<PAGE>   1



                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549

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

                                    FORM 10-K

                 X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

                     OF THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 1999

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

              Securities and Exchange Commission File No. 812-06037

            THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
             (Exact name of registrant as specified in its charter)

                                    DELAWARE
         (State or other jurisdiction of incorporation or organization)

                                   22-2265014
                      (I.R.S. Employer Identification No.)

                               500 Boylston Street
                                    Suite 400
                           Boston, Massachusetts 02116
                    (Address of principal executive offices)

                                 (617) 663-3000
              (Registrant's telephone number, including area code)

        Securities registered pursuant to Section 12(g) of the Act: None

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

Indicated by check mark whether the registrant (1) has filed reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

           X  Yes                              No
          ---                              ---
No shares of voting stock are held by nonaffiliates of the Registrant.

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares outstanding of the issuer's sole class of common stock, as
of December 31, 1999 was 2,600.


<PAGE>   2




                                     PART 1

Item 1 -- Business

Description of Company, Reportable Segments and Products

The Registrant, The Manufacturers Life Insurance Company of North America
("MNA"), (which includes two subsidiaries, The Manufacturers Life Insurance
Company of New York ("MNY") and Manufacturers Securities Services, LLC ("MSS"),
hereinafter with MNA referred to collectively as the "Company"), is a stock life
insurance company organized under the laws of Delaware in 1979. MNA's principal
office is located at 500 Boylston Street, Suite 400, Boston, Massachusetts
02116. MNA is a wholly-owned subsidiary of Manulife-Wood Logan Holding Co., Inc.
("MWLH"). MWLH is an indirect wholly-owned subsidiary of The Manufacturers Life
Insurance Company ("MLI"); prior to June 1, 1999, MLI indirectly owned 85% of
MWLH, and minority shareholders associated with MWLH owned the remaining 15%.
MLI is a wholly-owned subsidiary of Manulife Financial Corporation ("MFC"), a
publicly traded company, based in Toronto, Canada. MFC and its subsidiaries are
known collectively as "Manulife Financial."

MNY is a stock life insurance company organized under the laws of New York in
1992. MNY is licensed to conduct business in the State of New York. MSS, a
Delaware limited liability company that MNA controls, is a broker-dealer
registered under the Securities Exchange Act of 1934 and a member of the
National Association of Securities Dealers, Inc. MSS acts as investment adviser
to the Manufacturers Investment Trust ("MIT"), a no-load, open-end management
investment company organized as a Massachusetts business trust and as principal
underwriter of the Company's variable annuity and life insurance contracts. MSS
has entered into a non-exclusive promotional agent agreement with Manulife-Wood
Logan Co., Inc. (formerly Wood Logan Associates, Inc. and hereinafter referred
to as "MWL"). MSS is the successor to NASL Financial Services, Inc. ("NASL
Financial"), a broker dealer that conducted operations until September 30, 1997,
when it was reorganized into MSS. Prior to October 1, 1997, NASL Financial also
acted as investment adviser to North American Funds ("NAF"), a no-load, open-end
management investment company organized as a Massachusetts business trust.

In 1999, the Company's ultimate parent, MFC, became a publicly traded company.
Part of MFC's external reporting includes a discussion of its operations
presented separately for wealth management and insurance. For 1999, the Company
has realigned its definition of its operations to match those of MFC. The
Company's operations are now classified as either wealth management or insurance
in comparison to the 1998 classification of annuities, pensions and insurance.
Through its wealth management operations, the Company offers wealth management
products and services in the form of individual and group annuities as well as
401(k) pension products. Through its insurance operations, the Company offers
traditional life insurance products. The Company's reportable operations have
been determined based on differences in product features and distribution, and
are consistent with the Company's management structure.

MNA is licensed to sell fixed and variable annuities, traditional life and
variable life insurance (discontinued sales on July 1, 1998), in all states
except New Hampshire and New York. MNY is licensed to sell fixed and variable
annuities, pension products and traditional life insurance in New York only.
Amounts invested in the fixed portion of the Company's contracts are allocated
to the general accounts of the Company or, in the case of the market value
adjusted annuity contract, to non-insulated separate accounts of the Company.
Amounts invested in the variable portion of the contracts are allocated to
separate accounts of the Company, each sub-account of which invests in shares of
one of the portfolios of MIT or in open-end management investment companies
offered and managed by unaffiliated third parties. As a result, the variable
annuity and life products provide returns based upon the returns of the
underlying mutual funds. Those returns will fluctuate based on market
performance and are not guaranteed.

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During 1997, the Company sold its mutual fund business which consisted solely of
NAF, a group of thirteen mutual funds, to an unrelated party. In 1997 and 1998,
pursuant to an expanded plan of operations for MNY, the Company began selling
insurance products and pension products in the State of New York.

The remainder of Item 1 will focus solely on the wealth management operations of
the Company due to the limited assets and revenues associated with the Company's
insurance operations which are in a developmental stage.

Wealth Management Operations:

Annuities provide insurance protection against the risk of outliving an
individual's income during his or her lifetime. Annuities also provide
tax-deferred savings during the accumulation savings phase and tax-favored
retirement income during the income phase. The Company's variable annuity sales
occur via its Venture annuity series: Venture(R), Venture Vision(R) and Venture
Vantage(R). All three variable annuities offer multiple variable investment
options and one or more fixed investment options as well as competitive minimum
death benefit guarantees. In addition to the variable investment options, the
Venture series products offer multiple fixed investment options that guarantee
the interest rate return for the stated guaranteed duration. However, certain of
the Venture products impose a market value charge for premature withdrawals or
transfers prior to the end of the guaranteed duration. All Venture products
impose an annual asset based fee on amounts held in variable investment options
and certain of those products contain a graded contingent deferred sales charge.
In addition to the variable Venture series, the Company also sells the Venture
Market Value-Adjusted Annuity which offers only fixed investment options and
imposes a market value adjustment upon surrender.

Under current law, returns credited on annuities and life insurance policies
during the accumulation phase (the period during which interest is credited and
annuity payments have not yet begun) are generally not subject to federal or
state income tax. Proceeds payable on death from a life insurance policy may
also be free from such taxes. At maturity or payment date of an annuity policy,
the policyholder is entitled to receive the original deposit plus accumulated
returns. The policyholder may elect to take this amount in either a lump sum or
receive a series of payments over a stated period of time. The untaxed return
component of such payments is taxed at the time of receipt as ordinary income.

The Company began to sell pension products in 1998. No significant revenues were
generated from the sales of these products in either 1998 or 1999.


Sales and Asset Retention

Annuity sales are primarily driven by the U.S. domestic and international equity
markets, distribution capabilities, attractive policy features and client
servicing capabilities. The variable options tend to be more attractive in low
interest rate environments as they provide potential for high returns through
equity investments. For this potential higher return, the policyholder assumes
directly the investment risk of the underlying mutual funds. Higher interest
rate environments tend to favor the fixed investment options as the policyholder
may lock in guaranteed interest rates without assuming the investment risk
associated with variable investment options.

The Venture annuity series offers a variety of investment options, death benefit
options, administrative features and customer services that enhance both sales
and asset retention. The variable investment options offered by the Company
employ a multi-manager approach through the use of subadvisers to the underlying
mutual funds. Currently sixteen investment management firms provide investment
management expertise to the forty-one variable investment options, including
five Lifestyle portfolios which are "funds of funds". The Lifestyle investment
options strategically allocate deposits over various investment disciplines with
the goal of matching return to the risk profile of the policyholder. The ability
to provide superior investment returns under the variable options is essential
to the retention of assets.

                                       3
<PAGE>   4



Policyholders are permitted to withdraw all or part of their account value at
any time subject to possible contingent deferred sales charges and/or market
value charges. Such premature terminations result in a loss of the Company's
anticipated future earnings related to the annuity deposit and accelerated
recognition of expenses related to policy acquisition, principally commissions,
which are otherwise deferred and amortized over the life of the policy.
Contingent deferred sales charges (dependent upon the policy) are designed to
compensate the Company for the accelerated recognition of policy acquisition
costs. The contingent deferred sales charge acts as a deterrent against
policyholders surrendering their policies prematurely. Generally, contingent
deferred sales charges do not apply to withdrawals up to the higher of 10% of
payments or accumulated earnings. Market value charges are imposed to offset the
cost of selling depressed asset values in increasing interest rate environments.

The Venture, Venture Vision and Venture Vantage annuities provide minimum death
benefits to policyholders. For issue ages 80 and younger Venture guarantees the
greater of deposits or a locking of any investment gains on a yearly basis up to
attained age 80. Venture Vision provides a minimum death benefit equal to
deposits indexed at 5% per annum up to a maximum of twice the original deposit
for issues up to age 80. Venture Vantage provides a minimum death benefit equal
to the larger of deposits or the contract value on the ninth contract
anniversary. The minimum death benefits are designed to provide long-term value
to policyholders and to facilitate asset retention.


The Company, along with MLI, enjoys strong financial ratings that enhance its
ability to attract new sales and retain assets. Distributors and consumers of
variable and fixed annuity products utilize the relative financial strength
ratings as a criteria in choosing an annuity carrier. The Company is rated A++
(Superior) by A.M. Best, AA+ (Very Strong) by Standard and Poor's ("S&P") and
Aa2 (Excellent) by Moody's as to the relative financial strength of the Company.
The Company is rated AAA (Highest) by Duff & Phelps in terms of the Company's
ability to meet its contractual obligations to its policyholders.

The ability to service policyholders in an effective, efficient and courteous
manner is an important success factor for sales and asset retention. The Company
has received high service ratings through independent surveys. To maintain this
level of service the Company has and will continue to make significant
investments in its infrastructure. The Company's administrative unit operates in
a paper-less environment employing optical imaging systems and electronic
communication with both policyholders and distributors.

Marketing and Distribution

The variable annuity market in the United States is relatively young and has
realized significant growth in the past few years. According to the Total
Reference survey conducted by Variable Annuity Research and Data Services, sales
grew 21% in 1999 over 1998 with total 1999 sales of $120.8 billion. The Company,
with 1999 total sales of $3.5 billion captured market share of 2.87%, ranking it
13th for variable annuity products issued in the United States. All sales and
marketing activities are conducted through MWL which employs a team of
wholesalers soliciting broker-dealer firms across the United States. The
Company's annuity sales are distributed through four different channels
including wirehouses, regional brokerage firms, financial planners, and banks.


                                       4
<PAGE>   5



Regulation

MNA is subject to the laws of the state of Delaware governing insurance
companies and to the regulation of the Delaware Insurance Department. MNY is
subject to the laws and regulation of the State of New York. In addition, the
Company is subject to regulation under the insurance laws of other jurisdictions
in which the Company operates. Regulation by each insurance department includes
periodic examination of the Company's operations, including contract liabilities
and reserves. Regulation by supervisory agencies includes licensing to transact
business, overseeing trade practices, licensing agents, approving policy forms,
establishing reserve requirements, fixing maximum interest rates on life
insurance policy loans and minimum rates for accumulation of surrender values,
prescribing the form and content of required financial statements and regulation
of the type and amounts of investments permitted. The Company's books and
accounts are subject to review by each insurance department and other
supervisory agencies at all times, and the Company files annual statements with
these agencies. A full examination of the MNA's operations is conducted
periodically by the Delaware insurance department (The New York Insurance
Department for MNY.)

Several insurers affiliated with the Company, The Manufacturers Life Insurance
Company (U.S.A.) ("ManUSA") and The Manufacturers Life Insurance Company of
America ("ManAmerica"), are domiciled in Michigan and therefore subject to
Michigan regulation. Consequently, the Michigan Insurance Bureau has
jurisdiction in applying its laws and regulations to transactions which may
occur between the Company and ManUSA. Under Michigan holding company laws and
other laws and regulations, intercompany transactions, transfers of assets and
dividend payments may be subject to prior notification or approval depending
upon the size of such transfers and payments in relation to the financial
positions of the companies. Transactions between the Company and MWL are
primarily regulated by Delaware but may also be subject to Michigan regulation
if the transaction involves ManUSA or ManAmerica.

