&#160;1, 2014, we applied a prospective change to our method of calculating DAC amortization for variable annuity policies issued after 2010. The change in estimate will minimize accounting mismatches on interest and claim projections within the estimated gross profits (EGP) calculation. The implementation of this change resulted in a decrease in income from operations before income taxes of approximately $669 for the year ended December&#160;31, 2014. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">See Note 8 and 9 of the Notes to the Financial Statements for additional information regarding Deferred Acquisition Costs and Deferred Sales Inducements. </p>

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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-STYLE: italic; MARGIN-TOP: 0pt">Account Balances and Future Policy Benefit Reserves </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">We calculate and maintain reserves for the estimated future payment of claims to policyholders based on actuarial assumptions and in accordance with industry practice. Many factors can affect these reserves, including economic and social conditions, inflation, and changes in doctrines of legal liability. The reserves we establish are Policy and contract account balances for <font style="WHITE-SPACE: nowrap">interest-sensitive</font> products, which include fixed deferred annuities and are generally carried at accumulated contract values. We issue variable annuity contracts through our separate accounts for which investment income and investment gains and losses accrue directly to, and investment risk is borne by, the contractholder. We recognize gains or losses on transfers from the general account to the separate accounts at fair value to the extent of contractholder interests in separate accounts, which are offset by changes in contractholder liabilities. We also issue variable annuity contracts through our separate accounts where we provide certain contractual guarantees to the contractholder. These guarantees are in the form of a guaranteed minimum death benefit (GMDB), a guaranteed minimum income benefit (GMIB), GMAB, and a GMWB. These guarantees provide for benefits that are payable to the contractholder in the event of death, annuitization, or at specified dates during the accumulation period. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">Changes in GMDB and GMIB are calculated in accordance with the Financial Services &#8211; Insurance Topic of the Codification and are included in Policyholder benefits on the Statements of Operations. GMAB and GMWB are considered to be embedded derivatives under the Derivatives and Hedging Topic of the Codification, and the changes in these embedded derivatives are included in Change in fair value of annuity and life embedded derivatives on the Statements of Operations. The GMDB provides a specified minimum return upon death. The survivor has the option to terminate the contract or continue it and have the death benefit paid into the contract. The GMIB is a living benefit that provides the contractholder with a guaranteed annuitization value. The GMDB and GMIB liabilities are determined each period by estimating the expected future claims in excess of the associated account balances. We regularly evaluate estimates used and adjust the additional liability balance, with a related charge or credit to Policyholder benefits on the Statements of Operations if actual experience or other evidence suggests that earlier assumptions should be revised. The GMAB is a living benefit that provides the contractholder with a guaranteed value that was established at least five&#160;years prior at each contract anniversary. The GMWB is a living benefit that provides the contractholder with a guaranteed amount of income in the form of partial withdrawals. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">Policy and contract account balances for variable annuity products are carried at accumulated contract values. Future policy benefit reserves for any death and income benefits that may exceed the accumulated contract values are established using a range of economic scenarios and are accrued for using assumptions consistent with those used in EGPs for purposes of amortizing DAC. Future policy benefit reserves for accumulation and withdrawal benefits that may exceed account values are established using capital market assumptions, such as index and volatility, along with estimates of future policyholder behavior. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">For <font style="WHITE-SPACE: nowrap">fixed-indexed</font> annuity products, the policyholder obligation is divided into two parts &#8211; one part representing the value of the underlying base contract (host contract) and the second part representing the fair value of the expected index benefit over the life of the contract. The host contract is valued using principles consistent with similar deferred annuity contracts without an index benefit. The index benefit is valued at fair value using current capital market assumptions, such as index and volatility, to estimate future index levels. The index benefit valuation is also dependent upon estimates of future policyholder behavior. We must include provisions for our own credit risk and for risk that our assumptions about policyholder activity could differ from actual experience. The fair value determination of the index benefit is sensitive to the economic market and interest rate environment, as it is discounted at current market interest rates. There is volatility in this liability due to these external market sensitivities. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">We established an additional LTC reserve in 2015 in our Other segment to provide for future expected losses that are anticipated to occur after a period of profits. The reserve accrual will be over the profit period and is based on best estimate assumptions as of the current accrual period without provisions for adverse deviation. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">See Note 2 of the Notes to the Financial Statements for additional information regarding Account Balances and Future Policy Benefit Reserves. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-STYLE: italic; MARGIN-TOP: 18pt">Other than Temporary Impairments </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">We review the available-for-sale investment portfolio each quarter to determine whether or not declines in fair value are other-than-temporary. We continue to evaluate factors in addition to average cost and fair value, including credit quality, </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Selected Financial Data and Management&#8217;s Discussion and Analysis </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 6 of 24 </p>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 0pt">the extent and duration of the decline, market analysis, current events, recent price declines, changes in risk-free interest rates, likelihood of recovery in a reasonable period of time, and management&#8217;s judgment, to determine whether fixed income securities are considered other-than-temporarily impaired. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">When the fair value of a <font style="WHITE-SPACE: nowrap">fixed-maturity</font> security is less than its amortized cost, we assess whether or not: (i)&#160;we have the intent to sell the security or (ii)&#160;it is more likely than not that we will be required to sell the security before its anticipated recovery. We also evaluate factors to determine whether we or any of our investment managers have intent to sell a security or a group of securities. Additionally, we perform a cash flow projection for several years into the future to determine whether cash needs would require the sale of any securities. If either of these conditions is met, we must recognize an <font style="WHITE-SPACE: nowrap">other-than-temporary</font> impairment for the difference between the investment&#8217;s amortized cost basis and its fair value through earnings. For securities that do not meet the above criteria, and we do not expect to recover a security&#8217;s amortized cost basis, the security is considered <font style="WHITE-SPACE: nowrap">other-than</font> temporarily impaired. For these securities, we separate the total impairment into the credit loss component and the amount of the loss related to other factors. The amount of the total impairment related to credit loss is considered an OTTI and is recognized in Realized investment gains, net on the Statements of Operations. The amount of the total impairment related to other factors is recognized in other comprehensive income, net of impacts to DAC, DSI, reserves, and deferred income taxes. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">See Note 2 and 4 of the Notes to the Financial Statements for additional information regarding other than temporary impairment losses. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-STYLE: italic; MARGIN-TOP: 18pt">Income Taxes </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">We file a consolidated federal income tax return with AZOA. The consolidated tax allocation agreement stipulates that each company participating in the return will bear its share of the tax liability pursuant to certain tax allocation elections under the Internal Revenue Code and its related regulations and reimbursement will be in accordance with an intercompany tax reimbursement arrangement. We provide for federal income taxes based on amounts we believe are ultimately owed. Inherent in the provision for federal income taxes are estimates regarding the deductibility of certain items and the realization of certain tax credits. In the event the ultimate deductibility of certain items or the realization of certain tax credits differs from estimates, we may be required to significantly change the provision for federal income taxes recorded on the Balance Sheets. Any such change could significantly affect the amounts reported on the Statements of Operations. Management uses best estimates to establish reserves based on current facts and circumstances regarding tax exposure items where the ultimate deductibility is open to interpretation. Quarterly, we evaluate the appropriateness of such reserves based on any new developments specific to their fact patterns. Information considered includes results of completed tax examinations, Technical Advice Memorandums, and other rulings issued by the Internal Revenue Service (IRS) or the tax courts. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">We utilize the asset and liability method of accounting for income tax. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. Valuation allowances are established when it is determined that it is more likely than not that the deferred tax asset will not be fully realized or that the related temporary differences, such as OTTI, will not reverse over time. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">Although realization is not assured, we believe it is not necessary to establish a valuation allowance for ordinary deferred tax assets, as it is more likely than not the deferred tax assets will be realized principally through future reversals of existing ordinary taxable temporary differences and future ordinary taxable income. For deferred tax assets that are capital in nature, considering all objective evidence and the available tax planning strategy, it is more likely than not the deferred tax assets that are capital in nature will be realized and no valuation allowance is required. The amount of the ordinary and capital deferred tax assets considered realizable could be reduced in the near term if estimates of future reversals of existing taxable temporary differences and future ordinary and capital taxable income are reduced. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">See Note 13 of the Notes to the Financial Statements for additional information regarding income tax estimates and assumptions. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Selected Financial Data and Management&#8217;s Discussion and Analysis </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 7 of 24 </p>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-STYLE: italic; MARGIN-TOP: 0pt">Allocation of Income and Expense </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">The Company maintains segregated investment portfolios at the subsidiary level but does not for each individual segment. All Interest and similar income, net and Realized investment gains, net are allocated to the segments. Assets are only monitored at the total company level, and as such, asset disclosures by segment are not included herein. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">Income and expense related to assets backing policyholder reserves are allocated to the segments based on policyholder reserve levels. The results of our Individual Annuity and Other segments also reflect allocation of income and expense related to assets backing surplus. Income and expense related to assets backing surplus are allocated to the segments based on required capital levels for each segment and are excluded from estimated gross profits used in reserve and DAC model projections. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 18pt">Results of Operations </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zeef1ab7b70374b449e47ce1935f341e7" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 41%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom" rowspan="2">Total Company:</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="10" align="center">Year Ended December 31,</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">Increase (decrease) and<br>
 % change</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">Increase (decrease) and<br>
 % change</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2015</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2014</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2013</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">2015 - 2014</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">2014 - 2013</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Revenue:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Net premiums and policy fees</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">68,870</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">61,716</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">50,733</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">7,154</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11.6</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">10,983</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;&#160;&#160;21.6</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
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<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Interest and similar income, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">27,387</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">28,859</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">29,635</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,472</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(5.1</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(776</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(2.6</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Change in fair value of assets and liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,373</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">66,806</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(78,944</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(55,433</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(83.0</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">145,750</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">184.6</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Realized investment gains, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">583</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">77</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">829</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">506</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">657.1</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(752</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(90.7</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Fee, commission, and other revenue</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7,221</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,864</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5,904</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">357</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5.2</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">960</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">16.3</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total revenue</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;115,434</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;164,322</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">8,157</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(48,888</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(29.8</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">156,165</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">NM</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Benefits and expenses:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Net benefits</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">87,511</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">143,893</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(38,103</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;(56,382</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(39.2</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">181,996</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">477.6</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">General and administrative and commission</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">41,792</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">39,789</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">35,519</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,003</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,270</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">12.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Change in deferred acquisition costs, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(8,165</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(15,064</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(6,163</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,899</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">45.8</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(8,901</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(144.4</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total benefits and expenses</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">121,138</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">168,618</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(8,747</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(47,480</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(28.2</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;177,365</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">NM</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Pretax (loss) income</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(5,704</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(4,296</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">16,904</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,408</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(32.8</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(21,200</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(125.4</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Income tax (benefit) expense</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(4,441</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(3,133</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,425</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,308</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;(41.7</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(7,558</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(170.8</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Net (loss) income</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(1,263</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(1,163</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;12,479</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(100</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(8.6</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(13,642</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;(109.3</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zbb37d571ed09493cb837700e6f388818" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%" valign="top" align="left">NM</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Not meaningful </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z5da5b7a12e02449fb6ace93a9a33a33d" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 45%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="10" align="center">Year Ended December 31,</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">Increase (decrease)<br>
 and % change</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">Increase&#160;(decrease) and<br>
 % change</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2015</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2014</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2013</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">2015 - 2014</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">2014 - 2013</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Pretax (loss) income:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Individual Annuity</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;(4,030</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;(2,986</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;17,477</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;(1,044</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;(35.0</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;(20,463</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;(117.1</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Other</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,674</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,310</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(573</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(364</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(27.8</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(737</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;(128.6</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total Pretax (loss) income</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(5,704</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(4,296</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">16,904</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(1,408</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;(32.8</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(21,200</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(125.4</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
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<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Selected Financial Data and Management&#8217;s Discussion and Analysis </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 8 of 24 </p>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 0pt">Year Ended December&#160;31, 2015 Compared to Year Ended December&#160;31, 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 6pt">Overview </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zce4575e9bca24e1e958818c67f828aee" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 5%">&#160;</td>
<td style="WIDTH: 2%" valign="top" align="left">&#8226;</td>
<td style="WIDTH: 1%" valign="top">&#160;</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><i>Net (loss) income:</i> For the Company, net loss of $(1,263) in 2015 is in line with the prior year results of ($1,163). The pretax loss decrease is primarily due to the impact of the Individual Annuity reserves net of economic hedges driven by change in the equity markets and interest rates during 2015. </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 18pt">Year Ended December&#160;31, 2014 Compared to Year Ended December&#160;31, 2013 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 6pt">Overview </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt"><i>Net (loss) income:</i> For the Company, net loss is a decrease of $13,642 or 109.3% to $(1,163) for 2014 compared to $12,479 for the prior year. The net income decrease is primarily due to the unfavorable impact of the Individual Annuity reserves net of economic hedging driven by interest rate movement in 2014. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 18pt">Selected operating performance measures </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z3fda4ad409e749b3a8cf4b1a3dc47d3c" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 37%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="10" align="center">Year Ended December 31,</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">Increase&#160;(decrease) and<br>
 % change</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">Increase (decrease) and<br>
 % change</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2015</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2014</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2013</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">2015&#160;-&#160;2014</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">2014&#160;-&#160;2013</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Deposits &amp; Gross Written Premium</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Individual Annuity</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">277,549</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">322,272</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">314,109</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(44,723</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(13.9</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">8,163</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2.6</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Other</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,600</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,693</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,815</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(93</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(2.0</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(122</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(2.5</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Total</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">282,149</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">326,965</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">318,924</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;(44,816</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(13.7</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">8,041</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2.5</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Inforce</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Individual Annuity</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;2,764,367</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;2,768,560</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;2,546,237</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(4,193</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(0.2</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;$</td>
<td valign="bottom" align="right">222,323</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">8.7</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Other</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">71,620</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">77,592</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">84,046</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(5,972</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(7.7</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(6,454</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(7.7</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Total</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,835,987</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,846,152</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,630,283</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(10,165</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;(0.4</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">215,869</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;8.2</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">Deposits, gross written premiums, and in-force amounts in the table above are for direct and assumed business. Gross premiums written and deposits reflect amounts collected on both new and renewal business. Individual Annuity in-force represents account values of the annuity contracts for our variable, variable-indexed, fixed-deferred, and fixed-indexed annuity contracts. The overall decrease in deposits is a result of the decline in traditional variable annuity sales partially offset by the variable-indexed annuity, which was introduced to the market in 2014 and continued to grow throughout 2015. Other products in-force amounts represent life insurance in-force within our special markets products. The decrease in gross premiums written and in-force on other products over the last two years is due to these being closed blocks of business. The movement of in-force on Individual Annuity, year over year, is primarily driven by policyholder activity and market performance. Increases are driven by deposits and new business, and decreases are driven by policyholder charges, surrenders, and claims. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 18pt">Individual Annuity and Other </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">Based upon the significance of the Individual Annuity segment and its overall impact on the total results of operations, we only provided variance commentary at the total company level for year ended December&#160;31, 2015 compared to 2014 and year ended December&#160;31, 2014, compared to 2013. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Selected Financial Data and Management&#8217;s Discussion and Analysis </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 9 of 24 </p>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-TOP: 0pt">The following tables provide the results of operations for the Individual Annuity and Other segments: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 18pt">Individual Annuity </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 6pt">Segment results of operations </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z26728bb5594d49b5b6cdc248fd3811ae" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 48%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="10" align="center">Year Ended December 31,</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">Increase (decrease)<br>
 and % change</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">Increase (decrease) and<br>
 % change</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2015</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2014</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2013</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">2015 - 2014</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">2014 - 2013</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Revenue:</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Net premiums and policy fees</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">65,603</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">58,728</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">47,281</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">6,875</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11.7</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">11,447</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">24.2</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Interest and similar income, net</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">25,378</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">27,293</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">28,562</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,915</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(7.0</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,269</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(4.4</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Change in fair value of assets and liabilities</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,374</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">66,806</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(78,945</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(55,432</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(83.0</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">145,751</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">184.6</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
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<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Realized investment gains, net</p>
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<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">549</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">73</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">796</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">476</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">652.1</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(723</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(90.8</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Fee, commission, and other revenue</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7,221</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,869</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5,904</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">352</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5.1</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">965</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">16.3</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total revenue</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;110,125</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;159,769</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,598</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(49,644</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(31.1</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">156,171</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,340.5</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Benefits and expenses:</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Net benefits</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">81,697</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">138,957</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(42,034</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;(57,260</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;(41.2</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;180,991</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;430.6</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">General and administrative and commission</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">41,145</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">38,886</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;34,595</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,259</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5.8</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,291</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">12.4</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Change in deferred acquisition costs, net</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(8,687</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(15,088</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(6,440</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,401</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">42.4</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(8,648</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(134.3</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total benefits and expenses</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">114,155</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">162,755</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(13,879</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(48,600</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(29.9</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">176,634</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,272.7</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Pretax (loss) income</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(4,030</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(2,986</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">17,477</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(1,044</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(35.0</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(20,463</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(117.1</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 18pt">Other </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 6pt">Segment results of operations </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zce8c4411a4dc47be9fe3abbd1881a7d0" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 52%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="10" align="center">Year Ended December 31,</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">Increase&#160;(decrease)<br>
 and % change</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">Increase&#160;(decrease)<br>
 and % change</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2015</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2014</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2013</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">2015 - 2014</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">2014 - 2013</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Revenue:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Net premiums and policy fees</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">3,267</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">2,988</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">3,452</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">279</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">9.3</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(464</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(13.4</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Interest and similar income, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,009</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,566</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,073</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">443</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">28.3</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">493</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">45.9</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Change in fair value of assets and liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(100.0</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Realized investment gains, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">34</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">33</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">30</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">750.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(29</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(87.9</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Fee, commission and other revenue</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(5</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">100.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(5</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total revenue</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5,309</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,553</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,559</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">756</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">16.6</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(6</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(0.1</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Benefits and expenses:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Net benefits</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5,814</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,936</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;3,931</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">878</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">17.8</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,005</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">25.6</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">General and administrative and commission</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">647</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">903</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">924</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(256</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(28.3</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(21</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(2.3</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Change in deferred acquisition costs, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">522</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">24</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">277</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">498</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;2,075.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(253</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(91.3</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total benefits and expenses</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,983</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;5,863</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5,132</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;1,120</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">19.1</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">731</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">14.2</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Pretax loss</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;(1,674</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(1,310</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(573</td>
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<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(364</td>
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<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(27.8</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;(737</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;(128.6</td>
<td valign="bottom" nowrap="nowrap">)%&#160;</td>
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<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
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</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
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</td>
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</td>
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</td>
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<p style="BORDER-TOP: #000000 3px double">&#160;</p>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Selected Financial Data and Management&#8217;s Discussion and Analysis </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 10 of 24 </p>

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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 0pt">Total Company &#8211; Statement of Operations Line Item Variance Analysis </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 6pt">Year Ended December&#160;31, 2015 Compared to Year Ended December&#160;31, 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 6pt">Revenue </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt"><i>Net premiums and policy fees. </i>Net premiums consist primarily of premiums for long-term care, net of reinsurance, and life insurance. Policy fees represent asset fees, cost of insurance charges, administrative fees, charges for guarantees on investment products, and surrender charges for investment products. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zb6fa91961814400b80016b088efcd140" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 5%">&#160;</td>
<td style="WIDTH: 2%" valign="top" align="left">&#8226;</td>
<td style="WIDTH: 1%" valign="top">&#160;</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Premium and policy fee revenue increase of $7,154 or 11.6% in 2015 as compared to 2014 is primarily due to increases in rider charges due to the higher benefit base and higher variable-indexed annuity product fee income driven by continued growth of this product within our Individual Annuity segment. </p>
</td>
</tr>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt"><i>Interest and similar income, net. </i>Interest and similar income primarily includes interest income on fixed-maturity securities classified as available-for-sale. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z491446a7604d40e3be4bd34367d60b6c" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 5%">&#160;</td>
<td style="WIDTH: 2%" valign="top" align="left">&#8226;</td>
<td style="WIDTH: 1%" valign="top">&#160;</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Interest and similar income decrease of $1,472 or 5.1% in 2015 compared to 2014 is primarily due to a decrease in allocated investment income driven by the closed block of the fixed-annuity business within the Individual Annuity segment. </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt"><i>Change in fair value of assets and liabilities. </i>Change in fair value of assets and liabilities represents the changes in fair value and the realized gains and losses from derivative instruments. We utilize derivatives within certain actively managed investment portfolios to manage the risk associated with variability in cash flows or changes in fair values related to financial assets and liabilities. See Application of Critical Accounting Policies for additional information. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="za862a3bf5ea14f949074e169c217511d" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 5%">&#160;</td>
<td style="WIDTH: 2%" valign="top" align="left">&#8226;</td>
<td style="WIDTH: 1%" valign="top">&#160;</td>
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<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Change in fair value of assets and liabilities is a decrease of $55,433 or 83.0% in 2015 compared to 2014. The variance is driven by the unfavorable impact of interest rates partially offset by less negative results mainly due to change in the equity market (equity market decline in 2015 vs increase in 2014). The change in fair value of assets result economically hedges reserve changes in net benefits. </p>
</td>
</tr>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt"><i>Realized investment gains, net</i>. Realized investment gains (losses) consist of gains and losses from the sale or impairment of investments. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z3be39ea026624af5b1fdb0eb87d84b35" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 5%">&#160;</td>
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<td style="WIDTH: 1%" valign="top">&#160;</td>
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<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Realized investment gains is an increase of $506 in 2015 compared to 2014 primarily a result of normal investment activity in 2015. </p>
</td>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt"><i>Fee, commission and other revenue. </i>Fee, commission and other revenue relate primarily to fees earned from assets under management by certain fund companies. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z231a1f20577e47c688a8d63cf4542566" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 5%">&#160;</td>
<td style="WIDTH: 2%" valign="top" align="left">&#8226;</td>
<td style="WIDTH: 1%" valign="top">&#160;</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Fee, commission and other revenue increase of $357 or 5.2% in 2015 compared to 2014 is due to an overall increase in 12b-1 fees and other revenue sharing from Allianz Life Financial Services, LLC relating to the distribution of variable annuity products. </p>
</td>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 18pt">Benefits and Expenses </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt"><i>Net benefits. </i>Net benefits consist of amounts paid to policyholders and changes in liabilities held for anticipated future benefit payments under insurance policies and annuity contracts. Amounts are net of benefit payments recovered or expected to be recovered under reinsurance contracts. The index benefit under fixed-indexed annuities and the accumulation and withdrawal benefits under variable annuity guarantees include the change in fair value for these embedded derivatives. The derivatives to economically hedge these benefits are included in revenue under change of fair value of assets and liabilities. Net benefits also include amortization of DSI. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zcdf098f7baec46109427aa417afdde13" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 5%">&#160;</td>
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<td style="WIDTH: 1%" valign="top">&#160;</td>
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<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Net benefits decrease of $56,382 or 39.2% in 2015 compared to 2014 is primarily due to the favorable change in reserves for Individual Annuity driven by the relative decrease in equity market returns in 2015 compared to 2014 partially offset by the impact of interest rate movement in 2015 compared to 2014. </p>
</td>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt"><i>General and administrative and commissions. </i>General and administrative and commission expenses includes compensation, consultant fees, information technology, facilities and equipment, advertising and marketing, legal and regulatory and corporate related expenses. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Selected Financial Data and Management&#8217;s Discussion and Analysis </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 11 of 24 </p>

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<table id="zeddd352917024de9a649ccaf8aa2e9dd" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
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<td style="WIDTH: 5%">&#160;</td>
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<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">General and administrative and commission expenses increase of $2,003 or 5.0% in 2015 compared to 2014 is due to an overall increase in expense sharing (higher allocated expenses) which was implemented in 2015 by Allianz Life. </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt"><i>Change in deferred acquisition costs, net</i>. Change in deferred acquisition costs represents the capitalization of acquisition costs reported in general and administrative and commission expenses, and amortization of DAC and DSI. For fixed, fixed-indexed, and variable annuity contracts issued in 2010 and after, acquisition costs are amortized in relation to the present value of future EGPs from investment margins, mortality, morbidity, and expense charges. For variable annuity contracts issued prior to 2010, acquisition costs are amortized in relation to the present value of estimated gross revenues from investments and mortality, morbidity, and expense charges. Acquisition costs for LTC policies are deferred and amortized over the lives of the policies. Changes in assumptions are recorded as an increase or decrease in amortization (unlocking). </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zf28341d471844f6bb803de42a28ff31e" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 5%">&#160;</td>
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<td style="WIDTH: 1%" valign="top">&#160;</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Change in deferred acquisition costs is an increase of $6,899 or 45.8% in 2015 compared to 2014. The increase was driven by higher amortization, partially offset by lower capitalization. The increase in amortization was driven by the equity market impact on guarantee reserves in 2015. The lower capitalization trends with the lower production in 2015. </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 18pt">Income tax (benefit) expense </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z704d2c5e05124244b330ac4f292d1091" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 5%">&#160;</td>
<td style="WIDTH: 2%" valign="top" align="left">&#8226;</td>
<td style="WIDTH: 1%" valign="top">&#160;</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><i>Income tax (benefit) expense:</i> The 2015 income tax benefit is an increase of $1,308 or 41.7% compared to 2014. The change is primarily due to the additional pre-tax loss and additional Separate Account dividends received deduction (DRD) benefit from the respective funds. </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 18pt">Year Ended December&#160;31, 2014 Compared to Year Ended December&#160;31, 2013 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 6pt">Revenue </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt"><i>Net premiums and policy fees. </i>Net premiums consist primarily of premiums for long-term care, net of reinsurance, and life insurance. Policy fees represent asset fees, cost of insurance charges, administrative fees, charges for guarantees on investment products, and surrender charges for investment products. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zd59a0e48caf84c3e883331d83b7ebddf" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 5%">&#160;</td>
<td style="WIDTH: 2%" valign="top" align="left">&#8226;</td>
<td style="WIDTH: 1%" valign="top">&#160;</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Premium and policy fee revenue increase of $10,983 or 21.6% in 2014 as compared to 2013 is primarily due to increases in fee revenue and rider charges driven by higher Individual Annuity separate account balances and growing benefit base. </p>
</td>
</tr>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt"><i>Interest and similar income, net. </i>Interest and similar income primarily includes interest income on fixed-maturity securities classified as available-for-sale. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z417ee78d4e824512959a37fdceeef01b" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 5%">&#160;</td>
<td style="WIDTH: 2%" valign="top" align="left">&#8226;</td>
<td style="WIDTH: 1%" valign="top">&#160;</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Interest and similar income decrease of $776 or 2.6% in 2014 compared to 2013 is primarily due to a decrease in the book value of assets and the average yield earned on the investments. </p>
</td>
</tr>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt"><i>Change in fair value of assets and liabilities. </i>Change in fair value of assets and liabilities represents the changes in fair value and the realized gains and losses from derivative instruments. We utilize derivatives within certain actively managed investment portfolios to manage the risk associated with variability in cash flows or changes in fair values related to financial assets and liabilities. See Application of Critical Accounting Policies for additional information. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="za0279cb94cea4d1e85a1a422097682ba" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 5%">&#160;</td>
<td style="WIDTH: 2%" valign="top" align="left">&#8226;</td>
<td style="WIDTH: 1%" valign="top">&#160;</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Change in fair value of assets and liabilities is an increase of $145,750 or 184.6% in 2014 compared to 2013. This is driven by the favorable hedge results on derivatives for Individual Annuity primarily due to interest rate movement impacting the economic hedge for variable annuity products. The Individual Annuity economic hedge results partially offset reserve changes in net benefits. </p>
</td>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt"><i>Realized investment gains, net</i>. Realized investment gains (losses) consist of gains and losses from the sale or impairment of investments. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zd4711a243eb34f199a16b98f959756de" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 5%">&#160;</td>
<td style="WIDTH: 2%" valign="top" align="left">&#8226;</td>
<td style="WIDTH: 1%" valign="top">&#160;</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Realized investment gains is a decrease of $752 or 90.7% in 2014 compared to 2013 primarily a result of the lower sales in 2014 of fixed-maturity securities. </p>
</td>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Selected Financial Data and Management&#8217;s Discussion and Analysis </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 12 of 24 </p>

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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 0pt"><i>Fee, commission and other revenue. </i>Fee, commission and other revenue relate primarily to fees earned from assets under management by certain fund companies. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zbaaffdaf699a438dabc0d8f0720bf8b1" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 5%">&#160;</td>
<td style="WIDTH: 2%" valign="top" align="left">&#8226;</td>
<td style="WIDTH: 1%" valign="top">&#160;</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Fee, commission and other revenue increase of $960 or 16.3% in 2014 compared to 2013 is due to higher fund administration fees driven by increases in Individual Annuities assets under management as a result of the continued asset base growth in 2014. </p>
</td>
</tr>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 18pt">Benefits and Expenses </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt"><i>Net benefits. </i>Net benefits consist of amounts paid to policyholders and changes in liabilities held for anticipated future benefit payments under insurance policies and annuity contracts. Amounts are net of benefit payments recovered or expected to be recovered under reinsurance contracts. The index benefit under fixed-indexed annuities and the accumulation and withdrawal benefits under variable annuity guarantees include the change in fair value for these embedded derivatives. The derivatives to hedge these benefits are included in revenue under change of fair value of assets and liabilities. Net benefits also include amortization of DSI. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z0f1219e0416749b3b58343a986c24cd6" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 5%">&#160;</td>
<td style="WIDTH: 2%" valign="top" align="left">&#8226;</td>
<td style="WIDTH: 1%" valign="top">&#160;</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Net benefits increase of $181,996 or 477.6% in 2014 compared to 2013 is primarily due to an unfavorable change in reserves for Individual Annuity driven by the impact of interest rate movement in 2014 compared to 2013. Individual Annuity reserve movements are partially economically hedged in Change in fair value of assets and liabilities. </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt"><i>General and administrative and commissions. </i>General and administrative and commission expenses includes compensation, consultant fees, information technology, facilities and equipment, advertising and marketing, legal and regulatory and corporate related expenses. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zfa5e7e4001fe4e4aa79ff433ccea10b2" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 5%">&#160;</td>
<td style="WIDTH: 2%" valign="top" align="left">&#8226;</td>
<td style="WIDTH: 1%" valign="top">&#160;</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">General and administrative and commission expenses increase of $4,270 or 12.0% in 2014 compared to 2013 is primarily due to higher trail commissions from the continued growth of assets under management as a result of positive market conditions and higher allocated expenses and service fees. </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt"><i>Change in deferred acquisition costs, net</i>. Change in deferred acquisition costs represents the capitalization of acquisition costs reported in general and administrative and commission expenses, and amortization of DAC and DSI. For fixed, fixed-indexed, and variable annuity contracts issued in 2010 and after, acquisition costs are amortized in relation to the present value of future EGPs from investment margins, mortality, morbidity, and expense charges. For variable annuity contracts issued prior to 2010, acquisition costs are amortized in relation to the present value of estimated gross revenues from investments and mortality, morbidity, and expense charges. Acquisition costs for LTC policies are deferred and amortized over the lives of the policies. Changes in assumptions are recorded as an increase or decrease in amortization (unlocking). </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z6e259d9b5fdf4c7c808ddaa74bbada91" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 5%">&#160;</td>
<td style="WIDTH: 2%" valign="top" align="left">&#8226;</td>
<td style="WIDTH: 1%" valign="top">&#160;</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Change in deferred acquisition costs is a decrease of $8,901 or 144.4% in 2014 compared to 2013. The favorable change in deferred acquisition costs is due to the change in DAC amortization driven by the change in interest rates and its impact on estimated gross profits in 2014 compared to 2013. </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 18pt">Income tax (benefit) expense </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z4d0db37695e6421ea26b417367589cf4" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 5%">&#160;</td>
<td style="WIDTH: 2%" valign="top" align="left">&#8226;</td>
<td style="WIDTH: 1%" valign="top">&#160;</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><i>Income tax (benefit) expense:</i> The 2014 income tax benefit is a decrease of $7,558 or 170.8% compared to 2013. The change is primarily attributable to a decrease in pre-tax income of $21,200. </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 18pt">Financial Condition </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-STYLE: italic; MARGIN-TOP: 6pt">Investment Strategy </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">Our investment strategy focuses on diversification by asset class. We seek to achieve economic diversification, while reducing overall credit and liquidity risks. We attempt to mitigate these credit and liquidity risks by adhering to investment policies that provide portfolio diversification on an asset class, creditor, and industry basis, and by complying with investment limitations governed by state insurance laws and regulations, as applicable. We also consider all relevant objective information available in estimating the cash flows related to structured securities. In addition, we seek to mitigate the impact of cash flow variability from embedded options in our variable annuities, through certain investment products such as interest rate swaps and futures contracts. We actively monitor and manage exposures, and determine whether any securities are impaired. The aggregate credit risk taken in the investment portfolio is influenced by our </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Selected Financial Data and Management&#8217;s Discussion and Analysis </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 13 of 24 </p>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 0pt">risk/return preferences, the economic and credit environment, and the relationship of credit risk in the asset portfolio to liabilities. We also have an asset-liability management strategy to align cash flows and duration of the investment portfolio with contractholder liability cash flows and duration. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-TOP: 12pt">The following table presents the investment portfolio at December&#160;31. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z543c2723b93047c0b5e3ff981a9637f3" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 92%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 56%"></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom" rowspan="2" nowrap="nowrap"><b>Portfolio Composition</b></td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">2015</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">2014</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">Carrying&#160;value</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">%&#160;of&#160;total</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">Carrying&#160;value</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">%&#160;of&#160;total</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Fixed maturities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">674,562</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">97.2</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">655,141</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">97.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Derivatives</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">15,064</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2.2</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,516</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">0.7</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Equity securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,368</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">0.6</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,858</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">0.3</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Policy loans</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">275</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">0.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">253</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">0.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Short-term securites</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">0.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">13,728</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Total investments</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;694,269</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;100.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;675,496</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;100.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-STYLE: italic; MARGIN-TOP: 18pt">Fixed Maturity Securities </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">At December&#160;31, the amortized cost, gross unrealized gains, gross unrealized losses, and fair values of available-for-sale securities are as shown in the following tables: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="ze3255c1b99924ac5a6b72837f4af64ec" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 46%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>Gross</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>Gross</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>OTTI in<br>
accumulated<br>
 other</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>Amortized</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>%</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>unrealized</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>unrealized</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>Fair</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>%</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>comprehensive</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>cost</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>of&#160;Total</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>gains</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>losses</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>value</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>of&#160;Total</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>income</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2015:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Fixed-maturity securities:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">U.S. government</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">72,035</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">10.9</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,188</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">73,223</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">10.9</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">States and political subdivisions</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,112</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1.7</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">214</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">282</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,044</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1.6</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Foreign government</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">505</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">0.1</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">510</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">0.1</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Public utilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">36,467</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5.5</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,989</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">789</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">38,667</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5.7</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Corporate securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">406,982</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">61.6</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">18,230</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">9,697</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">415,515</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">61.6</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Mortgage-backed securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">133,853</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">20.2</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,909</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,159</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">135,603</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">20.1</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Total</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;660,954</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;100.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">25,535</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,927</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">674,562</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">100.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Selected Financial Data and Management&#8217;s Discussion and Analysis </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 14 of 24 </p>

<p style="PAGE-BREAK-BEFORE: always"></p>

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<tr>
<td style="WIDTH: 45%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
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<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
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<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
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<td></td>
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<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>Gross</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>Gross</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>OTTI in<br>
accumulated<br>
 other</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>Amortized</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>%</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>unrealized</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>unrealized</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>Fair</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>%</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>comprehensive</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>cost</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>of&#160;Total</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>gains</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>losses</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>value</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>of&#160;Total</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>income</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2014:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Fixed-maturity securities:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">U.S. government</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">93,692</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">15.3</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,446</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">61</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">95,077</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">14.5</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">States and political subdivisions</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,679</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1.9</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">305</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">42</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,942</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1.8</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Foreign government</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,517</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">0.4</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">30</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,547</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">0.4</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Public utilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">36,746</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,625</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">43</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">41,328</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6.3</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Corporate securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">328,406</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">53.5</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">30,664</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,740</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">357,330</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">54.6</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Mortgage-backed securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">140,682</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">22.9</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,416</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">181</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">146,917</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">22.4</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Total</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;613,722</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;100.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">43,486</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,067</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">655,141</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;100.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">As of December&#160;31, 2015 and 2014, there were 104 and 32 available-for-sale fixed-maturity securities that were in an unrealized loss position, respectively. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">As of December&#160;31, 2015 and 2014, of the total amount of unrealized losses, $11,856 or 97.1% and $1,983 or 95.9%, respectively, are related to unrealized losses on investment grade securities. Investment grade is defined as a security having a credit rating of Aaa, Aa, A, or Baa from Moody&#8217;s or a rating of AAA, AA, A, or BBB from Standards and Poor (S&amp;P), or a NAIC rating of 1 or 2 if a Moody&#8217;s or S&amp;P rating is not available. Unrealized losses on securities are principally related to changes in interest rates or changes in sector spreads from the date of purchase. As contractual payments continue to be met, management continues to expect all contractual cash flows to be received. As mentioned in Note 2 of the Financial Statements, the Company reviews these securities regularly to determine whether or not declines in fair value are other than temporary. Further, as the Company neither has an intention to sell nor does it expect to be required to sell the securities outlined above, the Company did not consider these investments to be other-than-temporarily-impaired. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">Unrealized investment losses of fixed-maturity securities, for investment grade (IG) and below investment grade (BIG) securities by duration are as follows at December&#160;31: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z42499db4c94e44a08970b2a1ca66a390" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 92%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 53%"></td>
<td style="WIDTH: 7%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 7%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 7%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 7%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="14" align="center">2015</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">IG</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">%&#160;of&#160;IG&#160;and&#160;BIG</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">BIG</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">%&#160;of&#160;IG&#160;and&#160;BIG</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Twelve months or less below amortized cost</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">7,133</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">59.8</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">97</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">0.8</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">More than twelve months below amortized cost</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,453</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">37.3</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">244</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2.1</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Total</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">11,586</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">97.1</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">341</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2.9</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 1pt">
<td style="HEIGHT: 16px"></td>
<td style="HEIGHT: 16px" colspan="16"></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="14" align="center">2014</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">IG</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">% of IG and BIG</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">BIG</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">% of IG and BIG</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Twelve months or less below amortized cost</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">889</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">43.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">0.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">More than twelve months below amortized cost</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,094</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">52.9</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">84</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4.1</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Total</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;&#160;&#160;1,983</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">95.9</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;84</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4.1</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Selected Financial Data and Management&#8217;s Discussion and Analysis </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 15 of 24 </p>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 0pt">Unrealized investment losses of fixed-maturity securities, for instances in which fair value declined below amortized cost by greater than or less than 20% for consecutive periods as indicated in the tables below, are as follows at December&#160;31: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z1762f15459924414bf601df562368dc3" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 49%"></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">Amortized&#160;Cost</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">Unrealized&#160;Loss</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">Number&#160;of&#160;Securities</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">2015</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">&lt; 20%</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">&gt; 20%</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">&lt; 20%</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">&gt; 20%</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">&lt; 20%</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">&gt; 20%</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Twelve months or less below amortized cost</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">175,415</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">6,779</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">5,796</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1,434</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">86</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">More than twelve months below amortized cost</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,627</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">13,762</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">690</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,007</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Total unrealized investment losses</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;182,042</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;20,541</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;6,486</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;5,441</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;90</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;14</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 1pt">
<td style="HEIGHT: 16px"></td>
<td style="HEIGHT: 16px" colspan="8"></td>
<td style="HEIGHT: 16px" colspan="8"></td>
<td style="HEIGHT: 16px" colspan="8"></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">Amortized Cost</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">Unrealized Loss</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center">Number&#160;of&#160;Securities</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">2014</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">&lt; 20%</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">&gt; 20%</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">&lt; 20%</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">&gt; 20%</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">&lt; 20%</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">&gt; 20%</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Twelve months or less below amortized cost</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">25,396</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">559</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">791</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">98</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">More than twelve months below amortized cost</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">40,542</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,178</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">20</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Total unrealized investment losses</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">65,938</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">559</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1,969</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">98</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">31</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">There were no other-than-temporary impairments included in the Statements of Operations, as of December&#160;31, 2015 and 2014, respectively. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">The following table presents a rollforward of the Company&#8217;s cumulative impairments on fixed-maturity securities held on December&#160;31: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z00c48419cb2b478591dd9fef49878092" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 76%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 81%"></td>
<td style="WIDTH: 5%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 5%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Balance as of January 1</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">241</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Additions for credit impairments recognized on:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Securities not previously impaired</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Securities that the Company intends to sell or more&#160;likely than not be required to sell before&#160;recovery (interest)</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">184</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Reductions for credit impairments previously on:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Securities that matured or were sold during&#160;the period</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;(184</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;(241</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Balance as of December 31</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Selected Financial Data and Management&#8217;s Discussion and Analysis </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 16 of 24 </p>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-TOP: 0pt">Total available for sale fixed-maturity securities by quality rating category at December&#160;31, are shown below: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z06f4f943123245088c2f12ae0ae1a04d" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 92%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 60%"></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="14" align="center">2015</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">Fair Value</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">%&#160;of&#160;Total</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">Amortized&#160;Cost</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">%&#160;of&#160;Total</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">AAA</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">83,291</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">12.4</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">82,897</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">12.6</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">AA</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">177,611</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">26.3</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">172,308</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">26.1</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">A</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">207,740</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">30.8</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">197,794</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">29.9</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">BBB</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">200,096</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">29.7</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">201,880</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">30.5</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">BB</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,360</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">0.6</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,534</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">0.7</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">B and below</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,464</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">0.2</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,541</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">0.2</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Total</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;674,562</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;100.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;660,954</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;100.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 1pt">
<td style="HEIGHT: 16px"></td>
<td style="HEIGHT: 16px" colspan="16"></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="14" align="center">2014</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">Fair Value</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">% of Total</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">Amortized Cost</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">% of Total</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">AAA</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">83,491</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">12.7</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">79,933</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">13.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">AA</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">211,016</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">32.2</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">202,992</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">33.1</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">A</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">192,507</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">29.4</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">174,112</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">28.4</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">BBB</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">165,605</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">25.3</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">154,178</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">25.1</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">BB</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,019</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">0.3</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,963</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">0.3</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">B and below</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">503</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">0.1</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">544</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">0.1</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Total</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">655,141</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">100.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">613,722</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">100.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Selected Financial Data and Management&#8217;s Discussion and Analysis </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 17 of 24 </p>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 0pt">The amortized cost and fair value of available-for-sale and held to maturity fixed-maturity securities at December&#160;31, 2015, by contractual maturity, are shown below: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zf44a0cdfe944402fbfe1d388d99ad2e7" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 76%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 73%"></td>
<td style="WIDTH: 4%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 4%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Amortized<br>
 cost</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Fair value</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Available-for-sale fixed-maturity securities:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Due in one year or less</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">26,179</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">26,635</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Due after one year through five years</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">186,049</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">194,706</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Due after five years through ten years</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">198,798</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">201,432</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Due after ten years</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">116,075</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">116,186</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Mortgage-backed securities and collateralized&#160;mortgage obligations</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">133,853</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">135,603</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total available-for-sale fixed-maturity securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;660,954</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;674,562</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">Expected maturities will differ from contractual maturities, because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-STYLE: italic; MARGIN-TOP: 18pt">Commercial Mortgage-backed and Other Asset-backed Securities </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">Commercial mortgage-backed securities (CMBS) represent pools of commercial mortgages that are broadly diversified across property types and geographical areas. The following table summarizes our exposure to CMBS holdings by credit quality and vintage year as of December&#160;31: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z8bad61173780448989b8e4bec6defb25" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 35%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 33%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="18" nowrap="nowrap" align="center">
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">2015</p>
</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="8" nowrap="nowrap" align="center">
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">% of total CMBS</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="8" align="center">
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Vintage</p>
</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">AAA</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">75,432</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">81.6</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">2015</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">41,362</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">44.7</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">AA</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">10,099</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">10.9</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">2014</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">10,995</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11.9</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">A</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,934</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7.5</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">2013 and prior</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">40,108</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">43.4</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">92,465</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">100.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">92,465</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">100.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 1pt">
<td style="HEIGHT: 16px" colspan="19"></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="18" nowrap="nowrap" align="center">
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">2014</p>
</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="8" nowrap="nowrap" align="center">
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">% of total CMBS</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="8" align="center">
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Vintage</p>
</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">AAA</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">72,882</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">79.4</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">2014</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">11,151</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">12.1</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">AA</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,211</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">12.2</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">2013</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,515</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1.6</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">A</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7,740</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">8.4</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">2012 and prior</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">79,167</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">86.3</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;91,833</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;100.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;91,833</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;100.0</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">Our Asset Backed Security (ABS) holdings consist primarily of credit card and utility asset backed securities and typically meet specific criteria, such as credit quality, insurance requirements, or limits on the types of collateral underlying those investments. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Selected Financial Data and Management&#8217;s Discussion and Analysis </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 18 of 24 </p>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-TOP: 0pt">The following table summarizes our exposure to other ABS holdings by credit quality and vintage year as of December&#160;31: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z01ca3595a42a47bdb82767745bb4aa19" style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 44%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 40%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="10" align="center">
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">2015</p>
</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="4" align="center">
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">% of total other ABS</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="4" align="center">
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Vintage</p>
</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">AAA</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">6,451</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">2008 and prior</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">6,451</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">6,451</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">6,451</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 1pt">
<td style="HEIGHT: 16px" colspan="11"></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="10" align="center">
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">2014</p>
</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="4" align="center">
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">% of total other ABS</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="4" align="center">
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Vintage</p>
</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">AAA</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">8,648</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">2008 and prior</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">8,648</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;8,648</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;8,648</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">The following financial instruments are carried at fair value on a recurring basis in the Company Financial Statements: available-for-sale securities, freestanding and embedded derivatives, and separate accounts assets and liabilities. The Company has analyzed the valuation techniques and related inputs, evaluated its assets and liabilities reported at fair value, and determined an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs. Based on the results of this evaluation and investment class analysis, each valuation was classified into Level 1, 2, or 3. See Note 6 of the Notes to Financial Statements in Item&#160;8 for additional information. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z6b1498b23e8e409591648b3158ea6311" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 92%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 57%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Total</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level 1</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level 2</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level 3</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2015:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Assets accounted for at fair value:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Fixed-maturity securities:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">U.S. government</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">73,223</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">73,223</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">States and political&#160;subdivisions</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,044</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,044</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Foreign government</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">510</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">510</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Public utilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">38,667</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">38,667</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Corporate securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">415,515</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">414,468</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,047</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Mortgage-backed securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">135,603</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">135,603</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Derivative asset</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">15,064</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">15,064</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Equity securities, trading</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,368</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,368</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Separate account assets</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,205,548</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,205,548</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 9em; TEXT-INDENT: -1em">Total assets accounted&#160;for at fair value</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">2,899,542</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,283,139</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;615,356</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,047</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Liabilities accounted for at fair&#160;value:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Derivative liability</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">7,956</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7,956</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Separate account liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,205,548</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,205,548</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Reserves at fair value</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">265,884</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">265,884</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 9em; TEXT-INDENT: -1em">Total liabilities&#160;accounted for at&#160;fair value</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;2,479,388</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;2,205,548</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7,956</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;265,884</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Selected Financial Data and Management&#8217;s Discussion and Analysis </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 19 of 24 </p>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
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<tr>
<td style="WIDTH: 57%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Total</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level 1</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level 2</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level 3</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2014:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Assets accounted for at fair value:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Fixed-maturity securities:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">U.S. government</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">95,077</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">95,077</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">States and political&#160;subdivisions</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,942</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,942</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Foreign government</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,547</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,547</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Public utilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">41,328</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">41,328</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Corporate securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">357,330</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">356,258</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,072</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Mortgage-backed securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">146,917</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">146,917</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Derivative asset</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,516</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,516</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Equity securities, trading</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,858</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,858</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Separate account assets</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,214,422</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,214,422</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 9em; TEXT-INDENT: -1em">Total assets accounted&#160;for at fair value</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">2,875,937</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,311,357</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;563,508</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,072</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Liabilities accounted for at fair&#160;value:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Derivative liability</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">4,894</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,894</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Separate account liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,214,422</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,214,422</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Reserves at fair value</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">150,251</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">150,251</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 9em; TEXT-INDENT: -1em">Total liabilities&#160;accounted for at&#160;fair value</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;2,369,567</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;2,214,422</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,894</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;150,251</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 18pt">Liquidity and Capital Resources </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-STYLE: italic; MARGIN-TOP: 6pt">Overview </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">Liquidity and Capital Resources represent our overall financial strength and ability to generate cash flows from the business. The liquidity requirements are generally met through funds provided by investment income, receipt of insurance premiums, management and expense (M&amp;E) fees and benefit rider income, maturities and sales of investments, reinsurance recoveries, and capital contributions from Allianz Life. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">We do not utilize the capital markets as a source of capital. Should the need for capital arise, we may utilize our parent, Allianz Life, as an alternative source of funding. We have a line of credit agreement with Allianz Life to provide liquidity as needed. As of December&#160;31, 2015 and December&#160;31, 2014, there are no amounts outstanding under the line of credit agreement and no amounts have been borrowed during the years ended December&#160;31, 2015 and 2014. If capital infusions are deemed necessary, we obtain prior approval by the New York Department of Financial Services, as appropriate. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-STYLE: italic; MARGIN-TOP: 18pt">Financial Ratings and Strength </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-TOP: 6pt">We received the following financial strength ratings as of December&#160;31, 2015: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zfe77f0cf6e4a4eedb0deb277c0ab6a7b" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 26%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 23%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 23%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 22%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; TEXT-INDENT: 2em"><font style="FONT-FAMILY: Times New Roman">&#8226;</font> AM Best</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">A+ (Superior)</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; TEXT-INDENT: 2em"><font style="FONT-FAMILY: Times New Roman">&#8226;</font> S&amp;P</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">AA (Very Strong)</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top"></td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">The financial strength ratings are influenced by many factors including the operating and financial performance, asset quality, liquidity, asset/liability management, overall portfolio mix, financial leverage, and exposure to risks. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Selected Financial Data and Management&#8217;s Discussion and Analysis </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 20 of 24 </p>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-STYLE: italic; MARGIN-TOP: 0pt">Cash Flows </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-TOP: 6pt">The following table sets forth information from our Statements of Cash Flows for the years ended December&#160;31: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z1567b8a63fe040989ccb734f4b6637c8" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 84%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 63%"></td>
<td style="WIDTH: 6%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 6%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 6%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="10" align="center">Year Ended December&#160;31,</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" nowrap="nowrap">
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 0pt">Consolidated Cash Flows</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2015</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2014</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">2013</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Net cash provided by operating activities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">53,061</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">45,090</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">8,590</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Net cash (used in) provided by investing activities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;(34,053</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;(11,839</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">20,962</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Net cash used in financing activities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(9,475</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(28,322</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;(71,068</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Net change in cash and cash equivalents</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">9,533</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">4,929</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(41,516</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">Cash and cash equivalents increased (decreased) $9,533, $4,929, and ($41,516) for the years ended December&#160;31, 2015, 2014, and 2013, respectively. We have the funds necessary to meet the capital requirements in the state of New York, and to support our operations. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">The increase in net cash provided by operating activities in 2015 as compared to 2014 is driven by gains recognized on derivative options relating to interest rate swaps. The increase in net cash provided by operating activities in 2014 as compared to 2013 is driven by gains recognized on variation margin settlements relating to interest rate swaps. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">In 2015, the increase in cash flows used in investing activities was primarily driven by higher purchases of available-for-sale fixed maturity securities compared to 2014 and partially offset by higher sales and redemptions of available-for-sale fixed-maturity securities compared to 2014. In 2014, the decrease in cash flows used in investing activities was primarily driven by fewer sales and redemptions of available-for-sale fixed-maturity securities and partially offset by lower purchases of available-for-sale fixed maturity securities compared to 2013. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">The increase in cash flows used in financing activities in 2015 as compared to 2014 was driven by higher deposits and partially offset by higher policyholder withdrawals. The increase in cash flows used in financing activities in 2014 as compared to 2013 was driven by higher deposits and lower policyholder withdrawals. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-STYLE: italic; MARGIN-TOP: 18pt">Risk-Based Capital </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">An insurance company&#8217;s state of domicile imposes minimum risk-based capital (RBC) requirements that were developed by the NAIC. The formulas for determining the amount of RBC specify various weighting factors that are applied to financial balances or various levels of activity based on the perceived degree of risk. Regulatory compliance is determined by a ratio of a company&#8217;s regulatory total adjusted capital to its authorized control level RBC, as defined by the NAIC. Companies below specific trigger points or ratios are classified within certain levels, each of which requires specified corrective action. This ratio for the Company significantly exceeds required minimum thresholds as of December&#160;31, 2015 and 2014. We consider our surplus position more than adequate to handle severe adverse experience based upon industry standards and our own risk analysis. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-STYLE: italic; MARGIN-TOP: 18pt">Dividends and Capital Contributions </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">We did not pay any dividends or receive any capital contributions during the year ended December&#160;31, 2015, and December&#160;31, 2014. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Selected Financial Data and Management&#8217;s Discussion and Analysis </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 21 of 24 </p>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-STYLE: italic; MARGIN-TOP: 0pt">Commitments </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">The following table summarizes certain contractual obligations and the Company&#8217;s commitments by period as of December&#160;31, 2015: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z26d49ded1ede454a9a454687ca563320" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 55%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2" align="center">In&#160;1&#160;year</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2" align="center">after&#160;1&#160;year</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2" align="center">After&#160;3&#160;years</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2" align="center">After</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">Total</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">or less</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">up&#160;to&#160;3&#160;years</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">up&#160;to&#160;5&#160;years</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center">5 Years</td>
<td valign="bottom">&#160;</td>
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<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Payments due</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Policyholder liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">928,763</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">124,655</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">188,152</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">159,676</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">456,280</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Operating leases</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">108</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">24</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">48</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">36</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total payments due</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;928,871</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;124,679</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;188,200</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;159,712</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;456,280</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">Policyholder liabilities include estimated claim and benefit, policy surrender and commission obligations offset by expected future deposits and premiums on in-force insurance policies and investment contracts in the Individual Annuity and Other segments. We have excluded the separate account liabilities as these obligations are legally insulated from general account obligations and will be fully funded by cash flows from separate account assets. The obligations have not been discounted at present value. Estimated claim and benefit obligations are based upon mortality, morbidity and lapse assumptions comparable to historical experience. The results are based on assuming market growth and interest crediting consistent with other valuation assumptions. In contrast to this table, the majority of the Company&#8217;s obligations are recorded on the Balance Sheets at current account values or other GAAP prescribed measurements that are not directly related to liability cash flows. These obligations do not incorporate an expectation on future market growth, interest crediting, or future deposits. Therefore, due to the significance of the assumptions used, the amounts presented could materially differ from actual results. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-TOP: 12pt">Operating leases include non-cancelable obligations on certain office space and equipment. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-STYLE: italic; MARGIN-TOP: 18pt">Contingencies </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">We may become subject to claims and lawsuits that arise in the ordinary course of business. It is our opinion that the ultimate resolution of such litigation will not have a material adverse effect on our financial position. We are contingently liable for possible future assessments under regulatory requirements pertaining to insolvencies and impairments of unaffiliated insurance companies. Provision has been made for assessments currently received and assessments anticipated for known insolvencies. We recognize legal costs as incurred. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">The financial services industry, including mutual funds, variable and fixed annuities, life insurance, distribution companies, and <font style="WHITE-SPACE: nowrap">broker-dealers,</font> has been the subject of close scrutiny by regulators, legislators, and the media. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">Federal and state regulators, such as state insurance departments, state securities departments, the SEC, and Financial Industry Regulatory Authority (FINRA) and other regulatory bodies regularly make inquiries and conduct examinations or investigations concerning various selling practices, including suitability reviews, product exchanges, sales to seniors, and compliance with, among other things, insurance laws and securities laws. We are subject to ongoing market conduct examinations and investigations by regulators which may have a material adverse effect on the Company. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 18pt">Off-Balance Sheet Arrangements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">We do not have any off-balance sheet transactions, arrangements or other relationships that we believe would be reasonably likely to have a material effect on our liquidity or the requirements for capital resources. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">We utilize exchange-traded futures to economically hedge certain product liabilities. Under this kind of transaction, we agree to purchase a specified number of contracts and settle the variation margin with the counterparty on a daily basis in an amount equal to the change in the market value of the underlying contracts from the close of the previous trading day. The parties with whom we enter into the exchange-traded futures contracts are regulated futures commission&#8217;s merchants who are members of a trading exchange. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">We are exposed to credit-related losses in the event of non-performance by counterparties under the terms of the futures contracts. We minimize counterparty credit risk by establishing relationships only with counterparties rated A- and </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Selected Financial Data and Management&#8217;s Discussion and Analysis </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 22 of 24 </p>

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<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 0pt">higher. Given the credit ratings of the counterparties with which we transact, we do not expect any counterparties to fail to meet their obligations. We also have executed CSA agreements with all active counterparties and require a CSA from all new counterparties added to our counterparty pool. The CSA agreements further limit our counterparty credit risk by requiring the counterparty to post collateral to a segregated custodial account based on the net exposure to the Company. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">As our futures transactions are executed through a regulated exchange, positions are marked-to-market and settled on a daily basis, and collateral is posted prior to execution of a transaction, we have minimal exposure to credit-related losses in the event of non-performance. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">We are also required to post collateral for any futures and options contracts that are executed. The amount of collateral required is determined by the exchange on which the contract is traded. For 2015 and 2014, we posted U.S. Government Securities to satisfy this collateral requirement. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 18pt">Forward-looking Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">This report reviews the Company&#8217;s financial condition and results of operations. Where appropriate, factors that may affect future financial performance are also identified and discussed. Certain statements made in this report include &#8220;forward-looking statements&#8221; within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include any statement that may predict, forecast, indicate or imply future results, performance or achievements instead of historical facts, and may contain words like &#8220;believe,&#8221; &#8220;expect,&#8221; &#8220;estimate,&#8221; &#8220;project,&#8221; &#8220;budget,&#8221; &#8220;forecast,&#8221; &#8220;anticipate,&#8221; &#8220;plan,&#8221; &#8220;will,&#8221; &#8220;shall,&#8221; &#8220;may,&#8221; and other words, phrases or expressions with similar meaning. Forward-looking statements are subject to risks and uncertainties. Readers are cautioned not to place undue reliance on forward-looking statements as a prediction of actual results. We undertake no obligation to update publicly or revise any forward-looking statements. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 18pt">Item&#160;11(j). </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 6pt">Quantitative and Qualitative Disclosures about Market Risk </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">Market risk is the risk of the loss of fair value resulting from adverse changes in market rates and prices, such as interest rates and equity prices. Market risk is directly influenced by the volatility and liquidity in the markets in which the related underlying financial instruments are traded. The following is a discussion of our market risk exposures and our risk management practices. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 18pt">Interest Rate Risk </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">Interest rate risk is the risk that movements in interest rates or interest rate volatility will change and cause a decrease in the value of an insurer&#8217;s assets relative to the value of its liabilities and/or an unfavorable change in prepayment activity resulting in compressed interest margins. We have an asset liability management strategy to align cash flows and duration of the investment portfolio with policyholder liability cash flows and duration. We further limit interest rate risk on variable annuity guarantees through interest rate hedges. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 18pt">Equity Market Risk </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">Equity market risk is the risk that movements in equity prices or equity volatility will cause a decrease in the value of an insurer&#8217;s assets relative to the value of its liabilities. The policy value of the fixed-indexed annuity and fixed-indexed universal life products is linked to equity market indices. We economically hedge this exposure with derivatives. Variable annuity products may provide a minimum guaranteed level of benefits irrespective of market movements. We have adopted an economic hedging program to manage the equity risk of these products. We also monitor the economic and accounting impacts of equity stress scenarios on assets and liabilities regularly. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">Basis risk is the risk that the variable annuity hedge asset value changes unexpectedly relative to the value of the underlying separate account funds of the variable annuity contracts. Basis risk may arise from the Company&#8217;s inability to directly hedge the underlying variable investment option of the variable annuity contracts. We mitigate this risk through regular review and synchronization of fund mappings, product design features, and hedge design. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 18pt">Sensitivity Analysis </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">To assess the impact of changes in interest rate and equity markets, we perform sensitivity tests. Sensitivity tests measure the instantaeous impact of a single hypothetical interest rate or equity price change on our pre-tax income, or fair value of an asset or liability, while holding all other rates or prices constant. To assess interest rate risk we perform a sensitivity </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Selected Financial Data and Management&#8217;s Discussion and Analysis </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 23 of 24 </p>

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<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 0pt">test which instantaneously shocks interest rates across all maturities by a hypothetical 50 basis points (bps). To assess equity risk, we perform a sensitivity test which instantaneously decreases all equity prices by a hypothetical 15%. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-STYLE: italic; MARGIN-TOP: 18pt">Interest Rate Risk </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">One means of assessing exposure to interest rate changes is to measure the potential change in fair value of an asset due to a hypothetical change in interest rates of 50 bps across all maturities. We noted that under this model, with all other factors remaining constant, a 50 bps increase in interest rates would result in the decrease in the fair value of our fixed income securities of $18,494 based on our securities positions as of December&#160;31, 2015. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">We also examined the impact on pre-tax income due to hypothetical decrease in interest rates of 50 bps across all maturities. Note that all impacts referenced below reflect reserve changes net of economic hedge impact and DAC changes unless otherwise noted. Under this model, with all other factors being constant, we estimated that such a decline would cause our pre-tax income to decrease by $5,357 as of December&#160;31, 2015. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-STYLE: italic; MARGIN-TOP: 18pt">Equity Market Risk </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">One means of assessing exposure to changes in equity market prices is to estimate the potential changes in pre-tax income from a hypothetical decline in equity market prices of 15%. Under this model, with all other factors constant, we estimated that such a decline in equity market prices would cause our pre-tax income to decrease by $8,307 based on our equity exposure as of December&#160;31, 2015. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-STYLE: italic; MARGIN-TOP: 18pt">Adoption of New Financial Accounting Standards </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 6pt">See Note 2 &#8211; &#8220;Summary of Significant Accounting Policies&#8221; of the Company&#8217;s Financial Statements in Item&#160;8 &#8211; Financial Statements of this prospectus for information related to recent accounting pronouncements. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Selected Financial Data and Management&#8217;s Discussion and Analysis </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 24 of 24 </p>
</div>

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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 12pt">Financial Statements and Supplemental Schedules </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 12pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 12pt">(With Report of Independent Registered Public Accounting Firm Thereon) </p>

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<table id="z6107843003d342b3b26b595d7b2e9b30" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 13%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 85%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-LEFT: 2em; MARGIN-TOP: 0pt">KPMG LLP</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 2em; MARGIN-TOP: 0pt">4200 Wells Fargo Center</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 2em; MARGIN-TOP: 0pt">90 South Seventh Street</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 2em; MARGIN-TOP: 0pt">Minneapolis, MN 55402</p>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 24pt">Report of Independent Registered Public Accounting Firm </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-TOP: 12pt">The Board of Directors and Stockholder </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-TOP: 0pt">Allianz Life Insurance Company of New York: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">We have audited the accompanying balance sheets of Allianz Life Insurance Company of New York (the Company) as of December 31, 2015 and 2014, and the related statements of operations, comprehensive income (loss), stockholder&#8217;s equity, and cash flows for each of the years in the three-year period ended December 31, 2015. These financial statements are the responsibility of the Company&#8217;s management. Our responsibility is to express an opinion on these financial statements based on our audits. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Allianz Life Insurance Company of New York as of December 31, 2015 and 2014, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2015, in conformity with U.S. generally accepted accounting principles. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information included in Schedules I, II, and III is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<div style="TEXT-ALIGN: right">
<table id="z4fe750487eef4fa19f2e18affcc5877e" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 40%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 100%"></td>
</tr>

<tr style="FONT-SIZE: 1pt">
<td style="HEIGHT: 16px"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td style="BORDER-BOTTOM: #000000 1px solid" valign="top">/s/ KPMG LLP</td>
</tr>
</table>
</div>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 12pt">Minneapolis, Minnesota </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-TOP: 0pt">March 31, 2016 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 12pt">KPMG LLP is a Delaware limited liability partnership,<b>&#160;</b>the U.S. member firm of KPMG International Cooperative </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">(&#8220;KPMG International&#8221;), a Swiss entity. </p>

<p style="PAGE-BREAK-BEFORE: always"></p>
</div>

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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Balance Sheets </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except share data) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z3d03a587d90b4a84b58783ae18232b63" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 78%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom" align="center"><b>Assets</b></td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Investments:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Fixed-maturity securities, available-for-sale, at fair value (amortized cost of $660,954 and $613,722, respectively)</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">674,562</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">655,141</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Short-term securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">13,728</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Policy loans</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">275</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">253</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Derivatives</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">15,064</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,516</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Equity securities, trading, (cost of $4,383 and $1,855, respectively)</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,368</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,858</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total investments</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">694,269</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">675,496</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Cash and cash equivalents</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">37,172</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">27,639</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Accrued investment income</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">14,557</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">8,130</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Receivables (net of allowance for uncollectible accounts of $33 and $20, respectively)</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">13,202</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7,039</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Reinsurance recoverable</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,596</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,091</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Deferred acquisition costs</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">134,374</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">118,319</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Net deferred tax asset</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">33,660</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">13,375</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Other assets</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">22,277</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">20,639</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Assets, exclusive of separate accounts assets</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">953,107</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">873,728</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Separate account assets</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,205,548</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,214,422</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total assets</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;3,158,655</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;3,088,150</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z1b05dd2580f247ce85e805c58bbd6b67" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 2 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
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<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Balance Sheets </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except share data) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z8e1af0c56019414e8f2045126721f3ac" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 79%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom" align="center"><b>Liabilities and Stockholder&#8217;s Equity</b></td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Policyholder liabilities:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Account balances and future policy benefit reserves (includes $72,491 and $16,026 measured at fair value under the fair value option at December&#160;31, 2015 and 2014)</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">762,986</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">691,011</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Policy and contract claims</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,157</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,787</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Unearned premiums</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,571</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,518</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Other policyholder funds</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,174</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,203</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Total policyholder liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">769,888</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">697,519</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Derivative liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7,956</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,894</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Other liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">26,775</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">9,908</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Liabilities, exclusive of separate account liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">804,619</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">712,321</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Separate account liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,205,548</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,214,422</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Total liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,010,167</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,926,743</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Stockholder&#8217;s equity:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Common stock, $10 par value. Authorized, issued, and outstanding 200,000 shares, at December&#160;31, 2015 and 2014</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,000</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,000</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Additional paid-in capital</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">72,500</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">72,500</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Retained earnings</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">68,988</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">70,251</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Accumulated other comprehensive income, net of tax</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5,000</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">16,656</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Total stockholder&#8217;s equity</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">148,488</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">161,407</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Total liabilities and stockholder&#8217;s equity</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;3,158,655</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,088,150</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-TOP: 12pt">See accompanying notes to financial statements. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z64297db93bc74f85b1179ad9c3b905b2" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 93%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 3 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top"></td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Statements of Operations </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Years ended December&#160;31, 2015, 2014 and 2013 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z7e3d892bea30442e972e1d8c1086e09d" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 73%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Revenue:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Premiums</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">4,461</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,559</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,703</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Policy fees</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">65,756</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">58,599</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">47,579</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Premiums and policy fees, ceded</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,347</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,442</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,549</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Net premiums and policy fees</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">68,870</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">61,716</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">50,733</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Interest and similar income, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">27,387</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">28,859</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">29,635</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Change in fair value of assets and liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,373</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">66,806</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(78,944</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Realized investment gains, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">583</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">77</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">829</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Fee, commission, and other revenue</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7,221</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,864</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5,904</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Total revenue</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;115,434</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;164,322</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;8,157</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Benefits and expenses:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Policyholder benefits</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,601</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7,993</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">9,668</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Change in fair value of annuity and life embedded derivatives</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">60,876</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">112,364</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(71,546</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Net interest credited to account values</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">16,290</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">24,635</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">25,342</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Benefit recoveries</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,256</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,099</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,567</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Net benefits</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">87,511</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">143,893</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(38,103</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Commissions and other agent compensation</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">23,976</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">25,275</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">23,011</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">General and administrative expenses</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">17,816</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">14,514</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">12,508</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Change in deferred acquisition costs, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(8,165</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(15,064</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(6,163</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Total benefits and expenses</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">121,138</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">168,618</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(8,747</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">(Loss) income from operations before income taxes</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(5,704</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(4,296</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">16,904</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Income tax (benefit) expense:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Current</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">9,567</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,774</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,495</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Deferred</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(14,008</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(7,907</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,930</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Total income tax (benefit) expense</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(4,441</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(3,133</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,425</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Net (loss) income</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(1,263</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,163</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;12,479</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Supplemental disclosures:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Realized investment (losses), net:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total other-than-temporary impairment losses on securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(184</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(241</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Portion of loss recognized in other comprehensive income</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Net impairment losses recognized in realized investment gains, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(184</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(241</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Other net realized gains</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">767</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">77</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,070</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Realized investment gains, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">583</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">77</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">829</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-TOP: 12pt">See accompanying notes to financial statements. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z21a61aaee7d94e0db1d637ecd89edc44" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 4 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top"></td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Statements of Comprehensive Income (Loss) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Years ended December&#160;31, 2015, 2014, and 2013 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z62163ad22eb64a2ebc711efb5612f4aa" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 70%"></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Net (loss) income</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(1,263)</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;(1,163)</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">12,479</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Other comprehensive (loss) income:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Net unrealized (loss) gain on investments, net of shadow adjustments and deferred taxes</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;(11,656)</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,309</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;(23,698)</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Total other comprehensive (loss) income</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(11,656)</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,309</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(23,698)</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Total comprehensive (loss) income</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(12,919)</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5,146</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(11,219)</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-TOP: 12pt">See accompanying notes to financial statements. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zc4199bed42064639b806e123a73c5711" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 5 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top"></td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Statements of Stockholder&#8217;s Equity </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Years ended December&#160;31, 2015, 2014, and 2013 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z180a2af3904b4069a1f4a764c1dd3a3f" style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 48%"></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Common<br>
 stock</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Additional<br>
paid-in<br>
 capital</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Retained<br>
 earnings</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Accumulated<br>
other<br>
comprehensive<br>
 income</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Total<br>
stockholder&#8217;s<br>
 equity</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2013:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Balance, beginning of year</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">2,000</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">72,500</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">58,935</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">34,045</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">167,480</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Comprehensive income (loss):</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Net income</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">12,479</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">12,479</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Net unrealized loss on investments, net of shadow adjustments and deferred taxes</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(23,698</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(23,698</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 9em; TEXT-INDENT: -1em">Total comprehensive loss</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(11,219</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Balance, end of year</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">2,000</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">72,500</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">71,414</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">10,347</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">156,261</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2014:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Balance, beginning of year</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">2,000</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">72,500</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">71,414</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">10,347</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">156,261</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Comprehensive income (loss):</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Net loss</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,163</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,163</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Net unrealized gain on investments, net of shadow adjustments and deferred taxes</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,309</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,309</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 9em; TEXT-INDENT: -1em">Total comprehensive income</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5,146</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Balance, end of year</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">2,000</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">72,500</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">70,251</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">16,656</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">161,407</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2015:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Balance, beginning of year</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">2,000</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">72,500</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">70,251</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">16,656</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">161,407</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Comprehensive income (loss):</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Net loss</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,263</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,263</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Net unrealized loss on investments, net of shadow adjustments and deferred taxes</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(11,656</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(11,656</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 9em; TEXT-INDENT: -1em">Total comprehensive loss</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(12,919</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Balance, end of year</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;2,000</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;72,500</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;68,988</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5,000</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;148,488</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-TOP: 12pt">See accompanying notes to financial statements. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z75b1c1972803482a819c48853d68047f" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 6 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top"></td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Statements of Cash Flows </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Years ended December&#160;31, 2015, 2014, and 2013 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z5d68ee149cb74752b8c0549e317c6940" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 72%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Cash flows provided by (used in) operating activities:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Net (loss) income</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(1,263</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,163</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">12,479</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Adjustments to reconcile net (loss) income to net cash provided by operating activities:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Realized investment gains and change in fair value of equity securities, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(564</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(77</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(829</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Change in annuity-related options, derivatives, and gross reserves</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(12,437</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(71,181</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">66,071</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Purchase of trading securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(36,109</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(4,780</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Sale of trading securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">33,580</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,927</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Deferred federal income tax (benefit) expense</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(14,008</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(7,907</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,930</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Charges to policy account balances</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(604</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(173</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(247</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Interest credited to policy account balances</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;17,342</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;24,336</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;25,275</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Amortization of discount, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">764</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(409</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,570</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Change in:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Accrued investment income</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(6,427</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">665</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(784</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Receivables and other assets</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(5,751</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(4,777</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,186</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Reinsurance recoverable</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(505</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(590</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(287</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Deferred acquisition costs</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(8,165</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(15,064</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(6,163</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Future policy benefit reserves</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">70,637</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">121,202</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(71,613</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Policy and contract claims</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,370</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,259</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,156</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Unearned premiums</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(9</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(17</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(57</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Other policyholder funds</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,029</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">402</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">347</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Other liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">16,239</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(357</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(13,836</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Payable to (receivable from) parent</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">794</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(2,924</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 9em; TEXT-INDENT: -1em">Total adjustments</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">54,324</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">46,253</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(3,889</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 9em; TEXT-INDENT: -1em">Net cash provided by operating activities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">53,061</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">45,090</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">8,590</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Cash flows (used in) provided by investing activities:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Purchase of available-for-sale fixed-maturity securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(176,948</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(62,126</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(109,700</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Sale and other redemptions of fixed-maturity securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">113,930</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">57,669</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">123,684</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Maturity of fixed-maturity securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">15,600</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,510</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,980</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Net change in short-term securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">13,728</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(13,728</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Options purchased, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(341</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(174</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Other, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(22</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">10</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(2</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 9em; TEXT-INDENT: -1em">Net cash (used in) provided by investing activities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(34,053</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(11,839</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">20,962</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Cash flows (used in) provided by financing activities:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Policyholders&#8217; deposits to account balances</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">56,693</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">17,043</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,532</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Policyholders&#8217; withdrawals from account balances</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(67,832</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(45,731</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(68,304</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Policyholders&#8217; net transfers between account balances</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,031</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">182</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(3,504</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Change in amounts drawn in excess of bank balances</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">633</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">184</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(792</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 9em; TEXT-INDENT: -1em">Net cash used in financing activities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(9,475</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(28,322</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(71,068</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 9em; TEXT-INDENT: -1em">Net change in cash and cash equivalents</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">9,533</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,929</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(41,516</td>
<td valign="bottom" nowrap="nowrap">)</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Cash and cash equivalents at beginning of year</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">27,639</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">22,710</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">64,226</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Cash and cash equivalents at end of year</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">37,172</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">27,639</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">22,710</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-TOP: 12pt">See accompanying notes to financial statements. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z73cab6971bf54ddb99335f82485bc61d" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 7 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top"></td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zdae18f9db81e47ba8fd162ca2ed037a0" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%" valign="top" align="left"><b>(1)</b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: justify">Organization </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">Allianz Life Insurance Company of New York (the&#160;Company) is a wholly owned subsidiary of Allianz Life Insurance Company of North America (Allianz Life), which is a wholly owned subsidiary of Allianz of America, Inc. (AZOA). AZOA is a wholly owned subsidiary of Allianz Europe B.V., which is a wholly owned subsidiary of Allianz SE. Allianz SE is a European Company registered in Munich, Germany. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">The Company is a life insurance company licensed to sell annuity, group and traditional life, individual long-term care and group accident and health policies in six states and the District of Columbia. Based on 2015 statutory net premium written, 99% of the Company&#8217;s business is annuity. Accident and health, and life insurance combined, amount to 1% of the Company&#8217;s business. The annuity business consists of variable and variable-indexed annuities representing 80% and 20% of 2015 statutory annuity net premium written, respectively. Accident and health business comprises primarily <font style="WHITE-SPACE: nowrap">long-term</font> care (LTC) insurance. The Company has discontinued selling fixed annuity, life and LTC products. The Company&#8217;s primary distribution channel is through <font style="WHITE-SPACE: nowrap">broker-dealers.</font> </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 18pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z4df9489177ac488aa97c35b7d1b32f8f" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%" valign="top" align="left"><b>(2)</b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: justify">Summary of Significant Accounting Policies </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z45ff733e2fd7425b8a2c0704bc59af7b" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(a)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Basis of Presentation </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Financial Statements have been prepared in accordance with U.S.&#160;generally accepted accounting principles (GAAP), which vary in certain respects from accounting practices prescribed or permitted by state insurance regulatory authorities. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zea0f2ea6a3fe44e5973ef61c308a3a4c" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(b)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Use of Estimates </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect reported amounts of assets and liabilities, including reporting or disclosure of contingent assets and liabilities as of the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Future events, including changes in mortality, morbidity, interest rates, capital markets, and asset valuations could cause actual results to differ from the estimates used in the Financial Statements. Such changes in estimates are recorded in the period they are determined. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z7aa755eb27534f7f85437326d2f62398" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(c)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Investment Products and Universal Life Business </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Investment products consist primarily of variable and fixed annuity products. Premium receipts are reported as deposits to the contractholders&#8217; accounts. Policy fees on the Statements of Operations represent asset fees, cost of insurance charges, administrative fees, charges for guarantees on investment products, and surrender charges for investment products and universal life insurance. These fees have been earned and assessed against contractholders on a daily or monthly basis throughout the contract period and are recognized as revenue when assessed and earned. Amounts assessed that represent compensation to the Company for services to be provided in future periods are not earned in the period assessed. Such amounts are reported as unearned premiums and recognized in operations over the period benefited using the same assumptions and factors used to amortize capitalized acquisition costs. Surrender charges are recognized upon surrender of a contract in accordance with contractual terms. Derivatives embedded in <font style="WHITE-SPACE: nowrap">fixed-indexed</font> and variable products </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zd4dccf66b71a430f82071dba997d9b95" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 8 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 0pt">are recorded at fair value and changes in value are included in Change in fair value of annuity and life embedded derivatives on the Statements of Operations. Benefits consist of interest credited to contractholders&#8217; accounts and claims incurred in excess of the contractholders&#8217; account balance and are included in Net interest credited to account values and Policyholder benefits, respectively, on the Statements of Operations. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">During 2014, the Company began offering a variable annuity product that combines a separate account option with a general account option that is similar to a <font style="WHITE-SPACE: nowrap">fixed-indexed</font> annuity. The Company has elected the fair value option to account for the entire insurance contract liability and the variable investment option assets backing the separate account. The insurance contracts&#8217; reserves are reported in Account balances and future policy benefit reserves and the variable investment option assets backing the separate account are reported in Equity securities, trading on the Balance Sheets. Electing the fair value option for an insurance contract liability requires that the Company account for that liability as a financial instrument and also requires that acquisition costs be recognized immediately in expense. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zdde576fc69a04b9b84967be2df55f305" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(d)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Life and Accident and Health Insurance </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Premiums on traditional life products are recognized as earned when due. Benefits and expenses are associated with earned premiums so as to result in recognition of profits over the life of the contracts. This association is accomplished by establishing provisions for future policy benefits and deferral and amortization of related acquisition costs. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Accident and health premiums are recognized as earned on a pro rata basis over the risk coverage periods. Benefits and expenses are recognized as incurred. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z55c4157c581a4b03a952e5dd4be263af" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(e)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Deferred Acquisition Costs </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Acquisition costs consist of commissions and other incremental costs that are directly related to the successful acquisition of insurance contracts. Acquisition costs are deferred to the extent recoverable from future policy revenues and gross profits. However, acquisition costs associated with insurance contracts recorded under the fair value option are not deferred as guidance related to the fair value option requires that transaction costs are recorded immediately as an expense. For <font style="WHITE-SPACE: nowrap">interest-sensitive</font> products and variable annuity contracts issued in 2010 and after, acquisition costs are amortized in relation to the present value of expected future gross profits from investment and mortality, morbidity, and expense charges. For variable annuity contracts issued prior to 2010, acquisition costs are amortized in relation to the present value of estimated gross revenues from investment and mortality, morbidity, and expense charges. Acquisition costs for accident and health insurance policies are deferred and amortized over the lives of the policies in the same manner as premiums are earned. For traditional life and group life products, such costs are amortized over the projected earnings pattern of the related policies using the same actuarial assumptions used in computing future policy benefit reserves. Deferred acquisition costs (DAC) are reviewed for recoverability and loss recognition, at least annually, and adjusted when necessary. Recoverability and loss recognition are evaluated separately for fixed annuities, variable annuities, and life insurance products. The evaluation is a <font style="WHITE-SPACE: nowrap">two-step</font> process where current policy year issues are evaluated for recoverability, and </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z9fbce311bfa24d00a40fa5f29f1cfcfb" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
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<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
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<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 9 of 68</p>
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<td valign="top" align="right">(Continued)</td>
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<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 0pt">then <font style="WHITE-SPACE: nowrap">in-force</font> policies are evaluated for loss recognition. Before assessing recoverability and loss recognition, DAC is capped, if necessary, such that the balance cannot exceed the original capitalized costs plus interest. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Adjustments to DAC are made to reflect the corresponding impact on the present value of expected future gross profits and revenue from unrealized gains and losses on <font style="WHITE-SPACE: nowrap">available-for-sale</font> investments used to support policyholder liabilities (commonly known as shadow DAC). These adjustments are included in accumulated other comprehensive income and are explained further in the investments section of this note. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Changes in assumptions can have an impact on the amount of DAC reported for annuity and life insurance products and their related amortization patterns. In the event experience differs from assumptions or assumptions are revised, the Company is required to record an increase or decrease in DAC amortization expense (DAC unlocking). In general, increases in the estimated investment spreads and fees result in increased expected future profitability and may decrease the rate of DAC amortization, while increases in costs of product guarantees, and lapse/surrender and mortality assumptions reduce the expected future profitability of the underlying business and may increase the rate of DAC amortization. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company formally evaluates the appropriateness of the <font style="WHITE-SPACE: nowrap">best-estimate</font> assumptions on an annual basis. If the economic environment or policyholder behavior changes quickly and substantially, assumptions will be reviewed more frequently to affirm best estimates. Any resulting DAC unlocking is reflected prospectively as a Change in deferred acquisition costs, net on the Statements of Operations. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Adjustments may also be made to the estimated gross profits (EGP) or estimated gross revenues related to DAC that correspond with deferred annuities and universal life products for investment activity, such as <font style="WHITE-SPACE: nowrap">write-downs</font> on <font style="WHITE-SPACE: nowrap">other-than-temporarily</font> impaired <font style="WHITE-SPACE: nowrap">fixed-maturity</font> securities. Management action may include assumption changes in the DAC models, such as adjustments to expected future gross profits or revenues used, as well as <font style="WHITE-SPACE: nowrap">in-force</font> management action such as crediting rate changes or index rate cap adjustments. This approach applies to <font style="WHITE-SPACE: nowrap">fixed-maturity</font> securities purchased as <font style="WHITE-SPACE: nowrap">investment-grade</font> only and not <font style="WHITE-SPACE: nowrap">noninvestment-grade</font> items that were purchased with other yield considerations. See further discussion of DAC unlocking in note&#160;8. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company assesses internal replacements on insurance contracts to determine whether such modifications significantly change the contract terms. An internal replacement represents a modification in product benefits, features, rights, or coverage that occurs by the exchange of an <font style="WHITE-SPACE: nowrap">in-force</font> insurance contract for a new insurance contract, or by amendment, endorsement, or rider to a contract, or by the election of a feature or coverage within a contract. If the modification substantially changes the contract, the remaining DAC on the original contract are immediately expensed and any new DAC on the replacement contract are deferred. If the contract modification does not substantially change the contract, DAC amortization on the original contract continues and any new acquisition costs associated with the modification are immediately expensed. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z9e88e9d9cf0b475992904f7766e34b77" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
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<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
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<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 10 of 68</p>
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<td valign="top" align="right">(Continued)</td>
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<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zcf1888ceb3cb4122965a520f6cdd0c25" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(f)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Deferred Sales Inducements </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Sales inducements are product features that enhance the investment yield to the contractholder on the contract. The Company offers two types of sales inducements on certain universal life and annuity contracts. The first type, an immediate bonus, increases the account value at inception, and the second type, a persistency bonus, increases the account value at the end of a specified period. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Annuity sales inducements are deferred when credited to contractholders, and life sales inducements are deferred and recognized as part of the liability for policy benefits. Deferred sales inducements (DSI) is reported in Other assets on the Balance Sheets. They are amortized over the expected life of the contract in a manner similar to DAC and are reviewed annually for recoverability. DSI capitalization and amortization is recorded in Policyholder benefits on the Statements of Operations. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Adjustments to DSI are made to reflect the estimated corresponding impact on the present value of expected future gross profits and revenues from unrealized gains and losses on <font style="WHITE-SPACE: nowrap">available-for-sale</font> investments used to support policyholder liabilities (commonly known as shadow DSI). These adjustments are included in accumulated other comprehensive income and are explained further in the Investments section of this note. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Adjustments may also be made to DSI related to deferred annuities for investment activity, such as <font style="WHITE-SPACE: nowrap">write-downs</font> on <font style="WHITE-SPACE: nowrap">other-than-temporarily</font> impaired <font style="WHITE-SPACE: nowrap">fixed-maturity</font> securities. Management action may include assumption changes in the DSI models, such as adjustments to expected future gross profits used, as well as policyholder changes, such as credited rate changes. This approach applies to <font style="WHITE-SPACE: nowrap">fixed-maturity</font> securities purchased at <font style="WHITE-SPACE: nowrap">investment-grade</font> only and not <font style="WHITE-SPACE: nowrap">noninvestment-grade</font> items that were purchased with other yield considerations. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

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<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(g)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Account Balances and Future Policy Benefit Reserves </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Policy and contract account balances for <font style="WHITE-SPACE: nowrap">interest-sensitive</font> products, which include universal life and fixed deferred annuities, are generally carried at accumulated contract values. For <font style="WHITE-SPACE: nowrap">fixed-indexed</font> annuity products, the policyholder obligation is divided into two parts: the first part representing the value of the underlying base contract (host contract); and the second part representing the fair value of the expected index benefit over the life of the contract. The host contract is valued using principles consistent with similar deferred annuity contracts without an index benefit. The index benefit is valued at fair value using current capital market assumptions, such as index and volatility, to estimate future index levels. The index benefit valuation is also dependent upon estimates of future policyholder behavior. The Company must include provisions for the Company&#8217;s own credit risk and for risk that the Company&#8217;s assumptions about policyholder activity could differ from actual experience. The fair value determination of the index benefit is sensitive to the economic market and interest rate environment, as it is discounted at current market interest rates. There is volatility in this liability due to these external market sensitivities. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Policy and contract account balances for variable annuity products are carried at accumulated contract values. Future policy benefit reserves for any death and income benefits that may exceed the accumulated contract values are established using a range of economic scenarios and are accrued using assumptions consistent with those used in estimating gross profits or gross revenues for </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zaa9e849254c14818ac737b5e8e9c894e" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
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<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 11 of 68</p>
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<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 0pt">purposes of amortizing DAC. Future policy benefit reserves for accumulation and withdrawal benefits that may exceed account values are established using capital market assumptions, such as index and volatility, along with estimates of future policyholder behavior. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Future policy benefit reserves on traditional life products are computed by the net <font style="WHITE-SPACE: nowrap">level-premium</font> method based upon estimated future investment yield, mortality, and withdrawal assumptions, commensurate with the Company&#8217;s experience, modified as necessary to reflect anticipated trends, including possible unfavorable deviations. Most life reserve interest assumptions range from 2.3% to 6.0%. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">An additional reserve has been established to provide for future expected losses that are anticipated to occur after a period of profits. The reserve accrual will be over the profit period and is based on best estimate assumptions as of the current accrual period without provisions for adverse deviation. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

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<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(h)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Policy and Contract Claims </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Policy and contract claims include the liability for claims reported but not yet paid, claims incurred but not yet reported (IBNR), and claim settlement expenses on the Company&#8217;s accident and health business. Actuarial reserve development methods are generally used in the determination of IBNR liabilities. In cases of limited experience or lack of credible claims data, loss ratios are used to determine an appropriate IBNR liability. Claim and IBNR liabilities of a <font style="WHITE-SPACE: nowrap">short-term</font> nature are not discounted, but those claim liabilities resulting from disability income or LTC benefits include interest and mortality discounting. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z563bfc2079fc4168a8edbb7438b010c2" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(i)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Reinsurance </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company assumes and cedes business with other insurers. Reinsurance premium and benefits paid or provided are accounted for in a manner consistent with the basis used in accounting for original policies issued and the terms of the reinsurance contracts and are included in Premiums and policy fees, ceded, and Benefit recoveries, respectively, on the Statements of Operations. Insurance liabilities are reported before the effects of reinsurance. Account balances and future policy benefit reserves, and policy and contract claims covered under reinsurance contracts are recorded as a Reinsurance recoverable on the Balance Sheets. Amounts paid or deemed to have been paid for claims covered by reinsurance contracts are recorded as Receivables on the Balance Sheets. Reinsurance recoverables are recognized in a manner consistent with the liabilities related to the underlying reinsured contracts. Amounts due to other insurers on assumed business are recorded as a reinsurance payable, and are included in Other liabilities on the Balance Sheets. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">A gain recognized when the Company enters into a coinsurance agreement with a <font style="WHITE-SPACE: nowrap">third-party</font> reinsurer is deferred and recorded in Other liabilities on the Balance Sheets. Such gains are amortized into operations over the <font style="WHITE-SPACE: nowrap">revenue-producing</font> period or the claims <font style="WHITE-SPACE: nowrap">run-off</font> period, of the related reinsured policies. These amortized gains are recorded in Fee, commission and other revenue on the Statements of Operations. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

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<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 12 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z4269a36c8cc44b62a53a1cf9606d7aae" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(j)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Investments </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt"><font style="WHITE-SPACE: nowrap">Fixed-maturity</font> Securities and Equity Securities </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company has portfolios of <font style="WHITE-SPACE: nowrap">fixed-maturity</font> securities classified as <font style="WHITE-SPACE: nowrap">&#8220;available-for-sale.&#8221;</font> Accordingly, the securities are carried at fair value, and related unrealized gains and losses are credited or charged directly to accumulated other comprehensive income in stockholder&#8217;s equity, net of tax and related shadow adjustments. The adjustments to DAC and DSI represent the change in amortization that would have been required as a charge or credit to operations had such unrealized amounts been realized. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company has a portfolio of equity securities classified as &#8220;trading&#8221;. These securities are carried at fair value, and their respective related unrealized gains and losses are reflected in Change in fair value of assets and liabilities, within the Statements of Operations. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Dividends are accrued on the date they are declared, and interest is accrued as earned. Premiums or discounts on <font style="WHITE-SPACE: nowrap">fixed-maturity</font> securities are amortized using the constant yield method. Realized gains and losses are computed based on the average cost basis of all lots owned of each security. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt"><font style="WHITE-SPACE: nowrap">Mortgage-backed</font> securities and structured securities are amortized using anticipated prepayments. Prepayment assumptions for <font style="WHITE-SPACE: nowrap">loan-backed</font> securities are obtained from various external sources or internal estimates. The Company believes these assumptions are consistent with those a market participant would use. The Company recognizes income using a constant effective yield method based on prepayment assumptions and the estimated economic life of the securities. When estimated prepayments differ significantly from anticipated prepayments, the effective yield is recalculated to reflect actual payments to date and anticipated future payments using the retrospective method. Any resulting adjustment is included in Interest and similar income, net on the Statements of Operations. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt"><font style="WHITE-SPACE: nowrap">Short-term</font> securities are carried at amortized cost, which approximates fair value. Policy loan balances, which are supported by the underlying cash value of the policies, are carried at unpaid principal balances, which approximate fair value. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The fair value of <font style="WHITE-SPACE: nowrap">fixed-maturity</font> securities and equity securities is obtained from <font style="WHITE-SPACE: nowrap">third-party</font> pricing sources whenever possible. Management completes its own Independent Price Verification (IPV) process, which ensures security pricing is obtained from a <font style="WHITE-SPACE: nowrap">third-party</font> source other than the sources used by the investment managers. The IPV process supports the reasonableness of price overrides and challenges by the investment managers and reviews pricing for appropriateness. Results of the IPV are reviewed by the Company&#8217;s Pricing Committee. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company reviews the <font style="WHITE-SPACE: nowrap">available-for-sale</font> investment portfolio to determine whether or not declines in fair value are other than temporary. The Company continues to evaluate factors in addition to average cost and fair value, including credit quality, the extent and duration of the decline, market analysis, current events, recent price declines, changes in risk-free interest rates, likelihood of recovery in a reasonable period of time, and management&#8217;s judgment, to determine whether <font style="WHITE-SPACE: nowrap">fixed-income</font> securities are considered <font style="WHITE-SPACE: nowrap">other-than-temporarily</font> impaired. When the fair value of a <font style="WHITE-SPACE: nowrap">fixed-maturity</font> security is less than its amortized cost, the Company assesses whether or not: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