Under insurance guaranty fund laws in most states, insurers doing business
therein can be assessed (up to prescribed limits) for policyholder losses
incurred by insolvent companies. The amount of any future assessments on the
Company under these laws cannot be reasonably estimated. Most of these laws do
provide, however, that an assessment may be excused or deferred if it would
threaten an insurer's own financial strength.

Although the federal government generally does not directly regulate the
business of insurance, federal initiatives often have an impact on the business
in a variety of ways. Federal legislation that removed barriers preventing banks
from engaging in the insurance business or that changed the Federal income tax
treatment of insurance companies, insurance company products, or employee
benefit plans could significantly affect the insurance business.

Forward-looking Statements

Certain information included herein is forward-looking with respect to the
Company, including its business operations and strategy and financial
performance and condition. These statements generally can be identified by the
use of forward-looking words such as "may", "will", "expect", "intend",
"estimate", "anticipate", "believe" or "continue" or the negative thereof or
similar variations. Although management believes that the expectations reflected
in such forward-looking statements are reasonable, such statements involve risks
and uncertainties and actual results may differ materially from those expressed
or implied by such forward-looking statements. Important factors that could
cause actual results to differ materially from the Company's expectations
include among other things, general economic and market factors, including
interest rates, business competition and changes in government regulations or in
tax laws.


Item 2 -- Properties

The Registrant owns no property.

                                       5
<PAGE>   6


Item 3. Legal Proceedings

Nothing to report.

Item 4 -- Submission of Matters to a Vote of Security Holders

Nothing to report.

                                     PART II

Item 5 -- Market for Registrant's Common Equity and Related Stockholder Matters

MWLH is the sole record holder of the MNA's shares. Therefore, there is no
public trading market for MNA's common stock. MNA has declared no cash dividends
on its common stock at any time during the two most recent fiscal years.

MNA currently sells Venture Group Annuity, a flexible premium payment deferred
variable unallocated group annuity, to retirement plans that qualify for special
tax treatment under Section 401(a) of the Internal Revenue Code. Sales of these
securities are not required to be registered under the Securities Act of 1933
(Section 3(a)(2) of this Act). MSS is the principal underwriter of the contracts
and MWL is the promotional agent. There are no maximum or minimum purchase
payments required to establish a contract. The value of a contract will vary
according to the investment performance, charges and expenses of the
sub-accounts in which the contract is vested. As of December 31, 1999, the total
variable assets in the Venture Group Annuity was $112,098,563.


Item 6 -- Selected Financial Data


<TABLE>
<CAPTION>
                                                        For the Years Ended December 31
                                       ----------------------------------------------------------------------
                                           1999          1998            1997           1996          1995
                                           ----          ----            ----           ----          ----
                                                                  (in thousands)
Under Accounting Principles Generally
Accepted in the United States:

<S>                                     <C>           <C>              <C>            <C>           <C>
Total Revenues                         $   353,523   $   274,216     $   202,751     $  147,772    $  143,896

Net Income                                  59,852        44,420          33,233         15,735        11,032

Total Separate Account Assets           16,022,215    12,188,420       9,529,160      6,820,599     5,131,536

Total Assets                            17,726,298    13,496,414      10,633,763      7,811,370     6,244,352

Shareholder's Equity                       337,243       254,030         208,726        127,070        95,256

</TABLE>












                                       6
<PAGE>   7





Item 7 -- Management's Discussion and Analysis of Financial Condition and
          Results of Operations


OVERVIEW

The following analysis of the consolidated results of operations and financial
condition of the Company should be read in conjunction with the consolidated
financial statements and the related notes to consolidated financial statements.

The Company's primary source of earnings is from the sale of individual annuity
products within its wealth management operations. As such, the remainder of this
discussion will be limited to the results of operations from the sale of these
products except as noted. Earnings from the sale of individual annuity products
are comprised of fees assessed against policyholder account balances included in
the Company's separate accounts including: mortality and expense risks charges,
surrender charges and an annual administrative charge. In addition, a spread is
earned between the advisory fees charged to manage the separate account assets
invested in MIT and the subadvisory fees paid to external managers of those
assets. A key factor in the Company's profitability is sustained growth in the
underlying assets through market performance coupled with the ability to acquire
and retain variable annuity and life deposits.


REVIEW OF CONSOLIDATED OPERATING RESULTS

1999 Compared to 1998

The Company recorded net income from continuing operations of $59.9 million in
1999 versus $43.8 million in 1998, an increase of $16.1 million or 37%. The
increase was primarily a result of fee income earned on additional separate
account assets and higher advisory fees earned during 1999 associated with the
assets held in MIT. Separate account assets and total assets grew by 31% during
1999. This growth is attributed to record sales of $3.5 billion for 1999
compared to 1998 sales of $2.4 billion and strong equity market performance
during 1999. Total fees, including advisory fees, generated by separate accounts
and policyholder funds increased by $79.6 million or 30% in 1999.

                                       7
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The Company incurred total benefits and expenses in 1999 of $261.0 million, an
increase of $54.5 million, or 26% compared to 1998. The additional expenses
primarily reflect an increase in non-capitalized acquisition expenses,
increasing sub-advisory expenses associated with additional assets in MIT, and
higher financing costs which were offset by a decrease in Deferred Acquisition
Costs (DAC) amortization. The amortization of DAC was reduced by $8.9 million
during 1999 due primarily to improved investment performance of the Company's
Separate Account Assets compared to 1998. It is this asset base against which
fees are assessed. Higher projected fees due to improved annual investment
results compared to 1998 resulted in reduced DAC amortization for the year. The
Company paid an additional $14.4 million of sub-advisory expenses during 1999
due to the higher asset base. The Company's commission financing loans increased
by approximately $70.1 million over December 31, 1998 levels resulting in
additional financing costs.

1998 Compared to 1997

The Company recorded net income from continuing operations of $43.8 million in
1998 versus $27.4 million in 1997, an increase of $16.4 million or 60%. The
increase was primarily a result of fee income earned on additional separate
account assets. Separate account assets grew by 28% while total assets increased
by 27% during 1998. This growth is attributed to record sales of $2.4 billion
for 1998 compared to 1997 sales of $2.2 billion, strong equity market
performance during 1998 and favorable contract persistency. Total fees,
including advisory fees, generated by separate accounts and policyholder funds
increased by $67.0 million or 34% in 1998. Net investment income grew by $4.3
million or 54% due to additional fixed account sales. In addition, the Company
recognized additional net investment income for the full year of 1998 associated
with the $47.7 million capital infusion received in the fourth quarter of 1997
to support expanded operations in New York.

The Company incurred total benefits and expenses in 1998 of $206.5 million, an
increase of $46.2 million, or 29% compared to 1997. The additional expenses
reflect an increase in non-capitalized acquisition expenses, increasing
sub-advisory expenses associated with additional assets in MIT, higher financing
costs, an increase in DAC amortization and additional start-up expenses
associated with expanding the Company's operations in New York. The amortization
of DAC was increased by $12.9 million during 1998 due primarily to lower
investment returns associated with the Company's Separate Account Assets
compared to 1997. It is this asset base against which fees are assessed. Lower
projected fees due to the yearly results compared to that of 1997 resulted in an
increased DAC amortization for the year. The Company paid an additional $12.3
million of sub-advisory expenses during 1999. The Company's commission financing
loans increased by approximately $57.5 million over December 31, 1997 levels
resulting in additional financing costs.

The discontinued mutual fund operation, under the terms of the sale agreement
concluded in 1997, received a contingent payment of $1.0 million on October 1,
1998. After taxes and an adjustment to the final sales price, an additional $0.6
million gain on sale was recorded in 1998 compared to net income of $5.8
million, including a $5.9 million gain on sale, in 1997.


FINANCIAL POSITION

1999 Compared to 1998

Total assets increased from $13.5 billion at December 31, 1998 to $17.7 billion
at December 31, 1999, an increase of $4.2 billion or 31%. Separate account
assets increased by 31% in 1999 compared to 1998 and represent 90% of total
assets as the Company continues to focus on its variable option annuity
products. The Company continues to own high quality investment grade fixed
maturity investments to support its general account liabilities and
shareholder's equity. The Company's DAC asset grew by 46% as the Company
experienced record sales volumes during 1999 and deferred the related costs, net
of current amortization, associated with those sales. Due from reinsurers
increased $155.9 million as a result of higher fixed deferred account values
related to dollar cost averaging promotions offered to policyholders.

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<PAGE>   9

Total liabilities increased proportionately with the growth in the related
assets during 1999, primarily in the Company's separate accounts. During 1999,
the Company borrowed an additional $70.1 million from MLI to support its record
sales volumes and related acquisition expenses. Amount payable to reinsurers
increased by $152.7 million primarily as a result of higher fixed annuity
deposits and increased account values associated with the policies reinsured
under a fixed annuity coinsurance agreement.

The growth in retained earnings is primarily due to net income from operations
of $59.9 million. In addition, accumulated other comprehensive income decreased
$4.7 million due to the lower market value of invested assets at December 31,
1999. The Company received a capital contribution of $28.1 million from MWLH
during December 1999 to support the Company's surplus position for NAIC
Statutory purposes which incurs a surplus drain as the Company increases its
sales volumes.

1998 Compared to 1997

Total assets increased from $10.6 billion at December 31, 1997 to $13.5 billion
at December 31, 1998, an increase of $2.9 billion or 27%. Separate account
assets increased by 28% in 1998 compared to 1997 and represent 90% of total
assets as the Company continues to focus on its variable option insurance
products. The Company continues to own high quality investment grade fixed
maturity investments to support its general account liabilities and
shareholder's equity. The Company's DAC asset grew by 23% as the Company
experienced record sales volumes during 1998 and deferred the related costs, net
of current amortization, associated with those sales. Due from reinsurers
increased $88.0 million as a result of higher fixed deferred account values
related to dollar cost averaging promotions offered to policyholders in 1998.

Total liabilities increased proportionately with the growth in the related
assets during 1998, primarily in the Company's separate accounts. During 1998,
the Company borrowed an additional $57.5 million from MLI to support its record
sales volumes and related acquisition expenses. Amount payable to reinsurers
increased by $81.0 million primarily as a result of higher fixed annuity
deposits and increased account values associated with the policies reinsured
under a fixed annuity coinsurance agreement.

The growth in retained earnings is due to net income from operations of $44.4
million. In addition, accumulated other comprehensive income increased $0.9
million due to the higher market value of invested assets at December 31, 1998.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity describes the ability of a company to generate sufficient cash flows
to meet the cash requirements of business operations. Historically, the
Company's principal cash flow sources have been deposits and charges on
contracts, investment income, maturing investments, and proceeds from sales of
investment assets. In addition to the need for cash flow to meet operating
expenses, the liquidity requirements of the Company relate principally to its
annuity liabilities and to the funding of investments in new products,
processes, and technologies. The liabilities mentioned above include the payment
of benefits under its annuity contracts along with contract withdrawals and
policy loans.

The general account liabilities consist of policyholder funds whose liquidity
requirements have not fluctuated significantly from one year to the next.
Policyholder transactions related to separate accounts do not materially impact
the cash flow of the Company.

                                       9
<PAGE>   10



The substantial increase in the Company's sales since 1993 has resulted in the
Company requiring cash financing to support this growth. The Company must invest
all of its variable option deposits in the separate accounts while paying
commissions and acquisition expenses related to these deposits and other sales
from its general account. Prior to 1995, the Company used capital and general
account assets to fund these costs. Since 1995, the Company's fixed account
acquisition expenses are largely funded through a fixed account reinsurance
agreement. Starting in 1996, substantially all variable account acquisition
costs are financed through borrowing from MLI and internally generated cash
flows.

The Company maintains a prudent amount invested in cash and short term
investments. At the end of 1999, this amounted to $69.1 million or 30% of total
investments compared to $ 44.4 million in 1998 or 21%. In addition, the
Company's liquidity is managed by maintaining an easily marketable portfolio of
fixed maturity securities. Because of the Company's expanding business,
acquisition costs will not only result in losses from operations, but will also
create a cash flow strain. The Company on an annual basis forecasts its capital
and financing requirements to support its operations. The Company looks to MLI
for the necessary capital or financing to support the Company's growth.

The Company's net cash flows from operating activities were ($94.7) million,
($18.7) million and ($38.8) million for the years ended December 31, 1999, 1998
and 1997, respectively. The negative cash flows from operations are primarily
related to increased commissions and acquisition expenses associated with
increasing sales volumes. Offsetting these items each year are increases in
total fees, including net advisory fees, generated by separate accounts and
policyholder funds.

The Company's net cash flows from investing activities were ($13.5) million,
($33.3) million and ($39.1) million for the years ended December 31, 1999, 1998
and 1997, respectively. The decrease in cash flows for 1999 and 1998 resulted
primarily from fixed maturity securities maturing or sold offset by purchases of
fixed maturity securities to meet the Company's cash flow needs. The negative
cash flows in 1997 were primarily attributable to the purchases of fixed
maturity securities associated with a capital infusion of $47.7 million and were
partially offset by the disposal of the mutual fund operation in 1997 along with
the disposal of foreclosed real estate.

The Company's net cash flows from financing activities were $125.7 million,
$55.1 million, and $73.2 million, for the years ended December 31, 1999, 1998
and 1997, respectively. The increase in net cash flows for all three years is
primarily related to additional borrowings from MLI to support the Company's
growth. Net deposits to policyholder funds for 1999, 1998 and 1997 and capital
contributions in 1999 and 1997 also contributed additional cash to the Company.
Offsetting the cash flows for all three years were reinsurance costs.

Aside from the financing required to partially fund acquisition costs, the
Company's cash flows are adequate to meet the general obligations on all annuity
contracts.


CAPITAL REQUIREMENTS AND SOLVENCY PROTECTION

In order to enhance the regulation of insurer solvency, the NAIC has established
minimum Risk Based Capital (RBC) requirements. The requirements are designed to
monitor capital adequacy and to raise the level of protection that statutory
surplus provides for policyholders. The RBC model law requires that life
insurance companies report on a formula-based RBC standard which is calculated
by applying various factors to asset, premium and reserve items. The formula
takes into account risk characteristics of the life insurer, including asset
risk, insurance risk, interest risk and business risk. If an insurer's ratio
falls below certain thresholds, regulators will be authorized, and in some
circumstance required, to take regulatory action.

                                       10
<PAGE>   11





The Company's policy is to maintain capital and surplus balances well in excess
of the minimums required under government regulations in all jurisdictions in
which the Company does business. At December 31, 1999 the Company's capital and
surplus balances exceeded all such required minimums.

IMPACT OF YEAR 2000

The year 2000 issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize the
year 2000 as 1900 or some other date, resulting in errors when information using
year 2000 dates is processed. In addition, similar problems may arise in some
systems which use certain dates in 1999 to represent something other than a
date. The systems used by the Company have been assessed as part of a
comprehensive written plan conducted by Manulife Financial Corporation
(collectively with its subsidiaries "Manulife Financial"), to ensure that
computer systems and processes of Manulife Financial and its subsidiaries,
including the Company, are year 2000 compliant. Although the change in date has
occurred and management believes that its systems are year 2000 compliant, it is
not possible to conclude that all aspects of the year 2000 issue that may affect
the entity, including those related to customers, suppliers, or other third
parties, have been fully resolved.

Manulife Financial estimates the total cost of its year 2000 project will be
approximately $60.5 million*, of which $59.9 million* has been incurred through
December 31, 1999. In addition, previously unbudgeted costs associated with the
start up of a new joint venture in Japan in April 1999 are estimated to be $4.1
million*, of which approximately $3.8 million* was incurred through December 31,
1999. These previously unbudgeted costs have been shared by Manulife Financial
and its joint venture partner. Actual costs incurred for the year 2000 project
are not expected to be materially higher than estimated. Manulife Financial's
year 2000 costs were $10.6 million* for 1999, excluding the total joint venture
costs, and $34.7 million* for 1998.

* All figures are shown in US dollars converted from Canadian dollars using the
average exchange rate of 1.49 in effect for the year ended December 31, 1999.


Item 7A.  Quantitative and Qualitative Disclosure About Market Risk

Market risk is the risk that the Company will incur losses due to adverse
changes in market rates and prices. The primary market risk exposure for the
Company is the impact of lower than expected equity market performance on its
asset-related fee revenue. The Company also has certain exposures to changes in
interest rates.

Equity Risk

The Company earns asset based fees based on the asset levels invested in the
separate accounts. As a result, the Company is subject to the effect changes in
equity market levels will have on the amounts invested in the separate accounts.
The Company estimates that the effect of a 10% decline in equity fair values
related to in force separate account contracts at December 31, 1999, if the
decline existed throughout 2000, would adversely affect the Company's asset
based fees for 2000 by $31 million.

                                       11
<PAGE>   12



Interest Rate Risk

Interest rate risk is the risk that the Company will incur economic losses due
to adverse changes in interest rates. This risk arises from the issuance of
certain interest sensitive annuity products and the investing of those proceeds
in fixed rate investments. The Company manages its interest rate risk through an
asset/liability management program. The Company has established a target
portfolio mix which takes into account the risk attributes of the liabilities
supported by the assets, expectations of market performance, and a conservative
investment philosophy. Preservation of capital and maintenance of income flows
are key objectives of this program. In addition, the Company has diversified its
product portfolio offerings to include products that contain features that will
protect it against fluctuations in interest rates. Those features include
adjustable crediting rates, policy surrender charges, and market value
adjustments on liquidations.

Based upon the Company's investment strategy, asset-liability management
process, and the durations of its assets and liabilities at December 31, 1999,
management estimates that a 100 basis point immediate, parallel increase in
interest rates for the entire year of 2000 would decrease the fair value of its
general account assets by approximately $2.3 million. There would be no effect
on the fair value of the Company's liabilities because of the features inherent
in the Company's products.

Item 8 - Financial Statements and Supplementary Data

The Report of Independent Auditors and the Company's consolidated financial
statements attached hereto are incorporated herein. See following page.

                                       12
<PAGE>   13




                       FINANCIAL STATEMENTS AND SCHEDULES
                        THE MANUFACTURERS LIFE INSURANCE
                            COMPANY OF NORTH AMERICA

                  YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
                       WITH REPORT OF INDEPENDENT AUDITORS

                                    CONTENTS



<TABLE>
<S>                                                                                             <C>
Report of Independent Auditors...................................................................14
Audited Consolidated Financial Statements
     Consolidated Balance Sheets.................................................................15
     Consolidated Statements of Income...........................................................16
     Consolidated Statements of Changes in Shareholder's Equity..................................17
     Consolidated Statements of Cash Flows.......................................................18
Notes to Consolidated Financial Statements.......................................................19
</TABLE>



                                       13
<PAGE>   14




                         REPORT OF INDEPENDENT AUDITORS



The Board of Directors and Shareholder
The Manufacturers Life Insurance Company of North America


We have audited the accompanying consolidated balance sheets of The
Manufacturers Life Insurance Company of North America, (the Company), as of
December 31, 1999 and 1998, and the related consolidated statements of income,
changes in shareholder's equity, and cash flows for each of the three years in
the period ended December 31, 1999. Our audits also included the financial
statement schedules listed in the Index at Item 14(a). These consolidated
financial statements and schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the consolidated
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 consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of The
Manufacturers Life Insurance Company of North America at December 31, 1999 and
1998, and the consolidated results of its operations and its cash flows for each
of the three years in the period ended December 31, 1999, in conformity with
accounting principles generally accepted in the United States. Also, in our
opinion, the related financial statement schedules, when consolidated in
relation to the basic financial statements taken as a whole, present fairly in
all material respects the information set forth therein.



Boston, Massachusetts
February 28, 2000                                              Ernst & Young LLP



                                       14
<PAGE>   15



THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA

CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
As at December 31
ASSETS  ($ thousands)                                                                  1999                   1998
--------------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>                     <C>
INVESTMENTS:
Fixed-maturity securities  available-for-sale,  at fair value (note 3)        $     152,922           $    157,743
(amortized cost:  1999 $156,382; 1998 $152,969)
Short-term investments                                                               41,311                 34,074
Policy loans                                                                          7,049                  5,175
--------------------------------------------------------------------------------------------------------------------
Total investments                                                             $     201,282           $    196,992
--------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents                                                     $      27,790           $     10,320
Accrued investment income                                                             2,630                  3,132
Deferred acquisition costs (note 5)                                                 655,294                449,332
Other assets                                                                         19,341                  6,360
Due from reinsurers                                                                 797,746                641,858
Separate account assets                                                          16,022,215             12,188,420
--------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS                                                                  $  17,726,298           $ 13,496,414
--------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDER'S EQUITY ($ thousands)
--------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Policyholder liabilities and accruals                                         $     139,764           $    102,252
Payable to affiliates                                                                10,267                  4,388
Notes payable to affiliates (note 10)                                               311,100                241,000
Deferred income taxes (note 6)                                                       46,533                 23,777
Other liabilities                                                                    50,577                 26,655
Due to reinsurers                                                                   808,599                655,892
Separate account liabilities                                                     16,022,215             12,188,420
--------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES                                                             $  17,389,055           $ 13,242,384
--------------------------------------------------------------------------------------------------------------------
SHAREHOLDER'S EQUITY:
Common stock (note 8)                                                         $       2,600           $      2,600
Additional paid-in capital (note 8)                                                 207,102                179,053
Retained earnings                                                                   130,145                 70,293
Accumulated other comprehensive (loss) income                                        (2,604)                 2,084
--------------------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDER'S EQUITY                                                    $     337,243           $    254,030
--------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY                                    $  17,726,298           $ 13,496,414
--------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes.

                                       15
<PAGE>   16



THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA

CONSOLIDATED STATEMENTS OF INCOME


<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31
 ($ thousands)                                                           1999                 1998              1997
--------------------------------------------------------------- ----------------- ------------------- ----------------
<S>                                                               <C>                    <C>              <C>
REVENUES:
     Fees from separate accounts and policyholder funds           $   218,231            $ 166,498        $  126,636
     Advisory fees and other distribution revenues                    122,662               94,821            67,678
     Premiums                                                             175                    -                 -
     Net investment income (note 3)                                    12,721               12,178             7,906
     Net realized investment (losses) gains (note 3)                     (266)                 719               531
--------------------------------------------------------------- ----------------- ------------------- ----------------
TOTAL REVENUE                                                     $   353,523            $ 274,216        $  202,751
--------------------------------------------------------------- ----------------- ------------------- ----------------

BENEFITS AND EXPENSES:
     Policyholder benefits and claims                             $     6,735            $   4,885        $    4,986
     Amortization of deferred acquisition costs (note 5)               44,554               53,499            40,649
     Other insurance expenses (note 11)                               192,834              135,624           100,385
     Financing costs                                                   16,842               12,497            14,268
--------------------------------------------------------------- ----------------- ------------------- ----------------
TOTAL BENEFITS AND EXPENSES                                       $   260,965            $ 206,505        $  160,288
--------------------------------------------------------------- ----------------- ------------------- ----------------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES             $    92,558            $  67,711        $   42,463
--------------------------------------------------------------- ----------------- ------------------- ----------------
--------------------------------------------------------------- ----------------- ------------------- ----------------
INCOME TAX EXPENSE (NOTE 6)                                       $    32,706            $  23,873        $   15,044
--------------------------------------------------------------- ----------------- ------------------- ----------------
--------------------------------------------------------------- ----------------- ------------------- ----------------
NET INCOME FROM CONTINUING OPERATIONS                             $    59,852            $  43,838        $   27,419
--------------------------------------------------------------- ----------------- ------------------- ----------------
Discontinued operations (note 15):
     Loss from operations, net of tax                             $         -            $       -        $     (141)
     Gain on disposal, net of tax                                 $         -            $     582        $    5,955
--------------------------------------------------------------- ----------------- ------------------- ----------------
NET INCOME                                                        $    59,852            $  44,420        $   33,233
--------------------------------------------------------------- ----------------- ------------------- ----------------
</TABLE>

See accompanying notes.