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<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 13 of 68</p>
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<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
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<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 0pt">(i)&#160;it has the intent to sell the security or (ii)&#160;it is more likely than not that the Company will be required to sell the security before its anticipated recovery. The Company evaluates these factors to determine whether the Company or any of its investment managers have an intent to sell a security or a group of securities. Additionally, the Company performs a cash flow projection for several years into the future to determine whether cash needs would require the sale of any securities in an unrealized loss position. If either of these conditions is met, the Company must recognize an other-than temporary impairment (OTTI) for the difference between the investment&#8217;s amortized cost basis and its fair value through earnings. For securities that do not meet the above criteria, and the Company does not expect to recover a security&#8217;s amortized cost basis, the security is considered <font style="WHITE-SPACE: nowrap">other-than-temporarily</font> impaired. For these securities, the Company separates the total impairment into the credit loss component and the amount of the loss related to other factors. The amount of the total impairment related to credit loss is considered an OTTI and is recognized in Realized investment gains, net on the Statements of Operations. The amount of the total impairment related to other factors is recognized in other comprehensive income, net of impacts to DAC, DSI, reserves, and deferred income taxes. For <font style="WHITE-SPACE: nowrap">available-for-sale</font> securities that have recognized an OTTI through earnings, if through subsequent evaluation there is a significant increase in the cash flow expected, the difference between the amortized cost basis and the discounted cash flows expected to be collected is accreted as interest income. Subsequent increases and decreases not related to additional credit losses in the fair value of <font style="WHITE-SPACE: nowrap">available-for-sale</font> securities are included as a separate component in the Statements of Comprehensive Income (Loss). </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company evaluates whether a credit loss exists by considering primarily the following factors: (a)&#160;the length of time and extent to which the fair value has been less than the amortized cost of the security, (b)&#160;changes in the financial condition, credit rating, and <font style="WHITE-SPACE: nowrap">near-term</font> prospects of the issuer, (c)&#160;whether the issuer is current on contractually obligated interest and principal payments, (d)&#160;changes in the financial condition of the security&#8217;s underlying collateral, if any, and (e)&#160;the payment structure of the security. The Company uses a <font style="WHITE-SPACE: nowrap">probability-weighted</font> cash flow model for corporate bonds to determine the credit loss amount. This measurement is a quantitative and qualitative process that incorporates information received from <font style="WHITE-SPACE: nowrap">third-party</font> sources along with certain internal assumptions and significant judgments regarding the future performance of the security. The Company&#8217;s <font style="WHITE-SPACE: nowrap">probability-weighted</font> cash flow model involves assumptions including, but not limited to, various performance indicators, such as historical and projected default and recovery rates, credit ratings, and current delinquency rates. For structured securities, the Company selects a <font style="WHITE-SPACE: nowrap">probability-weighted</font> or best estimate cash flow model depending on the specifics of the individual security and the information available to measure the expected cash flows of the underlying collateral. In the event that sufficient information is not available to measure the expected cash flows of a structured security in a timely manner due to a lack of available information on the valuation date, the entire decline in fair value is considered to be related to credit loss. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company provides a supplemental disclosure on its Statements of Operations that presents the total OTTI losses recognized during the period less the portion of OTTI losses recognized in other comprehensive income to equal the <font style="WHITE-SPACE: nowrap">credit-related</font> portion of OTTI that was recognized in earnings during the period. The portion of OTTI losses recognized in other comprehensive income includes the portion of OTTI losses related to factors other than credit recognized during the period, offset by </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z337652dc014b48618e2fa7daaa977418" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
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<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 14 of 68</p>
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<td valign="top" align="right">(Continued)</td>
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<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 0pt">reclassifications of OTTI losses previously determined to be related to factors other than credit that are determined to be <font style="WHITE-SPACE: nowrap">credit-related</font> in the current period. The amount presented in the supplemental disclosure on the Statements of Operations represents the portion of OTTI losses recognized in other comprehensive income and excludes subsequent increases and decreases in the fair value of these securities. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Impairments in the value of securities held by the Company, considered to be other than temporary, are recorded as a reduction of the cost of the security, and a corresponding realized loss is recognized in the Statements of Operations. The Company adjusts DAC, and DSI for impairments on securities, as discussed in their respective sections of this note. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Options and Futures Contracts </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company provides additional benefits through certain life and annuity products, which are linked to the fluctuation of various United States and international stock and bond market indices. In addition, certain variable annuity contracts provide minimum guaranteed benefits. The Company has analyzed the characteristics of these benefits and has entered into over-the-counter (OTC) option contracts and exchange-traded futures contracts tied to an appropriate underlying index with similar characteristics with the objective to economically hedge these risks. The Company uses exchange-traded futures contracts with the objective to increase the effectiveness of the economic hedge. Management monitors in-force amounts and option and futures contract values to ensure satisfactory matching and to identify unsatisfactory mismatches. If persistency assumptions were to deviate significantly from anticipated rates, management would purchase or sell option and futures contracts as deemed appropriate or take other actions. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The OTC option contracts are reported at fair value as Derivatives on the Balance Sheets. The fair value of the OTCs is derived internally and deemed by management to be reasonable via performing an IPV process. The process of deriving internal derivative prices requires the Company to calibrate Monte Carlo scenarios to actual market information. The calibrated scenarios are applied to derivative cash flow models to calculate fair value prices for the derivatives. Futures contracts do not require an initial cash outlay, and the Company has agreed to daily net settlement based on movements of the representative index. Therefore, no asset or liability is recorded on the Balance Sheets. Gains and/or losses on futures contracts are included in Change in fair value of assets and liabilities on the Statements of Operations. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Interest Rate Swaps </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company utilizes interest rate swaps (IRS) to hedge cash flows and market risks embedded in certain annuities. The IRS are reported at fair value in Derivatives on the Balance Sheets. The fair value of the IRS is derived using a <font style="WHITE-SPACE: nowrap">third-party</font> vendor software program and deemed by management to be reasonable. Changes in unrealized gains and losses on the swaps are recorded in Change in fair value of assets and liabilities on the Statements of Operations. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z6ced33f59b564dcc816423cd9504bd35" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
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<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 15 of 68</p>
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<td valign="top" align="right">(Continued)</td>
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<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zaa2ddc709b4a47b4b91a6eea9c800c2b" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(k)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Receivables </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Receivable balances (contractual amount less allowance for doubtful accounts) are based on pertinent information available to management as of <font style="WHITE-SPACE: nowrap">year-end,</font> including the financial condition and creditworthiness of the parties underlying the receivables. Receivable balances are monitored and allowances for doubtful accounts are maintained based on the nature of the receivable, and the Company&#8217;s assessment of the ability to collect. The allowance is estimated by aging the balances due from individual parties and generally setting up an allowance for any balances that are more than 90&#160;days old. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zf30d90167b524bcfa177cf838976bed2" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(l)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Income Taxes </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company and the Company&#8217;s parent, Allianz Life, file a consolidated federal income tax return with AZOA and many of its wholly owned subsidiaries. The consolidated tax allocation agreement stipulates that each company participating in the return will bear its share of the tax liability pursuant to certain tax allocation elections under the Internal Revenue Code and its related regulations, and that reimbursement will be in accordance with an intercompany tax reimbursement arrangement. The Company generally will be paid for the tax benefit on its losses and any other tax attributes to the extent it could have obtained a benefit against the Company&#8217;s <font style="WHITE-SPACE: nowrap">post-1990</font> separate return tax liability. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company provides for federal income taxes based on amounts the Company believes it ultimately will owe. Inherent in the provision for federal income taxes are estimates regarding the deductibility of certain items and the realization of certain tax credits. In the event the ultimate deductibility of certain items or the realization of certain tax credits differs from estimates, the Company may be required to significantly change the provision for federal income taxes recorded on the Balance Sheets. Any such change could significantly affect the amounts reported on the Statements of Operations. Management uses best estimates to establish reserves based on current facts and circumstances regarding tax exposure items where the ultimate deductibility is open to interpretation. Quarterly, management evaluates the appropriateness of such reserves based on any developments specific to their fact patterns. Information considered includes results of completed tax examinations, Technical Advice Memorandums, and other rulings issued by the Internal Revenue Service or the tax courts. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company utilizes the asset and liability method of accounting for income tax. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. Valuation allowances are established when it is determined that it is more likely than not that the deferred tax asset will not be fully realized or that the related temporary differences, such as OTTI, will not reverse over time (see further discussion in note&#160;13). </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

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<td valign="bottom">&#160;&#160;</td>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 16 of 68</p>
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</tr>
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<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

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<td style="WIDTH: 4%" valign="top" align="left"><b><i>(m)</i></b></td>
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<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Separate Accounts and Annuity Product Guarantees </p>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company issues variable annuity contracts through its separate accounts for which investment income and investment gains and losses accrue directly to, and investment risk is borne by, the contractholder. The Company also issues variable-indexed annuity contracts to its customers. These products have investment options similar to fixed-indexed annuities, but allow contractholders to invest in a variety of variable separate account investment options. The Company recognizes gains or losses on transfers from the general account to the separate accounts at fair value to the extent of contractholder interests in separate accounts, which are offset by changes in contractholder liabilities. The Company also issues variable annuity contracts through its separate accounts, where the Company provides certain contractual guarantees to the contractholder. These guarantees are in the form of a guaranteed minimum death benefit (GMDB), a guaranteed minimum income benefit (GMIB), a guaranteed minimum accumulation benefit (GMAB), and a guaranteed minimum withdrawal benefit (GMWB). These guarantees provide for benefits that are payable to the contractholder in the event of death, annuitization, or at specified dates during the accumulation period. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Separate account assets supporting variable annuity contracts represent funds for which investment income and investment gains and losses accrue directly to contractholders. Each fund has specific investment objectives, and the assets are carried at fair value. The assets of each account are legally segregated and are not subject to claims that arise out of any of the other business of the Company. Separate account assets and liabilities are reported as summary totals on the Balance Sheets. Amounts charged to the contractholders for mortality and contract maintenance are included in Policy fees on the Statements of Operations. These fees have been earned and assessed against contractholders on a daily or monthly basis throughout the contract period and are recognized as revenue when assessed and earned. Changes in GMDB and GMIB are calculated in accordance with the Financial Services &#8211; Insurance Topic of the Codification, and are included in Policyholder benefits on the Statements of Operations. GMAB and GMWB are considered to be embedded derivatives under the Derivatives and Hedging Topic of the Codification, and the changes in these embedded derivatives are included in Change in fair value of annuity and life embedded derivatives on the Statements of Operations. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The GMDB net amount at risk is defined as the guaranteed amount that would be paid upon death, less the current accumulated contractholder account value. The GMIB net amount at risk is defined as the current amount that would be needed to fund expected future guaranteed payments less the current contractholder account value, assuming that all benefit selections occur as of the valuation date. The GMAB net amount at risk is defined as the current amount that would be added to the contracts less the current contractholder account value. The GMWB net amount at risk is defined as the current accumulated benefit base amount less the current contractholder account value. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 17 of 68</p>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 0pt">The GMDB provides a specified minimum return upon death. The survivor has the option to terminate the contract or continue it and have the death benefit paid into the contract. The Company&#8217;s GMDB options have the following features: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

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<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><i>Return of Premium</i>: Provides the greater of account value or total deposits made to the contract, less any partial withdrawals and assessments </p>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

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<td style="WIDTH: 9%">&#160;</td>
<td style="WIDTH: 3%" valign="top" align="left">&#8226;</td>
<td style="WIDTH: 1%" valign="top">&#160;</td>
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<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><i>Reset</i>: Provides the greater of a return of premium death benefit or the most recent <font style="WHITE-SPACE: nowrap">five-year</font> anniversary account value (prior to age&#160;81), adjusted for withdrawals </p>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

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<td style="WIDTH: 9%">&#160;</td>
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<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><i>Ratchet</i>: Provides the greater of a return of premium death benefit or the highest specified anniversary account value (prior to age&#160;81), adjusted for withdrawals. There are three versions of ratchet, with the difference based on the definition of anniversary: quarter, evaluated quarterly; annual, evaluated annually; and <font style="WHITE-SPACE: nowrap">six-year,</font> evaluated every sixth year. </p>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The GMIB is a living benefit that provides the contractholder with a guaranteed annuitization value. The GMIB features are: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

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<td style="WIDTH: 9%">&#160;</td>
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<td style="WIDTH: 1%" valign="top">&#160;</td>
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<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><i>Return of Premium</i>: Provides the greater of account value or total deposits made to the contract, less any partial withdrawals and assessments </p>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

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<td style="WIDTH: 9%">&#160;</td>
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<td style="WIDTH: 1%" valign="top">&#160;</td>
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<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><i>Rollup</i>: Provides an annuitization value equal to the greater of account value and premiums, adjusted for withdrawals accumulated with a compound interest rate, which is subject to a cap for certain interest rates and products </p>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The GMDB and GMIB liabilities are determined each period by estimating the expected future claims in excess of the associated account balances. The Company regularly evaluates estimates and adjusts the additional liability balance, with a related charge or credit to Policyholder benefits on the Statements of Operations, if actual experience or other evidence suggests that earlier assumptions should be revised. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The following assumptions were used to determine the GMDB and GMIB liabilities as of December&#160;31, 2015 and 2014: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

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<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">100 stochastically generated investment performance scenarios </p>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

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<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Mean investment performance assumption was 6.5% for 2015 and 2014 </p>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

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<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Volatility assumption was 13.4% for 2015 and 2014 </p>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

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<td style="WIDTH: 9%">&#160;</td>
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<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Mortality assumption of 87% of the Annuity 2000 Mortality Table for all variable annuity products in 2015 and 90% of the Annuity 2000 Mortality Table for all variable annuity products in 2014. </p>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

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<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Lapse rates vary by contract type and duration. Spike rates could approach 40%, with an ultimate rate around 15%. </p>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 18 of 68</p>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

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<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Discount rates vary by contract type and are equal to an assumed <font style="WHITE-SPACE: nowrap">long-term</font> investment return (6.5%), less the applicable mortality and expense rate. </p>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

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<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">GMIB contracts contain a dynamic lapse assumption. For example, if the contract is projected to have a large additional benefit, then it becomes less likely to lapse. </p>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The GMAB is a living benefit that provides the contractholder with a guaranteed value that was established at least five&#160;years prior at each contract anniversary. This benefit is first available at the fifth contract anniversary, seventh contract anniversary, or tenth contract anniversary depending on the type of contract. Depending on the contractholder&#8217;s selection at issue, this value either may be a return of premium or may reflect market gains, adjusted at least proportionately for withdrawals. The contractholder also has the option to reset this benefit. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The GMWB is a living benefit that provides the contractholder with a guaranteed amount of income in the form of partial withdrawals. The benefit is payable provided the covered person is between the specified ages in the contract. The benefit is a fixed rate (depending on the age of the covered person) multiplied by the benefit base in the first&#160;year the benefit is taken and contract value in following years. The benefit does not decrease if the contract value decreases due to market losses. The benefit can decrease if the contract value is reduced by withdrawals. The benefit base used to calculate the initial benefit is the maximum of the contract value, the quarterly anniversary value, or the guaranteed annual increase of purchase payments (capped at twice the total purchase payments). Additionally, there is a GMWB living benefit where the benefit is an initial payment percentage established at issue, based on issue age. For each year there is a <font style="WHITE-SPACE: nowrap">year-over-year</font> contract value increase, the payment percentage will increase by 1.0% (up to age 91). This payment percentage is applied against total purchase payments instead of a benefit base value. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The GMAB and GMWB liabilities are determined each period as the difference between expected future claims and the expected future profits. One result of this calculation is that these liabilities can be negative <font style="WHITE-SPACE: nowrap">(contra-liability).</font> If the sum of the total embedded derivative balance is negative, the Company will reclassify the balance as an asset on the Balance Sheets. This methodology will also be applied to the fixed-indexed benefit. The Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to Change in fair value of annuity and life embedded derivatives on the Statements of Operations, if experience or other evidence suggests that earlier assumptions should be revised. Products featuring these benefits were first issued in 2007. In the calendar year that a product launches, the reserves are set to zero, until the policy&#8217;s first anniversary date. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The following assumptions were used to determine the GMAB and GMWB liabilities as of December&#160;31, 2015 and 2014: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

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<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">1000 stochastically generated investment performance scenarios. </p>
</td>
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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 19 of 68</p>
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<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zc87bd814de1a44538a4648d39daf4139" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 9%">&#160;</td>
<td style="WIDTH: 3%" valign="top" align="left">&#8226;</td>
<td style="WIDTH: 1%" valign="top">&#160;</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Market volatility assumption varies by fund type and grades from a current volatility number to a <font style="WHITE-SPACE: nowrap">long-term</font> assumption over four&#160;years as shown below: </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<div style="TEXT-ALIGN: right">
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<tr style="COLOR: white; LINE-HEIGHT: 0pt; VISIBILITY: hidden">
<td style="WIDTH: 78%"></td>
<td style="WIDTH: 8%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 8%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
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<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" nowrap="nowrap">
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 0pt">Fund index type</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Current</b><br>
<b>volatility</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b style="WHITE-SPACE: nowrap">Long-term</b><br>
<b>forward</b><br>
<b>volatility</b></td>
<td valign="bottom">&#160;</td>
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<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Large cap</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">17.6</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">18.1</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Bond</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3.4</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3.9</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">International</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">17.9</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">23.1</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
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<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Small cap</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">20.8</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">21.3</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
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<tr style="FONT-SIZE: 1pt">
<td style="HEIGHT: 16px"></td>
<td style="HEIGHT: 16px" colspan="8"></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Large cap</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">16.6</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">18.2</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Bond</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3.4</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3.9</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">International</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">16.3</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">23.7</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Small cap</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">21.3</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">21.2</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>
</table>
</div>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

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<tr>
<td style="WIDTH: 9%">&#160;</td>
<td style="WIDTH: 3%" valign="top" align="left">&#8226;</td>
<td style="WIDTH: 1%" valign="top">&#160;</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Mortality assumption of and 87% of the Annuity 2000 Mortality Table for all variable annuity products in 2015 and 90% of the Annuity 2000 Mortality Table for all variable annuity products in 2014. </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

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<tr>
<td style="WIDTH: 9%">&#160;</td>
<td style="WIDTH: 3%" valign="top" align="left">&#8226;</td>
<td style="WIDTH: 1%" valign="top">&#160;</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Lapse rates vary by contract type and duration. Spike rates could approach 40%, with an ultimate rate around 15%. </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 13%; MARGIN-TOP: 6pt">GMAB cash flows are discounted using a rate equal to the current month&#8217;s London Interbank Offered Rate (LIBOR) plus a Company specific spread for the years ended December&#160;31, 2015 and 2014. Beginning in December of 2014, the expected life-contingent GMWB payments are discounted using a blend of short and long term rates to the date the account value is expected to be exhausted. These obligations and all cash flows are then discounted to the current date using LIBOR plus a spread for the Company&#8217;s own nonperformance risk. Previously, GMWB cash flows were discounted using a rate equal to the current month&#8217;s LIBOR plus a Company specific spread </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 13%; MARGIN-TOP: 6pt">The Company has <font style="WHITE-SPACE: nowrap">in-force</font> <font style="WHITE-SPACE: nowrap">fixed-indexed</font> annuities with a GMWB as an optional rider. The GMWB has a <font style="WHITE-SPACE: nowrap">roll-up</font> feature. The net amount at risk is partially limited because the contractholder account value has an annual credit that is floored at zero. Since the account value cannot decrease, in contrast to a variable annuity, the difference between the withdrawal value and the account value will not diverge to the degree that is possible in a variable annuity. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

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<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(n)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Permitted and Prescribed Statutory Accounting Practices </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company is required to file annual statements with insurance regulatory authorities, which are prepared on an accounting basis prescribed or permitted by such authorities. Prescribed statutory </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

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<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 20 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
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<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 0pt">accounting practices include state laws, regulations, and general administrative rules, as well as a variety of publications of the National Association of Insurance Commissioners (NAIC). Permitted statutory accounting practices encompass all accounting practices that are not prescribed; such practices differ from state to state, may differ from company to company within a state, and may change in the future. The Company did not have any permitted or prescribed practices in effect in 2015. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

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<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(o)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Recently Issued Accounting Pronouncements &#8211; Adopted </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">In August 2014, the Financial Accounting Standards Board (FASB) issued amendments to guidance about troubled debt restructurings by creditors. The amendments require that a mortgage loan be derecognized and that a separate other receivable be recognized upon foreclosure if the following conditions are met: 1) the loan has a government guarantee that is not separable from the loan before foreclosure, 2) at the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim, and 3) at the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. The revisions are effective for fiscal years beginning after December&#160;15, 2014. This guidance does not have an impact on the Financial Statements as the Company does not currently have holdings that would be impacted by this guidance. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

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<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(p)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Recently Issued Accounting Pronouncements &#8211; To Be Adopted </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">In November 2015, the FASB released ASU 2015-17, Income Taxes, to simplify the presentation of deferred income taxes by requiring that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. This amendment will better align the accounting of deferred income tax assets and liabilities with IFRS guidance and is effective for financial statements issued for annual periods beginning after December&#160;15, 2016. This guidance does not have an impact on the Financial Statements as the Company does not currently have a classified balance sheet. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">In May 2015, the FASB released ASU 2015-09, Disclosures about Short-Duration Contracts, to add disclosure requirements for the liability for unpaid claims and claim adjustment expenses on short-duration insurance contracts. The guidance is effective for fiscal years beginning after December&#160;15, 2015. The Company is assessing the impact of this guidance on the Financial Statements. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">In May 2015, the FASB issued an amendment to the existing Topic 820, Fair Value Measurement (Update), permits a practical expedient to measure the fair value of certain investments using the net asset value per share of the investment. The investments valued using the practical expedient are categorized within the hierarchy on the basis of whether the investment is redeemable with the investee at net asset value on the measurement date, never redeemable with the investee at net asset value, or redeemable with the investee at net asset value at a future date. The amendments in this Update remove the requirement to categorize investments for which fair values are measured using the net asset value per share practical expedient. The amendments are effective for fiscal years beginning after December&#160;15, 2015 and interim periods within those years. The Company is assessing the impacts of the amendments on the Statements. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

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<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 21 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 0pt">In February 2015, the FASB issued ASC 2015-02 to reduce the number of consolidation models and place more emphasis on risk of loss when determining a controlling financial interest. Specifically, the amendments: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 13%; MARGIN-TOP: 6pt">1. Modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 13%; MARGIN-TOP: 6pt">2. Eliminate the presumption that a general partner should consolidate a limited partnership </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 13%; MARGIN-TOP: 6pt">3. Affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 13%; MARGIN-TOP: 6pt">4. Provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. The guidance is effective for public entities for fiscal years beginning after December&#160;15, 2015. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company is in the process of assessing the impact of these amendments. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">In January 2015, the FASB issued ASU 2015-01, Extraordinary and Unusual Items, to simplify financial statements by eliminating the concept of extraordinary items. The amendments are effective for interim and fiscal years beginning after December&#160;15, 2015. The Company does not currently report any extraordinary items; therefore, the amendment will not impact the Statements. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">In August 2014, the FASB issued an amendment to provide guidance about management&#8217;s responsibility to evaluate whether there is substantial doubt about an entity&#8217;s ability to continue as a going concern and to provide related footnote disclosures. The amendments are intended to reduce diversity in the timing and content of footnote disclosures. Additional disclosures are required. The revisions are effective for annual periods ending after December&#160;15, 2016, and for annual and interim periods, thereafter. The guidance is not expected to have an impact on the Financial Statements. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">In August 2014, the FASB revised guidance related to consolidations of variable interest entities (VIEs) that are a collateralized financing entity, such as a collateralized debt obligation (CDO) or a collateralized loan obligation (CLO) entity, when the reporting entity determines that it is the primary beneficiary. This revision will apply to reporting entities that are required to consolidate a collateralized financing entity under the variable interest entity guidance when 1) the reporting entity measures the financial assets and liabilities of that collateralized financing entity at fair value based on other Topics and 2) the changes in the fair value are reflected in earnings. The revisions are effective for fiscal years beginning after December&#160;15, 2015. Early adoption is permitted. The guidance is not expected to have an impact on the Financial Statements. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">In May 2014, the FASB issued a new standard for recognizing revenue from contracts when goods and services are transferred to a customer in exchange for payment. The model requires 1) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z833ef19fcdd344629f78341c5abdfd16" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 22 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 0pt">identifying contracts with a customer, 2) identifying separate performance obligations, 3) determining the transaction price, 4) allocating the transaction price to the separate performance obligations and 5) recognizing revenue when (or as) the entity satisfies a performance obligation. The revenue recognition standard does not apply to financial instruments or to insurance contracts. However, the standard will require significantly more disclosures about items that are recorded under the new revenue recognition model. An entity may apply the new guidance using one of the following two methods: (1)&#160;retrospectively to each prior period presented, or (2)&#160;retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application. In July 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which defers the effective date of ASU 2014-09 to the annual reporting period beginning January&#160;1, 2018. Early adoption for periods beginning on or after December&#160;15, 2016, is permitted. The Company is currently evaluating the impact of this guidance on the Financial Statements. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zab4e9ca1bf924d00a7ecac6436f99000" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(q)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Accounting Changes and Correction of Error</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">A portfolio of equity securities related to investments backing variable annuity reserves is classified as trading on the Balance Sheets. For the year ended December&#160;31, 2014, the presentation of purchases totaling ($4,780) and sales totaling $2,927 of these equity securities has been corrected from Net cash (used in) provided by investing activities to Net cash provided by operating activities on the Statements of Cash Flows as a result of a correction of an error. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">On April&#160;1, 2014, the Company applied a prospective change to its method of calculating DAC amortization for variable annuity policies issued prior to 2010. This was a change in estimate that is inseparable from the effect of a related change in accounting principle. For these annuities, acquisition costs are now amortized in relation to the present value of estimated gross revenues, whereas previously the amortization was based on estimated future gross profits. The implementation of the new DAC amortization will better reflect the revenue pattern of the pre-2010 variable block of business, which is currently in run-off. The implementation of this change resulted in a decrease in income from operations before income taxes of $8,820 for the year ended December&#160;31, 2014. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">On December&#160;1, 2014, the Company applied a prospective change to its method of calculating DAC amortization for variable annuity policies issued after 2010. The change in estimate will minimize accounting mismatches on interest and claim projections within the EGP calculation. The implementation of this change resulted in a decrease in income from operations before income taxes of approximately $669 for the year ended December&#160;31, 2014. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

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<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(r)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Reclassification</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Certain prior year balances have been reclassified to conform to the current year presentation. The reclassifications did not change total assets, stockholders equity or net income as previously reported. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="za8b38c70060a410280ac4d52593899b0" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 23 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z7396dd2bc11e4f24b62c72dfec3652b7" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%" valign="top" align="left"><b>(3)</b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: justify">Risk Disclosures </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">The following is a description of the significant risks facing the Company and how the Company attempts to mitigate those risks: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z55c7d52bb91b4d4abaad5da557c5fdb5" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(a)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Credit Risk</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Credit risk is the risk that issuers of fixed rate and variable rate income securities, mortgages on commercial real estate, or other parties with whom the Company has transactions, such as reinsurance and derivative counterparties, default on their contractual obligations, resulting in unexpected credit losses. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company mitigates this risk by adhering to investment policies and limits that provide portfolio diversification on an asset class, asset quality, creditor, and geographical basis, and by complying with investment limitations governed by state insurance laws and regulations, as applicable. The Company considers all relevant objective information available in estimating the cash flows related to structured securities. The Company actively monitors and manages exposures, and determines whether any securities are impaired. The aggregate credit risk taken in the investment portfolio is influenced by management&#8217;s risk/return preferences, the economic and credit environment, and the ability to manage this risk through liability portfolio management. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">For derivative counterparties, the Company mitigates credit risk by tracking and limiting exposure to each counterparty through limits that are reported regularly and, once breached, restricts further trades; establishing relationships with counterparties rated BBB+ and higher; and monitoring the credit default swap (CDS) of each counterparty as an early warning signal to cease trading when CDS spreads imply severe impairment in credit quality. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company executes Credit Support Annexes (CSA) with all active and new counterparties which further limits credit risk by requiring counterparties to post collateral to a segregated account to cover any counterparty exposure. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

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<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(b)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Credit Concentration Risk</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Credit concentration risk is the risk of increased exposure to significant asset defaults (of a single security issuer or class of security issuers); economic conditions (if business is concentrated in a certain industry sector or geographic area); or adverse regulatory or court decisions (if concentrated in a single jurisdiction) affecting credit. Concentration risk exposure is monitored regularly. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company&#8217;s Finance Committee, responsible for asset/liability management (ALM) issues, recommends an investment policy to the Company&#8217;s Board of Directors (BOD). The investment policy and accompanying investment mandates specify asset allocation among major asset classes and the degree of asset manager flexibility for each asset class. The investment policy complies, at a minimum, with state statutes. Compliance with the policy is monitored by the Finance Committee who is responsible for implementing internal controls and procedures. Deviations from the policy are monitored and addressed. The Finance Committee and subsequently the BOD review the investment policy at least annually. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zb234d7b2f0654b2497ace0de07429546" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 24 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 0pt">To further mitigate this risk, internal concentration limits based on credit rating and sector are established and are monitored regularly by Allianz Life on a consolidated basis. Any ultimate obligor group exceeding these limits is placed on a restricted list to prevent further purchases, and the excess exposure may be actively sold down to comply with concentration limit guidelines. Further, the Company performs a quarterly concentration risk calculation to ensure compliance with the State of New York basket clause. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z0d1aad72137f4afd9129f4d48f4abd91" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(c)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Liquidity Risk</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Liquidity risk is the risk that unexpected timing or amounts of cash needed will require liquidation of assets in a market that will result in a realized loss or an inability to sell certain classes of assets such that an insurer will be unable to meet its obligations and contractual guarantees. Liquidity risk also includes the risk that in the event of a company liquidity crisis refinancing is only possible at higher interest rates. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Liquidity risk can be affected by the maturity of liabilities, the presence of withdrawal penalties, the breadth of funding sources, and terms of funding sources. It can also be affected by counterparty collateral triggers as well as whether anticipated liquidity sources such as credit agreements are cancelable. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company manages liquidity within four specific domains: (1)&#160;monitoring product development, product management, business operations, and the investment portfolio; (2)&#160;setting ALM strategies; (3)&#160;managing the cash requirements stemming from the Company&#8217;s derivative dynamic hedging activities; and (4)&#160;establishing a liquidity facility with the Allianz Life to provide additional liquidity. The Company has established liquidity risk limits, which are approved by the Company&#8217;s Risk Committee, and the Company monitors its liquidity risk regularly. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z1a4252dabc984ec9a54cb4da5647d8b3" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(d)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Interest Rate Risk</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Interest rate risk is the risk that movements in interest rates or interest rate volatility will cause a decrease in the value of an insurer&#8217;s assets relative to the value of its liabilities and/or an unfavorable change in prepayment activity resulting in compressed interest margins. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company has an ALM strategy to align cash flows and duration of the investment portfolio with policyholder liability cash flows and duration. The Company further limits interest rate risk on variable annuity guarantees through interest rate hedges. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z7a63166e46994b5db2e82aa086020f9e" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(e)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Equity Market Risk</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Equity market risk is the risk that movements in the equity prices or equity volatility will cause a decrease in the value of an insurer&#8217;s assets relative to the value of its liabilities. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The policy value of the fixed-indexed annuity products is linked to equity market indices. The Company economically hedges this exposure with derivatives. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zaabb9112b5124bc8855c6dbe71018e02" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 25 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 0pt">Variable annuity products may provide a minimum guaranteed level of benefits irrespective of market movements. The Company has adopted an economic hedging program to manage the equity risk of these products. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Allianz Life monitors the economic and accounting impacts of equity stress scenarios on assets and liabilities on a consolidated basis regularly and on a Company specific basis periodically. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Basis risk is the risk that the variable annuity hedge asset value changes unexpectedly relative to the value of the underlying separate account funds of the variable annuity contracts. Basis risk may arise from the Company&#8217;s inability to directly hedge the underlying investment options of the variable annuity contracts. The Company mitigates this risk through regular review and synchronization of fund mappings, product design features, and hedge design. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z1e26051671f14c72a9a41c5a1c18d06c" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(f)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Operational Risk</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Operational risk is the risk of loss resulting from inadequate or failed internal processes and systems, fraud or errors, external events, or legal/regulatory risk. Operational risk is comprised of the following seven risk categories: (1)&#160;internal fraud; (2)&#160;external fraud; (3)&#160;employment practices and workplace safety; (4)&#160;clients / third party products and business practices; (5)&#160;damage to physical assets; (6)&#160;business disruption and system failure; and (7)&#160;execution, delivery and process management. Operational risk is comprehensively managed through a combination of core qualitative and quantitative activities. The Operational Risk Management framework includes the following key activities: (1)&#160;loss data capture identifies historical operational events that meet a designated threshold to ensure transparency and remediation of each event; (2)&#160;risk and control self-assessments are performed to proactively manage significant operational risk scenarios throughout the organization; and (3)&#160;scenario analyses are conducted to quantify operational risk capital. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z97d39c2149314453aee8630a1ae4cb8c" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(g)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Legal/Regulatory Risk</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Legal/regulatory risk is the risk that changes in the legal or regulatory environment in which the Company operates may result in reduced demand for its products or additional expenses not assumed in product pricing. Additionally, the Company is exposed to risk related to how the Company conducts itself in the market and the suitability of its product sales to contractholders. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company mitigates this risk by monitoring all <font style="WHITE-SPACE: nowrap">market-related</font> exposure, participating in national and international discussions relating to legal, regulatory, and accounting changes that may impact the business. A formal process exists to assess the Company&#8217;s risk exposure to changes in regulation. In addition, the Company has implemented suitability standards to mitigate suitability risk. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">In April 2015, the U.S. Department of Labor (DOL) proposed new regulations that, if enacted, will significantly expand the definition of &#8220;investment advice&#8221; and increase the circumstances in which companies and broker-dealers, insurance agencies and other financial institutions that sell the Company&#8217;s products could be deemed a fiduciary when providing investment advice with respect to plans under the Employee Retirement Income Security Act of 1974 (ERISA) or individual retirement accounts (IRAs). The DOL also proposed amendments to longstanding exemptions from the prohibited transaction provisions under ERISA that would increase fiduciary requirements in </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z51c3f2332a1e4e9981b2d73f2ac95e96" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 26 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 0pt">connection with transactions involving ERISA plans, plan participants and IRAs, and that would apply more onerous disclosure and contract requirements to such transactions. If these proposals are adopted, the Company may find it necessary to change sales representative and/or broker compensation, limit the assistance or advice provided to annuity contractholders, or otherwise change the manner in which the Company designs and supports sales of annuities. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zba0fb1614b6842808549c1b426fd516f" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(h)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Ratings Risk</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Ratings risk is the risk that rating agencies change their outlook or rating of the Company. The rating agencies generally utilize proprietary capital adequacy models in the process of establishing ratings for the Company. The Company is at risk of changes in these models and the impact that changes in the underlying business that the Company is engaged in can have on such models. To mitigate this risk, the Company maintains regular communications with the rating agencies and evaluates the impact of significant transactions on such capital adequacy models and considers the same in the design of transactions to minimize the adverse impact of this risk. Stress tests are performed regularly to assess how rating agency capital adequacy models would be impacted by severe economic events. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z6f64c78443cd41caa4c8306c6f65a318" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(i)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Mortality Risk</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Mortality risk is the risk that life expectancy assumptions used by the Company to price its products are too high (i.e., insureds live shorter than expected lives). Conversely, longevity risk is the risk that life expectancy assumptions used by the Company to price its products are too low (i.e., insureds live longer than expected lives). The Company mitigates mortality risk primarily through reinsurance, whereby the Company cedes a significant portion of its new and existing mortality to third parties. The Company manages mortality risk through the underwriting process. The Company also manages both mortality and longevity risks by reviewing its mortality assumptions at least annually, and reviewing mortality experience periodically. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z33a070c5318e4dd68bfafb52239b9ce0" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(j)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Lapse Risk</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Lapse risk is the risk that actual lapse experience evolves differently than the assumptions used for pricing and valuation exercises leading to a significant loss in Company value and/or income. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company mitigates this risk by performing sensitivity analysis at the time of pricing to affect policy design, regular ALM analysis and regular monitoring of policyholder experience. The Company quantifies lapse risk periodically. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z412f2ec0569247a680915c4c33a5bc47" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 27 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z127100356760455c9693c2c30ea390f3" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(k)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Cyber Security Risk</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Cyber Security Risk is the risk of denial of service and/or losses due to external and internal attacks leading to numerous impacts on systems, data, and key stakeholders (e.g. policyholders, producers, and employees.) The Company has implemented preventative measures for its internet breakout including Advanced Malware Detection, spyware, anti-virus software, phishing filters, email and laptop encryption, web content filtering, and regular scanning of all servers and network devices to identify vulnerabilities. Controls are implemented to prevent and review unauthorized access. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z62b0c414d753470c9668c00878f9aa44" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(l)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Reinsurance Risk</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Reinsurance risk is the risk that reinsurance companies default on their obligation where the Company has ceded a portion of its insurance risk. The Company uses reinsurance to limit its risk exposure to certain business lines and to enable better capital management. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Reinsurance contracts do not relieve the Company from its obligations to policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company mitigates this risk by requiring certain counterparties to meet thresholds related to the counterparty&#8217;s credit rating, exposure, or other factors. If the thresholds are not met, the counterparties are required to establish a trust or letter of credit backed by assets meeting certain quality criteria. All arrangements are regularly monitored to determine whether trusts or letters of credit are sufficient to support the ceded liabilities and that their terms are being met. Also, the Company regularly reviews the financial standings and ratings of its reinsurance counterparties and monitors concentrations of credit risk to minimize its exposure to significant losses from reinsurer insolvencies. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zd67a99f9d8e04b55a761b4d764e35775" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 28 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z937a8f5876644814a55244fac49c6006" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%" valign="top" align="left"><b>(4)</b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: justify">Investments </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zd87d4dad0bf74e5590e50d5238d1c742" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(a)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i><font style="WHITE-SPACE: nowrap">Fixed-maturity</font> Securities</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">At December&#160;31, the amortized cost, gross unrealized gains, gross unrealized losses, and fair values of <font style="WHITE-SPACE: nowrap">available-for-sale</font> securities are as shown in the following tables: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z1e7328f8fdf0448ca173fa0c9b833c70" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 92%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 57%"></td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Amortized<br>
 cost</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Gross<br>
unrealized<br>
 gains</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Gross<br>
unrealized<br>
 losses</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Fair value</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>OTTI in<br>
accumulated<br>
other<br>
comprehensive<br>
 income</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2015:</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Fixed-maturity securities:</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">U.S. government</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">72,035</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,188</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">73,223</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">States and political subdivisions</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,112</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">214</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">282</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,044</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Foreign government</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">505</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">510</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Public utilities</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">36,467</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,989</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">789</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">38,667</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Corporate securities</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">406,982</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">18,230</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">9,697</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">415,515</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Mortgage-backed securities</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">133,853</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,909</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,159</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">135,603</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Total</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;&#160;660,954</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">25,535</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,927</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">674,562</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 1pt">
<td style="HEIGHT: 16px"></td>
<td style="HEIGHT: 16px" colspan="4"></td>
<td style="HEIGHT: 16px" colspan="4"></td>
<td style="HEIGHT: 16px" colspan="4"></td>
<td style="HEIGHT: 16px" colspan="4"></td>
<td style="HEIGHT: 16px" colspan="4"></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Amortized<br>
 cost</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Gross<br>
unrealized<br>
 gains</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Gross<br>
unrealized<br>
 losses</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Fair value</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>OTTI in<br>
accumulated<br>
other<br>
comprehensive<br>
 income</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2014:</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Fixed-maturity securities:</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">U.S. government</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">93,692</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,446</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">61</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">95,077</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">States and political subdivisions</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,679</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">305</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">42</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,942</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Foreign government</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,517</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">30</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,547</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Public utilities</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">36,746</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,625</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">43</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">41,328</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Corporate securities</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">328,406</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">30,664</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,740</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">357,330</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Mortgage-backed securities</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">140,682</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,416</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">181</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">146,917</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Total</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;&#160;613,722</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;&#160;43,486</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;2,067</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;&#160;655,141</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z64a7e142257e47c3856aadab959075d3" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 29 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 0pt">The net unrealized gains on <font style="WHITE-SPACE: nowrap">available-for-sale</font> securities consist of the following at December&#160;31: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z30b28890b70b4235abfab37e7c60ee91" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 84%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 71%"></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Available-for-sale:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Fixed-maturity securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">13,608</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">41,419</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">30,576</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Adjustments for:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Shadow adjustments</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;(5,916)</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(15,794</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(14,657</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Deferred taxes</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(2,692</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(8,969</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(5,572</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Net unrealized gains</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">5,000</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">16,656</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">10,347</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The amortized cost and fair value of <font style="WHITE-SPACE: nowrap">available-for-sale</font> <font style="WHITE-SPACE: nowrap">fixed-maturity</font> securities at December&#160;31, 2015, by contractual maturity, are shown below: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z2a68ee3cf06f4fd39e7e8bf75178503f" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 84%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 75%"></td>
<td style="WIDTH: 4%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 4%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Amortized<br>
 cost</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Fair&#160;value</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Available-for-sale fixed-maturity securities:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Due in one year or less</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">26,179</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">26,635</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Due after one year through five years</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">186,049</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">194,706</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Due after five years through ten years</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">198,798</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">201,432</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Due after ten years</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">116,075</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">116,186</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Mortgage-backed securities and collateralized mortgage obligations</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">133,853</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">135,603</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total available-for-sale fixed-maturity securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;660,954</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">674,562</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The amortized cost of <font style="WHITE-SPACE: nowrap">fixed-maturity</font> securities with rights to call or prepay without penalty is $160,743 as of December&#160;31, 2015. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Proceeds from sales of available-for-sale investments for the years ended December&#160;31 are presented in the following table: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zd6d69f7890ad40319b8691bf8f5e7304" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 84%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 73%"></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Available-for-sale:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Fixed-maturity securities:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Proceeds from sales</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">54,740</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">22,808</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">77,960</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z31feae2337cd49a5822e0e481ef107f5" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 30 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 0pt">As of December&#160;31, 2015 and 2014, investments with a fair value of $1,713 and $1,731, respectively, were pledged to the New York Superintendent of Insurance, as required by statutory regulation. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company&#8217;s <font style="WHITE-SPACE: nowrap">available-for-sale</font> securities portfolio includes <font style="WHITE-SPACE: nowrap">mortgage-backed</font> securities. Due to the high quality of these investments and the lack of subprime loans within the securities, the Company does not have a material exposure to subprime mortgages. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z75836812485d46caa0ea83cce661c4de" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(b)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Unrealized Investment Losses</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Unrealized losses on <font style="WHITE-SPACE: nowrap">available-for-sale</font> securities and the related fair value as of December&#160;31 are shown below: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<div style="TEXT-ALIGN: right">
<table id="z7cd3fca47a9a40a8ae5260fd2edb594c" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 92%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 51%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>12 months or less</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>Greater&#160;than&#160;12&#160;months</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>Total</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Fair value</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Unrealized<br>
 losses</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Fair&#160;value</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Unrealized<br>
 losses</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Fair&#160;value</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Unrealized<br>
 losses</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2015:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Fixed-maturity securities:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">States and political subdivisions</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">4,206</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">282</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,206</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">282</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Public utilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">9,944</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">621</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">372</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">168</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">10,316</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">789</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Corporate securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">108,083</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5,291</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">12,335</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,406</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">120,418</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">9,697</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Mortgage-backed securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">52,731</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,036</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,985</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">123</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">55,716</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,159</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Total temporarily impaired available-for-sale securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;174,964</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7,230</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">15,692</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,697</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">190,656</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,927</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>
</div>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zaacd4c2f7db143878345d6c1ab9bb06d" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 31 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<div style="TEXT-ALIGN: right">
<table id="z1bfc369cf58148fe94ba73a2c29e38a9" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 92%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 51%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>12 months or less</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>Greater&#160;than&#160;12&#160;months</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>Total</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Fair value</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Unrealized<br>
 losses</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Fair&#160;value</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Unrealized<br>
 losses</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Fair&#160;value</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Unrealized<br>
 losses</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1pt">
<td style="HEIGHT: 16px"></td>
<td style="HEIGHT: 16px" colspan="4"></td>
<td style="HEIGHT: 16px" colspan="4"></td>
<td style="HEIGHT: 16px" colspan="4"></td>
<td style="HEIGHT: 16px" colspan="4"></td>
<td style="HEIGHT: 16px" colspan="4"></td>
<td style="HEIGHT: 16px" colspan="4"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2014:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Fixed-maturity securities:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">U.S. government</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">6,476</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">20</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,075</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">41</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">8,551</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">61</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">States and political subdivisions</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7,461</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">42</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7,461</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">42</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Public utilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">500</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">43</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">500</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">43</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Corporate securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">14,095</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">850</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">22,358</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">890</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">36,453</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,740</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Mortgage-backed securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,495</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">19</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,970</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">162</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,465</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">181</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Total temporarily impaired available-for-sale securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;25,066</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;889</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">39,364</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,178</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;64,430</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;2,067</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>
</div>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">As of December&#160;31, 2015 and 2014, there were 104 and 32 <font style="WHITE-SPACE: nowrap">available-for-sale</font> <font style="WHITE-SPACE: nowrap">fixed-maturity</font> securities that were in an unrealized loss position, respectively. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">As of December&#160;31, 2015 and 2014, of the total amount of unrealized losses, $11,586 or 97.1% and $1,983 or 95.9%, respectively, are related to unrealized losses on <font style="WHITE-SPACE: nowrap">investment-grade</font> securities. Investment grade is defined as a security having a credit rating of Aaa, Aa, A, or Baa from Moody&#8217;s or a rating of AAA, AA, A, or BBB from S&amp;P, or a NAIC rating of 1 or 2 if a Moody&#8217;s or S&amp;P rating is not available. Unrealized losses on securities are principally related to changes in interest rates or changes in sector spreads from the date of purchase. As contractual payments continue to be met, management continues to expect all contractual cash flows to be received. As mentioned in note&#160;2, the Company reviews these securities regularly to determine whether or not declines in fair value are <font style="WHITE-SPACE: nowrap">other-than-temporary.</font> Further, as the Company neither has an intention to sell nor does it expect to be required to sell the securities outlined above, the Company did not consider these investments to be <font style="WHITE-SPACE: nowrap">other-than-temporarily</font> impaired. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z4f17413006534528937dfbb3bd9d8665" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 32 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z67bc42178db148d4bcb0a8f893e8ce78" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(c)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>OTTI Losses</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The following table presents a rollforward of the Company&#8217;s cumulative credit impairments on <font style="WHITE-SPACE: nowrap">fixed-maturity</font> securities held at December&#160;31: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z89efe006b3644f39940e3a19a3009683" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 84%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr style="COLOR: white; LINE-HEIGHT: 0pt; VISIBILITY: hidden">
<td style="WIDTH: 83%"></td>
<td style="WIDTH: 4%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 4%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Balance as of January&#160;1</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">241</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Additions for credit impairments recognized on:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Securities not previously impaired</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Securities that the Company intends to sell or more likely than not be required to sell before recovery (interest)</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">184</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Reductions for credit impairments previously on:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Securities that matured or were sold during the period</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(184)</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(241</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Balance as of December&#160;31</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">$</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z8254c3f511274e74b5a2a1cc31c4383f" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(d)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Realized Investment Gains</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Gross and net realized investment gains for the respective years ended December&#160;31 are summarized as follows: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z39afc5e10127440893166e2b0eabf827" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 84%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr style="COLOR: white; LINE-HEIGHT: 0pt; VISIBILITY: hidden">
<td style="WIDTH: 77%"></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Fixed-maturity securities:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Gross gains on sales</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">895</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">277</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,324</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Gross losses on sales</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(133</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(206</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,286</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">OTTI</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(184</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(241</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Other</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">32</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Net realized investment gains</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">583</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">77</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">829</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z72e6e2bfc2bd4e2ba9d6e13dd9d9b963" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 33 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z9340bf617a1841eaae19ab7a16ebe0df" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(e)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Interest and Similar Income</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Major categories of interest and similar income, net for the respective years ended December&#160;31 are shown below: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zed93e79a16964b7c9a1045ab0eb9b144" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 84%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr style="COLOR: white; LINE-HEIGHT: 0pt; VISIBILITY: hidden">
<td style="WIDTH: 72%"></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Interest and similar income:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Fixed-maturity securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">27,699</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">29,131</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">29,904</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Short-term securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">24</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">13</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Policy loans</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">18</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">17</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">21</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Other</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">24</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">24</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">27,765</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">29,179</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">29,942</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Less:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Investment expenses</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">378</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">320</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">307</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total interest and similar income, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;27,387</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">28,859</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">29,635</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zb8eecb9105fd4457b15b0850277f6c7c" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(f)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Variable Interest Entities </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">In the normal course of business, the Company enters into relationships with various entities that are deemed to be VIE. A VIE is an entity that either (1)&#160;has equity investors that lack certain essential characteristics of a controlling financial interest (including the ability to control activities of the entity, the obligation to absorb the entity&#8217;s expected losses, and the right to receive the entity&#8217;s expected residual returns) or (2)&#160;lacks sufficient equity to finance its own activities without financial support provided by other entities, which in turn would be expected to absorb at least some of the expected losses of the VIE. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company invests in structured securities that include VIEs. These structured securities typically invest in <font style="WHITE-SPACE: nowrap">fixed-income</font> investments managed by third parties and include <font style="WHITE-SPACE: nowrap">mortgage-backed</font> securities and collateralized mortgage obligations. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company has carefully analyzed the VIEs to determine whether the Company is the primary beneficiary, taking into consideration whether the Company or the Company together with its affiliates has the power to direct the activities of the VIE that most affect its economic performance and whether the Company has the right to benefits from the VIE. Based on that analysis, the Company has concluded that it is not the primary beneficiary and, as such, did not consolidate any VIEs in the Financial Statements. The structured securities are classified as <font style="WHITE-SPACE: nowrap">Fixed-maturity</font> securities, <font style="WHITE-SPACE: nowrap">available-for-sale,</font> at fair value on the Balance Sheets. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company&#8217;s maximum exposure to loss from these entities is limited to their carrying value. The Company has not provided, and has no obligation to provide, material, financial, or other support </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zc5e77b9f65614df0a311c552da9521b5" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 34 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 0pt">that was not previously contractually required to these entities. The Company had no liabilities recorded as of December&#160;31, 2015 or 2014, related to these entities. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zde1bdf2959684c7997207130a9874606" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%" valign="top" align="left"><b>(5)</b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: justify">Derivative and Hedging Instruments </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">The Company uses derivatives as a risk management strategy to economically hedge its exposure to various market risks associated with both its products and operations. Derivative assets and liabilities are recorded at fair value in the Financial Statements using valuation techniques further discussed in note&#160;6. None of the derivative investments held by the Company qualify as hedging instruments for accounting purposes. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z4edf061c39f548c6b545d2b0a80b7636" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(a)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Interest Rate Swaps </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company utilizes OTC and exchange traded IRS to economically hedge certain variable and fixed-index annuity guarantee benefits. The Company can receive the fixed or variable rate. The IRS are traded in varying maturities. The Company only enters into OTC IRS contracts with counterparties rated BBB+ or better. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">IRS traded after May 2013, are centrally cleared through an exchange. For IRS traded prior to June 2013, the IRS exposure was netted with other OTC derivatives upon settlement and were subject to the rules of the International Swaps and Derivatives Association, Inc. agreements. The fair values of the collateral posted for OTC and exchange traded derivatives are discussed in the derivative collateral management section below. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z7b282ad61589414aab2f27fbad6b0999" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(b)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Option Contracts </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company utilizes OTC options with the objective to economically hedge certain variable annuity guaranteed benefits. These options are not used for speculative or income generating purposes. These options are cleared through the Options Clearing Corporation (OCC), which operates under the jurisdiction of both the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC). The credit rating on the OCC is currently AA+ from S&amp;P. The fair values of the collateral posted for OTC and exchange traded derivatives are discussed in the derivative collateral management section below. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z07d9e7370f9a4c86899eb8ef055d4f80" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(c)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Futures </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company utilizes exchange traded futures to economically hedge <font style="WHITE-SPACE: nowrap">fixed-indexed</font> annuity and variable annuity guarantees. The futures contracts do not require an initial investment except for the initial margin described below and the Company is required to settle cash daily based on movements of the representative index. Therefore, no asset or liability is recorded as of December&#160;31, 2015 and 2014. The fair value of the collateral posted for exchange traded derivatives is discussed in the derivative collateral management section below. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zb3b8885288b043b6bb2d98c624f0f3a9" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(d)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Derivative Collateral Management </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company manages separate collateral for exchange traded and OTC derivatives. The total collateral posted for exchange traded derivatives at December&#160;31, 2015 and 2014, had a fair value of </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z0385d3d0cb844e17be9e6a04b008b0a9" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 35 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 0pt">$49,007 and $49,560, respectively, and is included in <font style="WHITE-SPACE: nowrap">Fixed-maturity</font> securities on the Balance Sheets. The Company retains ownership of the exchange traded collateral, but the collateral resides in an account designated by the exchange. The collateral is subject to specific exchange rules regarding rehypothecation. The total collateral posted for OTC derivatives at December&#160;31, 2015 and 2014, had a fair value of $1,866 and $2,515, respectively, and is included in <font style="WHITE-SPACE: nowrap">Fixed-maturity</font> securities on the Balance Sheets. The Company posts collateral to OTC counterparties based upon exposure amounts. The Company retains ownership of the OTC collateral. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z7da5fa78d9bc421eb32185cba0328872" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(e)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Embedded Derivatives </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company issues certain variable annuity products with guaranteed minimum benefit riders, including GMWB and GMAB, which are measured at fair value separately from the host variable annuity contract, with changes in fair value reported in Change in fair value of annuity and life embedded derivatives on the Statements of Operations. These embedded derivatives are classified within Account balances and future policy benefit reserves on the Balance Sheets. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Certain <font style="WHITE-SPACE: nowrap">fixed-indexed</font> annuity products and universal life policies include a market value liability option (MVLO), which is essentially an embedded derivative with <font style="WHITE-SPACE: nowrap">equity-indexed</font> features. This embedded derivative is reported within Account balances and future policy benefit reserves on the Balance Sheets with changes in fair value reported in Change in fair value of annuity and life embedded derivatives on the Statements of Operations. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The following table presents the balance sheet location and the fair value of the derivatives, including embedded derivatives, as of December&#160;31: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<div style="TEXT-ALIGN: right">
<table id="zb7035494ff614948ac3ebf9100e1e775" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 92%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 76%"></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>Fair value</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" nowrap="nowrap" align="center">
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Derivative instruments, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">OTC</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1,441</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">407</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">GMWB</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(147,290</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(92,877</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">GMAB</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(27,579</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(16,870</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">MVLO</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(18,525</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(24,478</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Interest rate swaps</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5,667</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(785</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Total derivative instruments, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(186,286</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(134,603</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 1pt">
<td style="HEIGHT: 16px"></td>
<td style="HEIGHT: 16px" colspan="4"></td>
<td style="HEIGHT: 16px" colspan="4"></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" nowrap="nowrap" align="center">
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Location in balance sheets</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Derivatives</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">15,064</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,516</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Account balances and future policy benefit reserves</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(193,394</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(134,225</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Derivative liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(7,956</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(4,894</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Total derivative instruments, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;(186,286)</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(134,603</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>
</div>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z978c880f0279460aa57aefe744dd8fa1" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 36 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 0pt">The following table presents the gains or losses recognized in income on the various derivative instruments: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<div style="TEXT-ALIGN: right">
<table id="za3a70dc3ff62457199ce16aed7de3f25" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 92%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 25%"></td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td style="WIDTH: 52%"></td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" rowspan="2" nowrap="nowrap" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Derivative</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">instruments,</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" rowspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Location in</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">statements of operations</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="10" align="center"><b>Amount&#160;of&#160;gains&#160;(losses)&#160;on<br>
derivatives&#160;recognized&#160;for&#160;the<br>
 years&#160;ended December&#160;31</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">GMWB</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Change in fair value of annuity and life embedded derivatives</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(54,413</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(101,961</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">61,222</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">GMAB</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Change in fair value of annuity and life embedded derivatives</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(11,755</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(14,372</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,899</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">MVLO</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Change in fair value of annuity and life embedded derivatives</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5,292</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,969</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,575</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Total change in fair value of annuity embedded derivatives</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(60,876</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(112,364</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">71,546</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">MVLO</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Policy fees</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">534</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">681</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,061</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">MVLO</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Policyholder benefits</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">127</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">98</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">248</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Interest rate swaps</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Change in fair value of assets and liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">23,296</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">93,758</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(58,289</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Futures</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Change in fair value of assets and liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(11,861</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(26,878</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(20,684</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">OTC</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Change in fair value of assets and liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">692</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">232</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Total derivative loss</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(48,088</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(44,473</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(6,118</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>
</div>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z1b8c154a7fb24cd9a13619b74320d1f1" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(f)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Offsetting Assets and Liabilities </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Certain financial instruments and derivative instruments are eligible for offset in the Balance Sheets under GAAP. The Company&#8217;s derivative instruments are subject to master netting arrangements and collateral arrangements. A master netting arrangement with a counterparty creates a right of offset for amounts due to and from that same counterparty that is enforceable in the event of a default or bankruptcy. The Company&#8217;s policy is to recognize amounts subject to master netting arrangements on a gross basis on the Balance Sheets. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z44d549ec381140849d1f0240b104b75d" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 37 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 0pt">The following tables present additional information about derivative assets and liabilities subject to an enforceable master netting arrangement as of the dates indicated: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<div style="TEXT-ALIGN: right">
<table id="ze313aab97bb9479cb16de5be53fb90fb" style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; WIDTH: 92%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 40%"></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="22" align="center"><b>December&#160;31, 2015</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>Gross amounts not</b><br>
<b>offset in the balance</b><br>
<b>sheet</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Gross<br>
amounts<br>
 recognized</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Gross<br>
amounts<br>
offset&#160;in&#160;the<br>
 balance&#160;sheet</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Net&#160;amounts<br>
presented<br>
in&#160;the<br>
 balance sheet</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Financial</b><br>
<b>instruments&#160;<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-SIZE: 85%; VERTICAL-ALIGN: top">(1)</sup></b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Collateral<br>
pledged/<br>
 received</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Net<br>
 amounts</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Derivative assets</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">15,064</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">15,064</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(7,907</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(4,121</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,036</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Derivative liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;(7,910)</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(7,910</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7,907</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(3</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Net derivatives</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">7,154</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7,154</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(4,121</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,033</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 1pt">
<td style="HEIGHT: 16px"></td>
<td style="HEIGHT: 16px" colspan="24"></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="22" align="center"><b>December&#160;31,&#160;2014</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>Gross amounts not</b><br>
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<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
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<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Gross<br>
amounts<br>
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<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
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amounts<br>
offset in the<br>
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<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
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presented<br>
in&#160;the<br>
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<td valign="bottom">&#160;</td>
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<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
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pledged/<br>
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<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Net<br>
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<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Derivative assets</p>
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<td valign="bottom">$</td>
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<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,516</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(3,682</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(7</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">827</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Derivative liabilities</p>
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<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(4,894</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(4,894</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,682</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,195</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(17</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Net derivatives</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(378)</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(378</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;1,188</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;810</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>
</div>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zd61f1d336e5c421686160d984f6446da" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 8%">&#160;</td>
<td style="WIDTH: 5%" valign="top" align="left">(1)</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Represents the amount of assets or liabilities that could be offset by liabilities or assets with the same counterparty under master netting or similar arrangements that management elects not to offset on the Balance Sheets. </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z71c28730da6041669ac9dafbf8db6a52" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%" valign="top" align="left"><b>(6)</b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: justify">Fair Value Measurements </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">The Fair Value Measurements and Disclosures Topic of the Codification establishes a fair value hierarchy that prioritizes the inputs used in the valuation techniques to measure fair value. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zdc2ac38565ed432abaf7074cda51322b" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 92%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 7%"></td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td style="WIDTH: 92%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Level&#160;1&#160;&#8211;</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date</p>
</td>
</tr>

<tr style="FONT-SIZE: 1pt">
<td style="HEIGHT: 8px"></td>
<td style="HEIGHT: 8px" colspan="2"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Level&#160;2&#160;&#8211;</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Valuations derived from techniques that utilize observable inputs, other than quoted prices included in Level&#160;1, which are observable for the asset or liability either directly or indirectly, such as:</p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z3da2b7ce21dd47418a194d051b74a8f3" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 13%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left">(a)</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">quoted prices for similar assets or liabilities in active markets </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z3d1c2b1d989a40ec8ae70def324a506b" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 13%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left">(b)</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">quoted prices for identical or similar assets or liabilities in markets that are not active </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z784e077b75cb4d969c86e1061c0f2925" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 38 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z57916921aa8c48e59f70c30bbbd0ffb6" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 13%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left">(c)</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">inputs other than quoted prices that are observable </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z98e249825f3a411a8c95202e2e87cfac" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 13%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left">(d)</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">inputs that are derived principally from or corroborated by observable market data by correlation or other means </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z251ef845ae3b45eeb25165d23ddd1907" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 92%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 7%"></td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td style="WIDTH: 92%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Level&#160;3&#160;&#8211;</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Valuations derived from techniques in which the significant inputs are unobservable. Level&#160;3 fair values reflect the Company&#8217;s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk).</p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">The Company has analyzed the valuation techniques and related inputs, evaluated its assets and liabilities reported at fair value, and determined an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs. Based on the results of this evaluation and investment class analysis, each valuation was classified into Level&#160;1, 2, or 3. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">The following tables present the assets and liabilities measured at fair value on a recurring basis and their corresponding level in the fair value hierarchy at December&#160;31: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="ze38a326bf2514df8b06fd01982b3ad40" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 92%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr style="COLOR: white; LINE-HEIGHT: 0pt; VISIBILITY: hidden">
<td style="WIDTH: 57%"></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Total</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level 1</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level 2</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level 3</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2015:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Assets accounted for at fair value:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Fixed-maturity securities:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">U.S. government</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">73,223</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">73,223</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">States and political subdivisions</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,044</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,044</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Foreign government</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">510</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">510</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Public utilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">38,667</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">38,667</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Corporate securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">415,515</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">414,468</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,047</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Mortgage-backed securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">135,603</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">135,603</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Derivative asset</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">15,064</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">15,064</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Equity securities, trading</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,368</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,368</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Separate account assets</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,205,548</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,205,548</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 9em; TEXT-INDENT: -1em">Total assets accounted for at fair value</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;2,899,542</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,283,139</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">615,356</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,047</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Liabilities accounted for at fair value:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Derivative liability</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">7,956</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7,956</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Separate account liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,205,548</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,205,548</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Reserves at fair value</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">265,884</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">265,884</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 9em; TEXT-INDENT: -1em">Total liabilities accounted for at fair value</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">2,479,388</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,205,548</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7,956</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">265,884</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zad2cc50cff5d482893e9f8b2e6ff54d0" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 39 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z4e7cfd54a3574447b1cb4969f7343048" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 92%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr style="COLOR: white; LINE-HEIGHT: 0pt; VISIBILITY: hidden">
<td style="WIDTH: 57%"></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Total</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level 1</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level 2</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level 3</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2014:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Assets accounted for at fair value:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Fixed-maturity securities:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">U.S. government</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">95,077</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">95,077</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">States and political subdivisions</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,942</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,942</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Foreign government</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,547</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,547</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Public utilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">41,328</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">41,328</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Corporate securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">357,330</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">356,258</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,072</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Mortgage-backed securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">146,917</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">146,917</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Derivative asset</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,516</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,516</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Equity securities, trading</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,858</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,858</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Separate account assets</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,214,422</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,214,422</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 9em; TEXT-INDENT: -1em">Total assets accounted for at fair value</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">2,875,937</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,311,357</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">563,508</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,072</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Liabilities accounted for at fair value:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Derivative liability</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">4,894</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,894</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Separate account liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,214,422</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,214,422</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Reserves at fair value</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">150,251</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">150,251</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 9em; TEXT-INDENT: -1em">Total liabilities accounted for at fair value</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;2,369,567</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,214,422</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,894</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">150,251</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">The following is a discussion of the methodologies used to determine fair values for the assets and liabilities listed in the above table. These fair values represent an exit price (i.e., what a buyer in the marketplace would pay for an asset in a current sale or charge to transfer a liability). </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z5629fde51b6b41959bfb64d0d23b50dd" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(a)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Valuation of <font style="WHITE-SPACE: nowrap">Fixed-maturity</font> Securities and Equity Securities</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The fair value of <font style="WHITE-SPACE: nowrap">fixed-maturity</font> securities and equity securities is based on quoted market prices in active markets when available. Based on the market data, the securities are categorized into asset class, and based on the asset class of the security, appropriate pricing applications, models and related methodology, and standard inputs are utilized to determine what a buyer in the marketplace would pay for the security in a current sale. When quoted prices are not readily available or in an inactive market, standard inputs used in the valuation models, listed in approximate order of priority, include, but are not limited to, benchmark yields, reported trades, municipal securities rulemaking board (MSRB) reported trades, nationally recognized municipal securities information repository (NRMSIR) material event notices, broker/dealer quotes, issuer spreads, <font style="WHITE-SPACE: nowrap">two-sided</font> markets, </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z7c5db92a1abc4771b09824204a83136a" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 40 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 0pt">benchmark securities, bids, offers, reference data, and industry and economic events. In certain cases, including private placement securities as well as certain <font style="WHITE-SPACE: nowrap">difficult-to-price</font> securities, internal pricing models may be used that are based on market proxies. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Generally, U.S. Treasury securities and <font style="WHITE-SPACE: nowrap">exchange-traded</font> stocks are included in Level&#160;1. Most bonds for which prices are provided by <font style="WHITE-SPACE: nowrap">third-party</font> pricing sources are included in Level&#160;2 because the inputs used are market observable. Bonds for which prices were obtained from broker quotes and private placement securities that are internally priced are included in Level&#160;3. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company is responsible for establishing and maintaining an adequate internal control structure to prevent or detect material misstatements related to fair value measurements and disclosures. This responsibility is especially important when using third parties to provide valuation services. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company&#8217;s control framework around <font style="WHITE-SPACE: nowrap">third-party</font> valuations begins with obtaining an understanding of the pricing vendor&#8217;s methodologies. A Pricing Committee is in place that meets quarterly to establish and review a pricing policy, which includes approving any changes to pricing sources, assessing reasonableness of pricing services and addressing any ad hoc valuation issues that arise. The pricing methodologies used by the service providers and internal control reports provided by the service providers are reviewed by management. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">In addition to monitoring the <font style="WHITE-SPACE: nowrap">third-party</font> vendor&#8217;s policies, the Company is also responsible for monitoring the valuation results. Controls are in place to monitor the reasonableness of the valuations received. These controls include <font style="WHITE-SPACE: nowrap">price-analytic</font> reports that monitor significant fluctuations in price as well as an IPV process by which the Company obtains prices from vendors other than the primary source and compares them for reasonableness. Results of the independent price verification are also reviewed by the Pricing Committee. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">There are limited instances in which the primary <font style="WHITE-SPACE: nowrap">third-party</font> vendor is not used to obtain prices for <font style="WHITE-SPACE: nowrap">fixed-maturity</font> securities. These instances include private placement securities and certain other immaterial portfolios priced by a secondary external vendor. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">At December&#160;31, 2015 and 2014, private placement securities of $1,047 and $1,072, respectively, were included in Level&#160;3. Internal pricing models based on market proxy securities, and U.S.&#160;Treasury rates, which are monitored monthly by the investment manager for reasonableness, are used to value these holdings. This includes ensuring there are no significant credit events impacting the proxy security and that the spreads used are still reasonable under the circumstances. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z5cbcf5a4dc4f4274afa6431c2166857e" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(b)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Valuation of Derivative Assets and Liabilities</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Active markets for OTC option assets and liabilities do not exist. The fair value of OTC option assets and liabilities is derived internally, by calculating their expected discounted cash flows, using a set of calibrated, <font style="WHITE-SPACE: nowrap">risk-neutral</font> stochastic scenarios, including a market data monitor, a market data model generator, a stochastic scenario calibrator, and the actual asset pricing calculator. The valuation results are reviewed by Management via the Pricing Committee. Options that are internally priced and IRS are included in Level&#160;2, because they use market observable inputs. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zad0177ac426f4249bca66de136f74d7b" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 41 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 0pt">The fair value of the IRS is derived using a <font style="WHITE-SPACE: nowrap">third-party</font> vendor software program and deemed by management to be reasonable. IRS are included in Level&#160;2 because the valuation uses market observable inputs. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z127126efe2df484d9d8907084cbb0eb7" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(c)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Valuation of Separate Account Assets and Liabilities</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Separate account assets are carried at fair value, which is based on the fair value of the underlying assets. Funds in the separate accounts are primarily invested in variable investment options with the following investment types: bond; domestic equity; international equity; or specialty. The separate account funds also hold certain money market funds. Variable investments are included in Level&#160;1. The remaining investments are categorized similar to the investments held by the Company in the general account (e.g., if the separate account invested in corporate bonds or other <font style="WHITE-SPACE: nowrap">fixed-maturity</font> securities, that portion could be considered a Level&#160;2 or Level&#160;3). In accordance with the Financial Services &#8211; Insurance Topic of the Codification, the fair value of separate account liabilities is set to equal the fair value of separate account assets. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z10c29ac414f6465998175353a5c8d480" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(d)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Valuation of Reserves at Fair Value</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Reserves at fair value principally include the <font style="WHITE-SPACE: nowrap">equity-indexed</font> features contained in <font style="WHITE-SPACE: nowrap">fixed-indexed</font> annuity products certain variable annuity riders and variable-indexed annuity products. Fair values of the embedded derivative liabilities are calculated based on internally developed models, because active, observable markets do not exist for these liabilities. Fair value is derived from techniques in which one or more significant inputs are unobservable and are included in Level&#160;3. These fair values represent the Company&#8217;s best estimate of an amount that could be realized in a current market exchange absent actual market exchanges. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The fair value of the embedded derivative contained in the <font style="WHITE-SPACE: nowrap">fixed-indexed</font> annuity products is the sum of the current year&#8217;s option value projected stochastically, the projection of future index growth at the option budget, and the historical <font style="WHITE-SPACE: nowrap">interest/equity-indexed</font> credits. The valuation of the embedded derivative includes an adjustment for the Company&#8217;s own credit standing and a risk margin for noncapital market inputs. The Company&#8217;s own credit adjustment is determined by taking into consideration publicly available information on industry default risk with considerations for the Company&#8217;s own credit profile. Risk margin is incorporated into the valuation model to capture the noncapital market risks of the instrument, which represent the additional compensation a market participant would require to assume the risks related to the uncertainties of certain actuarial assumptions including surrenders, annuitization, and future equity index caps or participation rates. Market conditions including, but not limited to, changes in interest rates, equity indices, market volatility, changes in the Company&#8217;s own credit standing, and variations in actuarial assumptions regarding policyholder behavior and risk margin related to noncapital market inputs may result in significant fluctuations in the fair value of these embedded derivatives that could materially affect net loss (income). </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company issues certain variable annuity products with guaranteed minimum benefit riders, including GMWB and GMAB riders. The fair value for these riders is estimated using the present value of future benefits minus the present value of future fees using actuarial and capital market </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z2ab44d62aa484692b889d0c978e23bc7" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 42 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 0pt">assumptions related to the projected cash flows over the expected lives of the contracts. A risk neutral valuation methodology is used under which the cash flows from the riders are projected under multiple capital market scenarios using observable overnight index swap rates (OIS) plus funding valuation adjustments, as approximated by LIBOR. These cash flows are then discounted using the current month&#8217;s LIBOR plus a <font style="WHITE-SPACE: nowrap">company-specific</font> spread. Beginning in December of 2014, the expected life-contingent GMWB payments are discounted using a blend of short and long term rates to the date the account value is expected to be exhausted. These obligations are then discounted to the current date using LIBOR plus a spread for the Company&#8217;s own nonperformance risk. In 2012 and prior years, these cash flows were discounted using the U.S.&#160;Treasury rate plus a <font style="WHITE-SPACE: nowrap">company-specific</font> spread. The valuation of these riders includes an adjustment for the Company&#8217;s own credit standing and a risk margin for noncapital market inputs. The Company&#8217;s own credit adjustment is determined taking into consideration publicly available information relating to the Company&#8217;s claims paying ability. Risk margin is established to capture the noncapital market risks of the instrument, which represent the additional compensation a market participant would require to assume the risks related to the uncertainties of certain actuarial assumptions including surrenders, annuitization, and premium persistency. The establishment of the risk margin requires the use of significant management judgment. These riders may be more costly than expected in volatile or declining equity markets. Market conditions including, but not limited to, changes in interest rates, equity indices, market volatility, changes in the Company&#8217;s own credit standing and variations in actuarial assumptions regarding policyholder behavior, and risk margins related to noncapital market inputs may result in significant fluctuations in the fair value of the riders that could materially affect net loss (income). </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company elected the fair value option for certain insurance contracts related to the variable-indexed annuity product. The fair value is calculated internally using the present value of future expected cash flows. Future expected cash flows are generated using contractual features, actuarial assumptions, and market emergence over a complete set of market consistent scenarios. Cash flows are then averaged over the scenario set and discounted back to the valuation date using appropriate discount factors adjusted for nonperformance risk on the non-collateralized portions of the contract. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z4eeda618e0ab43d1b74a09b9153d5783" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 43 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z5846d98412044692960fbe0bd74b94dc" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(e)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Level&#160;3 Rollforward</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The following table provides a reconciliation of the beginning and ending balances for the Company&#8217;s Level&#160;3 assets and liabilities measured at fair value on a recurring basis: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<div style="TEXT-ALIGN: right">
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<td style="WIDTH: 64%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
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<td></td>
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<td style="WIDTH: 2%" valign="bottom"></td>
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<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
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<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>Realized</b></td>
<td valign="bottom">&#160;</td>
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<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
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<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>gains</b></td>
<td valign="bottom">&#160;</td>
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<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
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<td valign="bottom">&#160;</td>
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<td valign="bottom" colspan="2" align="center"><b>(losses)</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
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<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>included&#160;in</b></td>
<td valign="bottom">&#160;</td>
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<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
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<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>net (loss)</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
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<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>income</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
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<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>related to</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
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<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>financial</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
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<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>Other</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>Purchases</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>Sales</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>Transfer into</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>instruments</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>Beginning</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>comprehensive</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>and</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>and</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>and/or&#160;(out&#160;of)</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>Ending</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>still held&#160;at</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>balance</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Net&#160;Income</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>(loss)&#160;income</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>issuances</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>settlements</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level&#160;3,&#160;net</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>balance</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>December&#160;31</b></td>
<td valign="bottom">&#160;</td>
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<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2015:</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
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<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
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<td valign="bottom"></td>
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<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">Fixed-maturity securities:</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
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<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
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<td valign="bottom"></td>
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<td valign="bottom"></td>
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<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 4em; TEXT-INDENT: -1em">Corporate securities</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1,072</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(25</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
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<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,047</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
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</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
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</td>
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</td>
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</td>
<td>&#160;</td>
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</td>
<td valign="bottom">
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</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
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</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
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</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
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</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
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</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 6em; TEXT-INDENT: -1em">Total&#160;fixed-maturity<br>
 securities</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1,072</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(25</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,047</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">Reserves at fair value</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(150,251</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">15,670</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(138,736</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7,433</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(265,884</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(123,066</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2014:</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">Fixed-maturity securities:</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 4em; TEXT-INDENT: -1em">Corporate securities</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1,065</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,072</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 6em; TEXT-INDENT: -1em">Total&#160;fixed-maturity<br>
 securities</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1,065</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,072</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 2em; TEXT-INDENT: -1em">Reserves at fair value</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(22,640</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(44,557</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(85,482</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,428</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(150,251</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(130,039</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>
</div>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z5c6370be66594a929fcce23d57dd8bd1" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(f)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Transfers</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company reviews its fair value hierarchy classifications annually. This review could reveal that previously observable inputs for specific assets or liabilities are no longer available or reliable. For example, the market for a Level&#160;1 asset becomes inactive. In this case, the Company may need to adopt a valuation technique that relies on observable or unobservable components causing the asset to be transferred to Level&#160;2 or Level&#160;3. Alternatively, if the market for a Level&#160;3 asset or liability becomes active, the Company will report a transfer out of Level&#160;3. Transfers in and/or out of Level&#160;1, 2, and&#160;3 are reported as of the end of the period in which the change occurs. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">There were no transfers of securities between Level&#160;1 and Level&#160;2 for the years ended December&#160;31, 2015 and 2014. Additionally, there were no net transfers in or out of Level&#160;3 for the years ended December&#160;31, 2015 and 2014. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z2a86c78a7c424180a08a3d9d90a8c455" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 44 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zd4574a1ac43c47c3a87772f537f9a617" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(g)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The following table provides a summary of the significant unobservable inputs used in the fair value measurements developed by the Company or reasonably available to the Company of Level&#160;3 assets and liabilities on a recurring basis at December&#160;31: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<div style="TEXT-ALIGN: right">
<table id="zcb769ac7008a45f9bad59dd251feae9f" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 92%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 40%"></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" align="center"><b>Valuation</b></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" align="center"><b>Unobservable</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="center"><b>Range&#160;(weighted</b></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Fair value</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" align="center"><b>technique</b></td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" align="center"><b>input</b></td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" align="center"><b>average)</b></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2015:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Fixed-maturity securities:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Available-for-sale:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Corporate securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;1,047</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" align="center">Matrix&#160;pricing</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">Option&#160;adjusted&#160;spread*</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="center">208&#160;(208)</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Reserves at fair value: ***</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">MVLO</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">18,525</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" align="center">Income&#160;approach</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">Annuitizations</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="center">0&#8211;25%</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">Surrenders</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="center">0&#8211;25%</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">Mortality **</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="center">0&#8211;100%</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">Withdrawal&#160;Benefit&#160;Election</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="center">0&#8211;50%</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">GMWB and GMAB</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;174,869</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" align="center">Income approach</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">Surrenders</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="center">0.5&#8211;35%</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">Mortality **</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="center">0&#8211;100%</td>
</tr>
</table>
</div>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z8c6b8677416d4e62b94f4d06bcf0cb40" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 8%">&#160;</td>
<td style="WIDTH: 6%" valign="top" align="left">*</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">No range is applicable due to only one security within classification or the same assumption used on all securities. </p>
</td>
</tr>
</table>

<table id="z912d995d512a4b88be53f9ae81c60fcd" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 8%">&#160;</td>
<td style="WIDTH: 6%" valign="top" align="left">**</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Mortality assumptions are derived by applying management determined factors to the Annuity 2000 Mortality Table . </p>
</td>
</tr>
</table>