                                       16
<PAGE>   17



THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY


<TABLE>
<CAPTION>
                                                                                        ACCUMULATED
                                                                          RETAINED         OTHER          TOTAL
                                             COMMON       ADDITIONAL      EARNINGS     COMPREHENSIVE  SHAREHOLDER'S
  ($thousands)                                STOCK    PAID-IN CAPITAL    (DEFICIT)    (LOSS) INCOME     EQUITY
  -------------------------------------------------------------------------------------------------------------------

<S>                                           <C>           <C>            <C>           <C>            <C>
  Balance at January 1, 1997                  $2,600        $131,322       $(7,360)      $    509       $  127,071
  Capital contribution (note 8)                    -          47,731             -              -           47,731
  Comprehensive income (note 4)                    -               -        33,233            691           33,924
  -------------------------------------------------------------------------------------------------------------------
  BALANCE, DECEMBER 31, 1997                  $2,600        $179,053       $25,873       $  1,200       $  208,726
  Comprehensive income (note 4)                    -               -        44,420            884           45,304
  -------------------------------------------------------------------------------------------------------------------
  BALANCE, DECEMBER 31, 1998                  $2,600        $179,053       $70,293       $  2,084       $  254,030
  Capital contribution (note 8)                    -          28,049             -              -           28,049
  Comprehensive income (loss) (note 4)             -               -        59,852         (4,688)          55,164
  -------------------------------------------------------------------------------------------------------------------
  BALANCE, DECEMBER 31, 1999                  $2,600        $207,102       $130,145      $ (2,604)      $  337,243
  -------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes.

                                       17
<PAGE>   18



THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31
($ thousands)                                                                          1999        1998          1997

---------------------------------------------------------------------------- --------------  ----------   -----------
<S>                                                                            <C>             <C>          <C>
OPERATING ACTIVITIES:
Net income                                                                     $     59,852    $ 44,420     $  33,233
Adjustments  to  reconcile  net  income  to  net  cash  used  in  operating
activities:
     Amortization of bond discount and premium                                          747         685           401
     Benefits to policyholders                                                        6,735       4,885         4,986
     Provision for deferred income tax                                               24,269       6,872        15,767
     Net realized investment losses (gains)                                             266       (719)         (531)
     Amortization of deferred acquisition costs                                      44,554      53,499        40,649
     Amortization  of deferred  acquisition  costs included in discontinued               -           -         1,707
       operations
     Policy acquisition costs deferred                                             (248,483)   (138,527)     (123,965)
     Gain on disposal of discontinued operations                                         -            -        (9,394)
     Changes in assets and liabilities:
         Accrued investment income                                                      502       (491)          (835)
         Other assets                                                              (12,981)       3,266        (1,396)
         Receivable from affiliates                                                       -       4,605        (4,605)
         Payable to affiliates                                                        5,879       4,644        (1,462)
         Other liabilities                                                           23,922      (1,882)        6,642
---------------------------------------------------------------------------- --------------  ----------   -----------
Net cash used in operating activities                                          $    (94,738)   $(18,743)     $(38,803)
---------------------------------------------------------------------------- --------------  ----------   -----------
INVESTING ACTIVITIES:
Fixed-maturity securities sold, matured or repaid                              $     95,139    $ 37,694     $  74,626
Fixed-maturity securities purchased                                                 (99,565)    (50,056)     (118,765)
Equity securities sold                                                                    -           -             1
Equity securities purchased                                                               -           -          (250)
Foreclosed real estate sold                                                               -           -          2,268
Disposal of discontinued operations                                                       -           -         16,338
Net change in short-term investments                                                 (7,237)    (19,082)      (10,697)
Policy loans advanced, net                                                           (1,874)     (1,899)       (2,639)
---------------------------------------------------------------------------- --------------  ----------   -----------
Cash used in investing activities                                              $    (13,537)   $(33,343)    $ (39,118)
---------------------------------------------------------------------------- --------------  ----------   -----------
FINANCING ACTIVITIES:
Net reinsurance consideration                                                  $     (3,181)   $ (7,014)    $  (5,443)
Deposits to policyholder funds                                                       50,351      15,551        20,607
Return of policyholder funds                                                        (19,574)    (10,934)      (15,462)
Increase in notes payable to affiliates                                              70,100      57,464        25,754
Capital contribution by Parent                                                       28,049           -        47,731
---------------------------------------------------------------------------- --------------  ----------   -----------
Cash provided by financing activities                                          $    125,745    $ 55,067     $  73,187
---------------------------------------------------------------------------- --------------  ----------   -----------
CASH AND CASH EQUIVALENTS:
Increase (decrease) during the year                                                  17,470       2,981        (4,734)
Balance, beginning of year                                                           10,320       7,339        12,073
---------------------------------------------------------------------------- --------------  ----------   -----------
BALANCE, END OF YEAR                                                           $     27,790    $ 10,320     $   7,339
---------------------------------------------------------------------------- --------------  ----------   -----------
</TABLE>
See accompanying notes.

                                       18
<PAGE>   19



            THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1999
                            (IN THOUSANDS OF DOLLARS)

1.       ORGANIZATION

         The Manufacturers Life Insurance Company of North America (hereinafter
         referred to as "MNA"), is a wholly-owned subsidiary of Manulife-Wood
         Logan Holding Co., Inc. (hereinafter referred to as "MWLH"). MWLH is an
         indirect wholly-owned subsidiary of The Manufacturers Life Insurance
         Company ("MLI"); prior to June 1, 1999, MLI indirectly owned 85% of
         MWLH, and minority shareholders associated with MWLH owned the
         remaining 15%. MLI is a wholly-owned subsidiary of Manulife Financial
         Corporation, a publicly traded company. Manulife Financial Corporation
         and its subsidiaries are known collectively as "Manulife Financial."

         MNA owns 100% of The Manufacturers Life Insurance Company of New York
         (hereinafter referred to as "MNY") and is the managing member with a
         90% interest in Manufacturers Securities Services, LLC ("MSS"). MNY
         owns a 10% interest in MSS. MNA, MNY and MSS are hereinafter referred
         to collectively as "the Company."

         MNA issues individual and group annuity contracts in forty-eight
         states, excluding New York and New Hampshire. Prior to July 1, 1998,
         MNA also issued individual variable life insurance contracts. MNY
         issues individual and group annuity contracts and individual life
         insurance contracts in New York. Amounts invested in the fixed portion
         of the contracts are allocated to the general accounts of the Company
         or noninsulated separate accounts of the Company. Amounts invested in
         the variable portion of the contracts are allocated to the separate
         accounts of the Company. Each of these separate accounts invests in
         shares of the various portfolios of the Manufacturers Investment Trust
         (hereinafter referred to as "MIT"), a no-load, open-end investment
         management company organized as a Massachusetts business trust, or in
         open-end investment management companies offered and managed by
         unaffiliated third parties.

         Prior to October 1, 1997, NASL Financial Services Inc. ("NASL
         Financial"), a subsidiary of MNA, acted as investment adviser to MIT
         and as principal underwriter of the variable contracts issued by the
         Company. Effective October 1, 1997, MSS, the successor to NASL
         Financial, replaced NASL Financial as the investment adviser to MIT and
         as the principal underwriter of all variable contracts issued by MNA.
         MSS also acts as the principal underwriter for the variable contracts
         and is the exclusive distributor for all contracts issued by MNY.

         On October 31, 1998, MNA transferred a 10% interest in the members'
         equity of MSS to MNY as a contribution of capital valued at $175.

                                       19
<PAGE>   20



2.       SIGNIFICANT ACCOUNTING POLICIES

      A) BASIS OF PRESENTATION

         The accompanying consolidated financial statements of the Company have
         been prepared in conformity with generally accepted accounting
         principles ("GAAP") in the United States and include the accounts and
         operations, after intercompany eliminations, of the Company and its
         majority and wholly-owned subsidiaries, MSS and MNY.

         The preparation of financial statements in conformity with GAAP
         requires management to make estimates and assumptions that affect the
         amounts reported in the financial statements and accompanying notes.
         Actual results could differ from reported results using those
         estimates.

      B) RECENT ACCOUNTING STANDARDS

         i) In June 1998, the Financial Accounting Standards Board (FASB) issued
         Statement No. 133, "Accounting for Derivative Instruments and Hedging
         Activities" (SFAS No. 133). SFAS No. 133 establishes accounting and
         reporting standards for derivative instruments and for hedging
         activities. Contracts that contain embedded derivatives, such as
         certain insurance contracts, are also addressed by the Statement. SFAS
         No. 133 requires that an entity recognize all derivatives as either
         assets or liabilities in the statement of financial position and
         measure those instruments at fair value. In July 1999, the FASB issued
         Statement 137, which delayed the effective date of SFAS No. 133 to
         fiscal years beginning after June 15, 2000. The Company is evaluating
         the accounting implications of SFAS No. 133 and has not determined its
         potential impact on the Company's results of operations or its
         financial condition.

         ii) In December 1997, the American Institute of Certified Public
         Accountant's Accounting Standards Executive Committee (AcSEC) issued
         Statement of Position (SOP) 97-3, "Accounting by Insurance and Other
         Enterprises for Insurance-Related Assessments." SOP 97-3 provides
         guidance on the recognition and measurement of liabilities for various
         assessments related to insurance activities, including those by state
         guaranty funds. The Company adopted SOP 97-3 during 1999. Prior to the
         adoption of SOP 97-3, the Company expensed and recognized liabilities
         for such assessments on a "pay-as-you-go" basis. The effect of adopting
         SOP 97-3 did not have a material impact on the results of operations
         and financial condition of the Company for the year ended December 31,
         1999.

         iii) In March 1998, AcSEC issued SOP 98-1, "Accounting for the Costs of
         Computer Software Developed or Obtained for Internal Use." SOP 98-1
         requires the capitalization of certain costs incurred in connection
         with developing or obtaining internal-use software. The Company adopted
         SOP 98-1 during 1999. Prior to the adoption of SOP 98-1, the Company
         expensed internal-use software-related costs as incurred. The effect of
         adopting the SOP 98-1 was to increase net income by $1,039 for the year
         ended December 31, 1999.


                                       20
<PAGE>   21



2.       SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      C) INVESTMENTS

         The Company classifies all of its fixed-maturity securities as
         available-for-sale and records these securities at fair value. Realized
         gains and losses on sales of securities classified as
         available-for-sale are recognized in net income using the
         specific-identification method. Changes in the fair value of securities
         available-for-sale are reflected directly in accumulated other
         comprehensive income after adjustments for deferred taxes and deferred
         acquisition costs. Discounts and premiums on investments are amortized
         using the effective-interest method.

         The cost of fixed-maturity securities is adjusted for the amortization
         of premiums and accretion of discounts using the interest method. This
         amortization or accretion is included in net investment income.

         For the mortgage-backed bond portion of the fixed-maturity securities
         portfolio, the Company recognizes amortization using a constant
         effective yield based on anticipated prepayments and the estimated
         economic life of the securities. When actual prepayments differ
         significantly from anticipated prepayments, the effective yield is
         recalculated to reflect actual payments to date and anticipated future
         payments. The net investment in the security is adjusted to the amount
         that would have existed had the new effective yield been applied since
         the acquisition of the security. That adjustment is included in net
         investment income.

         Policy loans are reported at aggregate unpaid balances, which
         approximate fair value.

         Short-term investments, which include investments with maturities of
         less than one year and greater than 90 days at the date of acquisition,
         are reported at amortized cost, which approximates fair value.

      D) CASH EQUIVALENTS

         The Company considers all liquid debt instruments purchased with a
         maturity date of three months or less at acquisition to be cash
         equivalents. Cash equivalents are stated at cost plus accrued interest,
         which approximates fair value.


                                       21
<PAGE>   22



2.       SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      E) DEFERRED ACQUISITION COSTS (DAC)

         Commissions, net of commission allowances for reinsurance ceded, and
         other expenses which vary with, and are primarily related to the
         production of new business are deferred to the extent recoverable and
         included as an asset. Acquisition costs associated with annuity
         contracts and investment pension contracts are being amortized
         generally in proportion to the present value of expected gross profits
         from surrender charges and investment, mortality and expense margins.
         The amortization is adjusted retrospectively when estimates of current
         or future gross profits are revised. DAC associated with traditional
         nonparticipating individual insurance policies is charged to expense
         over the premium-paying period of the related policies. DAC is adjusted
         for the impact on estimated future gross profits, assuming the
         unrealized gains or losses on securities had been realized at year end.
         The impact of any such adjustments is included in net unrealized gains
         (losses) in accumulated other comprehensive income. DAC is reviewed
         annually to determine recoverability from future income and, if not
         recoverable, it is immediately expensed.

      F) POLICYHOLDER LIABILITIES

         Policyholder liabilities equal the policyholder account value for the
         fixed portions of annuity, variable life and investment pension
         contracts with no substantial mortality or morbidity risk. Account
         values are increased for deposits received and interest credited, and
         are reduced by withdrawals. For traditional nonparticipating life
         insurance policies, policyholder liabilities are computed using the net
         level premium method and are based upon estimates as to future
         mortality, persistency, maintenance expenses and interest rate yields
         that are applicable in the year of issue. The assumptions include a
         provision for adverse deviation.

      G) SEPARATE ACCOUNTS

         Separate account assets and liabilities that are reported in the
         accompanying balance sheets represent investments in MIT, which are
         mutual funds that are separately administered for the exclusive benefit
         of the policyholders of the Company and its affiliates, or open-end
         investment management companies offered and managed by unaffiliated
         third parties, which are mutual funds that are separately administered
         for the benefit of the Company's policyholders and other contract
         owners. These assets and liabilities are reported at fair value. The
         policyholders, rather than the Company, bear the investment risk. The
         operations of the separate accounts are not included in the
         accompanying financial statements. Fees charged on separate account
         policyholder funds are included in revenues.


                                       22
<PAGE>   23



2.       SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      H) REVENUE RECOGNITION

         Fee income from separate accounts, annuity contracts and investment
         pension contracts consists of charges for mortality, expenses, and
         surrender and administration charges that have been assessed against
         the policyholder account balances. Premiums on traditional
         nonparticipating life insurance policies are recognized as revenue when
         due. Investment income is recorded as revenue when due.

         MSS and formerly NASL Financial (collectively the Adviser) are
         responsible for managing the corporate and business affairs of MIT and
         act as investment adviser to MIT. As compensation for its investment
         advisory services, the Adviser receives advisory fees based on the
         daily average net assets of the portfolios. The Adviser, as part of its
         advisory services, is responsible for selecting and compensating
         subadvisers to manage the investment and reinvestment of the assets of
         each portfolio, subject to the supervision of the Board of Trustees of
         MIT. The Company's discontinued operations include the compensation of
         NASL Financial for investment advisory fees and subadviser compensation
         from the North American Funds ("NAF") through October 1, 1997, the date
         the Company sold NAF. Subadviser compensation for MIT is included in
         other insurance expenses.

     I)  POLICYHOLDER BENEFITS AND CLAIMS

         Benefits for annuity contracts and investment pension contracts include
         interest credited to policyholder account balances and benefit claims
         incurred during the period in excess of policyholder account balances.

      J) FINANCING AGREEMENTS

         MNA has entered into various financing agreements with reinsurers and
         an affiliated company. All assets and liabilities related to these
         contracts are reported on a gross basis. Due to the nature of MNA's
         products, these agreements are accounted for under the deposit method
         whereby the net premiums paid to the reinsurers are recorded as
         deposits.

      K) INCOME TAXES

         Income taxes have been provided using the liability method in
         accordance with Statement of Financial Accounting Standards No. 109,
         "Accounting for Income Taxes." Under this method, deferred tax assets
         and liabilities are determined based on differences between the
         financial reporting and tax bases of assets and liabilities and are
         measured using the enacted tax rates and laws that likely will be in
         effect when the differences are expected to reverse. The measurement of
         deferred tax assets is reduced by a valuation allowance if, based upon
         the available evidence, it is more likely than not that some or all of
         the deferred tax assets will not be realized.




                                       23
<PAGE>   24


2.       SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      L) RECLASSIFICATIONS

         Certain prior year amounts have been reclassified to conform to the
         current year presentation.

3.       INVESTMENTS AND INVESTMENT INCOME

      A) FIXED-MATURITY SECURITIES

         At December 31, 1999, the amortized cost and fair value of
         fixed-maturity securities available for sale are summarized as follows:

<TABLE>
<CAPTION>
                                                                   GROSS             GROSS
                                           AMORTIZED COST       UNREALIZED     UNREALIZED LOSSES      FAIR VALUE
         AS AT DECEMBER 31,                                        GAINS
         ($ thousands)                       1999      1998      1999    1998    1999     1998        1999      1998
         ------------------------------ ---------- ---------- -------- ------- --------- -------- --------- ---------
         <S>                            <C>        <C>        <C>      <C>       <C>       <C>    <C>       <C>
         U.S. government                $  28,634  $ 18,266   $    94  $1,144  $  (740)    $ (28) $  27,988  $ 19,382
         Corporate                         92,532   100,705       122   3,376   (2,486)      (35)    90,168   104,046
         Mortgage-backed                   28,234    16,812        27     131     (406)      (68)    27,855    16,875
         Foreign governments                5,924    16,129        23     151        -        (8)     5,947    16,272
         States/political subdivisions      1,058     1,057         -     111       94)        -        964     1,168
         ------------------------------ ---------- ---------- -------- ------- --------- -------- --------- ---------
         TOTAL FIXED-MATURITY           $ 156,382  $152,969   $   266  $4,913  $(3,726)    $(139)  $152,922  $157,743
         SECURITIES
         ------------------------------ ---------- ---------- -------- ------- --------- -------  --------- ---------
</TABLE>

         Proceeds from sales of fixed-maturity securities during 1999 were
         $81,874 (1998, $23,780; 1997, $53,325).

         The contractual maturities of fixed-maturity securities at December 31,
         1999 are shown below. Expected maturities may differ from contractual
         maturities because borrowers may have the right to call or prepay
         obligations with or without prepayment penalties. Corporate
         requirements and investment strategies may result in the sale of
         investments before maturity.

<TABLE>
<CAPTION>
         ($ thousands)                                                    AMORTIZED COST           FAIR VALUE
         -----------------------------------------------------------------------------------------------------------
         <S>                                                                   <C>                   <C>
         FIXED-MATURITY SECURITIES
            One year or less                                                  $ 42,477              $ 42,567
            Greater than 1; up to 5 years                                       49,172                48,582
            Greater than 5; up to 10 years                                      18,299                17,505
            Due after 10 years                                                  18,200                16,413
            Mortgage-backed securities                                          28,234                27,855
         -----------------------------------------------------------------------------------------------------------
         TOTAL FIXED-MATURITY SECURITIES                                      $156,382              $152,922
         -----------------------------------------------------------------------------------------------------------
</TABLE>

         Fixed-maturity securities with a fair value of $6,108 and $6,105 at
         December 31, 1999 and 1998, respectively, were on deposit with, or in
         custody accounts on behalf of, state insurance departments to satisfy
         regulatory requirements.


                                       24
<PAGE>   25



3.       INVESTMENTS AND INVESTMENT INCOME (CONTINUED)

      B) INVESTMENT INCOME AND NET REALIZED INVESTMENT GAINS

         Income by type of investment was as follows:

<TABLE>
<CAPTION>
         FOR THE YEARS ENDED DECEMBER 31
         ($ thousands)                                              1999               1998              1997
         -----------------------------------------------------------------------------------------------------------
         <S>                                                      <C>               <C>                <C>
         Fixed-maturity securities                                $9,945            $ 9,904            $7,250
         Short-term investments                                    2,960              2,503             1,126
         Other invested assets                                         -                 19                 -
         -----------------------------------------------------------------------------------------------------------
         Gross investment income                                  12,905             12,426             8,376
         -----------------------------------------------------------------------------------------------------------
         Investment expenses                                        (184)              (248)             (470)
         -----------------------------------------------------------------------------------------------------------
         NET INVESTMENT INCOME                                   $12,721           $ 12,178            $7,906
         -----------------------------------------------------------------------------------------------------------
</TABLE>

         The gross realized gains and losses on the sales of investments were as
follows:

<TABLE>
<CAPTION>
         FOR THE YEARS ENDED DECEMBER 31
         ($ thousands)                                                 1999               1998               1997
         -----------------------------------------------------------------------------------------------------------
         <S>                                                           <C>                <C>                <C>
         Fixed-maturity securities:
           Gross realized gains                                        $311               $724               $788
           Gross realized losses                                       (577)                (5)                (7)
         Equity securities
           Gross realized losses                                          -                  -               (250)
         -----------------------------------------------------------------------------------------------------------
         NET REALIZED (LOSS) GAIN                                     ($266)              $719               $531
         -----------------------------------------------------------------------------------------------------------
</TABLE>

4.       COMPREHENSIVE INCOME

         Total comprehensive income was as follows:

<TABLE>
<CAPTION>
          FOR THE YEARS ENDED DECEMBER 31
          ($ thousands)                                                            1999         1998         1997
          ---------------------------------------------------------------- -------------- ------------ -------------
          <S>                                                                  <C>         <C>           <C>
          NET INCOME                                                           $ 59,852    $  44,420     $ 33,233
          ---------------------------------------------------------------- -------------- ------------ -------------
          OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX:
            Unrealized holding (losses) gains arising during the period          (4,861)       1,351        1,036
             Less:
             Reclassification  adjustment  for  realized  (losses)  gains
          included In net income                                                   (173)         467          345
          ---------------------------------------------------------------- -------------- ------------ -------------
          Other comprehensive (loss) income                                      (4,688)         884          691
          ---------------------------------------------------------------- -------------- ------------ -------------
          COMPREHENSIVE INCOME                                                 $ 55,164    $  45,304     $ 33,924
          ---------------------------------------------------------------- -------------- ------------ -------------
</TABLE>

         Other comprehensive (loss) income is reported net of income taxes
         (benefit) of $(1,513), $476, and $372 for 1999, 1998, and 1997,
         respectively.










                                       25
<PAGE>   26





5.       DEFERRED ACQUISITION COSTS

         The components of the change in DAC were as follows:

<TABLE>
<CAPTION>
         FOR THE YEARS ENDED DECEMBER 31
         ($ thousands)                                               1999                1998             1997
         ----------------------------------------------- -------------------- ------------------- ------------------
         <S>                                                  <C>                 <C>                   <C>
         Balance at January 1                                 $   449,332         $   364,983           $ 290,610
         Capitalization                                           248,483             138,527             123,965
         Amortization                                             (44,554)            (53,499)            (40,649)
         Amortization included in discontinued                          -                   -              (1,707)
           operations
         Amortization included in gain on disposal of                   -                   -              (6,943)
           discontinued operations
         Effect of net unrealized losses (gains) on                 2,033                (679)               (293)
           securities available-for-sale
         ----------------------------------------------- -------------------- ------------------- ------------------
         BALANCE AT DECEMBER 31                               $   655,294         $   449,332           $ 364,983
         ----------------------------------------------- -------------------- ------------------- ------------------
</TABLE>


6.       INCOME TAXES

         The components of income tax expense from continuing operations were as
follows:

<TABLE>
<CAPTION>
         FOR THE YEARS ENDED DECEMBER 31
         ($ thousands)                                                    1999             1998              1997
         ----------------------------------------------------- ----------------- ----------------- -----------------
         <S>                                                        <C>                <C>                <C>
         Current expense (benefit)                                  $    8,437         $ 17,001           $  (723)
         Deferred expense                                               24,269            6,872            15,767
         ----------------------------------------------------- ----------------- ----------------- -----------------
         TOTAL EXPENSE                                               $  32,706         $ 23,873           $15,044
         ----------------------------------------------------- ----------------- ----------------- -----------------
</TABLE>

         Significant components of the Company's net deferred tax liability are
as follows:

<TABLE>
<CAPTION>
         -----------------------------------------------------------------------------------------------------------
         AS AT DECEMBER 31
         ($ thousands)                                                                     1999               1998
         -----------------------------------------------------------------------------------------------------------
         <S>                                                                          <C>               <C>
         DEFERRED TAX ASSETS:
            Financing arrangements                                                    $     136         $    1,289
            Unrealized losses on securities available for sale                            1,048                  -
         -----------------------------------------------------------------------------------------------------------
         Gross deferred tax assets                                                        1,184              1,289
            Valuation allowance                                                            (657)                 -
         -----------------------------------------------------------------------------------------------------------
         Net deferred tax assets                                                            527              1,289
         -----------------------------------------------------------------------------------------------------------
         DEFERRED TAX LIABILITIES:
            Deferred policy acquisition costs                                           (43,559)           (22,017)
            Unrealized gains on securities available-for-sale                                 -             (1,122)
            Other                                                                        (3,501)            (1,927)
         -----------------------------------------------------------------------------------------------------------
         Total deferred tax liabilities                                                 (47,060)           (25,066)
         -----------------------------------------------------------------------------------------------------------
         NET DEFERRED TAX LIABILITY                                                   $ (46,533)        $  (23,777)
         -----------------------------------------------------------------------------------------------------------
</TABLE>

         As of December 31, 1999, the Company had $3,460 of unrealized capital
         losses in its available-for-sale portfolio. Under federal tax law,
         utilization of these capital losses, when realized, is limited to use
         as an offset against capital gains. The Company believes that it is
         more likely than not that it will be unable to realize the benefit of
         the full deferred tax asset related to the net unrealized capital
         losses. The Company has therefore, established a valuation allowance
         for the amount in excess of the available capital gains. The Company
         believes that it will realize the full benefit of its remaining
         deferred tax assets.