<table id="zf82f592d6377405fafc64c1660cad90b" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 8%">&#160;</td>
<td style="WIDTH: 6%" valign="top" align="left">***</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Certain reseves at fair value related to a new product are not yet modeled and excluded from this disclosure. </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z4cb9a598e435467ba3324d5d880eaf9a" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(h)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Sensitivity of Fair Value Measurements to Changes in Unobservable Inputs</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt"><b><font style="WHITE-SPACE: nowrap">Fixed-maturity</font> securities matrix pricing:</b> The primary unobservable input used in the matrix pricing model is a benchmark security option adjusted spread (OAS), which is applied to an OAS ratio. A significant yield increase of the benchmark security OAS in isolation could result in a decreased fair value, while a significant yield decrease in OAS could result in an increased fair value. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zb36481c5f8f54ebdadf39cf779a8860e" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 45 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 0pt"><b>Annuity and life embedded derivative liabilities:</b> A significant increase (decrease) in the utilization of annuitization benefits could result in a higher (lower) fair value. A significant decrease (increase) in mortality rates, surrender rates, or utilization of lifetime income benefits could result in a higher (lower) fair value. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zcdf1053a8a9442619ed9d4f7b3dfdf5a" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(i)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Nonrecurring Fair Value Measurements</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Occasionally, certain assets and liabilities are measured at fair value on a nonrecurring basis (e.g., impaired assets). At December&#160;31, 2015 and 2014, there were no assets or liabilities reported at fair value on a nonrecurring basis. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zc8f5a5b3b53542caaaffca1b66fb78b8" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(j)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify"><b><i>Fair Value of Financial Assets and Liabilities</i></b> </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The following table presents the carrying amounts and fair values of financial assets and liabilities at December&#160;31: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<div style="TEXT-ALIGN: right">
<table id="z3918f06704cc412597bd494bac742b94" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 92%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr style="COLOR: white; LINE-HEIGHT: 0pt; VISIBILITY: hidden">
<td style="WIDTH: 66%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="18" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>Carrying</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="14" align="center"><b>Fair value</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>amount</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level&#160;1</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level&#160;2</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level&#160;3</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Total</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Financial assets:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Policy loans</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">275</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">275</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">275</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Financial liabilities:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Investment contracts</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;729,819</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">730,455</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">730,455</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1pt">
<td style="HEIGHT: 16px"></td>
<td style="HEIGHT: 16px" colspan="20"></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="18" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>Carrying</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="14" align="center"><b>Fair value</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>amount</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level&#160;1</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level&#160;2</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Level&#160;3</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Total</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Financial assets:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Policy loans</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">253</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">253</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">253</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Financial liabilities:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Investment contracts</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">664,924</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">665,404</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">665,404</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>
</table>
</div>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Policy loans, which are supported by the underlying cash value of the policies, are carried at unpaid principal balances, which approximate fair value. Therefore, fair value is classified as Level&#160;2. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Investment contracts include certain reserves related to deferred annuity products. These reserves are included in Account balances and future policy benefit reserves on the Balance Sheets. The fair values of investment contracts, which include deferred annuities and other annuities without significant mortality risk, are determined by testing amounts payable on demand against discounted cash flows using market interest rates commensurate with the risks involved, including consideration of the Company&#8217;s own credit standing and a risk margin for noncapital market inputs. Therefore, fair value is classified as Level 3. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Changes in market conditions subsequent to <font style="WHITE-SPACE: nowrap">year-end</font> may cause fair values calculated subsequent to <font style="WHITE-SPACE: nowrap">year-end</font> to differ from the amounts presented herein. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z042175bdfff441f097c26cac9f0c0fef" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 46 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z4f47fccff1024f1ea830e030d446e738" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%" valign="top" align="left"><b>(7)</b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: justify">Financing Receivables </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">The Company&#8217;s financing receivables comprise nontrade receivables. Nontrade receivables are amounts for policy or contract premiums due from the agents and <font style="WHITE-SPACE: nowrap">broker-dealers,</font> or amounts due from reinsurers. The nontrade receivables are evaluated on a collective basis for impairment. For additional information, see receivables section of note&#160;2. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">Rollforward of Allowance for Credit Losses </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">The allowance for credit losses and recorded investment in financing receivables as of December&#160;31 are shown below: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z89efa8b779b645e3bd065f2c27793e58" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 92%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 80%"></td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2">&#160;</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Nontrade&#160;Receivables</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Allowance for credit losses:</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Beginning balance</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">20</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">18</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Provision</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">13</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Ending balance</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">33</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">20</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Ending balance collectively evaluated for impairment</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;33</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;20</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Financing receivables:</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Ending balance</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">91</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">80</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Ending balance collectively evaluated for impairment</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">91</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">80</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z7354ce61a65c4c0c88a63cf363e83e68" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 47 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; MARGIN-LEFT: 4%; MARGIN-TOP: 0pt">Credit Quality Indicators </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">The Company analyzes certain financing receivables for credit risk by using specific credit quality indicators. The Company&#8217;s nontrade receivables are analyzed for credit risk based upon the customer classification of agent or reinsurer. The nontrade receivable and allowance for credit losses by customer classification as of December&#160;31 are shown below: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<div style="TEXT-ALIGN: right">
<table id="zd5e0ac23d881484abfb3f51cbd254e34" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 96%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr style="COLOR: white; LINE-HEIGHT: 0pt; VISIBILITY: hidden">
<td style="WIDTH: 66%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td style="FONT-SIZE: 8pt" nowrap="nowrap"><b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</b></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td style="FONT-SIZE: 8pt" nowrap="nowrap"><b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</b></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td style="FONT-SIZE: 8pt" nowrap="nowrap"><b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</b></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td style="FONT-SIZE: 8pt" nowrap="nowrap"><b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</b></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td style="FONT-SIZE: 8pt" nowrap="nowrap"><b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</b></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td style="FONT-SIZE: 8pt" nowrap="nowrap"><b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</b></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="10" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="10" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Agent</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Reinsurer</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Total</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Agent</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Reinsurer</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Total</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Nontrade receivables</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;41</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">50</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">91</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">23</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">57</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">80</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Allowance for credit losses</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(33</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(33</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(20</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(20</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Net nontrade receivable</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">8</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">50</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">58</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">57</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">60</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>
</div>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; MARGIN-LEFT: 4%; MARGIN-TOP: 12pt"><font style="WHITE-SPACE: nowrap">Past-due</font> Aging Analysis </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">Aging analysis of <font style="WHITE-SPACE: nowrap">past-due</font> financing receivables as of December&#160;31 is shown below: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<div style="TEXT-ALIGN: right">
<table id="z8889433601c04d43a2017282793ca7ec" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 96%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr style="COLOR: white; LINE-HEIGHT: 0pt; VISIBILITY: hidden">
<td style="WIDTH: 51%"></td>
<td style="WIDTH: 5%" valign="bottom"></td>
<td></td>
<td style="FONT-SIZE: 8pt" nowrap="nowrap"><b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</b></td>
<td></td>
<td style="WIDTH: 5%" valign="bottom"></td>
<td></td>
<td style="FONT-SIZE: 8pt" nowrap="nowrap"><b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</b></td>
<td></td>
<td style="WIDTH: 5%" valign="bottom"></td>
<td></td>
<td style="FONT-SIZE: 8pt" nowrap="nowrap"><b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</b></td>
<td></td>
<td style="WIDTH: 5%" valign="bottom"></td>
<td></td>
<td style="FONT-SIZE: 8pt" nowrap="nowrap"><b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</b></td>
<td></td>
<td style="WIDTH: 5%" valign="bottom"></td>
<td></td>
<td style="FONT-SIZE: 8pt" nowrap="nowrap"><b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</b></td>
<td></td>
<td style="WIDTH: 5%" valign="bottom"></td>
<td></td>
<td style="FONT-SIZE: 8pt" nowrap="nowrap"><b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</b></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>31&#8211;60<br>
 &#160;&#160;past&#160;due&#160;&#160;</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>61&#8211;90<br>
 &#160;&#160;past&#160;due&#160;&#160;</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Greater&#160;than<br>
 &#160;&#160;90&#160;past&#160;due&#160;&#160;</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Total<br>
 &#160;&#160;past&#160;due&#160;&#160;</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>&#160;&#160;Current&#160;&#160;</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>&#160;&#160;Total&#160;&#160;</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2015:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Nontrade receivables</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;29</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">33</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">62</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">29</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">91</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1pt">
<td style="HEIGHT: 16px"></td>
<td style="HEIGHT: 16px" colspan="4"></td>
<td style="HEIGHT: 16px" colspan="4"></td>
<td style="HEIGHT: 16px" colspan="4"></td>
<td style="HEIGHT: 16px" colspan="4"></td>
<td style="HEIGHT: 16px" colspan="4"></td>
<td style="HEIGHT: 16px" colspan="4"></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>31&#8211;60<br>
 past&#160;due</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>61&#8211;90<br>
 past&#160;due</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Greater&#160;than<br>
 90&#160;past&#160;due</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Total<br>
 past&#160;due</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Current</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Total</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2014:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Nontrade receivables</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">24</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">21</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">48</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">32</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">80</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>
</table>
</div>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">As of December&#160;31, 2015, the Company&#8217;s financing receivables do not include any balances, which are on a nonaccrual status, classified as a troubled debt restructuring, or impaired without a corresponding allowance for credit loss. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zf070003de200446ca5edb5438f9ad38a" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 48 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z65eae890d84a44d8b992e287a1992ce1" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%" valign="top" align="left"><b>(8)</b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: justify">Deferred Acquisition Costs </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">DAC at December&#160;31, and the changes in the balance for the years then ended, are as follows: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<div style="TEXT-ALIGN: right">
<table id="zb23df8f9391d4e9488605dd5edd09953" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 96%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 64%"></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Balance, beginning of year</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">118,319</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">104,002</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">92,245</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Capitalization</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">13,531</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">16,906</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">17,321</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Interest</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,197</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5,541</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5,011</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Amortization</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(11,563</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(7,383</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(16,169</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Change in shadow DAC</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7,890</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(747</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5,594</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Balance, end of year</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;134,374</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;118,319</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;104,002</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>
</div>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 12pt">The change in shadow DAC balances are impacted by movements in unrealized gains and losses as a result of market conditions. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">The Company reviews its <font style="WHITE-SPACE: nowrap">best-estimate</font> assumptions each year and records &#8220;unlocking&#8221; as appropriate. These reviews are based on recent changes in the organization and businesses of the Company and actual and expected performance of <font style="WHITE-SPACE: nowrap">in-force</font> policies. The reviews include all assumptions, including mortality, lapses, expenses, and separate account returns. The revised <font style="WHITE-SPACE: nowrap">best-estimate</font> assumptions are applied to the current <font style="WHITE-SPACE: nowrap">in-force</font> policies to project future gross profits.The pretax impact on the Company&#8217;s assets and liabilities as a result of the unlocking during 2015, 2014, and 2013 is as follows: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<div style="TEXT-ALIGN: right">
<table id="z2da85e43e58d4312a4cf3d7a8d077d46" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 96%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 71%"></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Assets:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">DAC</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">2,641</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">856</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,920</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">DSI</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">337</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">356</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(547</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total increase (decrease) in assets</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,978</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,212</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(2,467</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Liabilities:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Account balances and future policy benefit reserves</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5,867</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,259</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(4,669</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Unearned premiums</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">40</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(2</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total increase (decrease) in liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;5,907</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,261</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(4,669</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Net (decrease) increase</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(2,929</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;2,473</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;2,202</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Deferred income tax (benefit) expense</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,025</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">866</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">771</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Net (decrease) increase</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(1,904</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,607</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,431</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>
</div>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zf287b5edaffd48cc94629638b6e1dff4" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 49 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zb572c46669ed4a21a9a91616b4ccaf59" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%" valign="top" align="left"><b>(9)</b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: justify">Deferred Sales Inducements </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">DSI at December&#160;31, and the changes in the balance for years then ended, are as follows: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<div style="TEXT-ALIGN: right">
<table id="zaa60f178ce9d42338e518b30e70654c3" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 96%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 67%"></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Balance, beginning of year</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">19,510</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">18,345</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">18,745</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Capitalization</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,492</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,370</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,842</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Interest</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,020</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">971</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">987</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Amortization</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(2,924</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,762</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(5,171</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Change in shadow DSI</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,050</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(414</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,942</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Balance, end of year</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;21,148</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;19,510</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;18,345</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>
</div>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">The change in shadow DSI balances are impacted by movements in unrealized gains and losses as a result of market conditions. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zf7c9474c94ed4c1ca453f234ef604540" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 50 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zc197dd5859ad44288e4ecd1bbad5d77f" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%" valign="top" align="left"><b>(10)</b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: justify">Separate Accounts and Annuity Product Guarantees </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">Guaranteed minimums for the respective years ended December&#160;31 are summarized as follows (note that the amounts listed are not mutually exclusive, as many products contain multiple guarantees): </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<div style="TEXT-ALIGN: right">
<table id="z3270e0fd66d941cdbbf4c20fe3b3315c" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 96%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr style="COLOR: white; LINE-HEIGHT: 0pt; VISIBILITY: hidden">
<td style="WIDTH: 52%"></td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td style="WIDTH: 1%" valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="10" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="10" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>Account</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>Net&#160;amount</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>Weighted</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>Account</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>Net&#160;amount</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>Weighted</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>value</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>at risk</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>age&#160;(years)</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>value</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>at risk</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>age&#160;(years)</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">GMDB:</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Return of premium</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1,609,269</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">17,498</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">62.6</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,514,852</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,221</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">62.1</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Ratchet and return of premium</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">625,964</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">38,380</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">65.0</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">660,984</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">8,232</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">64.6</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Reset</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">88,037</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,422</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">75.7</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">102,983</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">677</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">74.8</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;2,323,270</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">57,300</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,278,819</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,130</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">GMIB:</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Return of premium</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">8,756</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">143</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">66.7</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">10,697</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">132</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">65.8</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Ratchet and rollup</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">140,274</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">32,123</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">64.2</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">170,337</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">23,212</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">63.6</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">149,030</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">32,266</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">181,034</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">23,344</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">GMAB:</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Five years</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">19,420</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">549</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">68.9</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">26,335</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">84</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">67.4</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Target date retirement &#8211; 7 year</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">48,571</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,636</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">63.3</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">57,042</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">368</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">62.7</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Target date retirement &#8211; 10 year</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">20,690</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,307</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">63.2</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">22,803</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">69</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">62.3</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Target date with management levers</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">377,123</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">21,100</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">63.0</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">373,740</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,152</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">62.0</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">465,804</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">24,592</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">479,920</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,673</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">GMWB:</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">No living benefit</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">62,096</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">67.1</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">56,606</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">67.0</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Life benefit with optional reset</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">78,108</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">8,170</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">70.7</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">91,834</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,087</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">69.9</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Life benefit with 8% rollup</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">30,070</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,520</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">69.1</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">34,001</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,691</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">68.3</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Life benefit with management levers</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,310,233</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">232,424</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">60.7</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,241,305</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">97,957</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">60.2</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1,480,507</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;247,114</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,423,746</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">105,735</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
</table>
</div>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 12pt">The net amount at risk has increased in 2015 due to the market performance. The guaranteed rollup on the benefit base has exceeded the market impacts on account values. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z7212b7be5dc34feabec621084bb15da8" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 51 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 0pt">At December&#160;31, variable annuity account balances were invested in separate account funds with the following investment objectives. Balances are presented at fair value: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<div style="TEXT-ALIGN: right">
<table id="z254e117bc90d43a1a6760b5273b1a8cf" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 96%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 70%"></td>
<td style="WIDTH: 4%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 4%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" nowrap="nowrap">
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 0pt">Investment type</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Mutual funds:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Bond</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">291,103</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">291,694</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Domestic equity</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,164,383</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,172,573</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">International equity</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">71,227</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">83,531</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Specialty</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">646,452</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">623,849</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total mutual funds</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,173,165</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,171,647</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Money market funds</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">31,191</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">41,586</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Other</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,192</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,189</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;2,205,548</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;2,214,422</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>
</div>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 12pt">The following table summarizes the liabilities for variable contract guarantees that are reflected in the general account and shown in Account balances and future policy benefit reserves on the Balance Sheets: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<div style="TEXT-ALIGN: right">
<table id="z5547a6c74ac64087b122312329e4a0d5" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 96%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 60%"></td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 1%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>GMDB</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>GMIB</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>GMAB</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>GMWB</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Totals</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Balance as of December&#160;31, 2013</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1,114</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,967</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,498</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(9,084</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(2,505</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Incurred guaranteed benefits</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">669</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">191</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">14,372</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">101,961</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">117,193</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Paid guaranteed benefits</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(125</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(125</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Balance as of December&#160;31, 2014</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,658</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,158</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">16,870</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">92,877</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">114,563</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Incurred guaranteed benefits</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,111</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">907</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,755</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">54,413</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">68,186</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Paid guaranteed benefits</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(530</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(42</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,046</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,618</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Balance as of December&#160;31, 2015</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;2,239</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;4,023</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;27,579</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;147,290</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;181,131</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>
</div>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z57b42594e4b54c4fb7ec3f74511b3ec4" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%" valign="top" align="left"><b>(11)</b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: justify">Accident and Health Claim Reserves </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">Accident and health claim reserves are based on estimates that are subject to uncertainty. Uncertainty regarding reserves of a given accident year is gradually reduced as new information emerges each succeeding year, thereby allowing more reliable reevaluations of such reserves. While management believes that reserves as of December&#160;31, 2015, are appropriate, uncertainties in the reserving process could cause such reserves to develop favorably or unfavorably in the near term as new or additional information emerges. Any adjustments to reserves are reflected in the operating results of the periods in which they are made. Movements in reserves could significantly impact the Company&#8217;s future reported earnings. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z0719d2973c3c4e8da9e089b6877a89e9" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 52 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 0pt">Activity in the accident and health claim reserves is summarized as follows: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<div style="TEXT-ALIGN: right">
<table id="zabfa42108a0d4e47ad5938da99a879ee" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 96%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 73%"></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Balance at January&#160;1, net of reinsurance recoverable of $360, $264, and $200 respectively</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">2,136</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,032</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,229</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Incurred related to:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Current year</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,173</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,251</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">868</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Prior years</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(154</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">283</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">564</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total incurred</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,019</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,534</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,432</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Paid related to:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Current year</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">42</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">49</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">77</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Prior years</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">609</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">381</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,552</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total paid</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">651</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">430</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,629</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Balance at December&#160;31, net of reinsurance recoverable of $497, $360, and $264, respectively</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;3,504</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;2,136</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;1,032</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>
</div>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 12pt">Prior years incurred reflect favorable / (unfavorable) claim development with the group marketing and individual long term care lines of business. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="ze3e9d472afdc43e6a6b5021752df5e41" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%" valign="top" align="left"><b>(12)</b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: justify">Reinsurance </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">The Company primarily enters into reinsurance agreements to manage risk resulting from its life, annuity and accident and health businesses, as well as businesses the Company has chosen to exit. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">In the normal course of business, the Company seeks to limit its exposure to loss on any single insured and to recover a portion of benefits paid by ceding risks under excess coverage and coinsurance contracts. The Company generally retained between $50 and $1,500 coverage per individual life depending on the type of policy for the years ended December&#160;31, 2015 and 2014. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">On LTC business, the Company retains 90% of Limited Benefit Plans, and 90% on claims up through year eight and 20% on claims years nine and beyond for Lifetime Benefit Plans. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">The Company monitors the financial exposure to the reinsurers, as well as evaluates the financial strength of the reinsurers on an ongoing basis. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z15ceafd06e8b4ce4acbe18652aa80d54" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 53 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 0pt">The following table shows the net exposure to reinsurance receivables and recoverable at December&#160;31: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<div style="TEXT-ALIGN: right">
<table id="z9f834131290642e7827ab1f2c240d3c7" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 96%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 78%"></td>
<td style="WIDTH: 4%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 4%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Reinsurance receivables</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">50</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">60</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Reinsurance recoverable</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,596</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,091</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Reinsurance payables</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(34</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(60</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Net reinsurance exposure</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;3,612</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;3,091</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>
</div>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z16b44bdbc60d40cdb531ebfc63bdf996" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%" valign="top" align="left"><b>(13)</b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: justify">Income Taxes </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z9e2f0aac766849d599a3f39edbfc30cf" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(a)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Income Tax (Benefit) Expense </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Total income tax (benefit) expense for the years ended December&#160;31 is as follows: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z200c008367de45d597af12e66195442e" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 84%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr style="COLOR: white; LINE-HEIGHT: 0pt; VISIBILITY: hidden">
<td style="WIDTH: 71%"></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Income tax (benefit) expense attributable to operations:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Current tax expense (benefit)</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;&#160;9,567</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,774</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,495</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Deferred tax (benefit) expense</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(14,008</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(7,907</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,930</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total income tax (benefit) expense attributable to operations</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(4,441</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(3,133</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,425</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Income tax effect on equity:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Attributable to unrealized losses gains for the year</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(6,277</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,397</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(12,760</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total income tax effect on equity</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(10,718</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">264</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(8,335</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zd69600dddfcd4d37bb68c303514d84d5" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 54 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zf709cc5fad694dc4aa4cea8c08b9e4e6" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(b)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Components of Income Tax (Benefit) Expense </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Income tax (benefit) expense computed at the statutory rate of 35% varies from income tax (benefit) expense reported on the Statements of Operations for the respective years ended December&#160;31 as follows: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zfaa05a8ea136495c8957ce0b94042c36" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 84%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr style="COLOR: white; LINE-HEIGHT: 0pt; VISIBILITY: hidden">
<td style="WIDTH: 67%"></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2013</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Income tax (benefit) expense computed at the statutory rate</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(1,996</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,504</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;5,916</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Dividends-received deductions and tax-exempt interest</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(2,455</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,447</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,603</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Other</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">10</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(182</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">112</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Income tax (benefit) expense as reported</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;(4,441)</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;(3,133)</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,425</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z342e48dfc4b44347ac0b7a3d81408acf" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(c)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Components of Deferred Tax Assets and Liabilities on the Balance Sheet </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Tax effects of temporary differences giving rise to the significant components of the net deferred tax asset (liability). Net deferred tax asset on the Balance Sheets at December&#160;31 are as follows: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<div style="TEXT-ALIGN: right">
<table id="z84cb5fb54d5640e18799f0189849f4f2" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 92%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 72%"></td>
<td style="WIDTH: 5%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 5%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Deferred tax assets:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Future benefit reserves</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">113,361</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">70,323</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Expense accruals</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">241</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">132</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total deferred tax assets</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;113,602</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#160;&#160;&#160;&#160;&#160;70,455</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Deferred tax liabilities:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Deferred acquisition costs</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(42,684</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(36,324</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Due and deferred premium</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(14</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(6</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Net unrealized gains on investments</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(4,763</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(14,497</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Investment income</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(32,481</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(6,253</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total deferred tax liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(79,942</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(57,080</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Net deferred tax asset</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">33,660</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">13,375</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>
</div>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 12pt">Although realization is not assured, the Company believes it is not necessary to establish a valuation allowance for ordinary deferred tax assets, as it is more likely than not the deferred tax assets will be realized principally through future reversals of existing ordinary taxable temporary differences and future ordinary taxable income. For deferred tax assets that are capital in nature, considering all </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z39113fd41b5d4d3aafb99bdfd094a530" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 55 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 0pt">objective evidence and the available tax planning strategy, it is more likely than not the deferred tax assets that are capital in nature will be realized and no valuation allowance is required. The amount of the ordinary and capital deferred tax assets considered realizable could be reduced in the near term if estimates of future reversals of existing taxable temporary differences and future ordinary and capital taxable income are reduced. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">Income taxes paid by the Company were $4,405, $2,271, and $17,449, in 2015, 2014, and 2013, respectively. The Company had a tax payable to AZOA of $9,874 and $4,713 at December&#160;31, 2015 and 2014, respectively reported in Other liabilities on the Balance Sheets. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company is included in the consolidated group for which AZOA files a federal income tax return on behalf of all group members. As a member of the AZOA consolidated group, the Company is no longer subject to U.S. federal and non-U.S. income tax examinations for years prior to 2012, though examinations of combined returns filed by AZOA that include the Company by certain U.S. state and local tax authorities may still be conducted for 2008 and subsequent years. The last Internal Revenue Service examination of AZOA involved amended returns filed by AZOA for the 2008 and 2009 tax years. These amended returns were accepted by the Internal Revenue Service as filed. The Internal Revenue Service has not given notice that any subsequent tax periods are or will be under examination in the near future. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">In accordance with the Income Taxes Topic of the Codification, the Company recognizes liabilities for certain unrecognized tax benefits. The Company had no unrecognized tax benefits as of December&#160;31, 2015 and 2014. The Company does not expect any significant changes related to unrecognized tax benefits during the next 12 months. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company recognizes interest and penalties accrued related to unrecognized tax benefits in federal income tax expense. During the years ended December&#160;31, 2015, 2014, and 2013, the Company did not recognize any expense related to interest and penalties. The Company accrued $0 for the payment of interest and penalties at December&#160;31, 2015 and 2014. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z0fc14169f56b48cf9cc9117b19f0ae82" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%" valign="top" align="left"><b>(14)</b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: justify"><font style="WHITE-SPACE: nowrap">Related-party</font> Transactions </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z14e4addee93a4f378b4e1257e2ba2ad4" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(a)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Real Estate </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company subleases office space from Allianz Global Corporate and Specialty (AGCS) (an affiliate). In connection with this agreement, the Company incurred rent expense of $27, $32, and $29 in 2015, 2014, and 2013, respectively, which is included in General and administrative expenses on the Statements of Operations. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zda1d411048a842dd8596ebc39958c193" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(b)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Service Fees </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company has incurred fees for certain administrative services provided by Allianz Life of $9,437, $8,368, and $6,454 in 2015, 2014, and 2013, respectively. The Company&#8217;s liability for these fees was $839 and $948 as of December&#160;31, 2015 and 2014, respectively, and is included in Other liabilities on the Balance Sheets. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zb2c1f7a01d9c4b7bb16ada9aef6c9303" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 56 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 0pt">The Company has incurred fees for certain investment advisory services provided by affiliated companies of $272, $212, and $199 in 2015, 2014, and 2013, respectively. The Company&#8217;s liability for these charges was $22 and $22 as of December&#160;31, 2015 and 2014, respectively, and is included in Other liabilities on the Balance Sheets. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company has agreements with its affiliates Pacific Investment Management Company (PIMCO), Oppenheimer Capital LLC (OpCap), and with certain other related parties whereby (1)&#160;specific investment options managed by PIMCO and OpCap are made available through the Company&#8217;s separate accounts to holders of the Company&#8217;s variable annuity products, (2)&#160;the Company receives compensation for providing administrative and recordkeeping services relating to the investment options managed by PIMCO and OpCap. Income recognized by the Company from these affiliates for distribution and <font style="WHITE-SPACE: nowrap">in-force</font> related costs as a result of providing investment options to the contractholders was $1,115, $1,182, and $1,109 during 2015, 2014, and 2013, respectively, which is included in Fee, commission and other revenue on the Statements of Operations. At December&#160;31, 2015 and 2014, $181 and $97, respectively, was included for these fees in Receivables on the Balance Sheets. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company has incurred commission expense related to the distribution of variable annuity products from Allianz Life Financial Services, LLC, (ALFS) an affiliated company, in the amount of $23,410, $24,771, and $22,493 for the years ended December&#160;31, 2015, 2014, and 2013, respectively. At December&#160;31, 2015 and 2014, $1,771 and $1,613, respectively, was included for the expense in Other liabilities on the Balance Sheets. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">The Company has an agreement with ALFS, whereby 12b-1 fees are assigned to the Company and Allianz Life. The Company has also agreed with Allianz Life to share in reimbursing ALFS for the excess of ALFS expenses over revenues, exclusive of trading gains (losses). In the event that revenues exceed expenses, ALFS records a reimbursement to the Company and Allianz Life. The Company recorded revenue from this agreement of $4,332, $3,860, and $3,109 for the years ended December&#160;31, 2015, 2014, and 2013, respectively. The Company recorded expenses related to this agreement of $4,198, $1,454, and $1,656, for the years ended December&#160;31, 2015, 2014, and 2013, respectively. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 6pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z06ab73fa745747b6ae7af05563caa296" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%">&#160;</td>
<td style="WIDTH: 4%" valign="top" align="left"><b><i>(c)</i></b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; TEXT-ALIGN: justify">Line of Credit Agreement </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 8%; MARGIN-TOP: 6pt">In 2013, the Company entered into a line of credit agreement with its parent, Allianz Life, to provide liquidity, as needed. As of December&#160;31, 2015 and December&#160;31, 2014, there are no amounts outstanding under the line of credit agreement and no amounts have been borrowed during the years ended December&#160;31, 2015 and 2014. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z7be8ad28058a457d8815dc8341ff8ca9" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%" valign="top" align="left"><b>(15)</b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: justify">Employee Benefit Plans </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">The Company participates in the Allianz Asset Accumulation Plan (AAAP), a defined contribution plan sponsored by Allianz of America Corporation (AZOAC). Eligible employees are immediately enrolled in the AAAP on their first day of employment. The AAAP will accept participants&#8217; pretax, Roth 401(k) and/or <font style="WHITE-SPACE: nowrap">after-tax</font> contributions up to 80.0% of the participants&#8217; eligible compensation, although contributions remain subject to annual limitations set by the Internal Revenue Service. In 2015, 2014, and </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z7173022925cd4106aae53d68346059ae" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 57 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 0pt">2013, the Company matched up to a maximum of 7.5% of the employees&#8217; eligible compensation. Participants are 100% vested in the Company&#8217;s matching contribution after three&#160;years of service. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">The AAAP administration expenses and the trust fund, including trustee fees, investment manager fees, and audit fees, are payable from the trust fund but may, at the Company&#8217;s discretion, be paid by the Company. Any legal fees are not paid from the trust fund, but are instead paid by the Company. It is the Company&#8217;s policy to fund the AAAP costs as incurred. The Company has expensed $205, $214, and $144 in 2015, 2014, and 2013, respectively, toward the AAAP matching contributions and administration expenses. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">In addition to the AAAP, the Company offers certain benefits to eligible employees, including a comprehensive medical, dental, and vision plan and a flexible spending plan. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z5e46eb87a49149b78b59c57d1942f1e0" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%" valign="top" align="left"><b>(16)</b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: justify">Statutory Financial Data and Dividend Restrictions </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">Statutory accounting practices prescribed or permitted by the Company&#8217;s state of domicile are directed toward insurer solvency and protection of policyholders. Accordingly, certain items recorded in financial statements prepared under GAAP are excluded or vary in calculation in determining statutory policyholders&#8217; surplus and gain from operations. Currently, these items include, among others, DAC, furniture and fixtures, deferred taxes, accident and health premiums receivable, which are more than 90&#160;days past due, reinsurance, certain investments, and undeclared dividends to policyholders. Additionally, account balances and future policy benefit reserves and policy and contract claims calculated for statutory reporting do not include provisions for withdrawals. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">The Company&#8217;s statutory capital and surplus reported in the statutory annual statements filed with the State of New York as of December&#160;31, 2015 and 2014 was $198,759 and $165,195, respectively. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">The Company is required to meet minimum statutory capital and surplus requirements. The Company&#8217;s statutory capital and surplus as of December&#160;31, 2015 and 2014 were significantly in excess of these requirements. The maximum amount of dividends that can be paid by New York insurance companies to stockholders without prior approval of the Department is subject to restrictions relating to statutory earned surplus, also known as unassigned funds. Unassigned funds are determined in accordance with the accounting procedures and practices governing preparation of the statutory annual statements. In accordance with New York statutes, the maximum amount of ordinary dividends that can be paid by the Company is the greater of 10% of prior <font style="WHITE-SPACE: nowrap">year-end</font> capital and surplus, or the prior year net gain from operations, but is limited by the amount in unassigned surplus. Based on these limitations, ordinary dividends of $19,876 can be paid in 2016 without the approval of the Department. The Company paid no dividends in 2015, 2014 or 2013. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; FONT-STYLE: italic; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">Regulatory <font style="WHITE-SPACE: nowrap">Risk-Based</font> Capital </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">An insurance enterprise&#8217;s state of domicile imposes minimum <font style="WHITE-SPACE: nowrap">risk-based</font> capital requirements that were developed by the NAIC. The formulas for determining the amount of <font style="WHITE-SPACE: nowrap">risk-based</font> capital specify various weighting factors that are applied to financial balances or various levels of activity based on the perceived degree of risk. Regulatory compliance is determined by a ratio of an enterprise&#8217;s regulatory total adjusted capital to its authorized <font style="WHITE-SPACE: nowrap">control-level</font> <font style="WHITE-SPACE: nowrap">risk-based</font> capital, as defined by the NAIC. Companies below </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z659a781727ed4e7c9f29d2110712c6dc" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 58 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 0pt">specific trigger points or ratios are classified within certain levels, each of which requires specified corrective action. This ratio for the Company significantly exceeds required minimum thresholds, as of December&#160;31, 2015 and 2014. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z4d71b34b637e4c7886a70f5ce96d6e1a" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%" valign="top" align="left"><b>(17)</b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: justify">Commitments and Contingencies </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">The Company is or may become subject to claims and lawsuits that arise in the ordinary course of business. In the opinion of management, the ultimate resolution of any such known litigation will not have a material adverse effect on the Company&#8217;s financial position. The Company is contingently liable for possible future assessments under regulatory requirements pertaining to insolvencies and impairments of unaffiliated insurance companies. Provision has been made for assessments currently received and assessments anticipated for known insolvencies. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">The financial services industry, including mutual fund, variable and fixed annuity, life insurance, and distribution companies, is subject to close scrutiny by regulators, legislators, and the media. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">Federal and state regulators regularly make inquiries and conduct examinations or investigations concerning various selling practices in the annuity industry, including suitability reviews, product exchanges, sales to seniors, and compliance with, among other things, insurance laws and securities laws. The Company is also subject to ongoing market conduct examinations and investigations by regulators, which may have a material adverse effect on the Company. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">It can be expected that annuity product design and sales practices will be an ongoing source of regulatory scrutiny and enforcement actions, litigation, and rulemaking. Similarly, private litigation regarding sales practices is ongoing against a number of insurance companies. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">These matters could result in legal precedents and new <font style="WHITE-SPACE: nowrap">industry-wide</font> legislation, rules, and regulations that could significantly affect the financial services industry, including life insurance and annuity companies. It is unclear at this time whether any such litigation or regulatory actions will have a material adverse effect on the Company in the future. When evaluating litigation, claims, and assessments, management considers the nature of the litigation, progress of the case, opinions or views of legal counsel, as well as prior experience in similar cases. Management uses this information to assess whether a loss is probable and if the amount of loss can be reasonably estimated prior to making any accruals. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zdf83c65432cb4073badfd2e0d6351413" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 59 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 0pt">The Company leases office space as mentioned in note&#160;14. Expense for the operating lease was $28, $32, and $29 in 2015, 2014, and 2013, respectively. The future minimum lease payments required under operating leases are as follows: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="za56c248a88644359b7ff77fd0d14a8da" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 68%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 89%"></td>
<td style="WIDTH: 6%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2016</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">24</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2017</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">24</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2018</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">24</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2019</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">24</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2020</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">12</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2021 and beyond</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">TOTAL</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;108</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z6a3f1432354d490991bd2ed7e5e96e0d" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%" valign="top" align="left"><b>(18)</b></td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: justify">Segment Information </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">The Company has organized its principal operations into the following segments: Individual Annuities and Other products. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">The Individual Annuities segment consists of variable, variable-indexed, and fixed annuities, which are provided through independent distribution channels made up of independent and wholly owned broker dealers, agents, and registered representatives. Revenues for the Company&#8217;s fixed annuity products are primarily earned as net investment income on invested assets supporting fixed account balances, with profitability driven by the spread between net investment income earned and interest credited to account balances. Although the Company discontinued selling fixed annuity products in 2011, the <font style="WHITE-SPACE: nowrap">in-force</font> volume is significant and thus included within the Individual Annuities segment. Revenues for the Company&#8217;s variable annuity products are primarily earned as management and expense fees charged on underlying account balances. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">The Other products segment consists of closed blocks of Life, LTC, and Special Markets products. The Company discontinued selling Life products in 2010 and LTC products in 2009. The Special Markets products include individual and group annuity and life products, including whole and term life insurance. Although other products are part of the combined results, the Company does not allocate additional resources to these areas other than to maintain the operational support to its current customers. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">The Company does not maintain segregated investment portfolios for each segment. <font style="WHITE-SPACE: nowrap">Investment-related</font> income, gains, and losses are allocated to the segments based on reserve levels and capital requirements. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z7f53f3f093354ba9b1f4236ea55e534c" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 60 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 0pt">Segment results are reconciled to the statements of operations in the tables below: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<div style="TEXT-ALIGN: right">
<table id="z700e19fcffda42719bdcbe2bdb3c38f0" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 96%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr style="COLOR: white; LINE-HEIGHT: 0pt; VISIBILITY: hidden">
<td style="WIDTH: 70%"></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td style="FONT-SIZE: 8pt" nowrap="nowrap"><b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</b></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td style="FONT-SIZE: 8pt" nowrap="nowrap"><b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</b></td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td style="FONT-SIZE: 8pt" nowrap="nowrap"><b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</b></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="10" align="center"><b>Year ended December&#160;31, 2015</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Individual<br>
 annuities</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Other</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Total</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Revenue:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Net premiums and policy fees</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">65,603</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,267</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">68,870</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Interest and similar income, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">25,378</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,009</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">27,387</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Change in fair value of assets and liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,374</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,373</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Realized investment gains, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">549</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">34</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">583</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Fee, commission, and other revenue</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7,221</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">7,221</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total revenue</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">110,125</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5,309</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">115,434</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Benefits and expenses:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Net benefits</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">81,697</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5,814</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">87,511</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">General and administrative expenses and commissions</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">41,145</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">647</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">41,792</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Change in deferred acquisition costs, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(8,687</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">522</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(8,165</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total benefits and expenses</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">114,155</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,983</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">121,138</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Pretax (loss)</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(4,030</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,674</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(5,704</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>
</div>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z66ba1b3baf464ee19063389843726101" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 61 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
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<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<div style="TEXT-ALIGN: right">
<table id="z1b45b439dd914e128736fe2a31b65963" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 96%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr style="COLOR: white; LINE-HEIGHT: 0pt; VISIBILITY: hidden">
<td style="WIDTH: 73%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="10" align="center"><b>Year ended December&#160;31, 2014</b></td>
<td valign="bottom">&#160;</td>
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<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Individual<br>
 annuities</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Other</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Total</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Revenue:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Net premiums and policy fees</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">58,728</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,988</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">61,716</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Interest and similar income, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">27,293</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,566</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">28,859</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Change in fair value of assets and liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">66,806</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">66,806</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Realized investment gains, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">73</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">77</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Fee, commission, and other revenue</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,869</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(5</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,864</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total revenue</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">159,769</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,553</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">164,322</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Benefits and expenses:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Net benefits</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">138,957</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,936</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">143,893</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">General and administrative expenses and commissions</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">38,886</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">903</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">39,789</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Change in deferred acquisition costs, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(15,088</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">24</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(15,064</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total benefits and expenses</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">162,755</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5,863</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">168,618</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Pretax (loss)</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">(2,986</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,310</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(4,296</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>
</div>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z94ef817ad25f4a35a74f6a6e8e01674b" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 62 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<div style="TEXT-ALIGN: right">
<table id="ze4068d6048384e40b5490a4e93b8966c" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 96%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr style="COLOR: white; LINE-HEIGHT: 0pt; VISIBILITY: hidden">
<td style="WIDTH: 72%"></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="10" align="center"><b>Year ended December&#160;31, 2013</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Individual<br>
 annuities</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Other</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Total</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Revenue:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Net premiums and policy fees</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">47,281</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,452</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">50,733</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Interest and similar income, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">28,562</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,073</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">29,635</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Change in fair value of assets and liabilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(78,945</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(78,944</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Realized investment gains, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">796</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">33</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">829</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Fee, commission, and other revenue</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5,904</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5,904</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total revenue</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,598</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,559</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">8,157</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Benefits and expenses:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Net benefits</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(42,034</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,931</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(38,103</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">General and administrative expenses and commissions</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">34,595</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">924</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">35,519</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Change in deferred acquisition costs, net</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(6,440</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">277</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(6,163</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total benefits and expenses</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(13,879</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5,132</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(8,747</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Pretax income (loss)</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">17,477</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(573</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">16,904</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>
</div>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z769048a6dab447f3a3419be9029d4b82" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 63 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z1c8e1c5016ed48a4aa77129f8cac422b" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%" valign="top" align="left"><b>(19)</b></td>
<td valign="top" align="left"><b>Changes in and Reclassifications from Accumulated Other Comprehensive Income (AOCI) </b></td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">Changes in AOCI, net of tax, by component consist of the following: </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zfa42e20ecee94df696678506b742b04c" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 92%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 62%"></td>
<td style="WIDTH: 7%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 7%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 7%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="10" align="center"><b>Year ended December&#160;31, 2015</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Net<br>
unrealized<br>
gain&#160;(losses)<br>
 on&#160;securities</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>OTTI<br>
gains&#160;(losses)<br>
 in OCI</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Total&#160;AOCI</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Beginning balance</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">16,656</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">16,656</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">OCI before reclassifications</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(11,163</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(117</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(11,280</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Amounts reclassified from AOCI</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(493</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">117</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(376</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Net OCI</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(11,656</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(11,656</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Ending balance</p>
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<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">5,000</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5,000</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 1pt">
<td style="HEIGHT: 16px"></td>
<td style="HEIGHT: 16px" colspan="12"></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="10" align="center"><b>Year ended December 31, 2014</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Net<br>
unrealized<br>
gain (losses)<br>
 on securities</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>OTTI</b><br>
<b>gains (losses)<br>
 in OCI</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Total AOCI</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Beginning balance</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">10,347</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">10,347</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">OCI before reclassifications</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,280</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">74</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,354</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Amounts reclassified from AOCI</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">29</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(74</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(45</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Net OCI</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,309</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">6,309</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Ending balance</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">16,656</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">16,656</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z97fe9bc41cb94818a970b1ab99668c3c" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 64 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Notes to Financial Statements </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 and 2014 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands, except security holdings quantities) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<div style="TEXT-ALIGN: right">
<table id="z3b416492c49d4a1fa30e966078a6bdd3" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 96%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 54%"></td>
<td style="WIDTH: 5%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 5%" valign="bottom"></td>
<td></td>
<td></td>
<td></td>
<td style="WIDTH: 5%" valign="bottom"></td>
<td style="WIDTH: 25%"></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>Amount&#160;reclassified&#160;from&#160;AOCI</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="center"><b>Affected&#160;line&#160;item</b></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="6" align="center"><b>December&#160;31,</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="center"><b>in the</b></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" nowrap="nowrap">
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 0pt">AOCI</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2015</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>2014</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="center">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; WIDTH: 97.25pt; BORDER-BOTTOM: #000000 1pt solid; FONT-WEIGHT: bold; TEXT-ALIGN: center">Statements&#160;of&#160;Operations</p>
</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Net unrealized gain (loss) on securities:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Available-for-sale securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">758</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(44</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">Realized&#160;investment&#160;gains,&#160;net</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">265</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(15</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">Income tax (benefit) expense</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">493</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(29</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">Net (loss) income</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">OTTI gains in OCI:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Other than temporary impairments</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(180</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">115</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">Realized investment gains, net</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(63</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">41</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">Income tax (benefit) expense</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(117</td>
<td valign="bottom" nowrap="nowrap">)&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">74</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">Net (loss) income</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total amounts reclassified from AOCI</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">376</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">45</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">Total net (loss) income</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
</tr>
</table>
</div>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z4fa32d90713b466f9ef2d2ac6f9386db" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%" valign="top" align="left"><b>(20)</b></td>
<td valign="top" align="left"><b>Subsequent Events </b></td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt">No material subsequent events have occurred since December&#160;31, 2015, through March&#160;31, 2016 that require adjustments to the financial statements. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="zf11c2a4453af46c0bbdb0aaea6fdba56" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 65 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="right">(Continued)</td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: right; MARGIN-TOP: 0pt">Schedule I </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 12pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Summary of Investments &#8211; Other than Investments in Related Parties </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">December&#160;31, 2015 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="ze94f6e928e1c41c48a8a655891c36e9c" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr style="COLOR: white; LINE-HEIGHT: 0pt; VISIBILITY: hidden">
<td style="WIDTH: 73%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td style="FONT-SIZE: 8pt" nowrap="nowrap"><b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</b></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td style="FONT-SIZE: 8pt" nowrap="nowrap"><b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</b></td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td style="FONT-SIZE: 8pt" nowrap="nowrap"><b>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</b></td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" nowrap="nowrap">
<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; MARGIN-TOP: 0pt">Type of investment</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Amortized<br>
cost<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-SIZE: 85%; VERTICAL-ALIGN: top"> (1)</sup></b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Fair value</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>Amount at<br>
which<br>
shown&#160;in&#160;the<br>
 balance&#160;sheet</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Fixed-maturity securities:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">U.S. government</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">72,035</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">73,223</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">73,223</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">States and political subdivisions</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,112</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,044</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,044</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Foreign government</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">505</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">510</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">510</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Public utilities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">36,467</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">38,667</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">38,667</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Corporate securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">406,982</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">415,515</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">415,515</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Mortgage-backed securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">133,853</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">135,603</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">135,603</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total fixed-maturity securities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">660,954</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">674,562</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">674,562</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Equity Securities, trading</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,383</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,368</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,368</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total other investments</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,383</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,368</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,368</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">Other investments:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Policy loans</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">275</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">275</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">275</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Derivatives</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">15,064</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">15,064</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">15,064</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total other investments</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">15,339</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">15,339</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">15,339</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
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<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
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<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Total investments</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">680,676</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">694,269</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">694,269</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z4c7bc441d19b4230aa62afa6b6dc8f3d" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
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<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">Original cost of fixed-maturity securities reduced by repayments and adjusted for amortization of premiums or accrual discounts </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-TOP: 12pt">See accompanying report of independent registered public accounting firm. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z169b2175775745b1a1b8a3433919652f" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 66 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top"></td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: right; MARGIN-TOP: 0pt">Schedule II </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 12pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Supplementary Insurance Information </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Years ended December&#160;31, 2015, 2014, and 2013 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

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<td style="WIDTH: 32%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
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<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
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<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
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<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
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<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
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<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
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<td style="WIDTH: 2%" valign="bottom"></td>
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<td></td>
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<tr style="FONT-SIZE: 7.5pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="18" align="center"><b>December&#160;31</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="22" align="center"><b>Year ended December&#160;31</b></td>
<td valign="bottom">&#160;</td>
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<tr style="FONT-SIZE: 7.5pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" nowrap="nowrap" align="center"><b>Deferred<br>
acquisition<br>
 costs</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" nowrap="nowrap" align="center"><b>Deferred<br>
sales<br>
 inducements</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" nowrap="nowrap" align="center"><b>Account<br>
balances<br>
and<br>
future<br>
benefit<br>
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<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
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 premiums</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" nowrap="nowrap" align="center"><b>Policy&#160;and<br>
contract<br>
 claims</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
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<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
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<b>similar</b><br>
<b>income,&#160;net</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" nowrap="nowrap" align="center"><b>Net<br>
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<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" nowrap="nowrap" align="center"><b>Net change<br>
in deferred<br>
sales<br>
 inducements*</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" nowrap="nowrap" align="center"><b>Net<br>
change in<br>
deferred<br>
acquisition<br>
 costs**</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" nowrap="nowrap" align="center"><b>Other<br>
operating<br>
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<td valign="bottom">&#160;</td>
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<tr style="FONT-SIZE: 7.5pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 7.5pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2015:</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 7.5pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 7.5pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Annuities</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">131,754</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">21,148</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">738,333</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">65,603</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">25,378</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">81,285</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">412</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(8,687</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">41,145</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 7.5pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 7.5pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Other</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,620</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">24,653</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,571</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,157</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,267</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,009</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">5,814</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">522</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">647</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 7.5pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">134,374</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">21,148</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">762,986</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,571</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,157</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">68,870</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">27,387</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">87,099</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">412</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(8,165</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">41,792</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
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<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
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<td valign="top">
<p style="FONT-SIZE: 7.5pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2014:</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 7.5pt; FONT-FAMILY: ARIAL">
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<td valign="bottom">$</td>
<td valign="bottom" align="right">115,271</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">19,510</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">670,265</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">58,728</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">27,293</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">140,536</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,579</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(15,088</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">38,886</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
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<td valign="top">
<p style="FONT-SIZE: 7.5pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Other</p>
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<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,048</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">20,746</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,518</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,787</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,988</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,566</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">4,936</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">24</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">903</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
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<tr style="FONT-SIZE: 7.5pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">118,319</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">19,510</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">691,011</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,518</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,787</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">61,716</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">28,859</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">145,472</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(1,579</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(15,064</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">39,789</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 7.5pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 7.5pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">2013:</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 7.5pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 7.5pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Annuities</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">100,897</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">18,345</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">561,358</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">47,281</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">28,562</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(44,376</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,342</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(6,440</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">34,595</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 7.5pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 7.5pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Other</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,105</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">16,762</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,559</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,528</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,452</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,073</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,931</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">277</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">924</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
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<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
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<tr style="FONT-SIZE: 7.5pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">$</td>
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<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">18,345</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">578,120</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,559</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,528</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">50,733</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">29,635</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(40,445</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,342</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(6,163</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">35,519</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z36ea7c16fef44f6f87a667b3c71fafdf" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%" valign="top" align="left">*</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">See note 8 for aggregate gross amortization of deferred sales inducements. </p>
</td>
</tr>
</table>

<table id="zdbbc979a274747f080349aedf1c62e9a" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="WIDTH: 4%" valign="top" align="left">**</td>
<td valign="top" align="left">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: justify">See note 7 for aggregate gross amortization of deferred acquisition costs. </p>
</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-TOP: 12pt">See accompanying report of independent registered public accounting firm. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z6bace7b37d8b47d7a9bf4801b69f311a" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr>
<td style="WIDTH: 3%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 84%"></td>
<td style="WIDTH: 2%" valign="bottom"></td>
<td style="WIDTH: 9%"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 67 of 68</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="top"></td>
</tr>
</table>

<p style="PAGE-BREAK-BEFORE: always"></p>

<hr style="WIDTH: 100%; COLOR: #999999" align="center" size="3">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: right; MARGIN-TOP: 0pt">Schedule III </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 12pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Reinsurance </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">Years ended December&#160;31, 2015, 2014, and 2013 </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 6pt">(In thousands) </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 12pt; MARGIN-TOP: 0pt">&#160;</p>

<table id="z62958dc785104694afb2f65e20e2f75d" style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; WIDTH: 100%; BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" align="center" border="0">
<tr style="COLOR: white; LINE-HEIGHT: 0pt; VISIBILITY: hidden">
<td style="WIDTH: 61%"></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
<td style="WIDTH: 3%" valign="bottom"></td>
<td></td>
<td nowrap="nowrap">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</td>
<td></td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>Direct</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Ceded</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">to&#160;other</p>
</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>Assumed<br>
 from other</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" colspan="2" align="center"><b>Net</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" colspan="2" align="center">
<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Percentage</p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">of amount</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; FONT-WEIGHT: bold; TEXT-ALIGN: center; MARGIN-TOP: 0pt">assumed</p>
</td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL">
<td valign="bottom" nowrap="nowrap">
<p style="FONT-SIZE: 8pt; FONT-FAMILY: ARIAL; WIDTH: 43.15pt; BORDER-BOTTOM: #000000 1pt solid; FONT-WEIGHT: bold">Year ended</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>amount</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>companies</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>companies</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>amount</b></td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td style="BORDER-BOTTOM: #000000 1pt solid" valign="bottom" colspan="2" align="center"><b>to net</b></td>
<td valign="bottom">&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">December&#160;31, 2015:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Life insurance in force</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">&#160;&#160;71,620</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">61,791</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">9,829</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Premiums and policy fees:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Life</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1,144</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">842</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">302</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Annuities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">65,603</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">65,603</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Accident and health</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,470</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">505</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">2,965</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Total premiums and policy fees</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">70,217</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,347</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">68,870</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">December&#160;31, 2014:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Life insurance in force</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">77,593</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">67,376</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">10,217</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Premiums and policy fees:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Life</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">902</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">916</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">(14</td>
<td valign="bottom" nowrap="nowrap">)</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Annuities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">58,727</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">58,727</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Accident and health</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,529</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">526</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,003</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Total premiums and policy fees</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">63,158</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,442</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">61,716</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 1em; TEXT-INDENT: -1em">December&#160;31, 2013:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Life insurance in force</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">84,046</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">73,019</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">11,027</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 3em; TEXT-INDENT: -1em">Premiums and policy fees:</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom">&#160;</td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Life</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">1,389</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">975</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">414</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Annuities</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">47,280</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">47,280</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 5em; TEXT-INDENT: -1em">Accident and health</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,613</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">574</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">3,039</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 1px solid">&#160;</p>
</td>
<td>&#160;</td>
</tr>

<tr style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL" bgcolor="#cceeff">
<td valign="top">
<p style="FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-LEFT: 7em; TEXT-INDENT: -1em">Total premiums and policy fees</p>
</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">$</td>
<td valign="bottom" align="right">52,282</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">1,549</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom" nowrap="nowrap" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">50,733</td>
<td valign="bottom" nowrap="nowrap">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom" align="right">&#8212;&#160;&#160;</td>
<td valign="bottom" nowrap="nowrap">%&#160;</td>
</tr>

<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
<td valign="bottom">&#160;</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td valign="bottom">
<p style="BORDER-TOP: #000000 3px double">&#160;</p>
</td>
<td>&#160;</td>
</tr>
</table>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; MARGIN-TOP: 12pt">See accompanying report of independent registered public accounting firm. </p>

<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 8pt; MARGIN-TOP: 0pt">&#160;</p>

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<p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Financial&#160;Statements&#160;and&#160;Supplemental&#160;Schedules</p>

<p style="MARGIN-BOTTOM: 1pt; FONT-SIZE: 10pt; FONT-FAMILY: ARIAL; TEXT-ALIGN: center; MARGIN-TOP: 0pt">Page 68 of 68</p>
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<div><br>
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<div>
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<div><br>
</div>
</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">You can review and copy information about us, the Separate Account, the prospectus and the SAI at the SEC's Public Reference Room in Washington, D.C. You may obtain information about the operation of the Public Reference Room by calling (202) 551-8090.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">The SEC also maintains a website (www.sec.gov). The prospectus, the SAI and other information about the Contract are available on the EDGAR database on the SEC's website. If you do not have access to the website, you can get copies of information from the website upon payment of a duplication fee by writing to:</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-LEFT: 28.8pt; TEXT-INDENT: -14.4pt">Public Reference Section of the Commission</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-LEFT: 28.8pt; TEXT-INDENT: -14.4pt">100 F Street, NE</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-LEFT: 28.8pt; TEXT-INDENT: -14.4pt">Washington, DC 20549</div>

<div style="MARGIN-BOTTOM: 4pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 4pt"><!--Anchor-->OUR SERVICE CENTER</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">If you need customer service (for Contract changes, information on Contract Values, requesting a withdrawal or transfer, changing your allocation instructions, etc.) please contact our Service Center at <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">(800) 624-0197</font>.</div>

<div style="MARGIN-BOTTOM: 2pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">To send an application, a check for an additional Purchase Payment, or for general customer service, please mail to the appropriate address as follows:</div>

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<tr>
<td style="WIDTH: 50%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 4px solid; BACKGROUND-COLOR: #d9d9d9">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Send an application or additional Purchase Payment<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif"><br>
</font> with a check:</div>
</td>
<td style="WIDTH: 50%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 4px solid; BACKGROUND-COLOR: #d9d9d9">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Send an application or general customer service<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif"><br>
</font> without a check:</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">REGULAR MAIL</div>
</td>
<td style="WIDTH: 50%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">REGULAR MAIL</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Allianz Life Insurance Company of New York</div>
</td>
<td style="WIDTH: 50%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Allianz Life Insurance Company of New York</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">NW5990</div>
</td>
<td style="WIDTH: 50%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">P.O. Box 561</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">P.O. Box 1450</div>
</td>
<td style="WIDTH: 50%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Minneapolis, MN 55440-0561</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Minneapolis, MN 55485-5990</div>
</td>
<td style="WIDTH: 50%; VERTICAL-ALIGN: top">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 50%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 50%; VERTICAL-ALIGN: top">&#160;</td>
</tr>

<tr>
<td style="WIDTH: 50%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">OVERNIGHT, CERTIFIED, OR REGISTERED MAIL</div>
</td>
<td style="WIDTH: 50%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">OVERNIGHT, CERTIFIED, OR REGISTERED MAIL</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Allianz Life Insurance Company of New York</div>
</td>
<td style="WIDTH: 50%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Allianz Life Insurance Company of New York</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">NW5990</div>
</td>
<td style="WIDTH: 50%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">5701 Golden Hills Drive</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">1801 Parkview Drive</div>
</td>
<td style="WIDTH: 50%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Golden Valley, MN 55416-1297</div>
</td>
</tr>

<tr>
<td style="WIDTH: 50%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left">Shoreview, MN 55126</div>
</td>
<td style="WIDTH: 50%; VERTICAL-ALIGN: top">&#160;</td>
</tr>
</table>

<div style="BACKGROUND-COLOR: #f3f3f3">
<div><br>
</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 6pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-STYLE: italic">NOTE:</font> Checks sent to the wrong address for applications or additional Purchase Payments are forwarded to the 1801 Parkview Drive address listed above, which may delay processing.</div>

<div><br>
</div>
</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">To send information by email, please use this address: variableannuity@send.allianzlife.com. To send information over the web, please upload to your account on our website at: www.allianzlife.com/newyork. If you have questions about whether you can submit certain information by email or over the web, please contact our Service Center.</div>

<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left">Until May 1, 2017, all dealers that effect transactions in these securities may be required to deliver a prospectus.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Allianz Index Advantage ADV<sup style="vertical-align: text-top; line-height: 1; font-size: smaller">SM</sup> New York Variable Annuity Prospectus &#8211; November 14, 2016</div>

<div style="FONT-SIZE: 9pt; FONT-FAMILY: Arial, sans-serif; FONT-WEIGHT: bold; COLOR: #ffffff; TEXT-ALIGN: center; BACKGROUND-COLOR: #ffffff"></div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: Arial, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 69.1pt; LINE-HEIGHT: 11.4pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; PART II - INFORMATION NOT REQUIRED IN PROSPECTUS</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: Arial, sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 69.1pt; LINE-HEIGHT: 11.4pt">&#160;</div>

<div style="MARGIN-TOP: 0.35pt; LINE-HEIGHT: 19.95pt"><br style="LINE-HEIGHT: 19.95pt">
</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-LEFT: 5pt; LINE-HEIGHT: 11.4pt">ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.</div>

<div style="LINE-HEIGHT: 11.4pt"><br style="LINE-HEIGHT: 11.4pt">
</div>

<div style="MARGIN-TOP: 0.1pt; LINE-HEIGHT: 11.4pt"><br style="LINE-HEIGHT: 11.4pt">
</div>

<table id="zf3aa3bc05bdd4c3ab7a3514721851535" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 80.92%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 14.4pt; LINE-HEIGHT: 12pt; TEXT-INDENT: -14.4pt">&#160;&#160;&#160;&#160;Securities and Exchange Commission Registration Fee</div>
</td>
<td style="WIDTH: 19.08%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 14.4pt; LINE-HEIGHT: 12pt; TEXT-INDENT: -14.4pt">$&#160;&#160; XXXX*</div>
</td>
</tr>

<tr>
<td style="WIDTH: 80.92%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 19.08%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 14.4pt; LINE-HEIGHT: 12pt; TEXT-INDENT: -14.4pt">&#160;--------------</div>
</td>
</tr>

<tr>
<td style="WIDTH: 80.92%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 14.4pt; LINE-HEIGHT: 12pt; TEXT-INDENT: -14.4pt">&#160;&#160;&#160;&#160;Estimated Printing and Filing Costs:</div>
</td>
<td style="WIDTH: 19.08%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 14.4pt; LINE-HEIGHT: 12pt; TEXT-INDENT: -14.4pt">$&#160;&#160; 10,000</div>
</td>
</tr>

<tr>
<td style="WIDTH: 80.92%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 19.08%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 14.4pt; LINE-HEIGHT: 12pt; TEXT-INDENT: -14.4pt">&#160;--------------</div>
</td>
</tr>

<tr>
<td style="WIDTH: 80.92%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 14.4pt; LINE-HEIGHT: 12pt; TEXT-INDENT: -14.4pt">&#160;&#160;&#160;&#160;Estimated Accounting Fees:</div>
</td>
<td style="WIDTH: 19.08%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 14.4pt; LINE-HEIGHT: 12pt; TEXT-INDENT: -14.4pt">$&#160; &#160; 75,000</div>
</td>
</tr>

<tr>
<td style="WIDTH: 80.92%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 19.08%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 14.4pt; LINE-HEIGHT: 12pt; TEXT-INDENT: -14.4pt">---------------</div>
</td>
</tr>

<tr>
<td style="WIDTH: 80.92%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 14.4pt; LINE-HEIGHT: 12pt; TEXT-INDENT: -14.4pt">&#160;&#160;&#160;&#160;Estimated Legal Fees:</div>
</td>
<td style="WIDTH: 19.08%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 14.4pt; LINE-HEIGHT: 12pt; TEXT-INDENT: -14.4pt">$&#160; &#160; XXXX*</div>
</td>
</tr>

<tr>
<td style="WIDTH: 80.92%; VERTICAL-ALIGN: top">&#160;</td>
<td style="WIDTH: 19.08%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 14.4pt; LINE-HEIGHT: 12pt; TEXT-INDENT: -14.4pt">---------------</div>
</td>
</tr>

<tr>
<td style="WIDTH: 80.92%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 14.4pt; LINE-HEIGHT: 12pt; TEXT-INDENT: -14.4pt">&#160;&#160;&#160;&#160;Estimated Miscellaneous Fees:</div>
</td>
<td style="WIDTH: 19.08%; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 14.4pt; LINE-HEIGHT: 12pt; TEXT-INDENT: -14.4pt">$&#160; &#160; &#160; &#160; N/A</div>
</td>
</tr>

<tr>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 10.4pt; LINE-HEIGHT: 11.4pt">INDEMNIFICATION OF OFFICERS, DIRECTORS AND EMPLOYEES</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 27.55pt; MARGIN-TOP: 0.5pt; LINE-HEIGHT: 14.25pt; MARGIN-RIGHT: 9.4pt">To the fullest extent allowed under New York law, the Company shall indemnify officers, directors and employees of the Company. No director shall be personally liable to the Company or any of its shareholders for damages for any breach of duty as a director; provided, however, that the foregoing provision shall not eliminate or limit (i) the liability of a director if a judgment or other final adjudication adverse to him or her establishes that his or her acts or omissions were in bad faith or involved intentional misconduct or were acts or omissions (a) which he or she knew or reasonably should have known violated the New York Insurance Law or (b) which violated a specific standard of care imposed on directors directly, and not by reference, by a provision of the New York Insurance Law (or any regulations promulgated thereunder) or (c) which constituted a knowing violation of any other law, or establishes that he or she personally gained in fact a financial profit or other advantage to which he or she was not legally entitled; or (ii) the liability of a director for any act or omission prior to adoption of these Restated Bylaws by the shareholders of the Company.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 25.15pt; LINE-HEIGHT: 11.4pt">NOT APPLICABLE.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-LEFT: 5pt; LINE-HEIGHT: 11.4pt">(a)</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; TEXT-INDENT: 16.75pt">Exhibits.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 40.5pt; LINE-HEIGHT: 11.85pt; MARGIN-RIGHT: 9.15pt; TEXT-INDENT: -36pt">1.&#160; &#160; &#160;&#160; (a) Principal Underwriter Agreement by and between Preferred Life Insurance Company of New York on behalf of Preferred Life Variable Account C and NALAC Financial Plans, Inc. incorporated by reference as exhibit EX-99.B3.a. from Registrant's Pre-Effective Amendment No. 1 to Form N-4 (File Nos. 333-19699 and 811-05716) electronically filed on May 12, 1997. Preferred Life Insurance Company of New York is the predecessor to Allianz Life Insurance Company of New York. Preferred Life Variable Account C is the predecessor to Allianz Life of NY Variable Account C. NALAC Financial Plans, Inc., is the predecessor to USAllianz Investor Services, LLC, which is the predecessor to Allianz Life Financial Services, LLC.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 40.5pt; LINE-HEIGHT: 14.25pt; MARGIN-RIGHT: 9.15pt; TEXT-INDENT: -13.5pt">(b) Broker-Dealer Agreement (amended and restated) between Allianz Life Insurance Company of New York and Allianz Life Financial Services, LLC, dated June 1, 2010 incorporated by reference as exhibit EX- 99.B3.b. from Registrant's Post-Effective Amendment No. 21 to Form N-4 (File Nos. 333-143195 and 811- 05716) electronically filed on October 21, 2010.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 40.5pt; MARGIN-TOP: 4.8pt; LINE-HEIGHT: 14.25pt; MARGIN-RIGHT: 18.4pt; TEXT-INDENT: -13.5pt">(c) The current specimen of the selling agreement between Allianz Life Financial Services, LLC, the principal underwriter for the Contracts, and retail brokers which offer and sell the Contracts to the public is incorporated by reference as exhibit EX-99.B3.b. from the Initial Registration Statement to Allianz Life Variable Account B's Form N-4 (File Nos.333-134267 and 811-05618) electronically filed on May 19, 2006. The underwriter has executed versions of the agreement with approximately 2,100 retail brokers.</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; WIDTH: 67.5pt; VERTICAL-ALIGN: top; align: right">3.&#160; &#160; &#160;&#160; (a)</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Articles of Incorporation, as amended and restated March 9, 20111, of Allianz Life Insurance Company of New York, filed on December 19, 2013 as Exhibit 3(a) to Registrant's initial registration on Form S-1 (File No. 333-192948), is incorporated by reference.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; WIDTH: 58.5pt; VERTICAL-ALIGN: top; align: right">&#160;&#160;&#160;&#160;&#160;&#160;(b)</td>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Bylaws, as amended and restated March 9, 2011, of Allianz Life Insurance Company of New York, filed on December 19, 2013 as Exhibit 3(b) to Registrant's initial registration on Form S-1 (File No. 333-192948), is incorporated by reference.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">(a)** Deferred Annuity Contract, to be filed by amendment.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Allocation Options Schedule page S40876-NY01 (5/2015), filed on April 20, 2015, as Exhibit 4(f) to Registrant's Post-Effective Amendment No. 2 on Form S-1 (File No. 333-192948), is incorporated by reference.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Variable and Index-Linked Annuity Contract L40538-NY01 (5/2015), filed on April 20, 2015, as Exhibit 4(g) to Registrant's Post-Effective Amendment No. 2 on Form S-1 (File No. 333-192948), is incorporated by reference.</td>
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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Waiver of Withdrawal Charge Rider, filed herewith.</td>
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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 40.5pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 9.15pt; TEXT-INDENT: -13.5pt">(h) Allocation Options Schedule Page-S40876-NY01 (5/2015), incorporated by reference as exhibit EX-99.B4.g. from Registrant's N-4 filing (File Nos. 333-192949 and 811-05716) electronically filed on April 21, 2015.</div>

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<div style="MARGIN-BOTTOM: 6pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; COLOR: #000000; TEXT-ALIGN: left; MARGIN-LEFT: 40.5pt; LINE-HEIGHT: 11.4pt; MARGIN-RIGHT: 9.15pt; TEXT-INDENT: -13.5pt">(k) IRA Endorsement - P30012-NY incorporated by reference as exhibit EX-99.B4.i. from Registrant's Pre Effective Amendment No. 1 to Form N-4 (File Nos. 333-124767 and 811-05716) electronically filed on November 20, 2006.</div>

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<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; WIDTH: auto; VERTICAL-ALIGN: top; TEXT-ALIGN: left">Opinion re Legality - not applicable</td>
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<table id="zc1ed7af4cd174d6987c6cc242b3134d4" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%; MARGIN-TOP: 5.3pt" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 31.5pt; VERTICAL-ALIGN: top; align: right">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-LEFT: 4.5pt; MARGIN-TOP: 5.3pt; LINE-HEIGHT: 11.4pt">15.</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-TOP: 5.3pt; LINE-HEIGHT: 11.4pt">Not applicable</div>
</td>
</tr>
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</div>

<div>
<table id="z0da830a58d5341b0b63845a3aa4d28c3" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%; MARGIN-TOP: 5.3pt" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 31.5pt; VERTICAL-ALIGN: top; align: right">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-LEFT: 4.5pt; MARGIN-TOP: 5.3pt; LINE-HEIGHT: 11.4pt">16.</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-TOP: 5.3pt; LINE-HEIGHT: 11.4pt">Not applicable</div>
</td>
</tr>
</table>
</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 31.5pt; MARGIN-TOP: 5.3pt; LINE-HEIGHT: 11.4pt; TEXT-INDENT: -27pt">21. Not applicable.</div>

<div>
<table id="z18fc36bf56724805a3c8facf35392431" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%; MARGIN-TOP: 5.3pt" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 31.5pt; VERTICAL-ALIGN: top; align: right">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 4.5pt; MARGIN-TOP: 5.3pt; LINE-HEIGHT: 19.95pt">23.</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-TOP: 5.3pt; LINE-HEIGHT: 19.95pt">(a)**Consent of Independent Registered Public Accounting Firm &#8211; KPMG, to be filed by amendment.</div>
</td>
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</table>
</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 31.5pt; MARGIN-TOP: 5.3pt; LINE-HEIGHT: 19.95pt; MARGIN-RIGHT: 5.5pt; TEXT-INDENT: -27pt">(b)**Consent of Counsel, to be filed by amendment.</div>

<div>
<table id="z274c7dd5a7d241f382d4c6f4becffd4c" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%; MARGIN-TOP: 0.2pt" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 31.5pt; VERTICAL-ALIGN: top; align: right">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 4.5pt; MARGIN-TOP: 0.2pt; LINE-HEIGHT: 14.25pt">24.</div>
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<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-TOP: 0.2pt; LINE-HEIGHT: 14.25pt">(a)* Powers of Attorney, filed herewith.</div>
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<div>
<table id="z45f9834e49f14827bad31e3824b1103e" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%; MARGIN-TOP: 4.85pt" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 31.5pt; VERTICAL-ALIGN: top; align: right">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-LEFT: 4.5pt; MARGIN-TOP: 4.85pt; LINE-HEIGHT: 14.25pt">(b)</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-TOP: 4.85pt; LINE-HEIGHT: 14.25pt">Board Resolution, effective December 11, 2012, of the Board of Directors of Allianz Life Insurance Company of North America, filed on December 19, 2013 as Exhibit 24(b) to Registrant's initial registration on Form S-1 (File No. 333-192948), is incorporated by reference.</div>
</td>
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</div>

<div>
<table id="z7b903ed23cf74d94b8ccd31d7b94e3d3" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%; MARGIN-TOP: 4.8pt" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 31.5pt; VERTICAL-ALIGN: top; align: right">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-LEFT: 4.5pt; MARGIN-TOP: 4.8pt; LINE-HEIGHT: 14.25pt">(c)</div>
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<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-TOP: 4.8pt; LINE-HEIGHT: 14.25pt">Board Resolution, effective March 6, 2014, of the Board of Directors of Allianz Life Insurance Company of New York, filed on May 2, 2014 as Exhibit 24(d) to Registrant's Pre-Effective Amendment No. 1 on Form S-1 (File No. 333-192948), is incorporated by reference.</div>
</td>
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</table>
</div>

<div>
<table id="zae6a6f6cabe7401b931adc76ad19fb36" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%; MARGIN-TOP: 4.8pt" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 31.5pt; VERTICAL-ALIGN: top; align: right">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 4.5pt; MARGIN-TOP: 4.8pt; LINE-HEIGHT: 11.4pt">25.</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-TOP: 4.8pt; LINE-HEIGHT: 11.4pt">Not applicable</div>
</td>
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<div>
<table id="z3f56049a77f64dad81440437b12a23ea" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%; MARGIN-TOP: 5.3pt" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 31.5pt; VERTICAL-ALIGN: top; align: right">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 4.5pt; MARGIN-TOP: 5.3pt; LINE-HEIGHT: 11.4pt">26.</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-TOP: 5.3pt; LINE-HEIGHT: 11.4pt">Not applicable</div>
</td>
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</table>
</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 31.5pt; MARGIN-TOP: 6.5pt; LINE-HEIGHT: 14.25pt; MARGIN-RIGHT: 18.4pt; TEXT-INDENT: -27pt">99. (a) Daily Adjustment Calculation Exhibit (VS10 vers. &amp; ALIP vers.), filed on April 20, 2015, as Exhibit 99(a) to Registrant's Post-Effective Amendment No. 2 on Form S-1, is incorporated by reference.</div>

<div style="LINE-HEIGHT: 11.4pt"><br style="LINE-HEIGHT: 11.4pt">
</div>

<div style="MARGIN-BOTTOM: 4.8pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 31.5pt; LINE-HEIGHT: 12pt; TEXT-INDENT: -27pt">101.INS**&#160; &#160; XBRL Instance Document, to be filed by amendment.</div>

<div style="MARGIN-BOTTOM: 4.8pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 31.5pt; LINE-HEIGHT: 12pt; TEXT-INDENT: -27pt">101.SCH**&#160; XBRL Taxonomy Extension Schema Document, to be filed by amendment.</div>

<div style="MARGIN-BOTTOM: 4.8pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 31.5pt; LINE-HEIGHT: 12pt; TEXT-INDENT: -27pt">101.CAL**&#160; XBRL Taxonomy Extension Calculation Linkbase, to be filed by amendment.</div>

<div style="MARGIN-BOTTOM: 4.8pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 31.5pt; LINE-HEIGHT: 12pt; TEXT-INDENT: -27pt">101.DEF**&#160; XBRL Taxonomy Extension Definition Linkbase, to be filed by amendment.</div>

<div style="MARGIN-BOTTOM: 4.8pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 31.5pt; LINE-HEIGHT: 12pt; TEXT-INDENT: -27pt">101.LAB**&#160; XBRL Taxonomy Extension Labels Linkbase, to be filed by amendment.</div>

<div style="MARGIN-BOTTOM: 4.8pt; FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 31.5pt; LINE-HEIGHT: 12pt; TEXT-INDENT: -27pt">101.PRE**&#160; XBRL Taxonomy Extension Presentation Linkbase , to be filed by amendment.</div>

<div style="MARGIN-BOTTOM: 4.8pt; LINE-HEIGHT: 12pt"><br style="LINE-HEIGHT: 12pt">
</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-TOP: 6pt; LINE-HEIGHT: 11.4pt">&#160;&#160;&#160;*&#160; Filed herewith</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-TOP: 6pt; LINE-HEIGHT: 11.4pt">&#160;** To be filed by amendment</div>

<div style="LINE-HEIGHT: 11.4pt"><br style="LINE-HEIGHT: 11.4pt">
</div>

<div>
<table id="z4042e316e6d143d68a46efbc431d15a8" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%; MARGIN-TOP: 5.9pt" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 22.25pt; VERTICAL-ALIGN: top; align: right">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-LEFT: 7.5pt; MARGIN-TOP: 5.9pt; LINE-HEIGHT: 11.4pt">(b)</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-TOP: 5.9pt; LINE-HEIGHT: 11.4pt; TEXT-INDENT: 13.75pt">Financial Statement Schedules</div>
</td>
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</table>
</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 23pt; MARGIN-TOP: 6.5pt; LINE-HEIGHT: 11.85pt; MARGIN-RIGHT: 9.15pt">All required financial statement schedules of Allianz Life Insurance Company of New York are included in Part I of this registration statement.</div>

<div style="MARGIN-TOP: 0.35pt; LINE-HEIGHT: 11.4pt"><br style="LINE-HEIGHT: 11.4pt">
</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; FONT-WEIGHT: bold; TEXT-ALIGN: left; MARGIN-LEFT: 5pt; LINE-HEIGHT: 11.4pt">ITEM 17. UNDERTAKINGS.</div>

<div style="MARGIN-TOP: 0.25pt; LINE-HEIGHT: 11.4pt"><br style="LINE-HEIGHT: 11.4pt">
</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-LEFT: 5pt; LINE-HEIGHT: 11.4pt">The undersigned registrant hereby undertakes pursuant to Item 512 of Regulation S-K:To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:</div>

<div>
<table id="zcf8023263093486491acee4f910ec71b" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%; MARGIN-TOP: 5.9pt" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 32pt; VERTICAL-ALIGN: top; align: right">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-LEFT: 14pt; MARGIN-TOP: 5.9pt; LINE-HEIGHT: 11.4pt">(i)</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-TOP: 5.9pt; LINE-HEIGHT: 11.4pt">To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;</div>
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<div style="LINE-HEIGHT: 11.4pt"><br style="LINE-HEIGHT: 11.4pt">
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<div>
<table id="z14b25fe210ea4721a3e67f7c8a2f9140" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%; MARGIN-TOP: 2.65pt" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 32pt; VERTICAL-ALIGN: top; align: right">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-LEFT: 14pt; MARGIN-TOP: 2.65pt; LINE-HEIGHT: 11.85pt">(ii)</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-TOP: 2.65pt; LINE-HEIGHT: 11.85pt; TEXT-INDENT: 4pt">To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement.</div>
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<div>
<table id="z1e554a9d4fb04903adb4bdfe503510b9" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%; MARGIN-TOP: 2.05pt" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 32pt; VERTICAL-ALIGN: top; align: right">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-LEFT: 14pt; MARGIN-TOP: 2.05pt; LINE-HEIGHT: 14.1pt">(iii)</div>
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<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-TOP: 2.05pt; LINE-HEIGHT: 14.1pt">To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.</div>
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<div>
<table id="za12f82d2c0c0420eac0189a51a3fd9d9" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%; MARGIN-TOP: 2.3pt" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 23pt; VERTICAL-ALIGN: top; align: right">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-LEFT: 5pt; MARGIN-TOP: 2.3pt; LINE-HEIGHT: 14.25pt">(2)</div>
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<td style="VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-TOP: 2.3pt; LINE-HEIGHT: 14.25pt">That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.</div>
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<div>
<table id="z80598efb864d44258bd00777e0b1ffa8" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%; MARGIN-TOP: 6pt" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 23pt; VERTICAL-ALIGN: top; align: right">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-LEFT: 5pt; MARGIN-TOP: 6pt; LINE-HEIGHT: 14.25pt">(3)</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-TOP: 6pt; LINE-HEIGHT: 14.25pt">To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.</div>
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<div>
<table id="z79f57833d63f42b4af37bfd1fa3f7c6d" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%; MARGIN-TOP: 6pt" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 23pt; VERTICAL-ALIGN: top; align: right">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-LEFT: 5pt; MARGIN-TOP: 6pt; LINE-HEIGHT: 14.25pt">(4)</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-TOP: 6pt; LINE-HEIGHT: 14.25pt">That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.</div>
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</table>
</div>

<div>
<table id="z033affad1cc84027b15e5513860a2e60" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%; MARGIN-TOP: 6pt" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 23pt; VERTICAL-ALIGN: top; align: right">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-LEFT: 5pt; MARGIN-TOP: 6pt; LINE-HEIGHT: 14.25pt">(5)</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-TOP: 6pt; LINE-HEIGHT: 14.25pt">That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:</div>
</td>
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</table>
</div>

<div>
<table id="z053d35d8dfd549fbb681ea23e296d2fa" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%; MARGIN-TOP: 6pt" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 32pt; VERTICAL-ALIGN: top; align: right">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-LEFT: 14pt; MARGIN-TOP: 6pt; LINE-HEIGHT: 14.1pt">(i)</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-TOP: 6pt; LINE-HEIGHT: 14.1pt">Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;</div>
</td>
</tr>
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<div>
<table id="z4f2a258d70ea4fdd9263d861625577a6" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%; MARGIN-TOP: 2.3pt" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 32pt; VERTICAL-ALIGN: top; align: right">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-LEFT: 14pt; MARGIN-TOP: 2.3pt; LINE-HEIGHT: 14.1pt">(ii)</div>
</td>
<td style="WIDTH: auto; VERTICAL-ALIGN: top">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-TOP: 2.3pt; LINE-HEIGHT: 14.1pt; TEXT-INDENT: 4pt">Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;</div>
</td>
</tr>
</table>
</div>

<div>
<table id="z81330d97bff3421382e07cf62bab5c21" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%; MARGIN-TOP: 2.15pt" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 32pt; VERTICAL-ALIGN: top; align: right">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-LEFT: 14pt; MARGIN-TOP: 2.15pt; LINE-HEIGHT: 14.1pt">(iii)</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif; TEXT-ALIGN: left; MARGIN-TOP: 6.5pt; LINE-HEIGHT: 14.25pt">Insofar as indemnification for liability arising under the Securities Act of&#160; 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the registrant 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 the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant 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, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-LEFT: 5pt; LINE-HEIGHT: 12pt; MARGIN-RIGHT: 9.4pt">Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on this 15<font style="FONT-SIZE: 6.5pt; FONT-FAMILY: 'Times New Roman', serif">th </font>day of August, 2016.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-LEFT: 167.05pt; MARGIN-TOP: 6.25pt; LINE-HEIGHT: 11.4pt">ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK</div>

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<div style="TEXT-ALIGN: left; MARGIN-LEFT: 71.65pt; LINE-HEIGHT: 1pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">Walter R. White</font><font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 1px; WIDTH: 149.4pt; DISPLAY: inline-block">&#160;</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Chairman of the Board and Chief Executive Officer</font></div>

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<div style="TEXT-ALIGN: left; MARGIN-LEFT: 73.4pt; MARGIN-TOP: 0.5pt; LINE-HEIGHT: 11.4pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">William E. Gaumond</font><font id="TRGRRTFtoHTMLTab" style="FONT-SIZE: 1px; WIDTH: 149.4pt; DISPLAY: inline-block">&#160;</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Arial Narrow', sans-serif">Director, Chief Financial Officer and Treasurer</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', serif; TEXT-ALIGN: left; MARGIN-LEFT: 32.6pt; MARGIN-TOP: 0.25pt; LINE-HEIGHT: 11.4pt">Senior Counsel</div>