                                       26
<PAGE>   27





6.       INCOME TAXES (CONTINUED)

         The Company is a member of the MWLH-affiliated group, filing a
         consolidated federal income tax return. MNA and MNY file separate state
         income tax returns. The method of allocation between the companies is
         subject to a written tax-sharing agreement under which the tax
         liability is allocated to each member of the group on a pro rata basis
         based on the relationship that the member's tax liability (computed on
         a separate-return basis) bears to the tax liability of the consolidated
         group. The tax charge to MNA or MNY will not be more than either
         company would have paid on a separate-return basis. Settlements of
         taxes are made through an increase or reduction to the payable to
         parent, subsidiaries and affiliates, which are settled periodically.

         The Company made estimated tax payments of $11,077, $12,516 and $531 in
         1999, 1998 and 1997, respectively.

7.       FINANCING AND REINSURANCE AGREEMENTS

         The financing agreements entered into with reinsurance companies relate
         primarily to the products sold by MNA. Most of MNA's reinsured products
         are considered investment products under generally accepted accounting
         principles and, as such, the reinsurance agreements are considered
         financing arrangements and are accounted for under the deposit method.
         Under this method, net premiums received by the reinsurer are recorded
         as deposits. Financing transactions have been entered into primarily to
         improve cash flow and statutory capital.

         The Company has entered into two indemnity coinsurance agreements to
         reinsure 100% of all contractual liabilities arising from the fixed
         portion of both in-force and new variable annuity business written by
         the Company. Under these agreements, each reinsurer, one unaffiliated
         and one affiliated, receives the fixed portion of all premiums and
         transfers received by the Company. Each reinsurer reimburses the
         Company for all claims and provides expense allowances to cover
         commissions and other costs associated with the reinsured business.

         The Company has modified coinsurance agreements with two unaffiliated
         life insurance companies. The treaties cover the quota share of all
         elements of risk under the variable portion of certain variable annuity
         policy forms. Another treaty, recaptured in 1999, with an unaffiliated
         life insurance company covered the variable portion of certain annuity
         contracts written prior to December 31, 1996.

         The Company has treaties with three reinsurers, two unaffiliated and
         one affiliated, to reinsure its Minimum Death Benefit Guarantee risk.
         In addition, the Company reinsures a portion of its risk related to
         waiving surrender charges at death. The Company is paying the
         reinsurers an asset- based premium, the level of which varies with both
         the amount of exposure to this risk and the realized experience.



                                       27
<PAGE>   28

7.       FINANCING AND REINSURANCE AGREEMENTS (CONTINUED)

         The Company has a treaty with an unaffiliated reinsurer to reinsure a
         quota share of the variable portion of the Company's variable life
         insurance contracts. In addition, the reinsurer assumes the product's
         net amount at risk in excess of the Company's retention limit on a
         yearly renewable term basis.

         During 1998, MNY entered into reinsurance agreements with various
         reinsurers to reinsure face amounts in excess of $100 for its
         traditional nonparticipating insurance product. To date, there have
         been no reinsurance recoveries under these agreements.

         In the event of insolvency of a reinsurer, the Company remains
         primarily liable to its policyholders. Failure of reinsurers to honor
         their obligations could result in losses to the Company and,
         accordingly, the Company periodically monitors the financial condition
         of its reinsurers.

         The Company has not entered into any reinsurance agreements in which
         the reinsurer may unilaterally cancel any reinsurance for reasons other
         than nonpayment of premiums or other similar credits or a significant
         change in the ownership of the Company. The Company does not have any
         reinsurance agreements in effect under which the amount of losses paid
         or accrued through December 31, 1999 would result in a payment to the
         reinsurer of amounts which, in the aggregate and allowing for offset of
         mutual credits from other reinsurance agreements with the same
         reinsurer, exceed the total direct premiums collected under the
         reinsured policies.

8.       SHAREHOLDER'S EQUITY

         The Company has one class of capital stock:

<TABLE>
<CAPTION>
         AS AT DECEMBER 31:
         ($ thousands)                                                                         1999             1998
         ---------------------------------------------------------------- -------------------------- ----------------
         <S>                                                                                <C>               <C>
         AUTHORIZED:
             3,000 Common shares, par value $1,000
         ISSUED AND OUTSTANDING:
             2,600 Common shares                                                            $ 2,600           $2,600
         ---------------------------------------------------------------- -------------------------- ----------------
</TABLE>



                                       28
<PAGE>   29



8.       SHAREHOLDER'S EQUITY (CONTINUED)

         In December 1999, the Company received a capital contribution of
         $28,049 from MWLH.

         In October 1997, the Company received a capital contribution of $47,731
         from MWLH to support expansion of its New York operations.

         The net assets of MNA and MNY available to MWLH as dividends are
         generally limited to, and cannot be made except from, earned statutory
         basis profits. The maximum amount of dividends that may be paid by life
         insurance companies without prior approval of the Insurance
         Commissioners of the States of Delaware and New York is subject to
         restrictions relating to statutory surplus and net gain from operations
         on a statutory basis.

         Net (loss) income and capital and surplus, as determined in accordance
         with statutory accounting principles for MNA and MNY were as follows:

<TABLE>
<CAPTION>
         FOR THE YEARS ENDED DECEMBER 31
         ($ thousands)                                              1999               1998              1997
         -----------------------------------------------------------------------------------------------------------
         <S>                                                    <C>                <C>                <C>
         MNA:
            Net (loss) income                                   $ (2,524)          $ 28,067          $ 22,259
            Net capital and surplus                              171,094            157,940           139,171
         MNY:
            Net income (loss)                                        932             (5,678)           (1,562)
            Net capital and surplus                               63,470             62,881            68,336
         -----------------------------------------------------------------------------------------------------------
</TABLE>

         State regulatory authorities prescribe statutory accounting practices
         that differ in certain respects from accounting principles generally
         accepted in the United States followed by stock life insurance
         companies. The significant differences relate to investments, deferred
         acquisition costs, deferred income taxes, nonadmitted asset balances
         and reserve calculation assumptions.

         MNA's broker dealer subsidiary, MSS, is subject to the Securities and
         Exchange Commission's (SEC) "Net Capital Rule" as defined under rule
         15c3-1. At December 31, 1999 and 1998, the net capital of the broker
         dealer exceeded the SEC's minimum capital requirements.

9.       RELATED-PARTY TRANSACTIONS

         The Company utilized various services provided by MLI in 1999, 1998 and
         1997, such as legal, personnel, investment accounting and other
         corporate services. The charges for these services were approximately
         $11,751, $12,752 and $8,229 in 1999, 1998 and 1997, respectively. At
         December 31, 1999 and 1998, the Company had a net liability to MLI for
         these services and interest accrued on notes payable of $8,341 and
         $180, respectively. At December 31, 1999 and 1998, the payable is
         offset by a receivable from MIT and MLI for expenses paid on their
         behalf of $434 and $792, respectively. In addition, the Company has an
         intercompany payable to MWLH relating to federal income taxes of $2,360
         and $5,000 reflected in the intercompany payable at December 31, 1999
         and 1998, respectively.



                                       29
<PAGE>   30



9.       RELATED-PARTY TRANSACTIONS (CONTINUED)

         The financial statements have been prepared from the records maintained
         by the Company and may not necessarily be indicative of the financial
         conditions or results of operations that would have occurred if the
         Company had been operated as an unaffiliated corporation (see also
         Notes 1, 6, 7, 8, 10, 12, 13 and 14 for additional related-party
         transactions).

10.      NOTES PAYABLE TO AFFILIATES AND LINES OF CREDIT

         MNA has promissory notes from The Manufacturers Life Insurance Company
         (U.S.A.) ("ManUSA") for $291,100 including an additional borrowing of
         $70,100 during 1999. Interest on the loan is calculated at a
         fluctuating rate equal to LIBOR plus 32.5 basis points and is payable
         in quarterly installments. Principal and accrued interest are payable
         within 45 days of demand. Accrued interest payable at December 31, 1999
         and 1998 is $834 and $419, respectively.

         MNA has a surplus note of $20,000 with interest at 8% due to ManUSA.
         The note and accrued interest are subordinated to payments due to
         policyholders and other claimants. Principal and interest payments and
         interest accruals can be made only upon prior approval of the Insurance
         Department of the State of Delaware.

         MNA and MNY have unsecured lines of credit with State Street Bank and
         Trust Company totaling $15,000, bearing interest at the bank's money
         market rate plus 50 basis points. There were no outstanding advances
         under the lines of credit at December 31, 1999 and 1998.

         Interest expense and interest paid in 1999 were $15,546 and $15,250,
         respectively (1998 $13,506 and $16,861; 1997 $10,887 and $9,354).

11.      OTHER INSURANCE EXPENSES

         Other insurance expenses were as follows:

<TABLE>
<CAPTION>
         FOR THE YEARS ENDED DECEMBER 31
         ($ thousands)                                                1999               1998                1997
         -----------------------------------------------------------------------------------------------------------
         <S>                                                      <C>                 <C>                 <C>
         Selling and administrative expenses                      $69,757             $49,732             $42,581
         Subadvisory fees                                          53,118              38,701              26,364
         General operating expenses                                69,959              47,191              31,440
         -----------------------------------------------------------------------------------------------------------

         TOTAL
                                                                 $192,834            $135,624            $100,385
         -----------------------------------------------------------------------------------------------------------
</TABLE>




                                       30
<PAGE>   31



12.      EMPLOYEE BENEFITS

      A) EMPLOYEE RETIREMENT PLAN

         Prior to July 1, 1998, MNA and MNY, participated in a noncontributory
         defined benefit pension plan (the Nalaco Plan) sponsored by MLI,
         covering its employees. A similar plan (the Manulife Plan) also existed
         for ManUSA. Both plans provided pension benefits based on length of
         service and final average earnings. Vested benefits were fully funded;
         current pension costs were funded as they accrue.

         Effective July 1, 1998, the Nalaco Plan was merged into the Manulife
         Plan as approved by the Board of Directors of MLI. The merged plan was
         then restated as a cash balance pension plan entitled "The Manulife
         Financial U.S. Cash Balance Pension Plan" (Cash Balance Plan).
         Participants in the two prior plans ceased accruing benefits under the
         old plan effective June 30, 1998, and became participants in the Cash
         Balance Plan on July 1, 1998. Also effective July 1, ManUSA became the
         sponsor of the Cash Balance Plan. Each participant who was a
         participant in one of the prior plans received an opening account
         balance equal to the present value of their June 30, 1998 accrued
         benefit under the prior plan, using Pension Benefit Guaranty
         Corporation rates (PBCG). Future contribution credits under the Cash
         Balance Plan vary by service, and interest credits are a function of
         the interest rate levels. Pension benefits are provided to those
         participants after three years of vesting service, and the normal
         retirement benefit is actuarially equivalent to the cash balance
         account at normal retirement date. The normal form of payment under the
         Cash Balance Plan is a life annuity, with various optional forms
         available.

         Actuarial valuation of accumulated plan benefits are based on projected
         salaries and best estimates of investment yields on plan assets,
         mortality of participants, employee termination and ages at retirement.
         Pension costs relating to current service and amortization of
         experience gains and losses are amortized to income over the estimated
         average remaining service lives of the participants. No pension expense
         was recognized by the sponsor in 1999, 1998 or 1997 because the plan
         was subject to the full funding limitation under the Internal Revenue
         Code.

         At December 31, 1999, the projected benefit obligation based on an
         assumed interest rate of 7.5% was $68,410. The fair value of plan
         assets invested in ManUSA's general fund deposit administration
         insurance contracts was $86,777.

         Prior to July 1, 1998, MNA also participated in an unfunded
         Supplemental Executive Retirement Plan (Manulife SERP) sponsored by MLI
         for executives. This was a non-qualified plan that provides defined
         pension benefits in excess of limits imposed by the law to those
         retiring after age 50 with 10 or more years of vesting service, and the
         pension benefit is a final average benefit based on the executive's
         highest 5-year average earnings. Compensation was not limited by, and
         benefits were not restricted by the Internal Revenue Code Section 415.




                                       31
<PAGE>   32



     12. EMPLOYEE BENEFITS (CONTINUED)

      A) EMPLOYEE RETIREMENT PLAN (CONTINUED)

         Effective July 1, 1998, the Manulife SERP was restated to become a
         supplemental cash balance plan, and each participant in the SERP who
         became a participant in the restated plan was provided with an opening
         account balance equal to the present value of their June 30, 1998
         accrued benefit under the SERP, using PBGC rates. Future contribution
         credits vary by service, and interest credits are a function of
         interest rate levels. These annual contribution credits are made in
         respect of the participant's compensation that is in excess of the
         limit in Internal Revenue Code Section 401(a)(17). In addition, a one
         time contribution may be made for a participant if it is determined at
         the time of their termination of employment that the participant's
         pension benefit under the Cash Balance Plan is limited by Internal
         Revenue Code Section 415. Together, these contributions serve to
         restore to the participant the benefit that they would have been
         entitled to under the Cash Balance Plan's benefit formula but for the
         limitation in Internal Revenue Code Sections 401(a)(17) and 415.
         Benefits are provided to participants after three years. The default
         form of payment under the plan is a lump sum although participants may
         elect to receive payment in the form of an annuity provided that such
         election is made within the time period prescribed in the plan. If an
         annuity form of payment is elected, the amount payable is equal the
         actuarial equivalent of the participant's balance under the
         supplemental Cash Balance Plan, using the factors and assumptions for
         determining immediate annuity amounts applicable to the participant
         under the qualified Cash Balance Plan.

      B) 401(K) PLAN

         Prior to July 1, 1998, the Company also sponsored a defined
         contribution plan, the North American Security Life 401(k) Savings
         Plan, which was subject to the provisions of the Employee Retirement
         Income Security Act of 1974 (ERISA). A similar plan, the Manulife
         Financial 401K Savings Plan, also existed for employees of ManUSA.
         These two plans were merged on July 1, 1998 into one defined
         contribution plan sponsored by ManUSA, as approved by the Board of
         Directors on March 26, 1998. The Company contributed $300, $285 and
         $353 in 1999, 1998 and 1997, respectively.

      C) OTHER POSTRETIREMENT BENEFIT PLAN

         In addition to the retirement plan, the Company participates in the
         other postretirement benefit plan of ManUSA which provides retiree
         medical and life insurance benefits to those who have attained age 55
         with ten or more years of service. The plan provides the medical
         coverage for retirees and spouses under age 65. When the retirees or
         the covered dependents reach age 65, Medicare provides primary coverage
         and the plan provides secondary coverage. There is no contribution for
         post-age 65, coverage and no contributions are required for retirees
         for life insurance coverage. The plan is unfunded.

         The other postretirement benefit cost of the Company, which includes
         the expected cost of postretirement benefits for newly eligible
         employees and for vested employees, interest cost, and gains and losses
         arising from differences between actuarial assumptions and actual
         experience is accounted for by the plan sponsor, ManUSA.





                                       32
<PAGE>   33

 13.     LEASES

         In January 1999, ManUSA entered into a new sublease agreement on behalf
         of the Company. In September 1999, the Company surrendered its old
         office space and was released from its lease commitment. The Company
         moved into the new office space in September 1999 with payments to the
         landlord commencing January 1, 2000. The free rent from September to
         December 1999 is being amortized over the term of the lease. For the
         years ended December 31, 1999, 1998 and 1997, the Company incurred rent
         expenses of $3,105, $1,617 and, $1,316, respectively. The Company also
         leases various office equipment under operating lease agreements.

         The minimum lease payments associated with the office space and various
         office equipment under operating lease agreements are as follows:

         <TABLE>
         <CAPTION>
         YEAR ENDED:            MINIMUM LEASE PAYMENTS
         ------------------------------------------------------
         <S>                               <C>
           2000                            4,028
           2001                            4,012
           2002                            4,008
           2003                            3,994
           2004 and after                 19,234
         ------------------------------------------------------

         Total                           $35,276
         ------------------------------------------------------
         </TABLE>

14.      GUARANTEE AGREEMENT

         Pursuant to a guarantee agreement, MLI unconditionally guarantees that
         it will, on demand, make funds available to the Company for the timely
         payment of contractual claims made under the fixed portion of the
         variable annuity contracts issued by MNA. The guarantee covers the
         outstanding fixed portion of variable annuity contracts, including
         those issued prior to the date of the guarantee agreement.

15.      DISCONTINUED OPERATIONS

         On May 6, 1997, MNA signed a letter of intent to sell its mutual fund
         operations. This disposal has been accounted for as discontinued
         operations in accordance with Accounting Principles Board Opinion No.
         30, which, among other provisions, required the plan of disposal to be
         carried out within one year. On October 1, 1997, the Company sold its
         advisory operations for NAF and the pre-existing deferred commission
         assets related to the mutual fund operations. In 1998, related to the
         sale, the Company received a contingent payment of $1,000, before
         income taxes, less an adjustment of $105 to the final settlement of the
         purchase price. For 1998 and 1997, the Company realized a gain of $895
         and $9,161, before applicable taxes of $313 and $3,206, respectively.
         Included in the gain for 1997 is a provision of $10, before applicable
         taxes of $3, for the loss from continuing operations during the
         phase-out period. Expenses of $223 in 1997 were incurred on the sale
         and netted against the realized gain.




                                       33
<PAGE>   34



15.      DISCONTINUED OPERATIONS (CONTINUED)

         The operating results related to discontinued operations are summarized
         as follows:

<TABLE>
<CAPTION>
         FOR THE YEAR ENDED DECEMBER 31
         ($ thousands)                                           1997
         ------------------------------------------  -------------------
         <S>                                               <C>

         Advisory fees, commissions
            and distribution revenues                      $     4,605
         ------------------------------------------  -------------------
         Loss from operations before income tax            $      (217)
            benefit
         Income tax benefit                                         76
         ------------------------------------------  -------------------

         Loss from operations, net of tax                  $      (141)
         ------------------------------------------  -------------------
</TABLE>

16.      FAIR VALUE OF FINANCIAL INSTRUMENTS

         The carrying values and estimated fair values of the Company's
         financial instruments are as follows:

<TABLE>
<CAPTION>
                                                           1999                           1998
      ---------------------------------------- ----------------------------- -------------------------------
      ($ thousands)                            CARRYING VALUE   FAIR VALUE    CARRYING VALUE    FAIR VALUE
      ---------------------------------------- ---------------- ------------ ----------------- -------------
      <S>                                                 <C>            <C>             <C>            <C>
      ASSETS:
          Fixed-maturity securities                 152,922        152,922         157,743        157,743
          Short-term investments                     41,311         41,311          34,074         34,074
          Policy loans                                7,049          7,049           5,175          5,175
          Cash and cash equivalents                  27,790         27,790          10,320         10,320
          Due from reinsurers                       797,746        797,746         641,858        641,858
          Separate account assets                16,022,215     16,022,215      12,188,420     12,188,420

      LIABILITIES:
          Policyholder liabilities and              139,764        137,717         102,252         98,312
             accruals
          Due to reinsurers                         808,599        808,599         655,892        655,892
          Notes payable to affiliates               311,100        311,100         241,000        241,000
          Separate account liabilities           16,022,215     16,022,215      12,188,420     12,188,420
      ----------------------------------------  -----------    -----------     -----------   ------------
</TABLE>

         The following methods and assumptions were used by the Company in
         estimating the fair value disclosures for financial instruments:

         Fixed-Maturity Securities: Fair values for fixed-maturity securities
         are obtained from an independent pricing service.

         Short-Term Investments and Cash and Cash Equivalents: Carrying values
         approximate fair values.

         Policy Loans:  Carrying values approximate fair values.


                                       34
<PAGE>   35



16.      FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

         Due from Reinsurers: Fair value is equal to deposits made under the
         contract and approximates the carrying value.

         Separate Account Assets and Liabilities: The carrying amounts in the
         balance sheet for separate account assets and liabilities approximate
         their fair value.

         Policyholder Liabilities and Accruals: Fair values of the Company's
         liabilities under contracts not involving significant mortality risk
         (deferred annuities) are estimated to be the cash surrender value, or
         the cost the Company would incur to extinguish the liability.

         Due to Reinsurers: Amounts on deposit from and payable to reinsurers
         reflects the net reinsured cash flow related to financing agreements
         which is primarily a current liability. As such, fair value
         approximates carrying value.

         Notes Payable to Affiliates: Fair value is considered to approximate
         carrying value as the majority of notes payable are at variable
         interest rates that fluctuate with market interest rate levels.

17.      CONTINGENCIES

         The Company is subject to various lawsuits that have arisen in the
         course of its business. Contingent liabilities arising from litigation,
         income taxes and other matters are not considered material in relation
         to the financial position of the Company.

                                       35
<PAGE>   36




Item 9 - Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

Nothing to report.

                                    PART III

Item 10 - Directors and Executive Officers of the Registrant (also referred to
as the "Company")

Officers and Directors of the Company

The directors and executive officers of the Company, together with their
principal occupations during the past five years, are as follows:

Name                 Position with the Company     Principal Occupation

James R. Boyle       Director* and President       President of the Company,
Age: 40                                            July 1999 to present; Senior
                                                   Vice President, US
                                                   Annuities, Manulife
                                                   Financial, July 1999 to
                                                   present; Vice President,
                                                   Institutional Markets,
                                                   Manulife Financial, May 1998
                                                   to June 1999; Vice
                                                   President, Administration of
                                                   the Company, September 1996
                                                   to May 1998; Vice President,
                                                   Treasurer and Chief
                                                   Administrative Officer,
                                                   North America Funds, June
                                                   1994 to September 1996.

John D. DesPrez III  Director*  and  Chairman of   Executive Vice President,
Age: 43              the Board                     U.S. Operations, Manulife
                                                   Financial, January 1999 to
                                                   date; Senior Vice President,
                                                   US Annuities, Manulife
                                                   Financial, September 1996 to
                                                   December, 1998; President of
                                                   the Company, September 1996
                                                   to December, 1998; Vice
                                                   President, Mutual Funds,
                                                   Manulife Financial, January
                                                   1995 to September 1996.

John D. Richardson   Director*                     Senior Executive Vice
Age: 62                                            President, U.S. Operations,
                                                   Manulife Financial, January
                                                   1999 to date; Executive Vice
                                                   President and General
                                                   Manager, U.S. Operations,
                                                   Manulife Financial, January
                                                   1995 to January 1999.