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[{"type": "S-1", "sequence": "1", "filename": "indadvadvnys1aug152016.htm", "description": "INDEX ADVANTAGE ADV NEW YORK S-1 AUG 15, 2016", "secsgml_size_bytes": 2816578}]
{"company-data": {"conformed-name": "ALLIANZ LIFE INSURANCE CO OF NEW YORK", "cik": "0000080019", "irs-number": "133191369", "state-of-incorporation": "NY", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-213126", "film-number": "161832139"}, "business-address": {"street1": "5701 GOLDEN HILLS DRIVE", "city": "GOLDEN VALLEY", "state": "MN", "zip": "55308", "phone": "800-950-5872"}, "mail-address": {"street1": "5701 GOLDEN HILLS DRIVE", "city": "GOLDEN VALLEY", "state": "MN", "zip": "55308"}, "former-company": {"former-conformed-name": "PREFERRED LIFE INSURANCE CO OF NEW YORK", "date-changed": "19951128"}}
As filed with the Securities and Exchange Commission on August 15, 2016
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
¾¾¾¾¾¾¾¾¾¾¾¾¾¾
FORM S-1 REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
¾¾¾¾¾¾¾¾¾¾¾¾¾¾
Allianz Life Insurance Company of New York
(Exact name of Registrant as specified in its charter)
New York
(State or other jurisdiction of incorporation or organization)
6311
(Primary Standard Industrial Classification Code Number)
13-3191369
(I.R.S. Employer
Identification No.)
One Chase Manhattan Plaza, 37th Floor, New York, New York 10005-1423 (212) 586-7733
(Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices)
Stewart D. Gregg, Esq.
Allianz Life Insurance Company of North America
5701 Golden Hills Drive Minneapolis, MN 55416
(763) 765-2913
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Approximate date of commencement of proposed sale to the public:
As soon as practicable after this registration statement becomes effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. [X]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
[   ]
Accelerated filer
[   ]
Non-accelerated filer
[X]
Smaller reporting company [    ] (Do not check if a smaller reporting company)
Calculation of Registration Fee
Title of each class of securities
to be registered
Amount to
be registered pursant to this Registration Statement
Proposed maximum offering price per unit
Proposed  maximum aggregate offering price including previously registered securities
Amount of aggregate
registration fee, including fee paid for previously registered securities
Individual Flexible Purchase Payment
Index-Linked Deferred  Annuity Contract
$1,000,000
(1)
NA
(2)
$300,000,000
(1)
$ 100.70
(1)
(1) To be updated upon pre-effective amendment.
(2) The proposed maximum offering price per unit is not applicable since these securities are not issued in predetermined amounts or units.
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 statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
PART I PROSPECTUS
ALLIANZ INDEX ADVANTAGE
ADV
SM
NEW YORK VARIABLE ANNUITY CONTRACT
Issued by Allianz Life
®
of NY Variable Account C and Allianz Life Insurance Company of New York
(Allianz Life
®
of New York, we, us, our)
Prospectus Dated: November 14, 2016
The information in this prospectus is not complete and may be changed. We cannot sell Allianz Index Advantage ADV New York Variable Annuity pursuant to this prospectus until the Registration Statement containing this prospectus filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell the Contract and is not soliciting an offer to buy the Contract in any state where the offer or sale is not permitted.
This prospectus describes an individual flexible purchase payment variable and index-linked deferred annuity contract (Contract). The Contract is designed to be used by purchasers who are working with a registered investment adviser. The Contract offers both variable investment options (Variable Options) and index-linked investment options (Index Options). (The Variable Options and the Index Options together are referred to as Allocation Options.) You can allocate your money (Purchase Payments) to any or all of the Variable Options or Index Options. The Contract also offers various standard annuity features, including multiple fixed annuitization options (Annuity Options), a free withdrawal privilege, and a guaranteed death benefit (Traditional Death Benefit). The Contract has a six-year withdrawal charge period.
If you allocate Purchase Payments to the Variable Options, the value of your investment (Variable Account Value) increases and decreases based on your selected Variable Options' performance.
The Variable Options do not provide any protection against loss of principal. You can lose money you allocate to the Variable Options.
Variable Options Currently Available
AZL
®
MVP Growth Index Strategy Fund
AZL
®
MVP Balanced Index Strategy Fund
AZL
®
Government Money Market Fund
If you allocate Purchase Payments to the Index Options, you receive annual returns (Performance Credits) based on the performance of one or more third-party broad based securities indices (Index or Indices). Unlike the Variable Options, the Index Options do not involve an indirect investment by you in any underlying fund and do not participate directly in the equity market.
Instead, Performance Credits are an obligation of Allianz Life of New York, and are subject to the claims paying ability of Allianz Life of New York. Performance Credits are calculated by us based on annual changes in the Index's value.
We currently offer two Index credit calculation methods (Crediting Methods). These are the
Index Performance Strategy
and
Index Protection NY Strategy
. Both Crediting Methods provide a combination of a credit that is calculated by reference to Index performance, a level of protection against negative Index performance, and a limit or Cap on participation in positive Index performance.
Indices Currently Available with Index Performance Strategy and Index Protection NY Strategy
S&P 500
®
Index
Russell 2000
®
Index
Nasdaq-100
®
Index
EURO STOXX 50
®
The
Index Performance Strategy
and
Index Protection NY Strategy
provide a positive Performance Credit based on positive Index Return (annual changes in Index value) subject to an upper limit called the Cap. If the Index Return is negative, you will receive a negative Performance Credit if the loss is greater than a specified percentage called the Buffer.
A negative Performance Credit means that you can lose money.
We can change the Caps at the beginning of each Index Year, but we establish the Buffers at the beginning of the first Contract Year and we cannot change them. The Caps and Buffers can be different depending on the Index Options you select. The values allocated to an Index Option may fluctuate between Index Anniversaries. We base interim values on a calculation called the Daily Adjustment, which reflects changes in Index Option Value resulting from Index performance. An Index Anniversary is a twelve-month anniversary of the Index start date (Index Effective Date) and is the date we apply Performance Credits.
You can lose money that you allocate to the Index Performance Strategy or the Index Protection NY Strategy if Index losses are greater than the Buffer. This loss could be significant. If money is withdrawn or removed from an Index Option before the Index Anniversary, you could lose principal even if the Index Return is positive on the date of withdrawal due to the application of the Daily Adjustment.
The two Crediting Methods have different risk and return potentials. The Index Performance Strategy has higher Caps in exchange for lower Buffers (i.e., in exchange for higher risk). The Index Protection NY Strategy provides more protection and has higher Buffers in exchange for lower Caps.
Allianz Index Advantage ADV
SM
New York Variable Annuity Prospectus – November 14, 2016
1
All guarantees under the Contract are the obligations of Allianz Life of New York and are subject to the claims paying ability of Allianz Life of New York.
The Contract involves certain risks, as described in section 1, Risk Factors on page 17 of this prospectus.
Please read this prospectus before investing and keep it for future reference. It contains important information about your annuity and Allianz Life of New York that you ought to know before investing. This prospectus is not an offering in any state, country, or jurisdiction in which we are not authorized to sell the Contracts. You should rely only on the information contained in this prospectus. We have not authorized anyone to give you different information.
Allianz Life of NY Variable Account C is the Separate Account that holds the assets allocated to the Variable Options. Additional information about the Separate Account has been filed with the Securities and Exchange Commission (SEC) and is available upon written or oral request without charge, or on the EDGAR database on the SEC's website (www.sec.gov). A Statement of Additional Information (SAI) dated the same date as this prospectus includes additional information about the annuity offered by this prospectus. The SAI is incorporated by reference into this prospectus. The SAI is filed with the SEC on Form N-4 and is available without charge by contacting us at the telephone number or address listed at the back of this prospectus. The SAI's table of contents appears after the Privacy and Security Statement in this prospectus. The prospectus, SAI and other Contract information are also available on the EDGAR database.
The SEC has not approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. An investment in this Contract is not a deposit of a bank or financial institution and is not federally insured or guaranteed by the Federal Deposit Insurance Corporation or any other federal government agency. An investment in this Contract involves investment risk including the possible loss of principal. Variable and index-linked annuity contracts are complex insurance and investment vehicles. Before you invest, be sure to ask your Financial Professional about the Contract's features, benefits, risks, and fees, and whether the Contract is appropriate for you based upon your financial situation and objectives.
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TABLE OF CONTENTS
Glossary
4
Summary
8
Who Should Consider Purchasing the Contract?
8
What Are the Contract's Charges?
8
What Are the Contract's Benefits?
9
What Are the Index-Linked Crediting Methods and How Do They Work?
9
How Can I Allocate My Purchase Payments?
11
What Are the Different Values Within the Contract?
11
How Do We Apply Performance Credits to the Index Options?
12
How Do the Caps and Buffers Affect My Contract's Potential Growth?
12
Can My Contract Lose Value Because of Negative Changes in an Index's Value?
12
Can I Transfer Index Option Value Between the Allocation Options?
12
How Can I Take Money Out of My Contract?
12
What Are My Annuity Options?
13
Does the Contract Provide a Death Benefit?
13
What If I Need Customer Service?
13
Fee Tables
14
Owner Transaction Expenses
14
Owner Periodic Expenses
14
Annual Operating Expenses of the Variable Options
15
Examples
16
Condensed Financial Information
16
1.
Risk Factors
17
Liquidity Risk
17
Risk of Investing in Securities
17
Risk of Negative Returns
17
Calculation of Performance Credits
18
Substitution of an Index
18
Changes to Caps and Notice of Buffers
19
Investment in Derivative Securities
19
Variable Option Risk
20
Our Financial Strength and Claims-Paying Ability
20
Regulatory Protections
20
2.
The Variable Annuity Contract
20
When The Contract Ends
21
3.
Ownership, Annuitants, Determining Life, Beneficiaries, and Payees
21
Owner
21
Joint Owner
21
Annuitant
21
Determining Life (Lives)
22
Beneficiary
22
Payee
22
Assignments, Changes of Ownership and Other Transfers of Contract Rights
23
4.
Purchasing the Contract
23
Purchase Requirements
23
Applications Sent Electronically
24
Allocation of Purchase Payments and Transfers Between the Allocation Options
24
Automatic Investment Plan (AIP)
25
Free Look/Right to Examine Period
25
5.
Variable Options
26
Substitution of Variable Options and Limitation on Further Investments
27
Transfers Between Variable Options
28
Electronic Transfer and Allocation Instructions
28
Excessive Trading and Market Timing
29
Financial Adviser Fees
30
Voting Privileges
31
6.
Valuing Your Contract
31
Accumulation Units
31
Computing Variable Account Value
32
7.
Index Options
32
Determining the Index Option Values
32
Optional Rebalancing Program
34
8.
Expenses
35
Product Fee
35
Contract Maintenance Charge
36
Withdrawal Charge
36
Transfer Fee
38
Premium Tax
38
Income Tax
38
Variable Option Expenses
38
9.
Access to Your Money
39
Free Withdrawal Privilege
39
Systematic Withdrawal Program
40
Minimum Distribution Program and Required Minimum Distribution (RMD) Payments
40
Waiver of Withdrawal Charge Benefit
40
Suspension of Payments or Transfers
41
10.
The Annuity Phase
41
Calculating Your Annuity Payments
41
Annuity Payment Options
41
When Annuity Payments Begin
42
11.
Death Benefit
42
Death of the Owner and/or Annuitant
43
Death Benefit Payment Options During the Accumulation Phase
44
12.
Taxes
45
Qualified and Non-Qualified Contracts
45
Taxation of Annuity Contracts
45
Tax-Free Section 1035 Exchanges
46
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13.
Other Information
46
The Registered Separate Account
46
Our General Account
47
Our Unregistered Separate Account
47
Distribution
47
Additional Credits for Certain Groups
48
Administration/Allianz Service Center
48
Legal Proceedings
49
Status Pursuant to Securities Exchange Act of 1934
49
14.
Information on Allianz Life of New York
50
Directors, Executive Officers and Corporate Governance
50
Executive Compensation
55
Security Ownership of Certain Beneficial Owners and Management
71
Transactions with Related Persons, Promoters and Certain Control Persons
71
Risks Associated with the Financial Services Industry
71
15.
Financial Statements
88
16.
Privacy Notice
89
17.
Table of Contents of the Statement of Additional Information (SAI)
90
Appendix A – Available Indices
91
Standard & Poor's 500 Index
91
Russell 2000
®
Index
92
Nasdaq-100
®
Index
92
EURO STOXX 50
®
93
Appendix B – Daily Adjustment
94
Appendix C – Unaudited Selected Financial Data and Financial Statements
95
Management's Discussion and Analysis of Financial Condition and Results of Operations (For the 12 month period ending June 30, 2016)
95
Unaudited Consolidated Financial Statements and Supplemental Schedules
95
Appendix D – Audited Selected Financial Data and Financial Statements
96
Management's Discussion and Analysis of Financial Condition and Results of Operations (For the 12 month period ending December 31, 2015)
96
Financial Statements and Supplemental Schedules
96
For Service or More Information
97
Our Service Center
97
GLOSSARY
This prospectus is written in plain English. However, there are some technical words or terms that are capitalized and are used as defined terms throughout the prospectus. For your convenience, we included this glossary to define these terms.
Accumulation Phase –
the initial phase of your Contract before you apply your Contract Value to Annuity Payments. The Accumulation Phase begins on the Issue Date.
Allocation Options –
the Variable Options and Index Options available to you under the Contract.
Annuitant –
the individual upon whose life we base the Annuity Payments. Subject to our approval, the Owner designates the Annuitant, and can add a joint Annuitant for the Annuity Phase.
There are restrictions on who can become an Annuitant.
Annuity Date
– the date we begin making Annuity Payments to the Payee from the Contract.
Annuity Options –
the annuity income options available to you under the Contract.
Annuity Payments –
payments made by us to the Payee pursuant to the chosen Annuity Option.
Annuity Phase
– the phase the Contract is in once Annuity Payments begin.
Beneficiary
–the person(s) the Owner designates to receive any death benefit, unless otherwise required by the Contract or applicable law.
Buffer
– the negative Index Return that Allianz Life of New York absorbs before applying a negative Performance Credit. We declare Buffers for each Index Option on the Issue Date. Buffers do not change after the Issue Date.
Business Day
– each day on which the New York Stock Exchange is open for trading, except, with regard to a specific Variable Option, when that Variable Option does not value its shares. Allianz Life of New York is open for business on each day that the New York Stock Exchange is open. Our Business Day closes when regular trading on the New York Stock Exchange closes, which is usually at 4:00 p.m. Eastern Time.
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Cap
– the maximum amount of positive Index Return that you can receive as a positive Performance Credit. We declare Caps for each Index Option on the Index Effective Date and each Index Anniversary. The Caps are shown on the Index Options Statement.
Charge Base
– the Contract Value on the preceding Quarterly Contract Anniversary (or the initial Purchase Payment received on the Issue Date if this is before the first Quarterly Contract Anniversary), adjusted for subsequent Purchase Payments and withdrawals. We use the Charge Base to determine the next product fee we deduct.
Contract
– the individual flexible purchase payment variable and index-linked deferred annuity contract described by this prospectus.
Contract Anniversary
– a twelve-month anniversary of the Issue Date or any subsequent Contract Anniversary.
Contract Value
– on any Business Day, the sum of your Index Option Value(s) and Variable Account Value. The Contract Value does not include any currently applicable withdrawal charge, final product fee, or final contract maintenance charge. The Variable Account Value component of the Contract Value fluctuates each Business Day. The Index Option Value component of the Contract Value is adjusted on each Index Anniversary to reflect Performance Credits, which can be negative.
A negative Performance Credit means that you can lose money.
The Index Option Values also reflect the Daily Adjustment on every Business Day other than the Index Anniversary.
Contract Year
– any period of twelve months beginning on the Issue Date or a subsequent Contract Anniversary.
Crediting Method
– a method we use to calculate annual Performance Credits if you allocate money to an Index Option.
Daily Adjustment
– the change in the market value of an Index Option as discussed in section 7, Index Options and Appendix B. We use the Daily Adjustment to calculate the Index Option Values on each Business Day during the Index Year other than the Index Effective Date or Index Anniversary. The Daily Adjustment can affect the values available for withdrawals, annuitizations, death benefits, and the Contract Value used to determine the Charge Base and contract maintenance charge.
Determining Life (Lives)
– the person(s) designated at Contract issue and named in the Contract on whose life we base the guaranteed Traditional Death Benefit.
Financial Professional
– the person who advises you regarding the Contract. A Financial Professional may be a securities registered representative and/or a registered investment advisory representative.
Good Order –
a request is in "Good Order" if it contains all of the information we require to process the request. If we require information to be provided in writing, "Good Order" also includes providing information on the correct form, with any required certifications, guarantees and/or signatures, and received at our Service Center after delivery to the correct mailing, email, or website address, which are all listed at the back of this prospectus. If you have questions about the information we require, or whether you can submit certain information by fax, email or over the web, please contact our Service Center. If you send information by email or upload it to our website, we send you a confirmation number that includes the date and time we received your information.
Index (Indices)
– one (or more) of the third-party broad based securities indexes available to you under your Contract.
Index Anniversary
– a twelve-month anniversary of the Index Effective Date or any subsequent Index Anniversary. If an Index Anniversary does not occur on a Business Day, we consider it to occur on the next Business Day for the purposes of declaring Caps, determining Index values and Index Returns, and applying Performance Credits.
Index Effective Date
– the date shown on the Index Options Statement that starts the first Index Year. When you purchase this Contract you select the Index Effective Date as discussed in section 4, Purchasing the Contract – Allocation of Purchase Payments and Transfers Between the Allocation Options.
Index Option
– the combination of an Index and a Crediting Method to which you can allocate money.
Index Option Base
– an amount we use to calculate Performance Credits and the Daily Adjustment. The Index Option Base is equal to the amounts you allocate to an Index Option adjusted for withdrawals, Contract expenses, transfers into or out of the Index Option, and the application of any Performance Credits.
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Index Option Value
– on any Business Day it is equal to the value in an Index Option. We establish an Index Option Value for each Index Option you select. Each Index Option Value includes any Performance Credits from previous Index Anniversaries and the deduction of any previously assessed contract maintenance charge, product fee, and withdrawal charge. On each Business Day during the Index Year other than the Index Effective Date or an Index Anniversary, each Index Option Value also includes the Daily Adjustment.
Index Options Statement
– an account statement we mail to you on the Index Effective Date and each Index Anniversary thereafter. On the Index Effective Date, the statement shows the Index values, and the Caps that are initially declared on the Index Effective Date. On each Index Anniversary, the statement shows the new Index values, and the Caps that are effective for the next year.
Index Performance Strategy
– one of the Index Crediting Methods available to you under the Contract described in section 7, Index Options. The Index Performance Strategy calculates Performance Credits based on Index Returns subject to a Cap and Buffer. You can receive negative Performance Credits,
which means you can lose principal
.
The Index Performance Strategy provides more performance potential than the Index Protection NY Strategy as it has higher Caps in exchange for lower Buffers.
Index Protection NY Strategy
– one of the Index Crediting Methods available to you under the Contract
described in section 7, Index Options
. The Index Protection NY Strategy calculates Performance Credits based on Index Returns subject to a Cap and Buffer. You can receive negative Performance Credits under this Crediting Method,
which means you can lose principal
. The Index Protection NY Strategy provides more protection than the Index Performance Strategy as it has higher Buffers in exchange for lower Caps.
Index Return
– a calculation we use to determine the Performance Credits on each Index Anniversary. The Index Return is an Index's current value, minus its value on the last Index Anniversary (or the Index Effective Date if this is the first Index Anniversary), divided by the Index's value on the last Index Anniversary (or the Index Effective Date if this is the first Index Anniversary).
Index Year
– any period of twelve months beginning on the Index Effective Date or a subsequent Index Anniversary.
Issue Date
– the date shown on the Contract that starts the first Contract Year. Contract Anniversaries and Contract Years are measured from the Issue Date. We must receive your initial Purchase Payment and all necessary information before we issue the Contract.
Joint Owners
– two Owners who own a Contract.
Lock Date
– the Business Day we process your request to lock in an Index Option Value (a Performance Lock) before the Index Anniversary.
Non-Qualified Contract
– a Contract that is not purchased under a pension or retirement plan qualified for special tax treatment under sections of the Internal Revenue Code.
Owner
– "you," "your" and "yours." The person(s) or entity designated at Contract issue and named in the Contract who may exercise all rights granted by the Contract.
Payee
– the person or entity who receives Annuity Payments during the Annuity Phase.
Performance Lock
– a feature that allows you to lock in each of your current Index Option Values before the Index Anniversary. A Performance Lock applies to the total Index Option Value in an Index Option, and not just a portion of that Index Option Value. After the Lock Date, Daily Adjustments do not apply for the remainder of the Index Year and the Index Option Value will not receive a Performance Credit on the next Index Anniversary.
Performance Credit
– the credit we apply on the Index Anniversary to each Index Option. We base Performance Credits on Index Returns limited by the Cap or Buffer. Performance Credits can be negative,
which means that you can lose money
.
Proxy Investment
– an investment tracking mechanism we establish that is structured as a hypothetical set of call and put options designed to provide the same returns as the Performance Credits on an Index Anniversary. We use the Proxy Investment to calculate the Daily Adjustment between Index Anniversaries. For more information, see Appendix B.
Proxy Value
– the value of the Proxy Investment for an Index Option used to calculate the Daily Adjustment as discussed in Appendix B.
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Purchase Payment
– the money you put into the Contract.
Qualified Contract
– a Contract purchased under a pension or retirement plan qualified for special tax treatment under sections of the Internal Revenue Code (for example, 401(a) and 401(k) plans), Individual Retirement Annuities (IRAs), or Tax-Sheltered Annuities (referred to as TSA or 403(b) contracts). Currently, we issue Qualified Contracts that may include, but are not limited to Roth IRAs, Traditional IRAs and Simplified Employee Pension (SEP) IRAs. We may also issue an Inherited IRA and Inherited Roth IRA to make any required minimum distribution payments to a beneficiary of a previously held tax-qualified arrangement.
Quarterly Contract Anniversary –
the day that occurs three calendar months after the Issue Date or any subsequent Quarterly Contract Anniversary.
Separate Account
– Allianz Life of NY Variable Account C is the Separate Account that issues the variable investment portion of your Contract. It is a separate investment account of Allianz Life of New York. The Separate Account holds the Variable Options that underlie the Contracts. The Separate Account is divided into subaccounts, each of which invests exclusively in a single Variable Option. The Separate Account is registered with the SEC as a unit investment trust, and may be referred to as the Registered Separate Account.
Service Center
– the area of our company that issues Contracts and provides Contract maintenance and routine customer service. Our Service Center address and telephone number are listed at the back of this prospectus. The address for mailing applications and/or checks for Purchase Payments may be different and is also listed at the back of this prospectus.
Traditional Death Benefit
– the death benefit provided by the Contract that is equal to the greater of
Contract Value (after deduction of the final product fee),
or total Purchase Payments adjusted for withdrawals.
Valid Claim
– the documents we require to be received in Good Order at our Service Center before we pay any death claim. This includes the death benefit payment option, due proof of death, and any required governmental forms. Due proof of death includes a certified copy of the death certificate, a decree of court of competent jurisdiction as to the finding of death, or any other proof satisfactory to us.
Variable Account Value
– on any Business Day, the sum of the values in your selected Variable Options. The Variable Account Value includes the deduction of the Variable Option operating expenses, and any previously assessed transfer fee, contract maintenance charge, product fee, and withdrawal charge.
Variable Options
– the variable investments available to you under the Contract. Variable Option performance is based on the securities in which they invest.
Withdrawal Charge Basis
– the total amount under your Contract that is subject to a withdrawal charge as discussed in section 8, Expenses – Withdrawal Charge.
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SUMMARY
The Allianz Index Advantage ADV New York Variable Annuity is a variable and index-linked annuity product. When you purchase a Contract, you tell us how to allocate your money. You can select any or all of the available Variable Options and Index Options. Your allocations must be in whole percentages and we only allow allocations to the Index Options once each Index Year. An Index Year is a twelve month-period beginning on the Index Effective Date and each subsequent Index Anniversary. You can only reallocate money from the Index Options to the Variable Options on every sixth Index Anniversary. If you allocate money to the Variable Options offered through the Contract, the value of your investment (Variable Account Value) increases and decreases based on your selected Variable Options performance.
If you allocate money to an Index Option, we calculate an annual return or Performance Credit, on each Index Anniversary. The Performance Credit is based on the change in value of one or more nationally recognized third-party broad based securities Indices. Performance Credits may be positive, zero, or, in some instances, negative. There is a Cap on positive Performance Credits, there is also a Buffer on negative Performance Credits, but there is no protection for negative Performance Credits for losses greater than the Buffer. Once we issue your Contract we can change the Caps annually. We establish the Buffers on the date we issue the Contract (Issue Date) and we cannot change them. For newly issued Contracts, we publish any changes to the Buffers and Caps at least seven calendar days before they take effect on our website at www.allianzlife.com/iaadvnyrates, or call (800) 624-0197.
You can lose money that you allocate to the Index Options if Index losses are greater than the Buffer. The Index Performance Strategy and Index Protection NY Strategy include a risk of potential loss of principal and this loss could be significant. If money is withdrawn or removed from an Index Option before the Index Anniversary, you could lose principal even if the Index Return is positive on the date of withdrawal.
On each Business Day during the Index Year other than the Index Effective Date or Index Anniversary, the Index Option Values change for Index performance through the Daily Adjustment. A Business Day is any day the New York Stock Exchange is open, except, with regard to a specific Variable Option, when that Variable Option does not value its shares. The Daily Adjustment is meant to approximate the Index Option Value on the next Index Anniversary, as adjusted for gains during the Index Year subject to the Cap and losses greater than the Buffer.
Even if the current Index Return during the Index Year is positive, or losses are within the Buffer, the Daily Adjustment may be negative until the Index Anniversary. This means you could receive reduced principal even if the Index Return is positive on that day.
The Contract has two phases: the Accumulation Phase and the Annuity Phase. During the Accumulation Phase your Contract Value (the total of your Variable Account Value and all Index Option Values) fluctuates based on the returns of your selected Variable Options and Index Options. During the Accumulation Phase you can add Purchase Payments to your Contract, take withdrawals, and we pay a death benefit if you die.
The Accumulation Phase of your Contract ends and the Annuity Phase starts once you begin Annuity Payments. You can take Annuity Payments based on your Contract Value as discussed in section 10, The Annuity Phase.
Who Should Consider Purchasing the Contract?
We designed the Contract for people who are looking for a level of protection for their principal while providing potentially higher returns than are available on traditional fixed annuities. This Contract is not intended for someone who is seeking complete protection from downside risk.
What Are the Contract's Charges?
The Contract includes a product fee, contract maintenance charge, transfer fee, and contingent withdrawal charge. These fees and charges are discussed in more detail in section 8, Expenses.
We assess a 0.25% annualized product fee. The fee is deducted quarterly during the Accumulation Phase while your Contract Value is positive. We calculate and accrue the fee on a daily basis as a percentage of the Charge Base. The Charge Base is the Contract Value on the preceding Quarterly Contract Anniversary (or the initial Purchase Payment received on the Issue Date if this is before the first Quarterly Contract Anniversary), adjusted for subsequent Purchase Payments and withdrawals. A Quarterly Contract Anniversary is the day that occurs three calendar months after the Issue Date or any subsequent Quarterly Anniversary.
We assess a $50 contract maintenance charge annually, but we waive this charge if your Contract Value is at least $100,000.
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We assess a $25 transfer fee for each transfer in excess of 12 between the Variable Options in a Contract Year. A Contract Year is any period of twelve months beginning on the Issue Date or a subsequent Contract Anniversary (a twelve-month anniversary of the Issue Date).
The withdrawal charge is calculated based upon Purchase Payments. The withdrawal charge period applies separately to each Purchase Payment. The withdrawal charge starts at 6.5% and decreases to zero after we have had a Purchase Payment for six complete years. During the period that the withdrawal charge applies, if you withdraw more than is allowed under the free withdrawal privilege, we may deduct a withdrawal charge. (See section 9, Access to Your Money – Free Withdrawal Privilege.)
Contract charges and pro-rata fees are assessed on any full or partial withdrawal from either the Variable Options or the Index Options as discussed in more detail in section 8, Expenses.
What Are the Contract's Benefits?
The Contract offers a variety of variable and index-linked Allocation Options, each with different return and risk characteristics. The Contract has a free withdrawal privilege that allows you to withdraw up to 10% of your total Purchase Payments from your Contract each Contract Year during the Accumulation Phase without incurring a withdrawal charge. The Contract includes a waiver of withdrawal charge benefit that allows you to take money out of the Contract without incurring a withdrawal charge if you are confined to a nursing home for a period of time. Keep in mind that if you withdraw money from an Index Option on any day other than an Index Anniversary, we apply the Daily Adjustment when calculating your Index Option Value for the withdrawal, even if the withdrawal is not subject to a withdrawal charge. The Contract has several Annuity Options which can provide guaranteed income for life, or life and term certain. (For more information see section 9, Access to Your Money and section 10, The Annuity Phase.) We also pay a death benefit to your Beneficiary(s) if you die before Annuity Payments begin.
What Are the Index-Linked Crediting Methods and How Do They Work?
The Contract offers two Index Crediting Methods: the
Index Performance Strategy
and
Index Protection NY Strategy.
Both of these Crediting Methods are described in more detail in section 7, Index Options.
The two methods both provide a positive Performance Credit if the Index Return is positive, adjusted by an upper limit called the Cap. The Index Return is an Index's value on the current Index Anniversary, minus its value on the last Index Anniversary (or the Index Effective Date if this is the first Index Anniversary), divided by the Index's value on the last Index Anniversary (or the Index Effective Date if this is the first Index Anniversary). If the Index Return is negative, you will receive a negative Performance Credit if the loss is greater than a specified percentage called the Buffer.
A negative Performance Credit means that you can lose money.
If the Index Return is negative, but the loss is less than or equal to the Buffer, your Performance Credit is zero. We can change the Caps annually, but we establish the Buffers on the Issue Date and we cannot change them. The Caps and Buffers can be different depending on the Index Options you select. Caps may change frequently, and may vary substantially based on market conditions.
For information on the Caps and Buffers we currently offer for newly issued Contracts, see our website at www.allianzlife.com/iaadvnyrates, or call (800) 624-0197. For newly issued Contracts, we publish any changes to the Caps and Buffers on our website at least seven calendar days before they take effect. Buffers may change before we issue your Contract and Caps may change before your Index Effective Date. The minimum Cap is 1.5% for the entire time you own your Contract. The minimum Buffer is 5%. Your actual Buffers are stated in your Contract and cannot change after the Issue Date. We inform you of the initial Caps for your Contract in the Index Options Statement, which we mail to you on the Index Effective Date and each Index Anniversary. The Index Options Statement also includes the Index values on the Index Effective Date and each subsequent Index Anniversary. We use these Index values to determine the Index Return and Performance Credits.
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Caps can be adjusted each year, in our discretion. We will send you a letter at least 30 days before each Index Anniversary. This letter advises you that your current Caps are expiring on the upcoming Index Anniversary, and the renewal Caps for the next Index Year will be available for your review in your account on our website at least seven calendar days before the upcoming Index Anniversary. We also have a link to your Contract information with your renewal Caps on our website at www.allianzlife.com/iaadvnyrates. Your Index Options Statement that we mail on each Index Anniversary will include the actual renewal Caps you received for the current Index Year. The Index Anniversary letter also reminds you of your opportunity to transfer Contract Value from the Variable Options to the Index Options, or rebalance your Index Option Values, on the upcoming anniversary. We must receive your transfer instructions in Good Order at our Service Center by the end of the last Business Day before your Index Anniversary. If we do not receive transfer instructions from you, your Index Option Value will remain allocated to your existing Index Options at the renewal Caps.
The two Crediting Methods have different risk and return potentials. The Index Performance Strategy provides more performance potential than the Index Protection NY Strategy as it has higher Caps in exchange for lower Buffers. The Index Protection NY Strategy provides more protection as it has higher Buffers in exchange for lower Caps.
The Index Performance Strategy Caps will always be greater than the Index Protection NY Strategy Caps. The Index Performance Strategy Buffers will always be less than the Index Protection NY Strategy Buffers.
NOTE:
·
Caps may be different for newly issued Contracts and for inforce Contracts, even if the Contracts have Index Effective Dates with the same month and day. The initial Caps for newly issued Contracts may be higher or lower than the renewal Caps for inforce Contracts. However, all inforce Contracts with Index Effective Dates in the same date range will receive the same renewal Caps.
For example, if on January 1, 2019 we declared initial and renewal Caps for the Index Performance Strategy Index Option using the S&P 500
®
Index for Contracts with Index Effective Dates of January 7 through February 3, these Caps might hypothetically be as follows: 13% for newly issued Contracts, 14% for inforce Contracts issued in 2018, and 12% for inforce Contracts issued in 2017.
·
If your Contract is still within its Free Look/Right to Examine period, you may be able to take advantage of any increase in initial Caps for newly issued Contracts by cancelling your existing Contract and purchasing a new Contract.
Caps will vary depending upon a variety of factors, including our hedging strategies and investment performance, your Index Effective Date, and the level of interest rates and volatility on your Index Effective Date and on Index Anniversaries. Caps may be different for new Contracts and for inforce Contracts that have reached an Index Anniversary and are receiving a current renewal rate, and may also be different for Contracts with the same Index Anniversaries that were issued in different years. Caps are also higher for the Index Performance Strategy compared to the Index Protection NY Strategy.
While initial and renewal Caps may be affected by a variety of factors including, for example, a change in the current level of interest rates, the effect of a change in interest rates or other market conditions on the Caps may not be direct or immediate. There may be a lag in changes to Caps. In a rising interest rate environment, increases in Caps, if any, may be substantially slower than increases in interest rates.
(For more information see section 7, Index Options.)
We cannot eliminate or modify the two Crediting Methods; however, we can adjust the amount of the Caps each Index Year. We can replace an Index as described in section 1, Risk Factors – Substitution of an Index. We can add new Crediting Methods to your Contract in the future, and you can select these Crediting Methods if they are made available to you.
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How Can I Allocate My Purchase Payments?
You can allocate your Purchase Payments to any or all of the available Allocation Options in whole percentages. We only allow allocations to the Index Options on the Index Effective Date and on subsequent Index Anniversaries. The Index Effective Date starts the first Index Year and is shown on the Index Options Statement. An Index Anniversary is a twelve-month anniversary of the Index Effective Date, or any subsequent Index Anniversary. An Index Year is any period of twelve months beginning on the Index Effective Date or a subsequent Index Anniversary. You can only reallocate money from the Index Options to the Variable Options on every sixth Index Anniversary.
NOTE:
If you allocate an additional Purchase Payment to the Index Options, we place that allocation in the AZL Government Money Market Fund until the next Index Anniversary, when we transfer the allocations from the AZL Government Money Market Fund to the Index Options. Additional Purchase Payments that we receive after the Index Effective Date that you allocate to an Index Option are not eligible to receive Performance Credits until the second Index Anniversary after we receive them because they are not applied to the Index Option until the next Index Anniversary.
What Are the Different Values Within the Contract?
The Contract provides the following values.
·
The Contract Value is the sum of your Variable Account Value and total Index Option Values. Contract Value does not include any currently applicable withdrawal charge, final product fee, or final contract maintenance charge that we assess on a full withdrawal or when you request Annuity Payments.
·
The Variable Account Value is the sum of the values in your selected Variable Options. It includes the deduction of Variable Option operating expenses, and any previously assessed transfer fee, contract maintenance charge, product fee, and withdrawal charge. Your Variable Account Value changes daily based on the performance of your selected Variable Options.
·
The total Index Option Value is the sum of the values in each of your selected Index Options. Each Index Option Value includes any Performance Credits from previous Index Anniversaries and the deduction of any previously assessed contract maintenance charge, product fee, and withdrawal charge. On each Business Day during the Index Year other than the Index Effective Date or an Index Anniversary, we calculate the current Index Option Value for each Index Option by applying a Daily Adjustment to the Index Option Base (which is the amount you allocate to an Index Option adjusted for withdrawals, Contract expenses, transfers into or out of the Index Option, and the application of any Performance Credits). We calculate the Daily Adjustment before we process any partial withdrawal or deduct any Contract expenses, and the adjustment can be positive or negative. Any amounts removed from an Index Option during the Index Year
do not
receive a Performance Credit on the next Index Anniversary, but the amount remaining does receive a Performance Credit subject to the Cap and Buffer.
On each Business Day during the Index Year other than the Index Effective Date or Index Anniversary, the Index Option Values change for Index performance through the Daily Adjustment. The Daily Adjustment is meant to approximate the Index Option Value on the next Index Anniversary, as adjusted for gains during the Index Year subject to the Cap and losses greater than the Buffer. The application of the Daily Adjustment is based on your agreement to be exposed to Index Anniversary gains in Index value subject to the Cap and losses in Index value greater than the Buffer. The Daily Adjustment does this by tracking the hypothetical value of a Proxy Investment (called the Proxy Value) each Business Day other than an Index Anniversary using the formula in Appendix B. The Proxy Investment is designed to return the same amount as the Index Option on an Index Anniversary (an amount equal to the Performance Credit as determined using the applicable Cap and Buffer). Between Index Anniversaries, the Proxy Investment provides a current estimate of what the Index value gain or loss would be if the investment were held until the Index Anniversary. The actual value of the relevant Index is not used in the Daily Adjustment calculation. The Daily Adjustment does not give you the actual Index return on the day of the calculation.
When the Daily Adjustment is positive, your Index Option Value has increased since the beginning of the year; when it is negative, your Index Option Value has decreased (excluding the effect of any partial withdrawal or the deduction of Contract expenses). The Daily Adjustment is generally negatively affected by increases in the expected volatility of index prices, interest rate decreases, and by poor market performance. All other factors being equal, even if the current Index Return during the Index Year is greater than the Cap, the Daily Adjustment will be lower than the Cap during the Index Year and will not be equal to the Cap until the next Index Anniversary.
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For more information see section 6, Valuing Your Contract, section 7, Index Options, and Appendix B. The specific details of the Daily Adjustment formula are described in Appendix B and in Exhibit 99(a) of the Form S-1 Registration Statement filed with the SEC, of which this prospectus is a part. This information is incorporated by reference into this prospectus. You can obtain a copy of Exhibit 99(a) by calling (800) 624-0197.
How Do We Apply Performance Credits to the Index Options?
We calculate and apply Performance Credits on the Index Anniversary based on the Index Returns. Positive Performance Credits are not guaranteed. Performance Credits can be zero or negative after application of the Buffer.
You can lock in the current Index Option Value on any Business Day during the Index Year by requesting a Performance Lock. You can request a lock once each Index Year for each of your selected Index Options. A Performance Lock applies to the total Index Option Value (including any Daily Adjustment) in an Index Option, and not just a portion of that Index Option Value. After the Business Day we process your request to lock in an Index Option Value (Lock Date), Daily Adjustments do not apply for the remainder of the Index Year and the Index Option Value will not receive a Performance Credit on the next Index Anniversary.
NOTE REGARDING WITHDRAWALS DURING THE INDEX YEAR:
Amounts removed from the Index Options during the Index Year for partial withdrawals and Contract expenses receive the Daily Adjustment, but do not receive a Performance Credit on the next Index Anniversary. However, the remaining amount is eligible for a Performance Credit, subject to the Cap and Buffer.
Contract expenses include the product fee, the contract maintenance charge and any applicable withdrawal charge.
How Do the Caps and Buffers Affect My Contract's Potential Growth?
The Index Performance Strategy and Index Protection NY Strategy involve both a Cap and a Buffer. The Cap limits your ability to receive positive index-linked returns, and the Buffer limits the impact of negative returns. We set the Buffers on the Issue Date and the initial Caps on the Index Effective Date. We declare new Caps on each Index Anniversary. The Caps do not change during the Index Year. The Caps cannot be less than 1.5% for the entire time you own your Contract.
The Buffers do not change after the Issue Date. The Buffers cannot be less than 5%.
For newly issued Contracts, we publish any changes to the Buffers and Caps at least seven calendar days before they take effect on our website at www.allianzlife.com/iaadvnyrates, or call (800) 624-0197.
Can My Contract Lose Value Because of Negative Changes in an Index's Value?
If you select an Index Option your Contract can lose value due to negative Index Returns.
These losses could be significant.
Can I Transfer Index Option Value Between the Allocation Options?
On each Index Anniversary you can transfer Variable Account Value to the available Index Options and you can reallocate your Index Option Values. On every sixth Index Anniversary you can transfer Index Option Value to the Variable Options. At the end of the six-year term, we allow you to transfer all of the money in the Index Options to the Variable Options, even if a portion of that money was added after the start of the six-year term, and has been allocated to the Index Options for less than six years.
How Can I Take Money Out of My Contract?
You can take money out of your Contract by taking withdrawals, required minimum distributions or Annuity Payments. You can withdraw money from either the Variable Options or the Index Options. Amounts withdrawn from an Index Option on any day other than an Index Anniversary do not receive a Performance Credit, but they do receive the Daily Adjustment on the day of the withdrawal.
A withdrawal before an Index Anniversary from an Index Option may not receive the full benefit of the Cap or Buffer. This occurs because the Daily Adjustment calculation takes into account what may potentially happen between the withdrawal date and the next Index Anniversary. As a result, even if the Index Return is above the Cap, the Daily Adjustment may be less than the Cap, because there is a possibility that the Index Return could decrease before the end of the Index Year. Similarly, even though a negative Index Return may be within the amount of the Buffer, the Owner (person(s) designated at Contract issue who may exercise all rights granted by the Contract – "you," "your," and "yours"
)
still may receive a negative Daily Adjustment (i.e., lose money) because there is a possibility that the Index Return could decrease before the end of the Index Year.
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If you withdraw more than is allowed by the free withdrawal privilege we may assess a withdrawal charge. Under the waiver of withdrawal charge benefit you can take a one-time withdrawal from your Contract after the first Contract Anniversary without incurring a withdrawal charge if you are confined to a nursing home for a period of at least 90 consecutive days. If you take required minimum distributions from a Contract that qualifies for special tax treatment under sections of the Internal Revenue Code (Qualified Contract) to pay required minimum distribution amounts owing with regard to the Contract, these distributions are not subject to a withdrawal charge. However, required minimum distributions reduce the amount available under the free withdrawal privilege.
When we process a withdrawal from an Index Option on a day other than an Index Anniversary we determine the proper amount to deduct by calculating the Index Option Value using the Daily Adjustment. For more information see section 9, Access to Your Money.
What Are My Annuity Options?
The Contract includes several Annuity Options that can provide fixed life, or fixed life and term certain Annuity Payments. The designated individual(s) upon whose life we base Annuity Payments are the Annuitant(s). For more information see section 10, The Annuity Phase.
Does the Contract Provide a Death Benefit?
The Contract provides a guaranteed Traditional Death Benefit based on the greater of Contract Value or total Purchase Payments adjusted for withdrawals. The Traditional Death Benefit is a first-to-die death benefit based on the life of the person(s) designated at Contract issue (Determining Life). The Determining Life (or Lives) is either the Owner(s) or the Annuitant if the Owner is a non-individual. We establish the Determining Lives at Contract issue and they generally do not change unless there is a divorce or you establish a Trust. If you change Owners or the Annuitant after the Issue Date, upon death of the Owner, the person(s) designated to receive the death benefit (Beneficiary(s)) may only receive the Contract Value. For more information see section 3, Ownership, Annuitants, Determining Life, Beneficiaries, and Payees and section 11, Death Benefit.
What If I Need Customer Service?
If you need customer service (for Contract changes, information on Contract Values, requesting a withdrawal or transfer, changing your allocation instructions, etc.) please contact our Service Center at (800) 624-0197. You can also contact us by mail at Allianz Life Insurance Company of New York, P.O. Box 561, Minneapolis, MN 55440-0561.
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FEE TABLES
These tables describe the fees and expenses you pay when purchasing, owning and taking a withdrawal from the Contract, or transferring Contract Value between Allocation Options. For more information, see section 8, Expenses.
OWNER TRANSACTION EXPENSES
Withdrawal Charge During Your Contract's Initial Phase, the Accumulation Phase
(1)
(as a percentage of each Purchase Payment withdrawn)
(2)
Number of Complete Years Since Purchase Payment
Withdrawal Charge Amount
0
6.5%
1
6%
2
5%
3
4%
4
2%
5
1%
6 years or more
0%
Transfer Fee
(3)
………………………………….....................................................
$
25
(for each transfer between Variable Options after twelve in a Contract Year)
Premium Tax
(4)
…………………………………………………………………….…
3.5
%
(as a percentage of each Purchase Payment)
OWNER PERIODIC EXPENSES
Contract Maintenance Charge
(5)
……………………………………………….....
$
50
(per Contract per year)
(1)
The Contract provides a free withdrawal privilege that allows you to withdraw 10% of your total Purchase Payments annually without incurring a withdrawal charge, as discussed in section 9, Access to Your Money – Free Withdrawal Privilege.
(2)
The Withdrawal Charge Basis is the amount subject to a withdrawal charge, as discussed in section 8, Expenses – Withdrawal Charge.
(3)
We count all transfers made in the same Business Day as one transfer, as discussed in section 8, Expenses – Transfer Fee. The transfer fee does not apply to transfers to or from the Index Options and these transfers do not count against your free transfers. Transfers are subject to the market timing policies discussed in section 5, Variable Options – Excessive Trading and Market Timing.
(4)
New York does not currently impose this tax, but we reserve the right to deduct this charge if they do so in the future. This is the current maximum charge we would deduct, as discussed in section 8, Expenses – Premium Tax.
(5)
Waived if the Contract Value is at least $100,000, as discussed in section 8, Expenses – Contract Maintenance Charge.
CONTRACT ANNUAL EXPENSES
Product Fee
(6)
………………………………….......
0.25%
(as a percentage of the Charge Base)
(6)
We do not assess the product fee during the Annuity Phase. See section 8, Expenses – Product Fee.
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ANNUAL OPERATING EXPENSES OF THE VARIABLE OPTIONS
Following are the minimum and maximum total annual operating expenses charged by any of the Variable Options for the period ended December 31, 2015, before the effect of any contractual expense reimbursement or fee waiver. We show the expenses as a percentage of a Variable Option's average daily net assets.
The Index Options do not assess any separate operating expenses, and are not included in the following chart.
Minimum
Maximum
Total annual Variable Option operating expenses
(including management fees, distribution or 12b‑1 fees, and other expenses)
before fee waivers and expense reimbursements
0.65%
0.73%
The table below describes, in detail, the annual expenses of the Variable Options before fee waivers and/or expense reimbursements. We show the expenses as a percentage of a Variable Option's average daily net assets for the most recent calendar year. Expenses may vary in current and future years. The investment advisers for the Variable Options provided the fee and expense information and we did not independently verify it. See the Variable Options' prospectuses for further information regarding the expenses you may expect to pay. Some of the Variable Options or their affiliates may also pay service fees to us or our affiliates. If these fees are deducted from Variable Option assets, they are reflected in the table below.
Variable Option
Management fees
Rule 12b‑1 fees
Other expenses
Acquired fund fees and expenses
Total annual fund operating expenses before fee waivers and/or expense reimbursements
BLACKROCK
AZL Government Money Market Fund
.35
.25
.05
–
.65
ALLIANZ FUND OF FUNDS
AZL MVP Balanced Index Strategy Fund
(1)
.10
–
.04
.59
.73
AZL MVP Growth Index Strategy Fund
(1)
.10
–
.02
.57
.69
(1)
The underlying funds may pay 12b‑1 fees to the distributor of the Contracts for distribution and/or administrative services. The underlying funds do not pay service fees or 12b‑1 fees to the Allianz Fund of Funds and the Allianz Fund of Funds do not pay service fees or 12b‑1 fees. The underlying funds of the Allianz Fund of Funds may pay service fees to the insurance companies issuing variable contracts, or their affiliates, for providing customer service and other administrative services to contract purchasers. The amount of such service fees may vary depending on the underlying fund.
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EXAMPLES
These examples are intended to help you compare the cost of investing in this Contract's Variable Options with the costs of other variable annuity contracts. These examples assume you make a $10,000 investment and your Variable Options earn a 5% annual return. They are not a representation of past or future expenses. Your Contract expenses may be more or less than the examples below, depending on the Variable Options you select and whether and when you take withdrawals.
We deduct the $50 contract maintenance charge in the examples on each Contract Anniversary during the Accumulation Phase (or the next Business Day if the Contract Anniversary is not a Business Day). We may waive this charge under certain circumstances, as described in section 8, Expenses – Contract Maintenance Charge. We deduct the annual product fee (maximum charge of 0.25%) in the examples on each Quarterly Contract Anniversary during the Accumulation Phase, as described in section 8, Expenses – Product Fee. A transfer fee may apply, but is not reflected in these examples (see section 8, Expenses – Transfer Fee).
1)
If you surrender your Contract (take a full withdrawal) at the end of each time period.
Total annual Variable Option operating expenses
before any fee waivers or expense reimbursements of:
1 Year
3 Years
5 Years
10 Years
0.73% (the maximum Variable Option operating expense)
$
735
$
910
$
965
$
1,672
0.65% (the minimum Variable Option operating expense)
$
727
$
885
$
922
$
1,581
2)
If you annuitize your Contract and begin Annuity Payments at the end of each time period. The earliest available Annuity Date (the date Annuity Payments begin) is 13 months after the Issue Date (the date we issue the Contract).
Total annual Variable Option operating expenses
before any fee waivers or expense reimbursements of:
1 Year
3 Years
5 Years
10 Years
0.73% (the maximum Variable Option operating expense)
-
$
410
$
735
$
1,622
0.65% (the minimum Variable Option operating expense)
-
$
385
$
692
$
1,531
3)
If you do not surrender your Contract.
Total annual Variable Option operating expenses
before any fee waivers or expense reimbursements of:
1 Year
3 Years
5 Years
10 Years
0.73% (the maximum Variable Option operating expense)
$
150
$
460
$
785
$
1,672
0.65% (the minimum Variable Option operating expense)
$
142
$
435
$
742
$
1,581
As of December 31, 2015, no Contracts offered by this prospectus had been sold. Therefore, we have not included any condensed financial information for the Variable Options. We will provide condensed financial information when it becomes available.
CONDENSED FINANCIAL INFORMATION
The financial statements of Allianz Life Insurance Company of New York are included in Appendix D of this prospectus, and the financial statements of Allianz Life of NY Variable Account C are included in Part C of the Form N-4 Registration Statement.
Accumulation unit value (AUV) information for the Contract offered by this prospectus, as of the end of December 31, 2015, is listed in the table below. This information should be read in conjunction with the financial statements and related notes of the Separate Account included in Part C of the Form N-4 Registration Statement.
(Number of Accumulation Units in thousands)Period or Year Ended
AUV at Beginning of Period
AUV at End of Period
Number of Accumulation Units Outstanding at End of Period
AZL Government Money Market Fund
12/31/2014
NA
12.755
124
12/31/2015
12.755
12.756
249
AZL MVP Balanced Index Strategy Fund
12/31/2014
NA
12.956
13
12/31/2015
12.956
12.927
60
AZL MVP Growth Index Strategy Fund
12/31/2014
NA
14.280
8
12/31/2015
14.280
14.165
29
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1.
RISK FACTORS
The Contract involves certain risks that you should understand before purchasing. You should carefully consider your income needs and risk tolerance to determine whether the Contract is appropriate for you. The level of risk you bear and your potential investment performance will differ depending on the Allocation Options you choose.
LIQUIDITY RISK
We designed the Contract to be a long-term investment that you can use to help build and provide income for retirement. The Contract is not suitable for short-term investment. If you need to take money from your Contract during the withdrawal charge period, we deduct a withdrawal charge unless the withdrawal is specifically not subject to this charge (for example, the amount allowed under the free withdrawal privilege). We calculate the withdrawal charge as a percentage of your Purchase Payments, not Contract Value. Consequently, if the Contract Value has declined since you made a Purchase Payment it is possible the percentage of Contract Value withdrawn to cover the withdrawal charge would be greater than the withdrawal charge percentage. For example, assume you buy the Contract with a single Purchase Payment of $1,000. If your Contract Value in the 5th year is $800 and you take a full withdrawal a 2% withdrawal charge applies. The total withdrawal charge would be $20 (2% of $1,000). This results in you receiving $780.
Deduction of the withdrawal charge, product fee, and contract maintenance charge may result in loss of principal and Performance Credits. We only apply Performance Credits once each Index Year on the Index Anniversary, rather than on a daily basis. In the interim, we calculate Index Option Values based on the Daily Adjustment, which may result in you not receiving the full benefit of the Index Returns, Caps and Buffers if, before the Index Anniversary, you take a withdrawal or annuitize the Contract, or if we pay a death benefit. While the free withdrawal privilege and required minimum distributions provide liquidity, they permit limited withdrawals and are designed to be used over a number of years. If you need to withdraw most or all of your Contract Value in a short period, this will exceed the charge-free amounts available to you and result in a withdrawal charge. Amounts withdrawn from this Contract may also be subject to a 10% additional federal tax if taken before age 59½.
You can transfer Contract Value from an Index Option to a Variable Option only on every sixth Index Anniversary. At other times, you can only withdraw money from an Index Option by taking partial withdrawals or surrendering the Contract. This may limit your ability to react to changes in market conditions. Amounts withdrawn from an Index Option before the Index Anniversary may not receive the full benefit of the Buffer. You should consider whether investing in an Index Option is consistent with your financial needs.
RISK OF INVESTING IN SECURITIES
Returns on securities and securities Indexes can vary substantially, which may result in investment losses. The historical performance of the available Allocation Options does not guarantee future results. It is impossible to predict whether underlying investment values will fall or rise. Trading prices of the securities underlying the Allocation Options are influenced by economic, financial, regulatory, geographic, judicial, political and other complex and interrelated factors. These factors can affect capital markets generally and markets on which the underlying securities are traded and these factors can influence the performance of the underlying securities.
RISK OF NEGATIVE RETURNS
If you allocate money to the Variable Options, returns will fluctuate and may be negative. You can lose money.
If you allocate money to the Index Performance Strategy or Index Protection NY Strategy, Index fluctuations may cause Performance Credits to be negative after application of the Buffer. You can incur a loss, which could be significant.
If money is withdrawn or removed from an Index Option before the Index Anniversary, you could lose principal even if the Index Return is positive on the date of withdrawal.
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If you select the Index Performance Strategy or Index Protection NY Strategy we calculate each of your Index Option Values on each Business Day during the Index Year by applying the Daily Adjustment. The Daily Adjustment affects the calculation of Index Option Values we use to calculate Contract Value between Index Anniversaries, and it affects the Contract Value available for withdrawal, annuitization, death benefits, and the Contract Value used to determine the Charge Base and contract maintenance charge. The Daily Adjustment may result in a loss even if Index performance has been positive since the beginning of the Index Year. The Contract Value as adjusted by the Daily Adjustment may also be less than you would have received as a Performance Credit on the next Index Anniversary. The Daily Adjustment is generally negatively affected by increases in the expected volatility of Index prices, interest rate decreases, and by poor market performance. All other factors being equal, even if the current Index Return during the Index Year is greater than the Cap, the Daily Adjustment will be lower than the Cap during the Index Year and will not be equal to the Cap until the next Index Anniversary.
Even if the current Index Return during the Index Year is positive, or losses are within the Buffer, the Daily Adjustment may be negative until the Index Anniversary. This means you could receive reduced principal even if the Index Return is positive on that day.
CALCULATION OF PERFORMANCE CREDITS
We calculate Performance Credits each Index Year on the Index Anniversary. The Caps on the Index Performance Strategy and Index Protection NY Strategy limit upward performance and could cause your returns to be lower than they would otherwise have been if you invested in a mutual fund or exchange traded fund designed to track the performance of the applicable Index, or if you allocated to the Variable Options.
The Index Options do not directly participate in the returns of the Indices' underlying securities, and do not receive any dividends payable on these securities. Index returns would be higher if they included the dividends from the underlying securities. Over the past ten years the actual Index returns without dividends and the returns if dividends for the underlying securities had been included would have been as follows:
January 1, 2006 through December 31, 2015
S&P 500
®
Index
Nasdaq-100
®
Index
Russell 2000
®
Index
EURO STOXX 50
®
Returns without dividends
6.86%
13.72%
7.40%
1.26%
Returns with dividends
9.11%
14.97%
8.82%
5.37%
Caps may be adjusted annually on the Index Anniversary and may vary significantly from year to year. Changes to Caps may significantly affect the amount of Performance Credit you receive. (For more information, see the "Changes to Caps and Notice of Buffers" discussion later in this section.)
The Crediting Methods only capture Index values on one day each year, so you will bear the risk that the Index value might be abnormally low on these days.
SUBSTITUTION OF AN INDEX
There is no guarantee that the Indices will be available during the entire time that you own your Contract. If we substitute a new Index for an existing Index, the performance of the new Index may be different and this may affect your ability to receive positive Performance Credits. We may substitute a new Index for an existing Index if:
·
the Index is discontinued,
·
we are unable to use the Index because, for example, changes to an Index make it impractical or expensive to purchase derivative securities to hedge the Index, or we are not licensed to use the Index, or
·
the method of calculation of the Index values changes substantially, resulting in significantly different values and performance results. This could occur, for example, if an Index altered the types of securities tracked, or the weighting of different categories of securities.
If we add or substitute an Index, unless the Index has been discontinued, we first seek regulatory approval (from each applicable state insurance regulator) and then provide you with written notice. We also provide you with written notice if an Index changes its name. Substitutions of an Index may occur during an Index Year. If we substitute an Index, this does not cause a change in the Buffers, current Charge Base, or current Caps. Changes, if any, occur at the next regularly scheduled Index Anniversary. Depending on the constitution of the substituted Index, the volatility of its investments, and our ability to hedge the Index's performance, we may determine for the next Index Year, in our discretion, that a higher or lower Cap may be appropriate. However, we would not implement any change to reflect this difference until the next Index Anniversary after the substitution. This may result in an abnormally large change in the Daily Adjustment on the day we substitute the Index.
The selection of a substitution Index is in our discretion; however, it is anticipated that any substitute Index will be substantially similar to the Index it is replacing and we will replace any equity Index with a broad-based equity index.
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CHANGES TO CAPS AND NOTICE OF BUFFERS
We determine the Buffers on the Issue Date. We determine the initial Caps on the Index Effective Date. We publish Buffers and Caps for newly issued Contracts at least seven calendar days before they take effect on our website at www.allianzlife.com/iaadvnyrates, or call (800) 624-0197.
We can change the renewal Caps as frequently as annually and they are effective on Index Anniversaries. The renewal Caps may be adjusted up or down, or they may stay the same. The Buffers you receive are stated in your Contract and do not change after the Issue Date. Renewal Caps are available for your review in your account on our website at least seven calendar days before each Index Anniversary. We send you a letter at least 30 days in advance of each Index Anniversary notifying you of your upcoming anniversary. When the renewal Caps are set on the Index Anniversary, you have the option of staying in your current Index Option or moving to another permitted Allocation Option, subject to the limitations on transferring from an Index Option to a Variable Option.
If you do not review information regarding renewal Caps when they are published, or take no action to move to another permitted Allocation Option, you stay in your current Index Options and automatically become subject to any new Caps. You will be subject to the new Caps until the next Index Anniversary.
You risk the possibility that the renewal Caps you receive may be less than you would find acceptable. If you do not find the renewal Caps acceptable, you must give us notice no later than the Index Anniversary (or the next Business Day if the anniversary is not a Business Day) and request to move your money on the Index Anniversary or you will be subject to these renewal Caps for the next Index Year. Other than on a sixth Index Anniversary when you can move money from the Index Options to the Variable Options, when your Caps change the only option available to your is to move your money between the Index Options. We will inform you of the renewal Caps applicable to your Contract in your annual Index Options Statement.
Caps may vary significantly from year to year. There are a variety of factors that may affect Caps including market volatility, the price and availability of hedging instruments, the level of interest rates, utilization of Contract benefits by Owners, and our profitability goals.
We manage our obligation to provide Performance Credits in part by trading call and put options, and other derivatives on the available Indices. The costs of the call and put options and other derivatives vary based on market conditions, and we may adjust future renewal Caps to reflect these cost changes. The primary factor affecting the differences in the initial new business Caps and renewal Caps for inforce Contracts is the difference in what we can earn from these investments for new business versus what we are earning on the investments that were made, and are being held to maturity, for inforce Contracts. In some instances we may need to reduce the Caps for new business and inforce Contracts, or we may need to replace an Index on the Contract. You bear the risk that we may reduce the Caps, which reduces your opportunity to receive positive Performance Credits. You also bear the risk that the Buffers we declare on the Issue Date are small, which increases the risk that you could receive negative Performance Credits.
For more information about how we set Buffers and Caps, see the "What Are the Index-Linked Crediting Methods and How Do They Work?" discussion in the Summary section of this prospectus.
INVESTMENT IN DERIVATIVE SECURITIES
The Index Options are supported by bonds and other fixed income securities used to support the Contract guarantees, cash, and derivative hedging instruments used to hedge the movements of the applicable Index.
At Contract issue, we invest a substantial majority of the initial Contract Value allocated to the Index Options in fixed income securities, with most of the remainder invested in derivative hedging securities. The derivative securities are purchased to track and hedge Index movements and support our obligations with regard to the Index Options. The derivative securities we purchase include put options, call options, futures, swaps, and other derivatives.
The Index Performance Strategy and Index Protection NY Strategy move assets in the unregistered separate account between a book value subaccount and a market value subaccount during the Index Year based on Index performance. We typically transfer assets between the subaccounts if there is a 10% incremental change in year-to-date Index performance. For the Index Performance Strategy this starts at a -10% decrease in the market; for the Index Protection NY Strategy, this starts at a -30% decrease in the market. We monitor year-to-date Index performance daily and change allocations daily if needed based on this 10% increment. For more information on our unregistered separate account backing the Index Performance Strategy and Index Protection NY Strategy, see section 13, Other Information – Our Unregistered Separate Account.
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We currently limit our purchase of derivative securities to liquid securities. However, like many types of derivative securities, these securities may be volatile and their price may vary substantially. In addition, because we pay Performance Credits regardless of the performance of derivative securities we purchase, we may incur losses on hedging mismatches or errors in hedging. Our experience with hedging securities may affect new business rates for Buffers and Caps, and may also affect renewal Caps.
Certain Variable Options may also invest in derivative securities. For more information on these investments, see the Variable Option prospectuses.
VARIABLE OPTION RISK
The Variable Options do not provide any protection against loss of principal. You can lose some or all of the money you allocate to the Variable Options.
OUR FINANCIAL STRENGTH AND CLAIMS-PAYING ABILITY
We make Annuity Payments and apply Performance Credits from our general account. Our general account assets are subject to claims by our creditors, and any payment we make from our general account is subject to our financial strength and claims-paying ability. The assets in our unregistered separate account, Separate Account IANY, are also subject to claims by our creditors. You can obtain information on our financial condition by reviewing our financial statements in this prospectus.
REGULATORY PROTECTIONS
Allianz Life of New York is not an investment company and therefore we are not registered as an investment company under the Investment Company Act of 1940, as amended, and the protections provided by this Act are not applicable to the guarantees we provide. The Separate Account is, however, registered as an investment company. Any allocations you make to an Index Option are not part of the Separate Account. Allianz Life of New York is not an investment adviser and so is not subject to the Investment Advisers Act of 1940, and does not provide investment advice to you in connection with your Contract.
Your Contract is registered in accordance with the Securities Act of 1933 and the offering of the Contract must be conducted in accordance with the requirements of this Act. In addition, the offer and sale of the Contract is subject to the provisions of the Securities Exchange Act of 1934.
The Contract is filed with and approved by New York. State insurance laws provide a variety of regulatory protections.
2.
THE VARIABLE ANNUITY CONTRACT
An annuity is a contract between you as the Owner, and an insurance company (in this case Allianz Life of New York), where you make payments to us and the money is invested in Allocation Options available through the Contract. Depending on market conditions, your Contract may gain or lose value based on the returns of your selected Allocation Options. When you are ready to take money out, we make payments to you according to your instructions and any restrictions associated with the payout option you select that is described in this prospectus. We do not make any changes to your Contract without your permission except as may be required by law.
The Contract has an Accumulation Phase and an Annuity Phase.
The
Accumulation Phase
is the first phase of your Contract, and it begins on the Issue Date. During the Accumulation Phase, your money is invested in the Allocation Options you select on a tax-deferred basis. Tax deferral means you are not taxed on any earnings or appreciation on the assets in your Contract until you take money out of your Contract. (For more information, see section 12, Taxes.)
During the Accumulation Phase you can take withdrawals (subject to any withdrawal charge) and you can make additional Purchase Payments subject to the restrictions set out in section 4, Purchasing the Contract – Purchase Requirements.
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The Accumulation Phase ends upon the earliest of the following.
·
The Business Day before the Annuity Date.
·
The Business Day we process your request for a full withdrawal.
·
Upon the death of any Owner (or the Annuitant if the Contract is owned by a non-individual), the Business Day we first receive the documents we require before we pay any death claim (Valid Claim) from any one Beneficiary, unless the surviving spouse/Beneficiary continues the Contract. If there are multiple Beneficiaries, the remaining Contract Value continues to fluctuate with the performance of the Allocation Options until the complete distribution of the death benefit.
If you request Annuity Payments, your Contract enters the
Annuity Phase
. During the Annuity Phase we make regular fixed periodic payments (Annuity Payments) based on the life of a person you choose (the Annuitant), or life and term certain. We send Annuity Payments to you (the Payee). You can choose when Annuity Payments begin (the Annuity Date), subject to certain restrictions. We base Annuity Payments on your Contract Value and the payout rates for the Annuity Option you select. Your Annuity Payments do not change unless an Annuitant dies. The Annuity Phase ends when we make the last Annuity Payment under your selected Annuity Option. For more information, see section 10, The Annuity Phase.
WHEN THE CONTRACT ENDS
The Contract ends when:
·
all applicable phases of the Contract (Accumulation Phase and/or Annuity Phase) have ended, and/or
·
if we received a Valid Claim, all applicable death benefit payments have been made.
For example, if you purchase a Contract and later take a full withdrawal of the total Contract Value, both the Accumulation Phase and the Contract end even though the Annuity Phase never began and we did not make any death benefit payments.
3.
OWNERSHIP, ANNUITANTS, DETERMINING LIFE, BENEFICIARIES, AND PAYEES
OWNER
You, as the Owner, have all the rights under the Contract. The Owner is designated at Contract issue. The Owner may be a non-individual, which is anything other than an individual person, and could be a trust, qualified plan, or corporation. Qualified Contracts can only have one Owner.
JOINT OWNER
A Contract that is not qualified pursuant to a specialized provision of the Internal Revenue Code (Non-Qualified Contract) can be owned by up to two individual Owners (Joint Owners). We generally require the signature of both Joint Owners on any forms that are submitted to our Service Center.
ANNUITANT
The Annuitant is the individual on whose life we base Annuity Payments. Subject to our approval, you designate an Annuitant when you purchase a Contract. For Qualified Contracts, before the Annuity Date the Owner must be the Annuitant unless the Contract is owned by a qualified plan or is part of a custodial arrangement. You can change the Annuitant on an individually owned Non-Qualified Contract at any time before the Annuity Date, but you cannot change the Annuitant if the Owner is a non-individual (for example, a qualified plan or trust). Subject to our approval, you can add a joint Annuitant on the Annuity Date. For Qualified Contracts, the ability to add a joint Annuitant is subject to any plan requirements associated with the Contract. For jointly owned Contracts, if an Annuitant who is not also an Owner dies before the Annuity Date, the younger Owner automatically becomes the new Annuitant, but the Owner can subsequently name another Annuitant.
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Designating different persons as Owner(s) and Annuitant(s) can have important impacts on whether a death benefit is paid, and on who receives it as indicated below.
For more examples, please see the Appendix to the SAI.
Use care when designating Owners and Annuitants, and consult your Financial Professional if you have questions.
UPON THE DEATH OF A SOLE OWNER
Action if the Contract is in the Accumulation Phase
Action if the Contract is in the Annuity Phase
·
We pay a death benefit to the person you designate (the Beneficiary) unless the Beneficiary is the surviving spouse and continues the Contract.
·
The Beneficiary becomes the Payee. If we are still required to make Annuity Payments under the selected Annuity Option, the Beneficiary also becomes the new Owner.
·
If the deceased was not an Annuitant, Annuity Payments to the Payee continue. No death benefit is payable.
·
If the deceased Owner was the Determining Life and the surviving spouse Beneficiary continues the Contract, we increase the Contract Value to equal total Purchase Payments adjusted for withdrawals (if greater), the Traditional Death Benefit ends, the surviving spouse becomes the new Owner, and the Accumulation Phase continues. If the deceased Owner was not the Determining Life the Traditional Death Benefit is not available.
·
If the deceased was the only surviving Annuitant, Annuity Payments end or continue as follows.
–
Annuity Option 1  or 3, payments end.
–
Annuity Option 2 or 4, payments end when the guarantee period ends.
–
Annuity Option 5,  payments end and the Payee may receive a lump sum refund.
·
If the deceased was an Annuitant and there is a surviving joint Annuitant, Annuity Payments to the Payee continue during the lifetime of the surviving joint Annuitant. No death benefit is payable.
·
Upon the surviving spouse's death, his or her Beneficiary(s) receives the Contract Value.
DETERMINING LIFE (LIVES)
The Determining Life (Lives) are the individuals on whose life we base the guaranteed Traditional Death Benefit. We establish the Determining Life (Lives) at Contract issue and they generally do not change. For an individually owned Contract the Determining Life (Lives) are the Owner(s). For a non-individually owned Contract the Determining Life is the Annuitant. After the Issue Date the Determining Life (Lives) only change as follows:
·
If you remove a Joint Owner due to divorce we also remove that person as a Determining Life, or
·
If you establish a jointly owned Non-Qualified Contract and change ownership to a Trust, we remove the prior Owner who is not the Annuitant as a Determining Life.
BENEFICIARY
The Beneficiary is the person(s) or entity you designate at Contract issue to receive any death benefit. You can change the Beneficiary or contingent Beneficiary at any time before your death unless you name an irrevocable Beneficiary. If a Beneficiary dies before you, or you and a Beneficiary die simultaneously, that Beneficiary's interest in this Contract ends unless your Beneficiary designation specifies otherwise. You and a Beneficiary are deemed to have died simultaneously if it is not established by clear and convincing evidence that either you or the Beneficiary survived the other by 120 hours. If there are no surviving Beneficiaries or if there is no named Beneficiary, we pay the death benefit to your estate or the Owner if the Owner is a non-individual.
NOTE FOR JOINTLY OWNED CONTRACTS:
The sole primary Beneficiary is the surviving Joint Owner regardless of any other named Beneficiaries. If both Joint Owners die simultaneously, we pay the death benefit to the named contingent Beneficiaries, or equally to the estate of the Joint Owners if there are no named contingent Beneficiaries.
PAYEE
The Payee is the person or entity who receives Annuity Payments during the Annuity Phase. The Owner receives tax reporting on those payments. Generally we require the Payee to be an Owner. However, you can name a charitable trust, financial institution, qualified plan, or an individual specified in a court order as a Payee. For Qualified Contracts owned by a qualified plan, the qualified plan must be the Payee.
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ASSIGNMENTS, CHANGES OF OWNERSHIP AND OTHER TRANSFERS OF CONTRACT RIGHTS
You can assign your rights under this Contract to someone else during the Accumulation Phase. An assignment may be absolute or limited, and includes changes of ownership, collateral assignments, or any other transfer of specific Contract rights. After an assignment, you may need the consent of the assignee of record to exercise certain Contract rights depending on the type of assignment and the rights assigned.
You must submit your request to assign the Contract in writing to our Service Center and we must approve it in writing. Upon receipt of your request in Good Order, we record the assignment. We are not responsible for the validity or effect of the assignment. We are not liable for any actions we take or payments we make before we receive your request in Good Order and record it. A request is in "Good Order" when it contains all the information we require to process it. Assigning the Contract does not change, revoke or replace the originally named Annuitant or Beneficiary; if you also want to change the Annuitant or Beneficiary you must make a separate request.
An assignment may be a taxable event.
In addition, there are other restrictions on changing the ownership of a Qualified Contract and Qualified Contracts generally cannot be assigned absolutely or on a limited basis.
You should consult with your tax adviser before assigning this Contract.
NOTE:
An assignment does not change the Determining Life (Lives), but it may remove a person as a Determining Life.
The Traditional Death Benefit is only available on the death of a Determining Life. If you assign the Contract and the Determining Life (Lives) are no longer an Owner (or Annuitant if the Owner is a non-individual) the Traditional Death Benefit may not be available to your Beneficiary(s).
4.
PURCHASING THE CONTRACT
PURCHASE REQUIREMENTS
To purchase this Contract, all Owners and the Annuitant must be age 80 or younger on the Issue Date.
The Purchase Payment requirements for this Contract are as follows.
·
The minimum initial Purchase Payment due on the Issue Date is $10,000.
·
You can make additional Purchase Payments of $50 or more during the Accumulation Phase.
·
We do not accept additional Purchase Payments on or after the Annuity Date.
·
The maximum total Purchase Payments we accept is $1 million.
We may, at our sole discretion, waive the minimum Purchase Payment requirements.
Once we receive your initial Purchase Payment and all necessary information in Good Order at our Service Center, we issue the Contract within two Business Days and allocate your payment to your selected Allocation Options. If you do not give us all of the information we need, we contact you or your Financial Professional. If for some reason we are unable to complete this process within five Business Days, we either send back your money or get your permission to keep it until we get all of the necessary information. If you make additional Purchase Payments, we add this money to your Contract on the Business Day we receive it in Good Order. Our Business Day closes when regular trading on the New York Stock Exchange closes.
If you submit a Purchase Payment and/or application to your Financial Professional, we do not begin processing the payment and/or application until we receive it. A Purchase Payment is "received" when it arrives at our Service Center from the address for mailing checks listed at the back of this prospectus regardless of how or when you submitted them. We forward Purchase Payments we receive at the wrong address to the last address listed at the back of this prospectus, which may delay processing.
We can only decline a Purchase Payment if it would cause total Purchase Payments to be more than $1 million, or if it would otherwise violate the Purchase Payment restrictions of your Contract (for example, we do not allow additional Purchase Payments on or after the Annuity Date). If mandated under applicable law, we may be required to reject a Purchase Payment.
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APPLICATIONS SENT ELECTRONICALLY
We accept manually signed applications that are in Good Order and are sent by fax, or email, or uploaded to our website. It is important to verify receipt of any faxed application, or to receive a confirmation number when using email or the web. We are not liable for applications that we do not receive. A manually signed application sent by fax, email or over the web is considered the same as an application delivered by mail. Our electronic systems (fax, email or website) may not always be available; any electronic system can experience outages or slowdowns which may delay application processing. Although we have taken precautions to help our system handle heavy use, we cannot promise complete reliability. If you experience problems, please submit your written application by mail to our Service Center.
We
reserve
the right to discontinue or modify our electronic application policy at any time and for any reason.
ALLOCATION OF PURCHASE PAYMENTS AND TRANSFERS BETWEEN THE ALLOCATION OPTIONS
You can allocate your Purchase Payments to the available Allocation Options. At issue we collect Index Effective Date allocation instructions. You must allocate your money to the Allocation Options in whole percentages. If an Index Option is chosen at issue, then the future Purchase Payment allocation instructions for the portion allocated to the Index Options will be to the AZL Government Money Market Fund until the next Index Anniversary unless you give us alternate instructions.
We only allow allocations (both Purchase Payments and transfers of Contract Value) into the Index Options on the Index Effective Date and on subsequent Index Anniversaries. We only allow you to move money between Index Options on an Index Anniversary. You cannot move money from one Index Option to another mid-year. When you purchase this Contract you select the Index Effective Date. The Index Effective Date can be any Business Day from the Issue Date up to and including the first Quarterly Anniversary. However, it cannot be the 29th, 30th or 31st of a month, and it must be a Business Day. If the Index Effective Date would occur on the 29th, 30th or 31st of a month, or on a day that is not a Business Day, we change the Index Effective Date to be the next available Business Day.
On each Index Anniversary, if we have not received new allocation instructions from you, all monies invested in an Index Option continue to be invested in that option at the renewal Caps.
We place any Purchase Payments you allocate to an Index Option that we receive before the Index Effective Date or the next Index Anniversary, as applicable, in the AZL Government Money Market Fund. Then on the Index Effective Date, we rebalance your Contract Value among your selected Allocation Options according to your Index Effective Date allocation instructions. We only allow transfers of Index Option Value from the Index Options to the Variable Options on every sixth Index Anniversary. At the end of the six-year term, we allow you to transfer all of the money in the Index Options to the Variable Options, even if a portion of that money was added after the start of the six-year term, and has been allocated to the Index Options for less than six years. A request to transfer Index Option Value to the Variable Options on a sixth Index Anniversary will automatically cancel any prior transfer instructions you gave to us regarding moving Variable Account Value to the Index Options. We must receive all transfer instructions in Good Order at our Service Center by 4 p.m. Eastern Time on the Index Anniversary (or the next Business Day if the Index Anniversary is not a Business Day).
You can instruct us on how to allocate additional Purchase Payments, but we do not allow you to invest additional Purchase Payments in Index Options until the next Index Anniversary. If you do not instruct us on how to allocate an additional Purchase Payment, we allocate it according to your future Purchase Payment allocation instructions. The allocation instructions you provide us at issue automatically become your future Purchase Payment allocation instructions until you give us different instructions. However,
if those instructions include allocations to the Index Options, we place those allocations in the AZL Government Money Market Fund until the next Index Anniversary, when we transfer the allocations from the AZL Government Money Market Fund to the Index Option.
We notify you at least 30 days in advance of each Index Anniversary as a reminder that you may transfer Contract Value from the Variable Options to the Index Options on the upcoming anniversary.
Contract Value transfers between Allocation Options do not change your future allocation instructions.
For more information, see section 5, Variable Options – Electronic Transfer and Allocation Instructions.
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You can change your future allocation instructions at any time without fee or penalty. Future allocation instruction changes are effective on the Business Day we receive them in Good Order at our Service Center.
We accept changes to future allocation instructions from any Owner unless you instruct otherwise. We may allow you to authorize someone else to change allocation instructions on your behalf.
NOTE:
Variable Options are subject to market risk and money allocated to them may lose value before it can be transferred into the Index Options. Additional Purchase Payments that we receive after the Index Effective Date that you allocate to an Index Option are not eligible to receive Performance Credits until the second Index Anniversary after we receive them because they are not applied to the Index Option until the next Index Anniversary.
AUTOMATIC INVESTMENT PLAN (AIP)
The AIP makes additional Purchase Payments to the Variable Options during the Accumulation Phase on a monthly or quarterly basis by electronic money transfer from your savings, checking or brokerage account. You can participate in AIP by completing our AIP form. Our Service Center must receive your form in Good Order by the 15th of the month (or the next Business Day if the 15th is not a Business day) in order for AIP to begin that same month. We process AIP Purchase Payments on the 20th of the month, or the next Business Day if the 20th is not a Business Day. We allocate AIP Purchase Payments according to your future allocation instructions which must comply with the allocation requirements and restrictions stated in this section. AIP has a maximum of $1,000 per month. We must receive your request to stop or change AIP at our Service Center by 4 p.m. Eastern Time on the Business Day immediately before the Business Day we process AIP to make the change that month. If you choose to begin Annuity Payments, AIP ends automatically on the Business Day before the Annuity Date. We reserve the right to discontinue or modify
AIP at any time and for any reason.
NOTE:
For Owners of Qualified Contracts, AIP is not available if your Contract is funding a plan that is tax qualified under Section 401 of the Internal Revenue Code. AIP is also not available if your Contract is an Inherited IRA or Inherited Roth IRA.
FREE LOOK/RIGHT TO EXAMINE PERIOD
If you change your mind about owning the Contract, you can cancel it within ten days after receiving it. We return your Contract Value as of the day we receive your cancellation request. This may be more or less than your initial Purchase Payment. If you have an IRA Qualified Contract, we refund your Purchase Payments less withdrawals, or Contract Value less withdrawal charges, if greater. For IRA Qualified Contracts, we reserve the right to allocate your initial Purchase Payment to the AZL Government Money Market Fund until the free look period ends, and then re-allocate your money, less fees and charges, according to your future Purchase Payment allocation instructions. If we do this, we return the greater of Purchase Payments less withdrawals, or Contract Value. In the Contract, the free look provision is also called the right to examine.
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5.
VARIABLE OPTIONS
The following table lists this Contract's Variable Options and their associated investment advisers and subadvisers, investment objectives, and primary investments. Depending on market conditions, you can gain or lose value by investing in the Variable Options. In the future, we may add, eliminate or substitute Variable Options to the extent permitted by the federal securities laws and, when required, the SEC.
You should read the Variable Options' prospectuses carefully.
The Variable Options invest in different types of securities and follow varying investment strategies. There are potential risks associated with each of these types of securities and investment strategies. The operation of the Variable Options and their various risks and expenses are described in the Variable Options' prospectuses. We send you the current copy of the Variable Options' prospectus when we issue the Contract.
(You can also obtain the current Variable Options' prospectus by contacting your Financial Professional or calling us at the toll-free telephone number listed at the back of this prospectus.)
Currently, the Variable Options are not publicly traded mutual funds. They are available only as Variable Options in variable annuity contracts or variable life insurance policies issued by life insurance companies or in some cases, through participation in certain qualified pension or retirement plans. A material conflict of interest may arise between insurance companies, owners of different types of contracts, and retirement plans or their participants. Each Variable Option's Board of Directors monitors for material conflicts, and determines what action, if any, should be taken.
The names, investment objectives and policies of certain Variable Options may be similar to the names, investment objectives and policies of other portfolios managed by the same investment advisers. Although the names, objectives and policies may be similar, the Variable Options' investment results may be higher or lower than these other portfolios' results. The investment advisers cannot guarantee, and make no representation, that these similar funds' investment results will be comparable even though the Variable Options have the same names, investment advisers, objectives, and policies.
Each Variable Option offered by the Allianz Variable Insurance Products Fund of Funds Trust (Allianz VIP Fund of Funds Trust) is a "fund of funds" and diversifies its assets by investing primarily in shares of several other affiliated mutual funds.
The Variable Options may pay 12b‑1 fees to the Contracts' distributor, our affiliate, Allianz Life Financial Services, LLC, for distribution and/or administrative services. In addition, we may enter into certain arrangements under which we, or Allianz Life Financial Services, LLC, are compensated by the Variable Options' advisers, distributors and/or affiliates for administrative services and benefits we provide to the Variable Options. The compensation amount usually is based on the Variable Options' aggregate assets purchased through contracts we issue or administer. Some advisers may pay us more or less than others. The maximum service fee we currently receive from any Variable Option in any Contract is 0.35% annually of the average aggregate amount invested by us in the Variable Options.
The Allianz VIP Fund of Funds Trust underlying funds do not pay 12b‑1 fees or service fees to the Trust, and the Trust does not charge 12b‑1 fees or service fees. The Allianz VIP Fund of Funds Trust underlying funds or their advisers may pay service fees to us and our affiliates for providing customer service and other administrative services to you. Service fees may vary depending on the underlying fund.
We offer other variable annuity contracts that may invest in these Variable Options. These contracts may have different charges and may offer different benefits more appropriate to your needs. For more information about these contracts, please contact our Service Center.
Allianz Investment Management LLC is an adviser/subadviser that is a subsidiary of Allianz Life.
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VARIABLE OPTIONS
Investment Management Company and Adviser/Subadviser
Investment Option Name
Asset Class
Investment Objective
Principal Investment Strategies
(Normal market conditions)
ALLIANZ FUND OF FUNDS
Allianz Investment Management LLC
AZL MVP Balanced Index Strategy Fund
A "Fund of Funds" Model Portfolio
Long-term capital appreciation with preservation of capital as an important consideration
Invests primarily (approximately 80% to 100%) in a combination of five underlying index funds (generally allocated 40% to 60% to underlying equity index funds and 40% to 60% to underlying bond index funds), combined with the MVP (Managed Volatility Portfolio) risk management process intended to adjust the risk of the portfolio based on quantitative indicators of market risk. May invest up to 20% of the Fund's assets in a combination of derivative and fixed income instruments.
AZL MVP Growth Index Strategy Fund
A "Fund of Funds" Model Portfolio
Long-term capital appreciation
Invests primarily (approximately 80% to 100%) in a combination of five underlying index funds (generally allocated 65% to 85% to underlying equity index funds and 15% to 35% to underlying bond index funds), combined with the MVP (Managed Volatility Portfolio) risk management process intended to adjust the risk of the portfolio based on quantitative indicators of market risk. May invest up to 20% of the Fund's assets in a combination of derivative and fixed income instruments.
BLACKROCK
Allianz Investment Management LLC/BlackRock Advisors, LLC
AZL Government Money Market Fund
Cash Equivalent
Current income consistent with stability of principal
Invests at least 99.5% of its total assets in cash, government securities, or repurchase agreements that are collateralized fully. Invests at least 80% in government securities or in repurchase agreements collateralized by government securities. Investments include U.S. Treasury bills, notes and other obligations issued or guaranteed as to principal and interest by the U.S. Government, its agencies or instrumentalities, and repurchase agreements secured by such obligations. In addition, the Fund may invest in variable and floating rate instruments. During extended periods of low interest rates, and due in part to contract fees and expenses, the yield of the AZL Government Money Market Fund may also become extremely low and possibly negative.
SUBSTITUTION OF VARIABLE OPTIONS AND LIMITATION ON FURTHER INVESTMENTS
We may substitute another Variable Option for one of your selected Variable Options, for any reason in our sole discretion. To the extent required by the Investment Company Act of 1940 or other applicable law, we do not substitute any shares without SEC approval and providing you notice. We may make substitutions with respect to your existing allocations, future Purchase Payment allocations, or both. New or substitute Variable Options may have different fees and expenses, and their availability may be limited to certain purchaser classes. We may limit further Variable Option allocations if marketing, tax or investment considerations warrant, or for any reason in our sole discretion. We may also close Variable Options to additional allocations. The fund companies that sell Variable Option shares to us, pursuant to participation agreements, may end those agreements and discontinue offering us their shares.
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TRANSFERS BETWEEN VARIABLE OPTIONS
You can make transfers between Variable Options. Transfers may be subject to a transfer fee, see section 8, Expenses.
The following applies to any transfer.
·
Your request for a transfer must clearly state the Variable Options involved and how much to transfer.
·
Your right to make transfers is subject to the Excessive Trading and Market Timing policy discussed later in this section.
·
Variable Account Value transfers between Variable Options do not change your future Purchase Payment allocation instructions.
We process transfer requests based on prices next determined after we receive your request in Good Order at our Service Center. If we do not receive your transfer request
before
the end of the
current
Business Day, even if due to our delay in answering your call or a delay caused by our electronic systems, you receive the
next
Business Day's prices. For jointly owned Contracts, unless you require us to obtain signatures from both Joint Owners, we accept transfer instructions from any Joint Owner. We may also allow you to authorize someone else to request transfers on your behalf.
ELECTRONIC TRANSFER AND ALLOCATION INSTRUCTIONS
We use reasonable procedures to confirm that electronic transfer and allocation instructions given to us are genuine. If we do not use such procedures, we may be liable for any losses due to unauthorized or fraudulent instructions. We record all telephone instructions and log all fax, email and website instructions. We reserve the right to deny any transfer request or allocation instruction change, and to discontinue or modify our electronic instruction privileges at any time for any reason.
Please note that telephone, fax, email and/or the website may not always be available. Any electronic system, whether it is ours, yours, your service provider's, or your Financial Professional's, can experience outages or slowdowns for a variety of reasons, which may delay or prevent our processing of your transfer request or allocation instruction change. Although we have taken precautions to help our systems handle heavy use, we cannot promise complete reliability. If you are experiencing problems, you should submit your instructions in writing to our Service Center.
By authorizing electronic instructions, you authorize us to accept and act upon these instructions for your Contract. There are risks associated with electronic communications that do not occur with a written request. Anyone authorizing or making such requests bears those risks. You should protect your website password, because the website is available to anyone with your password; we cannot verify that the person providing instructions on the website is you, or is authorized by you.
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EXCESSIVE TRADING AND MARKET TIMING
We may restrict or modify your right to make transfers to prevent any use that we consider to be part of a market timing program.
Frequent transfers, programmed transfers, transfers into and then out of a Variable Option in a short period of time, and transfers of large amounts at one time (collectively referred to as "potentially disruptive trading") may have harmful effects for other Owners, Annuitants and Beneficiaries. These risks and harmful effects include the following.
·
Dilution of the interests of long-term investors in a Variable Option, if market timers or others transfer into a Variable Option at prices that are below their true value, or transfer out at prices above their true value.
·
An adverse effect on portfolio management, such as causing a Variable Option to maintain a higher level of cash or causing a Variable Option to liquidate investments prematurely.
·
Increased brokerage and administrative expenses.
We attempt to protect our Owners and the Variable Options from potentially disruptive trading through our excessive trading and market timing policies and procedures. Under these policies and procedures, we could modify your transfer privileges for some or all of the Variable Options. Unless prohibited by your Contract or applicable state law, we may:
·
Limit transfer frequency (for example, prohibit more than one transfer a week, or more than two a month, etc.).
·
Restrict the transfer method (for example, requiring all transfers be sent by first-class U.S. mail and rescinding electronic transfer privileges).
·
Require a minimum time period between each transfer into or out of the same Variable Option. Our current policy, which is subject to change without notice, prohibits "round trips" within 14 calendar days. We do not include transfers into and/or out of the AZL Government Money Market Fund when available in your Contract. Round trips are transfers into and back out of the same Variable Option, or transfers out of and back into the same Variable Option.
·
Refuse transfer requests made on your behalf by an asset allocation and/or market timing service.
·
Limit the dollar amount of any single Purchase Payment or transfer request to a Variable Option.
·
Prohibit transfers into specific Variable Options.
·
Impose other limitations or restrictions to the extent permitted by federal securities laws.
We also reserve the right to reject any specific Purchase Payment allocation or transfer request from any person if in the investment adviser's, subadviser's or our judgment, a Variable Option may be unable to invest effectively in accordance with its investment objectives and policies. This could occur, for example, where frequent or rapid trading causes the investment adviser to hold an excess of uninvested cash to meet redemption requests, or to sell investment positions to fund redemptions, thereby affecting Variable Option returns. Similarly, rapid or frequent trading may cause a Variable Option to incur excessive transaction fees, which also could affect performance.
Currently, we attempt to
deter
disruptive trading as follows. If a transfer(s)
is/are
identified as potentially disruptive trading, we may (bu
t are not required to) send a warning letter. If the conduct continues and we determine it constitutes disruptive trading, we also impose transfer restrictions. Transfer restrictions may include refusing electronic transfers and requiring all transfers be sent by first-class U.S. mail. We do not enter into agreements permitting market timing and would not permit activities determined to be disruptive trading to continue. We also reserve the right to impose transfer restrictions if we determine, in our sole discretion, that transfers disadvantage other Owners. We notify you in writing if we impose transfer restrictions on you.
We do not include automatic transfers made under any of our programs or Contract features when applying our market timing policy.
We adopted these policies and procedures as a preventative measure to protect all Owners from the potential effects of disruptive trading, while also abiding by your legitimate interest in diversifying your investment and making periodic asset re-allocations based on your personal situation or overall market conditions. We attempt to protect your interests in making legitimate transfers by providing reasonable and convenient transfer methods that do not harm other Owners.
We may make exceptions when imposing transfer restrictions if we determine a transfer is appropriate, although it may technically violate our policies and procedures discussed here. In determining if a transfer is appropriate, we may, but are not required to, take into consideration its relative size, whether it was purely a defensive transfer into the AZL Government Money Market Fund, and whether it involved an error or similar event. We may also reinstate electronic transfer privileges after we revoke them, but we do not reinstate these privileges if we believe they might be used for future disruptive trading.
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We cannot guarantee the following.
·
Our monitoring will be 100% successful in detecting all potentially disruptive trading activity.
·
Revoking electronic transfer privileges will successfully deter all potentially disruptive trading.
In addition, some of the Variable Options are available to other insurance companies and we do not know if they adopted policies and procedures to detect and deter potentially disruptive trading, or what their policies and procedures might be. Because we may not be completely successful at detecting and preventing market timing activities, and other insurance companies that offer the Variable Options may not have adopted adequate market timing procedures, there is some risk that market timing activity may occur and negatively affect other Owners.
We may, without prior notice to any party, take whatever action we deem appropriate to comply with any state or federal regulatory requirement. In addition, purchase orders for a Variable Option's shares are subject to acceptance by that Variable Option's manager. We reserve the right to reject, without prior notice, any Variable Option transfer request or Purchase Payment if the purchase order is rejected by the investment manager. We have entered into agreements required under SEC Rule 22c-2 (Rule 22c-2 agreements) whereby, upon request by an underlying fund or its designee, we must provide information about you and your trading activities
to the underlying fund or its designee. Under the terms of the Rule 22c-2 agreements, we are required to: (1) provide details concerning every purchase, redemption, transfer, or exchange of Variable Options during a specified period; and (2) restrict your trading activity if the party receiving the information so requests. Under certain Rule 22c-2 agreements, if we fail to comply with a request to restrict trading activity, the underlying fund or its designee may refuse to accept buy orders from us until we comply.
Variable Options may add or change policies designed to restrict market timing activities. For example, Variable Options may impose restrictions on transfers between Variable Options in an affiliated group if the investment adviser to one or more of the Variable Options determines that the person requesting the transfer has engaged, or is engaging in, market timing or other abusive trading activities. In addition, a Variable Option may impose a short-term trading fee on purchases and sales within a specified period. You should review the Variable Options' prospectuses regarding any applicable transfer restrictions and the imposition of any fee to discourage short-term trading.
The imposition of these restrictions would occur as a result of Variable Option restrictions and actions taken by the Variable Options' managers.
NOTE:
This Contract is not designed for professional market timing organizations, or other persons using programmed, large, or frequent transfers, and we may restrict excessive or inappropriate transfer activity.
We retain some discretion in determining what actions constitute potentially disruptive trading and in determining when and how to impose trading restrictions. Therefore, persons engaging in potentially disruptive trading may be subjected to some uncertainty as to when and how we apply trading restrictions, and persons not engaging in potentially disruptive trading may not know precisely what actions will be taken against a person engaging in potentially disruptive trading.
For example, if we determine a person is engaging in potentially disruptive trading, we may revoke that person's electronic transfer privileges and require all future requests to be sent by first-class U.S. mail. In the alternative, if the disruptive trading affects only a single Variable Option, we may prohibit transfers into or Purchase Payment allocations to that Variable Option. We notify the person or entity making the potentially disruptive trade when we revoke any transfer privileges.
The retention of some level of discretion by us may result in disparate treatment among persons engaging in potentially disruptive trading, and it is possible that some persons could experience adverse consequences if others are able to engage in potentially disruptive trading practices that have negative effects.
FINANCIAL ADVISER FEES
If you have an investment adviser and want to pay their fees from this Contract, you can submit a written request to our Service Center on a form satisfactory to us. If we approve your request, we withdraw the fee and pay it to your adviser.
We
treat this fee payment as a withdrawal.
Financial adviser fees paid from a Non-Qualified Contract will be a taxable withdrawal to the extent that gain exists within the Contract. If any Owner is under age 59½, withdrawals may be subject to a 10% additional federal tax.
Financial adviser fees paid from an IRA will not be treated as a taxable withdrawal as long as the annuity contract is solely liable for the payment of the fee. You should consult a tax adviser regarding the tax treatment of adviser fee payments.
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Your investment adviser acts on your behalf, not ours. We are not party to your advisory agreement or responsible for your adviser's actions. We do not set your adviser's fee or receive any part of it. Any adviser fee you pay is in addition to this Contract's fees and expenses. You should ask your adviser about compensation they receive for this Contract.
You can submit a written request to our Service Center on a form satisfactory to us to allow your adviser to make Variable Option transfers on your behalf. However, we reserve the right to review an adviser's trading history before allowing him or her to make transfers. If, in our sole discretion, we believe the adviser's trading history indicates excessive trading, we can deny your request. If we approve it, your adviser is subject to the same trading restrictions that apply to Owners. We can deny or revoke trading authority in our sole discretion.
VOTING PRIVILEGES
We legally own the Variable Option shares. However, when a Variable Option holds a shareholder vote that affects your investment, we ask you to give us voting instructions. We then vote all of our shares, including any we own on our behalf, in proportion to those instructions. Because most Owners do not give us instructions and we vote shares proportionally, a small number of Owners may determine a vote's outcome. If we determine we no longer need to get your voting instructions, we will decide how to vote the shares. Only Owners have voting privileges. Annuitants, Beneficiaries, Payees and other persons have no voting privileges unless they are also Owners.
We determine your voting interest in a Variable Option as follows.
·
You can provide voting instructions based on the dollar value of the Variable Option's shares in your Contract's subaccount. We calculate this value based on the number and value of accumulation units for your Contract on the record date. We count fractional units.
·
You receive proxy materials and a voting instruction form.
6.
VALUING YOUR CONTRACT
Your Contract Value increases and decreases based on Purchase Payments, transfers, withdrawals, deduction of fees and charges, and the performance of your selected Allocation Options. Your Contract Value is the total of the Variable Account Value (if you allocate to the Variable Options) and the total Index Option Value (if you allocate to the Index Options). For information on how we calculate your Index Option Values see section 7, Index Options.
ACCUMULATION UNITS
When we receive a Purchase Payment that you allocate to the Variable Options at our Service Center, we credit your Contract with accumulation units based on the Purchase Payment amount and daily price (accumulation unit value) for the subaccount of your selected Variable Option. A subaccount's accumulation unit value is based on the price (net asset value) of the underlying Variable Option. A Variable Option's net asset value is typically determined at the end of each Business Day, and any Purchase Payment received at or after the end of the current Business Day receives the next Business Day's price.
We arbitrarily set the initial accumulation unit value for each subaccount.
On the Issue Date, the number of accumulation units in each subaccount is equal to the initial Purchase Payment amount allocated to a subaccount, divided by that subaccount's accumulation unit value.
Example
·
On Wednesday, we receive at our Service Center an additional Purchase Payment of $3,000 from you before the end of the Business Day.
·
When the New York Stock Exchange closes on that Wednesday, we determine that the accumulation unit value is $13.25 for your selected Variable Option.
We then divide $3,000 by $13.25 and credit your Contract on Wednesday night with 226.415094 subaccount accumulation units for your selected Variable Option.
At the end of each Business Day, w
e adjust the number of
accumulation units in each subaccount as follows. Additional Purchase Payments and transfers into a subaccount increase the number of accumulation units. Withdrawals, transfers out of a subaccount, and the deduction of any Contract charge decrease the number of accumulation units.
At the end of each Business Day for each subaccount, we multiply the accumulation unit value at the end of the prior Business Day by the percentage change in value of a Variable Option since the prior Business Day. The percentage change includes the market performance of the Variable Option.
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COMPUTING VARIABLE ACCOUNT VALUE
We calculate your Variable Account Value at the end of each Business Day by multiplying each subaccount's accumulation unit value by its number of accumulation units, and then adding those results together for all subaccounts. Allocations (additional Purchase Payments and transfers of Index Option Value to the Variable Options) increase your Variable Account Value, withdrawals and Contract expenses reduce your Variable Account Value.
7.
INDEX OPTIONS
When you allocate money to the Index Options you earn Performance Credits based on the Index Option you select. Each Index Option is the combination of a Crediting Method and an Index.
Indices Currently Available with Index Performance Strategy and Index Protection NY Strategy
S&P 500
®
Index
Russell 2000
®
Index
Nasdaq-100
®
Index
EURO STOXX 50
®
For more information on the Indices, see Appendix A.
The two Crediting Methods have different risk and return potentials. The Index Performance Strategy provides more performance potential than the Index Protection NY Strategy as it has higher Caps in exchange for lower Buffers. The Index Protection NY Strategy provides more protection as it has higher Buffers in exchange for lower Caps. However, you can lose money that you allocate to these Crediting Methods due to negative Index performance
and these losses could be significant
.
The total Index Option Value is the sum of the values in each of your selected Index Options. Each Index Option Value includes any Performance Credits from previous Index Anniversaries, and the deduction of any previously assessed contract maintenance charge, product fee, and withdrawal charge during the Index Year. Positive Performance Credits are not guaranteed, and Performance Credits can be zero or negative after application of the Buffer.
A negative Performance Credit means that you can lose money.
We apply Performance Credits on Index Anniversaries. On Index Anniversaries each Index Option Value also increases with any additional Purchase Payment allocated or Contract Value transferred into an Index Option, and decreases with any transfer out of an Index Option.
On each Business Day during the Index Year other than the Index Effective Date or an Index Anniversary, each Index Option Value is valued by using the Daily Adjustment. The Daily Adjustment estimates the present value of positive or negative Performance Credits on the next Index Anniversary. The Daily Adjustment is based on your agreement to be exposed to gains in Index value subject to the Cap and losses in the Index value greater than the Buffer on the next Index Anniversary. The Daily Adjustment is a calculation mechanism by which Index Option Values are established each Business Day for purposes of computing amounts available for full or partial withdrawals, an annuitization, death benefits, and the Contract Value used to determine the Charge Base and contract maintenance charge. The Daily Adjustment may result in an adjustment up or down from the preceding Index Anniversary or Index Effective Date.
NOTE REGARDING WITHDRAWALS DURING THE INDEX YEAR:
Amounts removed from the Index Options during the Index Year for partial withdrawals and Contract expenses do not receive a Performance Credit on the next Index Anniversary. However, the remaining amount in the Index Options is eligible for a Performance Credit on the next Index Anniversary subject to the Cap and Buffer.
DETERMINING THE INDEX OPTION VALUES
We use the Index Option Base to determine the Index Option Value. On each Index Anniversary we determine each of your selected Index Option Values by applying its associated Performance Credit to its Index Option Base. On any day other than an Index Anniversary each Index Option Value is equal to the Index Option Base plus the Daily Adjustment as discussed later in this section.
On the Index Effective Date both the Index Option Value and the Index Option Base for each of your selected Index Options are equal to either:
·
the amount of your initial Purchase Payment you allocated to that Index Option if the Index Effective Date is the Issue Date, or
·
the percentage of Variable Account Value you allocated to that Index Option.
At the end of each Business Day during the Index Year
other than the Index Effective Date or Index Anniversary
we first add each Index Option's Daily Adjustment to its Index Option Base and determine its Index Option Value (as discussed later in this section) before we process any partial withdrawal or deduct any Contract expenses.
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At the end of each Business Day during the Index Year we reduce each Index Option Value by the dollar amount withdrawn from the Index Option for partial withdrawals you request and Contract expenses we deduct (any withdrawal charge, product fee and/or contract maintenance charge).
·
We deduct partial withdrawals and Contract expenses from the Allocation Options proportionately based on the percentage of Contract Value in each Allocation Option.
–
The percentage is equal to each Index Option Value divided by the Contract Value using values determined at the end of the Business Day before we process the withdrawal or deduct the Contract expense.
·
However, if you specifically direct us to take a partial withdrawal from an Index Option we reduce that Index Option Value by the dollar amount you specify, including any applicable withdrawal charge.
·
We then reduce each Index Option Base by the same percentage that the amount withdrawn reduced its associated Index Option Value.
On each Index Anniversary we first determine your Performance Credit. If you select the EURO STOXX 50
®
, Performance Credits are based on the Index Returns without any exchange rate adjustment.
If the Index Return is positive, you receive a positive Performance Credit limited by the Cap. For example if the Cap is 8% and the Index Return is 10%, you receive a 8% Performance Credit. If the Index Return is zero, the Performance Credit is zero. If the Index Return is negative we apply the Buffer and determine if you receive a negative Performance Credit. For example:
·
if you selected the Index Performance Strategy and the Buffer is 10% and the Index Return is -8%, we apply a Performance Credit of zero to your Index Option Base. If instead the Index Return is -12%, we apply a -2% Performance Credit to your Index Option Base.
·
if you selected the Index Protection NY Strategy and the Buffer is 30% and the Index Return is -28%, we apply a Performance Credit of zero to your Index Option Base. If instead the Index Return is -32%, we apply a -2% Performance Credit to your Index Option Base.
We then apply the Performance Credit to the Index Option as follows:
·
We multiply each Index Option Base by its Performance Credit and add this amount to its Index Option Base.
·
Then we set each Index Option Value equal to its Index Option Base.
Then we increase and/or decrease each Index Option Base and Index Option Value on the Index Anniversary for additional Purchase Payments, transfers into or out of the Index Option, partial withdrawals and the deduction of any Contract expenses.
·
Additional Purchase Payments received and allocated to this Index Option and transfers of Variable Account Value or Index Option Value into this Index Option increase these values by the dollar amount allocated to this Index Option.
·
Transfers out of this Index Option reduce these values by the dollar amount removed from the Index Option.
·
Partial withdrawals and Contract expenses reduce these values as on any other Business Day.
Index Option Value Daily Adjustment
We designed the Daily Adjustment to provide an Index Option Value during the Accumulation Phase on days other than the Index Effective Date or an Index Anniversary. The Daily Adjustment generally reflects the change in market value of your allocation to an Index Option. We apply a Daily Adjustment to the Index Option Values for purposes of computing amounts available for withdrawal, annuitization,
death benefits, and the Contract Value used to determine the Charge Base and contract maintenance charge.
The Daily Adjustment directly increases or decreases your Index Option Values.
The Daily Adjustment is different from the method we use to apply Performance Credits to an Index Option on an Index Anniversary. The Daily Adjustment is meant to approximate the Index Option Value on the next Index Anniversary, as adjusted for gains during the Index Year subject to the Cap and losses greater than the Buffer. The application of the Daily Adjustment is based on your agreement to be exposed to Index Anniversary gains in Index value subject to the Cap and losses in Index value greater than the Buffer. The Daily Adjustment does this by using a Black Scholes model to track the hypothetical value of a Proxy Investment (called the Proxy Value) each Business Day other than an Index Anniversary. The Proxy Investment is designed to return the same amount as the Index Option on an Index Anniversary (an amount equal to the Performance Credit as determined using the applicable Cap and Buffer). Between Index Anniversaries, the Proxy Investment provides a current estimate of what the Index value gain or loss would be if the investment were held until the Index Anniversary. The actual value of the relevant Index is not used in the Daily Adjustment calculation. The Daily Adjustment does not give you the actual Index return on the day of the calculation.
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The Daily Adjustment can be positive or negative. When the Daily Adjustment is positive, an Index Option Value is higher than the Index Option Base. When the Daily Adjustment is negative, an Index Option Value is lower than the Index Option Base. The Daily Adjustment will differ from the Index Return. The Daily Adjustment is affected by the length of time until the next Index Anniversary and it is generally negatively affected by increases in the expected volatility of index prices, interest rate decreases, and by poor market performance. All other factors being equal, even if the current Index Return during the Index Year is greater than the Cap, the Daily Adjustment will be lower than the Cap during the Index Year and will not be equal to the Cap until the next Index Anniversary.
Even if the current Index Return during the Index Year is positive, or losses are within the Buffer, the Daily Adjustment may be negative until the next Index Anniversary.
At the end of each Business Day during the Index Year (other than the Index Effective Date or Index Anniversary) we add each Daily Adjustment to its Index Option Base to calculate each Index Option Value before we process any partial withdrawal or deduct any Contract expenses. If there is a system error in calculating your Daily Adjustment, or if the Index value for a Business Day is not received, we will calculate the Daily Adjustment when corrected or other required information is received, effective as of the original pricing date.
For more information on how we calculate the Daily Adjustment see Appendix B.
Index Option Value Performance Locks
You can lock in a current Index Option Value by requesting a Performance Lock. You can request a lock once each Index Year for each of your selected Index Options. A Performance Lock applies to the total Index Option Value in an Index Option, and not just a portion of that Index Option Value. After the Lock Date Daily Adjustments do not apply for the remainder of the Index Year and the Index Option Value will not receive a Performance Credit on the next Index Anniversary. However, the Index Option Value does decrease during the remainder of the Index Year for any partial withdrawals and the deduction of any Contract expenses. Beginning on the next Index Anniversary, your locked Index Options will no longer be locked and Daily Adjustments will again apply.
A Performance Lock can help eliminate doubt about future Index performance and possibly limit the impact, or avoid receiving, a negative Performance Credit. The disadvantage of taking a Performance Lock is that the relevant Index value may increase until the next Index Anniversary, and you will not participate in that increase. In addition, if you exercise a Performance Lock, you may receive less than the full Cap or less than the full protection of the Buffer that you would have received if you waited for us to apply the Performance Credit on the next Index Anniversary.
OPTIONAL REBALANCING PROGRAM
Your selected Index Options' performance may cause the percentage of total Index Option Value in each Index Option to change. Rebalancing can help you maintain your selected Index Option allocation percentages. You can direct us to automatically adjust your Index Option Value on each Index Anniversary (or on the next Business Day if the Index Anniversary is not a Business Day) according to your instructions. We must receive your optional rebalancing program form in Good Order at our Service Center by 4 p.m. Eastern Time on the Business Day we rebalance. We reserve the right to discontinue or modify the optional rebalancing program at any time and for any reason. To end this program, we must receive your request at our Service Center by 4 p.m. Eastern Time on the Business Day immediately before the Index Anniversary.
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8.
EXPENSES
Contract fees and expenses reduce your investment return and are described here in detail.
PRODUCT FEE
We deduct a product fee from your Contract Value during the Accumulation Phase, under death benefit payment Option B, and with optional payments under death benefit payment Option C as noted in section 11, Death Benefit. The product fee is an annualized rate of 0.25% that is calculated and accrued on a daily basis as a percentage of the Charge Base.
The Charge Base is initially equal to the Purchase Payment received on the Issue Date. At the end of each Business Day, we adjust the Charge Base as follows.
·
We increase it by the amount of any additional Purchase Payments.
·
We reduce it by the percentage of any Contract Value withdrawn. Withdrawals include all Contract expenses (withdrawal charge, product fee, contract maintenance charge, and transfer fee).
On each Quarterly Contract Anniversary (or on the next Business Day if the Quarterly Contract Anniversary is not on a Business Day) the Charge Base is equal to the Contract Value determined at the end of the Business Day.
We begin calculating and accruing the daily product fee amount on the day after the Issue Date. We deduct the product fee on each Quarterly Contract Anniversary (or the next Business Day if the Quarterly Contract Anniversary is not a Business Day) with the following exceptions.
·
If you withdraw the total Contract Value, we deduct the final product fee (the total of all daily product fees we calculated for the current Contract quarter) before processing the withdrawal.
·
If you annuitize the Contract, we deduct the final product fee before calculating Annuity Payments.
·
Upon the death of an Owner (or Annuitant if the Owner is a non-individual), we deduct the final product fee before calculating the death benefit if death benefit payment Option A or Annuity Payments under death benefit payment Option C is selected.
We deduct the product fee on a dollar for dollar basis from the Contract Value and we deduct it proportionately from each Allocation Option.
We do not treat the deduction of the product fee as a withdrawal when computing total Purchase Payments adjusted for withdrawals under the Traditional Death Benefit (see section 11). If on a Quarterly Contract Anniversary (or the next Business Day if the Quarterly Contract Anniversary is not a Business Day) the Contract Value is less than the product fee, we deduct your total remaining Contract Value to cover the final product fee and reduce your Contract Value to zero. If the deduction of the final product fee reduces your Contract Value to zero and the Traditional Death Benefit has ended, we treat this as a full withdrawal and your Contract ends.
Changes to the Charge Base change the product fee amount. For example, if you make an additional Purchase Payment both your Charge Base and daily product fee amount also increase. Similarly, a withdrawal decreases both your Charge Base and daily product fee amount.
The product fee compensates us for all your Contract's benefits, including our contractual obligation to make Annuity Payments, certain Contract expenses, and assuming the expense risk that the current charges are less than future Contract administration costs. If the product fee covers these costs and risks, any excess is profit to us. We anticipate making such a profit.
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CONTRACT MAINTENANCE CHARGE
Your annual contract maintenance charge is $50. This charge is for Contract administration and maintenance expenses. We waive this charge as follows:
·
During the Accumulation Phase, if the total Contract Value for all Index Advantage ADV New York Contracts you own is at least $100,000 at the end of the last Business Day before the Contract Anniversary, or if the Contract Value for this single Index Advantage ADV New York Contract is at least $100,000 on the Contract Anniversary. We determine the total Contract Value for all individually owned Index Advantage ADV New York Contracts by using the Owner's social security number, and for non-individually owned Index Advantage ADV New York Contracts we use the Annuitant's social security number.
·
During the Annuity Phase.
·
When paying death benefits under death benefit payment options A, B, or C.
We deduct the contract maintenance charge on a dollar for dollar basis from the Contract Value on the Contract Anniversary and we deduct it proportionately from each Allocation Option. If you take a full withdrawal from your Contract (other than on a Contract Anniversary), we deduct the full contract maintenance charge. We do not treat the deduction of the contract maintenance charge as a withdrawal when computing total Purchase Payments adjusted for withdrawals under the Traditional Death Benefit.
WITHDRAWAL CHARGE
You can take withdrawals during the Accumulation Phase. A withdrawal charge applies if any part of a withdrawal comes from a Purchase Payment that is still within the withdrawal charge period. We assess the withdrawal charge against the Withdrawal Charge Basis, which is equal to total Purchase Payments, less any Purchase Payments withdrawn (including any penalty-free withdrawals) and less any applicable withdrawal charge. We do not reduce the Withdrawal Charge Basis for any amounts we deduct to pay other Contract expenses.
We do not assess a withdrawal charge on penalty-free withdrawals or amounts we deduct to pay Contract expenses, other than the withdrawal charge. However, any amounts used to pay a withdrawal charge are subject to a withdrawal charge.
Amounts withdrawn to pay investment adviser fees are subject to a withdrawal charge if they exceed the free withdrawal privilege. Penalty-free withdrawals include: withdrawals under the free withdrawal privilege and waiver of withdrawal charge benefit and; payments under our minimum distribution program.
For purposes of calculating any withdrawal charge, we withdraw Purchase Payments on a "first-in-first-out" (FIFO) basis and we process withdrawal requests as follows.
1.
First we withdraw from Purchase Payments that we have had for six or more complete years, which is your Contract's withdrawal charge period. This withdrawal is not subject to a withdrawal charge and it reduces the Withdrawal Charge Basis.
2.
Then, if this is a partial withdrawal, we withdraw from the free withdrawal privilege (see section 9, Access to Your Money – Free Withdrawal Privilege). This withdrawal is not subject to a withdrawal charge, it reduces the Withdrawal Charge Basis, and is withdrawn from Purchase Payments on a FIFO basis.
3.
Next, on a FIFO basis, we withdraw from Purchase Payments within your Contract's withdrawal charge period and assess a withdrawal charge. Withdrawing payments on a FIFO basis may help reduce the total withdrawal charge because the charge declines over time. We determine your total withdrawal charge by multiplying each payment by its applicable withdrawal charge percentage and then totaling the charges. This withdrawal reduces the Withdrawal Charge Basis.
4.
Finally we withdraw any Contract earnings. This withdrawal is not subject to a withdrawal charge and it does not reduce the Withdrawal Charge Basis.
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The withdrawal charge as a percentage of each Purchase Payment withdrawn is as follows.
Number of Complete Years Since Purchase Payment
Withdrawal Charge Amount
0
6.5%
1
6%
2
5%
3
4%
4
2%
5
1%
6 years or more
0%
Upon a full withdrawal, we first deduct any applicable product fee and contract maintenance charge before we calculate the withdrawal charge. We deduct any applicable withdrawal charge from the total Contract Value and send you the remaining amount. For a partial withdrawal we deduct the amount you request, plus any applicable withdrawal charge from the total Contract Value. We apply the withdrawal charge to this total amount and we pay you the amount you requested. We deduct any partial withdrawal (including any withdrawal charge) proportionately from each Allocation Option unless you provide us with alternate instructions. If a partial withdrawal occurs on a day that we also assess the product fee and/or contract maintenance charge, we assess these charges in this order after we deduct the withdrawal and any applicable withdrawal charge from the Contract Value.
The withdrawal charge compensates us for expenses associated with selling the Contract.
Example:
You make an initial Purchase Payment of $30,000 and make another Purchase Payment in the first month of the second Contract Year of $70,000. In the third month of the third Contract Year, your Contract Value is $110,000 and you request a $52,000 withdrawal. We withdraw money and compute the withdrawal charge as follows.
1)
Purchase Payments beyond the withdrawal charge period.
All payments are still within the withdrawal charge period, so this does not apply.
2)
Amounts available under the free withdrawal privilege.
You did not take any other withdrawals this year, so you can withdraw up to 10% of your total payments (or $10,000) without incurring a withdrawal charge. We also deduct this $10,000 from the first Purchase Payment.
3)
Purchase Payments within the withdrawal charge period on a FIFO basis.
The total amount we withdraw from the first Purchase Payment is the remaining $20,000, which is subject to a 5% withdrawal charge, and you receive $19,000. We determine this amount as follows:
(amount withdrawn) x (1 – withdrawal charge) = the amount you receive, or:
$20,000 x 0.95 = $19,000.
Next we withdraw from the second Purchase Payment. So far, you received $29,000 ($10,000 under the free withdrawal privilege and $19,000 from the first Purchase Payment), so we withdraw $23,000 from the second Purchase Payment to equal the $52,000 you requested. The second Purchase Payment is subject to a 6% withdrawal charge. We calculate the total amount withdrawn and its withdrawal charge as follows:
(the amount you receive) ÷ (1 – withdrawal charge) = amount withdrawn, or:
$23,000 ÷ 0.94 = $24,468.
4)
Contract earnings.
We already withdrew your requested amount, so this does not apply.
In total we withdrew $54,468 from your Contract, of which you received $52,000 and paid a withdrawal charge of $2,468.
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Reduction or Elimination of the Withdrawal Charge
We may reduce or eliminate the withdrawal charge when the Contract is sold under circumstances that reduce its sales expenses. For example, if a large group of individuals purchases Contracts or if a prospective purchaser already has a relationship with us. We may choose not to deduct a withdrawal charge under a Contract issued to an officer, director, or employee of Allianz Life of New York or any of its affiliates. Also, we may reduce or eliminate the withdrawal charge when a Contract is sold by a Financial Professional appointed with Allianz Life of New York to any members of his or her immediate family and the Financial Professional waives their commission. We must pre-approve any withdrawal charge reduction or elimination. Keep in mind that if you withdraw money from an Index Option on any day other than an Index Anniversary, we apply the Daily Adjustment when calculating your Index Option Value for the withdrawal, even if the withdrawal is not subject to a withdrawal charge.
NOTE:
·
Because we do not reduce the Withdrawal Charge Basis for Contract expenses other than the withdrawal charge, we may assess a withdrawal charge on more than the amount you are withdrawing upon a full withdrawal of the total Contract Value. Also, upon full withdrawal, if the Contract Value has declined due to poor performance, the withdrawal charge may be greater than the total Contract Value and you will not receive any money.
·
Withdrawals
may have tax consequences and, if taken before age 59½, may be subject to a 10% additional federal tax. For tax purposes in most instances, withdrawals from Non-Qualified Contracts are considered to come from earnings first, not Purchase Payments
.
TRANSFER FEE
The first twelve transfers between Variable Options every Contract Year are free. After that, we deduct a $25 transfer fee for each additional transfer. We count all transfers made in the same Business Day as one transfer. We do not count transfers between the Variable Options and Index Options or reallocation of Index Option Value among the Index Options against the free transfers we allow and these transfers are not subject to a transfer fee. The transfer fee continues to apply under death benefit payment Option B, and with optional payments under death benefit payment Option C as noted in section 11, Death Benefit.
We deduct the transfer fee on a dollar for dollar basis from the amount of Variable Account Value being transferred before allocating the remaining Variable Account Value to your selected Variable Options. We do not treat the deduction of the transfer fee as a withdrawal when computing total Purchase Payments adjusted for withdrawals under the Traditional Death Benefit.
PREMIUM TAX
Premium tax is based on your state of residence at the time you make each Purchase Payment. In states that assess a premium tax, we do not currently deduct it from the Contract, although we reserve the right to do so in the future. Premium tax normally ranges from 0% to 3.5% of the Purchase Payment, depending on the state or governmental entity. New York does not currently assess a premium tax.
INCOME TAX
Currently, we do not deduct any Contract related income tax we incur, although we reserve the right to do so in the future.
VARIABLE OPTION EXPENSES
The Variable Options' assets are subject to operating expenses (including management fees). These expenses are described in the Fee Tables and in the Variable Options' prospectuses. These expenses reduce the Variable Options' performance and, therefore, negatively affect your Contract Value and any payments based on Contract Value. The Variable Options' investment advisers provided us with the expense information in this prospectus and we did not independently verify it.
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9.
ACCESS TO YOUR MONEY
The money in your Contract is available under the following circumstances:
·
by withdrawing your Contract Value;
·
by taking required minimum distributions (Qualified Contracts only) as discussed in "Minimum Distribution Program and Required Minimum Distribution (RMD) Payments" later in this section;
·
by taking Annuity Payments; or
·
when we pay a death benefit.
You can take withdrawals
during the Accumulation Phase. We process withdrawal requests based on values next determined after receipt of the request in Good Order at our Service Center. Values are normally determined at the end of each Business Day. Any withdrawal request received at or after the end of the current Business Day receives the next Business Day's values.
Any partial withdrawal must be for at least $100.* The Contract Value after a partial withdrawal must be at least $2,000.*
We reserve the right to treat a partial withdrawal that reduces the Contract Value below this minimum as a full withdrawal.
*
Does not apply to required minimum distributions.
We deduct any partial withdrawal (including any withdrawal charge) proportionately from each Allocation Option unless you provide us with alternate instructions.
When you take a full withdrawal,
we
process
your request on the Business Day we receive it in Good Order at our Service Center as follows:
·
total Contract Value,
·
less any final product fee and final contract maintenance charge, and
·
less any withdrawal charge.
See the Fee Tables and section 8, Expenses for a discussion of these charges.
We pay withdrawals promptly, but in no event later than seven days after receipt of your request in Good Order at our Service Center, unless the suspension of payments or transfers provision is in effect (see the discussion later in this section).
NOTE:
·
Ordinary income taxes and tax penalties may apply to any withdrawal you take.
·
We may be required to provide information about you or your Contract to government regulators. We may also be required to stop Contract disbursements and thereby refuse any transfer requests, and refuse to pay any withdrawals, surrenders, or death benefits until we receive instructions from the appropriate regulator. If, pursuant to SEC rules, the AZL Government Money Market Fund suspends payment of redemption proceeds in connection with a fund liquidation, we will delay payment of any transfer, partial withdrawal, surrender, or death benefit from the AZL Government Money Market Fund subaccount until the fund is liquidated.
FREE WITHDRAWAL PRIVILEGE
Each Contract Year, you can withdraw up to 10% of your total Purchase Payments without incurring a withdrawal charge (the free withdrawal privilege). Any unused free withdrawal privilege in one Contract Year is not added to the amount available next year.
Withdrawals of Purchase Payments that are beyond the withdrawal charge period are not subject to a withdrawal charge and do not reduce your free withdrawal privilege. Required minimum distribution payments are not subject to a withdrawal charge, but do reduce your free withdrawal privilege.
NOTE:
The free withdrawal privilege is not available upon a full withdrawal
.
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SYSTEMATIC WITHDRAWAL PROGRAM
If your Contract Value is at least $25,000, the systematic withdrawal program can provide automatic withdrawal payments to you. You can request to receive these withdrawal payments monthly, quarterly, semi-annually or annually.
The minimum amount you can withdraw under this program is $100 and there is no maximum. During the withdrawal charge period (if applicable), systematic withdrawals in excess of the free withdrawal privilege are subject to
a withdrawal charge. We make systematic withdrawals on the ninth of the month, or the next Business Day if the ninth is not a Business Day. We must receive your systematic withdrawal program form instructions in Good Order at our Service Center by 4 p.m. Eastern Time on the Business Day before we process these withdrawals, or your program does not begin until the next month. This program ends at your request or when you withdraw your total Contract Value. However, we reserve the right to discontinue or modify the systematic withdrawal program at any time and for any reason.
NOTE:
·
Ordinary income taxes and tax penalties may apply to systematic withdrawals.
·
The systematic withdrawal program is not
available while you are receiving required minimum distribution payments.
MINIMUM DISTRIBUTION PROGRAM AND REQUIRED MINIMUM DISTRIBUTION (RMD) PAYMENTS
If you own an IRA or SEP IRA Qualified Contract, you can participate in the minimum distribution program during the Accumulation Phase. If you purchase this Contract as an Inherited IRA Qualified Contract, we generally require you to participate in the minimum distribution program when you purchase this Contract. Under this program, we make payments to you designed to meet the applicable minimum distribution requirements imposed by the Internal Revenue Code for this Qualified Contract. RMD payments are not subject to a withdrawal charge, but they reduce the free withdrawal privilege amount during the Contract Year. We can make payments to you on a monthly, quarterly, semi-annual or annual basis. However, if your Contract Value is less than $25,000, we only make annual payments. You cannot aggregate RMD payments between this Contract and other qualified contracts that you own. We make RMD payments on the ninth of the month, or the next Business Day if the ninth is not a Business Day. We must receive your program form instructions in Good Order at our Service Center by 4 p.m. Eastern Time on the Business Day before we process these payments, or your program does not begin until the next month.
Inherited IRA Contracts.
If you (the Owner) were the spouse of the deceased owner of a previous tax-qualified investment and your spouse had not yet reached the date at which he/she was required to begin receiving RMD payments, then you can wait to begin receiving RMD payments until the year that your deceased spouse would have reached age 70½. Alternately, if your deceased spouse had already reached the date at which he/she was required to begin receiving RMD payments, you can begin RMD payments based on your single life expectancy in the year following your deceased spouse's death, or (if longer) your deceased spouse's life expectancy in the year of his/her death  reduced by one. You must begin to receive these RMD payments by December 31 of the year following the year of your deceased spouse's death.
NOTE:
·
You should consult a tax adviser before purchasing a Qualified Contract that is subject to RMD payments.
·
The minimum distribution program is not available while you are receiving systematic withdrawals.
WAIVER OF WITHDRAWAL CHARGE BENEFIT
After the first Contract Year, if any Owner becomes confined to a nursing home for a period of at least 90 consecutive days and a physician certifies that continued confinement is necessary, you can take a withdrawal and we waive the withdrawal charge. This waiver is not available if any Owner was confined to a nursing home on the Issue Date. We base this benefit on the Annuitant for non-individually owned Contracts. We must receive proof of confinement in Good Order before we waive the withdrawal charge.
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SUSPENSION OF PAYMENTS OR TRANSFERS
We may be required to suspend or postpone transfers or payments for withdrawals for any period when:
·
the New York Stock Exchange is closed (other than customary weekend and holiday closings);
·
trading on the New York Stock Exchange is restricted;
·
an emergency (as determined by the SEC) exists as a result of which disposal of the Variable Option shares is not reasonably practicable or we cannot reasonably value the Variable Option shares; or
·
during any other period when the SEC, by order, so permits for the protection of Owners.
10.
THE ANNUITY PHASE
Prior to annuitization, you can surrender your Contract and receive your total Contract Value (less the final product fee, final contract maintenance charge, and any applicable withdrawal charge).
Annuity Payments offer a guaranteed income stream with certain tax advantages and are designed for Owners who are not concerned with continued access to Contract Value.
You can apply your Contract Value to regular periodic fixed annuity payments (Annuity Payments). The Payee receives the Annuity Payments. You receive tax reporting on the payments, whether or not you are the Payee. We may require proof of the Annuitant(s)' age before we make any life contingent Annuity Payment. If you misstate the Annuitant(s)' age or gender, we recalculate the Annuity Payments based on the correct age or gender.
CALCULATING YOUR ANNUITY PAYMENTS
We base Annuity Payments upon the following:
·
The Contract Value on the Annuity Date.
·
The age of the Annuitant and any joint Annuitant on the Annuity Date.
·
The gender of the Annuitant and any joint Annuitant where permitted.
·
The Annuity Option you select.
·
Your Contract's interest rate (or current rates, if higher) and mortality table.
If the Annuity Date is not an Index Anniversary and you selected an Index Option, Contract Value includes the Daily Adjustment. We guarantee the dollar amount of Annuity Payments and this amount remains fixed and does not change during the entire annuity payout option period that you selected, except as provided under Annuity Option 3.
ANNUITY PAYMENT OPTIONS
You can choose one of the Annuity Options described below or any other payment option to which we agree. Before the Annuity Date, you can select and/or change the Annuity Option with at least 30 days written notice to us. After Annuity Payments begin, you cannot change the Annuity Option.
Option 1. Life Annuity.
We make Annuity Payments during the life of the Annuitant, and the last payment is the one that is due before the Annuitant's death. If the Annuitant dies shortly after the Annuity Date, the Payee may receive less than your investment in the Contract.
Option 2. Life Annuity with Payments Over 5, 10, 15 or 20 Years Guaranteed.
We make Annuity Payments during the life of the Annuitant, with payments for a guaranteed minimum period that you select.
Option 3. Joint and Last Survivor Annuity.
We make Annuity Payments during the lifetimes of the Annuitant and the joint Annuitant. Upon the death of one Annuitant, Annuity Payments to the Payee continue during the lifetime of the surviving joint Annuitant, at a level of 100%, 75% or 50% selected by the Owner when he or she chose this Annuity Payment option. If both Annuitants die shortly after the Annuity Date, the Payee may receive less than your investment in the Contract.
Option 4. Joint and Last Survivor Annuity with Payments Over 5, 10, 15 or 20 Years Guaranteed.
We make Annuity Payments during the lifetimes of the Annuitant and the joint Annuitant, with payments for a minimum guaranteed period that you select.
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Option 5. Refund Life Annuity.
We make Annuity Payments during the lifetime of the Annuitant, and the last payment is the one that is due before the Annuitant's death. After the Annuitant's death, the Payee may receive a lump sum refund. The amount of the refund equals the amount applied to this Annuity Option minus the total paid under this option.
After the Annuitant's death under Option 2, or the last surviving joint Annuitant's death under Option 4, we make Annuity Payments during the remaining guaranteed period in the following order based on who is still alive: the Payee, any surviving original Owner, the last surviving Owner's Beneficiaries, or to the last surviving Owner's estate if there are no remaining or named Beneficiaries.
Annuity Payments are usually lower if you select an Annuity Option that requires us to make more frequent Annuity Payments or to make payments over a longer period of time. If you choose life contingent Annuity Payments, payout rates for a younger Annuitant are lower than the payout rates for an older Annuitant and payout rates for life with a guaranteed period are typically lower than life only payments. Monthly payout rates are lower than annual payout rates, payout rates for a 20-year guaranteed period are less than payout rates for a 10-year guaranteed period, and payout rates for a 50-year-old Annuitant are less than payout rates for a 70-year-old Annuitant.
NOTE:
If you do not choose an Annuity Option before the Annuity Date, we make Annuity Payments to the Payee under Annuity Option 2 with ten years of guaranteed monthly payments.
WHEN ANNUITY PAYMENTS BEGIN
Annuity Payments begin on the Annuity Date. Your scheduled Annuity Date is the maximum permitted date allowed for your Contract, which is the first day of the calendar month following the Annuitant's 90th birthday. An earlier Annuity Date or a withdrawal may be required to satisfy minimum required distribution rules under certain Qualified Contracts.
You can make an authorized request for a different, earlier or later Annuity Date after the Issue Date, but any such request is subject to applicable law and our approval.
An earlier or later Annuity Date may not be available to you depending on the Financial Professional you purchase your Contract through and your state of residence. Your Annuity Date must be at least 13 months after the Issue Date. The Annuity Date cannot be later than what is permitted under applicable law.
NOTE:
If on the maximum permitted Annuity Date
(which is generally age 95 or 100)
your Contract Value is greater than zero, you must annuitize the Contract.
We notify you
of your available options
in writing 60 days in advance.
If you have not selected an Annuity Option, we make payments under Annuity Option 2 with ten years of guaranteed monthly payments. Upon annuitization you no longer have Contract Value or a death benefit,
and you cannot receive
any other periodic withdrawals or payments other than Annuity Payments.
11.
DEATH BENEFIT
"You" in this section refers to the Owner, or the Annuitant if the Contract is owned by a non-individual.
The death benefit is only available during the Accumulation Phase.
If you or the Determining Life (Lives) die during the Accumulation Phase, we process the death benefit using prices determined after we receive the required information, which is either a Valid Claim or due proof of death as stated here. (For information on due proof of death see the Glossary – Valid Claim). If we receive this information after the end of the current Business Day, we use the next Business Day's prices. We will not accept additional Purchase Payments after receipt of the first Valid Claim from any Beneficiary. We also will not allow any partial or full withdrawals after receipt of a Valid Claim.
If
there are multiple Beneficiaries, each Beneficiary receives the portion of the death benefit he or she is entitled to when we receive his or her Valid Claim. If a Beneficiary dies before you or the Designated Life, that Beneficiary's interest in this Contract ends unless your Beneficiary designation specifies otherwise. If there are no remaining Beneficiaries, or no named Beneficiaries, we pay the death benefit to your estate, or if the Owner is a non-individual, to the Owner. Unless you instruct us to pay Beneficiaries a specific percentage of the death benefit, he or she each receives an equal share. Any part of the death benefit that is in the Allocation Options remains there until distribution begins. From the time we determine the death benefit until we make a complete distribution, any amount in the Allocation Options continues to be subject to investment risk that is borne by the recipient(s). Once we receive notification of death, we no longer accept additional Purchase Payments or process transfer requests.
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The Contract provides the Traditional Death Benefit based on the greater of:
·
Contract Value, or
·
total of all Purchase Payments received, reduced by the percentage of Contract Value withdrawn, determined at the end of each Business Day. Withdrawals include withdrawal charges, but not amounts we withdraw for other Contract expenses.
If the date we are determining the death benefit is not an Index Anniversary, Contract Value includes the Daily Adjustment.
If you are the Determining Life, or if you and the Determining Life (Lives) are different individuals and die simultaneously as described in the discussion of Beneficiaries in section 3, Ownership, Annuitants, Determining Life, Beneficiaries and Payees, we determine the Traditional Death Benefit
at the end of the Business Day
we receive a Valid Claim. For multiple Beneficiaries, each surviving Beneficiary receives the greater of their portion of total Purchase Payments adjusted for withdrawals determined
at the end of the Business Day
we receive the first Valid Claim from any one Beneficiary, or their portion of the Contract Value determined at the end of the Business Day during which we receive his or her Valid Claim.
If you and the Determining Life (Lives) are different individuals and do not die simultaneously, the death benefit is as follows.
This can only occur if you change the Owner after the Issue Date.
·
If a Determining Life dies before you we do not pay a death benefit to the Beneficiary(s), but we may increase the Contract Value.
We compare the Contract Value and total Purchase Payments adjusted for withdrawals determined at the end of Business Day we receive due proof of a Determining Life's death. If your Contract Value is less than total Purchase Payments adjusted for withdrawals, we increase your Contract Value to equal total Purchase Payments adjusted for withdrawals. The Traditional Death Benefit becomes the Contract Value,
and the Traditional Death Benefit ends
. We allocate any Contract Value increase to the Variable Options according to future Purchase Payment allocation instructions.
·
Upon your death your Beneficiary(s) receive the Contract Value determined at the end of the Business Day during which we receive each Beneficiary's Valid Claim.
The Traditional Death Benefit ends upon the earliest of the following.
·
The Business Day before the Annuity Date.
·
The Business Day that total Purchase Payments adjusted for withdrawals and Contract Value are both zero.
·
Upon the death of a Determining Life, the end of the Business Day we receive a Valid Claim from all Beneficiaries if you and the Determining Life are the same individuals, or if you and the Determining Life (Lives) are different individuals and die simultaneously as defined by applicable state law or regulation.
·
Upon the death of a Determining Life, the end of the Business Day we receive due proof of the Determining Life's death if you and the Determining Life (Lives) are different individuals and do not die simultaneously.
·
Upon the death of an Owner (or Annuitant if the Owner is a non-individual), the end of the Business Day we receive the first Valid Claim from any one Beneficiary, if the Owner (or Annuitant) is no longer a Determining Life.
·
The Business Day the Contract ends.
NOTE:
The Traditional Death Benefit is a first-to-die benefit based on the Determining Life.
This means that upon the death of an Owner (or Annuitant if the Owner is a non-individual), if a surviving spouse continues the Contract the Traditional Death Benefit is no longer available. Also, if you and the Determining Life (Lives) are different individuals and you die first, the Traditional Death Benefit is not available to your Beneficiary(s).
DEATH OF THE OWNER AND/OR ANNUITANT
The Appendix to the Statement of Additional Information includes tables that are intended to help you better understand what happens upon the death of any Owner and/or Annuitant under the different portions of the Contract.
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DEATH BENEFIT PAYMENT OPTIONS DURING THE ACCUMULATION PHASE
If you do not designate a death benefit payment option, a Beneficiary must select one of the options listed below. If no death benefit payment option is selected, we default payment to Option B. If a Beneficiary requests a lump sum payment under Option A, we pay that Beneficiary within seven days of receipt of his or her Valid Claim, unless the suspension of payments or transfers provision is in effect. Payment of the death benefit may be delayed, pending receipt of any state forms. For Contracts issued or delivered in New York, if Option A is selected and we do not pay the claim within seven days, we pay interest on the death benefit amount beginning on the eighth calendar day at the greater of the current settlement rate which we declare annually, or 3%. You can contact our Service Center at the address or phone number listed at the back of this prospectus for information on the current settlement rate.
Spousal Continuation:
If the Beneficiary is the deceased Owner's spouse, he or she can choose to continue the Contract with the portion of the death benefit the spouse is entitled to in his or her own name. For non-individually owned Contracts, spousal continuation is only available to Qualified Contracts.
Spouses must qualify as such under federal law to continue the Contract.
Individuals who have entered into a registered domestic partnership, civil union, or other similar relationship that is not considered to be a marriage under state law are also not considered to be married under federal law. An election by the spouse to continue the Contract must be made on the death claim form before we pay the death benefit. If the surviving spouse continues the Contract, at the end of the Business Day we receive his or her Valid Claim, we increase the Contract Value to equal total Purchase Payments adjusted for withdrawals, if applicable. If the surviving spouse continues the Contract:
·
he or she may exercise all of the Owner's rights, including naming a new Beneficiary or Beneficiaries;
·
he or she is subject to any remaining withdrawal charge; and
·
upon the surviving spouse's death their Beneficiary(s) receive the Contract Value, determined at the end of the Business Day during which we receive a Valid Claim from each Beneficiary.
Option A:
Lump sum payment of the death benefit.
Option B:
Payment of the entire death benefit within five years of the date of any Owner's death. The Beneficiary can continue to make transfers between Allocation Options and is subject to a transfer fee and the product fee.
Option C:
If the Beneficiary is an individual,
payment of the death benefit as Annuity Payments under Annuity Options 1, 2 or 5. With our written consent, other options may be available for payment over a period not extending beyond the Beneficiary's life expectancy under which the Beneficiary can continue to make transfers between Allocation Options and is subject to a transfer fee and the product fee. Distribution must begin within one year of the date of the Owner's death.
Any portion of the death benefit not applied to Annuity Payments within one year of the date of the Owner's death must be distributed within five years of the date of death.
If the Contract is owned by a non-individual, then we treat the death of an Annuitant as the death of an Owner for purposes of the Internal Revenue Code's distribution at death rules, which are set forth in Section 72(s) of the Code.
In all events, notwithstanding any provision to the contrary in the Contract or this prospectus, the Contract is interpreted and administered in accordance with Section 72(s) of the Internal Revenue Code.
Other rules may apply to Qualified Contracts.
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12.
TAXES
This section provides a summary explanation of the tax ramifications of purchasing a Contract. More detailed information about product taxation is contained in the Statement of Additional Information, which is available by
calling the toll-free telephone number at the back of this prospectus.
We do not provide individual tax advice. You should contact your tax adviser to discuss this Contract's effects on your personal tax situation.
QUALIFIED AND NON-QUALIFIED CONTRACTS
You can purchase either a Qualified Contract or a Non-Qualified Contract. A Qualified Contract is purchased pursuant to a specialized provision of the Internal Revenue Code (Code). For example, a Contract may be purchased pursuant to Section 408 of the Code as an Individual Retirement Annuity (IRA).
Qualified Contracts are subject to certain restrictions, including restrictions on the amount of annual contributions, restrictions on how much you can earn and still be able to contribute to a Qualified Contract, and specialized restrictions on withdrawals. Qualified Contracts must be purchased from earned income from the relevant year or years, or from a rollover or transfer from a qualified contract. An IRA to IRA indirect rollover can occur only once in any twelve month period from all of the IRAs you currently own. Purchase Payments to Qualified Contracts other than from a qualified transfer may be restricted once the Owner reaches age 70½.
Currently, we offer the following types of Qualified Contracts.
Type of Contract
Persons and Entities that can buy the Contract
IRA
Must have the same individual as Owner and Annuitant.
Roth IRA
Must have the same individual as Owner and Annuitant.
Simplified Employee Pension (SEP) IRA
Must have the same individual as Owner and Annuitant.
Certain Code Section 401 Plans
A qualified retirement plan is the Owner and the Annuitant must be an individual.
We may determine which types of qualified retirement plans are eligible to purchase this Contract.
Inherited IRA and Inherited Roth IRA
Must have the same individual as Owner and Annuitant. The deceased owner of the previously held tax‑qualified arrangement will also be listed in the titling of the Contract.
If you purchase a Qualified Contract, you already receive the benefit of tax deferral through the qualified plan, and so you should purchase this Contract for purposes other than tax deferral.
You can instead purchase a Non-Qualified Contract, which is not qualified pursuant to a specialized provision of the Code. There are no Code restrictions on annual contributions to a Non-Qualified Contract or how much you can earn and still contribute to a Contract.
TAXATION OF ANNUITY CONTRACTS
The Contract has the following tax characteristics.
·
Taxes on earnings are deferred until you take money out. Non-Qualified Contracts owned by corporations or partnerships do not receive income tax deferral on earnings.
·
When you take money out of a Non-Qualified Contract, earnings are generally subject to federal income tax and applicable state income tax. All pre-tax money distributed from Qualified Contracts are subject to federal and state income tax, but qualified distributions from Roth IRA Contracts are not subject to federal income tax. This prospectus does not address specific state tax laws. You should discuss state taxation with your tax adviser.
·
Taxable distributions are subject to an ordinary income tax rate, rather than a capital gains rate.
·
Distributions from Non-Qualified Contracts are considered investment income for purposes of the Medicare tax on investment income. Thus, in certain circumstances, a 3.8% tax may apply to some or all of the taxable portion of distributions (e.g. earnings) to individuals whose income exceeds certain threshold amounts ($200,000 for filing single, $250,000 for married filing jointly and $125,000 for married filing separately.) Please consult a tax advisor for more information.
·
If you take partial withdrawals from your Non-Qualified Contract, the withdrawals are generally taxed as though you were paid taxable earnings first, and then as a non-taxable return of Purchase Payments.
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·
If you annuitize your Non-Qualified Contract and receive a stream of Annuity Payments, you receive the benefit of the exclusion ratio. The exclusion ratio is a calculation that causes a portion of each Annuity Payment to be non-taxable, based upon the percentage of your Contract Value that is from Purchase Payments. Purchase Payments are treated as a non-taxable return of principal, whereas earnings are taxable.
·
If you take partial withdrawals or annuitize a Qualified Contract, you will be responsible for determining what portion, if any, of the distribution consists of after-tax money.
·
If you take out earnings before age 59½, you may be subject to a 10% additional federal tax, unless you take a lifetime annuitization of your Contract or you take money out in a stream of substantially equal payments over your expected life in accordance with the requirements of the Code.
·
A pledge, assignment, or ownership change of a Contract may be treated as a taxable event. You should discuss any pledge, assignment, or ownership change of a Contract with your tax adviser.
·
If you purchase multiple non-qualified deferred annuity contracts from an affiliated group of companies in one calendar year, these contracts are treated as one contract for purposes of determining the tax consequences of any distribution.
·
Death benefit proceeds from Non-Qualified Contracts are taxable to the beneficiary as ordinary income to the extent of any earnings. Death benefit proceeds must be paid out in accordance with the requirements of the Code.
·
Depending upon the type of Qualified Contract you own, required minimum distributions (RMDs) must be satisfied when you reach a certain age. If you enroll in our minimum distribution program, we make RMD payments to you that are designed to meet this Contract's RMD requirements.
TAX-FREE SECTION 1035 EXCHANGES
Subject to certain restrictions, you can make a "tax-free" exchange under Section 1035 of the Internal Revenue Code for all or a portion of one annuity contract for another, or all of a life insurance policy for an annuity contract. Before making an exchange, you should compare both contracts carefully. Remember that if you exchange a life insurance policy or annuity contract for the Contract described in this prospectus:
·
you might have to pay a withdrawal charge on your previous contract,
·
there is a new withdrawal charge period for this Contract,
·
other charges under this Contract may be higher (or lower),
·
the benefits may be different, and
·
you no longer have access to any benefits from your previous contract.
If the exchange does not qualify for Section 1035 treatment, you also may have to pay federal income tax
, including a possible additional federal tax,
on the exchange. You should not exchange an existing life insurance policy or another annuity contract for this Contract unless you determine the exchange is in your best interest
and not just better for the person selling you the Contract who generally earns a commission on each sale. You should consult a tax adviser to discuss the potential tax effects before making a 1035 exchange.
13.
OTHER INFORMATION
THE REGISTERED SEPARATE ACCOUNT
We established Allianz Life of NY Variable Account C (the Separate Account, formerly Preferred Life Variable Account C), as a separate account under New York insurance law on February 26, 1988. The Separate Account is registered with the SEC as a unit investment trust under the Investment Company Act of 1940. The SEC does not supervise our management of the Separate Account.
The Separate Account holds the shares of the Variable Options that have been purchased with Contract assets. We keep the Separate Account assets separate from the assets of our general account and other separate accounts, including the non-unitized separate accounts we established in connection with the Index Options. The Separate Account is divided into subaccounts, each of which invests exclusively in a single Variable Option.
We own the assets of the Separate Account. We credit gains to or charge losses against the Separate Account, whether or not realized, without regard to the performance of other investment accounts. The Separate Account's assets are insulated, so that the assets cannot be used to pay any of our liabilities, other than those arising from the investment of Contract assets in the Variable Options.
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If the Separate Account's assets exceed the required reserves and other liabilities, we may transfer the excess to our general account, to the extent of seed money invested by us or earned fees and charges. The obligations under the Contracts are obligations of Allianz Life of New York.
OUR GENERAL ACCOUNT
Our general account holds all our assets other than assets in our separate accounts. We own our general account assets, and, subject to applicable law, have sole investment discretion over them. The assets are subject to our general business operation liabilities and claims of our creditors and may lose value. We have not registered our general account as an investment company under the Investment Company Act of 1940.
Our general account assets fund guarantees provided in the Contracts. Contract Value that you apply to Annuity Payments becomes part of our general account.
OUR UNREGISTERED SEPARATE ACCOUNT
We allocate all assets backing the Index Options to an unregistered, non-unitized, non-insulated separate account (Separate Account IANY), which we established under New York Insurance Law solely for the purpose of supporting our obligations to pay Performance Credits associated with the Index Options. Separate Account IANY has two subaccounts: Subaccount IABV (which is a book value subaccount) and Subaccount IAMV (which is a market value subaccount).
Initially, a substantial majority of the aggregate assets backing the Index Options are allocated to Subaccount IABV. We place all other assets that you allocate to the Index Options that are not invested in Subaccount IABV in Subaccount IAMV. Subsequently, there may be significant transfer of assets between Subaccount IABV and Subaccount IAMV in response to Index performance during the then-current Index Year. We typically transfer assets between these subaccounts if there is a 10% incremental change in year-to-date Index performance. We examine year-to-date Index performance daily and change the subaccount allocations daily if needed based on this 10% increment.
We invest the assets in Subaccount IAMV in hedging instruments, including derivative investments such as put and call options, as well as cash and fixed income securities. Like our general account, the assets in Separate Account IANY are subject to our general business operation liabilities and the claims of our creditors.
An Owner who allocates Contract Value to an Index Option does not have any interest in or claim on the assets in Separate Account IANY. In addition, neither the Owner nor the Index Options participate in any way in the performance of assets held in Separate Account IANY.
DISTRIBUTION
Allianz Life Financial Services, LLC (Allianz Life Financial), a wholly owned subsidiary of Allianz Life Insurance Company of North America, serves as principal underwriter for the Contracts. Allianz Life Financial is a limited liability company organized in Minnesota, and is located at 5701 Golden Hills Drive, Minneapolis, MN 55416. Allianz Life Financial is registered as a broker/dealer with the SEC under the Securities Exchange Act of 1934, as well as with the securities commissions in the states in which it operates, and is a member of the Financial Industry Regulatory Authority (FINRA). Allianz Life Financial is not a member of Securities Investors Protection Corporation. More information about Allianz Life Financial is available at www.finra.org or by calling 1-800-289-9999. You also can obtain an investor brochure from FINRA describing its Public Disclosure Program.
We have entered into a distribution agreement with Allianz Life Financial for the distribution of the Contracts. Allianz Life Financial also may perform various administrative services on our behalf.
We may fund Allianz Life Financial's operating and other expenses, including: overhead; legal and accounting fees; Financial Professional training; compensation for the Allianz Life Financial management team; and other expenses associated with the Contracts. Financial Professionals and their managers are also eligible for various benefits, such as production incentive bonuses, insurance benefits, and non-cash compensation items that we may provide jointly with Allianz Life Financial. Non-cash items include conferences, seminars and trips (including travel, lodging and meals in connection therewith), entertainment, awards, merchandise and other similar items.
Allianz Life Financial does not itself sell the Contracts to customers. Rather, customers typically are working with a Financial Professional acting as an investment adviser, who advises the customer to purchase a Contract through a third-party broker-dealer. Investment advisers and broker-dealers involved in selling the Contracts may include Questar Asset Management, Inc., an affiliated investment adviser, or Questar Capital Corporation, an affiliated broker/dealer.
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We do not pay sales commissions in connection with sales of the Contracts. Rather, the Contract Owner pays an investment advisory fee to his or her Financial Professional.
The Investment Options may assess a Rule 12b‑1 fee. These fees are paid to Allianz Life Financial as consideration for providing certain services and incurring certain expenses permitted under the Investment Option's plan. These fees typically equal 0.25% of an Investment Option's average daily net assets for the most recent calendar year.
In certain instances, an investment adviser and/or subadviser (and/or their affiliates) of an Investment Option may make payments for administrative services to Allianz Life Financial or its affiliates.
Broker-dealers and investment advisers  involved in sales of the Contracts may receive payments from us for administrative and other services that do not directly involve the sale of the Contracts, including payments made for recordkeeping, the recruitment and training of personnel, production of promotional literature and similar services.
We and/or Allianz Life Financial may pay certain broker-dealer and investment advisory firms additional marketing support allowances for:
·
marketing services and increased access to their Financial Professionals;
·
sales promotions relating to the Contracts;
·
costs associated with sales conferences and educational seminars;
·
the cost of client meetings and presentations; and
·
other sales expenses incurred by them.
We retain substantial discretion in determining whether to grant a marketing support payment to a particular firm and the amount of any such payment.
We may also make payments for marketing and wholesaling support to broker/dealer affiliates of Variable Options that are available through the variable annuities we offer.
Additional information regarding marketing support payments can be found in the Distributor section of the Statement of Additional Information.
A portion of the payments made to broker-dealer and investment advisory firms may be passed on to their Financial Professionals. Financial Professionals may receive cash and non-cash compensation and other benefits. Ask your Financial Professional for further information about what they and their firm may receive in connection with your purchase of a Contract.
We offer the Contracts to the public on a continuous basis. We anticipate continuing to offer the Contracts but reserve the right to discontinue the offering.
ADDITIONAL CREDITS FOR CERTAIN GROUPS
We may credit additional amounts to a Contract instead of modifying charges because of special circumstances that result in lower sales or administrative expenses or better than expected mortality or persistency experience.
ADMINISTRATION/ALLIANZ SERVICE CENTER
The Allianz Service Center performs certain administrative services regarding the Contracts and is located at 5701 Golden Hills Drive, Minneapolis, Minnesota. The Service Center mailing address and telephone number are listed at the back of this prospectus. The administrative and routine customer services performed by our Service Center include processing and mailing of account statements and other mailings to Owners, responding to Owner correspondence and inquiries. Allianz Life Insurance Company of North America also contracts with Tata Consultancy Services (Tata) located at #42(P) & 45(P), Think Campus, Electronic City, Phase II, Bangalore, Karnataka 560100, India, to perform certain administrative services including:
·
issuance and maintenance of the Contracts,
·
maintenance of Owner records, and
·
routine customer service including:
–
processing of Contract changes,
–
processing withdrawal requests (both partial and total) and
–
processing requests for fixed annuity payments.
Services performed by Tata are overseen and quality control checked by our Service Center.
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To reduce expenses, only one copy of most financial reports and prospectuses, including reports and prospectuses for the Variable Options, may be mailed to your household, even if you or other persons in your household have more than one contract issued by us or our affiliate. Call our Service Center at the toll-free telephone number listed at the back of this prospectus if you need additional copies of financial reports, prospectuses, or annual and semiannual reports, or if you would like to receive one copy for each contract in future mailings.
LEGAL PROCEEDINGS
Like other life insurance companies, we from time to time are involved in legal proceedings of various kinds, including regulatory proceedings and individual and class action lawsuits. In some legal proceedings involving insurers, substantial damages have been sought and/or material settlement payments have been made. Although the outcome of any such proceedings cannot be predicted with certainty, we believe that, at the present time, there
are no pending
or threatened legal proceedings
to which we, the
Separate Account, or Allianz Life Financial is a party that are reasonably likely to materially affect the Separate Account, our ability to meet our obligations under the Contracts, or Allianz Life Financial's ability to perform its obligations.
STATUS PURSUANT TO SECURITIES EXCHANGE ACT OF 1934
Allianz Life of New York hereby relies on the exemption provided by Rule 12h-7 under the Securities Exchange Act of 1934 from the requirement to file reports pursuant to Section 15(d) of that Act.
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14.
INFORMATION ON ALLIANZ LIFE OF NEW YORK
Allianz Life of New York is a stock life insurance company organized under the laws of the State of New York on September 21, 1982. Our address is 28 Liberty Street, 38th Floor, New York, NY 10005-1422. Before January 1, 2003, Allianz Life of New York was known as Preferred Life Insurance Company of New York. We are a subsidiary of Allianz Life Insurance Company of North America (Allianz Life), which is also a stock life insurance company. Allianz Life is a subsidiary of Allianz of America, Inc. (AZOA), a financial holding company. AZOA is a wholly owned subsidiary of Allianz Europe, B.V., which in turn is a wholly owned subsidiary of Allianz SE, which is registered in Munich, Germany. We currently offer variable annuities and registered index-linked annuities and are licensed to do direct business in six states, including New York and the District of Columbia.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
BOARD OF DIRECTORS
The Board currently consists of nine members, including our Chairman and Chief Executive Officer, our President, our Chief Financial Officer and Treasurer, our Vice President, Appointed Actuary, and five independent members.
The Board holds regular semi-annual meetings, generally in April and November of each year, and holds special meetings or takes action by unanimous written consent as circumstances warrant. The Board has standing Executive, Audit and Evaluation, Conflict of Interest, and Finance Committees, each of which is described in further detail below. All directors attended 100% of the Board and committee meetings to which he or she was assigned during 2015. In 2015, the Board acted twice by unanimous written action.
The current members of our Board are as follows:
Walter R. White
Chairman, Director, and Chief Executive Officer
Walter R. White, age 59, joined Allianz Life in 2009, and became President and Chief Executive Officer of Allianz Life and Chairman and Chief Executive Officer of Allianz Life of New York on January 1, 2012. In this role Mr. White is responsible for leading and overseeing Allianz Life of New York and Allianz Life and providing strategic management and direction. Mr. White served as Chief Administrative Officer of Allianz Life from 2009 to 2011. Prior to joining Allianz Life, Mr. White held executive roles at Woodbury Financial Services from 2001 to 2009, serving as Chief Operating Officer from 2003 to 2007 and President from 2007 to 2009. Prior to that, Mr. White held senior management roles at Fortis from 1994 to 2001, serving as Senior Vice President of Fortis Investors from 1998 to 2001. Mr. White also held senior management roles at the MONY Group from 1988 to 1994, serving as the President of MONY Brokerage from 1991 to 1994
.
Mr. White brings to the Board extensive financial services and brokerage experience as well as key strategic planning and leadership skills developed as the Chief Executive Officer of Allianz Life of New York and President of Woodbury Financial.
Thomas P. Burns
Director and President
Thomas P. Burns, age 60, joined Allianz Life of New York's Board of Directors on April 3, 2007. Mr. Burns currently serves as President of Allianz Life of New York. He also serves as Senior Vice President, Chief Distribution Officer of Allianz Life. Mr. Burns is responsible for the development, design and implementation of Allianz Life of New York's and Allianz Life's sales and distribution strategies. Prior to joining Allianz Life, Mr. Burns served as Senior Vice President, Distribution of Securian from 2002 to 2006. Prior to joining Securian, Mr. Burns worked for Prudential for 24 years, from 1978 to 2002, in various managerial capacities.
Mr. Burns brings to the Board extensive knowledge of Allianz Life of New York 's sales and distribution strategies as well as over 35 years of experience in insurance and annuity products.
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Ronald M. Clark
Director
Ronald M. Clark, age 68, joined
Allianz Life of New York
's Board of Directors on March 31, 2013. Mr. Clark has over 40 years of experience in investments, having served as the President of Allianz Investment Corporation from 1980 to 1990, Chief Operating
Officer
of Allianz of America, Inc. ("AZOA") from 1990 to 2001, and Chief Investment Officer of AZOA from 2002 to 2011.
Mr. Clark retired as of December 31, 2011.
Mr. Clark also serves on the Board of Directors of Allianz Life and serves as a director and Chair of the
Compensation
Committee of Manitex International, Inc. Manitex is a leading provider of engineered lifting solutions, including cranes, forklifts and reach stackers.
Mr. Clark brings to the Board extensive experience in the financial services and insurance industries as well as extensive experience with investment matters. The Board also benefits from his perspective as a current and former director of other companies.
Kevin J. Doyle
Director
Kevin J. Doyle, age 59, joined Allianz Life of New York's Board of Directors on January 20, 2014. In addition to serving on the Board of Directors of Allianz Life of NY, Mr. Doyle serves as a director of ACA Financial Guaranty Insurance Company where he is Chairman of the Corporate Governance Committee and a member of the Audit Committee. From 2000 through 2011, Mr. Doyle served as the Senior Vice President and General Counsel of Ambac Financial Group, Inc., where he was responsible for legal, regulatory and governance affairs of an SEC-registered, NYSE-listed holding company and 50 state-licensed financial guarantee insurance company, including securities laws compliance, insurance regulatory compliance, corporate governance, litigation management and management of legal aspects of a $700 billion financial guaranty insurance portfolio. Prior to that, Mr. Doyle served in various capacities for Ambac from 1991 to 2000, including Vice President and Assistant General Counsel from 1991 to 1995 and Managing Director and General Counsel of Specialized Finance from 1995 to 2000. Prior to joining Ambac, Mr. Doyle was an associate attorney at the law firm of LeBoeuf, Lamb, Greene & MacRae from 1986 to 1991 and an associate attorney at the law firm of Peck, Shaffer & Williams from 1983 to 1985. Mr. Doyle received his Bachelor of Arts degree from Yale University in 1979 and received his J.D. degree from the University of Washington in 1983.
Mr. Doyle brings to the Board extensive experience in the insurance and financial services industry, including extensive legal and regulatory experience for
Martha Clark Goss
Director
Martha
Clark Goss,
age 66
, joined
Allianz Life of New York
's Board of Directors on October 15, 2005. Ms. Goss has more than 35 years of executive experience, primarily in finance and investments and risk management. Since 1992 she has served on a number of public and private company boards, has provided independent consulting services to various companies and serves as an instructor for executive leadership training for Deloitte. From 1999 to 2001, she served as the Chief Financial Officer of Capital Markets Company and from 1995 to 1999 was Chief Financial Officer and Vice President of Booz Allen Hamilton Holding Corporation (formerly Booz-Allen Hamilton Inc.). Previously, she served as Senior Vice President of Enterprise Integrated Risk Management and Control of Prudential Insurance Company of America from 1994 to 1995, President of Prudential Asset Management Company from 1992 to 1994, President of Prudential Power Funding from 1989 to 1992 and Corporate Treasurer of Prudential from 1983 to 1989. She joined Prudential in 1983 in the Corporate Finance Department after spending eight years at The Chase Manhattan Bank in credit and lending.
Ms. Goss has served as a director of numerous corporations, including, currently, American Water Works Company, Inc., Neuberger Berman Mutual Funds and Berger Group Holdings, Inc. Previously, she served on the boards of Ocwen Financial Corp., Parsons Brinckerhoff Group Inc. (also known as Parsons Brinckerhoff, Inc.), Channel Reinsurance Ltd., Claire's Stores, Inc., Bank Leumi USA, Foster Wheeler Corporation, IBJ Whitehall Business Credit Corporation and Dexter Corporation and was on the Metropolitan Regional Board of The Chase Manhattan Bank.
Ms. Goss brings to the Board extensive experience in the financial services industry as well as expertise on corporate governance and enterprise risk management matters.
The Board also benefits from her perspective as a current and former director of other companies.
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Stephen R. Herbert
Director
Steven R. Herbert,
age 66,
joined Allianz Life of New York's Board of Directors on April 11, 1997 and also serves as Chair of Allianz Life of New York's Audit and Evaluation Committee. Mr. Herbert is a partner of Locke & Herbert LLP and Of Counsel with Sutherland Asbill & Brennan LLP. Mr. Herbert counsels insurance and financial services companies and various insurance distributors, including life, annuity (fixed and variable) and health insurance providers, on state insurance regulatory law. Mr. Herbert focuses on regulatory matters, including sales and market conduct; product development; policy form preparation and filing; producer licensing and appointment; agent compensation; corporate governance; corporate transactions; business agreements; investments; claims and litigation; and reinsurance. Mr. Herbert also advises in matters relating to forming, licensing, regulating and operating life insurance and annuity companies and their products, with a heavy concentration on New York law.
Mr. Herbert has been in private practice for more than 30 years. He previously served as vice president, general counsel and secretary at a New York-based, 50-state licensed life insurance company. Mr. Herbert also was general counsel for a New York state life insurance company trade association and assistant general counsel for a New York life insurance and financial services company.
Mr. Herbert brings to the Board extensive legal and regulatory experience in the financial services industry, including extensive experience with New York laws and regulations.
Gary A. Smith
Director
Gary A. Smith, age 56, joined Allianz Life of New York's Board of Directors on May 10, 2005. Mr. Smith is Co-Founder and Senior Partner of Ivy Planning Group (Ivy), a 22-year-old management consulting and training company specializing in strategy, diversity, leadership and change management. Ivy is recognized as one of the Top 50 minority-owned companies by DiversityBusiness.com and received the Working Woman magazine Entrepreneurial Excellence Award. Mr. Smith has over 25 years of strategy, technology, management consulting and executive coaching to large private sector and government organizations. He has successfully developed and implemented strategies, led teams, and served the needs of a wide spectrum of clients, experiencing best practices in management consulting in multiple venues.
Mr. Smith co-founded Ivy after a successful career managing sales, marketing, and technical organizations, including IBM, where he held Marketing and Technical positions; Amdahl Corporation, where he served as an Account Executive; Masstor Systems, where he served as Director of U.S. Operations; Comdisco Inc., where he served as Director of Federal Marketing; and Technical Software Services, where he served as Vice President and Chief Operating Officer.
Mr. Smith has served on the Boards of the Capital Chapter of Strategic Leadership Forum, The International Society for Strategic Management, the Strategic Planning Board and Lakewood Country Club. Mr. Smith received his Bachelor of Arts degree in political science from Yale University.
Mr. Smith brings to the Board extensive experience in management consulting and diversity initiatives. The Board also benefits from his perspective as a current and former director of other companies
.
William E. Gaumond
Director, Chief Financial Officer and Treasurer
William E. Gaumond, age 42, joined Allianz Life of New York in 2016 and currently serves as Director, Chief Financial Officer and Treasurer. Mr. Gaumond joined Allianz Life in 2004 and currently serves as Senior Vice President, Chief Financial Officer and Treasurer and as a member of the Board of Directors. Mr. Gaumond is responsible for all finance and risk management functions, with oversight of the controller, financial planning, treasury and corporate risk management areas. Prior to his current role, Mr. Gaumond spent 12 years in a number of finance and investment-related positions at Allianz Life, including Senior Vice President of the Asset Liability Management and Investment Risk Management department. During this time, Mr. Gaumond also served for two years as a senior member of the Group Planning and Controlling department for Allianz SE in Munich, Germany. Before joining Allianz Life, Mr. Gaumond worked for nine years at PricewaterhouseCoopers LLP. Mr. Gaumond received his Bachelor of Business Administration degree in accounting from the University of Notre Dame, where he graduated summa cum laude.
Mr. Gaumond brings to the Board extensive financial services, investment and insurance industry experience, including serving as Chief Financial Officer and Treasurer of Allianz Life of New York and Allianz Life.
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Steven J. Thiel
Director and Vice President, Appointed Actuary
Steven J. Thiel, age 46, joined Allianz Life of New York's Board of Directors on November 13, 2012 and serves as Vice President, Appointed Actuary of Allianz Life of New York. He also serves as Vice President, Actuarial Reporting and Analysis of Allianz Life. Mr. Thiel leads a team responsible for accurate and timely reporting of the actuarial balances for Allianz Life and Allianz Life of New York. He is accountable for analyzing aspects of the financial performance and delivering key projects that drive financial strength and stability
Mr. Thiel joined Allianz Life in 2008. Prior to joining Allianz Life, Mr. Thiel was assistant vice president of reinsurance for Sun Life Financial, where he directed the financial reporting and analysis function of the reinsurance business group. Prior to that, he served as an actuary for Allstate Life Insurance Company, where he was accountable for providing financial analysis and oversight for activities involving a captive distribution channel. Mr. Thiel earned a Bachelor of Business Administration degree with double major in Actuarial Science and Risk Management and Insurance from the University of Wisconsin-Madison. He is a fellow in the Society of Actuaries and a member of the American Academy of Actuaries.
Mr. Thiel brings to the Board extensive experience in actuarial and financial performance matters.
EXECUTIVE OFFICERS
The current executive officers (other than Messrs. White, Gaumond and Burns, whose biographies are included above in the Board of Directors information) are as follows:
Gretchen Cepek
Chief Legal Officer and Secretary
Gretchen Cepek, age 48, joined Allianz Life in 2009, and currently serves as Senior Vice President, General Counsel and Secretary of Allianz Life She is also Chief Legal Officer and Secretary of Allianz Life of New York. Ms. Cepek is responsible for the legal and compliance departments as well as government relations and the special investigations unit. Prior to her current role, Ms. Cepek served as Vice President,
Legal Business Operations, Distribution and Product Development
of Allianz Life from 2009 to February 2012. Prior to joining Allianz Life, Ms. Cepek served as Counsel at Woodbury Financial Services from 2005 to 2009. Prior to joining Woodbury Financial, Ms. Cepek spent 13 years with the law firm of Querrey & Harlow, Ltd. from 1992 to 2005, where she served as a law clerk, associate attorney and then as a shareholder. Ms. Cepek received her J.D. from Valparaiso University School of Law in 1993.
Cathy A. Mahone
Chief Administrative Officer
Cathy Mahone, age 51, serves as the Senior Vice President, Chief Administrative Officer of Allianz Life and Chief Administrative Officer of Allianz Life of New York. Ms. Mahone is responsible for enterprise operations, information technology, and other strategic corporate initiatives. Previously, Ms. Mahone served as Senior Vice President, Enterprise Operations for Allianz Life, a position she held until assuming her current role in 2012.
Prior to joining Allianz Life, Ms. Mahone had approximately 20 years of financial services experience with Ameriprise Financial (formerly American Express), where she served in several leadership roles, including Vice President of the Operations Project Management Office. In her more than 20-year career with Ameriprise, Ms. Mahone held a variety of leadership positions in operations, distribution and marketing. Ms. Mahone earned a Bachelor of Arts degree in mass communications from the University of Minnesota and a Master's degree in business communications from the University of St. Thomas. Ms. Mahone also holds her FINRA Series 7 and 24 securities registrations.
Neil H. McKay
Chief Actuary
Neil H. McKay, age 54, joined Allianz Life of New York and Allianz Life in 1999 and currently serves as Senior Vice President, Chief Actuary of Allianz Life, and Chief Actuary of Allianz Life of New York. Mr. McKay is responsible for all of the actuarial functions of Allianz Life of New York and Allianz Life, including the actuarial assumptions underlying their products and the rate setting associated with existing and new products. Prior to joining Allianz Life, Mr. McKay served in a variety of roles at LifeUSA Holding Company (prior to its merger with Allianz Life) from 1990 to 1999, culminating in the position of Vice President of Finance. Prior to that, Mr. McKay held the position of Assistant Product Actuary from 1984 to 1990 for Security Life of Denver, in Denver, Colorado.
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Todd M. Hedtke
Chief Investment Officer
Todd M. Hedtke, age 43, joined Allianz Life of New York in 2011 and currently serves as Chief Investment Officer. He also currently serves as Senior Vice President, Chief Investment Officer of Allianz Life. Mr. Hedtke leads the investment management, liquidity planning, hedging, and trading functions at Allianz Life. He is also a member of the global Allianz Investment Management Board, which services the Allianz Group insurance companies. Prior to his current role, Mr. Hedtke spent 15 years in a number of investment-related positions at Allianz Life and its affiliate Allianz Investment Management, LLC, including his prior role as Vice President, Investment Management from October 2010 until August 2015. Prior to joining Allianz Life, Mr. Hedtke held various finance and investment positions at Cargill, EBF & Associates, and American Express. Mr. Hedtke earned his BA from Hamline University and MBA from the University of Minnesota Carlson School of Management. In addition to being a Chartered Financial Analyst, he holds designations as a financial risk manager and Fellow of the Life Management Institute.
Robert DeChellis
Field Vice President, Broker Dealer Distribution
Robert DeChellis, age 49, joined Allianz Life in 2006 and currently serves as Field Senior Vice President, Broker Dealer Distribution of Allianz Life, and Field Vice President, Broker Dealer Distribution of Allianz Life of New York. He also serves as President of Allianz Life Financial Services, LLC. As President, Mr. DeChellis is responsible for sales and distribution of Allianz Life's and Allianz Life of New York's products, including variable annuities, fixed indexed annuities, and life insurance through broker-dealers and various financial institutions. In this role, he is also responsible for expanding the company's wholesale annuity distribution network. Prior to joining Allianz Life, Mr. DeChellis served as Executive Vice President of the Retail Annuities Division of Travelers Life & Annuity. Prior to that, Mr. DeChellis served as Executive Vice President and national sales manager for Jackson National Life Distributors, Inc. Before joining the annuity industry, Mr. DeChellis spent 13 years in asset management, holding positions with firms including Goldman Sachs and Lord Abbett.
CORPORATE GOVERNANCE
Committees of the Board
The Executive Committee of the Board ("Executive Committee") is currently composed of Messrs. White (Chair), Gaumond and Herbert. The function of the Executive Committee is to exercise the authority of the Board between meetings of the Board, with the exceptions set forth in Allianz Life of New York's By-Laws. The Executive Committee
did not meet
in 2015.
The Audit and Evaluation Committee of the Board is currently composed of Messrs. Herbert (Chair), Clark and Smith. The Audit and Evaluation Committee is responsible for
recommending the selection of independent certified public accountants, reviewing Allianz Life of New York's financial condition and the scope and results of the independent audit and any internal audit, nominating candidates for director, evaluating the performance of principal officers deemed by the Audit and Evaluation Committee to be principal officers of Allianz Life of New York and recommending to the Board of Directors the selection and compensation of such principal officers and any plan to issue options to its officers and employees for the purchase of shares of stock.
The Audit and Evaluation Committee met
twice in 2015, and acted once by written action
.
The Conflict of Interest Committee of the Board is currently composed of Messrs. White (Chair), Herbert and Ms. Cepek. The Conflict of Interest Committee assists Allianz Life of New York in addressing ethics and conflict of interest matters. The Conflict of Interest Committee met one time in 2015.
The Finance Committee of the Board is currently composed of Messrs. Hedtke, (Chair), Clark and Thiel. The Finance Committee is responsible for exercising all the powers of the Board of Directors with respect to the investments of the funds of Allianz Life of New York. The Finance Committee met twice in 2015, and acted three times by written action.
Independence of Certain Directors
Allianz Life of New York is not subject to the independence standards of the New York Stock Exchange or any other national securities exchange, but is subject to the independence standards set out in New York Insurance laws and the Model Audit Rule. Applying the independence standards of the Model Audit Rule to the current members of Allianz Life of New York's Board of Directors, the Board of Directors has determined that Ms. Goss and Messrs. Clark, Doyle, Herbert and Smith are "independent" under those standards.
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Code of Ethics
All of our officers and employees, including our Chief Executive Officer, President, Chief Financial Officer and Controller, are subject to Allianz Life of New York's Code of Ethics.
Section 16(a) Beneficial Ownership Reporting Compliance
Not applicable.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
In this section, we provide an overview of the goals and principal components of our executive compensation program and describe how we determine the compensation of our "Named Executive Officers" or "NEOs." Allianz Life of New York is a subsidiary of Allianz Life. Each of our NEOs is employed by both Allianz Life of New York and Allianz Life.  Our NEOs are compensated directly by Allianz Life. Allianz Life charges Allianz Life of New York an allocated percentage of each of our NEO's compensation. The allocated percentages of the New York principal officers is reviewed and recommended by our Audit and Evaluation Committee. The "NY Principal Officers" are the Chief Executive Officer, President, Chief Legal Officer and Secretary, Chief Administrative Officer and Chief Financial Officer and Treasurer.
The allocated percentage of compensation charged to Allianz Life of New York for our NEO's during the year ended December 31, 2015 is set forth below and hereafter referred to as the "Allocation Percentages." For 2015, our NEOs were:
Name
Title
Allocation Percentages
Walter White
Chairman and Chief Executive Officer
4.00%
Giulio Terzariol
Chief Financial Officer and Treasurer
2.50%
Thomas Burns
President
8.00%
Neil McKay
Chief Actuary
8.00%
Robert DeChellis
Field Vice President, Broker Dealer Distribution
14.50%
The details of each NEO's compensation may be found in the Summary Compensation Table and other compensation tables included in this Executive Compensation section. Mr. Terzariol resigned his position as Chief Financial Officer and Treasurer effective December 31, 2015 to take on the role of Head of Group Planning and Controlling with Allianz SE. He was replaced effective January 1, 2016 by Mr. Gaumond who was promoted from Senior Vice President, ALM & Investment Risk Management.
Executive Summary
Our NEOs are also officers of Allianz Life, our parent company, and are not paid additional compensation for serving as executive officers of Allianz Life of New York. Instead, our NEOs are paid directly by Allianz Life with a certain portion of their Allianz Life compensation allocated to Allianz Life of New York, which is reviewed and approved by our Audit and Evaluation Committee with respect to the NY Principal Officers. Therefore, our parent company, Allianz Life, establishes our NEOs compensation programs with our Audit and Evaluation Committee reviewing and approving the actual compensation allocated to Allianz Life of New York with respect to our NY Principal Officers. Allianz Life's compensation programs are intended to align our NEOs' interests with those of our ultimate stockholder. Our indirect stockholder is Allianz SE, the ultimate parent company of Allianz Life and Allianz Life of New York. Allianz Life's compensation programs are designed to reward performance that meets or exceeds the goals established by the Compensation Committee, a management committee of Allianz Life, which is an indirect subsidiary of Allianz SE. Allianz Life is tasked with establishing the executive compensation philosophy. In line with Allianz Life's compensation philosophy described below, the total compensation received by our NEOs will vary based on individual and corporate performance in light of annual and long-term performance goals. Our NEOs' total compensation is composed of a mix of annual base salary, annual cash awards based on corporate objectives and executive performance factors and long-term equity incentive awards in the form of restricted stock units of the equity securities of Allianz SE.
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Compensation Philosophy and Strategy
Overview
The overriding goal of Allianz Life's executive compensation programs is to attract, retain and motivate top-performing executive officers who will dedicate themselves to long-term financial and operational success. To this end, Allianz Life has structured the executive compensation programs to foster a pay-for-performance management culture by:
·
providing total compensation opportunities that are competitive with the levels of total compensation available at the large diversified financial services companies with which Allianz Life most directly competes in the marketplace;
·
setting performance metrics and objectives for variable compensation arrangements that reward executives for attaining both annual targets and medium-range and long-term business objectives, thereby providing individual executives with the opportunity to earn above-average compensation by achieving above-average results;
·
establishing equity-based arrangements that align executives' financial interests with those of Allianz SE by ensuring executives have a material financial stake in the equity value of Allianz SE and the business success of its affiliates; and
·
structuring compensation packages and outcomes to foster internal pay equity.
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Compensation Components
To support this pay-for-performance strategy, Allianz Life's total compensation program provides a mix of compensation components that bases the majority of each executive's compensation on their success and on an assessment of each executive's overall contribution to that success.
Compensation Element
Description
Objective
Base Salary
Fixed rate of pay that compensates employees for fulfilling their basic job responsibilities. For NEOs, increases are generally provided in the case of a significant increase in responsibilities or a significant discrepancy versus the market.
Attract and retain high-caliber leadership.
Annual Incentive Plan
Incentive compensation that promotes and rewards the achievement of annual performance objectives through awards under the Allianz Life Annual Incentive Plan ("AIP"), (formerly known as AZOA Services Corporation Annual Incentive Plan).
▪  Link compensation to annual performance results.
▪  Attract and motivate high-caliber leadership.
▪  Align the interests of NEOs and our stockholder.
Variable Compensation Plan
Variable compensation that promotes and rewards the achievement of annual performance objectives through awards under the Variable Compensation Immediate and Deferred Plan.
▪  Link compensation to annual performance results.
▪  Motivate and retain high-caliber leadership with long-term vesting.
Long-Term Incentives
Incentive compensation that promotes and rewards the achievement of long-term performance objectives through awards under the Allianz Life Long-Term Performance Unit Plan ("ALTPUP"), (formerly known as AZOA Services Corporation Long-Term Performance Unit Plan).
In the case of Allianz Life's Chief Executive Officer, Walter White, he is eligible to receive annual awards through the Allianz SE Mid-Term Bonus Plan instead of the ALTPUP.
▪  Link compensation to annual and multi-year performance results.
▪  Motivate and retain high-caliber leadership with multi-year vesting.
▪  Align the interests of NEOs and our stockholder.
Performance-Based Equity Incentives
Incentive compensation through restricted stock unit awards made under the Allianz Equity Incentive Plan ("AEI") that promotes and rewards the achievement of  senior executive officers. The AEI replaced the Allianz Group Equity Incentives Plan 2007 ("GEI").
▪  Retain high-caliber leadership with multi-year vesting.
▪  Align the interests of NEOs and our stockholder.
Severance Arrangements
Severance payments to employees, including NEOs, under certain company-initiated termination events.
Compensate employees for situations where the employee's position is eliminated as a result of outsourcing, merger or other corporate transaction.
Perquisites-Benefits
Perquisites provided to our NEOs include employer matching contributions to the NEOs' 401(k) plans and may also include the payment of life insurance premiums, relocation reimbursements, reimbursements for financial planning and tax preparation services and reimbursements of spousal travel expenses.
Provide market competitive total compensation package.
In addition, Allianz Life offers all employees, including our NEOs, broad-based benefits, including comprehensive medical, dental and vision insurance, group term life insurance and participation in a 401(k) plan.
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How Compensation Decisions Are Made
Role of the Board of Directors and Compensation Committee
The framework governing the executive compensation policies for Allianz Life, which directly compensates the executives of Allianz Life of New York, except as such policies relate to the compensation for the Chief Executive Officer, is set through the Compensation Committee of Allianz Life. Decisions affecting the compensation of the Chief Executive Officer are outside the scope of the Allianz Life Compensation Committee. Any such decisions are made by Allianz SE, subject to review by the Nomination, Evaluation and Compensation Committee of the Allianz Life Board of Directors (the "NEC Committee"), and final approval by Allianz Life's Board. With respect to the compensation of other "principal officers" selected by the Board for purposes of the duties of the NEC Committee under Minn. Stat. § 60D.20, subd. 3(d), the Compensation Committee's decision are similarly subject to review by the NEC Committee and final approval by Allianz Life's Board. The "principal officers" include the Chief Executive Officer, Chief Financial Officer and General Counsel. Further, with respect to the compensation paid by Allianz Life that is allocated to the NY Principal Officers, the Audit and Evaluation Committee of Allianz Life of New York reviews and approves the Allocation Percentages. Allianz Life's Board has delegated the following responsibilities to the Compensation Committee:
·
In general, establish the compensation philosophy and strategy of Allianz Life and oversee the development and implementation of compensation, benefit and perquisite programs for corporate executives consistent with the principles of ensuring that leadership is compensated effectively in a manner consistent with the stated compensation strategy, internal equity considerations, competitive practices, shareholder interests, and the requirements of any applicable regulatory bodies in order to attract and retain high-quality leadership.
·
Review and approve the establishment of, or material modification to, any executive incentive compensation plans or programs for Allianz Life.
·
Review and approve any special benefits, perquisites or compensation contracts in effect for, or offered to, any prospective, current or former Allianz Life employee, regardless of the employee's level or assignment within Allianz Life. Such benefits and perquisites are those that are unusual or different than the benefits offered to all similarly-situated employees.
·
Review and approve any employment agreements or any severance, change in control or similar termination arrangements or agreements proposed to be made with any prospective, current or former employee of Allianz Life. This does not include special termination agreements, separation or settlement agreements negotiated in connection with and at the time of termination of an executive's employment.
·
Review and approve compensation decisions.
·
Oversee Allianz Life's compliance with regulations with respect to compensation matters and ensure adherence to the set principles and standards of the Allianz Group Rewards Framework and German regulations.
The Compensation Committee will at all times be composed of at least five members who are appointed by the full Board of Directors of Allianz Life. The Compensation Committee currently consists of the following members: the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the General Counsel, and the Chief Human Resources Officer. The Compensation Committee also utilizes internal personnel to provide advice to the Compensation Committee regarding market trends in compensation policies at competing companies and on a more macro level.
Following its review and decision, the Compensation Committee produces and submits a report on executive compensation to Allianz Life's Board of Directors at its request. With respect to the compensation of "principal officers" selected by Allianz Life's Board for purposes of the duties of the NEC Committee under Minnesota Statutes § 60D.20, subd. 3(d), the Compensation Committee produces and submits a report on executive compensation proposed for the designated "principal officers", to the NEC Committee for its review and recommendation to Allianz Life's Board for final approval. Once Allianz Life's Board approves the compensation for executives, with respect to the compensation of Allianz Life executives who also serve as NY Principal Officers, the Audit and Evaluation Committee of Allianz Life of New York reviews and approves the Allocation Percentages of the compensation to be allocated to Allianz Life of New York.
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Role of the Chief Executive Officer
Allianz Life of New York's Chief Executive Officer assists the Compensation Committee in its review of the total compensation of all the NEOs except himself. He provides the Compensation Committee with his assessment of their performances relative to the corporate and individual goals and other expectations set for them for the preceding year. He then provides his recommendations for each NEO's total compensation and the appropriate goals for each in the year to come. However, the Compensation Committee is not bound by his recommendations.
Role of Allianz Life's Human Resources
Allianz Life's Human Resources supports the Compensation Committee on executive compensation matters by being responsible for many of the organizational and administrative tasks that underlie the compensation review and determination process and making presentations on various topics. Allianz Life's Human Resources' efforts include, among other things:
·
evaluating the compensation data from industry groups, national executive pay surveys and other sources for the NEOs and other executive officers as appropriate;
·
gathering and correlating performance ratings and reviews for individual executive officers, including the NEOs;
·
reviewing executive compensation recommendations against appropriate market data and for internal consistency and equity; and
·
reporting to, and answering requests for, information from the Compensation Committee.
Allianz Life's Human Resources officers also coordinate and share information with their counterparts at Allianz SE.
Use of Competitive Compensation Data
Because Allianz Life competes most directly for executive talent with other large diversified financial services companies, they regard it as essential to regularly review the competitiveness of the total compensation programs for executives to ensure that Allianz Life provides compensation opportunities that compare favorably with the levels of total compensation offered to similarly situated executives by other companies that participate in the compensation surveys with which it participates. Allianz Life relies primarily on external market surveys of corporate compensation and benefits published by various national compensation consulting firms, especially salary surveys focusing on insurance companies. In addition, other factors taken into account include the average revenues and number of employees of companies that participate in such surveys.
All these information sources are employed to measure and compare actual pay levels not only on an aggregate, total compensation basis but by breaking down the total compensation program component by component to review and compare specific compensation elements as well as the particular mixes of fixed versus variable, short-term versus long-term and cash versus equity-based compensation at the surveyed companies. This information, as collected and reviewed by Allianz Life's Human Resources, is submitted to the Compensation Committee for review and discussion.
Internal Pay Equity Analysis
Allianz Life's compensation programs are designed with the goal of providing compensation to our NEOs that is fair, reasonable, and competitive. To achieve this goal, Allianz Life believes it is important to compare compensation paid to each NEO not only with compensation paid by the surveyed companies, as discussed above, but also with compensation paid to each of our other NEOs. Such an internal comparison is important to ensure that compensation is equitable among our NEOs.
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Components of Total Compensation For Our NEOs
Allianz Life provides total compensation to our NEOs that consists of several components. These components include the three components of the total compensation program (i.e., base salary, annual and multi-year incentives and equity) as well as: (i) retirement, health and other benefit programs, (ii) severance benefits and (iii) perquisites.
Base Salary
Allianz Life's philosophy is to make base salary a relatively small portion of the overall compensation package for our NEOs, which it believes is common in the industry in which we operate. The amount of the base salary awarded to NEOs is based on the position held, the NEO's career experience, the scope of the position's responsibilities and the NEO's own performance, all of which are reviewed with the aid of market survey data. Using this data, Allianz Life maintains a 50th percentile pricing philosophy, comparing base salaries against the median for comparable salaries at surveyed companies, unless exceptional conditions require otherwise.
NEO compensation is determined based on the achievement of specific corporate and individual performance objectives. In determining the amount of each NEO's base salary, the Compensation Committee considers the scope of their responsibilities, taking into account available competitive market compensation paid by other companies for similar positions. With respect to the base salary of our Chief Executive Officer, the Chairman of the Board considered the Chief Executive Officer's experience, performance, and contribution to overall corporate performance when determining his base salary for 2015 for recommendation to the NEC Committee. Base salaries for our other NEOs for 2015 were also set by the Compensation Committee based upon each NEO's individual experience and contribution to the overall performance of Allianz Life, and subject to Allianz SE Compensation Committee reviews and, with respect to the base salaries of "principal officers" selected by Allianz Life's Board of Directors for purposes of the duties of the NEC Committee under Minnesota Statutes § 60D.20, subd. 3(d), subject to NEC Committee review and recommendation to Allianz Life's Board for final approval. Following Allianz Life's Board approval of the base salary for executives, with respect to the compensation of Allianz Life executives who also serve as NY Principal Officers, the Audit and Evaluation Committee of Allianz Life of New York reviews and approves the percentage of base salary to be allocated to Allianz Life of New York.
AIP
Allianz Life offers annual cash bonuses to certain executive officers under the AIP. The AIP is designed to improve performance and profitability by motivating employees to accomplish organizational objectives and financial goals. Bonus awards that may be paid pursuant to the AIP are within the sole discretion of the Compensation Committee and are intended to:
·
reward the performance of participants who have made significant contributions to the achievement of annual goals and objectives;
·
provide an incentive that will encourage future superior individual performance; and
·
encourage the retention of employees who have demonstrated exceptional performance and/or are anticipated to significantly contribute to the long-term success of Allianz Life.
Over the course of the year, the Compensation Committee developed a specific amount of cash awards to be made pursuant to the AIP to executive officers, including our NEOs, for the 2015 operating year. The amount determined to be available for such awards was at the discretion of the Compensation Committee and was dependent upon many factors as outlined previously, including, but not limited to, current financial performance and contributions of our NEOs in achieving performance objectives, and with respect to the awards to the "principal officers" selected by Allianz Life's Board for purposes of the duties of the NEC Committee under Minnesota Statutes § 60D.20, subd. 3(d), subject to NEC Committee review and recommendation to Allianz Life's Board for final approval. Following Board approval of the AIP for executives, with respect to the compensation of Allianz Life executives who also serve as NY Principal Officers, the Audit and Evaluation Committee of Allianz Life of New York reviews and approves the percentage of AIP to be allocated to Allianz Life of New York.
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Variable Compensation
Our Field Vice President, Broker Dealer Distribution participates in Variable Compensation. The purpose of Variable Compensation is to reward Allianz Life employees that have a significant influence over the sales objectives of the business for their contributions. Sales objectives are defined along with payout targets for various levels of performance against those objectives. The total payout is calculated based on the full year performance of the defined sales objectives. There are two components to this payment, a portion that is paid on March 31st following the calendar year for the sales objectives and a portion that is subject to mandatory deferral.
Long-Term Incentives
The purpose of the ALTPUP is to advance the interests of Allianz Life, including Allianz Life of New York, and our indirect stockholder. The ALTPUP seeks to accomplish this purpose by providing an incentive in addition to current compensation to certain individuals within designated classes of employees of Allianz Life who contribute significantly to their company's long-term performance. Such incentive shall be in the form of Long-Term Performance Units ("ALTPUP Units"), which are contingent awards, subject to the terms, conditions and restrictions described in the ALTPUP and the Award Agreement under which such awards are made, by which participants in the ALTPUP may become entitled to receive cash upon the redemption of the ALTPUP Units on the valuation date. The award of ALTPUP Units is discretionary and any payments from the ALTPUP are intended to:
·
reward the performance of participants who have made significant contributions to the achievement of their company's annual goals and objectives,
·
provide an incentive that will encourage future superior individual performance, and
·
encourage the retention of employees who have demonstrated exceptional performance and/or are anticipated to significantly contribute to the long-term success of their company.
The Compensation Committee (and, with respect to those NEOs that are "principal officers" for purposes of the NEC Committee's duties, the NEC Committee with final approval of Allianz Life's Board of Directors, followed by with respect to the Allocation Percentages of those Allianz Life executives who also serve as NY Principal Officers, the Audit and Evaluation Committee of Allianz Life of New York) reviewed the performance of our NEOs following the end of our 2015 fiscal year relative to the long-term equity incentive and retention awards program the Compensation Committee administers.
Targeted levels of bonus awards made pursuant to the ALTPUP for our NEOs were established by the Compensation Committee (or, in the case of those NEOs that are "principal officers" for purposes of the NEC Committee's duties, the NEC Committee with final approval of Allianz Life's Board followed by with respect to the Allocation Percentages of those Allianz Life executives who also serve as NY Principal Officers, the Audit and Evaluation Committee of Allianz Life of New York) based on a number of factors related to the performance of Allianz Life and Allianz Life of New York, and the performance of the NEO. Maximum bonus awards made to our NEOs pursuant to the ALTPUP are set to two times the target amount for each NEO. See footnote (2) to the Summary Compensation Table for the specific amounts awarded to each NEO for the year ended December 31, 2015.
Our Chief Executive Officer receives cash awards pursuant to the terms of the Allianz SE Mid-Term Bonus Plan instead of the ALTPUP. The Allianz SE Mid-Term Bonus Plan covers business performance over a non-rolling three-year period. The minimum payout is zero and the maximum payout is 165% of the target amount set by the Compensation Committee. Target award amounts generally focus on performance of Allianz Life and Allianz Life of New York, including the growth and operating profit and achievement of goals set by Allianz Life. At the end of each three-year period, the performance of Allianz Life is assessed, along with relevant comparable company comparisons. Proposed incentive awards are endorsed by the Allianz SE Board of Management and approved by the respective Compensation Committee and with respect to the "principal officers" for purposes of the NEC Committee's duties, by the NEC Committee for final approval by Allianz Life's Board. Following Allianz Life's Board approval of the incentive awards for executives, with respect to the compensation of Allianz Life executives who also serve as NY Principal Officers, the Audit and Evaluation Committee of Allianz Life of New York reviews and approves the percentage of the incentive award to be allocated to Allianz Life of New York.
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AEI
The AEI is (a) one part of the variable compensation element for senior executives and provided under the Allianz Sustained Performance Plan ("ASPP") or (b) offered by Allianz Life to selected senior employees as an additional part of their variable compensation on a case to case basis. The AEI is granted in the form of restricted stock units of Allianz SE ("RSUs").
Benefit Perquisites
Allianz Life provides our NEOs with certain limited perquisites. All of our employees, including our NEOs, may participate in the qualified 401(k) plan. Allianz Life and Allianz Life of New York generally provide our executive officers, including our NEOs, with a matching contribution up to $19,875 annually. In addition Allianz Life and Allianz Life of New York provide excess liability insurance coverage to all of our NEOs and provide financial planning and tax preparation services, relocation reimbursements and reimbursements of spousal travel expenses to certain of our NEOs. The incremental costs of perquisites for the NEOs during 2015 are included in the column entitled "All Other Compensation" in the Summary Compensation Table included in this section.
Severance Arrangements
Allianz Life has entered into an Executive Severance Agreement with our Chairman and Chief Executive Officer, Walter White, which is described in the "Allianz Life Executive Severance Agreement" discussion later in this section. We have not entered into any other specific severance agreements with any of our NEOs.
The remainder of our NEOs are subject to severance payments under either the Executive Severance Plan or the Severance Allowance Plan. If an NEO is eligible to receive severance payments pursuant to the Executive Severance Plan, he or she is not eligible to receive severance payments under the Severance Allowance Plan.
Other than the Executive Severance Plan and the Severance Allowance Plan, which are described later in this section, our NEOs (except for Walter White) are not eligible for severance payments. Certain of our executive officers receive offer letters which set forth the terms relating to base salary, sign-on incentives and equity compensation. However, Allianz Life does not view these offer letters as employment agreements as each offer letter states that employment with Allianz Life is "at will."
Other Compensation Policies
Tax and Accounting Implications
Stock-Based Compensation.
Stock-based compensation, including Allianz SE stock appreciation rights (SARs) and Allianz SE restricted stock units (RSUs) granted pursuant to the AEI, are accounted for in accordance with the requirements of Financial Accounting Standards Board Accounting Standards Codification ("FASB ASC") Topic 718. Under the FASB ASC Topic 718, the fair value of the SARs is estimated at the date of grant using the Black-Scholes-Merton option-pricing model, which requires the use of certain subjective assumptions. The most significant of these assumptions are the estimates on the expected term, volatility and forfeiture rates of the awards. Forfeitures are not estimated due to the limited history but are reversed in the period in which forfeiture occurs. As required under the accounting rules, valuation assumptions are reviewed at each grant date and, as a result, are likely to change the valuation assumptions used to value stock-based awards granted in future periods. The fair value of the RSUs at grant is the arithmetic average of the closing prices of an Allianz SE share in the electronic cash market trading system Xetra (or any successor system) on that day and the nine immediately preceding trading days, less the present value of dividends expected to be paid on one Allianz SE share over the vesting period.
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Deductibility of Executive Compensation.
When analyzing both total compensation and individual elements of compensation paid to our NEOs, the Compensation Committee considers the income tax consequences of compensation policies and procedures. In particular, the Compensation Committee considers Section 162(m) of the Internal Revenue Code, which limits the deductibility of non-performance-based compensation paid to certain of the NEOs to $1,000,000 per affected NEO. The Compensation Committee intends to balance its objective of providing compensation to our NEOs that is fair, reasonable, and competitive with the capability to take an immediate compensation expense deduction. The Board of Directors believes that the best interests of Allianz Life, Allianz Life of New York and their stockholder are served by executive compensation programs that encourage and promote their principal compensation philosophy, enhancement of stockholder value, and permit the Compensation Committee to exercise discretion in the design and implementation of compensation packages. Accordingly, Allianz Life and Allianz Life of New York may from time to time pay compensation to its NEOs that may not be fully tax deductible, including certain bonuses and RSUs. Units granted under the ALTPUP are intended to qualify as performance-based compensation under Section 162(m) and are generally fully deductible. Allianz Life will continue to review its executive compensation plans periodically to determine what changes, if any, should be made as a result of the limitation on deductibility.
Summary Compensation Table
The following table sets forth the compensation paid by Allianz Life during the year ended December 31, 2015 to our principal executive officer, our principal financial officer and each of the three highest paid NEOs who are involved in the management and operations of Allianz Life of New York, that was charged to Allianz Life of New York, based on the Allocation Percentage assigned to each NEO. The executive compensation information in this prospectus is shown for a one-year period, in accordance with Regulation S-K Item 402, Instruction 1 to Item 402(c).
Name and Principal Position
Year
Salary
Bonus
Stock
Awards
Option Awards
Non-Equity Incentive Plan Compensation
Change in Pension Value and
Nonqualified Deferred Compensation Earnings
All Other Compensation
Total
(a)
(b)
(c)
(d)
(e)
(1)
(f)
(g)
(2)
(h)
(i)
(5)
(j)
Walter White
Chairman and Chief Executive Officer
2015
$
33,760
N/A
$
47,525
N/A
$
83,050
N/A
$
859
$
165,193
Giulio Terzariol
(4)
Chief Financial Officer and Treasurer
2015
$
12,875
N/A
$
11,875
N/A
$
19,600
N/A
$
738
$
45,088
Thomas Burns
President
2015
$
47,200
N/A
$
34,960
N/A
$
63,280
N/A
$
2,770
$
148,210
Neil McKay
Chief Actuary
2015
$
39,600
N/A
$
33,280
N/A
$
57,040
N/A
$
2,749
$
132,669
Robert DeChellis
Field Vice President, Broker Dealer Distribution
2015
$
58,000
N/A
$
12,486
N/A
$
93,364
N/A
$
2,975
$
166,826
(1)
Represents the grant date fair value of the RSUs issued pursuant to the AEI. The RSUs vest over a four-year period. The RSUs issued in 2016 for the 2015 performance year have a March 2020 exercise date. The grant price of the RSUs was the arithmetic average of the closing prices of an Allianz SE share in the electronic cash market trading system Xetra (or any successor system) on that day and the nine immediately preceding trading days, less the present value of dividends expected to be paid on one Allianz SE share over the vesting period. These numbers show the amount realized for financial reporting purposes as calculated in accordance with the FASB ASC Topic 718. Under FASB ASC Topic 718, the grant date fair value is calculated using the closing market price of the common stock of Allianz SE on the date of grant, which is then recognized over the requisite service period of the award.
(2)
Includes the following payments and grants made pursuant to the AIP, ALTPUP and the Variable Compensation Immediate and Deferred Plan.
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Name
Year
Payments made pursuant to the AIP
Grants made pursuant to the ALTPUP
Payments made pursuant to the Variable Compensation Immediate & Deferred Plan
Walter White
2015
$
41,525
$
41,525
$
0
Giulio Terzariol
2015
$
11,875
$
7,725
$
0
Thomas Burns
2015
$
34,960
$
28,320
$
0
Neil McKay
2015
$
33,280
$
23,760
$
0
Robert DeChellis
2015
$
28,094
$
20,300
$
44,971
(3)
Walter White, as Chief Executive Officer, participates in the global Allianz SE Mid-Term Bonus Program rather than the ALTPUP.
(4)
Mr. Terzariol also participates in certain plans maintained by Allianz SE that are not part of Allianz Life's compensation program.
(5)
The following table provides additional details regarding compensation found in the "All Other Compensation" column.
Name
Year
Spousal Travel
(6)
Relocation
(7)
Tax Services
(8)
Life Insurance Premiums
Employer Match to 401(k) Plan
ASAAP Cont-ribution
(9)
ESPP Imputed Income
(10)
Total
Walter White
2015
$
18
--
--
$
46
$
795
--
--
$
859
Giulio Terzariol
2015
--
$
59
$
156
$
23
$
450
$
50
--
$
738
Thomas Burns
2015
$
1,132
--
--
$
47
$
1,590
--
--
$
2,770
Neil McKay
2015
$
662
--
--
$
73
$
1,590
--
$
424
$
2,749
Robert DeChellis
2015
--
--
--
$
75
$
2,610
$
290
--
$
2,975
(6)
Represents reimbursement or payments made to defray the costs of a spouse's travel.
(7)
Represents reimbursement or payments made to defray the cost of relocation expenses.
(8)
Represents reimbursements or payments made to defray the cost of tax related services.
(9)
Represents company matching contribution to the Allianz Supplemental Asset Accumulation Plan for deferrals in excess of IRS compensation limit.
(10)
Represents value of the discount associated with stock purchases in the Employee Stock Purchase Plan.
Performance-Based Incentive Compensation Plans
AIP
The AIP is intended to provide an incentive that will encourage superior individual performance and encourage retention of employees who are anticipated to significantly contribute to future success. The AIP seeks to accomplish this purpose by providing a bonus opportunity to eligible employees who have made significant contributions during the plan year to the achievement of annual goals and objectives.
The Compensation Committee or other duly authorized committee determines allocation of bonus awards to employees. With respect to "principal officers" for purposes of the NEC Committee's duties, the NEC Committee recommends to Allianz Life's Board of Directors awards for final approval. Following Allianz Life's Board approval of the AIP for executives, with respect to the compensation of Allianz Life executives who also serve as NY Principal Officers, the Audit and Evaluation Committee of Allianz Life of New York reviews and approves the percentage of AIP to be allocated to Allianz Life of New York. The guidelines for target awards are meant to be illustrative of competitive market bonuses for similar job levels in the marketplace. While the target awards may be used for illustrative, budget planning or distribution scenarios, all bonus awards are discretionary and are in no way guaranteed.
Variable Compensation
Variable Compensation is intended to reward the Field Vice President, Broker Dealer Distribution for attainment of various sales objectives. The minimum payout is zero and the maximum payout is 200% of the target amount. Once the total Variable Compensation has been determined, the payout is then split into a portion that is paid immediately (each year on March 31st) and a portion that is subject to a mandatory deferral period. These two portions are called Variable Compensation – Immediate, and Variable Compensation – Deferred respectively. The Variable Compensation – Deferred portion is subject to a 3-year cliff vesting schedule where Variable Compensation – Deferred payments are not eligible for withdrawal until January 1st three full years following the year for which the calculated compensation pertains. Payments pertaining to the 2015 calendar year will become eligible for withdrawal on January 1, 2019.
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ALTPUP
In order to be eligible for ALTPUP awards, individuals must be nominated by the business unit and approved by the Compensation Committee and with respect to "principal officers" for purposes of the NEC Committee's duties, by the NEC Committee with final approval by the Board. Following Allianz Life's Board approval of the ALTPUP for executives, with respect to the compensation of Allianz Life executives who also serve as NY Principal Officers, the Audit and Evaluation Committee of Allianz Life of New York reviews and approves the percentage of the ALTPUP award to be allocated to Allianz Life of New York. Receipt of an ALTPUP award one year is not a guarantee that an ALTPUP award will be granted in subsequent years. The ALTPUP incentive is in the form of ALTPUP Units, which have a target value of $10.00. The threshold value is $5.00 and the maximum value is $20.00.  The ALTPUP consists of three-year award periods, and one-third of the ALTPUP Units pay out each year over the three-year award period. The valuation date is December 31 at the end of each performance year, unless the Compensation Committee in its discretion selects an earlier date.
Allianz SE Mid-Term Bonus Plan
Our Chief Executive Officer receives cash awards pursuant to the terms of the Allianz SE Mid-Term Bonus Plan instead of the ALTPUP. The Allianz SE Mid-Term Bonus Plan covers business performance over a non-rolling three-year period. The minimum payout is zero and the maximum payout is 165% of the target amount set by the Compensation Committee. Target award amounts generally focus on company performance, including growth and operating profit and achievement of goals set by Allianz Life. At the end of each three-year period, the performance of Allianz Life is assessed, along with relevant company comparisons. Proposed incentive awards are endorsed by the Allianz SE Board of Management and approved by the Compensation Committee and with respect to the "principal officers" for purposes of the NEC Committee's duties, by the NEC Committee for final approval by the Board. Following Allianz Life's Board approval of the incentive award for executives, with respect to the compensation of Allianz Life executives who also serve as NY Principal Officers, the Audit and Evaluation Committee of Allianz Life of New York reviews and approves the percentage of the incentive award to be allocated to Allianz Life of New York.
AEI
The AEI is designed to recognize the participant's continuous employment with Allianz Life over the relevant period and shall be an incentive to continue in employment. Grants and payments under the AEI will only be made if the participant (i) is employed with Allianz Life at the date of grant, (ii) remains employed with Allianz Life during the vesting period of the RSU, and (iii) has not voluntarily left employment prior to retirement or been terminated for cause. The securities issuable under the AEI are RSUs. An RSU constitutes the right to receipt of the market value of Allianz SE common stock at the time of exercise. This amount will be paid in cash, Allianz SE stock, or other consideration at the sole discretion of Allianz Life. RSUs are subject to a  four-year vesting period. At the end of the four-year period, the RSUs are exercised uniformly for all participants, provided they remain employed by Allianz Life or are pensioners. The grant at fair value cannot be greater than 165% of a participant's target amount. The maximum value of an exercise is an increase of 200% over the grant value (i.e., 300% of the grant value).
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Grants of Plan-Based Awards
The following table provides additional information about plan-based compensation disclosed in the Summary Compensation Table. This table includes both equity and non-equity awards granted during the year ended December 31, 2015, and charged to Allianz Life of New York based on the Allocation Percentage assigned to each NEO.
Estimated Future Payouts Under Non-Equity Incentive Plan Awards
(1)(2)
Estimated Future Payouts Under Equity Incentive Plan Awards
(3)(4)
Name
Grant Date
Threshold ($)
Target ($)
Maximum ($)
Threshold ($)
Target ($)
Maximum ($)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
Walter White
3/4/2016
RSUs (under AEI)
$
0
$
33,760
$
167,112
AIP Award
$
0
$
33,760
$
55,704
Midterm Bonus Plan
$
0
$
33,760
$
55,704
Giulio Terzariol
3/4/2016
RSUs (under AEI)
$
0
$
7,725
$
38,239
AIP Award
$
0
$
7,725
$
15,450
ALTPUP Award
$
0
$
7,725
$
15,450
Thomas Burns
3/4/2016
RSUs (under AEI)
$
0
$
28,320
$
140,184
AIP Award
$
0
$
28,320
$
56,640
ALTPUP Award
$
0
$
28,320
$
56,640
Neil McKay
3/4/2016
RSUs (under AEI)
$
0
$
23,760
$
117,612
AIP Award
$
0
$
23,760
$
47,520
ALTPUP Award
$
0
$
23,760
$
47,520
Robert DeChellis
3/4/2016
RSUs (under AEI)
$
0
$
11,600
$
57,420
AIP Award
$
0
$
26,100
$
52,200
ALTPUP Award
$
0
$
20,300
$
40,600
Variable Compensation
$
0
$
56,260
$
112,520
(1)
The target and maximum columns show the target award and maximum award for 2015 for each NEO under the AIP. There is no threshold amount for any participant in the AIP. The actual 2015 awards granted to the NEOs are listed in the Non-Equity Incentive Compensation column of the Summary Compensation Table. AIP target and maximum awards are a pre-designated percentage of base salary determined at the executive's level.
(2)
The target and maximum columns show the target award and maximum award for 2015 for each NEO under the ALTPUP. Under the ALTPUP, all awards are discretionary. To the extent that awards are made, the minimum amount of an award will equal at least 50% of the target amount as determined by the Compensation Committee (or with respect to "principal officers" for purposes of the NEC Committee's duties, the NEC Committee with final approval of Allianz Life's Board, followed by with respect to the Allocation Percentages of those Allianz Life executives who also serve as NY Principal Officers, the Audit and Evaluation Committee of Allianz Life of New York). The actual 2015 awards granted to the NEOs are listed in the Non-Equity Incentive Compensation column of the Summary Compensation Table. ALTPUP target and maximum awards are a pre-designated percentage of base salary determined at the executive's level.
(3)
RSUs have a vesting schedule as disclosed in the footnotes to the Summary Compensation Table. See "Outstanding Equity Awards at December 31, 2015" for disclosure regarding the number of RSUs that are unvested as of December 31, 2015.
(4)
The target and maximum columns show the target award and maximum award for 2015 for each NEO under the AEI. There is no threshold amount for any participant in the AEI. The actual 2015 awards granted to the NEOs are listed in the Stock Awards column of the Summary Compensation Table.
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Outstanding Equity Awards at December 31, 2015
The following table sets forth the outstanding equity awards at the December 31, 2015 fiscal year-end. The table shows SARs and RSUs, granted pursuant to the AEI, based on the Allocation Percentage assigned to each NEO.
SARs
RSUs
Name
Number of Securities Underlying Unexercised SARs
Exercisable
Number of Securities Underlying Unexercised SARs
Unexercisable
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned SARs
SAR
Base
Price
SAR Expiration Date
Number of RSUs That Have Not Vested
Market Value of RSUs That Have Not Vested
Equity Incentive Plan Awards: Number of Unearned RSUs That Have Not Vested
Equity Incentive Plan Awards: Market or Payout Value of Unearned RSUs That Have Not Vested
(a)
(b)
(1)
(c)
(d)
(e)
(f)
(g)
(2)(3)
(h)
(4)
(i)
(j)
Walter
166.400
N/A
N/A
N/A
3/10/2017
N/A
N/A
White
151.520
$
27,046
317.200
$
56,620
317.080
$
56,599
254.560
$
45,439
Giulio
--
N/A
N/A
N/A
--
N/A
N/A
Terzariol
121.325
$
21,657
94.800
$
16,922
87.725
$
15,659
77.150
$
13,771
Thomas
--
N/A
N/A
N/A
--
N/A
N/A
Burns
416.080
$
74,270
282.080
$
50,351
297.840
$
53,164
252.080
$
44,996
Neil McKay
--
N/A
N/A
N/A
--
N/A
N/A
348.560
$
62,218
261.120
$
46,610
254.400
$
45,410
206.880
$
36,928
Robert
--
N/A
N/A
N/A
--
N/A
N/A
DeChellis
204.015
$
36,417
166.315
$
29,687
132.675
$
23,682
120.640
$
21,534
(1)
There is a two-year vesting period for exercisable securities underlying unexercised SARs.
(2)
Represents unvested RSUs issued pursuant to the AEI. RSUs issued under the AEI during 2015 are subject to a four-year vesting period from the grant date. At the end of the respective vesting period, the RSUs are exercised uniformly for all participants, provided they remain employed by the Allianz Life or are pensioners.
(3)
For each of the NEOs, the number of RSUs listed on the first line expired 2016, the RSUs listed on the second line expire 2017, the RSUs listed on the third line expire 2018, and the RSUs listed on the fourth line expire 2019.
(4)
Based on an assumed stock price of $178.50 per share, which was the closing stock price of Allianz SE common stock on December 31, 2015, converted from Euros into U.S. dollars.
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Allianz SE Option Exercises and Stock Grants Vested in 2015
The following table summarizes the value received from Allianz SE stock option exercises and stock grants vested during the year ended December 31, 2015, that were charged to Allianz Life of New York based on the Allocation Percentage assigned to each NEO.
Option Awards
Stock Awards
Name
Number of
Shares
Acquired
on Exercise (#)
Value Realized
on Exercise ($)
(1)
Number of
Shares
Acquired
on Vesting (#)
Value Realized
on Vesting ($)
(2)
Walter White
--
$
0
221.480
$
35,595
Giulio Terzariol
129.800
$
8,697
177.350
$
28,503
Thomas Burns
274.080
$
7,916
570.480
$
91,685
Neil McKay
531.280
$
29,840
511.440
$
82,196
Robert DeChellis
271.005
$
7,827
402.810
$
64,738
(1)
Represents Allianz SE SARs that were exercised during 2015 pursuant to the GEI. Amounts realized were paid in cash.
(2)
Represents Allianz SE RSUs that were exercised during 2015 pursuant to the GEI and AEI. Amounts realized were paid in cash.
Allianz Life Executive Severance Agreement
Allianz Life entered into an Executive Severance Agreement with its Chief Executive Officer, Walter White, with an expiration date of December 31, 2018. The severance arrangements for Mr. White as Chairman and Chief Executive Officer of Allianz Life of New York are prescribed by the Executive Severance Agreement.
Pursuant to the Executive Severance Agreement, Mr. White is entitled to lump sum cash payments upon separation of $1,648,000 in the event he is terminated without "cause" as defined in the Executive Severance Agreement. In addition, pursuant to the Executive Severance Agreement, Mr. White is also bound by other restrictive covenants, including covenants relating to confidentiality and non-disparagement. Mr. White would also be entitled to continuation of medical and dental benefits at the employee premium rates for a period of 18 months following termination.
The remainder of our NEOs are subject to severance payments under either the Executive Severance Plan or the Severance Allowance Plan. If an NEO is eligible to receive severance payments pursuant to the Executive Severance Plan, he or she is not eligible to receive severance payments under the Severance Allowance Plan. The terms of each of these plans are set forth below.
Executive Severance Plan
Executive officers who have the title of Senior Vice President or above and report directly to a senior executive officer at a specific level are eligible to receive severance allowance benefits under the Executive Severance Plan. For the year ended December 31, 2015, the NEOs eligible for severance benefits under this plan were Giulio Terzariol, Thomas Burns and Neil McKay. The purpose of the Executive Severance Plan is to provide severance benefits to executive officers whose employment is involuntarily terminated in order to assist with job transition. Pursuant to the Executive Severance Plan, eligible executive officers who are involuntarily terminated will receive a lump sum cash payment equal to one and one-half times their "annual base pay" in effect at the time of termination. Annual base pay, for purposes of this agreement, equals base salary and excludes special payments, such as bonuses, expense reimbursements, living or other allowances.
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Severance Allowance Plan
All employees, including our NEOs, who are not eligible to receive severance benefits under the Executive Severance Plan, are subject to severance payments under the Severance Allowance Plan. For the year ended December 31, 2015, the NEO eligible for severance benefits under this plan was Robert DeChellis. The Severance Allowance Plan provides that employees who are terminated for certain company-initiated reasons are eligible to receive a severance payment in an amount based on the employee's weekly base pay multiplied by the number of weeks set forth in the Severance Allowance Plan. Employees are generally eligible for severance payments if they are terminated for the following reasons:
·
employee's position is eliminated;
·
employee's position is outsourced; or
·
employee's position is eliminated in connection with a sale or merger or other corporate transaction.
The following table shows the portion of the lump sum payments that would have been allocated to Allianz Life of New York based on each NEO's Allocation Percentage and payable to each of our NEOs had they been terminated on December 31, 2015 and been eligible for severance payments pursuant to the Executive Severance Plan or the Severance Allowance Plan, as the case may be.
NEOs
Lump Sum Payment
Walter White
N/A
(1)
Giulio Terzariol
$
19,313
Thomas Burns
$
70,800
Neil McKay
$
59,400
Robert DeChellis
$
51,308
(1)
Mr. White is not eligible to receive payments pursuant to the Severance Allowance Plan. See "Allianz Life Executive Severance Agreement" for information regarding severance payments that Mr. White is eligible to receive upon termination of service.
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Director Compensation
The following table provides information on compensation paid to the directors of Allianz Life of New York for the year ended December 31, 2015.
Name
Fees Earned or Paid in Cash
($)
(1)
Stock Awards
($)
Option Awards
($)
Non-Equity Incentive Plan Compensation
($)
Change in Pension Value and
Nonqualified Deferred Compensation Earnings
All Other Compensation
Total
($)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
Walter White
(2)
Chairman and Chief Executive Officer
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Giulio Terzariol
(2,3)
Chief Financial Officer and Treasurer
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Thomas Burns
(2)
President
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Steven J. Thiel
(2)
Vice President, Appointed Actuary
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Marc B. Olson
(2,4)
Vice President, Financial Consulting
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Nicole Scanlon
(2,4)
Vice President, Financial Consulting
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Ronald M. Clark
Independent Director
$
13,000
N/A
N/A
N/A
N/A
N/A
$
13,000
Martha Clark Goss
Independent Director
$
13,000
N/A
N/A
N/A
N/A
N/A
$
13,000
Stephen R. Herbert
Independent Director
$
13,000
N/A
N/A
N/A
N/A
N/A
$
13,000
Gary A. Smith
Independent Director
$
3,000
N/A
N/A
N/A
N/A
N/A
$
3,000
Kevin J. Doyle
Independent Director
$
13,000
N/A
N/A
N/A
N/A
N/A
$
13,000
1
Represents cash compensation provided to our independent directors for the year ended December 31, 2015.
2
As employee directors, Messrs. White, Terzariol, Burns, Thiel and Olson and Ms. Scanlon do not receive any compensation for their service as directors. The compensation Messrs. White, Terzariol and Burns receive as executive officers of Allianz Life of New York is disclosed in the Summary Compensation Table as set forth herein.
3
Mr. Terzariol resigned his position as Chief Financial Officer and Treasurer effective December 31, 2015. He was replaced effective January 1, 2016 by Mr. Gaumond.
4
Mr. Olson was a director from January 1, 2015 to July 1, 2015. He was replaced, effective July 2, 2015, by Ms. Scanlon. Ms. Scanlon resigned her position as director effective December 31, 2015.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
We are an indirect wholly owned subsidiary of Allianz SE. Allianz SE's principal executive offices are located at Königinstrasse 28, 80802 Munich, Germany. As of March 31, 2016, the directors and executive officers of the Allianz Life of New York held less than 1% of Allianz SE's ordinary shares issued and outstanding.
We are not aware of any arrangements that may at a later date result in a change in control of Allianz Life of New York.
TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS
We are a wholly owned subsidiary of Allianz Life, which is a wholly owned subsidiary of AZOA, which in turn is a wholly owned subsidiary of Allianz Europe, B.V. Allianz Europe, B.V. is a wholly owned subsidiary of Allianz SE, our ultimate parent, which is registered in Munich, Germany.
Transactions with affiliates may not be on an arm's-length
basis and may present the potential for conflicts
.
RISKS ASSOCIATED WITH THE FINANCIAL SERVICES INDUSTRY
There are a number of risks associated with the financial services industry including the insurance industry.
Legal, Regulatory and Tax Risks
We are heavily regulated by the New York Department of Financial Services and other regulators, and changes in existing or new laws and regulations may reduce our profitability and limit our growth.
We are subject to detailed and comprehensive regulation and supervision in New York by the New York Department of Financial Services ("NYDFS") in jurisdictions in which we operate. The NYDFS has broad administrative powers with respect to all aspects of the insurance business and, in particular, monitors the manner in which an insurance company offers, sells and administers its products. Therefore, we may from time to time be subject to a variety of legal and regulatory actions relating to our current and past business operations and practices. In addition, our insurance operations are subject to insurance laws and regulations, which are generally intended to protect policyholders, not our stockholders or creditors. Changes in existing insurance laws and regulations may materially affect the way in which we conduct our business and the products we offer.
The NYDFS regulates most aspects of our insurance business. State laws in the United States grant insurance regulatory authorities broad administrative powers with respect to, among other things:
·
licensing companies and agents to transact business;
·
calculating the value of assets to determine compliance with statutory requirements;
·
regulating unfair trade and claims practices, including through the imposition of restrictions on marketing and sales practices, distribution arrangements and payment of inducements;
·
establishing statutory capital and reserve requirements and solvency standards;
·
fixing maximum interest rates on insurance policy loans and minimum rates for guaranteed crediting rates on life insurance policies and annuity contracts;
·
restricting the payment of dividends and other transactions between insurance subsidiaries and affiliates; and
·
regulating the types, amounts, concentrations and valuation of investments.
Our asset management operations are also subject to extensive regulation. These regulations are primarily intended to protect investors in the securities markets or investment advisory clients and generally grant supervisory authorities broad regulatory powers. Changes to these laws and regulations may adversely affect our asset management operations. We are also subject to increasing regulation under various laws and regulations governing the solvency of insurers and other financial institutions. We are also increasingly subject to detailed and comprehensive regulations governing such matters as money laundering, "know your customer," prohibited transactions with countries or counterparties subject to sanctions, and bribery and other anti-corruption measures.
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We are faced with significant challenges due to the fact that our regulatory environment is evolving rapidly and supervisory authorities around the country are assuming an increasingly active and aggressive role in interpreting and enforcing regulations governing a variety of business practices, such as the escheatment of unclaimed property, in the jurisdictions where we do business. We have been and may become in the future subject to regulatory investigations and/or examinations which, together with civil actions often following these investigations, may affect our image, brand, relations with regulators and/or results of operations. We cannot predict with any certainty the potential effects that any change in applicable laws or regulations, their interpretation or enforcement, or any enactment of new regulation or legislation in the future may have on our business, consolidated results of operations and financial condition.
Our products are heavily regulated and must be approved by the individual state regulators where such products are sold.
However, our products are only currently offered in New York. The NYDFS and the National Association of Insurance Commissioners ("NAIC") regularly reexamine existing laws and regulations applicable to insurance companies and their products. Changes in these laws and regulations, or in interpretations thereof,
could have a material adverse effect on our financial condition and consolidated results of operations. The NAIC continues to change and modernize its financial and solvency requirements and regulations. These changes could have a material adverse effect on our business, consolidated results of operations and financial condition.
In December 2014, the NAIC adopted Actuarial Guideline 48 ("AG 48") which established a new regulatory requirement applicable to XXX and AXXX reserve financing transactions ceded to reinsurers, including affiliated reinsurers. AG 48 is an important part of the implementation of the XXX and AXXX framework the NAIC adopted in June 2014. As adopted, AG 48 limits the type of assets that may be used as collateral to cover the XXX and AG 38 statutory reserves. In January 2016, the NAIC adopted changes to the model law, giving regulators the authority to pass regulations. The NAIC has charged multiple working groups with the responsibility to prepare regulations that would codify this regulatory framework as set forth in AG 48, which is expected in 2016. In May 2015, the NAIC adopted proposed revisions to the preamble to the NAIC accreditation standards, which  would require states to apply NAIC accreditation standards to captive reinsurers. The revisions would add captive insurance companies that assume XXX or AXXX business, variable annuities, and long-term care. A state will be deemed in compliance as it relates to XXX or AXXX captives if the applicable reinsurance transaction satisfies AG 48.
In June 2013, the NYDFS released a report critical of certain captive reinsurance structures and calling, in part, for other state regulators to adopt a moratorium on approving such structures pending further review by state and federal regulators. Insurance regulators in a few states, including New York and California, have imposed a moratorium on new reinsurance transactions between life insurers domiciled in those states and captive reinsurers. Allianz Life, which owns Allianz Life of New York, has two Missouri captive reinsurance subsidiaries. We cannot predict what actions and regulatory changes will result from the NAIC revisions or the NYDFS report, whether additional state insurance regulators will restrict the use of captive reinsurers or what impact such changes will have on our business, consolidated results of operations and financial condition.
In 2015, the NAIC established a variable annuity issues working group to study and address regulatory issues resulting in variable annuity captive reinsurance transactions. The working group developed a draft report that suggests numerous changes to current NAIC rules and regulations that would be designed to decrease incentives for insurers to establish variable annuity captives. This report proposes adoption of changes to current rules and regulations with an anticipated effective date in January 2017. If adopted, the changes could have a material adverse effect on our business, consolidated results of operations and financial condition.
State insurance guaranty associations have the right to assess insurance companies doing business in their state for funds to help pay the obligations of insolvent insurance companies to policyholders and claimants. Because the amount and timing of an assessment is beyond our control, the liabilities that we have currently established for these potential liabilities may not be adequate.
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Recently, certain states have adopted new laws and regulations that require life insurers to search for unreported deaths. The National Conference of Insurance Legislators ("NCOIL") has adopted the Model Unclaimed Life Insurance Benefits Act (the "Unclaimed Benefits Act") and various states have enacted similar legislation. The Unclaimed Benefits Act would require the implementation of procedures imposing, among other things, the following actions: (i) comparison of accounts against a Death Database; (ii) investigation of any potential matches to confirm a death; (iii) determination whether benefits are due and attempt to locate the beneficiaries of any benefits that are due; and (iv) escheatment of the benefit to the state as unclaimed property if no beneficiary can be located. States in which we conduct business may also consider adopting similar legislation. Additionally, a NAIC working group is also developing a model unclaimed property law. We cannot predict what impact such changes could have on our business, consolidated results of operations and financial condition.
A number of treasury departments and administrators of unclaimed property have audited life insurance companies for compliance with unclaimed property laws. The audits have focused on maturities of policies or contracts, policies that have exceeded limiting age with respect to death benefits that companies should treat as unclaimed property and should escheat to the state. There is no clear basis in previously existing law for treating an unreported death as giving rise to a policy benefit that would be subject to unclaimed property procedures. A number of life insurers have entered into resolution agreements with state treasury departments in which the insurers agree to procedures imposing, among other things, the following actions: (i) comparison of accounts against a Death Database; (ii) investigation of any potential matches to confirm a death; (iii) determination whether benefits are due and attempt to locate the beneficiaries of any benefits that are due; and (iv) escheatment of the benefit to the state as unclaimed property if no beneficiary can be located. States in which we conduct business may also consider adopting similar legislation. We could become subject to a state audit regarding unclaimed property and we cannot predict what impact such an audit could have on our business, consolidated results of operations and financial condition.
Our business is subject to significant litigation risks in the various states in which we operate; changes in existing or new laws and government regulations in these states and/or an adverse outcome in any significant pending or future litigation or regulatory investigation may have an adverse effect on our business, financial condition, results of operations, reputation or image in the marketplace.
We have been involved in various regulatory investigations and examinations and may be involved in more in the future. We may also be named as defendants in individual lawsuits in the future. These actions arise in various contexts, including in connection with our activities as an insurer, securities issuer, employer, investment adviser, investor and taxpayer. We cannot predict what impact certain lawsuits or regulatory investigations could have on our business, consolidated results of operations and financial condition.
Certain of these lawsuits and investigations seek significant or unspecified amounts of damages, including punitive damages, and certain of the regulatory authorities involved in these proceedings have substantial powers over the conduct and operations of our business. Due to the nature of certain of these lawsuits and investigations, we cannot make an estimate of loss or predict with any certainty the potential impact of these suits or investigations on our business, financial condition or results of operations.
Our products are subject to extensive regulation and failure to meet any of the complex product requirements may reduce profitability.
Our products are subject to a complex and extensive array of state and federal tax, securities, insurance and employee benefit plan laws and regulations, which are administered and enforced by a number of different governmental and self-regulatory authorities, including, among others, state insurance regulators, state securities administrators, state banking authorities, the SEC, FINRA, the Department of Labor and the IRS.
For example, U.S. federal income tax law imposes requirements relating to insurance and annuity product design, administration and investments that are conditions for beneficial tax treatment of such products under the Internal Revenue Code. Additionally, state and federal securities and insurance laws impose requirements relating to insurance and annuity product design, offering and distribution and administration. Failure to administer product features in accordance with contract provisions or applicable law, or to meet any of these complex tax, securities, or insurance requirements could subject us to administrative penalties imposed by a particular governmental or self-regulatory authority, unanticipated costs associated with remedying such failure or other claims, litigation, harm to our reputation or interruption of our operations. If this were to occur, it could adversely impact our profitability, business, consolidated results of operations and financial condition.
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Laws and regulations aimed at bank and financial institutions, including the Dodd-Frank Act, could have an adverse impact on our business, financial condition and results of operations.
Currently, the U.S. federal government does not directly regulate the business of insurance. While the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") does not remove primary responsibility for the supervision and regulation of insurance from the states, Title V of the Dodd-Frank Act establishes a Federal Insurance Office ("FIO") within the U.S. Treasury Department. The FIO has authority that extends to a wide variety of lines of insurance, including life insurance and annuities. Under the Dodd-Frank Act, the FIO is charged with monitoring all aspects of the insurance industry (including identifying gaps in regulation that could contribute to a systemic crisis), recommending to the Financial Stability Oversight Council the designation of any insurer and its affiliates as a non-bank systemically important financial institution subject to oversight by the Board of Governors of the Federal Reserve System (including the administration of stress testing on capital), assisting the Treasury Secretary in negotiating "covered agreements" with non-U.S. governments or regulatory authorities, and, with respect to state insurance laws and regulation, determining whether such state insurance measures are pre-empted by such covered agreements.
Under the so-called Volcker Rule, the Board of Governors of the Federal Reserve System could impose additional capital requirements and quantitative limits on certain trading and investment activities of a non-bank systemically important financial institution.
Nonbank financial companies such as Allianz Life and Allianz Life of New York that are not affiliates with an insured depository institution or otherwise brought within the definition of "banking entity" generally will not be subject to the Volcker Rule's prohibitions. However, the prohibitions of the Volcker Rule could impact financial markets generally, for example, through reduced liquidity in certain markets or the exiting of positions by banking entities as the end of the conformance period approaches.
Non-bank systemically important financial institutions and certain other large financial companies can be assessed under Dodd-Frank for any uncovered costs arising in connection with the resolution of a systemically important financial company and to cover the expenses of the Office of Financial Research, an agency established by Dodd-Frank to improve the quality of financial data available to policymakers and facilitate more robust and sophisticated analysis of the financial system. To date, Allianz Life has not been designated a non-bank systemically important financial institution.
On December 12, 2013, the FIO released a study required by Title V of the Dodd-Frank Act entitled "How to Modernize and Improve the System of Insurance Regulation in the United States" (the "Report"). While the Report reflects extensive study and analysis of the broader issue of the appropriate regulatory framework for insurance, it also reviews some narrower regulatory issues that are current topics of discussion. The Report does not recommend direct federal regulation of insurance, but does recommend significantly greater federal involvement in a number of areas. Some of the recommendations outlined in the Report have been implemented. President Obama has signed the National Association of Registered Agents and Brokers Reform Act into law in January 2015, which simplifies the agent and broker licensing process across state lines. The FIO has also engaged with the supervisory colleges to monitor financial stability and identify regulatory gaps for large national and internationally active insurers. We cannot predict what impact these or any other recommendations that stem from the Report could have on our business, consolidated results of operations and financial condition.
Other aspects of our operations could also be affected by the Dodd-Frank Act. For example, the Dodd-Frank Act also includes a new framework of regulation of the Over-The-Counter ("OTC") derivatives markets that requires clearing of certain types of transactions currently traded over-the-counter must be traded on swaps execution facilities. This imposes additional costs, including transaction costs, new capital and margin requirements, and additional regulation as well as changing the market structure for the trading of these types of derivatives. Increased margin requirements on our part could reduce our liquidity and narrow the range of securities in which we invest. However, increased margin requirements on counterparties could reduce our exposure to counterparties' default. We use derivatives to mitigate the impact of increased benefit exposures from annuity products we sold that offer guaranteed benefits. The derivative clearing requirements of the Dodd-Frank Act could increase the cost of such mitigation.
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In addition, the Dodd-Frank Act provides that the SEC may promulgate rules to provide that the standard of conduct for all broker-dealers, when providing personalized investment advice about securities to retail customers (and any other customers as the SEC may by rule provide) will be the same as the standard of conduct applicable to an investment adviser under the Investment Advisers Act of 1940. Although the full impact of such a provision can only be measured when the implementing regulations are adopted, the intent of this provision is to authorize the SEC to impose on broker-dealers fiduciary duties to their customers, similar to the duties applicable to investment advisers under existing law. FINRA has also issued a report addressing how its member firms might identify and address conflicts of interest including related to the introduction of new products and services and the compensation of associated persons. We cannot predict what impact these regulatory initiatives could have on our business, consolidated results of operations and financial condition.
The sales of insurance products could also be adversely affected to the extent that some or all of the third-party firms that distribute our products face heightened regulatory scrutiny and/or increased regulation that causes them to de-emphasize sales of the types of products issued by our insurance companies.
In addition, regulators and lawmakers in non-U.S. jurisdictions are engaged in addressing the causes of the financial crisis and means of avoiding such crises in the future.
On July 18, 2013, the Financial Stability Board
("FSB") published its initial list of nine
global systematically important insurers ("G-SIIs"), based on the IAIS' assessment methodology, which includes Allianz SE, our ultimate parent company.
For G-SIIs which engage in activities deemed to be systemically risky, the framework of policy measures calls for imposition of additional capital (higher loss absorbency ("HLA")) requirements on those activities. On July 9, 2014, the IAIS issued a second exposure draft of the basic capital requirements ("BCR") that the FSB has directed the IAIS to develop. The BCR provides a basis for the calculation of the HLA requirements. In October 2014, the IAIS concluded the development of its initial BCR framework.  Depending on the directions of domestic group wide supervisors, G-SIIs will be required to report their BCR results beginning in 2014 on a confidential basis. The BCR will continue to be revised by the IAIS once the confidential reporting period begins, and a final capital framework for G-SIIs is anticipated by 2019. In October 2015, the IAIS released the new HLA requirements that will apply to G-SIIs. HLA requirements are to be applied in 2019 to companies designated as G-SIIs in 2017. In addition, the IAIS proposes to develop a risk-based global insurance company standard by 2016 which will apply to all internationally active insurance groups, including G-SIIs, with implementation to begin in 2019 after two years of testing and refinement, and in December 2014 it published a proposed standard for public comment. The IAIS policy measures would need to be implemented by legislation or regulation in each applicable jurisdiction and the precise implications of being designated a G-SII are not yet clear
; however,
they could have far-reaching regulatory and competitive implications for Allianz SE and adversely impact its capital requirements, profitability, ability to provide capital/financial support for its affiliates, ability to grow through future acquisitions, ability to conduct its business and overall competitive position compared to insurance groups that are not designated G-SIIs. In November 2015, the IAIS released a public consultation document on the first step of a three-step consultation process related to requirements for non-traditional non-insurance activities and products, which focused on finalizing the analytical framework based on existing product features. All of these possibilities, if they occurred, could affect the way we conduct our business (including, for example, which products we offer) and manage our capital, and could require us to satisfy increased capital requirements, which could materially affect our business, consolidated results of operations and financial condition.
Additionally, Dodd-Frank created the Consumer Financial Protection Bureau ("CFPB"), an independent division of the Department of Treasury with jurisdiction over credit, savings, payment and other consumer financial products and services other than what is already regulated by the SEC or the U.S. Commodity Futures Trading Commission. The CFPB has issued a rule to bring under its supervisory authority certain non-banks whose activities or products it determines pose risks to consumers. Additionally, the CFPB is exploring the possibility of helping Americans manage their retirement savings and is considering the extent of its authority in that area. We are unable to predict the impact of these activities.
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In addition, on April 6, 2016, the Department of Labor issued a final rule that will significantly expand the definition of "investment advice" and increase the circumstances in which companies and broker-dealers, insurance agencies and other financial institutions that sell our products could be deemed a fiduciary when providing investment advice with respect to plans under the Employee Retirement Income Security Act of 1974 ("ERISA") or individual retirement accounts ("IRAs"). We are not yet certain how, if at all, the implementation of this rule will change our business, results of operations or financial condition. The Department of Labor has extended the implementation of the rule until April 2017. The department also introduced amendments to longstanding exemptions from the prohibited transaction provisions under ERISA that would increase fiduciary requirements in connection with transactions involving ERISA plans, plan participants and IRAs, and that would apply more onerous disclosure and contract requirements to such transactions. The Department of Labor has introduced an additional transition period for these amendments until January 2018. We may find it necessary to change sales representative and/or broker compensation, limit the assistance or advice we provide to owners of our annuities, or otherwise change the manner in which we design and support sales of our annuities. These changes could have an adverse impact on the level and type of services we could provide and compliance with the rule could also increase our overall operational costs for providing some of the services we currently provide.
Changes in tax laws and regulations, including elimination of tax benefits for our products, may adversely affect sales of our insurance and investment advisory products, and also impact our deferred tax assets.
Changes to tax laws may affect the attractiveness of certain of our products, which currently have beneficial tax treatment. From time to time, governments have considered or implemented proposals for changes in tax law that could adversely affect our products. These proposals have included proposals to levy tax on the undistributed increase in value of life insurance policies or annuities or similar proposals that affect the tax-favored status of life insurance products and annuities in certain jurisdictions as well as other changes that could adversely affect the attractiveness of our products. The enactment of these or other similar types of legislation in the various countries where we operate, including proposals in the U.S. to create or favor alternative tax-favored long-term savings vehicles, could result in a significant decrease in sales of our currently tax-favored products.
In addition, changes in tax laws or regulations or an operating performance below currently anticipated levels may lead to a significant impairment of deferred tax assets, in which case we could be obligated to write off certain tax assets. Tax assets may also need to be written down if certain assumptions of profitability prove to be incorrect, as losses incurred for longer than expected will make it more unlikely that we would be able to use our tax assets. We cannot predict what impact any such development could have on our business, consolidated results of operations and financial condition.
Capital, Credit and Investment Risks
The amount of statutory capital that we have and the amount of statutory capital we must hold to meet our statutory capital requirements and our financial strength and credit ratings can vary significantly from time to time.
Statutory accounting standards and capital and reserve requirements are prescribed by the NYDFS and the NAIC. The NYDFS has established regulations that govern reserving requirements and provide minimum capitalization requirements based on risk-based capital ("RBC") ratios for life insurance companies. This RBC formula establishes capital requirements relating to insurance, business, asset and market risks including equity and interest rate risks associated with variable annuities, fixed annuities, life insurance and other insurance businesses. In any particular year, statutory surplus amounts and RBC ratios may increase or decrease depending on a variety of factors, including but not limited to the amount of statutory income or losses we generate (which itself is sensitive to equity market and credit market conditions), changes in reserves, the amount of additional capital we must hold to support business growth, changes in equity market levels, the value of certain fixed-income and equity securities in our investment portfolio, changes in interest rates, and changes to existing RBC formulas. Additionally, state insurance regulators have significant leeway in interpreting existing regulations, which could further impact the amount of statutory capital or reserves that we must maintain. If the NYDFS were to take more stringent positions than other state insurance regulators on matters affecting, among other things, statutory capital and/or reserves, the effect of these more stringent positions may be that our financial condition appears to be worse than competitors who are not subject to the same stringent standards, which could have a material adverse impact on our competitiveness, results of operations and/or financial condition. Moreover, rating agencies may implement changes to their internal models that have the effect of increasing or decreasing the amount of capital we must hold in order to maintain our current ratings. To the extent that our statutory capital resources are deemed to be insufficient to maintain a particular rating by one or more rating agencies, our financial strength and credit ratings might be downgraded by one or more rating agencies. There can be no assurance that we will be able to maintain our current
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RBC ratio in the future or that our RBC ratio will not fall to a level that could have a material adverse effect on our business and consolidated results of operations or financial condition.
Changes in statutory reserve or other requirements and/or the impact of adverse market conditions could result in changes to our product offerings that could negatively impact our business.
Changes in statutory reserve or other requirements, increased costs of hedging, other risk mitigation techniques and financing, and other adverse market conditions could result in certain products becoming less profitable or unprofitable. These circumstances could cause modifications and/or the cessation of sales of certain products in the future. Modifications to products that we have made (or make in the future) may result in certain of our products being less attractive and/or competitive. This may adversely impact sales, which could negatively impact our ability to retain our sales personnel and maintain our distribution relationships. This, in turn, may negatively impact our business and our results of operations and financial condition.
Our reserves could be inadequate due to differences between our actual experience and management's estimates and assumptions.
We establish and carry reserves to pay future policyholder benefits and claims. Our reserve requirements for our business are calculated based on a number of estimates and assumptions, including estimates and assumptions related to future mortality, morbidity, interest rates, future equity performance, reinvestment rates, persistency, claims experience, and policyholder elections (i.e., the exercise or non-exercise of rights by policyholders under the contracts). Examples of policyholder elections include, but are not limited to, lapses and surrenders, withdrawals and amounts of withdrawals, and contributions and the allocation thereof. The assumptions and estimates used in connection with the reserve estimation process are inherently uncertain, involve the exercise of significant judgment, and reflect evolving information.
For example, the current rates of mortality and morbidity may continue to improve in the future due to medical and technological advancements that have resulted in policyholders living longer than anticipated. We periodically review the adequacy of reserves and the underlying assumptions and make adjustments when appropriate. We cannot, however, determine with precision the amounts that we will pay for, or the timing of payment of, actual benefits and claims or whether the assets supporting the policy liabilities will grow to the level assumed prior to payment of benefits or claims. Our claim costs could increase significantly and our reserves could be inadequate if actual results differ significantly from our estimates and assumptions. If so, we will be required to increase reserves or accelerate amortization of deferred acquisition costs ("DAC"), which could adversely impact our earnings and/or capital.
Our investments are subject to several market risks, including interest rate risk, market price fluctuation risk and counterparty credit risk. These factors may have a material effect on the fair values of our investments.
The fair values of our investments are subject to market risks, including credit risk, interest rate risk and equity price risk.
Credit Risk.
Counterparty credit risk is defined as the risk that a third party in a transaction will default on its commitments. Investment portfolios held by our insurance operations (excluding assets backing unit-linked products where the financial risk is borne by policyholders) could give rise to counterparty credit risk through the bonds and derivative products held within them. Credit risk diversification and analysis policies, particularly using credit ratings, are implemented by our investment group and monitored by our risk management group, but these policies may be inadequate or ineffective in protecting us against credit risk.
Interest Rate Risk
. The fair values of our fixed maturity investments will fluctuate in response to changes in market interest rates. Increases and decreases in prevailing interest rates generally result in decreases and increases in fair values of those instruments.
Equity Price Risk.
The carrying values of investments subject to equity price risk are, in almost all instances, based on quoted market prices as of the balance sheet dates. Market prices are subject to fluctuation and, consequently, the amount realized in the subsequent sale of an investment may differ significantly from the reported market value. Fluctuation in the market price of a security may result from, among other things, perceived changes in the underlying economic characteristics of the investee, the relative price of comparable investments and general market conditions.
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Losses due to defaults by financial institution counterparties and other third parties and affiliates, impairment of our investment assets and unrealized losses all could negatively affect the value of our investments and reduce our profitability.
Third parties and affiliates that owe us money, securities or other assets may not perform under their obligations. These parties include issuers whose securities we may hold in our investment portfolios (including mortgage-backed, asset-backed and other types of securities), borrowers under mortgages and other loans that we may hold or extend, customers, trading counterparties, counterparties under swap and other derivative contracts, other counterparties (including brokers and dealers, commercial and investment banks), other investment funds, clearing agents, exchanges, clearing houses and other financial institutions. Many of our transactions with these third parties and affiliates expose us to credit risk in the event of default of our counterparty. In addition, with respect to secured transactions, our credit risk may be exacerbated when the collateral held by us cannot be realized upon or is liquidated at prices not sufficient to cover the full amount of the loan, derivative or other secured obligation. Also, defaults by parties with which we have no direct contractual relation, such as a default by a credit insurer that has insured bonds, structured finance products or other securities we may hold in our investment portfolios, may adversely impact the value of those securities and potentially adversely affect the financial markets more generally. These parties may default on their obligations due to bankruptcy, lack of liquidity, downturns in the economy or real estate market, operational failure or other reasons. Negative trends and investment climates in our major markets may result in an increase in investment impairments on our investment assets. There can be no assurance that any such losses or impairments to the carrying value of these assets would not materially and adversely affect our business and results of operations. The default of a major market participant could disrupt the securities markets or clearance and settlement systems in our major markets, which could in turn cause market declines or volatility. A failure of a major market participant could also cause some clearance and settlement systems to assess members of that system or could lead to a chain of defaults that could adversely affect us.
Some of our investments are relatively illiquid. If we are forced to liquidate these investments, we may be unable to sell them at prices that reflect fair value.
We hold certain investments that may lack liquidity, such as privately placed fixed maturity securities, mortgage loans, collateralized debt obligations, commercial mortgage-backed securities, equity real estate and limited partnership interests. Although we seek to adjust our cash and short-term investment positions to minimize the likelihood that we would need to sell illiquid investments, if we were required to liquidate these investments on short notice, we may have difficulty doing so and be forced to sell them for less than we otherwise would have been able to realize.
Our performance is currently based solely on the success or failure of variable annuity and variable and index-linked annuity products which are the only products we sell in New York. If we are unsuccessful in selling these products, or these products do not perform as anticipated, our financial condition and results of operations will be adversely affected.
Because we currently only offer a single type of product in New York, our type of business is not diversified, and we rely exclusively on sales of this product in order to be successful.
In addition, we compete with other insurance companies that offer a wider range of products in New York which may make it more difficult for us to succeed. If we are unsuccessful in selling our variable annuity and variable and index-linked annuity products in New York, our financial condition and results of operations will be materially and adversely affected.
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Interest rate and credit spread volatility may adversely affect our profitability.
Our exposure to interest rate risk relates primarily to the market price and cash flow variability associated with changes in interest rates.
During periods of declining interest rates, life insurance and annuity products may be relatively more attractive to consumers, resulting in increased premium payments on products with flexible premium features, and a higher percentage of insurance policies remaining in force from year-to-year, creating asset-liability duration mismatches. During a low interest rate period, our investment earnings may be lower because the interest earnings on our fixed income investments will likely have declined in parallel with market interest rates, which would also cause unrealized gains on our assets recorded at fair value under GAAP. In addition, mortgages and fixed maturity securities in our investment portfolios will be more likely to be prepaid or redeemed as borrowers seek to borrow at lower interest rates. Consequently, we may be required to reinvest the proceeds in securities bearing lower interest rates. Accordingly, during periods of declining interest rates, our profitability may suffer as the result of a decrease in the spread between interest rates credited to policyholders and returns on our investment portfolios.
Conversely, in periods of increasing interest rates, surrenders of life insurance policies and fixed annuity contracts may increase as policyholders choose to forgo insurance protection and seek higher investment returns. Obtaining cash to satisfy these obligations may require us to liquidate fixed maturity investments at a time when market prices for those assets are depressed because of increases in interest rates. This may result in realized investment losses. Regardless of whether we realize an investment loss, these cash payments would result in a decrease in total invested assets, and may decrease our net income. Premature withdrawals may also cause us to accelerate amortization of DAC, which would also reduce our net income.
Our mitigation efforts with respect to interest rate risk are primarily focused towards maintaining an investment portfolio with diversified maturities that has a weighted average duration that is approximately equal to the duration of our estimated liability cash flow profile. However, our estimate of the liability cash flow profile may be inaccurate and we may be forced to liquidate investments prior to maturity at a loss in order to cover the liability. Although we take measures to manage the economic risks of investing in a changing interest rate environment, we may not be able to fully mitigate the interest rate risk of our assets relative to our liabilities.
Our exposure to credit spreads primarily relates to market variability associated with changes in credit spreads. A widening of credit spreads will increase the net unrealized loss position of the investment portfolio. Credit spread tightening will reduce net investment income associated with new purchases of fixed maturity securities. Ongoing volatility in interest rates and credit spreads, individually or in tandem with other factors such as lack of pricing transparency, market illiquidity and declines in equity prices could have a material adverse effect on our consolidated results of operations, financial condition or cash flows through realized losses, impairments, and changes in unrealized loss positions.
Recent periods have been characterized by low interest rates, and the Federal Reserve Board has committed to keeping interest rates low until there is substantial improvement in the labor market. Although the Federal Reserve recently moved to marginally increase short-term interest rates, medium and long-term interest rates have remained at historically low levels. A prolonged period during which interest rates remain at levels lower than those anticipated may result in (1) greater costs associated with certain of our product features that guarantee death benefits or income streams for stated periods or for life, (2) higher costs for derivative instruments used to hedge certain of our product risks or (3) shortfalls in investment income on assets supporting policy obligations as our portfolio earnings decline over time, each of which may require us to record charges to increase reserves. In addition to compressing spreads and reducing net investment income, such an environment may cause policies to remain in force for longer periods than we anticipated in our pricing, potentially resulting in greater claims costs than we expected and resulting in lower overall returns on business in force.
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Our hedging and reinsurance programs may be inadequate to protect us against the full extent of the exposure or losses we seek to mitigate.
Changes in equity markets, increased equity volatility, or reduced interest rates could result in an increase in the valuation of liabilities associated with our products, resulting in increases in reserves and reductions in net income. In the normal course of business, we seek to mitigate some of these risks through hedging programs and reinsurance programs. Growth in the underlying indices may result in an increase in reserves and a corresponding reduction in net income. However, these programs cannot eliminate all of these risks, and no assurance can be given as to the extent to which such programs will be effective in reducing such risks.
Reinsurance
. We utilize reinsurance to mitigate a portion of the risks that we face, principally in certain of our in-force life insurance and annuity products with regard to mortality, and in certain of our annuity products with regard to a portion of the enhanced guarantee features. Under our reinsurance arrangements, other insurers assume a portion of the obligation to pay claims and related expenses to which we are subject. However, we remain liable as the direct insurer on all risks we reinsure and, therefore, are subject to the risk that our reinsurer is unable or unwilling to pay or reimburse claims at the time demand is made. Although we evaluate periodically the financial condition (including the applicable capital requirements) of our reinsurers, the inability or unwillingness of a reinsurer to meet its obligations to us (or the inability to collect under our reinsurance treaties for any other reason) could have a material adverse impact on our business, consolidated results of operations and financial condition.
We are continuing to utilize reinsurance to mitigate a portion of our risk on certain new annuity sales. Prolonged or severe adverse mortality or morbidity experience could result in increased reinsurance costs, and ultimately may reduce the availability of reinsurance for future sales. If, for new sales, we are unable to maintain our current level of reinsurance or purchase new reinsurance protection in amounts that we consider sufficient, we would either have to be willing to accept an increase in our net exposures, revise our pricing to reflect higher reinsurance premiums, or limit the amount of new business written on any individual life. If this were to occur, we may be exposed to reduced profitability and cash flow strain, or we may not be able to price new business at competitive rates.
Hedging Programs
. We utilize hedging programs to mitigate a portion of the unreinsured risks we face in, among other areas, the guarantee features of our annuity products from unfavorable changes in benefit exposures due to movements in the equity markets and interest rates. In certain cases, however, we may not be able to apply these techniques to hedge these risks effectively because the derivative market(s) in question may not be of sufficient size or liquidity or there could be an operational error in the application of our hedging strategy or for other reasons. The operation of our hedging programs is based on models involving numerous estimates and assumptions, including, among others, mortality, lapse, surrender and withdrawal rates and amounts of withdrawals, election rates, market volatility, interest rates and correlation among various market movements. There can be no assurance that ultimate actual experience will not differ materially from our assumptions, particularly (but not only) during periods of high market volatility, which could adversely impact consolidated results of operations and financial condition. If results from our hedging programs in the future do not correlate with the economic effect of changes in benefit exposures to customers, we could experience economic losses which could have a material adverse impact on our business, consolidated results of operations and financial condition.
Our hedging programs do not fully hedge our statutory capital position. In addition, we may choose to hedge these risks on a basis that does not correspond to their anticipated or actual impact upon our results of operations or financial position under U.S. GAAP, which may decrease our earnings or increase the volatility of our results of operations or financial position. If the hedging instruments we use do not perform as intended, we could realize losses and have unanticipated cash needs to collateralize or settle such transactions. In addition, adverse market conditions can limit the availability and increase the costs associated with hedging instruments, and we may not be able to recover those costs in the pricing of the underlying products being hedged. Finally, hedging counterparties may fail to perform their obligations, thereby resulting in unhedged exposures and losses on positions that are not fully collateralized.
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Reinsurance may not be available, affordable or adequate to protect us against losses.
As part of our overall risk management strategy, we purchase reinsurance for certain risks underwritten by our various business segments. While reinsurance agreements generally bind the reinsurer for the life of the business reinsured at generally fixed pricing, market conditions beyond our control can determine the availability and cost of the reinsurance protection for new business. In certain circumstances, the price of reinsurance for business already reinsured may also increase. Any decrease in the amount of reinsurance will increase our risk of loss and any increase in the cost of reinsurance will reduce our earnings. Accordingly, we may be forced to incur additional expenses for reinsurance, may not be able to obtain sufficient reinsurance on acceptable terms or may not be able to obtain reinsurance coverage, which could adversely affect our ability to write future business, offer new products or enter new markets, or result in the assumption of more risk with respect to those policies we issue.
Our business is subject to fluctuations in financial markets and our hedging programs may be inadequate to protect us.
Certain types of insurance and investment products that we offer expose us to risks associated with fluctuations in financial markets, including certain types of interest sensitive or variable products such as guaranteed annuities or variable annuities, which have crediting or other guaranteed rates or guaranteed minimum benefits not necessarily related to prevailing market interest rates or investment returns on underlying assets. Although we use hedging techniques to manage our exposure under certain of these guarantees, increased volatility in the financial markets, combined with unanticipated policyholder behavior, may increase the cost of these hedges and/or negatively affect our ability to hedge certain of these risks, which may adversely affect our profitability. Our hedging programs may be inadequate to protect us against the full extent of the exposure or losses we seek to mitigate, which in turn may negatively impact our business, consolidated results of operations and financial condition.
Poor investment performance in our variable products could adversely affect our financial condition and results of operations.
Poor investment performance could result in a reduction in fee income received from our variable annuity products since these products generate fees primarily related to the value of our assets under management. Poor performance also could impair our prospects for growth, because our ability to attract funds from existing and new clients might diminish and existing clients might withdraw assets from our variable products in favor of better performing products of other companies, which would result in lower revenues.
The determination of the amount of allowances and impairments taken on our investments requires use of significant management judgment in certain cases, particularly for debt instruments, and could materially impact our results of operations or financial position.
The determination of the amount of allowances and impairments vary by investment type and is based upon our periodic evaluation and assessment of known and inherent risks associated with each asset class. Such evaluations and assessments are revised as conditions change and new information becomes available. In considering impairments, management considers a wide range of factors and uses its best judgment in evaluating the cause of the decline in the estimated fair value of the security and the prospects for near-term recovery. For certain asset classes, particularly debt instruments, management's evaluation involves a variety of assumptions and estimates about the operations of the issuer and its future earnings potential. Management updates its evaluations regularly and reflects changes in allowances and impairments as such evaluations are revised. There can be no assurance, however, that management has accurately assessed the level of impairments taken and allowances reflected in our financial statements, and any additional impairments and/or allowances may have a material adverse effect on our business, consolidated results of operations and financial condition.
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A downgrade or potential downgrade in our financial strength ratings could result in a loss of business.
Claims-paying and financial strength ratings, which various ratings organizations publish as measures of an insurance company's ability to meet contract holder and policyholder obligations, are important to maintaining public confidence in our Company and our products, and the ability to market our products and our competitive position. A downgrade in our financial strength ratings, or the announced potential for a downgrade, could have an adverse effect on our financial condition, results of operations and cash flows in several ways, including:
·
reducing new sales of insurance products, annuities and other investment products;
·
increasing our cost of capital or limiting our access to sources of capital;
·
adversely affecting our relationships with our field marketing organizations, agents and other sales specialists;
·
materially increasing the number or amount of policy surrenders and withdrawals by contract holders and policyholders;
·
requiring us to reduce prices or increase crediting rates for many of our products and services to remain competitive; and
·
adversely affecting our ability to obtain reinsurance or obtain reasonable pricing on reinsurance.
The impairment or negative performance of other financial institutions could adversely affect our business.
We have exposure to many different industries and counterparties, and routinely execute transactions with counterparties in the financial services industry, including broker-dealers, commercial banks, investment banks, insurers, reinsurers and other investment and financial institutions. The operations of U.S. and global financial services institutions are interconnected, and a decline in the financial condition of one or more financial services institutions, or the perceived lack of creditworthiness of such financial institutions, may expose us to credit losses or defaults, limit access to liquidity or otherwise disrupt the operations of our business. While we regularly assess our exposure to different industries and counterparties, the performance and financial strength of specific institutions are subject to rapid change, the timing and extent of which cannot be known.
Many transactions with and investments in the products and securities of other financial institutions expose us to credit risk in the event of default of our counterparty. With respect to secured transactions, our credit risk may be exacerbated when the collateral we hold cannot be realized upon or is liquidated at prices insufficient to recover the full amount of the loan or derivative exposure. We also have exposure to financial institutions in the form of unsecured debt instruments, derivative transactions, repurchase and underwriting arrangements and equity investments. There can be no assurance that any such losses or impairments to the carrying value of these assets would not materially and adversely impact our business, consolidated results of operations and financial condition.
Downgrades in the credit or financial strength ratings assigned to the counterparties with whom we transact business or other adverse reputational impacts to such counterparties could create the perception that our financial condition will be adversely impacted as a result of potential future defaults by such counterparties. Additionally, we could be adversely affected by a general, negative perception of financial institutions caused by the downgrade or other adverse impact to the reputation of other financial institutions.
Business and Operational Risks
Difficult conditions in the global capital markets and the economy could materially adversely affect our business, consolidated results of operations and financial condition.
Our business, consolidated results of operations and financial condition are materially affected by conditions in the global capital markets and the economy generally. We have been affected by the financial crisis and its aftermath since 2008. While financial markets generally stabilized and performed well in 2015, a wide variety of factors continue to negatively impact economic conditions and consumer confidence. These factors include, among others, concerns over the pace of the economic recovery, the U.S. Federal Reserve's tapering of its bond buying program, the level of U.S. national debt, the European sovereign debt crisis, unemployment, the availability and cost of credit and hedging instruments, the U.S. housing market, oil and commodity prices, inflation levels, and geopolitical issues. Additionally, the U.S. Federal Reserve, through the Federal Open Market Committee, has begun to slowly raise interest rates. Given our interest rate and equity market exposure, these events have had and may in the future have an adverse effect on us. Our revenues may decline, our profit margins could erode and we could incur significant losses.
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Factors such as consumer spending, business investment, government spending, the volatility and strength of the equity markets, interest rates, deflation and inflation all affect the business and economic environment and, ultimately, the profitability of our business. In an economic downturn characterized by higher unemployment, lower family income, lower corporate earnings, lower business investment and lower consumer spending, the demand for our financial and insurance products could be adversely affected. In addition, the levels of surrenders and withdrawals of our annuity contracts we face may be adversely impacted. Our policyholders may choose to defer paying insurance premiums or stop paying insurance premiums altogether. Adverse changes in the economy could affect earnings negatively and could have a material adverse effect on our business, consolidated results of operations and financial condition.
We use numerous assumptions to determine the appropriate level of insurance reserves and DAC and to calculate certain widely used industry measures of value, which involve a significant degree of management judgment and predictions about the future that are inherently uncertain; if these assumptions are not correct, it may have an adverse impact on our results of operations and/or performance indicators.
The establishment of insurance reserves, including the impact of minimum guarantees which are contained within certain of our variable annuity products, the adequacy test performed on the reserves for life and annuity policies and the establishment of DAC, are inherently uncertain processes involving assumptions about factors such as policyholder behavior (e.g., lapses, persistency and mortality), court decisions, changes in laws and regulations, social, economic and demographic trends, inflation, investment returns and other factors, and, in the life insurance and annuity business, assumptions concerning mortality and morbidity trends. The use of different assumptions about these factors could have a material effect on our reserves and underwriting expenses as well as on our DAC. In addition, insurance reserves for minimum guarantees contained within certain of our variable annuity products may be significantly impacted by the state of the financial markets and significant declines could have a material adverse effect on our business, consolidated results of operations and financial condition.
We face competition from other insurance companies, banks and other financial institutions, which may adversely impact our market share and profitability.
There is strong competition among insurers, banks, brokerage firms and other financial institutions and providers seeking clients for the types of products and services we provide, including insurance, annuity and other investment products and services. Competition is intense among a broad range of financial institutions and other financial service providers for retirement and other savings dollars. This competition makes it especially difficult to provide unique insurance products since, once such products are made available to the public, they often are reproduced and offered by our competitors. In addition, this competition may adversely impact our market share and profitability.
Our ability to compete is dependent on numerous factors, including, among others, the successful implementation of our strategy; our financial strength as evidenced, in part, by our financial and claims-paying ratings; our access to diversified sources of distribution; our size and scale; our product quality, range, features/functionality and price; our ability to bring customized products to the market quickly; our ability to explain complicated products and features to our distribution channels and customers; the visibility, recognition and understanding of our brands in the marketplace; our reputation and quality of service; and (with respect to variable insurance and annuity products, mutual funds and other investment products) our investment options, flexibility and investment management performance.
Consolidation of distributors of insurance products may adversely affect the insurance industry and the profitability of our business.
The insurance industry distributes many of its products through other financial institutions such as banks, broker-dealers and field marketing organizations. Over the last several years, there has been substantial consolidation of these financial institutions, particularly between and among banks and other financial services companies. An increase in consolidation activity with banks and other financial services companies affecting insurance distributors may create firms with even stronger competitive positions and negatively impact the industry's sales. Such consolidation could increase competition for access to distributors, result in greater distribution expenses and impair our ability to market insurance products to our current customer base or expand our customer base. Consolidation of distributors and/or other industry changes may also increase the likelihood that distributors will try to renegotiate the terms of any existing selling agreements to terms less favorable to us.
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Inadequate or failed processes or systems, human factors or external events may adversely affect our profitability, reputation or operational effectiveness.
Operational risk is inherent in our business and can manifest itself in various ways, including business interruption, poor vendor performance, information systems malfunctions or failures, regulatory breaches, human errors, employee misconduct, and external fraud. These events can potentially result in financial loss, harm to our reputation and/or hinder our operational effectiveness. Management attempts to control these risks and keep operational risk at low levels by maintaining a sound and well controlled environment in light of the characteristics of our business, markets and regulatory environment in which we operate. Notwithstanding these measures, operational risk is part of the business environment in which we operate, and we may incur losses from time to time due to these types or risks.
The failure to maintain and modernize our information systems could adversely affect our business.
Our business depends significantly on effective information systems, and we have different information systems for our various lines of business. We must commit significant resources to maintain and enhance our existing information systems, and develop new ones in order to keep pace with the evolving information technology, industry and regulatory standards and customer preferences. If we do not maintain adequate information systems, we may not be able to gather and rely on adequate information to base our pricing, underwriting and reserving decisions. We may also have difficulties in attracting new customers and preserving our existing customer base. In addition, underperforming information systems could cause us to become subject to a higher number of customer, provider and agent disputes, may increase our litigation and regulatory exposure and may make us incur higher administrative expenses, including remediation costs.
We may not be able to protect our intellectual property and may be subject to infringement claims by a third party.
We rely on a combination of contractual rights, copyright, trademark, and trade secret laws to establish and protect our intellectual property. Although we use a broad range of measures to protect our intellectual property rights, third parties may infringe or misappropriate our intellectual property. The loss of intellectual property protection or the inability to secure or enforce the protection of our intellectual property assets could have a material adverse effect on our business and our ability to compete.
Third parties may have, or may eventually be issued, patents or other protections that could be infringed by our products, methods, processes or services or could limit our ability to offer certain product features. In recent years, there has been increasing intellectual property litigation in the financial services industry challenging, among other things, product designs and business processes. If a third party were to successfully assert an intellectual property infringement claim against us, or if we were otherwise precluded from offering certain features or designs, or utilizing certain processes, it could have a material adverse effect on our business, consolidated results of operations and financial condition.
Changes in and the adoption of accounting standards could have a material impact on our financial statements.
We prepare our financial statements in accordance with U.S. GAAP. From time to time, the Financial Accounting Standards Board ("FASB"), the SEC, and other regulators change the financial accounting and reporting standards governing the preparation of our financial statements. In some cases, we could be required to apply a new or revised standard retrospectively, resulting in the restating of prior period financial statements. The FASB and International Accounting Standards Board ("IASB") have ongoing projects to revise accounting standards for insurance contracts. The FASB has focused on disclosures for short-duration insurance contracts and on targeted improvements to accounting measurements and disclosures for long-duration insurance contracts. The IASB continues to contemplate significant changes to accounting measurements for both short and long duration insurance contracts. While the final resolution of changes to U.S. GAAP and International Financial Reporting Standards pursuant to these projects remains unclear, changes to the manner in which we account for insurance products could have a significant impact on our future financial reports, business, consolidated results of operations and financial condition. Further, the adoption of a new insurance contracts standard as well as other future accounting standards could have a material effect on our business, consolidated results of operations and financial condition.
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Our risk management policies and procedures may not be fully effective in identifying or mitigating our risk exposure in all market environments or against all types of risk, including employee misconduct.
We have devoted significant resources to develop our risk management policies and procedures and will continue to do so. Nonetheless, our policies and procedures to identify, monitor and manage risks may not be fully effective in mitigating our risk exposure in all market environments or against all types of risk. Many of our methods of managing risk and exposures are based upon our use of observed historical market behavior or statistics based on historical models. During periods of market volatility or due to unforeseen events, the historically derived correlations upon which these methods are based may not be valid. As a result, these methods may not predict future exposures accurately, which could be significantly greater than what our models indicate. This could cause us to incur investment losses or cause our hedging and other risk management strategies to be ineffective.
Other risk management methods depend upon the evaluation of information regarding markets, clients, catastrophe occurrence or other matters that are publicly available or otherwise accessible to us, which may not always be accurate, complete, up-to-date or properly evaluated. Moreover, we are subject to the risks of errors and misconduct by our employees, such as fraud, non-compliance with policies, recommending transactions that are not suitable, and improperly using or disclosing confidential information. These risks are difficult to detect in advance and deter, and could harm our business, consolidated results of operations and financial condition.
We are also subject to the risk of nonperformance or inadequate performance of contractual obligations by third-party vendors of products and services that are used in our business as well as misconduct by our employees. Past or future misconduct by our employees or employees of our vendors could result in violations of law by us, regulatory sanctions and/or serious reputational or financial harm and the precautions we take to prevent and detect this activity may not be effective in all cases. Policies and procedures designed to mitigate operational, legal and regulatory risks may not be fully effective in mitigating our risk exposure in all market environments or against all types of risk. Insurance and other traditional risk-shifting tools may be held by or available to us in order to manage certain exposures, but they are subject to terms such as deductibles, coinsurance, limits and policy exclusions, as well as risk of counterparty denial of coverage, default or insolvency. We also review our compensation policies and practices as part of our overall risk management program, but it is possible that our compensation policies and practices could inadvertently incentivize excessive or inappropriate risk taking. If our associates take excessive or inappropriate risks, those risks could harm our reputation and have a material adverse effect on our business, consolidated results of operations and financial condition.
Breaches of security, or interference with our technology infrastructure, could harm our business.
Our business is reliant upon technology systems and networks, including systems and networks managed by third parties to process, transmit and store information and to conduct business activities and transactions with clients, distributors, vendors and other third parties. We are also subject to certain federal and state regulations that require us to establish and maintain policies and procedures designed to protect sensitive client information. Maintaining the integrity of our systems is critical to the success of our business operations, including the retention of clients, and to the protection of our clients' personal information. To date, we have not experienced any material breaches of or interference with our systems and networks; however, we routinely encounter and address such threats, including an increasing frequency of phishing scams, introductions of malware and unauthorized payment requests. Any such breaches or interference by third parties or by our employees that may in the future occur could have a material adverse impact on our business, consolidated results of operations and financial condition.
We have implemented and maintain security measures designed to protect against breaches of security and other interference with systems and networks resulting from attacks by third parties, including hackers, and from employee error or malfeasance. We also require third party vendors who, in the provision of services to us, are provided with or process information pertaining to our business or our clients to meet certain information security standards. Changes in our technology platforms, such as an evolution to accommodate mobile computing, may also require corresponding changes in our systems, networks and data security measures. In addition, the increasing reliance on technology systems and networks and the occurrence and potential adverse impact of attacks on such systems and networks, both generally and in the financial services industry, have enhanced government and regulatory scrutiny of the measures taken by companies to protect against cyber-security threats. As these threats, and government and regulatory oversight of associated risks, continue to evolve, we may be required to expend additional resources to enhance or expand upon the security measures we currently maintain. Despite the measures we have taken and may in the future take to address and mitigate these risks, we cannot ensure that our systems and networks will not be subject to breaches or interference. Any such event may result in operational disruptions as well as unauthorized access to or the disclosure or loss of our
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proprietary information or our clients' personal information, which in turn may result in legal claims, regulatory scrutiny and liability, reputational damage, the incurrence of costs to eliminate or mitigate further exposure, the loss of clients or other damage to our business. In addition, the trend toward broad consumer and general public notification of such incidents could exacerbate the harm to our business, financial condition, or results of operations. Even if we successfully protected our technology infrastructure and the confidentiality of sensitive data, we may incur significant expenses in responding to any such attacks as well as the adoption and maintenance of appropriate security measures. We could also suffer harm to our business and reputation if attempted security breaches are publicized. We cannot be certain that advances in criminal capabilities, discovery of new vulnerabilities, attempts to exploit vulnerabilities in our systems, data thefts, physical system or network break-ins or inappropriate access, or other developments will not compromise or breach the technology or other security measures protecting our networks and systems used in connection with our products and services.
The failure to protect our clients' confidential information and privacy could adversely affect our business.
A number of our businesses are subject to privacy regulations and confidentiality obligations. For example, certain of the activities conducted by our businesses are subject to the privacy regulations of the Gramm-Leach-Bliley Act and state privacy laws and regulations. We also have contractual obligations to protect certain confidential information we obtain from our existing vendors and clients. These obligations generally include protecting such confidential information in the same manner and to the same extent as we protect our own confidential information. The actions we take to protect confidential information vary by business segment and may include, among other things:
·
training and educating our employees regarding our obligations relating to confidential information;
·
monitoring changes in state or federal privacy and compliance requirements;
·
drafting appropriate contractual provisions into any contract that raises proprietary and confidentiality issues;
·
maintaining secure storage facilities for tangible records;
·
limiting access to electronic information; and
·
in the event of a security breach, providing credit monitoring or other services to affected customers.
In addition, we must develop, implement and maintain a comprehensive written information security program with appropriate administrative, technical and physical safeguards to protect such confidential information. If we do not properly comply with privacy regulations and protect confidential information, we could experience adverse consequences, including regulatory sanctions, such as penalties, fines and loss of license, as well as loss of reputation and possible litigation. This could have an adverse impact on our Company's image and, therefore, result in lower sales or lapses of existing business.
We face intense competition in attracting and retaining key talent.
Our continued success depends to a substantial degree on our ability to attract and retain qualified people. The market for qualified talent is extremely competitive, and we may not be able to attract and retain the employees we need to sustain and grow our business and operations. If we are unable to attract and retain qualified individuals or our recruiting and retention costs increase significantly, our financial condition and results of operations could be materially adversely impacted.
Third-party defaults, bankruptcy filings, legal actions and other events may limit the value of or restrict our access to cash and investments.
Capital and credit market volatility can exacerbate, and has exacerbated, the risk of third-party defaults, bankruptcy filings, foreclosures, legal actions and other events that may limit the value of or restrict our access to cash and investments.
We may have contingent liabilities from discontinued, divested and run-off businesses and may incur other off-balance sheet liabilities that could result in charges to the income statement.
We may, from time to time, retain insurance obligations and other contingent liabilities in connection with our liquidation or run-off of various businesses. Our reserves for these types of obligations and liabilities may be inadequate, which could cause us to take additional charges that could be material to our results of operations. We may also, from time to time and in the course of our business, provide guarantees and enter into derivative and other types of off-balance sheet transactions that could result in income statement charges.
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Protection from system interruptions and operating errors is important to our business. If we were to experience a sustained interruption to our telecommunications or data processing systems or other failure in operational execution, these events could harm our business.
Operating errors and system or network interruptions could delay and disrupt our ability to develop, deliver or maintain our products and services, causing harm to our business and reputation and resulting in loss of customers or revenue. Interruptions could be caused by operational failures arising from employee error or malfeasance, interference by third parties (including hackers and other cyber-attacks), implementation of new technology, and maintenance of existing technology. Our financial, accounting, data processing or other operating systems and facilities may fail to operate or report data properly, experience connectivity disruptions or otherwise become disabled as a result of events that are wholly or partially beyond our control, adversely affecting our ability to process transactions or provide products and services to customers. The cause of these interruptions can include fires, floods, earthquakes and other natural disasters, power losses, equipment failures, attacks by third parties, failures of internal or vendor software or systems and other events beyond our control.
We rely on third party service providers and vendors for certain communications, technology and business functions and face the risk of operational failure (including, without limitation, failure caused by an inaccuracy, untimeliness or other deficiency in data reporting), termination or capacity constraints of any of the clearing agents, exchanges, clearing houses or other third party service providers that we use to facilitate or are component providers to our transactions and other product manufacturing and distribution activities. These risks are heightened by the evolution in the financial markets of increasingly sophisticated products, by business-driven hedging, by compliance issues and by other risk management or investment or by financial management strategies. Any such failure, termination or constraint could adversely impact our ability to implement transactions, service our clients, manage our exposure to risk or otherwise achieve desired outcomes.
Failures elsewhere in the insurance industry could obligate us to pay assessments through guaranty associations.
When an insurance company becomes insolvent, state insurance guaranty associations have the right to assess other insurance companies doing business in their state for funds to pay obligations to policyholders of the insolvent company, up to the state-specified limit of coverage. The total amount of the assessment is typically based on the number of insured residents in each state, and each company's portion is based on its proportionate share of premium volume in the relevant lines of business. The future failure of a large life, health or annuity insurer could trigger assessments which we would be obligated to pay. Further, amounts for historical insolvencies may be assessed over many years, and there can be significant uncertainty around the total obligation for a given insolvency. In addition, certain states allow us to offset future assessments with premium tax offsets which are estimated and recorded as a corresponding asset. Existing liabilities may not be sufficient to fund the ultimate obligations of a historical insolvency, and we may be required to increase our liability, which could have an adverse effect on our results of operations. In addition, future premium tax offsets may not be realized and we may be required to decrease our assets, which could also have an adverse effect on our business, consolidated results of operations and financial condition.
The occurrence of natural or man-made disasters and catastrophes could adversely affect our financial condition and results of operations.
The occurrence of natural disasters and catastrophes, including acts of terrorism, pandemics, industrial accident, blackout, cyber-attack, computer virus, insider threat, insurrections and military actions, unanticipated problems with our disaster recovery systems, or a support failure from external providers, could adversely affect our financial condition or results of operations particularly if those events affect our computer-based data processing, transmission, storage, and retrieval systems or destroy data. Such disasters and catastrophes may also impact us indirectly by changing the condition and behaviors of our customers, business counterparties and regulators, as well as by causing declines or volatility in the economic and financial markets.
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15.
FINANCIAL STATEMENTS
The financial statements of Allianz Life of NY Variable Account C as of and for the year or period ended December 31, 2015 (including the statements of changes in net assets for each of the years or periods in the two year period then ended and the financial highlights for each of the periods presented), are included in Part C of the Registration Statement filed with the SEC on Form N-4 in reliance upon the report of KPMG LLP, independent registered public accounting firm, and upon the authority of said firm as experts in accounting and auditing.
The unaudited consolidated financial statements of Allianz Life Insurance Company of New York as of June 30, 2016 and December 31, 2015 and for the six month periods ended June 30, 2016 and June 30, 2015 are included in Appendix C of this prospectus.
The financial statements and supplemental schedules of Allianz Life Insurance Company of New York as of December 31, 2015 and 2014, and for each of the years in the three-year period ended December 31, 2015, are included in Appendix D of this prospectus, in reliance upon the report of KPMG LLP, independent registered public accounting firm, and upon the authority of said firm as experts in accounting and auditing.
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16.
PRIVACY NOTICE
2016
Your privacy is a high priority for Allianz Life Insurance Company of New York (Allianz Life® of NY). ("we" or "our"). Our pledge to protect your privacy is reflected in our Privacy Notice. This notice outlines our principles for collecting, using and protecting information that we maintain about you.
Information about you that Allianz Life
of NY collects
We collect information about you so that we can process the insurance transactions you request. We limit the amount of your information collected to what we feel is needed to maintain your account. We may collect your information from the following sources:
·
From you, either directly or through your agent. This may include information on your insurance application or other forms you may complete.  The information we collect includes, but is not limited to, your name, social security number, address and telephone number.
·
From others, through the process of handling a claim. This may include information from medical or accident reports.
·
From your doctor or during a home visit by a health assessment professional. This may include medical information about you gathered with your written authorization.
·
From your relationship with us, such as the number of years you have been a customer or the types of insurance products you purchased.
·
From a consumer reporting agency such as a medical, credit, or motor vehicle report. The information in these reports may be kept by the agency and shared with others.
Information about you that Allianz Life of NY shares
We do not share information about current or former customers with anyone, except as allowed by law. "Allowed by law" means that we may share your information, such as your name, address, and policy information, as follows:
·
With affiliates and other third parties in order to administer or service your policy.
·
With consumer reporting agencies to obtain a medical report, credit report, or motor vehicle report. These reports are used to determine eligibility for coverage or to process your requested transactions.
·
With your insurance agent so that they can perform services for you.
·
With medical professionals in order to process your claim.
·
With a state Department of Insurance in order to examine our records or business practices.
·
With state or federal law enforcement agency, as required by law or to report suspected fraud activities.
·
With research groups to conduct studies on claims results. No individual is identified in any study or report.
We advise the vendors with whom we legally share your information of our privacy policy. We make every effort to use vendors whose privacy policy reflects our own.
Allianz Life of NY does not sell your information to anyone
We do not sell your information to anyone for their own marketing purposes. For this reason, we are not required to obtain an "opt-in election," an "opt-out election" or an authorization from you.
Allianz Life of NY policies and practices regarding security of your information
We limit access to your information to those employees, affiliates, and service providers who need it to administer or service your policy.  We use computer hardware and software tools to maintain physical and electronic safeguards. These safeguards comply with applicable federal and state regulations. We use state of the art technology to secure our websites and protect the information that may be shared over these sites. We restrict access to information about you to those employees who need the information to service your policy.
If you visit one of our websites, we may use "cookies" (small text files sent from our site to your hard drive). These cookies help us to recognize repeat visitors and allow easy access to and use of the site. We do not use cookies to gather your information. The cookies only enable you to use our website more easily.
Your ability to access and correct your information
You have the right to access and obtain a copy of your information.  You may write to us and also ask for a record of any disclosure of your medical information made within the last three (3) years. This does not include the right to access and copy your information related to a claim or civil or criminal proceeding.  If you wish to review your information, please write us at the address below.
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Provide your full name, address and policy number(s). For your protection, please have your request notarized.
Within 30 working days of our receipt of your written request, you may see and get a copy of your information in person. If you prefer, we will send you a copy of your information.  If medical information is contained in your file, we may request that you name a medical professional to whom we will send your information.
If you believe any of your information is incorrect, notify us in writing at the address below. Within 30 working days, we will let you know if our review has resulted in a correction of your information. If we do not agree there is an error, you may file a statement disputing our finding. We will attach the statement to your file. We will send any corrections we make, or your statement, to anyone we shared your information with over the past two years, and to anyone who may receive your information from us in the future. We do not control the information about you obtained from a consumer reporting agency or a Department of Motor Vehicles. We will provide you with the names and addresses of these agencies so that you can contact them directly.
Notification of change
Your trust is one of our most important assets. If we revise our privacy practices in the future, we will notify you prior to introducing any changes. This Privacy Notice is also displayed on our website at www. https://www.allianzlife.com/new-york.
For more information or if you have questions
If you have any questions or concerns about our privacy policies or procedures, please call the Corporate Compliance Privacy Office at 800.328.5600, write us at the following address, or contact us via the secured website.
Allianz Life Insurance Company of New York
Home Office: New York, NY
Administrative Office
5701 Golden Hills Drive
Minneapolis, MN 55416-1297
800.950.5872
www.allianzlife.com/newyork
M40018-NY (R-09/2015)
17.
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION (SAI)
Allianz Life as Custodian
………………………
2
Income Tax Withholding…………………….………………..
9
Legal Opinions
…………………………………..
2
Multiple Contracts…………………………………………….
9
Distributor
……………………………………….
2
Partial 1035 Exchanges………………………………………
10
Federal Tax Status
………………………………
2
Assignments, Pledges and Gratuitous Transfers………….
10
Annuity Contracts in General…………………
3
Death Benefits…………………………………………………
10
Taxation of Annuities in General……………
3
Spousal Continuation and the Federal Defense of
Qualified Contracts……………………………
3
Marriage Act (DOMA)……………………………………
10
Purchasing a Qualified Contract……………
5
Federal Estate Taxes…………………………………………
10
Distributions-Qualified Contracts……………
6
Generation-Skipping Transfer Tax………………………….
11
Distributions-Non-Qualified Contracts………
7
Foreign Tax Credits…………………………………………..
11
Required Distributions…………………………
8
Possible Tax Law Changes………………………………….
11
Diversification………………………………….
8
Annuity Payments
……………………………………………..
11
Owner Control………………………………….
9
Annuity Payment Options……………………………………
11
Contracts Owned by Non-Individuals………
9
Appendix  – Death of the Owner and/or Annuitant
………
12
Annuity Purchases by Nonresident Aliens and
Foreign Corporations………………………
9
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APPENDIX A – AVAILABLE INDICES
STANDARD & POOR'S 500 INDEX
The S&P 500
®
Index is comprised of 500 stocks representing major U.S. industrial sectors.
S&P
®
is a registered trademark of Standard & Poor's Financial Services LLC ("S&P"). This trademark has been licensed for use by S&P Dow Jones Indices LLC. S&P marks are trademarks of S&P. This trademark has been sublicensed for certain purposes by Allianz Life Insurance Company of New York ("Allianz Life of NY"). The S&P 500
®
Index ("the Index") is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Allianz Life of NY.
Allianz Life of NY products are not sponsored, endorsed, sold, or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P, or any of their respective affiliates (collectively, "S&P Dow Jones Indices"). S&P Dow Jones Indices make no representation or warranty, express or implied, to the owners of the Allianz Life of NY products or any member of the public regarding the advisability of investments generally or in Allianz Life of NY products particularly or the ability of the Index to track general market performance. S&P Dow Jones Indices' only relationship to Allianz Life of NY with respect to the Index is the licensing of the Index and certain trademarks, service marks, and/or trade names of S&P Dow Jones Indices and/or its third-party licensors. The Index is determined, composed, and calculated by S&P Dow Jones Indices without regard to Allianz Life of NY or the products. S&P Dow Jones Indices have no obligation to take the needs of Allianz Life of NY or the owners of the products into consideration in determining, composing, or calculating the Index. S&P Dow Jones Indices are not responsible for and have not participated in the design, development, pricing, and operation of the products, including the calculation of any interest payments or any other values credited to the products. S&P Dow Jones Indices have no obligation or liability in connection with the administration, marketing, or trading of products. There is no assurance that investment products based on the Index will accurately track index performance or provide positive investment returns. S&P Dow Jones Indices LLC and its subsidiaries are not investment advisors. Inclusion of a security or futures contract within an index is not a recommendation by S&P Dow Jones Indices to buy, sell, or hold such security or futures contract, nor is it considered to be investment advice. Notwithstanding the foregoing, CME Group Inc. and its affiliates may independently issue and/or sponsor financial products unrelated to products currently being issued by Allianz Life of NY, but which may be similar to and competitive with Allianz Life of NY products. In addition, CME Group Inc., an indirect minority owner of S&P Dow Jones Indices LLC, and its affiliates may trade financial products which are linked to the performance of the Index. It is possible that this trading activity will affect the value of the products.
S&P DOW JONES INDICES DO NOT GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS, AND/OR THE COMPLETENESS OF THE INDEX OR ANY DATA RELATED THERETO OR ANY COMMUNICATION, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. S&P DOW JONES INDICES SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN. S&P DOW JONES INDICES MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY ALLIANZ LIFE OF NY, OWNERS OF THE PRODUCTS, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDEX OR WITH RESPECT TO ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL S&P DOW JONES INDICES BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME, OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE. THERE ARE NO THIRD-PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN S&P DOW JONES INDICES AND ALLIANZ LIFE OF NY OTHER THAN THE LICENSORS OF S&P DOW JONES INDICES.
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91
RUSSELL 2000
®
INDEX
The Russell 2000
®
Index is an equity index that measures the performance of the 2,000 smallest companies in the Russell 3000
®
Index, which is made up of 3,000 of the biggest U.S. stocks. The Russell 2000
®
Index is constructed to provide a comprehensive and unbiased small-cap barometer and is completely reconstituted annually to ensure larger stocks do not affect the performance and characteristics of the true small-cap index.
Allianz Life
®
of NY products are not sponsored, endorsed, sold or promoted by Frank Russell Company (""Russell""). Russell makes no representation or warranty, express or implied, to the owners of Allianz Life of NY products or any member of the public regarding the advisability of investing in securities generally or in Allianz Life of NY products particularly or the ability of the Russell 2000
®
Index to track general stock market performance or a segment of the same. Russell's publication of the Russell 2000
®
Index in no way suggests or implies an opinion by Russell as to the advisability of investment in any or all of the securities upon which the Russell 2000
®
Index is based. Russell's only relationship to Allianz Life Insurance Company of New York ("Allianz Life of NY") is the licensing of certain trademarks and trade names of Russell and of the Russell 2000
®
Index which is determined, composed and calculated by Russell without regard to Allianz Life of NY or Allianz Life of NY products. Russell is not responsible for and has not reviewed the Allianz Life of NY products nor any associated literature or publications and Russell makes no representation or warranty express or implied as to their accuracy or completeness, or otherwise. Russell reserves the right, at any time and without notice, to alter, amend, terminate or in any way change the Russell 2000
®
Index. Russell has no obligation or liability in connection with the administration, marketing or trading of Allianz Life of NY products.
RUSSELL DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE RUSSELL 2000
®
INDEX OR ANY DATA INCLUDED THEREIN AND RUSSELL SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. RUSSELL MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY ALLIANZ LIFE OF NY, INVESTORS, OWNERS OF ALLIANZ LIFE OF NY PRODUCTS, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE RUSSELL 2000
®
INDEX OR ANY DATA INCLUDED THEREIN. RUSSELL MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE RUSSELL 2000
®
INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL RUSSELL HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
NASDAQ-100
®
INDEX
The NASDAQ-100 Index
®
includes 100 of the largest domestic and international non-financial securities listed on The NASDAQ Stock Market
®
based on market capitalization. Allianz Life
®
of NY products are not sponsored, endorsed, sold or promoted by The NASDAQ OMX Group, Inc. or its affiliates (NASDAQ OMX, with its affiliates, are referred to as the "Corporations"). The Corporations have not passed on the legality or suitability of, or the accuracy or adequacy of descriptions and disclosures relating to, Allianz Life of NY products. The Corporations make no representation or warranty, express or implied to the owners of Allianz Life of NY products or any member of the public regarding the advisability of investing in securities generally or in Allianz Life of NY products particularly, or the ability of the NASDAQ-100 Index
®
to track general stock market performance. The Corporations' only relationship to Allianz Life Insurance Company of New York ("Licensee") is in the licensing of the NASDAQ
®
, NASDAQ OMX
®
, NASDAQ-100
®
, and NASDAQ-100 Index
®
registered trademarks, and certain trade names of the Corporations and the use of the NASDAQ-100 Index
®
which is determined, composed and calculated by NASDAQ OMX without regard to Licensee or Allianz Life of NY products. NASDAQ OMX has no obligation to take the needs of the Licensee or the owners of Allianz Life of NY products into consideration in determining, composing or calculating the NASDAQ-100 Index
®
. The Corporations are not responsible for and have not participated in the determination of the timing of, prices at, or quantities of Allianz Life of NY products to be issued or in the determination or calculation of the equation by which Allianz Life of NY products are to be converted into cash. The Corporations have no liability in connection with the administration, marketing or trading of the Allianz Life of NY products.
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New York Variable Annuity Prospectus – November 14, 2016
Appendix A
92
THE CORPORATIONS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED CALCULATION OF THE NASDAQ-100 INDEX
®
OR ANY DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF ALLIANZ LIFE OF NY PRODUCTS, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE NASDAQ-100 INDEX
®
OR ANY DATA INCLUDED THEREIN. THE CORPORATIONS MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE NASDAQ-100 INDEX
®
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL THE CORPORATIONS HAVE ANY LIABILITY FOR ANY LOST PROFITS OR SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
EURO STOXX 50
®
The EURO STOXX 50
®
provides a blue-chip representation of supersector leaders in the Eurozone. The index covers 50 stocks from 12 Eurozone countries: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. STOXX has no relationship to Allianz Life Insurance Company of New York ("Allianz Life
®
of NY"), other than the licensing of the EURO STOXX 50
®
and the related trademarks for use in connection with Allianz Life of NY products.
STOXX does
not
:
sponsor, endorse, sell or promote Allianz Life of NY products, recommend that any person invest in Allianz Life of NY products or any other securities, have any responsibility or liability for or make any decisions about the timing, amount or pricing of Allianz Life of NY products, have any responsibility or liability for the administration, management or marketing of Allianz Life of NY products, consider the needs of Allianz Life of NY products or the owners of Allianz Life of NY products in determining, composing or calculating the EURO STOXX 50 or have any obligation to do so.
STOXX will not have any liability in connection with Allianz Life of NY products. Specifically, STOXX does not make any warranties, express or implied and disclaims any and all warranties about:  the results to be obtained by Allianz Life of NY products, the owner of Allianz Life of NY products or any other person in connection with the use of the EURO STOXX 50 and the data included in the EURO STOXX 50
®
; the accuracy or completeness of the EURO STOXX 50 and its data; the merchantability and the fitness for a particular purpose or use of the EURO STOXX 50
®
and its data; STOXX has no liability for any errors, omissions or interruptions in the EURO STOXX 50
®
or its data; under no circumstances will STOXX be liable for any lost profits or indirect, punitive, special or consequential damages or losses, even if STOXX knows that they might occur.
The licensing agreement between Allianz Life of NY and STOXX is solely for their benefit and not for the benefit of the owners of Allianz Life of NY products or any other third parties.
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New York Variable Annuity Prospectus – November 14, 2016
Appendix A
93
APPENDIX B – DAILY ADJUSTMENT
We designed the Daily Adjustment to provide an Index Option Value on days other than the Index Effective Date or an Index Anniversary.
The Daily Adjustment is meant to approximate the Index Option Value on the next Index Anniversary, as adjusted for gains during the Index Year subject to the Cap and losses greater than the Buffer. The application of the Daily Adjustment is based on your agreement to be exposed to these Index Anniversary gains subject to the Cap and losses greater than the Buffer.
The Daily Adjustment in essence is a proxy for the performance of the Index Performance Strategy and Index Protection NY Strategy accomplished by investing a portion of the Index Option Value in a set of options and the remaining balance in an interest bearing asset.
The Daily Adjustment has two components, the change in Proxy Value and accumulated proxy interest, both multiplied by the Index Option Base. The change in Proxy Value represents the current market value of the Proxy Investment ("current Proxy Value"), less the cost of the Proxy Investment at the beginning of the Index Year ("beginning Proxy Value"). The proxy interest is an amount of interest that is earned to provide compensation for the cost of the Proxy Investment at the beginning of the Index Year. The proxy interest is approximated by the value of amortizing the cost of the Proxy Investment over the Index Year to zero. The proxy interest may be significantly different from current interest rates available on interest bearing investments. The change in Proxy Value and the proxy interest estimates the present value of positive or negative Performance Credits on the next Index Anniversary. You should note that even if your selected Index(s) experience positive growth, their Daily Adjustments may be negative because of other market conditions, such as the expected volatility of Index prices and interest rates.
The formula for the calculation of the Daily Adjustment is as follows:
Daily Adjustment = (a) change in Proxy Value plus (b) proxy interest
(a)
change in Proxy Value = (current Proxy Value – beginning Proxy Value) x Index Option Base
(b)
proxy interest = proxy interest rate x (1 - time remaining) x Index Option Base
proxy interest rate = beginning Proxy Value
The current Proxy Value is the Proxy Value calculated on the same day as the Daily Adjustment. The beginning Proxy Value is the Proxy Value calculated on the first day of the current Index Year. The time remaining is equal to the number of days remaining in the Index Year divided by 365.
The Proxy Value tracks three hypothetical derivative investments (call and put options) that we designed to mimic the market value of your allocation to an Index Performance Strategy or an Index Protection NY Strategy Index Option. We calculate a Proxy Value for each of your selected Index Options.
The Proxy Value has three components:
·
an at-the-money call;
·
an out-of-the-money call; and
·
an out-of-the-money put.
An Index Option's Proxy Value = (at-the-money call) – (out-of-the-money call) – (out-of-the-money put)
We designed the two call options to value the potential for Index gains up to the Cap. We designed the put option to value the potential for Index losses greater than the Buffer. It is important to note that the put option will almost always reduce the Daily Adjustment, even when the current Index value is higher than it was at the beginning of the Index Year. This is because the risk that the Index value could be lower on the next Index Anniversary is present to some extent whether or not the Index value is lower than it was at the beginning of the Index Year.
On the Index Anniversary, the current Proxy Value for an Index Option is equal to its Performance Credit as discussed in section 7, Index Options – Determining the Index Option Values.
You can find a more detailed explanation of the calculation of the Proxy Value, including examples, at Exhibit 99(a) of the Form S-1 Registration Statement filed with the SEC, of which this prospectus is a part. This Exhibit is incorporated by reference into this prospectus. You can obtain a copy of this Exhibit by calling (800) 624-0197.
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New York Variable Annuity Prospectus – November 14, 2016
Appendix B
94
APPENDIX C – UNAUDITED SELECTED FINANCIAL DATA AND FINANCIAL STATEMENTS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (FOR THE 12 MONTH PERIOD ENDING JUNE 30, 2016)
The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and notes to those statements included in this Appendix. The discussion and analysis in this Appendix includes certain forward-looking statements that are subject to risks, uncertainties and other factors, as described in "Risk Factors" and elsewhere in this prospectus, that could cause our actual growth, results of operations, performance, financial position and business prospects and opportunities in the remainder of 2016 and beyond to differ materially from those expressed in, or implied by, those forward-looking statements. See "Forward-Looking Statements."
[TO BE UPDATED UPON AMENDMENT]
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
The following unaudited consolidated financial statements of Allianz Life Insurance Company of New York and subsidiaries as of June 30, 2016 and December 31, 2015 and for the six month periods ended June 30, 2016 and June 30, 2015 are included in this Appendix.
[TO BE UPDATED UPON AMENDMENT]
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New York Variable Annuity Prospectus – November 14, 2016
Appendix C
95
APPENDIX D – AUDITED SELECTED FINANCIAL DATA AND FINANCIAL STATEMENTS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (FOR THE 12 MONTH PERIOD ENDING DECEMBER 31, 2015)
The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and notes to those statements included in this Appendix. The discussion and analysis in this Appendix includes certain forward-looking statements that are subject to risks, uncertainties and other factors, as described in "Risk Factors" and elsewhere in this prospectus, that could cause our actual growth, results of operations, performance, financial position and business prospects and opportunities in 2016 and beyond to differ materially from those expressed in, or implied by, those forward-looking statements. See "Forward-Looking Statements."
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
The following financial statements and supplemental schedules of Allianz Life Insurance Company of New York as of December 31, 2015 and 2014 and for each of the years in the three-year period ended December 31, 2015, are included in this Appendix in reliance upon the report of KPMG LLP, independent registered public accounting firm, and upon the authority of said experts in accounting and auditing. The principal business address of KPMG LLP is 4200 Wells Fargo Center, 90 South Seventh Street, Minneapolis, MN.
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New York Variable Annuity Prospectus – November 14, 2016
Appendix D
96
Part I
Item 11(e).
Financial Statements meeting the requirements of S-X Item
11(f).
Selected Financial Data
(dollars in thousands, unless otherwise stated)
The following table sets forth the Company's selected historical financial data. The selected financial data has been derived from the audited Financial Statements included elsewhere in this prospectus, and should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the Company's Financial Statements and related notes.
These historical results are not necessarily indicative of results to be expected for any future period.
Year Ended December 31,
Selected income data
2015
2014
2013
2012
2011
Net premiums and policy fees
$
68,870
$
61,716
$
50,733
$
40,192
$
30,891
Interest and similar income, net
27,387
28,859
29,635
30,834
32,587
Change in fair value of assets and liabilities
11,373
66,806
(78,944
)
(14,672
)
(8,119
)
Realized investment gains, net
583
77
829
14,514
1,605
Fee, commission, and other revenue
7,221
6,864
5,904
4,698
3,642
Total revenue
115,434
164,322
8,157
75,566
60,606
Benefits and expenses
121,138
168,618
(8,747
)
63,140
86,492
Income tax (benefit) expense
(4,441
)
(3,133
)
4,425
3,321
(10,626
)
Net (loss) income
$
(1,263
)
$
(1,163
)
$
12,479
$
9,105
$
(15,260
)
As of December 31,
Selected balance sheet data
2015
2014
2013
2012
2011
Total Investments
$
694,269
675,496
651,641
713,946
691,339
Receivables and reinsurance recoverables
16,798
10,130
6,661
4,706
13,688
Deferred acquisition costs
134,374
118,319
104,002
92,245
91,187
Separate account assets
2,205,548
2,214,422
1,986,039
1,577,274
1,182,126
Total assets
3,158,655
3,088,150
2,808,350
2,480,862
2,049,887
Policyholder liabilities
769,888
697,519
583,008
699,081
721,901
Separate account liabilities
2,205,548
2,214,422
1,986,039
1,577,274
1,182,126
Total liabilities
3,010,167
2,926,743
2,652,089
2,313,382
1,921,080
Stockholder's equity
148,488
161,407
156,261
167,480
128,807
Selected Financial Data and Management's Discussion and Analysis
Page 1 of 24
Item 11(h).
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis provides an assessment by management of the Company's financial condition as of December 31, 2015, compared with December 31, 2014, and its results of operations for each of the three years ended December 31. The information contained herein should be read in conjunction with the Company's audited U.S. generally accepted accounting principles (GAAP) Financial Statements and schedules. The information contained
below includes certain forward-looking statements that are subject to risks, uncertainties and other factors, as described in "Risk Factors" and elsewhere in this prospectus, that could cause actual growth, results of operations, performance, financial position and business prospects and opportunities in 2015 and beyond to differ materially from those expressed in, or implied by, those forward-looking statements. See "Forward-Looking Statements."
Company Overview
Allianz Life Insurance Company of New York (hereafter referred to as "the Company", "we", "our" and "us") is a life insurance company domiciled in New York and is licensed to sell annuity, individual life, group and traditional life and group accident and health policies in six U.S. states and the District of Columbia. We offer a portfolio of individual variable annuities, which are sold through licensed registered representatives contracted with a broker/dealer. We also maintain a legacy portfolio of individual fixed deferred and fixed-indexed annuities, individual and group life policies, and individual and group accident and health policies, but do not actively issue new policies related to these products. Product sales of our individual fixed deferred and individual fixed-indexed annuities were discontinued late in 2011.
The Company is a wholly owned subsidiary of Allianz Life Insurance Company of North America (Allianz Life). Allianz Life is a wholly owned subsidiary of Allianz of America, Inc. (AZOA), which is a subsidiary of Allianz Europe, B.V.. Allianz Europe, B.V. is a wholly owned subsidiary of Allianz SE, which is incorporated in Munich, Germany, and is our ultimate parent.
Our business is classified into two operating segments: Individual Annuities and Other.
Individual Annuity
The Individual Annuity segment provides tax-deferred investment growth and lifetime income opportunities for our customers through variable, variable-indexed, fixed deferred and fixed-indexed annuities. The "fixed" and "variable" classifications describe whether we or the contractholders bear the investment risk of the assets supporting the contract. Variable annuities allow the contractholder to make deposits into various investment options and also have unique product features that allow for guaranteed minimum income benefits, guaranteed minimum accumulation benefits, guaranteed minimum death benefits, and guaranteed minimum withdrawal benefits. The variable annuity products with guaranteed minimum benefits, which provide a minimum return based on their initial deposit may be increased by additional deposits, bonus amounts, or other account crediting features. The income and accumulation benefits shift a portion of the investment risk from the contractholder back to the Company. In 2015, the variable-indexed annuity which was introduced to the market in 2014, continued to gain momentum. This product has characteristics similar to our fixed-indexed annuities but allows contractholders to invest a portion of the funds into a variety of variable investment options and stock indexes. Our Individual Annuity products are sold through independent distribution channels made up of registered representatives contracted with a broker dealer. As previously noted, we discontinued selling individual fixed deferred and fixed-indexed annuities in 2011; however, it continues to be a significant portion of our in-force volume.
Other
Our Other business consists of life insurance products and closed blocks of Long-Term Care (LTC) and Special Markets products. The Special Markets products consist of closed blocks of individual and group whole life and term insurance. Although our Other product lines are part of the combined results, we do not focus additional resources in this area, other than to maintain the operational support to our current customers. The performance of these product lines is not material enough to warrant discussion as separate operating segments.
Refer to Application of Critical Accounting Policies below for information related to the allocation of income and expense to our segments.
Basis of Presentation
The Financial Statements have been prepared in accordance with GAAP, which vary in certain respects from accounting practices prescribed or permitted by state insurance regulatory authorities. The preparation of Financial Statements in conformance with GAAP requires us to make certain estimates and assumptions that affect reported assets and liabilities, including reporting or disclosure of contingent assets and liabilities as of the balance sheet date and the reported revenues and expenses during the reporting period. Future events, including changes in mortality, morbidity, interest rates, capital
Selected Financial Data and Management's Discussion and Analysis
Page 2 of 24
markets, and asset valuations could cause actual results to differ from the estimates used in the Financial Statements. Such changes in estimates are recorded in the period they are determined.
Application of Critical Accounting Policies
The preparation of the financial statements in conformance with GAAP requires us to adopt accounting policies and make certain estimates and assumptions, which affect amounts reported in the Financial Statements. Our critical accounting policies are summarized in "Summary of Significant Accounting Policies" included in the accompanying notes to the Financial Statements and require the use of judgments related to a variety of assumptions and estimates, in particular expectations of current and future mortality, persistency, investment returns, equity market performance, expenses, and interest rates. Our most critical accounting policies include those policies related to the Company's accounting for (i) Valuation of Investments, (ii) Derivatives and Hedging, (iii) Deferred Acquisition Costs (DAC) and Deferred Sales Inducements (DSI), (iv) Account Balances and Future Policy Benefit Reserves (v) Other than Temporary Impairments (OTTI), and (vi) Income Taxes. Due to the inherent uncertainty of assumptions and estimates, the effect of certain accounting policies under different conditions or assumptions could be materially different from that reported in the Financial Statements. A discussion of the various critical accounting policies is presented below.
Valuation of Investments
We have portfolios of
fixed-maturity
securities classified as
"available-for-sale."
Accordingly, the securities are carried at fair value, and related unrealized gains and losses are credited or charged directly to accumulated other comprehensive income in stockholder's equity, net of tax and related adjustments to DAC, DSI, and reserves (commonly referred to as shadow adjustments). The adjustments to DAC and DSI represent the change in amortization that would have been required as a charge or credit to operations had such unrealized amounts been realized. The adjustment to reserves represents the increase or decrease in the reserve balance that would have been required had such unrealized amounts been realized. We use a significant amount of judgment to determine the fair value of these investments.
The Fair Value Measurements and Disclosures Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) establishes a fair value hierarchy that prioritizes the inputs used in the valuation techniques to measure fair value.
Level 1 – Unadjusted quoted prices for identical assets or liabilities in active markets that we have the ability to access at the measurement date.
Level 2 – Valuations derived from techniques that utilize observable inputs, other than quoted prices included in Level 1, which are observable for the asset or liability either directly or indirectly, such as:
(a)
quoted prices for similar assets or liabilities in active markets;
(b)
quoted prices for identical or similar assets or liabilities in markets that are not active;
(c)
inputs other than quoted prices that are observable; and
(d)
inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3 – Valuations derived from techniques in which the significant inputs are unobservable. Level 3 fair values reflect our own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk).
The fair value of
fixed-maturity
securities are based on quoted market prices in active markets when available. Based on the market data, the securities are categorized by asset class, and based on the asset class of the security, appropriate pricing applications, models and related methodology, and standard inputs are utilized to determine what a buyer in the marketplace would pay for the security in a current sale. When quoted prices are not readily available or in an inactive market, standard inputs used in the valuation models, listed in approximate order of priority, include, but are not limited to, benchmark yields, reported trades, Municipal Securities Rulemaking Board (MSRB) reported trades, Nationally Recognized Municipal Securities Information Repository (NRMSIR) material event notices,
broker-dealer
quotes, issuer spreads,
two-sided
markets, benchmark securities, bids, offers, reference data, and industry and economic events. In some
Selected Financial Data and Management's Discussion and Analysis
Page 3 of 24
cases, including private placement securities and certain
difficult-to-price
securities, internal pricing models may be used that are based on market proxies.
Generally, U.S. Treasury securities and exchange-traded stocks are included in Level 1. Most bonds for which prices are provided by
third-party
pricing sources are included in Level 2, because the inputs used are market observable. Bonds for which prices were obtained from broker quotes and private placement securities that are internally priced are included in Level 3.
See Note 6 of the Notes to the Financial Statements for additional information regarding fair value of investments, including management's process related to review of third-party pricing services.
Derivatives and Hedging
We utilize derivatives within certain actively managed investment portfolios to manage the risk associated with variability in cash flows related to financial assets and liabilities. Within these portfolios, derivatives can be used for hedging, replication, and income generation only. The financial instruments are carried at fair value and the unrealized gains and losses on the derivatives are reflected in Change in fair value of assets and liabilities within the Statements of Operations.
We utilize over the counter (OTC) and exchange traded interest rate swaps to economically hedge certain variable annuity guarantee benefits. We can receive the fixed or variable rate. The interest rate swaps are traded in varying maturities. We will only enter into OTC interest rate swap contracts with counterparties rated BBB+ or better. The interest rate swaps are subject to the rules of the International Swaps and Derivatives Association, Inc. and associated Credit Support Annex (CSA) agreements.
We utilize OTC options with the objective to economically hedge certain variable annuity guaranteed benefits. These options are not used for speculative or income generating purposes. These options are cleared through the Options Clearing Corporation (OCC), which operates under the jurisdiction of both the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC). The credit rating on the OCC is currently AA+ from S&P.
We utilize futures to economically hedge fixed-indexed annuity and variable annuity guarantees. Future contracts do not require an initial cash outlay and we have agreed to daily net settlement based on changes in fair value. Therefore, no asset or liability is recorded on the Balance Sheets except for the outstanding unpaid variation margin representing market movements on the last trading day of the year and cash posted as initial margin. Gains or losses on future contracts are included in the Change in fair value of assets and liabilities on the Statements of Operations as of December 31, 2015 and 2014.
We issue certain variable annuity products with guaranteed minimum benefit riders, including guaranteed minimum withdrawal benefit (GMWB) and guaranteed minimum accumulation benefit (GMAB), which are measured at fair value separately from the host variable annuity contract, with changes in fair value reported in Change in fair value of annuity and life embedded derivatives on the Statements of Operations. These embedded derivatives are classified within Account balances and future policy benefit reserves on the Balance Sheets.
Certain
fixed-indexed
annuity products include a market value liability option (MVLO), which is essentially an embedded derivative with
equity-indexed
features. This embedded derivative is reported within account balances and future policy benefit reserves on the Balance Sheets with changes in fair value reported in Change in fair value of annuity and life embedded derivatives on the Statements of Operations.
See Note 5 of the Notes to the Financial Statements for additional information regarding derivatives and hedging instruments.
Deferred Acquisition Costs and Deferred Sales Inducements
We capitalize costs which consist of commissions and other incremental costs that are directly related to the successful acquisition of insurance contracts. For interest sensitive products and variable annuity contracts issued in 2010 and after, acquisition costs are amortized in relation to the present value of estimated future gross profits from investment and mortality, morbidity, and expense charges. For variable annuity contracts issued prior to 2010, acquisition costs are amortized in relation to the present value of estimated gross revenues from investment and mortality, morbidity, and
Selected Financial Data and Management's Discussion and Analysis
Page 4 of 24
expense charges. Acquisition costs for accident and health insurance policies are deferred and amortized over the lives of the policies in the same manner as premiums are earned. For traditional life and group life products, such costs are amortized over the projected earnings pattern of the related policies using the same actuarial assumptions used in computing future policy benefit reserves.
DAC is reviewed for recoverability, at least annually, and adjusted when necessary. Recoverability is evaluated separately for fixed deferred annuities, variable annuities, and life insurance products. The evaluation is a
two-step
process where current policy year issues are evaluated for recoverability, and then
in-force
policies are evaluated for loss recognition. Before assessing recoverability and loss recognition, DAC is capped, if necessary, such that the balance cannot exceed the original capitalized costs plus interest.
Changes in assumptions can have an impact on the amount of DAC reported for annuity and life insurance products and their related amortization patterns. In the event experience differs from assumptions or assumptions are revised, we are required to record an increase or decrease in DAC amortization expense (DAC unlocking). In general, increases in the estimated investment spreads and fees result in increased expected future profitability and may decrease the rate of DAC amortization, while increases in costs of product guarantees, and lapse/surrender and mortality assumptions reduce the expected future profitability of the underlying business and may increase the rate of DAC amortization.
We formally evaluate the appropriateness of the best estimate assumptions at least on an annual basis. If the economic environment or policyholder behavior changes quickly and substantially, assumptions will be reviewed more frequently to affirm best estimates. Any resulting DAC unlocking is reflected prospectively as a Change in deferred acquisition costs, net on the Statements of Operations.
Sales inducements are product features that enhance the investment yield to the contractholder on the contract. We offer two types of sales inducements on certain annuity contracts. The first type, an immediate bonus, increases the account value at inception, and the second type, a persistency bonus, increases the account value at the end of a specified period.
Annuity sales inducements are deferred when credited to contractholders. DSI is reported in Other assets in the Balance Sheets. They are amortized over the expected life of the contract in a manner similar to DAC and are reviewed annually for recoverability. DSI capitalization and amortization is recorded in Policyholder benefits on the Statements of Operations.
The impact of unlocking during 2015 was a $2,641 decrease in amortization of DAC and $337 decrease in amortization of DSI primarily due to adjustments made to future period assumptions for interest margins, mortality, policyholder behavior (including surrender, annuitization and lifetime income benefit utilization), separate account returns and maintenance expenses. In 2014, the impact of unlocking was a $856 decrease in DAC amortization and a $356 decrease in DSI amortization due to similar assumption changes.
On April 1, 2014, we applied a prospective change to our method of calculating DAC amortization for variable annuity policies issued prior to 2010. This was a change in estimate that is inseparable from the effect of a related change in accounting principle. For these annuities, acquisition costs are now amortized in relation to the present value of estimated gross revenues, whereas previously were amortized using expected future gross profits. The implementation of the new DAC amortization will better reflect the revenue pattern of the pre-2010 variable block of business, which is currently in run-off. The implementation of this change resulted in a decrease in income from operations before income taxes of $8,820 for the year ended December 31, 2014.
On December 1, 2014, we applied a prospective change to our method of calculating DAC amortization for variable annuity policies issued after 2010. The change in estimate will minimize accounting mismatches on interest and claim projections within the estimated gross profits (EGP) calculation. The implementation of this change resulted in a decrease in income from operations before income taxes of approximately $669 for the year ended December 31, 2014.
See Note 8 and 9 of the Notes to the Financial Statements for additional information regarding Deferred Acquisition Costs and Deferred Sales Inducements.
Selected Financial Data and Management's Discussion and Analysis
Page 5 of 24
Account Balances and Future Policy Benefit Reserves
We calculate and maintain reserves for the estimated future payment of claims to policyholders based on actuarial assumptions and in accordance with industry practice. Many factors can affect these reserves, including economic and social conditions, inflation, and changes in doctrines of legal liability. The reserves we establish are Policy and contract account balances for
interest-sensitive
products, which include fixed deferred annuities and are generally carried at accumulated contract values. We issue variable annuity contracts through our separate accounts for which investment income and investment gains and losses accrue directly to, and investment risk is borne by, the contractholder. We recognize gains or losses on transfers from the general account to the separate accounts at fair value to the extent of contractholder interests in separate accounts, which are offset by changes in contractholder liabilities. We also issue variable annuity contracts through our separate accounts where we provide certain contractual guarantees to the contractholder. These guarantees are in the form of a guaranteed minimum death benefit (GMDB), a guaranteed minimum income benefit (GMIB), GMAB, and a GMWB. These guarantees provide for benefits that are payable to the contractholder in the event of death, annuitization, or at specified dates during the accumulation period.
Changes in GMDB and GMIB are calculated in accordance with the Financial Services – Insurance Topic of the Codification and are included in Policyholder benefits on the Statements of Operations. GMAB and GMWB are considered to be embedded derivatives under the Derivatives and Hedging Topic of the Codification, and the changes in these embedded derivatives are included in Change in fair value of annuity and life embedded derivatives on the Statements of Operations. The GMDB provides a specified minimum return upon death. The survivor has the option to terminate the contract or continue it and have the death benefit paid into the contract. The GMIB is a living benefit that provides the contractholder with a guaranteed annuitization value. The GMDB and GMIB liabilities are determined each period by estimating the expected future claims in excess of the associated account balances. We regularly evaluate estimates used and adjust the additional liability balance, with a related charge or credit to Policyholder benefits on the Statements of Operations if actual experience or other evidence suggests that earlier assumptions should be revised. The GMAB is a living benefit that provides the contractholder with a guaranteed value that was established at least five years prior at each contract anniversary. The GMWB is a living benefit that provides the contractholder with a guaranteed amount of income in the form of partial withdrawals.
Policy and contract account balances for variable annuity products are carried at accumulated contract values. Future policy benefit reserves for any death and income benefits that may exceed the accumulated contract values are established using a range of economic scenarios and are accrued for using assumptions consistent with those used in EGPs for purposes of amortizing DAC. Future policy benefit reserves for accumulation and withdrawal benefits that may exceed account values are established using capital market assumptions, such as index and volatility, along with estimates of future policyholder behavior.
For
fixed-indexed
annuity products, the policyholder obligation is divided into two parts – one part representing the value of the underlying base contract (host contract) and the second part representing the fair value of the expected index benefit over the life of the contract. The host contract is valued using principles consistent with similar deferred annuity contracts without an index benefit. The index benefit is valued at fair value using current capital market assumptions, such as index and volatility, to estimate future index levels. The index benefit valuation is also dependent upon estimates of future policyholder behavior. We must include provisions for our own credit risk and for risk that our assumptions about policyholder activity could differ from actual experience. The fair value determination of the index benefit is sensitive to the economic market and interest rate environment, as it is discounted at current market interest rates. There is volatility in this liability due to these external market sensitivities.
We established an additional LTC reserve in 2015 in our Other segment to provide for future expected losses that are anticipated to occur after a period of profits. The reserve accrual will be over the profit period and is based on best estimate assumptions as of the current accrual period without provisions for adverse deviation.
See Note 2 of the Notes to the Financial Statements for additional information regarding Account Balances and Future Policy Benefit Reserves.
Other than Temporary Impairments
We review the available-for-sale investment portfolio each quarter to determine whether or not declines in fair value are other-than-temporary. We continue to evaluate factors in addition to average cost and fair value, including credit quality,
Selected Financial Data and Management's Discussion and Analysis
Page 6 of 24
the extent and duration of the decline, market analysis, current events, recent price declines, changes in risk-free interest rates, likelihood of recovery in a reasonable period of time, and management's judgment, to determine whether fixed income securities are considered other-than-temporarily impaired.
When the fair value of a
fixed-maturity
security is less than its amortized cost, we assess whether or not: (i) we have the intent to sell the security or (ii) it is more likely than not that we will be required to sell the security before its anticipated recovery. We also evaluate factors to determine whether we or any of our investment managers have intent to sell a security or a group of securities. Additionally, we perform a cash flow projection for several years into the future to determine whether cash needs would require the sale of any securities. If either of these conditions is met, we must recognize an
other-than-temporary
impairment for the difference between the investment's amortized cost basis and its fair value through earnings. For securities that do not meet the above criteria, and we do not expect to recover a security's amortized cost basis, the security is considered
other-than
temporarily impaired. For these securities, we separate the total impairment into the credit loss component and the amount of the loss related to other factors. The amount of the total impairment related to credit loss is considered an OTTI and is recognized in Realized investment gains, net on the Statements of Operations. The amount of the total impairment related to other factors is recognized in other comprehensive income, net of impacts to DAC, DSI, reserves, and deferred income taxes.
See Note 2 and 4 of the Notes to the Financial Statements for additional information regarding other than temporary impairment losses.
Income Taxes
We file a consolidated federal income tax return with AZOA. The consolidated tax allocation agreement stipulates that each company participating in the return will bear its share of the tax liability pursuant to certain tax allocation elections under the Internal Revenue Code and its related regulations and reimbursement will be in accordance with an intercompany tax reimbursement arrangement. We provide for federal income taxes based on amounts we believe are ultimately owed. Inherent in the provision for federal income taxes are estimates regarding the deductibility of certain items and the realization of certain tax credits. In the event the ultimate deductibility of certain items or the realization of certain tax credits differs from estimates, we may be required to significantly change the provision for federal income taxes recorded on the Balance Sheets. Any such change could significantly affect the amounts reported on the Statements of Operations. Management uses best estimates to establish reserves based on current facts and circumstances regarding tax exposure items where the ultimate deductibility is open to interpretation. Quarterly, we evaluate the appropriateness of such reserves based on any new developments specific to their fact patterns. Information considered includes results of completed tax examinations, Technical Advice Memorandums, and other rulings issued by the Internal Revenue Service (IRS) or the tax courts.
We utilize the asset and liability method of accounting for income tax. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. Valuation allowances are established when it is determined that it is more likely than not that the deferred tax asset will not be fully realized or that the related temporary differences, such as OTTI, will not reverse over time.
Although realization is not assured, we believe it is not necessary to establish a valuation allowance for ordinary deferred tax assets, as it is more likely than not the deferred tax assets will be realized principally through future reversals of existing ordinary taxable temporary differences and future ordinary taxable income. For deferred tax assets that are capital in nature, considering all objective evidence and the available tax planning strategy, it is more likely than not the deferred tax assets that are capital in nature will be realized and no valuation allowance is required. The amount of the ordinary and capital deferred tax assets considered realizable could be reduced in the near term if estimates of future reversals of existing taxable temporary differences and future ordinary and capital taxable income are reduced.
See Note 13 of the Notes to the Financial Statements for additional information regarding income tax estimates and assumptions.
Selected Financial Data and Management's Discussion and Analysis
Page 7 of 24
Allocation of Income and Expense
The Company maintains segregated investment portfolios at the subsidiary level but does not for each individual segment. All Interest and similar income, net and Realized investment gains, net are allocated to the segments. Assets are only monitored at the total company level, and as such, asset disclosures by segment are not included herein.
Income and expense related to assets backing policyholder reserves are allocated to the segments based on policyholder reserve levels. The results of our Individual Annuity and Other segments also reflect allocation of income and expense related to assets backing surplus. Income and expense related to assets backing surplus are allocated to the segments based on required capital levels for each segment and are excluded from estimated gross profits used in reserve and DAC model projections.
Results of Operations
Total Company:
Year Ended December 31,
Increase (decrease) and
% change
Increase (decrease) and
% change
2015
2014
2013
2015 - 2014
2014 - 2013
Revenue:
Net premiums and policy fees
$
68,870
$
61,716
$
50,733
$
7,154
11.6
%
$
10,983
21.6
%
Interest and similar income, net
27,387
28,859
29,635
(1,472
)
(5.1
)%
(776
)
(2.6
)%
Change in fair value of assets and liabilities
11,373
66,806
(78,944
)
(55,433
)
(83.0
)%
145,750
184.6
%
Realized investment gains, net
583
77
829
506
657.1
%
(752
)
(90.7
)%
Fee, commission, and other revenue
7,221
6,864
5,904
357
5.2
%
960
16.3
%
Total revenue
115,434
164,322
8,157
(48,888
)
(29.8
)%
156,165
NM
Benefits and expenses:
Net benefits
87,511
143,893
(38,103
)
(56,382
)
(39.2
)%
181,996
477.6
%
General and administrative and commission
41,792
39,789
35,519
2,003
5.0
%
4,270
12.0
%
Change in deferred acquisition costs, net
(8,165
)
(15,064
)
(6,163
)
6,899
45.8
%
(8,901
)
(144.4
)%
Total benefits and expenses
121,138
168,618
(8,747
)
(47,480
)
(28.2
)%
177,365
NM
Pretax (loss) income
(5,704
)
(4,296
)
16,904
(1,408
)
(32.8
)%
(21,200
)
(125.4
)%
Income tax (benefit) expense
(4,441
)
(3,133
)
4,425
(1,308
)
(41.7
)%
(7,558
)
(170.8
)%
Net (loss) income
$
(1,263
)
$
(1,163
)
$
12,479
$
(100
)
(8.6
)%
$
(13,642
)
(109.3
)%
NM
Not meaningful
Year Ended December 31,
Increase (decrease)
and % change
Increase (decrease) and
% change
2015
2014
2013
2015 - 2014
2014 - 2013
Pretax (loss) income:
Individual Annuity
$
(4,030
)
$
(2,986
)
$
17,477
$
(1,044
)
(35.0
)%
$
(20,463
)
(117.1
)%
Other
(1,674
)
(1,310
)
(573
)
(364
)
(27.8
)%
(737
)
(128.6
)%
Total Pretax (loss) income
$
(5,704
)
$
(4,296
)
$
16,904
$
(1,408
)
(32.8
)%
$
(21,200
)
(125.4
)%
Selected Financial Data and Management's Discussion and Analysis
Page 8 of 24
Year Ended December 31, 2015 Compared to Year Ended December 31, 2014
Overview
•
Net (loss) income:
For the Company, net loss of $(1,263) in 2015 is in line with the prior year results of ($1,163). The pretax loss decrease is primarily due to the impact of the Individual Annuity reserves net of economic hedges driven by change in the equity markets and interest rates during 2015.
Year Ended December 31, 2014 Compared to Year Ended December 31, 2013
Overview
Net (loss) income:
For the Company, net loss is a decrease of $13,642 or 109.3% to $(1,163) for 2014 compared to $12,479 for the prior year. The net income decrease is primarily due to the unfavorable impact of the Individual Annuity reserves net of economic hedging driven by interest rate movement in 2014.
Selected operating performance measures
Year Ended December 31,
Increase (decrease) and
% change
Increase (decrease) and
% change
2015
2014
2013
2015 - 2014
2014 - 2013
Deposits & Gross Written Premium
Individual Annuity
$
277,549
$
322,272
$
314,109
$
(44,723
)
(13.9
)%
$
8,163
2.6
%
Other
4,600
4,693
4,815
(93
)
(2.0
)%
(122
)
(2.5
)%
Total
282,149
326,965
318,924
(44,816
)
(13.7
)%
8,041
2.5
%
Inforce
Individual Annuity
$
2,764,367
$
2,768,560
$
2,546,237
$
(4,193
)
(0.2
)%
$
222,323
8.7
%
Other
71,620
77,592
84,046
(5,972
)
(7.7
)%
(6,454
)
(7.7
)%
Total
2,835,987
2,846,152
2,630,283
(10,165
)
(0.4
)%
215,869
8.2
%
Deposits, gross written premiums, and in-force amounts in the table above are for direct and assumed business. Gross premiums written and deposits reflect amounts collected on both new and renewal business. Individual Annuity in-force represents account values of the annuity contracts for our variable, variable-indexed, fixed-deferred, and fixed-indexed annuity contracts. The overall decrease in deposits is a result of the decline in traditional variable annuity sales partially offset by the variable-indexed annuity, which was introduced to the market in 2014 and continued to grow throughout 2015. Other products in-force amounts represent life insurance in-force within our special markets products. The decrease in gross premiums written and in-force on other products over the last two years is due to these being closed blocks of business. The movement of in-force on Individual Annuity, year over year, is primarily driven by policyholder activity and market performance. Increases are driven by deposits and new business, and decreases are driven by policyholder charges, surrenders, and claims.
Individual Annuity and Other
Based upon the significance of the Individual Annuity segment and its overall impact on the total results of operations, we only provided variance commentary at the total company level for year ended December 31, 2015 compared to 2014 and year ended December 31, 2014, compared to 2013.
Selected Financial Data and Management's Discussion and Analysis
Page 9 of 24
The following tables provide the results of operations for the Individual Annuity and Other segments:
Individual Annuity
Segment results of operations
Year Ended December 31,
Increase (decrease)
and % change
Increase (decrease) and
% change
2015
2014
2013
2015 - 2014
2014 - 2013
Revenue:
Net premiums and policy fees
$
65,603
$
58,728
$
47,281
$
6,875
11.7
%
$
11,447
24.2
%
Interest and similar income, net
25,378
27,293
28,562
(1,915
)
(7.0
)%
(1,269
)
(4.4
)%
Change in fair value of assets and liabilities
11,374
66,806
(78,945
)
(55,432
)
(83.0
)%
145,751
184.6
%
Realized investment gains, net
549
73
796
476
652.1
%
(723
)
(90.8
)%
Fee, commission, and other revenue
7,221
6,869
5,904
352
5.1
%
965
16.3
%
Total revenue
110,125
159,769
3,598
(49,644
)
(31.1
)%
156,171
4,340.5
%
Benefits and expenses:
Net benefits
81,697
138,957
(42,034
)
(57,260
)
(41.2
)%
180,991
430.6
%
General and administrative and commission
41,145
38,886
34,595
2,259
5.8
%
4,291
12.4
%
Change in deferred acquisition costs, net
(8,687
)
(15,088
)
(6,440
)
6,401
42.4
%
(8,648
)
(134.3
)%
Total benefits and expenses
114,155
162,755
(13,879
)
(48,600
)
(29.9
)%
176,634
1,272.7
%
Pretax (loss) income
$
(4,030
)
$
(2,986
)
$
17,477
$
(1,044
)
(35.0
)%
$
(20,463
)
(117.1
)%
Other
Segment results of operations
Year Ended December 31,
Increase (decrease)
and % change
Increase (decrease)
and % change
2015
2014
2013
2015 - 2014
2014 - 2013
Revenue:
Net premiums and policy fees
$
3,267
$
2,988
$
3,452
$
279
9.3
%
$
(464
)
(13.4
)%
Interest and similar income, net
2,009
1,566
1,073
443
28.3
%
493
45.9
%
Change in fair value of assets and liabilities
(1
)
—
1
(1
)
—
%
(1
)
(100.0
)%
Realized investment gains, net
34
4
33
30
750.0
%
(29
)
(87.9
)%
Fee, commission and other revenue
—
(5
)
—
5
100.0
%
(5
)
—
%
Total revenue
5,309
4,553
4,559
756
16.6
%
(6
)
(0.1
)%
Benefits and expenses:
Net benefits
5,814
4,936
3,931
878
17.8
%
1,005
25.6
%
General and administrative and commission
647
903
924
(256
)
(28.3
)%
(21
)
(2.3
)%
Change in deferred acquisition costs, net
522
24
277
498
2,075.0
%
(253
)
(91.3
)%
Total benefits and expenses
6,983
5,863
5,132
1,120
19.1
%
731
14.2
%
Pretax loss
$
(1,674
)
$
(1,310
)
$
(573
)
$
(364
)
(27.8
)%
$
(737
)
(128.6
)%
Selected Financial Data and Management's Discussion and Analysis
Page 10 of 24
Total Company – Statement of Operations Line Item Variance Analysis
Year Ended December 31, 2015 Compared to Year Ended December 31, 2014
Revenue
Net premiums and policy fees.
Net premiums consist primarily of premiums for long-term care, net of reinsurance, and life insurance. Policy fees represent asset fees, cost of insurance charges, administrative fees, charges for guarantees on investment products, and surrender charges for investment products.
•
Premium and policy fee revenue increase of $7,154 or 11.6% in 2015 as compared to 2014 is primarily due to increases in rider charges due to the higher benefit base and higher variable-indexed annuity product fee income driven by continued growth of this product within our Individual Annuity segment.
Interest and similar income, net.
Interest and similar income primarily includes interest income on fixed-maturity securities classified as available-for-sale.
•
Interest and similar income decrease of $1,472 or 5.1% in 2015 compared to 2014 is primarily due to a decrease in allocated investment income driven by the closed block of the fixed-annuity business within the Individual Annuity segment.
Change in fair value of assets and liabilities.
Change in fair value of assets and liabilities represents the changes in fair value and the realized gains and losses from derivative instruments. We utilize derivatives within certain actively managed investment portfolios to manage the risk associated with variability in cash flows or changes in fair values related to financial assets and liabilities. See Application of Critical Accounting Policies for additional information.
•
Change in fair value of assets and liabilities is a decrease of $55,433 or 83.0% in 2015 compared to 2014. The variance is driven by the unfavorable impact of interest rates partially offset by less negative results mainly due to change in the equity market (equity market decline in 2015 vs increase in 2014). The change in fair value of assets result economically hedges reserve changes in net benefits.
Realized investment gains, net
. Realized investment gains (losses) consist of gains and losses from the sale or impairment of investments.
•
Realized investment gains is an increase of $506 in 2015 compared to 2014 primarily a result of normal investment activity in 2015.
Fee, commission and other revenue.
Fee, commission and other revenue relate primarily to fees earned from assets under management by certain fund companies.
•
Fee, commission and other revenue increase of $357 or 5.2% in 2015 compared to 2014 is due to an overall increase in 12b-1 fees and other revenue sharing from Allianz Life Financial Services, LLC relating to the distribution of variable annuity products.
Benefits and Expenses
Net benefits.
Net benefits consist of amounts paid to policyholders and changes in liabilities held for anticipated future benefit payments under insurance policies and annuity contracts. Amounts are net of benefit payments recovered or expected to be recovered under reinsurance contracts. The index benefit under fixed-indexed annuities and the accumulation and withdrawal benefits under variable annuity guarantees include the change in fair value for these embedded derivatives. The derivatives to economically hedge these benefits are included in revenue under change of fair value of assets and liabilities. Net benefits also include amortization of DSI.
•
Net benefits decrease of $56,382 or 39.2% in 2015 compared to 2014 is primarily due to the favorable change in reserves for Individual Annuity driven by the relative decrease in equity market returns in 2015 compared to 2014 partially offset by the impact of interest rate movement in 2015 compared to 2014.
General and administrative and commissions.
General and administrative and commission expenses includes compensation, consultant fees, information technology, facilities and equipment, advertising and marketing, legal and regulatory and corporate related expenses.
Selected Financial Data and Management's Discussion and Analysis
Page 11 of 24
•
General and administrative and commission expenses increase of $2,003 or 5.0% in 2015 compared to 2014 is due to an overall increase in expense sharing (higher allocated expenses) which was implemented in 2015 by Allianz Life.
Change in deferred acquisition costs, net
. Change in deferred acquisition costs represents the capitalization of acquisition costs reported in general and administrative and commission expenses, and amortization of DAC and DSI. For fixed, fixed-indexed, and variable annuity contracts issued in 2010 and after, acquisition costs are amortized in relation to the present value of future EGPs from investment margins, mortality, morbidity, and expense charges. For variable annuity contracts issued prior to 2010, acquisition costs are amortized in relation to the present value of estimated gross revenues from investments and mortality, morbidity, and expense charges. Acquisition costs for LTC policies are deferred and amortized over the lives of the policies. Changes in assumptions are recorded as an increase or decrease in amortization (unlocking).
•
Change in deferred acquisition costs is an increase of $6,899 or 45.8% in 2015 compared to 2014. The increase was driven by higher amortization, partially offset by lower capitalization. The increase in amortization was driven by the equity market impact on guarantee reserves in 2015. The lower capitalization trends with the lower production in 2015.
Income tax (benefit) expense
•
Income tax (benefit) expense:
The 2015 income tax benefit is an increase of $1,308 or 41.7% compared to 2014. The change is primarily due to the additional pre-tax loss and additional Separate Account dividends received deduction (DRD) benefit from the respective funds.
Year Ended December 31, 2014 Compared to Year Ended December 31, 2013
Revenue
Net premiums and policy fees.
Net premiums consist primarily of premiums for long-term care, net of reinsurance, and life insurance. Policy fees represent asset fees, cost of insurance charges, administrative fees, charges for guarantees on investment products, and surrender charges for investment products.
•
Premium and policy fee revenue increase of $10,983 or 21.6% in 2014 as compared to 2013 is primarily due to increases in fee revenue and rider charges driven by higher Individual Annuity separate account balances and growing benefit base.
Interest and similar income, net.
Interest and similar income primarily includes interest income on fixed-maturity securities classified as available-for-sale.
•
Interest and similar income decrease of $776 or 2.6% in 2014 compared to 2013 is primarily due to a decrease in the book value of assets and the average yield earned on the investments.
Change in fair value of assets and liabilities.
Change in fair value of assets and liabilities represents the changes in fair value and the realized gains and losses from derivative instruments. We utilize derivatives within certain actively managed investment portfolios to manage the risk associated with variability in cash flows or changes in fair values related to financial assets and liabilities. See Application of Critical Accounting Policies for additional information.
•
Change in fair value of assets and liabilities is an increase of $145,750 or 184.6% in 2014 compared to 2013. This is driven by the favorable hedge results on derivatives for Individual Annuity primarily due to interest rate movement impacting the economic hedge for variable annuity products. The Individual Annuity economic hedge results partially offset reserve changes in net benefits.
Realized investment gains, net
. Realized investment gains (losses) consist of gains and losses from the sale or impairment of investments.
•
Realized investment gains is a decrease of $752 or 90.7% in 2014 compared to 2013 primarily a result of the lower sales in 2014 of fixed-maturity securities.
Selected Financial Data and Management's Discussion and Analysis
Page 12 of 24
Fee, commission and other revenue.
Fee, commission and other revenue relate primarily to fees earned from assets under management by certain fund companies.
•
Fee, commission and other revenue increase of $960 or 16.3% in 2014 compared to 2013 is due to higher fund administration fees driven by increases in Individual Annuities assets under management as a result of the continued asset base growth in 2014.
Benefits and Expenses
Net benefits.
Net benefits consist of amounts paid to policyholders and changes in liabilities held for anticipated future benefit payments under insurance policies and annuity contracts. Amounts are net of benefit payments recovered or expected to be recovered under reinsurance contracts. The index benefit under fixed-indexed annuities and the accumulation and withdrawal benefits under variable annuity guarantees include the change in fair value for these embedded derivatives. The derivatives to hedge these benefits are included in revenue under change of fair value of assets and liabilities. Net benefits also include amortization of DSI.
•
Net benefits increase of $181,996 or 477.6% in 2014 compared to 2013 is primarily due to an unfavorable change in reserves for Individual Annuity driven by the impact of interest rate movement in 2014 compared to 2013. Individual Annuity reserve movements are partially economically hedged in Change in fair value of assets and liabilities.
General and administrative and commissions.
General and administrative and commission expenses includes compensation, consultant fees, information technology, facilities and equipment, advertising and marketing, legal and regulatory and corporate related expenses.
•
General and administrative and commission expenses increase of $4,270 or 12.0% in 2014 compared to 2013 is primarily due to higher trail commissions from the continued growth of assets under management as a result of positive market conditions and higher allocated expenses and service fees.
Change in deferred acquisition costs, net
. Change in deferred acquisition costs represents the capitalization of acquisition costs reported in general and administrative and commission expenses, and amortization of DAC and DSI. For fixed, fixed-indexed, and variable annuity contracts issued in 2010 and after, acquisition costs are amortized in relation to the present value of future EGPs from investment margins, mortality, morbidity, and expense charges. For variable annuity contracts issued prior to 2010, acquisition costs are amortized in relation to the present value of estimated gross revenues from investments and mortality, morbidity, and expense charges. Acquisition costs for LTC policies are deferred and amortized over the lives of the policies. Changes in assumptions are recorded as an increase or decrease in amortization (unlocking).
•
Change in deferred acquisition costs is a decrease of $8,901 or 144.4% in 2014 compared to 2013. The favorable change in deferred acquisition costs is due to the change in DAC amortization driven by the change in interest rates and its impact on estimated gross profits in 2014 compared to 2013.
Income tax (benefit) expense
•
Income tax (benefit) expense:
The 2014 income tax benefit is a decrease of $7,558 or 170.8% compared to 2013. The change is primarily attributable to a decrease in pre-tax income of $21,200.
Financial Condition
Investment Strategy
Our investment strategy focuses on diversification by asset class. We seek to achieve economic diversification, while reducing overall credit and liquidity risks. We attempt to mitigate these credit and liquidity risks by adhering to investment policies that provide portfolio diversification on an asset class, creditor, and industry basis, and by complying with investment limitations governed by state insurance laws and regulations, as applicable. We also consider all relevant objective information available in estimating the cash flows related to structured securities. In addition, we seek to mitigate the impact of cash flow variability from embedded options in our variable annuities, through certain investment products such as interest rate swaps and futures contracts. We actively monitor and manage exposures, and determine whether any securities are impaired. The aggregate credit risk taken in the investment portfolio is influenced by our
Selected Financial Data and Management's Discussion and Analysis
Page 13 of 24
risk/return preferences, the economic and credit environment, and the relationship of credit risk in the asset portfolio to liabilities. We also have an asset-liability management strategy to align cash flows and duration of the investment portfolio with contractholder liability cash flows and duration.
The following table presents the investment portfolio at December 31.
Portfolio Composition
2015
2014
Carrying value
% of total
Carrying value
% of total
Fixed maturities
$
674,562
97.2
%
$
655,141
97.0
%
Derivatives
15,064
2.2
%
4,516
0.7
%
Equity securities
4,368
0.6
%
1,858
0.3
%
Policy loans
275
0.0
%
253
0.0
%
Short-term securites
—
0.0
%
13,728
2.0
%
Total investments
$
694,269
100.0
%
$
675,496
100.0
%
Fixed Maturity Securities
At December 31, the amortized cost, gross unrealized gains, gross unrealized losses, and fair values of available-for-sale securities are as shown in the following tables:
Gross
Gross
OTTI in
accumulated
other
Amortized
%
unrealized
unrealized
Fair
%
comprehensive
cost
of Total
gains
losses
value
of Total
income
2015:
Fixed-maturity securities:
U.S. government
$
72,035
10.9
%
1,188
—
73,223
10.9
%
—
States and political subdivisions
11,112
1.7
%
214
282
11,044
1.6
%
—
Foreign government
505
0.1
%
5
—
510
0.1
%
—
Public utilities
36,467
5.5
%
2,989
789
38,667
5.7
%
—
Corporate securities
406,982
61.6
%
18,230
9,697
415,515
61.6
%
—
Mortgage-backed securities
133,853
20.2
%
2,909
1,159
135,603
20.1
%
—
Total
$
660,954
100.0
%
25,535
11,927
674,562
100.0
%
—
Selected Financial Data and Management's Discussion and Analysis
Page 14 of 24
Gross
Gross
OTTI in
accumulated
other
Amortized
%
unrealized
unrealized
Fair
%
comprehensive
cost
of Total
gains
losses
value
of Total
income
2014:
Fixed-maturity securities:
U.S. government
$
93,692
15.3
%
1,446
61
95,077
14.5
%
—
States and political subdivisions
11,679
1.9
%
305
42
11,942
1.8
%
—
Foreign government
2,517
0.4
%
30
—
2,547
0.4
%
—
Public utilities
36,746
6.0
%
4,625
43
41,328
6.3
%
—
Corporate securities
328,406
53.5
%
30,664
1,740
357,330
54.6
%
—
Mortgage-backed securities
140,682
22.9
%
6,416
181
146,917
22.4
%
—
Total
$
613,722
100.0
%
43,486
2,067
655,141
100.0
%
—
As of December 31, 2015 and 2014, there were 104 and 32 available-for-sale fixed-maturity securities that were in an unrealized loss position, respectively.
As of December 31, 2015 and 2014, of the total amount of unrealized losses, $11,856 or 97.1% and $1,983 or 95.9%, respectively, are related to unrealized losses on investment grade securities. Investment grade is defined as a security having a credit rating of Aaa, Aa, A, or Baa from Moody's or a rating of AAA, AA, A, or BBB from Standards and Poor (S&P), or a NAIC rating of 1 or 2 if a Moody's or S&P rating is not available. Unrealized losses on securities are principally related to changes in interest rates or changes in sector spreads from the date of purchase. As contractual payments continue to be met, management continues to expect all contractual cash flows to be received. As mentioned in Note 2 of the Financial Statements, the Company reviews these securities regularly to determine whether or not declines in fair value are other than temporary. Further, as the Company neither has an intention to sell nor does it expect to be required to sell the securities outlined above, the Company did not consider these investments to be other-than-temporarily-impaired.
Unrealized investment losses of fixed-maturity securities, for investment grade (IG) and below investment grade (BIG) securities by duration are as follows at December 31:
2015
IG
% of IG and BIG
BIG
% of IG and BIG
Twelve months or less below amortized cost
$
7,133
59.8
%
$
97
0.8
%
More than twelve months below amortized cost
4,453
37.3
%
244
2.1
%
Total
$
11,586
97.1
%
$
341
2.9
%
2014
IG
% of IG and BIG
BIG
% of IG and BIG
Twelve months or less below amortized cost
$
889
43.0
%
$
—
0.0
%
More than twelve months below amortized cost
1,094
52.9
%
84
4.1
%
Total
$
1,983
95.9
%
$
84
4.1
%
Selected Financial Data and Management's Discussion and Analysis
Page 15 of 24
Unrealized investment losses of fixed-maturity securities, for instances in which fair value declined below amortized cost by greater than or less than 20% for consecutive periods as indicated in the tables below, are as follows at December 31:
Amortized Cost
Unrealized Loss
Number of Securities
2015
< 20%
> 20%
< 20%
> 20%
< 20%
> 20%
Twelve months or less below amortized cost
$
175,415
$
6,779
$
5,796
$
1,434
86
7
More than twelve months below amortized cost
6,627
13,762
690
4,007
4
7
Total unrealized investment losses
$
182,042
$
20,541
$
6,486
$
5,441
90
14
Amortized Cost
Unrealized Loss
Number of Securities
2014
< 20%
> 20%
< 20%
> 20%
< 20%
> 20%
Twelve months or less below amortized cost
$
25,396
$
559
$
791
$
98
11
1
More than twelve months below amortized cost
40,542
—
1,178
—
20
—
Total unrealized investment losses
$
65,938
$
559
$
1,969
$
98
31
1
There were no other-than-temporary impairments included in the Statements of Operations, as of December 31, 2015 and 2014, respectively.
The following table presents a rollforward of the Company's cumulative impairments on fixed-maturity securities held on December 31:
2015
2014
Balance as of January 1
$
—
241
Additions for credit impairments recognized on:
Securities not previously impaired
—
—
Securities that the Company intends to sell or more likely than not be required to sell before recovery (interest)
184
—
Reductions for credit impairments previously on:
Securities that matured or were sold during the period
(184
)
(241
)
Balance as of December 31
$
—
—
Selected Financial Data and Management's Discussion and Analysis
Page 16 of 24
Total available for sale fixed-maturity securities by quality rating category at December 31, are shown below:
2015
Fair Value
% of Total
Amortized Cost
% of Total
AAA
$
83,291
12.4
%
$
82,897
12.6
%
AA
177,611
26.3
%
172,308
26.1
%
A
207,740
30.8
%
197,794
29.9
%
BBB
200,096
29.7
%
201,880
30.5
%
BB
4,360
0.6
%
4,534
0.7
%
B and below
1,464
0.2
%
1,541
0.2
%
Total
$
674,562
100.0
%
$
660,954
100.0
%
2014
Fair Value
% of Total
Amortized Cost
% of Total
AAA
$
83,491
12.7
%
$
79,933
13.0
%
AA
211,016
32.2
%
202,992
33.1
%
A
192,507
29.4
%
174,112
28.4
%
BBB
165,605
25.3
%
154,178
25.1
%
BB
2,019
0.3
%
1,963
0.3
%
B and below
503
0.1
%
544
0.1
%
Total
$
655,141
100.0
%
$
613,722
100.0
%
Selected Financial Data and Management's Discussion and Analysis
Page 17 of 24
The amortized cost and fair value of available-for-sale and held to maturity fixed-maturity securities at December 31, 2015, by contractual maturity, are shown below:
Amortized
cost
Fair value
Available-for-sale fixed-maturity securities:
Due in one year or less
$
26,179
26,635
Due after one year through five years
186,049
194,706
Due after five years through ten years
198,798
201,432
Due after ten years
116,075
116,186
Mortgage-backed securities and collateralized mortgage obligations
133,853
135,603
Total available-for-sale fixed-maturity securities
$
660,954
674,562
Expected maturities will differ from contractual maturities, because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
Commercial Mortgage-backed and Other Asset-backed Securities
Commercial mortgage-backed securities (CMBS) represent pools of commercial mortgages that are broadly diversified across property types and geographical areas. The following table summarizes our exposure to CMBS holdings by credit quality and vintage year as of December 31:
2015
% of total CMBS
Vintage
AAA
$
75,432
81.6
%
2015
$
41,362
44.7
%
AA
10,099
10.9
%
2014
10,995
11.9
%
A
6,934
7.5
%
2013 and prior
40,108
43.4
%
$
92,465
100.0
%
$
92,465
100.0
%
2014
% of total CMBS
Vintage
AAA
$
72,882
79.4
%
2014
$
11,151
12.1
%
AA
11,211
12.2
%
2013
1,515
1.6
%
A
7,740
8.4
%
2012 and prior
79,167
86.3
%
$
91,833
100.0
%
$
91,833
100.0
%
Our Asset Backed Security (ABS) holdings consist primarily of credit card and utility asset backed securities and typically meet specific criteria, such as credit quality, insurance requirements, or limits on the types of collateral underlying those investments.
Selected Financial Data and Management's Discussion and Analysis
Page 18 of 24
The following table summarizes our exposure to other ABS holdings by credit quality and vintage year as of December 31:
2015
% of total other ABS
Vintage
AAA
$
6,451
2008 and prior
$
6,451
$
6,451
$
6,451
2014
% of total other ABS
Vintage
AAA
$
8,648
2008 and prior
$
8,648
$
8,648
$
8,648
The following financial instruments are carried at fair value on a recurring basis in the Company Financial Statements: available-for-sale securities, freestanding and embedded derivatives, and separate accounts assets and liabilities. The Company has analyzed the valuation techniques and related inputs, evaluated its assets and liabilities reported at fair value, and determined an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs. Based on the results of this evaluation and investment class analysis, each valuation was classified into Level 1, 2, or 3. See Note 6 of the Notes to Financial Statements in Item 8 for additional information.
Total
Level 1
Level 2
Level 3
2015:
Assets accounted for at fair value:
Fixed-maturity securities:
U.S. government
$
73,223
73,223
—
—
States and political subdivisions
11,044
—
11,044
—
Foreign government
510
—
510
—
Public utilities
38,667
—
38,667
—
Corporate securities
415,515
—
414,468
1,047
Mortgage-backed securities
135,603
—
135,603
—
Derivative asset
15,064
—
15,064
—
Equity securities, trading
4,368
4,368
—
—
Separate account assets
2,205,548
2,205,548
—
—
Total assets accounted for at fair value
$
2,899,542
2,283,139
615,356
1,047
Liabilities accounted for at fair value:
Derivative liability
$
7,956
—
7,956
—
Separate account liabilities
2,205,548
2,205,548
—
—
Reserves at fair value
265,884
—
—
265,884
Total liabilities accounted for at fair value
$
2,479,388
2,205,548
7,956
265,884
Selected Financial Data and Management's Discussion and Analysis
Page 19 of 24
Total
Level 1
Level 2
Level 3
2014:
Assets accounted for at fair value:
Fixed-maturity securities:
U.S. government
$
95,077
95,077
—
—
States and political subdivisions
11,942
—
11,942
—
Foreign government
2,547
—
2,547
—
Public utilities
41,328
—
41,328
—
Corporate securities
357,330
—
356,258
1,072
Mortgage-backed securities
146,917
—
146,917
—
Derivative asset
4,516
—
4,516
—
Equity securities, trading
1,858
1,858
—
—
Separate account assets
2,214,422
2,214,422
—
—
Total assets accounted for at fair value
$
2,875,937
2,311,357
563,508
1,072
Liabilities accounted for at fair value:
Derivative liability
$
4,894
—
4,894
—
Separate account liabilities
2,214,422
2,214,422
—
—
Reserves at fair value
150,251
—
—
150,251
Total liabilities accounted for at fair value
$
2,369,567
2,214,422
4,894
150,251
Liquidity and Capital Resources
Overview
Liquidity and Capital Resources represent our overall financial strength and ability to generate cash flows from the business. The liquidity requirements are generally met through funds provided by investment income, receipt of insurance premiums, management and expense (M&E) fees and benefit rider income, maturities and sales of investments, reinsurance recoveries, and capital contributions from Allianz Life.
We do not utilize the capital markets as a source of capital. Should the need for capital arise, we may utilize our parent, Allianz Life, as an alternative source of funding. We have a line of credit agreement with Allianz Life to provide liquidity as needed. As of December 31, 2015 and December 31, 2014, there are no amounts outstanding under the line of credit agreement and no amounts have been borrowed during the years ended December 31, 2015 and 2014. If capital infusions are deemed necessary, we obtain prior approval by the New York Department of Financial Services, as appropriate.
Financial Ratings and Strength
We received the following financial strength ratings as of December 31, 2015:
•
AM Best
A+ (Superior)
•
S&P
AA (Very Strong)
The financial strength ratings are influenced by many factors including the operating and financial performance, asset quality, liquidity, asset/liability management, overall portfolio mix, financial leverage, and exposure to risks.
Selected Financial Data and Management's Discussion and Analysis
Page 20 of 24
Cash Flows
The following table sets forth information from our Statements of Cash Flows for the years ended December 31:
Year Ended December 31,
Consolidated Cash Flows
2015
2014
2013
Net cash provided by operating activities
$
53,061
$
45,090
$
8,590
Net cash (used in) provided by investing activities
(34,053
)
(11,839
)
20,962
Net cash used in financing activities
(9,475
)
(28,322
)
(71,068
)
Net change in cash and cash equivalents
$
9,533
$
4,929
$
(41,516
)
Cash and cash equivalents increased (decreased) $9,533, $4,929, and ($41,516) for the years ended December 31, 2015, 2014, and 2013, respectively. We have the funds necessary to meet the capital requirements in the state of New York, and to support our operations.
The increase in net cash provided by operating activities in 2015 as compared to 2014 is driven by gains recognized on derivative options relating to interest rate swaps. The increase in net cash provided by operating activities in 2014 as compared to 2013 is driven by gains recognized on variation margin settlements relating to interest rate swaps.
In 2015, the increase in cash flows used in investing activities was primarily driven by higher purchases of available-for-sale fixed maturity securities compared to 2014 and partially offset by higher sales and redemptions of available-for-sale fixed-maturity securities compared to 2014. In 2014, the decrease in cash flows used in investing activities was primarily driven by fewer sales and redemptions of available-for-sale fixed-maturity securities and partially offset by lower purchases of available-for-sale fixed maturity securities compared to 2013.
The increase in cash flows used in financing activities in 2015 as compared to 2014 was driven by higher deposits and partially offset by higher policyholder withdrawals. The increase in cash flows used in financing activities in 2014 as compared to 2013 was driven by higher deposits and lower policyholder withdrawals.
Risk-Based Capital
An insurance company's state of domicile imposes minimum risk-based capital (RBC) requirements that were developed by the NAIC. The formulas for determining the amount of RBC specify various weighting factors that are applied to financial balances or various levels of activity based on the perceived degree of risk. Regulatory compliance is determined by a ratio of a company's regulatory total adjusted capital to its authorized control level RBC, as defined by the NAIC. Companies below specific trigger points or ratios are classified within certain levels, each of which requires specified corrective action. This ratio for the Company significantly exceeds required minimum thresholds as of December 31, 2015 and 2014. We consider our surplus position more than adequate to handle severe adverse experience based upon industry standards and our own risk analysis.
Dividends and Capital Contributions
We did not pay any dividends or receive any capital contributions during the year ended December 31, 2015, and December 31, 2014.
Selected Financial Data and Management's Discussion and Analysis
Page 21 of 24
Commitments
The following table summarizes certain contractual obligations and the Company's commitments by period as of December 31, 2015:
In 1 year
after 1 year
After 3 years
After
Total
or less
up to 3 years
up to 5 years
5 Years
Payments due
Policyholder liabilities
$
928,763
$
124,655
$
188,152
$
159,676
$
456,280
Operating leases
108
24
48
36
—
Total payments due
$
928,871
$
124,679
$
188,200
$
159,712
$
456,280
Policyholder liabilities include estimated claim and benefit, policy surrender and commission obligations offset by expected future deposits and premiums on in-force insurance policies and investment contracts in the Individual Annuity and Other segments. We have excluded the separate account liabilities as these obligations are legally insulated from general account obligations and will be fully funded by cash flows from separate account assets. The obligations have not been discounted at present value. Estimated claim and benefit obligations are based upon mortality, morbidity and lapse assumptions comparable to historical experience. The results are based on assuming market growth and interest crediting consistent with other valuation assumptions. In contrast to this table, the majority of the Company's obligations are recorded on the Balance Sheets at current account values or other GAAP prescribed measurements that are not directly related to liability cash flows. These obligations do not incorporate an expectation on future market growth, interest crediting, or future deposits. Therefore, due to the significance of the assumptions used, the amounts presented could materially differ from actual results.
Operating leases include non-cancelable obligations on certain office space and equipment.
Contingencies
We may become subject to claims and lawsuits that arise in the ordinary course of business. It is our opinion that the ultimate resolution of such litigation will not have a material adverse effect on our financial position. We are contingently liable for possible future assessments under regulatory requirements pertaining to insolvencies and impairments of unaffiliated insurance companies. Provision has been made for assessments currently received and assessments anticipated for known insolvencies. We recognize legal costs as incurred.
The financial services industry, including mutual funds, variable and fixed annuities, life insurance, distribution companies, and
broker-dealers,
has been the subject of close scrutiny by regulators, legislators, and the media.
Federal and state regulators, such as state insurance departments, state securities departments, the SEC, and Financial Industry Regulatory Authority (FINRA) and other regulatory bodies regularly make inquiries and conduct examinations or investigations concerning various selling practices, including suitability reviews, product exchanges, sales to seniors, and compliance with, among other things, insurance laws and securities laws. We are subject to ongoing market conduct examinations and investigations by regulators which may have a material adverse effect on the Company.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet transactions, arrangements or other relationships that we believe would be reasonably likely to have a material effect on our liquidity or the requirements for capital resources.
We utilize exchange-traded futures to economically hedge certain product liabilities. Under this kind of transaction, we agree to purchase a specified number of contracts and settle the variation margin with the counterparty on a daily basis in an amount equal to the change in the market value of the underlying contracts from the close of the previous trading day. The parties with whom we enter into the exchange-traded futures contracts are regulated futures commission's merchants who are members of a trading exchange.
We are exposed to credit-related losses in the event of non-performance by counterparties under the terms of the futures contracts. We minimize counterparty credit risk by establishing relationships only with counterparties rated A- and
Selected Financial Data and Management's Discussion and Analysis
Page 22 of 24
higher. Given the credit ratings of the counterparties with which we transact, we do not expect any counterparties to fail to meet their obligations. We also have executed CSA agreements with all active counterparties and require a CSA from all new counterparties added to our counterparty pool. The CSA agreements further limit our counterparty credit risk by requiring the counterparty to post collateral to a segregated custodial account based on the net exposure to the Company.
As our futures transactions are executed through a regulated exchange, positions are marked-to-market and settled on a daily basis, and collateral is posted prior to execution of a transaction, we have minimal exposure to credit-related losses in the event of non-performance.
We are also required to post collateral for any futures and options contracts that are executed. The amount of collateral required is determined by the exchange on which the contract is traded. For 2015 and 2014, we posted U.S. Government Securities to satisfy this collateral requirement.
Forward-looking Statements
This report reviews the Company's financial condition and results of operations. Where appropriate, factors that may affect future financial performance are also identified and discussed. Certain statements made in this report include "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include any statement that may predict, forecast, indicate or imply future results, performance or achievements instead of historical facts, and may contain words like "believe," "expect," "estimate," "project," "budget," "forecast," "anticipate," "plan," "will," "shall," "may," and other words, phrases or expressions with similar meaning. Forward-looking statements are subject to risks and uncertainties. Readers are cautioned not to place undue reliance on forward-looking statements as a prediction of actual results. We undertake no obligation to update publicly or revise any forward-looking statements.
Item 11(j).
Quantitative and Qualitative Disclosures about Market Risk
Market risk is the risk of the loss of fair value resulting from adverse changes in market rates and prices, such as interest rates and equity prices. Market risk is directly influenced by the volatility and liquidity in the markets in which the related underlying financial instruments are traded. The following is a discussion of our market risk exposures and our risk management practices.
Interest Rate Risk
Interest rate risk is the risk that movements in interest rates or interest rate volatility will change and cause a decrease in the value of an insurer's assets relative to the value of its liabilities and/or an unfavorable change in prepayment activity resulting in compressed interest margins. We have an asset liability management strategy to align cash flows and duration of the investment portfolio with policyholder liability cash flows and duration. We further limit interest rate risk on variable annuity guarantees through interest rate hedges.
Equity Market Risk
Equity market risk is the risk that movements in equity prices or equity volatility will cause a decrease in the value of an insurer's assets relative to the value of its liabilities. The policy value of the fixed-indexed annuity and fixed-indexed universal life products is linked to equity market indices. We economically hedge this exposure with derivatives. Variable annuity products may provide a minimum guaranteed level of benefits irrespective of market movements. We have adopted an economic hedging program to manage the equity risk of these products. We also monitor the economic and accounting impacts of equity stress scenarios on assets and liabilities regularly.
Basis risk is the risk that the variable annuity hedge asset value changes unexpectedly relative to the value of the underlying separate account funds of the variable annuity contracts. Basis risk may arise from the Company's inability to directly hedge the underlying variable investment option of the variable annuity contracts. We mitigate this risk through regular review and synchronization of fund mappings, product design features, and hedge design.
Sensitivity Analysis
To assess the impact of changes in interest rate and equity markets, we perform sensitivity tests. Sensitivity tests measure the instantaeous impact of a single hypothetical interest rate or equity price change on our pre-tax income, or fair value of an asset or liability, while holding all other rates or prices constant. To assess interest rate risk we perform a sensitivity
Selected Financial Data and Management's Discussion and Analysis
Page 23 of 24
test which instantaneously shocks interest rates across all maturities by a hypothetical 50 basis points (bps). To assess equity risk, we perform a sensitivity test which instantaneously decreases all equity prices by a hypothetical 15%.
Interest Rate Risk
One means of assessing exposure to interest rate changes is to measure the potential change in fair value of an asset due to a hypothetical change in interest rates of 50 bps across all maturities. We noted that under this model, with all other factors remaining constant, a 50 bps increase in interest rates would result in the decrease in the fair value of our fixed income securities of $18,494 based on our securities positions as of December 31, 2015.
We also examined the impact on pre-tax income due to hypothetical decrease in interest rates of 50 bps across all maturities. Note that all impacts referenced below reflect reserve changes net of economic hedge impact and DAC changes unless otherwise noted. Under this model, with all other factors being constant, we estimated that such a decline would cause our pre-tax income to decrease by $5,357 as of December 31, 2015.
Equity Market Risk
One means of assessing exposure to changes in equity market prices is to estimate the potential changes in pre-tax income from a hypothetical decline in equity market prices of 15%. Under this model, with all other factors constant, we estimated that such a decline in equity market prices would cause our pre-tax income to decrease by $8,307 based on our equity exposure as of December 31, 2015.
Adoption of New Financial Accounting Standards
See Note 2 – "Summary of Significant Accounting Policies" of the Company's Financial Statements in Item 8 – Financial Statements of this prospectus for information related to recent accounting pronouncements.
Selected Financial Data and Management's Discussion and Analysis
Page 24 of 24
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Financial Statements and Supplemental Schedules
December 31, 2015 and 2014
(With Report of Independent Registered Public Accounting Firm Thereon)
KPMG LLP
4200 Wells Fargo Center
90 South Seventh Street
Minneapolis, MN 55402
Report of Independent Registered Public Accounting Firm
The Board of Directors and Stockholder
Allianz Life Insurance Company of New York:
We have audited the accompanying balance sheets of Allianz Life Insurance Company of New York (the Company) as of December 31, 2015 and 2014, and the related statements of operations, comprehensive income (loss), stockholder's equity, and cash flows for each of the years in the three-year period ended December 31, 2015. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Allianz Life Insurance Company of New York as of December 31, 2015 and 2014, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2015, in conformity with U.S. generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary information included in Schedules I, II, and III is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ KPMG LLP
Minneapolis, Minnesota
March 31, 2016
KPMG LLP is a Delaware limited liability partnership,
the U.S. member firm of KPMG International Cooperative
("KPMG International"), a Swiss entity.
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Balance Sheets
December 31, 2015 and 2014
(In thousands, except share data)
Assets
2015
2014
Investments:
Fixed-maturity securities, available-for-sale, at fair value (amortized cost of $660,954 and $613,722, respectively)
$
674,562
655,141
Short-term securities
—
13,728
Policy loans
275
253
Derivatives
15,064
4,516
Equity securities, trading, (cost of $4,383 and $1,855, respectively)
4,368
1,858
Total investments
694,269
675,496
Cash and cash equivalents
37,172
27,639
Accrued investment income
14,557
8,130
Receivables (net of allowance for uncollectible accounts of $33 and $20, respectively)
13,202
7,039
Reinsurance recoverable
3,596
3,091
Deferred acquisition costs
134,374
118,319
Net deferred tax asset
33,660
13,375
Other assets
22,277
20,639
Assets, exclusive of separate accounts assets
953,107
873,728
Separate account assets
2,205,548
2,214,422
Total assets
$
3,158,655
3,088,150
Financial Statements and Supplemental Schedules
Page 2 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Balance Sheets
December 31, 2015 and 2014
(In thousands, except share data)
Liabilities and Stockholder's Equity
2015
2014
Policyholder liabilities:
Account balances and future policy benefit reserves (includes $72,491 and $16,026 measured at fair value under the fair value option at December 31, 2015 and 2014)
$
762,986
691,011
Policy and contract claims
4,157
2,787
Unearned premiums
1,571
1,518
Other policyholder funds
1,174
2,203
Total policyholder liabilities
769,888
697,519
Derivative liabilities
7,956
4,894
Other liabilities
26,775
9,908
Liabilities, exclusive of separate account liabilities
804,619
712,321
Separate account liabilities
2,205,548
2,214,422
Total liabilities
3,010,167
2,926,743
Stockholder's equity:
Common stock, $10 par value. Authorized, issued, and outstanding 200,000 shares, at December 31, 2015 and 2014
2,000
2,000
Additional paid-in capital
72,500
72,500
Retained earnings
68,988
70,251
Accumulated other comprehensive income, net of tax
5,000
16,656
Total stockholder's equity
148,488
161,407
Total liabilities and stockholder's equity
$
3,158,655
3,088,150
See accompanying notes to financial statements.
Financial Statements and Supplemental Schedules
Page 3 of 68
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Statements of Operations
Years ended December 31, 2015, 2014 and 2013
(In thousands)
2015
2014
2013
Revenue:
Premiums
$
4,461
4,559
4,703
Policy fees
65,756
58,599
47,579
Premiums and policy fees, ceded
(1,347
)
(1,442
)
(1,549
)
Net premiums and policy fees
68,870
61,716
50,733
Interest and similar income, net
27,387
28,859
29,635
Change in fair value of assets and liabilities
11,373
66,806
(78,944
)
Realized investment gains, net
583
77
829
Fee, commission, and other revenue
7,221
6,864
5,904
Total revenue
115,434
164,322
8,157
Benefits and expenses:
Policyholder benefits
11,601
7,993
9,668
Change in fair value of annuity and life embedded derivatives
60,876
112,364
(71,546
)
Net interest credited to account values
16,290
24,635
25,342
Benefit recoveries
(1,256
)
(1,099
)
(1,567
)
Net benefits
87,511
143,893
(38,103
)
Commissions and other agent compensation
23,976
25,275
23,011
General and administrative expenses
17,816
14,514
12,508
Change in deferred acquisition costs, net
(8,165
)
(15,064
)
(6,163
)
Total benefits and expenses
121,138
168,618
(8,747
)
(Loss) income from operations before income taxes
(5,704
)
(4,296
)
16,904
Income tax (benefit) expense:
Current
9,567
4,774
2,495
Deferred
(14,008
)
(7,907
)
1,930
Total income tax (benefit) expense
(4,441
)
(3,133
)
4,425
Net (loss) income
$
(1,263
)
(1,163
)
12,479
Supplemental disclosures:
Realized investment (losses), net:
Total other-than-temporary impairment losses on securities
$
(184
)
—
(241
)
Portion of loss recognized in other comprehensive income
—
—
—
Net impairment losses recognized in realized investment gains, net
(184
)
—
(241
)
Other net realized gains
767
77
1,070
Realized investment gains, net
$
583
77
829
See accompanying notes to financial statements.
Financial Statements and Supplemental Schedules
Page 4 of 68
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Statements of Comprehensive Income (Loss)
Years ended December 31, 2015, 2014, and 2013
(In thousands)
2015
2014
2013
Net (loss) income
$
(1,263)
(1,163)
12,479
Other comprehensive (loss) income:
Net unrealized (loss) gain on investments, net of shadow adjustments and deferred taxes
(11,656)
6,309
(23,698)
Total other comprehensive (loss) income
(11,656)
6,309
(23,698)
Total comprehensive (loss) income
$
(12,919)
5,146
(11,219)
See accompanying notes to financial statements.
Financial Statements and Supplemental Schedules
Page 5 of 68
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Statements of Stockholder's Equity
Years ended December 31, 2015, 2014, and 2013
(In thousands)
Common
stock
Additional
paid-in
capital
Retained
earnings
Accumulated
other
comprehensive
income
Total
stockholder's
equity
2013:
Balance, beginning of year
$
2,000
72,500
58,935
34,045
167,480
Comprehensive income (loss):
Net income
—
—
12,479
—
12,479
Net unrealized loss on investments, net of shadow adjustments and deferred taxes
—
—
—
(23,698
)
(23,698
)
Total comprehensive loss
(11,219
)
Balance, end of year
$
2,000
72,500
71,414
10,347
156,261
2014:
Balance, beginning of year
$
2,000
72,500
71,414
10,347
156,261
Comprehensive income (loss):
Net loss
—
—
(1,163
)
—
(1,163
)
Net unrealized gain on investments, net of shadow adjustments and deferred taxes
—
—
—
6,309
6,309
Total comprehensive income
5,146
Balance, end of year
$
2,000
72,500
70,251
16,656
161,407
2015:
Balance, beginning of year
$
2,000
72,500
70,251
16,656
161,407
Comprehensive income (loss):
Net loss
—
—
(1,263
)
—
(1,263
)
Net unrealized loss on investments, net of shadow adjustments and deferred taxes
—
—
—
(11,656
)
(11,656
)
Total comprehensive loss
(12,919
)
Balance, end of year
$
2,000
72,500
68,988
5,000
148,488
See accompanying notes to financial statements.
Financial Statements and Supplemental Schedules
Page 6 of 68
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Statements of Cash Flows
Years ended December 31, 2015, 2014, and 2013
(In thousands)
2015
2014
2013
Cash flows provided by (used in) operating activities:
Net (loss) income
$
(1,263
)
(1,163
)
12,479
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Realized investment gains and change in fair value of equity securities, net
(564
)
(77
)
(829
)
Change in annuity-related options, derivatives, and gross reserves
(12,437
)
(71,181
)
66,071
Purchase of trading securities
(36,109
)
(4,780
)
—
Sale of trading securities
33,580
2,927
—
Deferred federal income tax (benefit) expense
(14,008
)
(7,907
)
1,930
Charges to policy account balances
(604
)
(173
)
(247
)
Interest credited to policy account balances
17,342
24,336
25,275
Amortization of discount, net
764
(409
)
1,570
Change in:
Accrued investment income
(6,427
)
665
(784
)
Receivables and other assets
(5,751
)
(4,777
)
(1,186
)
Reinsurance recoverable
(505
)
(590
)
(287
)
Deferred acquisition costs
(8,165
)
(15,064
)
(6,163
)
Future policy benefit reserves
70,637
121,202
(71,613
)
Policy and contract claims
1,370
1,259
(1,156
)
Unearned premiums
(9
)
(17
)
(57
)
Other policyholder funds
(1,029
)
402
347
Other liabilities
16,239
(357
)
(13,836
)
Payable to (receivable from) parent
—
794
(2,924
)
Total adjustments
54,324
46,253
(3,889
)
Net cash provided by operating activities
53,061
45,090
8,590
Cash flows (used in) provided by investing activities:
Purchase of available-for-sale fixed-maturity securities
(176,948
)
(62,126
)
(109,700
)
Sale and other redemptions of fixed-maturity securities
113,930
57,669
123,684
Maturity of fixed-maturity securities
15,600
6,510
6,980
Net change in short-term securities
13,728
(13,728
)
—
Options purchased, net
(341
)
(174
)
—
Other, net
(22
)
10
(2
)
Net cash (used in) provided by investing activities
(34,053
)
(11,839
)
20,962
Cash flows (used in) provided by financing activities:
Policyholders' deposits to account balances
56,693
17,043
1,532
Policyholders' withdrawals from account balances
(67,832
)
(45,731
)
(68,304
)
Policyholders' net transfers between account balances
1,031
182
(3,504
)
Change in amounts drawn in excess of bank balances
633
184
(792
)
Net cash used in financing activities
(9,475
)
(28,322
)
(71,068
)
Net change in cash and cash equivalents
9,533
4,929
(41,516
)
Cash and cash equivalents at beginning of year
27,639
22,710
64,226
Cash and cash equivalents at end of year
$
37,172
27,639
22,710
See accompanying notes to financial statements.
Financial Statements and Supplemental Schedules
Page 7 of 68
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
(1)
Organization
Allianz Life Insurance Company of New York (the Company) is a wholly owned subsidiary of Allianz Life Insurance Company of North America (Allianz Life), which is a wholly owned subsidiary of Allianz of America, Inc. (AZOA). AZOA is a wholly owned subsidiary of Allianz Europe B.V., which is a wholly owned subsidiary of Allianz SE. Allianz SE is a European Company registered in Munich, Germany.
The Company is a life insurance company licensed to sell annuity, group and traditional life, individual long-term care and group accident and health policies in six states and the District of Columbia. Based on 2015 statutory net premium written, 99% of the Company's business is annuity. Accident and health, and life insurance combined, amount to 1% of the Company's business. The annuity business consists of variable and variable-indexed annuities representing 80% and 20% of 2015 statutory annuity net premium written, respectively. Accident and health business comprises primarily
long-term
care (LTC) insurance. The Company has discontinued selling fixed annuity, life and LTC products. The Company's primary distribution channel is through
broker-dealers.
(2)
Summary of Significant Accounting Policies
(a)
Basis of Presentation
The Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP), which vary in certain respects from accounting practices prescribed or permitted by state insurance regulatory authorities.
(b)
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect reported amounts of assets and liabilities, including reporting or disclosure of contingent assets and liabilities as of the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Future events, including changes in mortality, morbidity, interest rates, capital markets, and asset valuations could cause actual results to differ from the estimates used in the Financial Statements. Such changes in estimates are recorded in the period they are determined.
(c)
Investment Products and Universal Life Business
Investment products consist primarily of variable and fixed annuity products. Premium receipts are reported as deposits to the contractholders' accounts. Policy fees on the Statements of Operations represent asset fees, cost of insurance charges, administrative fees, charges for guarantees on investment products, and surrender charges for investment products and universal life insurance. These fees have been earned and assessed against contractholders on a daily or monthly basis throughout the contract period and are recognized as revenue when assessed and earned. Amounts assessed that represent compensation to the Company for services to be provided in future periods are not earned in the period assessed. Such amounts are reported as unearned premiums and recognized in operations over the period benefited using the same assumptions and factors used to amortize capitalized acquisition costs. Surrender charges are recognized upon surrender of a contract in accordance with contractual terms. Derivatives embedded in
fixed-indexed
and variable products
Financial Statements and Supplemental Schedules
Page 8 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
are recorded at fair value and changes in value are included in Change in fair value of annuity and life embedded derivatives on the Statements of Operations. Benefits consist of interest credited to contractholders' accounts and claims incurred in excess of the contractholders' account balance and are included in Net interest credited to account values and Policyholder benefits, respectively, on the Statements of Operations.
During 2014, the Company began offering a variable annuity product that combines a separate account option with a general account option that is similar to a
fixed-indexed
annuity. The Company has elected the fair value option to account for the entire insurance contract liability and the variable investment option assets backing the separate account. The insurance contracts' reserves are reported in Account balances and future policy benefit reserves and the variable investment option assets backing the separate account are reported in Equity securities, trading on the Balance Sheets. Electing the fair value option for an insurance contract liability requires that the Company account for that liability as a financial instrument and also requires that acquisition costs be recognized immediately in expense.
(d)
Life and Accident and Health Insurance
Premiums on traditional life products are recognized as earned when due. Benefits and expenses are associated with earned premiums so as to result in recognition of profits over the life of the contracts. This association is accomplished by establishing provisions for future policy benefits and deferral and amortization of related acquisition costs.
Accident and health premiums are recognized as earned on a pro rata basis over the risk coverage periods. Benefits and expenses are recognized as incurred.
(e)
Deferred Acquisition Costs
Acquisition costs consist of commissions and other incremental costs that are directly related to the successful acquisition of insurance contracts. Acquisition costs are deferred to the extent recoverable from future policy revenues and gross profits. However, acquisition costs associated with insurance contracts recorded under the fair value option are not deferred as guidance related to the fair value option requires that transaction costs are recorded immediately as an expense. For
interest-sensitive
products and variable annuity contracts issued in 2010 and after, acquisition costs are amortized in relation to the present value of expected future gross profits from investment and mortality, morbidity, and expense charges. For variable annuity contracts issued prior to 2010, acquisition costs are amortized in relation to the present value of estimated gross revenues from investment and mortality, morbidity, and expense charges. Acquisition costs for accident and health insurance policies are deferred and amortized over the lives of the policies in the same manner as premiums are earned. For traditional life and group life products, such costs are amortized over the projected earnings pattern of the related policies using the same actuarial assumptions used in computing future policy benefit reserves. Deferred acquisition costs (DAC) are reviewed for recoverability and loss recognition, at least annually, and adjusted when necessary. Recoverability and loss recognition are evaluated separately for fixed annuities, variable annuities, and life insurance products. The evaluation is a
two-step
process where current policy year issues are evaluated for recoverability, and
Financial Statements and Supplemental Schedules
Page 9 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
then
in-force
policies are evaluated for loss recognition. Before assessing recoverability and loss recognition, DAC is capped, if necessary, such that the balance cannot exceed the original capitalized costs plus interest.
Adjustments to DAC are made to reflect the corresponding impact on the present value of expected future gross profits and revenue from unrealized gains and losses on
available-for-sale
investments used to support policyholder liabilities (commonly known as shadow DAC). These adjustments are included in accumulated other comprehensive income and are explained further in the investments section of this note.
Changes in assumptions can have an impact on the amount of DAC reported for annuity and life insurance products and their related amortization patterns. In the event experience differs from assumptions or assumptions are revised, the Company is required to record an increase or decrease in DAC amortization expense (DAC unlocking). In general, increases in the estimated investment spreads and fees result in increased expected future profitability and may decrease the rate of DAC amortization, while increases in costs of product guarantees, and lapse/surrender and mortality assumptions reduce the expected future profitability of the underlying business and may increase the rate of DAC amortization.
The Company formally evaluates the appropriateness of the
best-estimate
assumptions on an annual basis. If the economic environment or policyholder behavior changes quickly and substantially, assumptions will be reviewed more frequently to affirm best estimates. Any resulting DAC unlocking is reflected prospectively as a Change in deferred acquisition costs, net on the Statements of Operations.
Adjustments may also be made to the estimated gross profits (EGP) or estimated gross revenues related to DAC that correspond with deferred annuities and universal life products for investment activity, such as
write-downs
on
other-than-temporarily
impaired
fixed-maturity
securities. Management action may include assumption changes in the DAC models, such as adjustments to expected future gross profits or revenues used, as well as
in-force
management action such as crediting rate changes or index rate cap adjustments. This approach applies to
fixed-maturity
securities purchased as
investment-grade
only and not
noninvestment-grade
items that were purchased with other yield considerations. See further discussion of DAC unlocking in note 8.
The Company assesses internal replacements on insurance contracts to determine whether such modifications significantly change the contract terms. An internal replacement represents a modification in product benefits, features, rights, or coverage that occurs by the exchange of an
in-force
insurance contract for a new insurance contract, or by amendment, endorsement, or rider to a contract, or by the election of a feature or coverage within a contract. If the modification substantially changes the contract, the remaining DAC on the original contract are immediately expensed and any new DAC on the replacement contract are deferred. If the contract modification does not substantially change the contract, DAC amortization on the original contract continues and any new acquisition costs associated with the modification are immediately expensed.
Financial Statements and Supplemental Schedules
Page 10 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
(f)
Deferred Sales Inducements
Sales inducements are product features that enhance the investment yield to the contractholder on the contract. The Company offers two types of sales inducements on certain universal life and annuity contracts. The first type, an immediate bonus, increases the account value at inception, and the second type, a persistency bonus, increases the account value at the end of a specified period.
Annuity sales inducements are deferred when credited to contractholders, and life sales inducements are deferred and recognized as part of the liability for policy benefits. Deferred sales inducements (DSI) is reported in Other assets on the Balance Sheets. They are amortized over the expected life of the contract in a manner similar to DAC and are reviewed annually for recoverability. DSI capitalization and amortization is recorded in Policyholder benefits on the Statements of Operations.
Adjustments to DSI are made to reflect the estimated corresponding impact on the present value of expected future gross profits and revenues from unrealized gains and losses on
available-for-sale
investments used to support policyholder liabilities (commonly known as shadow DSI). These adjustments are included in accumulated other comprehensive income and are explained further in the Investments section of this note.
Adjustments may also be made to DSI related to deferred annuities for investment activity, such as
write-downs
on
other-than-temporarily
impaired
fixed-maturity
securities. Management action may include assumption changes in the DSI models, such as adjustments to expected future gross profits used, as well as policyholder changes, such as credited rate changes. This approach applies to
fixed-maturity
securities purchased at
investment-grade
only and not
noninvestment-grade
items that were purchased with other yield considerations.
(g)
Account Balances and Future Policy Benefit Reserves
Policy and contract account balances for
interest-sensitive
products, which include universal life and fixed deferred annuities, are generally carried at accumulated contract values. For
fixed-indexed
annuity products, the policyholder obligation is divided into two parts: the first part representing the value of the underlying base contract (host contract); and the second part representing the fair value of the expected index benefit over the life of the contract. The host contract is valued using principles consistent with similar deferred annuity contracts without an index benefit. The index benefit is valued at fair value using current capital market assumptions, such as index and volatility, to estimate future index levels. The index benefit valuation is also dependent upon estimates of future policyholder behavior. The Company must include provisions for the Company's own credit risk and for risk that the Company's assumptions about policyholder activity could differ from actual experience. The fair value determination of the index benefit is sensitive to the economic market and interest rate environment, as it is discounted at current market interest rates. There is volatility in this liability due to these external market sensitivities.
Policy and contract account balances for variable annuity products are carried at accumulated contract values. Future policy benefit reserves for any death and income benefits that may exceed the accumulated contract values are established using a range of economic scenarios and are accrued using assumptions consistent with those used in estimating gross profits or gross revenues for
Financial Statements and Supplemental Schedules
Page 11 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
purposes of amortizing DAC. Future policy benefit reserves for accumulation and withdrawal benefits that may exceed account values are established using capital market assumptions, such as index and volatility, along with estimates of future policyholder behavior.
Future policy benefit reserves on traditional life products are computed by the net
level-premium
method based upon estimated future investment yield, mortality, and withdrawal assumptions, commensurate with the Company's experience, modified as necessary to reflect anticipated trends, including possible unfavorable deviations. Most life reserve interest assumptions range from 2.3% to 6.0%.
An additional reserve has been established to provide for future expected losses that are anticipated to occur after a period of profits. The reserve accrual will be over the profit period and is based on best estimate assumptions as of the current accrual period without provisions for adverse deviation.
(h)
Policy and Contract Claims
Policy and contract claims include the liability for claims reported but not yet paid, claims incurred but not yet reported (IBNR), and claim settlement expenses on the Company's accident and health business. Actuarial reserve development methods are generally used in the determination of IBNR liabilities. In cases of limited experience or lack of credible claims data, loss ratios are used to determine an appropriate IBNR liability. Claim and IBNR liabilities of a
short-term
nature are not discounted, but those claim liabilities resulting from disability income or LTC benefits include interest and mortality discounting.
(i)
Reinsurance
The Company assumes and cedes business with other insurers. Reinsurance premium and benefits paid or provided are accounted for in a manner consistent with the basis used in accounting for original policies issued and the terms of the reinsurance contracts and are included in Premiums and policy fees, ceded, and Benefit recoveries, respectively, on the Statements of Operations. Insurance liabilities are reported before the effects of reinsurance. Account balances and future policy benefit reserves, and policy and contract claims covered under reinsurance contracts are recorded as a Reinsurance recoverable on the Balance Sheets. Amounts paid or deemed to have been paid for claims covered by reinsurance contracts are recorded as Receivables on the Balance Sheets. Reinsurance recoverables are recognized in a manner consistent with the liabilities related to the underlying reinsured contracts. Amounts due to other insurers on assumed business are recorded as a reinsurance payable, and are included in Other liabilities on the Balance Sheets.
A gain recognized when the Company enters into a coinsurance agreement with a
third-party
reinsurer is deferred and recorded in Other liabilities on the Balance Sheets. Such gains are amortized into operations over the
revenue-producing
period or the claims
run-off
period, of the related reinsured policies. These amortized gains are recorded in Fee, commission and other revenue on the Statements of Operations.
Financial Statements and Supplemental Schedules
Page 12 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
(j)
Investments
Fixed-maturity
Securities and Equity Securities
The Company has portfolios of
fixed-maturity
securities classified as
"available-for-sale."
Accordingly, the securities are carried at fair value, and related unrealized gains and losses are credited or charged directly to accumulated other comprehensive income in stockholder's equity, net of tax and related shadow adjustments. The adjustments to DAC and DSI represent the change in amortization that would have been required as a charge or credit to operations had such unrealized amounts been realized.
The Company has a portfolio of equity securities classified as "trading". These securities are carried at fair value, and their respective related unrealized gains and losses are reflected in Change in fair value of assets and liabilities, within the Statements of Operations.
Dividends are accrued on the date they are declared, and interest is accrued as earned. Premiums or discounts on
fixed-maturity
securities are amortized using the constant yield method. Realized gains and losses are computed based on the average cost basis of all lots owned of each security.
Mortgage-backed
securities and structured securities are amortized using anticipated prepayments. Prepayment assumptions for
loan-backed
securities are obtained from various external sources or internal estimates. The Company believes these assumptions are consistent with those a market participant would use. The Company recognizes income using a constant effective yield method based on prepayment assumptions and the estimated economic life of the securities. When estimated prepayments differ significantly from anticipated prepayments, the effective yield is recalculated to reflect actual payments to date and anticipated future payments using the retrospective method. Any resulting adjustment is included in Interest and similar income, net on the Statements of Operations.
Short-term
securities are carried at amortized cost, which approximates fair value. Policy loan balances, which are supported by the underlying cash value of the policies, are carried at unpaid principal balances, which approximate fair value.
The fair value of
fixed-maturity
securities and equity securities is obtained from
third-party
pricing sources whenever possible. Management completes its own Independent Price Verification (IPV) process, which ensures security pricing is obtained from a
third-party
source other than the sources used by the investment managers. The IPV process supports the reasonableness of price overrides and challenges by the investment managers and reviews pricing for appropriateness. Results of the IPV are reviewed by the Company's Pricing Committee.
The Company reviews the
available-for-sale
investment portfolio to determine whether or not declines in fair value are other than temporary. The Company continues to evaluate factors in addition to average cost and fair value, including credit quality, the extent and duration of the decline, market analysis, current events, recent price declines, changes in risk-free interest rates, likelihood of recovery in a reasonable period of time, and management's judgment, to determine whether
fixed-income
securities are considered
other-than-temporarily
impaired. When the fair value of a
fixed-maturity
security is less than its amortized cost, the Company assesses whether or not:
Financial Statements and Supplemental Schedules
Page 13 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
(i) it has the intent to sell the security or (ii) it is more likely than not that the Company will be required to sell the security before its anticipated recovery. The Company evaluates these factors to determine whether the Company or any of its investment managers have an intent to sell a security or a group of securities. Additionally, the Company performs a cash flow projection for several years into the future to determine whether cash needs would require the sale of any securities in an unrealized loss position. If either of these conditions is met, the Company must recognize an other-than temporary impairment (OTTI) for the difference between the investment's amortized cost basis and its fair value through earnings. For securities that do not meet the above criteria, and the Company does not expect to recover a security's amortized cost basis, the security is considered
other-than-temporarily
impaired. For these securities, the Company separates the total impairment into the credit loss component and the amount of the loss related to other factors. The amount of the total impairment related to credit loss is considered an OTTI and is recognized in Realized investment gains, net on the Statements of Operations. The amount of the total impairment related to other factors is recognized in other comprehensive income, net of impacts to DAC, DSI, reserves, and deferred income taxes. For
available-for-sale
securities that have recognized an OTTI through earnings, if through subsequent evaluation there is a significant increase in the cash flow expected, the difference between the amortized cost basis and the discounted cash flows expected to be collected is accreted as interest income. Subsequent increases and decreases not related to additional credit losses in the fair value of
available-for-sale
securities are included as a separate component in the Statements of Comprehensive Income (Loss).
The Company evaluates whether a credit loss exists by considering primarily the following factors: (a) the length of time and extent to which the fair value has been less than the amortized cost of the security, (b) changes in the financial condition, credit rating, and
near-term
prospects of the issuer, (c) whether the issuer is current on contractually obligated interest and principal payments, (d) changes in the financial condition of the security's underlying collateral, if any, and (e) the payment structure of the security. The Company uses a
probability-weighted
cash flow model for corporate bonds to determine the credit loss amount. This measurement is a quantitative and qualitative process that incorporates information received from
third-party
sources along with certain internal assumptions and significant judgments regarding the future performance of the security. The Company's
probability-weighted
cash flow model involves assumptions including, but not limited to, various performance indicators, such as historical and projected default and recovery rates, credit ratings, and current delinquency rates. For structured securities, the Company selects a
probability-weighted
or best estimate cash flow model depending on the specifics of the individual security and the information available to measure the expected cash flows of the underlying collateral. In the event that sufficient information is not available to measure the expected cash flows of a structured security in a timely manner due to a lack of available information on the valuation date, the entire decline in fair value is considered to be related to credit loss.
The Company provides a supplemental disclosure on its Statements of Operations that presents the total OTTI losses recognized during the period less the portion of OTTI losses recognized in other comprehensive income to equal the
credit-related
portion of OTTI that was recognized in earnings during the period. The portion of OTTI losses recognized in other comprehensive income includes the portion of OTTI losses related to factors other than credit recognized during the period, offset by
Financial Statements and Supplemental Schedules
Page 14 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
reclassifications of OTTI losses previously determined to be related to factors other than credit that are determined to be
credit-related
in the current period. The amount presented in the supplemental disclosure on the Statements of Operations represents the portion of OTTI losses recognized in other comprehensive income and excludes subsequent increases and decreases in the fair value of these securities.
Impairments in the value of securities held by the Company, considered to be other than temporary, are recorded as a reduction of the cost of the security, and a corresponding realized loss is recognized in the Statements of Operations. The Company adjusts DAC, and DSI for impairments on securities, as discussed in their respective sections of this note.
Options and Futures Contracts
The Company provides additional benefits through certain life and annuity products, which are linked to the fluctuation of various United States and international stock and bond market indices. In addition, certain variable annuity contracts provide minimum guaranteed benefits. The Company has analyzed the characteristics of these benefits and has entered into over-the-counter (OTC) option contracts and exchange-traded futures contracts tied to an appropriate underlying index with similar characteristics with the objective to economically hedge these risks. The Company uses exchange-traded futures contracts with the objective to increase the effectiveness of the economic hedge. Management monitors in-force amounts and option and futures contract values to ensure satisfactory matching and to identify unsatisfactory mismatches. If persistency assumptions were to deviate significantly from anticipated rates, management would purchase or sell option and futures contracts as deemed appropriate or take other actions.
The OTC option contracts are reported at fair value as Derivatives on the Balance Sheets. The fair value of the OTCs is derived internally and deemed by management to be reasonable via performing an IPV process. The process of deriving internal derivative prices requires the Company to calibrate Monte Carlo scenarios to actual market information. The calibrated scenarios are applied to derivative cash flow models to calculate fair value prices for the derivatives. Futures contracts do not require an initial cash outlay, and the Company has agreed to daily net settlement based on movements of the representative index. Therefore, no asset or liability is recorded on the Balance Sheets. Gains and/or losses on futures contracts are included in Change in fair value of assets and liabilities on the Statements of Operations.
Interest Rate Swaps
The Company utilizes interest rate swaps (IRS) to hedge cash flows and market risks embedded in certain annuities. The IRS are reported at fair value in Derivatives on the Balance Sheets. The fair value of the IRS is derived using a
third-party
vendor software program and deemed by management to be reasonable. Changes in unrealized gains and losses on the swaps are recorded in Change in fair value of assets and liabilities on the Statements of Operations.
Financial Statements and Supplemental Schedules
Page 15 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
(k)
Receivables
Receivable balances (contractual amount less allowance for doubtful accounts) are based on pertinent information available to management as of
year-end,
including the financial condition and creditworthiness of the parties underlying the receivables. Receivable balances are monitored and allowances for doubtful accounts are maintained based on the nature of the receivable, and the Company's assessment of the ability to collect. The allowance is estimated by aging the balances due from individual parties and generally setting up an allowance for any balances that are more than 90 days old.
(l)
Income Taxes
The Company and the Company's parent, Allianz Life, file a consolidated federal income tax return with AZOA and many of its wholly owned subsidiaries. The consolidated tax allocation agreement stipulates that each company participating in the return will bear its share of the tax liability pursuant to certain tax allocation elections under the Internal Revenue Code and its related regulations, and that reimbursement will be in accordance with an intercompany tax reimbursement arrangement. The Company generally will be paid for the tax benefit on its losses and any other tax attributes to the extent it could have obtained a benefit against the Company's
post-1990
separate return tax liability.
The Company provides for federal income taxes based on amounts the Company believes it ultimately will owe. Inherent in the provision for federal income taxes are estimates regarding the deductibility of certain items and the realization of certain tax credits. In the event the ultimate deductibility of certain items or the realization of certain tax credits differs from estimates, the Company may be required to significantly change the provision for federal income taxes recorded on the Balance Sheets. Any such change could significantly affect the amounts reported on the Statements of Operations. Management uses best estimates to establish reserves based on current facts and circumstances regarding tax exposure items where the ultimate deductibility is open to interpretation. Quarterly, management evaluates the appropriateness of such reserves based on any developments specific to their fact patterns. Information considered includes results of completed tax examinations, Technical Advice Memorandums, and other rulings issued by the Internal Revenue Service or the tax courts.
The Company utilizes the asset and liability method of accounting for income tax. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. Valuation allowances are established when it is determined that it is more likely than not that the deferred tax asset will not be fully realized or that the related temporary differences, such as OTTI, will not reverse over time (see further discussion in note 13).
Financial Statements and Supplemental Schedules
Page 16 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
(m)
Separate Accounts and Annuity Product Guarantees
The Company issues variable annuity contracts through its separate accounts for which investment income and investment gains and losses accrue directly to, and investment risk is borne by, the contractholder. The Company also issues variable-indexed annuity contracts to its customers. These products have investment options similar to fixed-indexed annuities, but allow contractholders to invest in a variety of variable separate account investment options. The Company recognizes gains or losses on transfers from the general account to the separate accounts at fair value to the extent of contractholder interests in separate accounts, which are offset by changes in contractholder liabilities. The Company also issues variable annuity contracts through its separate accounts, where the Company provides certain contractual guarantees to the contractholder. These guarantees are in the form of a guaranteed minimum death benefit (GMDB), a guaranteed minimum income benefit (GMIB), a guaranteed minimum accumulation benefit (GMAB), and a guaranteed minimum withdrawal benefit (GMWB). These guarantees provide for benefits that are payable to the contractholder in the event of death, annuitization, or at specified dates during the accumulation period.
Separate account assets supporting variable annuity contracts represent funds for which investment income and investment gains and losses accrue directly to contractholders. Each fund has specific investment objectives, and the assets are carried at fair value. The assets of each account are legally segregated and are not subject to claims that arise out of any of the other business of the Company. Separate account assets and liabilities are reported as summary totals on the Balance Sheets. Amounts charged to the contractholders for mortality and contract maintenance are included in Policy fees on the Statements of Operations. These fees have been earned and assessed against contractholders on a daily or monthly basis throughout the contract period and are recognized as revenue when assessed and earned. Changes in GMDB and GMIB are calculated in accordance with the Financial Services – Insurance Topic of the Codification, and are included in Policyholder benefits on the Statements of Operations. GMAB and GMWB are considered to be embedded derivatives under the Derivatives and Hedging Topic of the Codification, and the changes in these embedded derivatives are included in Change in fair value of annuity and life embedded derivatives on the Statements of Operations.
The GMDB net amount at risk is defined as the guaranteed amount that would be paid upon death, less the current accumulated contractholder account value. The GMIB net amount at risk is defined as the current amount that would be needed to fund expected future guaranteed payments less the current contractholder account value, assuming that all benefit selections occur as of the valuation date. The GMAB net amount at risk is defined as the current amount that would be added to the contracts less the current contractholder account value. The GMWB net amount at risk is defined as the current accumulated benefit base amount less the current contractholder account value.
Financial Statements and Supplemental Schedules
Page 17 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
The GMDB provides a specified minimum return upon death. The survivor has the option to terminate the contract or continue it and have the death benefit paid into the contract. The Company's GMDB options have the following features:
•
Return of Premium
: Provides the greater of account value or total deposits made to the contract, less any partial withdrawals and assessments
•
Reset
: Provides the greater of a return of premium death benefit or the most recent
five-year
anniversary account value (prior to age 81), adjusted for withdrawals
•
Ratchet
: Provides the greater of a return of premium death benefit or the highest specified anniversary account value (prior to age 81), adjusted for withdrawals. There are three versions of ratchet, with the difference based on the definition of anniversary: quarter, evaluated quarterly; annual, evaluated annually; and
six-year,
evaluated every sixth year.
The GMIB is a living benefit that provides the contractholder with a guaranteed annuitization value. The GMIB features are:
•
Return of Premium
: Provides the greater of account value or total deposits made to the contract, less any partial withdrawals and assessments
•
Rollup
: Provides an annuitization value equal to the greater of account value and premiums, adjusted for withdrawals accumulated with a compound interest rate, which is subject to a cap for certain interest rates and products
The GMDB and GMIB liabilities are determined each period by estimating the expected future claims in excess of the associated account balances. The Company regularly evaluates estimates and adjusts the additional liability balance, with a related charge or credit to Policyholder benefits on the Statements of Operations, if actual experience or other evidence suggests that earlier assumptions should be revised.
The following assumptions were used to determine the GMDB and GMIB liabilities as of December 31, 2015 and 2014:
•
100 stochastically generated investment performance scenarios
•
Mean investment performance assumption was 6.5% for 2015 and 2014
•
Volatility assumption was 13.4% for 2015 and 2014
•
Mortality assumption of 87% of the Annuity 2000 Mortality Table for all variable annuity products in 2015 and 90% of the Annuity 2000 Mortality Table for all variable annuity products in 2014.
•
Lapse rates vary by contract type and duration. Spike rates could approach 40%, with an ultimate rate around 15%.
Financial Statements and Supplemental Schedules
Page 18 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
•
Discount rates vary by contract type and are equal to an assumed
long-term
investment return (6.5%), less the applicable mortality and expense rate.
•
GMIB contracts contain a dynamic lapse assumption. For example, if the contract is projected to have a large additional benefit, then it becomes less likely to lapse.
The GMAB is a living benefit that provides the contractholder with a guaranteed value that was established at least five years prior at each contract anniversary. This benefit is first available at the fifth contract anniversary, seventh contract anniversary, or tenth contract anniversary depending on the type of contract. Depending on the contractholder's selection at issue, this value either may be a return of premium or may reflect market gains, adjusted at least proportionately for withdrawals. The contractholder also has the option to reset this benefit.
The GMWB is a living benefit that provides the contractholder with a guaranteed amount of income in the form of partial withdrawals. The benefit is payable provided the covered person is between the specified ages in the contract. The benefit is a fixed rate (depending on the age of the covered person) multiplied by the benefit base in the first year the benefit is taken and contract value in following years. The benefit does not decrease if the contract value decreases due to market losses. The benefit can decrease if the contract value is reduced by withdrawals. The benefit base used to calculate the initial benefit is the maximum of the contract value, the quarterly anniversary value, or the guaranteed annual increase of purchase payments (capped at twice the total purchase payments). Additionally, there is a GMWB living benefit where the benefit is an initial payment percentage established at issue, based on issue age. For each year there is a
year-over-year
contract value increase, the payment percentage will increase by 1.0% (up to age 91). This payment percentage is applied against total purchase payments instead of a benefit base value.
The GMAB and GMWB liabilities are determined each period as the difference between expected future claims and the expected future profits. One result of this calculation is that these liabilities can be negative
(contra-liability).
If the sum of the total embedded derivative balance is negative, the Company will reclassify the balance as an asset on the Balance Sheets. This methodology will also be applied to the fixed-indexed benefit. The Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to Change in fair value of annuity and life embedded derivatives on the Statements of Operations, if experience or other evidence suggests that earlier assumptions should be revised. Products featuring these benefits were first issued in 2007. In the calendar year that a product launches, the reserves are set to zero, until the policy's first anniversary date.
The following assumptions were used to determine the GMAB and GMWB liabilities as of December 31, 2015 and 2014:
•
1000 stochastically generated investment performance scenarios.
Financial Statements and Supplemental Schedules
Page 19 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
•
Market volatility assumption varies by fund type and grades from a current volatility number to a
long-term
assumption over four years as shown below:
2015
Fund index type
Current
volatility
Long-term
forward
volatility
Large cap
17.6
%
18.1
%
Bond
3.4
3.9
International
17.9
23.1
Small cap
20.8
21.3
2014
Large cap
16.6
%
18.2
%
Bond
3.4
3.9
International
16.3
23.7
Small cap
21.3
21.2
•
Mortality assumption of and 87% of the Annuity 2000 Mortality Table for all variable annuity products in 2015 and 90% of the Annuity 2000 Mortality Table for all variable annuity products in 2014.
•
Lapse rates vary by contract type and duration. Spike rates could approach 40%, with an ultimate rate around 15%.
GMAB cash flows are discounted using a rate equal to the current month's London Interbank Offered Rate (LIBOR) plus a Company specific spread for the years ended December 31, 2015 and 2014. Beginning in December of 2014, the expected life-contingent GMWB payments are discounted using a blend of short and long term rates to the date the account value is expected to be exhausted. These obligations and all cash flows are then discounted to the current date using LIBOR plus a spread for the Company's own nonperformance risk. Previously, GMWB cash flows were discounted using a rate equal to the current month's LIBOR plus a Company specific spread
The Company has
in-force
fixed-indexed
annuities with a GMWB as an optional rider. The GMWB has a
roll-up
feature. The net amount at risk is partially limited because the contractholder account value has an annual credit that is floored at zero. Since the account value cannot decrease, in contrast to a variable annuity, the difference between the withdrawal value and the account value will not diverge to the degree that is possible in a variable annuity.
(n)
Permitted and Prescribed Statutory Accounting Practices
The Company is required to file annual statements with insurance regulatory authorities, which are prepared on an accounting basis prescribed or permitted by such authorities. Prescribed statutory
Financial Statements and Supplemental Schedules
Page 20 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
accounting practices include state laws, regulations, and general administrative rules, as well as a variety of publications of the National Association of Insurance Commissioners (NAIC). Permitted statutory accounting practices encompass all accounting practices that are not prescribed; such practices differ from state to state, may differ from company to company within a state, and may change in the future. The Company did not have any permitted or prescribed practices in effect in 2015.
(o)
Recently Issued Accounting Pronouncements – Adopted
In August 2014, the Financial Accounting Standards Board (FASB) issued amendments to guidance about troubled debt restructurings by creditors. The amendments require that a mortgage loan be derecognized and that a separate other receivable be recognized upon foreclosure if the following conditions are met: 1) the loan has a government guarantee that is not separable from the loan before foreclosure, 2) at the time of foreclosure, the creditor has the intent to convey the real estate property to the guarantor and make a claim on the guarantee, and the creditor has the ability to recover under that claim, and 3) at the time of foreclosure, any amount of the claim that is determined on the basis of the fair value of the real estate is fixed. The revisions are effective for fiscal years beginning after December 15, 2014. This guidance does not have an impact on the Financial Statements as the Company does not currently have holdings that would be impacted by this guidance.
(p)
Recently Issued Accounting Pronouncements – To Be Adopted
In November 2015, the FASB released ASU 2015-17, Income Taxes, to simplify the presentation of deferred income taxes by requiring that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. This amendment will better align the accounting of deferred income tax assets and liabilities with IFRS guidance and is effective for financial statements issued for annual periods beginning after December 15, 2016. This guidance does not have an impact on the Financial Statements as the Company does not currently have a classified balance sheet.
In May 2015, the FASB released ASU 2015-09, Disclosures about Short-Duration Contracts, to add disclosure requirements for the liability for unpaid claims and claim adjustment expenses on short-duration insurance contracts. The guidance is effective for fiscal years beginning after December 15, 2015. The Company is assessing the impact of this guidance on the Financial Statements.
In May 2015, the FASB issued an amendment to the existing Topic 820, Fair Value Measurement (Update), permits a practical expedient to measure the fair value of certain investments using the net asset value per share of the investment. The investments valued using the practical expedient are categorized within the hierarchy on the basis of whether the investment is redeemable with the investee at net asset value on the measurement date, never redeemable with the investee at net asset value, or redeemable with the investee at net asset value at a future date. The amendments in this Update remove the requirement to categorize investments for which fair values are measured using the net asset value per share practical expedient. The amendments are effective for fiscal years beginning after December 15, 2015 and interim periods within those years. The Company is assessing the impacts of the amendments on the Statements.
Financial Statements and Supplemental Schedules
Page 21 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
In February 2015, the FASB issued ASC 2015-02 to reduce the number of consolidation models and place more emphasis on risk of loss when determining a controlling financial interest. Specifically, the amendments:
1. Modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities
2. Eliminate the presumption that a general partner should consolidate a limited partnership
3. Affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships
4. Provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. The guidance is effective for public entities for fiscal years beginning after December 15, 2015.
The Company is in the process of assessing the impact of these amendments.
In January 2015, the FASB issued ASU 2015-01, Extraordinary and Unusual Items, to simplify financial statements by eliminating the concept of extraordinary items. The amendments are effective for interim and fiscal years beginning after December 15, 2015. The Company does not currently report any extraordinary items; therefore, the amendment will not impact the Statements.
In August 2014, the FASB issued an amendment to provide guidance about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. The amendments are intended to reduce diversity in the timing and content of footnote disclosures. Additional disclosures are required. The revisions are effective for annual periods ending after December 15, 2016, and for annual and interim periods, thereafter. The guidance is not expected to have an impact on the Financial Statements.
In August 2014, the FASB revised guidance related to consolidations of variable interest entities (VIEs) that are a collateralized financing entity, such as a collateralized debt obligation (CDO) or a collateralized loan obligation (CLO) entity, when the reporting entity determines that it is the primary beneficiary. This revision will apply to reporting entities that are required to consolidate a collateralized financing entity under the variable interest entity guidance when 1) the reporting entity measures the financial assets and liabilities of that collateralized financing entity at fair value based on other Topics and 2) the changes in the fair value are reflected in earnings. The revisions are effective for fiscal years beginning after December 15, 2015. Early adoption is permitted. The guidance is not expected to have an impact on the Financial Statements.
In May 2014, the FASB issued a new standard for recognizing revenue from contracts when goods and services are transferred to a customer in exchange for payment. The model requires 1)
Financial Statements and Supplemental Schedules
Page 22 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
identifying contracts with a customer, 2) identifying separate performance obligations, 3) determining the transaction price, 4) allocating the transaction price to the separate performance obligations and 5) recognizing revenue when (or as) the entity satisfies a performance obligation. The revenue recognition standard does not apply to financial instruments or to insurance contracts. However, the standard will require significantly more disclosures about items that are recorded under the new revenue recognition model. An entity may apply the new guidance using one of the following two methods: (1) retrospectively to each prior period presented, or (2) retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application. In July 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which defers the effective date of ASU 2014-09 to the annual reporting period beginning January 1, 2018. Early adoption for periods beginning on or after December 15, 2016, is permitted. The Company is currently evaluating the impact of this guidance on the Financial Statements.
(q)
Accounting Changes and Correction of Error
A portfolio of equity securities related to investments backing variable annuity reserves is classified as trading on the Balance Sheets. For the year ended December 31, 2014, the presentation of purchases totaling ($4,780) and sales totaling $2,927 of these equity securities has been corrected from Net cash (used in) provided by investing activities to Net cash provided by operating activities on the Statements of Cash Flows as a result of a correction of an error.
On April 1, 2014, the Company applied a prospective change to its method of calculating DAC amortization for variable annuity policies issued prior to 2010. This was a change in estimate that is inseparable from the effect of a related change in accounting principle. For these annuities, acquisition costs are now amortized in relation to the present value of estimated gross revenues, whereas previously the amortization was based on estimated future gross profits. The implementation of the new DAC amortization will better reflect the revenue pattern of the pre-2010 variable block of business, which is currently in run-off. The implementation of this change resulted in a decrease in income from operations before income taxes of $8,820 for the year ended December 31, 2014.
On December 1, 2014, the Company applied a prospective change to its method of calculating DAC amortization for variable annuity policies issued after 2010. The change in estimate will minimize accounting mismatches on interest and claim projections within the EGP calculation. The implementation of this change resulted in a decrease in income from operations before income taxes of approximately $669 for the year ended December 31, 2014.
(r)
Reclassification
Certain prior year balances have been reclassified to conform to the current year presentation. The reclassifications did not change total assets, stockholders equity or net income as previously reported.
Financial Statements and Supplemental Schedules
Page 23 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
(3)
Risk Disclosures
The following is a description of the significant risks facing the Company and how the Company attempts to mitigate those risks:
(a)
Credit Risk
Credit risk is the risk that issuers of fixed rate and variable rate income securities, mortgages on commercial real estate, or other parties with whom the Company has transactions, such as reinsurance and derivative counterparties, default on their contractual obligations, resulting in unexpected credit losses.
The Company mitigates this risk by adhering to investment policies and limits that provide portfolio diversification on an asset class, asset quality, creditor, and geographical basis, and by complying with investment limitations governed by state insurance laws and regulations, as applicable. The Company considers all relevant objective information available in estimating the cash flows related to structured securities. The Company actively monitors and manages exposures, and determines whether any securities are impaired. The aggregate credit risk taken in the investment portfolio is influenced by management's risk/return preferences, the economic and credit environment, and the ability to manage this risk through liability portfolio management.
For derivative counterparties, the Company mitigates credit risk by tracking and limiting exposure to each counterparty through limits that are reported regularly and, once breached, restricts further trades; establishing relationships with counterparties rated BBB+ and higher; and monitoring the credit default swap (CDS) of each counterparty as an early warning signal to cease trading when CDS spreads imply severe impairment in credit quality.
The Company executes Credit Support Annexes (CSA) with all active and new counterparties which further limits credit risk by requiring counterparties to post collateral to a segregated account to cover any counterparty exposure.
(b)
Credit Concentration Risk
Credit concentration risk is the risk of increased exposure to significant asset defaults (of a single security issuer or class of security issuers); economic conditions (if business is concentrated in a certain industry sector or geographic area); or adverse regulatory or court decisions (if concentrated in a single jurisdiction) affecting credit. Concentration risk exposure is monitored regularly.
The Company's Finance Committee, responsible for asset/liability management (ALM) issues, recommends an investment policy to the Company's Board of Directors (BOD). The investment policy and accompanying investment mandates specify asset allocation among major asset classes and the degree of asset manager flexibility for each asset class. The investment policy complies, at a minimum, with state statutes. Compliance with the policy is monitored by the Finance Committee who is responsible for implementing internal controls and procedures. Deviations from the policy are monitored and addressed. The Finance Committee and subsequently the BOD review the investment policy at least annually.
Financial Statements and Supplemental Schedules
Page 24 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
To further mitigate this risk, internal concentration limits based on credit rating and sector are established and are monitored regularly by Allianz Life on a consolidated basis. Any ultimate obligor group exceeding these limits is placed on a restricted list to prevent further purchases, and the excess exposure may be actively sold down to comply with concentration limit guidelines. Further, the Company performs a quarterly concentration risk calculation to ensure compliance with the State of New York basket clause.
(c)
Liquidity Risk
Liquidity risk is the risk that unexpected timing or amounts of cash needed will require liquidation of assets in a market that will result in a realized loss or an inability to sell certain classes of assets such that an insurer will be unable to meet its obligations and contractual guarantees. Liquidity risk also includes the risk that in the event of a company liquidity crisis refinancing is only possible at higher interest rates.
Liquidity risk can be affected by the maturity of liabilities, the presence of withdrawal penalties, the breadth of funding sources, and terms of funding sources. It can also be affected by counterparty collateral triggers as well as whether anticipated liquidity sources such as credit agreements are cancelable.
The Company manages liquidity within four specific domains: (1) monitoring product development, product management, business operations, and the investment portfolio; (2) setting ALM strategies; (3) managing the cash requirements stemming from the Company's derivative dynamic hedging activities; and (4) establishing a liquidity facility with the Allianz Life to provide additional liquidity. The Company has established liquidity risk limits, which are approved by the Company's Risk Committee, and the Company monitors its liquidity risk regularly.
(d)
Interest Rate Risk
Interest rate risk is the risk that movements in interest rates or interest rate volatility will cause a decrease in the value of an insurer's assets relative to the value of its liabilities and/or an unfavorable change in prepayment activity resulting in compressed interest margins.
The Company has an ALM strategy to align cash flows and duration of the investment portfolio with policyholder liability cash flows and duration. The Company further limits interest rate risk on variable annuity guarantees through interest rate hedges.
(e)
Equity Market Risk
Equity market risk is the risk that movements in the equity prices or equity volatility will cause a decrease in the value of an insurer's assets relative to the value of its liabilities.
The policy value of the fixed-indexed annuity products is linked to equity market indices. The Company economically hedges this exposure with derivatives.
Financial Statements and Supplemental Schedules
Page 25 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
Variable annuity products may provide a minimum guaranteed level of benefits irrespective of market movements. The Company has adopted an economic hedging program to manage the equity risk of these products.
Allianz Life monitors the economic and accounting impacts of equity stress scenarios on assets and liabilities on a consolidated basis regularly and on a Company specific basis periodically.
Basis risk is the risk that the variable annuity hedge asset value changes unexpectedly relative to the value of the underlying separate account funds of the variable annuity contracts. Basis risk may arise from the Company's inability to directly hedge the underlying investment options of the variable annuity contracts. The Company mitigates this risk through regular review and synchronization of fund mappings, product design features, and hedge design.
(f)
Operational Risk
Operational risk is the risk of loss resulting from inadequate or failed internal processes and systems, fraud or errors, external events, or legal/regulatory risk. Operational risk is comprised of the following seven risk categories: (1) internal fraud; (2) external fraud; (3) employment practices and workplace safety; (4) clients / third party products and business practices; (5) damage to physical assets; (6) business disruption and system failure; and (7) execution, delivery and process management. Operational risk is comprehensively managed through a combination of core qualitative and quantitative activities. The Operational Risk Management framework includes the following key activities: (1) loss data capture identifies historical operational events that meet a designated threshold to ensure transparency and remediation of each event; (2) risk and control self-assessments are performed to proactively manage significant operational risk scenarios throughout the organization; and (3) scenario analyses are conducted to quantify operational risk capital.
(g)
Legal/Regulatory Risk
Legal/regulatory risk is the risk that changes in the legal or regulatory environment in which the Company operates may result in reduced demand for its products or additional expenses not assumed in product pricing. Additionally, the Company is exposed to risk related to how the Company conducts itself in the market and the suitability of its product sales to contractholders.
The Company mitigates this risk by monitoring all
market-related
exposure, participating in national and international discussions relating to legal, regulatory, and accounting changes that may impact the business. A formal process exists to assess the Company's risk exposure to changes in regulation. In addition, the Company has implemented suitability standards to mitigate suitability risk.
In April 2015, the U.S. Department of Labor (DOL) proposed new regulations that, if enacted, will significantly expand the definition of "investment advice" and increase the circumstances in which companies and broker-dealers, insurance agencies and other financial institutions that sell the Company's products could be deemed a fiduciary when providing investment advice with respect to plans under the Employee Retirement Income Security Act of 1974 (ERISA) or individual retirement accounts (IRAs). The DOL also proposed amendments to longstanding exemptions from the prohibited transaction provisions under ERISA that would increase fiduciary requirements in
Financial Statements and Supplemental Schedules
Page 26 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
connection with transactions involving ERISA plans, plan participants and IRAs, and that would apply more onerous disclosure and contract requirements to such transactions. If these proposals are adopted, the Company may find it necessary to change sales representative and/or broker compensation, limit the assistance or advice provided to annuity contractholders, or otherwise change the manner in which the Company designs and supports sales of annuities.
(h)
Ratings Risk
Ratings risk is the risk that rating agencies change their outlook or rating of the Company. The rating agencies generally utilize proprietary capital adequacy models in the process of establishing ratings for the Company. The Company is at risk of changes in these models and the impact that changes in the underlying business that the Company is engaged in can have on such models. To mitigate this risk, the Company maintains regular communications with the rating agencies and evaluates the impact of significant transactions on such capital adequacy models and considers the same in the design of transactions to minimize the adverse impact of this risk. Stress tests are performed regularly to assess how rating agency capital adequacy models would be impacted by severe economic events.
(i)
Mortality Risk
Mortality risk is the risk that life expectancy assumptions used by the Company to price its products are too high (i.e., insureds live shorter than expected lives). Conversely, longevity risk is the risk that life expectancy assumptions used by the Company to price its products are too low (i.e., insureds live longer than expected lives). The Company mitigates mortality risk primarily through reinsurance, whereby the Company cedes a significant portion of its new and existing mortality to third parties. The Company manages mortality risk through the underwriting process. The Company also manages both mortality and longevity risks by reviewing its mortality assumptions at least annually, and reviewing mortality experience periodically.
(j)
Lapse Risk
Lapse risk is the risk that actual lapse experience evolves differently than the assumptions used for pricing and valuation exercises leading to a significant loss in Company value and/or income.
The Company mitigates this risk by performing sensitivity analysis at the time of pricing to affect policy design, regular ALM analysis and regular monitoring of policyholder experience. The Company quantifies lapse risk periodically.
Financial Statements and Supplemental Schedules
Page 27 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
(k)
Cyber Security Risk
Cyber Security Risk is the risk of denial of service and/or losses due to external and internal attacks leading to numerous impacts on systems, data, and key stakeholders (e.g. policyholders, producers, and employees.) The Company has implemented preventative measures for its internet breakout including Advanced Malware Detection, spyware, anti-virus software, phishing filters, email and laptop encryption, web content filtering, and regular scanning of all servers and network devices to identify vulnerabilities. Controls are implemented to prevent and review unauthorized access.
(l)
Reinsurance Risk
Reinsurance risk is the risk that reinsurance companies default on their obligation where the Company has ceded a portion of its insurance risk. The Company uses reinsurance to limit its risk exposure to certain business lines and to enable better capital management.
Reinsurance contracts do not relieve the Company from its obligations to policyholders. Failure of reinsurers to honor their obligations could result in losses to the Company.
The Company mitigates this risk by requiring certain counterparties to meet thresholds related to the counterparty's credit rating, exposure, or other factors. If the thresholds are not met, the counterparties are required to establish a trust or letter of credit backed by assets meeting certain quality criteria. All arrangements are regularly monitored to determine whether trusts or letters of credit are sufficient to support the ceded liabilities and that their terms are being met. Also, the Company regularly reviews the financial standings and ratings of its reinsurance counterparties and monitors concentrations of credit risk to minimize its exposure to significant losses from reinsurer insolvencies.
Financial Statements and Supplemental Schedules
Page 28 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
(4)
Investments
(a)
Fixed-maturity
Securities
At December 31, the amortized cost, gross unrealized gains, gross unrealized losses, and fair values of
available-for-sale
securities are as shown in the following tables:
Amortized
cost
Gross
unrealized
gains
Gross
unrealized
losses
Fair value
OTTI in
accumulated
other
comprehensive
income
2015:
Fixed-maturity securities:
U.S. government
$
72,035
1,188
—
73,223
—
States and political subdivisions
11,112
214
282
11,044
—
Foreign government
505
5
—
510
—
Public utilities
36,467
2,989
789
38,667
—
Corporate securities
406,982
18,230
9,697
415,515
—
Mortgage-backed securities
133,853
2,909
1,159
135,603
—
Total
$
660,954
25,535
11,927
674,562
—
Amortized
cost
Gross
unrealized
gains
Gross
unrealized
losses
Fair value
OTTI in
accumulated
other
comprehensive
income
2014:
Fixed-maturity securities:
U.S. government
$
93,692
1,446
61
95,077
—
States and political subdivisions
11,679
305
42
11,942
—
Foreign government
2,517
30
—
2,547
—
Public utilities
36,746
4,625
43
41,328
—
Corporate securities
328,406
30,664
1,740
357,330
—
Mortgage-backed securities
140,682
6,416
181
146,917
—
Total
$
613,722
43,486
2,067
655,141
—
Financial Statements and Supplemental Schedules
Page 29 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
The net unrealized gains on
available-for-sale
securities consist of the following at December 31:
2015
2014
2013
Available-for-sale:
Fixed-maturity securities
$
13,608
41,419
30,576
Adjustments for:
Shadow adjustments
(5,916)
(15,794
)
(14,657
)
Deferred taxes
(2,692
)
(8,969
)
(5,572
)
Net unrealized gains
$
5,000
16,656
10,347
The amortized cost and fair value of
available-for-sale
fixed-maturity
securities at December 31, 2015, by contractual maturity, are shown below:
Amortized
cost
Fair value
Available-for-sale fixed-maturity securities:
Due in one year or less
$
26,179
26,635
Due after one year through five years
186,049
194,706
Due after five years through ten years
198,798
201,432
Due after ten years
116,075
116,186
Mortgage-backed securities and collateralized mortgage obligations
133,853
135,603
Total available-for-sale fixed-maturity securities
$
660,954
674,562
Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. The amortized cost of
fixed-maturity
securities with rights to call or prepay without penalty is $160,743 as of December 31, 2015.
Proceeds from sales of available-for-sale investments for the years ended December 31 are presented in the following table:
2015
2014
2013
Available-for-sale:
Fixed-maturity securities:
Proceeds from sales
$
54,740
22,808
77,960
Financial Statements and Supplemental Schedules
Page 30 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
As of December 31, 2015 and 2014, investments with a fair value of $1,713 and $1,731, respectively, were pledged to the New York Superintendent of Insurance, as required by statutory regulation.
The Company's
available-for-sale
securities portfolio includes
mortgage-backed
securities. Due to the high quality of these investments and the lack of subprime loans within the securities, the Company does not have a material exposure to subprime mortgages.
(b)
Unrealized Investment Losses
Unrealized losses on
available-for-sale
securities and the related fair value as of December 31 are shown below:
12 months or less
Greater than 12 months
Total
Fair value
Unrealized
losses
Fair value
Unrealized
losses
Fair value
Unrealized
losses
2015:
Fixed-maturity securities:
States and political subdivisions
$
4,206
282
—
—
4,206
282
Public utilities
9,944
621
372
168
10,316
789
Corporate securities
108,083
5,291
12,335
4,406
120,418
9,697
Mortgage-backed securities
52,731
1,036
2,985
123
55,716
1,159
Total temporarily impaired available-for-sale securities
$
174,964
7,230
15,692
4,697
190,656
11,927
Financial Statements and Supplemental Schedules
Page 31 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
12 months or less
Greater than 12 months
Total
Fair value
Unrealized
losses
Fair value
Unrealized
losses
Fair value
Unrealized
losses
2014:
Fixed-maturity securities:
U.S. government
$
6,476
20
2,075
41
8,551
61
States and political subdivisions
—
—
7,461
42
7,461
42
Public utilities
—
—
500
43
500
43
Corporate securities
14,095
850
22,358
890
36,453
1,740
Mortgage-backed securities
4,495
19
6,970
162
11,465
181
Total temporarily impaired available-for-sale securities
$
25,066
889
39,364
1,178
64,430
2,067
As of December 31, 2015 and 2014, there were 104 and 32
available-for-sale
fixed-maturity
securities that were in an unrealized loss position, respectively.
As of December 31, 2015 and 2014, of the total amount of unrealized losses, $11,586 or 97.1% and $1,983 or 95.9%, respectively, are related to unrealized losses on
investment-grade
securities. Investment grade is defined as a security having a credit rating of Aaa, Aa, A, or Baa from Moody's or a rating of AAA, AA, A, or BBB from S&P, or a NAIC rating of 1 or 2 if a Moody's or S&P rating is not available. Unrealized losses on securities are principally related to changes in interest rates or changes in sector spreads from the date of purchase. As contractual payments continue to be met, management continues to expect all contractual cash flows to be received. As mentioned in note 2, the Company reviews these securities regularly to determine whether or not declines in fair value are
other-than-temporary.
Further, as the Company neither has an intention to sell nor does it expect to be required to sell the securities outlined above, the Company did not consider these investments to be
other-than-temporarily
impaired.
Financial Statements and Supplemental Schedules
Page 32 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
(c)
OTTI Losses
The following table presents a rollforward of the Company's cumulative credit impairments on
fixed-maturity
securities held at December 31:
2015
2014
Balance as of January 1
$
—
241
Additions for credit impairments recognized on:
Securities not previously impaired
—
—
Securities that the Company intends to sell or more likely than not be required to sell before recovery (interest)
184
—
Reductions for credit impairments previously on:
Securities that matured or were sold during the period
(184)
(241
)
Balance as of December 31
$
—
—
(d)
Realized Investment Gains
Gross and net realized investment gains for the respective years ended December 31 are summarized as follows:
2015
2014
2013
Fixed-maturity securities:
Gross gains on sales
$
895
277
2,324
Gross losses on sales
(133
)
(206
)
(1,286
)
OTTI
(184
)
—
(241
)
Other
5
6
32
Net realized investment gains
$
583
77
829
Financial Statements and Supplemental Schedules
Page 33 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
(e)
Interest and Similar Income
Major categories of interest and similar income, net for the respective years ended December 31 are shown below:
2015
2014
2013
Interest and similar income:
Fixed-maturity securities
$
27,699
29,131
29,904
Short-term securities
24
7
13
Policy loans
18
17
21
Other
24
24
4
Total
27,765
29,179
29,942
Less:
Investment expenses
378
320
307
Total interest and similar income, net
$
27,387
28,859
29,635
(f)
Variable Interest Entities
In the normal course of business, the Company enters into relationships with various entities that are deemed to be VIE. A VIE is an entity that either (1) has equity investors that lack certain essential characteristics of a controlling financial interest (including the ability to control activities of the entity, the obligation to absorb the entity's expected losses, and the right to receive the entity's expected residual returns) or (2) lacks sufficient equity to finance its own activities without financial support provided by other entities, which in turn would be expected to absorb at least some of the expected losses of the VIE.
The Company invests in structured securities that include VIEs. These structured securities typically invest in
fixed-income
investments managed by third parties and include
mortgage-backed
securities and collateralized mortgage obligations.
The Company has carefully analyzed the VIEs to determine whether the Company is the primary beneficiary, taking into consideration whether the Company or the Company together with its affiliates has the power to direct the activities of the VIE that most affect its economic performance and whether the Company has the right to benefits from the VIE. Based on that analysis, the Company has concluded that it is not the primary beneficiary and, as such, did not consolidate any VIEs in the Financial Statements. The structured securities are classified as
Fixed-maturity
securities,
available-for-sale,
at fair value on the Balance Sheets.
The Company's maximum exposure to loss from these entities is limited to their carrying value. The Company has not provided, and has no obligation to provide, material, financial, or other support
Financial Statements and Supplemental Schedules
Page 34 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
that was not previously contractually required to these entities. The Company had no liabilities recorded as of December 31, 2015 or 2014, related to these entities.
(5)
Derivative and Hedging Instruments
The Company uses derivatives as a risk management strategy to economically hedge its exposure to various market risks associated with both its products and operations. Derivative assets and liabilities are recorded at fair value in the Financial Statements using valuation techniques further discussed in note 6. None of the derivative investments held by the Company qualify as hedging instruments for accounting purposes.
(a)
Interest Rate Swaps
The Company utilizes OTC and exchange traded IRS to economically hedge certain variable and fixed-index annuity guarantee benefits. The Company can receive the fixed or variable rate. The IRS are traded in varying maturities. The Company only enters into OTC IRS contracts with counterparties rated BBB+ or better.
IRS traded after May 2013, are centrally cleared through an exchange. For IRS traded prior to June 2013, the IRS exposure was netted with other OTC derivatives upon settlement and were subject to the rules of the International Swaps and Derivatives Association, Inc. agreements. The fair values of the collateral posted for OTC and exchange traded derivatives are discussed in the derivative collateral management section below.
(b)
Option Contracts
The Company utilizes OTC options with the objective to economically hedge certain variable annuity guaranteed benefits. These options are not used for speculative or income generating purposes. These options are cleared through the Options Clearing Corporation (OCC), which operates under the jurisdiction of both the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC). The credit rating on the OCC is currently AA+ from S&P. The fair values of the collateral posted for OTC and exchange traded derivatives are discussed in the derivative collateral management section below.
(c)
Futures
The Company utilizes exchange traded futures to economically hedge
fixed-indexed
annuity and variable annuity guarantees. The futures contracts do not require an initial investment except for the initial margin described below and the Company is required to settle cash daily based on movements of the representative index. Therefore, no asset or liability is recorded as of December 31, 2015 and 2014. The fair value of the collateral posted for exchange traded derivatives is discussed in the derivative collateral management section below.
(d)
Derivative Collateral Management
The Company manages separate collateral for exchange traded and OTC derivatives. The total collateral posted for exchange traded derivatives at December 31, 2015 and 2014, had a fair value of
Financial Statements and Supplemental Schedules
Page 35 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
$49,007 and $49,560, respectively, and is included in
Fixed-maturity
securities on the Balance Sheets. The Company retains ownership of the exchange traded collateral, but the collateral resides in an account designated by the exchange. The collateral is subject to specific exchange rules regarding rehypothecation. The total collateral posted for OTC derivatives at December 31, 2015 and 2014, had a fair value of $1,866 and $2,515, respectively, and is included in
Fixed-maturity
securities on the Balance Sheets. The Company posts collateral to OTC counterparties based upon exposure amounts. The Company retains ownership of the OTC collateral.
(e)
Embedded Derivatives
The Company issues certain variable annuity products with guaranteed minimum benefit riders, including GMWB and GMAB, which are measured at fair value separately from the host variable annuity contract, with changes in fair value reported in Change in fair value of annuity and life embedded derivatives on the Statements of Operations. These embedded derivatives are classified within Account balances and future policy benefit reserves on the Balance Sheets.
Certain
fixed-indexed
annuity products and universal life policies include a market value liability option (MVLO), which is essentially an embedded derivative with
equity-indexed
features. This embedded derivative is reported within Account balances and future policy benefit reserves on the Balance Sheets with changes in fair value reported in Change in fair value of annuity and life embedded derivatives on the Statements of Operations.
The following table presents the balance sheet location and the fair value of the derivatives, including embedded derivatives, as of December 31:
Fair value
Derivative instruments, net
2015
2014
OTC
$
1,441
407
GMWB
(147,290
)
(92,877
)
GMAB
(27,579
)
(16,870
)
MVLO
(18,525
)
(24,478
)
Interest rate swaps
5,667
(785
)
Total derivative instruments, net
$
(186,286
)
(134,603
)
Location in balance sheets
Derivatives
$
15,064
4,516
Account balances and future policy benefit reserves
(193,394
)
(134,225
)
Derivative liabilities
(7,956
)
(4,894
)
Total derivative instruments, net
$
(186,286)
(134,603
)
Financial Statements and Supplemental Schedules
Page 36 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
The following table presents the gains or losses recognized in income on the various derivative instruments:
Derivative
instruments,
net
Location in
statements of operations
Amount of gains (losses) on
derivatives recognized for the
years ended December 31
2015
2014
2013
GMWB
Change in fair value of annuity and life embedded derivatives
$
(54,413
)
(101,961
)
61,222
GMAB
Change in fair value of annuity and life embedded derivatives
(11,755
)
(14,372
)
11,899
MVLO
Change in fair value of annuity and life embedded derivatives
5,292
3,969
(1,575
)
Total change in fair value of annuity embedded derivatives
(60,876
)
(112,364
)
71,546
MVLO
Policy fees
534
681
1,061
MVLO
Policyholder benefits
127
98
248
Interest rate swaps
Change in fair value of assets and liabilities
23,296
93,758
(58,289
)
Futures
Change in fair value of assets and liabilities
(11,861
)
(26,878
)
(20,684
)
OTC
Change in fair value of assets and liabilities
692
232
—
Total derivative loss
$
(48,088
)
(44,473
)
(6,118
)
(f)
Offsetting Assets and Liabilities
Certain financial instruments and derivative instruments are eligible for offset in the Balance Sheets under GAAP. The Company's derivative instruments are subject to master netting arrangements and collateral arrangements. A master netting arrangement with a counterparty creates a right of offset for amounts due to and from that same counterparty that is enforceable in the event of a default or bankruptcy. The Company's policy is to recognize amounts subject to master netting arrangements on a gross basis on the Balance Sheets.
Financial Statements and Supplemental Schedules
Page 37 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
The following tables present additional information about derivative assets and liabilities subject to an enforceable master netting arrangement as of the dates indicated:
December 31, 2015
Gross amounts not
offset in the balance
sheet
Gross
amounts
recognized
Gross
amounts
offset in the
balance sheet
Net amounts
presented
in the
balance sheet
Financial
instruments
(1)
Collateral
pledged/
received
Net
amounts
Derivative assets
$
15,064
—
15,064
(7,907
)
(4,121
)
3,036
Derivative liabilities
(7,910)
—
(7,910
)
7,907
—
(3
)
Net derivatives
$
7,154
—
7,154
—
(4,121
)
3,033
December 31, 2014
Gross amounts not
offset in the balance
sheet
Gross
amounts
recognized
Gross
amounts
offset in the
balance sheet
Net amounts
presented
in the
balance sheet
Financial
instruments
(1)
Collateral
pledged/
received
Net
amounts
Derivative assets
$
4,516
—
4,516
(3,682
)
(7
)
827
Derivative liabilities
(4,894
)
—
(4,894
)
3,682
1,195
(17
)
Net derivatives
$
(378)
—
(378
)
—
1,188
810
(1)
Represents the amount of assets or liabilities that could be offset by liabilities or assets with the same counterparty under master netting or similar arrangements that management elects not to offset on the Balance Sheets.
(6)
Fair Value Measurements
The Fair Value Measurements and Disclosures Topic of the Codification establishes a fair value hierarchy that prioritizes the inputs used in the valuation techniques to measure fair value.
Level 1 –
Unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access at the measurement date
Level 2 –
Valuations derived from techniques that utilize observable inputs, other than quoted prices included in Level 1, which are observable for the asset or liability either directly or indirectly, such as:
(a)
quoted prices for similar assets or liabilities in active markets
(b)
quoted prices for identical or similar assets or liabilities in markets that are not active
Financial Statements and Supplemental Schedules
Page 38 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
(c)
inputs other than quoted prices that are observable
(d)
inputs that are derived principally from or corroborated by observable market data by correlation or other means
Level 3 –
Valuations derived from techniques in which the significant inputs are unobservable. Level 3 fair values reflect the Company's own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk).
The Company has analyzed the valuation techniques and related inputs, evaluated its assets and liabilities reported at fair value, and determined an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs. Based on the results of this evaluation and investment class analysis, each valuation was classified into Level 1, 2, or 3.
The following tables present the assets and liabilities measured at fair value on a recurring basis and their corresponding level in the fair value hierarchy at December 31:
Total
Level 1
Level 2
Level 3
2015:
Assets accounted for at fair value:
Fixed-maturity securities:
U.S. government
$
73,223
73,223
—
—
States and political subdivisions
11,044
—
11,044
—
Foreign government
510
—
510
—
Public utilities
38,667
—
38,667
—
Corporate securities
415,515
—
414,468
1,047
Mortgage-backed securities
135,603
—
135,603
—
Derivative asset
15,064
—
15,064
—
Equity securities, trading
4,368
4,368
—
—
Separate account assets
2,205,548
2,205,548
—
—
Total assets accounted for at fair value
$
2,899,542
2,283,139
615,356
1,047
Liabilities accounted for at fair value:
Derivative liability
$
7,956
—
7,956
—
Separate account liabilities
2,205,548
2,205,548
—
—
Reserves at fair value
265,884
—
—
265,884
Total liabilities accounted for at fair value
$
2,479,388
2,205,548
7,956
265,884
Financial Statements and Supplemental Schedules
Page 39 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
Total
Level 1
Level 2
Level 3
2014:
Assets accounted for at fair value:
Fixed-maturity securities:
U.S. government
$
95,077
95,077
—
—
States and political subdivisions
11,942
—
11,942
—
Foreign government
2,547
—
2,547
—
Public utilities
41,328
—
41,328
—
Corporate securities
357,330
—
356,258
1,072
Mortgage-backed securities
146,917
—
146,917
—
Derivative asset
4,516
—
4,516
—
Equity securities, trading
1,858
1,858
—
—
Separate account assets
2,214,422
2,214,422
—
—
Total assets accounted for at fair value
$
2,875,937
2,311,357
563,508
1,072
Liabilities accounted for at fair value:
Derivative liability
$
4,894
—
4,894
—
Separate account liabilities
2,214,422
2,214,422
—
—
Reserves at fair value
150,251
—
—
150,251
Total liabilities accounted for at fair value
$
2,369,567
2,214,422
4,894
150,251
The following is a discussion of the methodologies used to determine fair values for the assets and liabilities listed in the above table. These fair values represent an exit price (i.e., what a buyer in the marketplace would pay for an asset in a current sale or charge to transfer a liability).
(a)
Valuation of
Fixed-maturity
Securities and Equity Securities
The fair value of
fixed-maturity
securities and equity securities is based on quoted market prices in active markets when available. Based on the market data, the securities are categorized into asset class, and based on the asset class of the security, appropriate pricing applications, models and related methodology, and standard inputs are utilized to determine what a buyer in the marketplace would pay for the security in a current sale. When quoted prices are not readily available or in an inactive market, standard inputs used in the valuation models, listed in approximate order of priority, include, but are not limited to, benchmark yields, reported trades, municipal securities rulemaking board (MSRB) reported trades, nationally recognized municipal securities information repository (NRMSIR) material event notices, broker/dealer quotes, issuer spreads,
two-sided
markets,
Financial Statements and Supplemental Schedules
Page 40 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
benchmark securities, bids, offers, reference data, and industry and economic events. In certain cases, including private placement securities as well as certain
difficult-to-price
securities, internal pricing models may be used that are based on market proxies.
Generally, U.S. Treasury securities and
exchange-traded
stocks are included in Level 1. Most bonds for which prices are provided by
third-party
pricing sources are included in Level 2 because the inputs used are market observable. Bonds for which prices were obtained from broker quotes and private placement securities that are internally priced are included in Level 3.
The Company is responsible for establishing and maintaining an adequate internal control structure to prevent or detect material misstatements related to fair value measurements and disclosures. This responsibility is especially important when using third parties to provide valuation services.
The Company's control framework around
third-party
valuations begins with obtaining an understanding of the pricing vendor's methodologies. A Pricing Committee is in place that meets quarterly to establish and review a pricing policy, which includes approving any changes to pricing sources, assessing reasonableness of pricing services and addressing any ad hoc valuation issues that arise. The pricing methodologies used by the service providers and internal control reports provided by the service providers are reviewed by management.
In addition to monitoring the
third-party
vendor's policies, the Company is also responsible for monitoring the valuation results. Controls are in place to monitor the reasonableness of the valuations received. These controls include
price-analytic
reports that monitor significant fluctuations in price as well as an IPV process by which the Company obtains prices from vendors other than the primary source and compares them for reasonableness. Results of the independent price verification are also reviewed by the Pricing Committee.
There are limited instances in which the primary
third-party
vendor is not used to obtain prices for
fixed-maturity
securities. These instances include private placement securities and certain other immaterial portfolios priced by a secondary external vendor.
At December 31, 2015 and 2014, private placement securities of $1,047 and $1,072, respectively, were included in Level 3. Internal pricing models based on market proxy securities, and U.S. Treasury rates, which are monitored monthly by the investment manager for reasonableness, are used to value these holdings. This includes ensuring there are no significant credit events impacting the proxy security and that the spreads used are still reasonable under the circumstances.
(b)
Valuation of Derivative Assets and Liabilities
Active markets for OTC option assets and liabilities do not exist. The fair value of OTC option assets and liabilities is derived internally, by calculating their expected discounted cash flows, using a set of calibrated,
risk-neutral
stochastic scenarios, including a market data monitor, a market data model generator, a stochastic scenario calibrator, and the actual asset pricing calculator. The valuation results are reviewed by Management via the Pricing Committee. Options that are internally priced and IRS are included in Level 2, because they use market observable inputs.
Financial Statements and Supplemental Schedules
Page 41 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
The fair value of the IRS is derived using a
third-party
vendor software program and deemed by management to be reasonable. IRS are included in Level 2 because the valuation uses market observable inputs.
(c)
Valuation of Separate Account Assets and Liabilities
Separate account assets are carried at fair value, which is based on the fair value of the underlying assets. Funds in the separate accounts are primarily invested in variable investment options with the following investment types: bond; domestic equity; international equity; or specialty. The separate account funds also hold certain money market funds. Variable investments are included in Level 1. The remaining investments are categorized similar to the investments held by the Company in the general account (e.g., if the separate account invested in corporate bonds or other
fixed-maturity
securities, that portion could be considered a Level 2 or Level 3). In accordance with the Financial Services – Insurance Topic of the Codification, the fair value of separate account liabilities is set to equal the fair value of separate account assets.
(d)
Valuation of Reserves at Fair Value
Reserves at fair value principally include the
equity-indexed
features contained in
fixed-indexed
annuity products certain variable annuity riders and variable-indexed annuity products. Fair values of the embedded derivative liabilities are calculated based on internally developed models, because active, observable markets do not exist for these liabilities. Fair value is derived from techniques in which one or more significant inputs are unobservable and are included in Level 3. These fair values represent the Company's best estimate of an amount that could be realized in a current market exchange absent actual market exchanges.
The fair value of the embedded derivative contained in the
fixed-indexed
annuity products is the sum of the current year's option value projected stochastically, the projection of future index growth at the option budget, and the historical
interest/equity-indexed
credits. The valuation of the embedded derivative includes an adjustment for the Company's own credit standing and a risk margin for noncapital market inputs. The Company's own credit adjustment is determined by taking into consideration publicly available information on industry default risk with considerations for the Company's own credit profile. Risk margin is incorporated into the valuation model to capture the noncapital market risks of the instrument, which represent the additional compensation a market participant would require to assume the risks related to the uncertainties of certain actuarial assumptions including surrenders, annuitization, and future equity index caps or participation rates. Market conditions including, but not limited to, changes in interest rates, equity indices, market volatility, changes in the Company's own credit standing, and variations in actuarial assumptions regarding policyholder behavior and risk margin related to noncapital market inputs may result in significant fluctuations in the fair value of these embedded derivatives that could materially affect net loss (income).
The Company issues certain variable annuity products with guaranteed minimum benefit riders, including GMWB and GMAB riders. The fair value for these riders is estimated using the present value of future benefits minus the present value of future fees using actuarial and capital market
Financial Statements and Supplemental Schedules
Page 42 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
assumptions related to the projected cash flows over the expected lives of the contracts. A risk neutral valuation methodology is used under which the cash flows from the riders are projected under multiple capital market scenarios using observable overnight index swap rates (OIS) plus funding valuation adjustments, as approximated by LIBOR. These cash flows are then discounted using the current month's LIBOR plus a
company-specific
spread. Beginning in December of 2014, the expected life-contingent GMWB payments are discounted using a blend of short and long term rates to the date the account value is expected to be exhausted. These obligations are then discounted to the current date using LIBOR plus a spread for the Company's own nonperformance risk. In 2012 and prior years, these cash flows were discounted using the U.S. Treasury rate plus a
company-specific
spread. The valuation of these riders includes an adjustment for the Company's own credit standing and a risk margin for noncapital market inputs. The Company's own credit adjustment is determined taking into consideration publicly available information relating to the Company's claims paying ability. Risk margin is established to capture the noncapital market risks of the instrument, which represent the additional compensation a market participant would require to assume the risks related to the uncertainties of certain actuarial assumptions including surrenders, annuitization, and premium persistency. The establishment of the risk margin requires the use of significant management judgment. These riders may be more costly than expected in volatile or declining equity markets. Market conditions including, but not limited to, changes in interest rates, equity indices, market volatility, changes in the Company's own credit standing and variations in actuarial assumptions regarding policyholder behavior, and risk margins related to noncapital market inputs may result in significant fluctuations in the fair value of the riders that could materially affect net loss (income).
The Company elected the fair value option for certain insurance contracts related to the variable-indexed annuity product. The fair value is calculated internally using the present value of future expected cash flows. Future expected cash flows are generated using contractual features, actuarial assumptions, and market emergence over a complete set of market consistent scenarios. Cash flows are then averaged over the scenario set and discounted back to the valuation date using appropriate discount factors adjusted for nonperformance risk on the non-collateralized portions of the contract.
Financial Statements and Supplemental Schedules
Page 43 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
(e)
Level 3 Rollforward
The following table provides a reconciliation of the beginning and ending balances for the Company's Level 3 assets and liabilities measured at fair value on a recurring basis:
Realized
gains
(losses)
included in
net (loss)
income
related to
financial
Other
Purchases
Sales
Transfer into
instruments
Beginning
comprehensive
and
and
and/or (out of)
Ending
still held at
balance
Net Income
(loss) income
issuances
settlements
Level 3, net
balance
December 31
2015:
Fixed-maturity securities:
Corporate securities
$
1,072
—
(25
)
—
—
—
1,047
—
Total fixed-maturity
securities
$
1,072
—
(25
)
—
—
—
1,047
—
Reserves at fair value
$
(150,251
)
15,670
—
(138,736
)
7,433
—
(265,884
)
(123,066
)
2014:
Fixed-maturity securities:
Corporate securities
$
1,065
—
7
—
—
—
1,072
—
Total fixed-maturity
securities
$
1,065
—
7
—
—
—
1,072
—
Reserves at fair value
$
(22,640
)
(44,557
)
—
(85,482
)
2,428
—
(150,251
)
(130,039
)
(f)
Transfers
The Company reviews its fair value hierarchy classifications annually. This review could reveal that previously observable inputs for specific assets or liabilities are no longer available or reliable. For example, the market for a Level 1 asset becomes inactive. In this case, the Company may need to adopt a valuation technique that relies on observable or unobservable components causing the asset to be transferred to Level 2 or Level 3. Alternatively, if the market for a Level 3 asset or liability becomes active, the Company will report a transfer out of Level 3. Transfers in and/or out of Level 1, 2, and 3 are reported as of the end of the period in which the change occurs.
There were no transfers of securities between Level 1 and Level 2 for the years ended December 31, 2015 and 2014. Additionally, there were no net transfers in or out of Level 3 for the years ended December 31, 2015 and 2014.
Financial Statements and Supplemental Schedules
Page 44 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
(g)
Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs
The following table provides a summary of the significant unobservable inputs used in the fair value measurements developed by the Company or reasonably available to the Company of Level 3 assets and liabilities on a recurring basis at December 31:
Valuation
Unobservable
Range (weighted
Fair value
technique
input
average)
2015:
Fixed-maturity securities:
Available-for-sale:
Corporate securities
$
1,047
Matrix pricing
Option adjusted spread*
208 (208)
Reserves at fair value: ***
MVLO
18,525
Income approach
Annuitizations
0–25%
Surrenders
0–25%
Mortality **
0–100%
Withdrawal Benefit Election
0–50%
GMWB and GMAB
174,869
Income approach
Surrenders
0.5–35%
Mortality **
0–100%
*
No range is applicable due to only one security within classification or the same assumption used on all securities.
**
Mortality assumptions are derived by applying management determined factors to the Annuity 2000 Mortality Table .
***
Certain reseves at fair value related to a new product are not yet modeled and excluded from this disclosure.
(h)
Sensitivity of Fair Value Measurements to Changes in Unobservable Inputs
Fixed-maturity
securities matrix pricing:
The primary unobservable input used in the matrix pricing model is a benchmark security option adjusted spread (OAS), which is applied to an OAS ratio. A significant yield increase of the benchmark security OAS in isolation could result in a decreased fair value, while a significant yield decrease in OAS could result in an increased fair value.
Financial Statements and Supplemental Schedules
Page 45 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
Annuity and life embedded derivative liabilities:
A significant increase (decrease) in the utilization of annuitization benefits could result in a higher (lower) fair value. A significant decrease (increase) in mortality rates, surrender rates, or utilization of lifetime income benefits could result in a higher (lower) fair value.
(i)
Nonrecurring Fair Value Measurements
Occasionally, certain assets and liabilities are measured at fair value on a nonrecurring basis (e.g., impaired assets). At December 31, 2015 and 2014, there were no assets or liabilities reported at fair value on a nonrecurring basis.
(j)
Fair Value of Financial Assets and Liabilities
The following table presents the carrying amounts and fair values of financial assets and liabilities at December 31:
2015
Carrying
Fair value
amount
Level 1
Level 2
Level 3
Total
Financial assets:
Policy loans
$
275
—
275
—
275
Financial liabilities:
Investment contracts
$
729,819
—
—
730,455
730,455
2014
Carrying
Fair value
amount
Level 1
Level 2
Level 3
Total
Financial assets:
Policy loans
$
253
—
253
—
253
Financial liabilities:
Investment contracts
$
664,924
—
—
665,404
665,404
Policy loans, which are supported by the underlying cash value of the policies, are carried at unpaid principal balances, which approximate fair value. Therefore, fair value is classified as Level 2.
Investment contracts include certain reserves related to deferred annuity products. These reserves are included in Account balances and future policy benefit reserves on the Balance Sheets. The fair values of investment contracts, which include deferred annuities and other annuities without significant mortality risk, are determined by testing amounts payable on demand against discounted cash flows using market interest rates commensurate with the risks involved, including consideration of the Company's own credit standing and a risk margin for noncapital market inputs. Therefore, fair value is classified as Level 3.
Changes in market conditions subsequent to
year-end
may cause fair values calculated subsequent to
year-end
to differ from the amounts presented herein.
Financial Statements and Supplemental Schedules
Page 46 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
(7)
Financing Receivables
The Company's financing receivables comprise nontrade receivables. Nontrade receivables are amounts for policy or contract premiums due from the agents and
broker-dealers,
or amounts due from reinsurers. The nontrade receivables are evaluated on a collective basis for impairment. For additional information, see receivables section of note 2.
Rollforward of Allowance for Credit Losses
The allowance for credit losses and recorded investment in financing receivables as of December 31 are shown below:
2015
2014
Nontrade Receivables
Allowance for credit losses:
Beginning balance
$
20
18
Provision
13
2
Ending balance
33
20
Ending balance collectively evaluated for impairment
$
33
20
Financing receivables:
Ending balance
$
91
80
Ending balance collectively evaluated for impairment
$
91
80
Financial Statements and Supplemental Schedules
Page 47 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
Credit Quality Indicators
The Company analyzes certain financing receivables for credit risk by using specific credit quality indicators. The Company's nontrade receivables are analyzed for credit risk based upon the customer classification of agent or reinsurer. The nontrade receivable and allowance for credit losses by customer classification as of December 31 are shown below:
2015
2014
Agent
Reinsurer
Total
Agent
Reinsurer
Total
Nontrade receivables
$
41
50
91
23
57
80
Allowance for credit losses
(33
)
—
(33
)
(20
)
—
(20
)
Net nontrade receivable
$
8
50
58
3
57
60
Past-due
Aging Analysis
Aging analysis of
past-due
financing receivables as of December 31 is shown below:
31–60
past due
61–90
past due
Greater than
90 past due
Total
past due
Current
Total
2015:
Nontrade receivables
$
29
—
33
62
29
91
31–60
past due
61–90
past due
Greater than
90 past due
Total
past due
Current
Total
2014:
Nontrade receivables
$
24
3
21
48
32
80
As of December 31, 2015, the Company's financing receivables do not include any balances, which are on a nonaccrual status, classified as a troubled debt restructuring, or impaired without a corresponding allowance for credit loss.
Financial Statements and Supplemental Schedules
Page 48 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
(8)
Deferred Acquisition Costs
DAC at December 31, and the changes in the balance for the years then ended, are as follows:
2015
2014
2013
Balance, beginning of year
$
118,319
104,002
92,245
Capitalization
13,531
16,906
17,321
Interest
6,197
5,541
5,011
Amortization
(11,563
)
(7,383
)
(16,169
)
Change in shadow DAC
7,890
(747
)
5,594
Balance, end of year
$
134,374
118,319
104,002
The change in shadow DAC balances are impacted by movements in unrealized gains and losses as a result of market conditions.
The Company reviews its
best-estimate
assumptions each year and records "unlocking" as appropriate. These reviews are based on recent changes in the organization and businesses of the Company and actual and expected performance of
in-force
policies. The reviews include all assumptions, including mortality, lapses, expenses, and separate account returns. The revised
best-estimate
assumptions are applied to the current
in-force
policies to project future gross profits.The pretax impact on the Company's assets and liabilities as a result of the unlocking during 2015, 2014, and 2013 is as follows:
2015
2014
2013
Assets:
DAC
$
2,641
856
(1,920
)
DSI
337
356
(547
)
Total increase (decrease) in assets
2,978
1,212
(2,467
)
Liabilities:
Account balances and future policy benefit reserves
5,867
(1,259
)
(4,669
)
Unearned premiums
40
(2
)
—
Total increase (decrease) in liabilities
5,907
(1,261
)
(4,669
)
Net (decrease) increase
(2,929
)
2,473
2,202
Deferred income tax (benefit) expense
(1,025
)
866
771
Net (decrease) increase
$
(1,904
)
1,607
1,431
Financial Statements and Supplemental Schedules
Page 49 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
(9)
Deferred Sales Inducements
DSI at December 31, and the changes in the balance for years then ended, are as follows:
2015
2014
2013
Balance, beginning of year
$
19,510
18,345
18,745
Capitalization
1,492
2,370
1,842
Interest
1,020
971
987
Amortization
(2,924
)
(1,762
)
(5,171
)
Change in shadow DSI
2,050
(414
)
1,942
Balance, end of year
$
21,148
19,510
18,345
The change in shadow DSI balances are impacted by movements in unrealized gains and losses as a result of market conditions.
Financial Statements and Supplemental Schedules
Page 50 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
(10)
Separate Accounts and Annuity Product Guarantees
Guaranteed minimums for the respective years ended December 31 are summarized as follows (note that the amounts listed are not mutually exclusive, as many products contain multiple guarantees):
2015
2014
Account
Net amount
Weighted
Account
Net amount
Weighted
value
at risk
age (years)
value
at risk
age (years)
GMDB:
Return of premium
$
1,609,269
17,498
62.6
1,514,852
2,221
62.1
Ratchet and return of premium
625,964
38,380
65.0
660,984
8,232
64.6
Reset
88,037
1,422
75.7
102,983
677
74.8
Total
$
2,323,270
57,300
2,278,819
11,130
GMIB:
Return of premium
$
8,756
143
66.7
10,697
132
65.8
Ratchet and rollup
140,274
32,123
64.2
170,337
23,212
63.6
Total
$
149,030
32,266
181,034
23,344
GMAB:
Five years
$
19,420
549
68.9
26,335
84
67.4
Target date retirement – 7 year
48,571
1,636
63.3
57,042
368
62.7
Target date retirement – 10 year
20,690
1,307
63.2
22,803
69
62.3
Target date with management levers
377,123
21,100
63.0
373,740
3,152
62.0
Total
$
465,804
24,592
479,920
3,673
GMWB:
No living benefit
$
62,096
—
67.1
56,606
—
67.0
Life benefit with optional reset
78,108
8,170
70.7
91,834
4,087
69.9
Life benefit with 8% rollup
30,070
6,520
69.1
34,001
3,691
68.3
Life benefit with management levers
1,310,233
232,424
60.7
1,241,305
97,957
60.2
Total
$
1,480,507
247,114
1,423,746
105,735
The net amount at risk has increased in 2015 due to the market performance. The guaranteed rollup on the benefit base has exceeded the market impacts on account values.
Financial Statements and Supplemental Schedules
Page 51 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
At December 31, variable annuity account balances were invested in separate account funds with the following investment objectives. Balances are presented at fair value:
Investment type
2015
2014
Mutual funds:
Bond
$
291,103
291,694
Domestic equity
1,164,383
1,172,573
International equity
71,227
83,531
Specialty
646,452
623,849
Total mutual funds
2,173,165
2,171,647
Money market funds
31,191
41,586
Other
1,192
1,189
Total
$
2,205,548
2,214,422
The following table summarizes the liabilities for variable contract guarantees that are reflected in the general account and shown in Account balances and future policy benefit reserves on the Balance Sheets:
GMDB
GMIB
GMAB
GMWB
Totals
Balance as of December 31, 2013
$
1,114
2,967
2,498
(9,084
)
(2,505
)
Incurred guaranteed benefits
669
191
14,372
101,961
117,193
Paid guaranteed benefits
(125
)
—
—
—
(125
)
Balance as of December 31, 2014
1,658
3,158
16,870
92,877
114,563
Incurred guaranteed benefits
1,111
907
11,755
54,413
68,186
Paid guaranteed benefits
(530
)
(42
)
(1,046
)
—
(1,618
)
Balance as of December 31, 2015
$
2,239
4,023
27,579
147,290
181,131
(11)
Accident and Health Claim Reserves
Accident and health claim reserves are based on estimates that are subject to uncertainty. Uncertainty regarding reserves of a given accident year is gradually reduced as new information emerges each succeeding year, thereby allowing more reliable reevaluations of such reserves. While management believes that reserves as of December 31, 2015, are appropriate, uncertainties in the reserving process could cause such reserves to develop favorably or unfavorably in the near term as new or additional information emerges. Any adjustments to reserves are reflected in the operating results of the periods in which they are made. Movements in reserves could significantly impact the Company's future reported earnings.
Financial Statements and Supplemental Schedules
Page 52 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
Activity in the accident and health claim reserves is summarized as follows:
2015
2014
2013
Balance at January 1, net of reinsurance recoverable of $360, $264, and $200 respectively
$
2,136
1,032
2,229
Incurred related to:
Current year
2,173
1,251
868
Prior years
(154
)
283
564
Total incurred
2,019
1,534
1,432
Paid related to:
Current year
42
49
77
Prior years
609
381
2,552
Total paid
651
430
2,629
Balance at December 31, net of reinsurance recoverable of $497, $360, and $264, respectively
$
3,504
2,136
1,032
Prior years incurred reflect favorable / (unfavorable) claim development with the group marketing and individual long term care lines of business.
(12)
Reinsurance
The Company primarily enters into reinsurance agreements to manage risk resulting from its life, annuity and accident and health businesses, as well as businesses the Company has chosen to exit.
In the normal course of business, the Company seeks to limit its exposure to loss on any single insured and to recover a portion of benefits paid by ceding risks under excess coverage and coinsurance contracts. The Company generally retained between $50 and $1,500 coverage per individual life depending on the type of policy for the years ended December 31, 2015 and 2014.
On LTC business, the Company retains 90% of Limited Benefit Plans, and 90% on claims up through year eight and 20% on claims years nine and beyond for Lifetime Benefit Plans.
The Company monitors the financial exposure to the reinsurers, as well as evaluates the financial strength of the reinsurers on an ongoing basis.
Financial Statements and Supplemental Schedules
Page 53 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
The following table shows the net exposure to reinsurance receivables and recoverable at December 31:
2015
2014
Reinsurance receivables
$
50
60
Reinsurance recoverable
3,596
3,091
Reinsurance payables
(34
)
(60
)
Net reinsurance exposure
$
3,612
3,091
(13)
Income Taxes
(a)
Income Tax (Benefit) Expense
Total income tax (benefit) expense for the years ended December 31 is as follows:
2015
2014
2013
Income tax (benefit) expense attributable to operations:
Current tax expense (benefit)
$
9,567
4,774
2,495
Deferred tax (benefit) expense
(14,008
)
(7,907
)
1,930
Total income tax (benefit) expense attributable to operations
(4,441
)
(3,133
)
4,425
Income tax effect on equity:
Attributable to unrealized losses gains for the year
(6,277
)
3,397
(12,760
)
Total income tax effect on equity
$
(10,718
)
264
(8,335
)
Financial Statements and Supplemental Schedules
Page 54 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
(b)
Components of Income Tax (Benefit) Expense
Income tax (benefit) expense computed at the statutory rate of 35% varies from income tax (benefit) expense reported on the Statements of Operations for the respective years ended December 31 as follows:
2015
2014
2013
Income tax (benefit) expense computed at the statutory rate
$
(1,996
)
(1,504
)
5,916
Dividends-received deductions and tax-exempt interest
(2,455
)
(1,447
)
(1,603
)
Other
10
(182
)
112
Income tax (benefit) expense as reported
$
(4,441)
(3,133)
4,425
(c)
Components of Deferred Tax Assets and Liabilities on the Balance Sheet
Tax effects of temporary differences giving rise to the significant components of the net deferred tax asset (liability). Net deferred tax asset on the Balance Sheets at December 31 are as follows:
2015
2014
Deferred tax assets:
Future benefit reserves
$
113,361
70,323
Expense accruals
241
132
Total deferred tax assets
113,602
70,455
Deferred tax liabilities:
Deferred acquisition costs
(42,684
)
(36,324
)
Due and deferred premium
(14
)
(6
)
Net unrealized gains on investments
(4,763
)
(14,497
)
Investment income
(32,481
)
(6,253
)
Total deferred tax liabilities
(79,942
)
(57,080
)
Net deferred tax asset
$
33,660
13,375
Although realization is not assured, the Company believes it is not necessary to establish a valuation allowance for ordinary deferred tax assets, as it is more likely than not the deferred tax assets will be realized principally through future reversals of existing ordinary taxable temporary differences and future ordinary taxable income. For deferred tax assets that are capital in nature, considering all
Financial Statements and Supplemental Schedules
Page 55 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
objective evidence and the available tax planning strategy, it is more likely than not the deferred tax assets that are capital in nature will be realized and no valuation allowance is required. The amount of the ordinary and capital deferred tax assets considered realizable could be reduced in the near term if estimates of future reversals of existing taxable temporary differences and future ordinary and capital taxable income are reduced.
Income taxes paid by the Company were $4,405, $2,271, and $17,449, in 2015, 2014, and 2013, respectively. The Company had a tax payable to AZOA of $9,874 and $4,713 at December 31, 2015 and 2014, respectively reported in Other liabilities on the Balance Sheets.
The Company is included in the consolidated group for which AZOA files a federal income tax return on behalf of all group members. As a member of the AZOA consolidated group, the Company is no longer subject to U.S. federal and non-U.S. income tax examinations for years prior to 2012, though examinations of combined returns filed by AZOA that include the Company by certain U.S. state and local tax authorities may still be conducted for 2008 and subsequent years. The last Internal Revenue Service examination of AZOA involved amended returns filed by AZOA for the 2008 and 2009 tax years. These amended returns were accepted by the Internal Revenue Service as filed. The Internal Revenue Service has not given notice that any subsequent tax periods are or will be under examination in the near future.
In accordance with the Income Taxes Topic of the Codification, the Company recognizes liabilities for certain unrecognized tax benefits. The Company had no unrecognized tax benefits as of December 31, 2015 and 2014. The Company does not expect any significant changes related to unrecognized tax benefits during the next 12 months.
The Company recognizes interest and penalties accrued related to unrecognized tax benefits in federal income tax expense. During the years ended December 31, 2015, 2014, and 2013, the Company did not recognize any expense related to interest and penalties. The Company accrued $0 for the payment of interest and penalties at December 31, 2015 and 2014.
(14)
Related-party
Transactions
(a)
Real Estate
The Company subleases office space from Allianz Global Corporate and Specialty (AGCS) (an affiliate). In connection with this agreement, the Company incurred rent expense of $27, $32, and $29 in 2015, 2014, and 2013, respectively, which is included in General and administrative expenses on the Statements of Operations.
(b)
Service Fees
The Company has incurred fees for certain administrative services provided by Allianz Life of $9,437, $8,368, and $6,454 in 2015, 2014, and 2013, respectively. The Company's liability for these fees was $839 and $948 as of December 31, 2015 and 2014, respectively, and is included in Other liabilities on the Balance Sheets.
Financial Statements and Supplemental Schedules
Page 56 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
The Company has incurred fees for certain investment advisory services provided by affiliated companies of $272, $212, and $199 in 2015, 2014, and 2013, respectively. The Company's liability for these charges was $22 and $22 as of December 31, 2015 and 2014, respectively, and is included in Other liabilities on the Balance Sheets.
The Company has agreements with its affiliates Pacific Investment Management Company (PIMCO), Oppenheimer Capital LLC (OpCap), and with certain other related parties whereby (1) specific investment options managed by PIMCO and OpCap are made available through the Company's separate accounts to holders of the Company's variable annuity products, (2) the Company receives compensation for providing administrative and recordkeeping services relating to the investment options managed by PIMCO and OpCap. Income recognized by the Company from these affiliates for distribution and
in-force
related costs as a result of providing investment options to the contractholders was $1,115, $1,182, and $1,109 during 2015, 2014, and 2013, respectively, which is included in Fee, commission and other revenue on the Statements of Operations. At December 31, 2015 and 2014, $181 and $97, respectively, was included for these fees in Receivables on the Balance Sheets.
The Company has incurred commission expense related to the distribution of variable annuity products from Allianz Life Financial Services, LLC, (ALFS) an affiliated company, in the amount of $23,410, $24,771, and $22,493 for the years ended December 31, 2015, 2014, and 2013, respectively. At December 31, 2015 and 2014, $1,771 and $1,613, respectively, was included for the expense in Other liabilities on the Balance Sheets.
The Company has an agreement with ALFS, whereby 12b-1 fees are assigned to the Company and Allianz Life. The Company has also agreed with Allianz Life to share in reimbursing ALFS for the excess of ALFS expenses over revenues, exclusive of trading gains (losses). In the event that revenues exceed expenses, ALFS records a reimbursement to the Company and Allianz Life. The Company recorded revenue from this agreement of $4,332, $3,860, and $3,109 for the years ended December 31, 2015, 2014, and 2013, respectively. The Company recorded expenses related to this agreement of $4,198, $1,454, and $1,656, for the years ended December 31, 2015, 2014, and 2013, respectively.
(c)
Line of Credit Agreement
In 2013, the Company entered into a line of credit agreement with its parent, Allianz Life, to provide liquidity, as needed. As of December 31, 2015 and December 31, 2014, there are no amounts outstanding under the line of credit agreement and no amounts have been borrowed during the years ended December 31, 2015 and 2014.
(15)
Employee Benefit Plans
The Company participates in the Allianz Asset Accumulation Plan (AAAP), a defined contribution plan sponsored by Allianz of America Corporation (AZOAC). Eligible employees are immediately enrolled in the AAAP on their first day of employment. The AAAP will accept participants' pretax, Roth 401(k) and/or
after-tax
contributions up to 80.0% of the participants' eligible compensation, although contributions remain subject to annual limitations set by the Internal Revenue Service. In 2015, 2014, and
Financial Statements and Supplemental Schedules
Page 57 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
2013, the Company matched up to a maximum of 7.5% of the employees' eligible compensation. Participants are 100% vested in the Company's matching contribution after three years of service.
The AAAP administration expenses and the trust fund, including trustee fees, investment manager fees, and audit fees, are payable from the trust fund but may, at the Company's discretion, be paid by the Company. Any legal fees are not paid from the trust fund, but are instead paid by the Company. It is the Company's policy to fund the AAAP costs as incurred. The Company has expensed $205, $214, and $144 in 2015, 2014, and 2013, respectively, toward the AAAP matching contributions and administration expenses.
In addition to the AAAP, the Company offers certain benefits to eligible employees, including a comprehensive medical, dental, and vision plan and a flexible spending plan.
(16)
Statutory Financial Data and Dividend Restrictions
Statutory accounting practices prescribed or permitted by the Company's state of domicile are directed toward insurer solvency and protection of policyholders. Accordingly, certain items recorded in financial statements prepared under GAAP are excluded or vary in calculation in determining statutory policyholders' surplus and gain from operations. Currently, these items include, among others, DAC, furniture and fixtures, deferred taxes, accident and health premiums receivable, which are more than 90 days past due, reinsurance, certain investments, and undeclared dividends to policyholders. Additionally, account balances and future policy benefit reserves and policy and contract claims calculated for statutory reporting do not include provisions for withdrawals.
The Company's statutory capital and surplus reported in the statutory annual statements filed with the State of New York as of December 31, 2015 and 2014 was $198,759 and $165,195, respectively.
The Company is required to meet minimum statutory capital and surplus requirements. The Company's statutory capital and surplus as of December 31, 2015 and 2014 were significantly in excess of these requirements. The maximum amount of dividends that can be paid by New York insurance companies to stockholders without prior approval of the Department is subject to restrictions relating to statutory earned surplus, also known as unassigned funds. Unassigned funds are determined in accordance with the accounting procedures and practices governing preparation of the statutory annual statements. In accordance with New York statutes, the maximum amount of ordinary dividends that can be paid by the Company is the greater of 10% of prior
year-end
capital and surplus, or the prior year net gain from operations, but is limited by the amount in unassigned surplus. Based on these limitations, ordinary dividends of $19,876 can be paid in 2016 without the approval of the Department. The Company paid no dividends in 2015, 2014 or 2013.
Regulatory
Risk-Based
Capital
An insurance enterprise's state of domicile imposes minimum
risk-based
capital requirements that were developed by the NAIC. The formulas for determining the amount of
risk-based
capital specify various weighting factors that are applied to financial balances or various levels of activity based on the perceived degree of risk. Regulatory compliance is determined by a ratio of an enterprise's regulatory total adjusted capital to its authorized
control-level
risk-based
capital, as defined by the NAIC. Companies below
Financial Statements and Supplemental Schedules
Page 58 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
specific trigger points or ratios are classified within certain levels, each of which requires specified corrective action. This ratio for the Company significantly exceeds required minimum thresholds, as of December 31, 2015 and 2014.
(17)
Commitments and Contingencies
The Company is or may become subject to claims and lawsuits that arise in the ordinary course of business. In the opinion of management, the ultimate resolution of any such known litigation will not have a material adverse effect on the Company's financial position. The Company is contingently liable for possible future assessments under regulatory requirements pertaining to insolvencies and impairments of unaffiliated insurance companies. Provision has been made for assessments currently received and assessments anticipated for known insolvencies.
The financial services industry, including mutual fund, variable and fixed annuity, life insurance, and distribution companies, is subject to close scrutiny by regulators, legislators, and the media.
Federal and state regulators regularly make inquiries and conduct examinations or investigations concerning various selling practices in the annuity industry, including suitability reviews, product exchanges, sales to seniors, and compliance with, among other things, insurance laws and securities laws. The Company is also subject to ongoing market conduct examinations and investigations by regulators, which may have a material adverse effect on the Company.
It can be expected that annuity product design and sales practices will be an ongoing source of regulatory scrutiny and enforcement actions, litigation, and rulemaking. Similarly, private litigation regarding sales practices is ongoing against a number of insurance companies.
These matters could result in legal precedents and new
industry-wide
legislation, rules, and regulations that could significantly affect the financial services industry, including life insurance and annuity companies. It is unclear at this time whether any such litigation or regulatory actions will have a material adverse effect on the Company in the future. When evaluating litigation, claims, and assessments, management considers the nature of the litigation, progress of the case, opinions or views of legal counsel, as well as prior experience in similar cases. Management uses this information to assess whether a loss is probable and if the amount of loss can be reasonably estimated prior to making any accruals.
Financial Statements and Supplemental Schedules
Page 59 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
The Company leases office space as mentioned in note 14. Expense for the operating lease was $28, $32, and $29 in 2015, 2014, and 2013, respectively. The future minimum lease payments required under operating leases are as follows:
2016
$
24
2017
24
2018
24
2019
24
2020
12
2021 and beyond
—
TOTAL
$
108
(18)
Segment Information
The Company has organized its principal operations into the following segments: Individual Annuities and Other products.
The Individual Annuities segment consists of variable, variable-indexed, and fixed annuities, which are provided through independent distribution channels made up of independent and wholly owned broker dealers, agents, and registered representatives. Revenues for the Company's fixed annuity products are primarily earned as net investment income on invested assets supporting fixed account balances, with profitability driven by the spread between net investment income earned and interest credited to account balances. Although the Company discontinued selling fixed annuity products in 2011, the
in-force
volume is significant and thus included within the Individual Annuities segment. Revenues for the Company's variable annuity products are primarily earned as management and expense fees charged on underlying account balances.
The Other products segment consists of closed blocks of Life, LTC, and Special Markets products. The Company discontinued selling Life products in 2010 and LTC products in 2009. The Special Markets products include individual and group annuity and life products, including whole and term life insurance. Although other products are part of the combined results, the Company does not allocate additional resources to these areas other than to maintain the operational support to its current customers.
The Company does not maintain segregated investment portfolios for each segment.
Investment-related
income, gains, and losses are allocated to the segments based on reserve levels and capital requirements.
Financial Statements and Supplemental Schedules
Page 60 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
Segment results are reconciled to the statements of operations in the tables below:
Year ended December 31, 2015
Individual
annuities
Other
Total
Revenue:
Net premiums and policy fees
$
65,603
3,267
68,870
Interest and similar income, net
25,378
2,009
27,387
Change in fair value of assets and liabilities
11,374
(1
)
11,373
Realized investment gains, net
549
34
583
Fee, commission, and other revenue
7,221
—
7,221
Total revenue
110,125
5,309
115,434
Benefits and expenses:
Net benefits
81,697
5,814
87,511
General and administrative expenses and commissions
41,145
647
41,792
Change in deferred acquisition costs, net
(8,687
)
522
(8,165
)
Total benefits and expenses
114,155
6,983
121,138
Pretax (loss)
$
(4,030
)
(1,674
)
(5,704
)
Financial Statements and Supplemental Schedules
Page 61 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
Year ended December 31, 2014
Individual
annuities
Other
Total
Revenue:
Net premiums and policy fees
$
58,728
2,988
61,716
Interest and similar income, net
27,293
1,566
28,859
Change in fair value of assets and liabilities
66,806
—
66,806
Realized investment gains, net
73
4
77
Fee, commission, and other revenue
6,869
(5
)
6,864
Total revenue
159,769
4,553
164,322
Benefits and expenses:
Net benefits
138,957
4,936
143,893
General and administrative expenses and commissions
38,886
903
39,789
Change in deferred acquisition costs, net
(15,088
)
24
(15,064
)
Total benefits and expenses
162,755
5,863
168,618
Pretax (loss)
$
(2,986
)
(1,310
)
(4,296
)
Financial Statements and Supplemental Schedules
Page 62 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
Year ended December 31, 2013
Individual
annuities
Other
Total
Revenue:
Net premiums and policy fees
$
47,281
3,452
50,733
Interest and similar income, net
28,562
1,073
29,635
Change in fair value of assets and liabilities
(78,945
)
1
(78,944
)
Realized investment gains, net
796
33
829
Fee, commission, and other revenue
5,904
—
5,904
Total revenue
3,598
4,559
8,157
Benefits and expenses:
Net benefits
(42,034
)
3,931
(38,103
)
General and administrative expenses and commissions
34,595
924
35,519
Change in deferred acquisition costs, net
(6,440
)
277
(6,163
)
Total benefits and expenses
(13,879
)
5,132
(8,747
)
Pretax income (loss)
$
17,477
(573
)
16,904
Financial Statements and Supplemental Schedules
Page 63 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
(19)
Changes in and Reclassifications from Accumulated Other Comprehensive Income (AOCI)
Changes in AOCI, net of tax, by component consist of the following:
Year ended December 31, 2015
Net
unrealized
gain (losses)
on securities
OTTI
gains (losses)
in OCI
Total AOCI
Beginning balance
$
16,656
—
16,656
OCI before reclassifications
(11,163
)
(117
)
(11,280
)
Amounts reclassified from AOCI
(493
)
117
(376
)
Net OCI
(11,656
)
—
(11,656
)
Ending balance
$
5,000
—
5,000
Year ended December 31, 2014
Net
unrealized
gain (losses)
on securities
OTTI
gains (losses)
in OCI
Total AOCI
Beginning balance
$
10,347
—
10,347
OCI before reclassifications
6,280
74
6,354
Amounts reclassified from AOCI
29
(74
)
(45
)
Net OCI
6,309
—
6,309
Ending balance
$
16,656
—
16,656
Financial Statements and Supplemental Schedules
Page 64 of 68
(Continued)
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Notes to Financial Statements
December 31, 2015 and 2014
(In thousands, except security holdings quantities)
Reclassifications from AOCI, net of tax, consist of the following:
Amount reclassified from AOCI
Affected line item
December 31,
in the
AOCI
2015
2014
Statements of Operations
Net unrealized gain (loss) on securities:
Available-for-sale securities
$
758
(44
)
Realized investment gains, net
265
(15
)
Income tax (benefit) expense
493
(29
)
Net (loss) income
OTTI gains in OCI:
Other than temporary impairments
(180
)
115
Realized investment gains, net
(63
)
41
Income tax (benefit) expense
(117
)
74
Net (loss) income
Total amounts reclassified from AOCI
$
376
45
Total net (loss) income
(20)
Subsequent Events
No material subsequent events have occurred since December 31, 2015, through March 31, 2016 that require adjustments to the financial statements.
Financial Statements and Supplemental Schedules
Page 65 of 68
(Continued)
Schedule I
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Summary of Investments – Other than Investments in Related Parties
December 31, 2015
(In thousands)
Type of investment
Amortized
cost
(1)
Fair value
Amount at
which
shown in the
balance sheet
Fixed-maturity securities:
U.S. government
$
72,035
73,223
73,223
States and political subdivisions
11,112
11,044
11,044
Foreign government
505
510
510
Public utilities
36,467
38,667
38,667
Corporate securities
406,982
415,515
415,515
Mortgage-backed securities
133,853
135,603
135,603
Total fixed-maturity securities
660,954
674,562
674,562
Equity Securities, trading
4,383
4,368
4,368
Total other investments
4,383
4,368
4,368
Other investments:
Policy loans
275
275
275
Derivatives
15,064
15,064
15,064
Total other investments
15,339
15,339
15,339
Total investments
$
680,676
694,269
694,269
(1)
Original cost of fixed-maturity securities reduced by repayments and adjusted for amortization of premiums or accrual discounts
See accompanying report of independent registered public accounting firm.
Financial Statements and Supplemental Schedules
Page 66 of 68
Schedule II
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Supplementary Insurance Information
Years ended December 31, 2015, 2014, and 2013
(In thousands)
December 31
Year ended December 31
Deferred
acquisition
costs
Deferred
sales
inducements
Account
balances
and
future
benefit
reserves
Unearned
premiums
Policy and
contract
claims
Net premium
and policy fees
Interest and
similar
income, net
Net
benefits
Net change
in deferred
sales
inducements*
Net
change in
deferred
acquisition
costs**
Other
operating
expenses
2015:
Annuities
$
131,754
21,148
738,333
—
—
65,603
25,378
81,285
412
(8,687
)
41,145
Other
2,620
—
24,653
1,571
4,157
3,267
2,009
5,814
—
522
647
$
134,374
21,148
762,986
1,571
4,157
68,870
27,387
87,099
412
(8,165
)
41,792
2014:
Annuities
$
115,271
19,510
670,265
—
—
58,728
27,293
140,536
(1,579
)
(15,088
)
38,886
Other
3,048
—
20,746
1,518
2,787
2,988
1,566
4,936
—
24
903
$
118,319
19,510
691,011
1,518
2,787
61,716
28,859
145,472
(1,579
)
(15,064
)
39,789
2013:
Annuities
$
100,897
18,345
561,358
—
—
47,281
28,562
(44,376
)
2,342
(6,440
)
34,595
Other
3,105
—
16,762
1,559
1,528
3,452
1,073
3,931
—
277
924
$
104,002
18,345
578,120
1,559
1,528
50,733
29,635
(40,445
)
2,342
(6,163
)
35,519
*
See note 8 for aggregate gross amortization of deferred sales inducements.
**
See note 7 for aggregate gross amortization of deferred acquisition costs.
See accompanying report of independent registered public accounting firm.
Financial Statements and Supplemental Schedules
Page 67 of 68
Schedule III
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
Reinsurance
Years ended December 31, 2015, 2014, and 2013
(In thousands)
Direct
Ceded
to other
Assumed
from other
Net
Percentage
of amount
assumed
Year ended
amount
companies
companies
amount
to net
December 31, 2015:
Life insurance in force
$
71,620
61,791
—
9,829
—
%
Premiums and policy fees:
Life
$
1,144
842
—
302
—
Annuities
65,603
—
—
65,603
—
Accident and health
3,470
505
—
2,965
—
Total premiums and policy fees
$
70,217
1,347
—
68,870
—
%
December 31, 2014:
Life insurance in force
$
77,593
67,376
—
10,217
—
%
Premiums and policy fees:
Life
$
902
916
—
(14
)
—
Annuities
58,727
—
—
58,727
—
Accident and health
3,529
526
—
3,003
—
Total premiums and policy fees
$
63,158
1,442
—
61,716
—
%
December 31, 2013:
Life insurance in force
$
84,046
73,019
—
11,027
—
%
Premiums and policy fees:
Life
$
1,389
975
—
414
—
Annuities
47,280
—
—
47,280
—
Accident and health
3,613
574
—
3,039
—
Total premiums and policy fees
$
52,282
1,549
—
50,733
—
%
See accompanying report of independent registered public accounting firm.
Financial Statements and Supplemental Schedules
Page 68 of 68
FOR SERVICE OR MORE INFORMATION
You can review and copy information about us, the Separate Account, the prospectus and the SAI at the SEC's Public Reference Room in Washington, D.C. You may obtain information about the operation of the Public Reference Room by calling (202) 551-8090.
The SEC also maintains a website (www.sec.gov). The prospectus, the SAI and other information about the Contract are available on the EDGAR database on the SEC's website. If you do not have access to the website, you can get copies of information from the website upon payment of a duplication fee by writing to:
Public Reference Section of the Commission
100 F Street, NE
Washington, DC 20549
OUR SERVICE CENTER
If you need customer service (for Contract changes, information on Contract Values, requesting a withdrawal or transfer, changing your allocation instructions, etc.) please contact our Service Center at
(800) 624-0197
.
To send an application, a check for an additional Purchase Payment, or for general customer service, please mail to the appropriate address as follows:
Send an application or additional Purchase Payment
with a check:
Send an application or general customer service
without a check:
REGULAR MAIL
REGULAR MAIL
Allianz Life Insurance Company of New York
Allianz Life Insurance Company of New York
NW5990
P.O. Box 561
P.O. Box 1450
Minneapolis, MN 55440-0561
Minneapolis, MN 55485-5990
OVERNIGHT, CERTIFIED, OR REGISTERED MAIL
OVERNIGHT, CERTIFIED, OR REGISTERED MAIL
Allianz Life Insurance Company of New York
Allianz Life Insurance Company of New York
NW5990
5701 Golden Hills Drive
1801 Parkview Drive
Golden Valley, MN 55416-1297
Shoreview, MN 55126
NOTE:
Checks sent to the wrong address for applications or additional Purchase Payments are forwarded to the 1801 Parkview Drive address listed above, which may delay processing.
To send information by email, please use this address: variableannuity@send.allianzlife.com. To send information over the web, please upload to your account on our website at: www.allianzlife.com/newyork. If you have questions about whether you can submit certain information by email or over the web, please contact our Service Center.
Until May 1, 2017, all dealers that effect transactions in these securities may be required to deliver a prospectus.
Allianz Index Advantage ADV
SM
New York Variable Annuity Prospectus – November 14, 2016
97
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Securities and Exchange Commission Registration Fee
$   XXXX*
--------------
Estimated Printing and Filing Costs:
$   10,000
--------------
Estimated Accounting Fees:
$    75,000
---------------
Estimated Legal Fees:
$    XXXX*
---------------
Estimated Miscellaneous Fees:
$        N/A
---------------
*To be provided upon pre-effective amendment
ITEM 14. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
The Bylaws of the Insurance Company provide:
ARTICLE X
INDEMNIFICATION OF OFFICERS, DIRECTORS AND EMPLOYEES
To the fullest extent allowed under New York law, the Company shall indemnify officers, directors and employees of the Company. No director shall be personally liable to the Company or any of its shareholders for damages for any breach of duty as a director; provided, however, that the foregoing provision shall not eliminate or limit (i) the liability of a director if a judgment or other final adjudication adverse to him or her establishes that his or her acts or omissions were in bad faith or involved intentional misconduct or were acts or omissions (a) which he or she knew or reasonably should have known violated the New York Insurance Law or (b) which violated a specific standard of care imposed on directors directly, and not by reference, by a provision of the New York Insurance Law (or any regulations promulgated thereunder) or (c) which constituted a knowing violation of any other law, or establishes that he or she personally gained in fact a financial profit or other advantage to which he or she was not legally entitled; or (ii) the liability of a director for any act or omission prior to adoption of these Restated Bylaws by the shareholders of the Company.
Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted for directors and officers or controlling persons of the Insurance Company pursuant to the foregoing, or otherwise, the Insurance Company 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, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Insurance Company of expenses incurred or paid by a director, officer or controlling person of the Insurance Company 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, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
NOT APPLICABLE.
ITEM 16.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a)
Exhibits.
1.       (a) Principal Underwriter Agreement by and between Preferred Life Insurance Company of New York on behalf of Preferred Life Variable Account C and NALAC Financial Plans, Inc. incorporated by reference as exhibit EX-99.B3.a. from Registrant's Pre-Effective Amendment No. 1 to Form N-4 (File Nos. 333-19699 and 811-05716) electronically filed on May 12, 1997. Preferred Life Insurance Company of New York is the predecessor to Allianz Life Insurance Company of New York. Preferred Life Variable Account C is the predecessor to Allianz Life of NY Variable Account C. NALAC Financial Plans, Inc., is the predecessor to USAllianz Investor Services, LLC, which is the predecessor to Allianz Life Financial Services, LLC.
(b) Broker-Dealer Agreement (amended and restated) between Allianz Life Insurance Company of New York and Allianz Life Financial Services, LLC, dated June 1, 2010 incorporated by reference as exhibit EX- 99.B3.b. from Registrant's Post-Effective Amendment No. 21 to Form N-4 (File Nos. 333-143195 and 811- 05716) electronically filed on October 21, 2010.
(c) The current specimen of the selling agreement between Allianz Life Financial Services, LLC, the principal underwriter for the Contracts, and retail brokers which offer and sell the Contracts to the public is incorporated by reference as exhibit EX-99.B3.b. from the Initial Registration Statement to Allianz Life Variable Account B's Form N-4 (File Nos.333-134267 and 811-05618) electronically filed on May 19, 2006. The underwriter has executed versions of the agreement with approximately 2,100 retail brokers.
2.
Not applicable
3.       (a)
Articles of Incorporation, as amended and restated March 9, 20111, of Allianz Life Insurance Company of New York, filed on December 19, 2013 as Exhibit 3(a) to Registrant's initial registration on Form S-1 (File No. 333-192948), is incorporated by reference.
(b)
Bylaws, as amended and restated March 9, 2011, of Allianz Life Insurance Company of New York, filed on December 19, 2013 as Exhibit 3(b) to Registrant's initial registration on Form S-1 (File No. 333-192948), is incorporated by reference.
4.
(a)** Deferred Annuity Contract, to be filed by amendment.
(b) Contract Schedule pages S40875-NY, as revised 5/9/14, filed on December 8, 2014, as Exhibit 4(b) to Registrant's Post-Effective Amendment No. 1 on Form S-1 (File No. 333-192948), is incorporated by reference.
(c)** Application for Individual Annuity Contract, INY-APP-ADV, to be filed by amendment.
(d)
Allocation Options Schedule page S40876-NY01 (5/2015), filed on April 20, 2015, as Exhibit 4(f) to Registrant's Post-Effective Amendment No. 2 on Form S-1 (File No. 333-192948), is incorporated by reference.
(e)
Variable and Index-Linked Annuity Contract L40538-NY01 (5/2015), filed on April 20, 2015, as Exhibit 4(g) to Registrant's Post-Effective Amendment No. 2 on Form S-1 (File No. 333-192948), is incorporated by reference.
(f)** Base Schedule Page, S40875-ADV-NY, to be filed by amendment.
(g)*
Waiver of Withdrawal Charge Rider, filed herewith.
(h) Allocation Options Schedule Page-S40876-NY01 (5/2015), incorporated by reference as exhibit EX-99.B4.g. from Registrant's N-4 filing (File Nos. 333-192949 and 811-05716) electronically filed on April 21, 2015.
(i)
Inherited IRA/Roth IRA Endorsement - S40714-NY incorporated by reference as exhibit EX-99.B4.i. from Registrant's Post Effective Amendment No. 15 to Form N-4 (File Nos.333-75718 and 811-05716) electronically filed on April 27, 2005.
(j)
Roth IRA Endorsement - P20041 incorporated by reference as exhibit EX-99.B4.k. from Registrant's Pre Effective Amendment No. 1 to Form N-4 (File Nos. 333-124767 and 811-05716) electronically filed on November 20, 2006.
(k) IRA Endorsement - P30012-NY incorporated by reference as exhibit EX-99.B4.i. from Registrant's Pre Effective Amendment No. 1 to Form N-4 (File Nos. 333-124767 and 811-05716) electronically filed on November 20, 2006.
(l)
Unisex Endorsement(S20146) incorporated by reference as exhibit EX-99.B4.l. from Registrant's Pre Effective Amendment No. 1 to Form N-4 (File Nos. 333-124767 and 811-05716) electronically filed on November 20, 2006.
5.
Opinion re Legality - not applicable
8.
Opinion re Tax Matters - not applicable
9.
Not applicable
10.
Material Contracts - not applicable
11.
Not applicable
12.
Not applicable
15.
Not applicable
16.
Not applicable
21. Not applicable.
23.
(a)**Consent of Independent Registered Public Accounting Firm – KPMG, to be filed by amendment.
(b)**Consent of Counsel, to be filed by amendment.
24.
(a)* Powers of Attorney, filed herewith.
(b)
Board Resolution, effective December 11, 2012, of the Board of Directors of Allianz Life Insurance Company of North America, filed on December 19, 2013 as Exhibit 24(b) to Registrant's initial registration on Form S-1 (File No. 333-192948), is incorporated by reference.
(c)
Board Resolution, effective March 6, 2014, of the Board of Directors of Allianz Life Insurance Company of New York, filed on May 2, 2014 as Exhibit 24(d) to Registrant's Pre-Effective Amendment No. 1 on Form S-1 (File No. 333-192948), is incorporated by reference.
25.
Not applicable
26.
Not applicable
99. (a) Daily Adjustment Calculation Exhibit (VS10 vers. & ALIP vers.), filed on April 20, 2015, as Exhibit 99(a) to Registrant's Post-Effective Amendment No. 2 on Form S-1, is incorporated by reference.
101.INS**    XBRL Instance Document, to be filed by amendment.
101.SCH**  XBRL Taxonomy Extension Schema Document, to be filed by amendment.
101.CAL**  XBRL Taxonomy Extension Calculation Linkbase, to be filed by amendment.
101.DEF**  XBRL Taxonomy Extension Definition Linkbase, to be filed by amendment.
101.LAB**  XBRL Taxonomy Extension Labels Linkbase, to be filed by amendment.
101.PRE**  XBRL Taxonomy Extension Presentation Linkbase , to be filed by amendment.
*  Filed herewith
** To be filed by amendment
(b)
Financial Statement Schedules
All required financial statement schedules of Allianz Life Insurance Company of New York are included in Part I of this registration statement.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes pursuant to Item 512 of Regulation S-K:To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i)
To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
(ii)
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement.
(iii)
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
(2)
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4)
That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(5)
That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i)
Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii)
Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii)
The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv)
Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(6)
Insofar as indemnification for liability arising under the Securities Act of  1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the registrant 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 the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant 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, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on this 15
th
day of August, 2016.
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
By:
/S/ Walter R. White*
Walter R. White
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on August 15, 2016.
Signature*
Title
Walter R. White
Chairman of the Board and Chief Executive Officer
Stephen R. Herbert
Director
Gary A. Smith
Director
Martha Clark Goss
Director
Steven J. Thiel
Director, Vice President and Appointed Actuary
Thomas P. Burns
Director and President
Ronald M. Clark
Director
Kevin J. Doyle
(
Director
William E. Gaumond
Director, Chief Financial Officer and Treasurer
*By Powers of Attorney, filed herewith.
BY
: /s/ Stewart D. Gregg
Stewart D. Gregg
Senior Counsel
FORM S-1
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
INDEX TO EXHIBITS
Exhibit
Description of Exhibit
4(g)
Waiver of Withdrawal Charge Rider
24(a)
Powers of Attorney