Robert Boyda         Vice President, Investment    Vice President, Investment
Age: 43              Management Services           Management Services of the
                                                   Company, January 1997 to
                                                   present; Vice President,
                                                   Investment Management
                                                   Services, Manulife
                                                   Financial, July 1998 to
                                                   present; Assistant Vice
                                                   President, Investment
                                                   Management Services,
                                                   Manulife Financial August
                                                   1994 to January 1997;
                                                   General Manager, Retail
                                                   Banking, CIBC, January 1987
                                                   to April 1994.









                                       36
<PAGE>   37




Name                 Position with the Company     Principal Occupation

James D. Gallagher   Vice President, Secretary     Vice President, Legal
Age: 45              and General Counsel           Services, Manulife
                                                   Financial, January 1996 to
                                                   date; President, The
                                                   Manufacturers Life Insurance
                                                   Company of New York, August
                                                   1999 to present; Vice
                                                   President, Secretary and
                                                   General Counsel of the
                                                   Company, June 1994 to date.








Kevin Hill           Vice President, Business      Vice President, Business
Age: 34              Implementation                Implementation of the
                                                   Company, October 1999 to
                                                   present; Assistant Vice
                                                   President, Project
                                                   Management and Annuity
                                                   Operations of the Company,
                                                   May 1996 to October 1999;
                                                   Director, Support Services
                                                   of the Company, October 1994
                                                   to June 1996.

Brian A. Kroll       Vice President, Product       Vice President, Product
Age: 38              Development                   Development of the Company,
                                                   October 1999 to present;
                                                   Assistant Vice President,
                                                   Product Development of the
                                                   Company, November 1994 to
                                                   September 1999.

David W. Libbey      Vice President, Treasurer,    Vice President, Treasurer
Age: 52              and Chief Financial Officer   and Chief Financial Officer
                                                   of the Company, December
                                                   1997 to present; Vice
                                                   President, Finance, US
                                                   Annuities, Manulife
                                                   Financial, June 1997 to
                                                   present; Vice President,
                                                   Finance of the Company June
                                                   1997 to December 1997; Vice
                                                   President & Actuary, Paul
                                                   Revere Insurance Group, June
                                                   1970 to March 1997.

Jonnie M. Smith      Vice President, Customer      Vice President, Customer
Age: 51              Service and Administration    Service and Administration
                                                   of the Company, October 1999
                                                   to present; Vice President,
                                                   Annuity Customer Services
                                                   and Operations, New England
                                                   Financial, July 1983 to
                                                   September 1999.

Janet Sweeney        Vice President, Corporate     Vice President, Human
Age: 49              Services                      Resources, U.S. Operations,
                                                   Manulife Financial, January
                                                   1996 to present; Vice
                                                   President, Corporate
                                                   Services of the Company,
                                                   January 1995 to present;
                                                   Executive, Corporate
                                                   Services of the Company,
                                                   July 1989 to December 1994.

John G. Vrysen       Vice President and Chief      Vice President and Chief
Age: 44              Actuary                       Financial Officer, U.S.
                                                   Operations, Manulife
                                                   Financial, January 1996 to
                                                   present; Vice President and
                                                   Chief Actuary of the
                                                   Company, January 1986 to
                                                   present.






                                       37
<PAGE>   38



Item 11 - Executive Compensation of the Registrant (also referred to as "MNA")

MNA's executive officers may also serve as officers of one or more of Manulife
Financial's affiliates. Allocations have been made as to such officers' time
devoted to duties as executive officers of MNA. The following table shows the
allocated compensation paid or awarded to or earned by MNA's Chief Executive
Officer for services provided to MNA and any other executive officer who had
allocated cash compensation in excess of $100,000.

                           Summary Compensation Table

<TABLE>
<CAPTION>
---------------------- ------- ----------- ----------- ------------ ----------- ------------- ----------- ----------
Name and Principal     Year    Salary      Bonus(2)    Other        Restricted  Securities    LTIP        All Other
Position                                               Annual       Stock       Underlying    Payout      Compensa-
                                                       Compensa-    Award(s)    Options/                  tion(5)
                                                       tion(3)                  SARs
---------------------- ------- ----------- ----------- ------------ ----------- ------------- ----------- ----------
<S>                    <C>        <C>         <C>          <C>         <C>          <C>       <C>          <C>
James R. Boyle,        1999    $ 70,175    $ 83,994     $ 2,864        N/A          N/A       $116,525(4)  $1,563
President(1)

John D. DesPrez III,   1999    $ 83,462    $104,688     $ 2,335        N/A          N/A       $215,625(4)  $1,512
Chairman

Theodore F.            1999    $109,052    $ 94,302     $16,404        N/A          N/A       $  9,330     $  911
Kilkuskie, Former
President1

David W. Libbey,       1999    $133,230    $ 84,807     $ 8,868        N/A          N/A          N/A       $2,395
Vice President,
Treasurer

Brian A. Kroll,        1999    $120,019    $ 44,177     $ 5,629        N/A          N/A          N/A       $4,650
Vice President,
Product Development

Kevin S. Hill,         1999    $ 94,419    $ 41,900     $12,901        N/A          N/A          N/A       $2,727
Vice President,
Business
Implementation
</TABLE>


1 Mr. Kilkuskie resigned and Mr. Boyle was elected President in July 1999.

2 Bonus for 1999 performance paid in 2000.

3 Does not include group health insurance since the plans are the same for all
  salaried employees.

4 These amounts represent allocation of one half of payments Mr. DesPrez and Mr.
  Boyle were entitled to receive through an arrangement available to them in
  respect of the Company's purchase in 1999 of the shares of Manulife-Wood Logan
  Holding Co., Inc. ("MWLH") that the Company did not already own. The other
  half of the payments will be made to Mr. DesPrez & Mr. Boyle in June 2000. Mr.
  DesPrez's and Mr. Boyle's participation in this arrangement was developed in
  order to better align Mr. DesPrez's and Mr. Boyle's interests with those of
  MWLH. Under this arrangement, Mr. DesPrez and Mr. Boyle have forfeited their
  rights to receive any grants or payments under the current LTIP. As a result,
  Mr. DesPrez and Mr. Boyle are not listed in the table "Long Term Incentive
  Plan - Awards in Most Recently Completed Financial Year."



                                       38
<PAGE>   39


5 Other Compensation includes the value of term life insurance premiums paid by
  Manulife Financial for the benefit of the executive officer and for US
  domiciled officers, it includes Company paid 401(k) plan contributions. In
  prior years, this column included company paid pension plan contributions for
  US domiciled officers but this year there were no company paid contributions
  since the plan is overfunded.

The Management Resources and Compensation Committee (the "MRCC") of the Board of
Directors is comprised of five external directors. The MRCC's principal mandate
is to approve the appointment, succession and remuneration of the Company's
Executive Vice Presidents and Senior Vice Presidents, including the Named
Executive Officers, excluding the President and Chief Executive Officer. The
MRCC also approves the compensation philosophy, policies and programs for all
other officers as well as the annual review of the Company's Annual Incentive
Plan awards, Long Term Incentive Plan grants and all Company pension plans.

The Corporate Governance and Nominating Committee of the Board of Directors
makes recommendations with respect to the compensation of the President and
Chief Executive Officer within the policies established by the MRCC, which are
reviewed and approved by the entire Board.

The Company's executive compensation policies are designed to recognize and
reward performance as well as to attract, retain, develop and motivate
employees. The MRCC seeks to align management compensation with shareholders'
interests and Company performance and to ensure that the total compensation
package is competitive with the median of the Company's comparator group. The
comparator group is comprised of major North American financial institutions
with emphasis on the five Schedule I Canadian banks and major North American
life insurance companies. Further, the Company ensures that its compensation
levels are competitive within local markets outside of Canada.

The Company's executive compensation program is comprised of three key
components: base salary, annual incentives and long term incentives.

SALARY

The Committee approves the salary ranges and salary increase levels for all of
Manulife Financial's Executive and Senior Vice Presidents individually, and all
Vice Presidents as a group, based on competitive industry data for all markets
in which Manulife Financial operates. Salary increases for Manulife Financial's
officers have been consistent with the salary increase programs approved for all
employees.

In establishing Manulife Financial's competitive position and developing annual
salary increase programs, Manulife Financial uses several annual surveys as
prepared by independent compensation consulting firms with reference to publicly
disclosed information.

ANNUAL INCENTIVE PLAN

Manulife Financial's Annual Incentive Plan ("AIP") provides executive officers
of Manulife Financial with the opportunity to earn incentive bonuses based on
the achievement of pre-established corporate and divisional earnings objectives
and divisional and individual performance objectives.

The Committee and management periodically review the design of the incentive
plan to ensure that it:

(i)   is competitive with Manulife Financial's comparator
      groups;

(ii)  supports, and aligns, with Manulife Financial's strategic
      objectives; and

(iii) recognizes and rewards individual contributions and value
      creation.

In conducting these reviews, Manulife Financial obtains advice from independent,
external consultants.




                                       39
<PAGE>   40





The AIP uses earnings and performance measures to determine awards with
predetermined thresholds for each component as approved by the Committee
annually. Incentive awards are established for each participant based on
organizational level. Incentive award levels range from 12% to 60% of base
salary assuming achievement of targeted performance objectives. When corporate
and divisional performance objectives are significantly exceeded, a participant
can receive incentive awards ranging from 30% to 150% of base salary. If
corporate and divisional performance objectives are below targeted performance,
the incentive awards are adjusted downward according to plan guidelines. The
Named Executive Officers participate in the AIP on the same basis as all other
officers.

LONG TERM INCENTIVE PLAN

<TABLE>
<CAPTION>
                                                                        Estimated Future Payouts Under
                                                                   Non-Securities-Price-Based Plans (US $)(3)
                          Securities     Performance or Other      ------------------------------------------
                        Units or Other       Period Until           Threshold                        Maximum
         Name            Rights (#)(1)   Maturation or Payout(2)     ($ or #)    Target ($ or #)(4)  ($ or #)
         ----          ---------------  ------------------------   ------------  ------------------  --------
<S>                         <C>              <C>                        <C>          <C>             <C>
Theodore F. Kilkuskie       19,487           Jan. 1, 2003               N/A          $70,199         N/A


David W. Libbey             4,980            Jan. 1, 2003               N/A          $17,940         N/A


Brian A. Kroll                        no 1999 LTIP grant as was only promoted in late 1999


Kevin S. Hill                         no 1999 LTIP grant as was only promoted in late 1999
</TABLE>


Notes:

1 Each grant has two components: Cash Appreciation Rights and Retirement
  Appreciation Rights.

2 The appreciation in the value of Cash Appreciation Rights are redeemed four
  years following the grant date. Retirement Appreciation Rights are only
  redeemed upon retirement or cessation of employment with Manulife Financial.

3 Canadian dollars converted to US dollars using a book rate of 1.50.

4 The target is calculated assuming Cash Appreciation Rights are exercised in
  the fourth year. At that time 50% of the target is redeemed in cash and the
  balance continues to appreciate until redeemed upon retirement or cessation of
  employment.

Manulife Financial's Board of Directors approved the implementation of a
Long-Term Incentive Plan ("LTIP") effective April 1, 1994. All employees at the
Vice President level and above are eligible to participate in the LTIP.

The purpose of the LTIP is to encourage executive officers to act in the
long-term interests of Manulife Financial and to provide an opportunity to share
in value creation as measured by changes in Manulife Financial's statutory
surplus. The LTIP is an appreciation rights plan which requires that a
substantial portion of any accumulated gain remain invested with Manulife
Financial during the participant's career with Manulife Financial.

The Committee reviews the LTIP on an annual basis having regard to Manulife
Financial's performance, targeted growth and competitive position. The Committee
approves grants on a prospective basis considering management's recommendations
for participation, size and terms of grant.



                                       40
<PAGE>   41

Grants of appreciation rights are generally made to participants in the LTIP
each year. The number of appreciation rights granted to participants is
determined based on the net present value of the potential payout represented by
the appreciation rights, assuming that Manulife Financial's surplus grows at a
targeted rate. Appreciation rights are granted such that this net present value
represents between 20% and 115% of the participant's salary level on the date of
grant.

PERQUISITES

In addition to cash compensation, all officers are entitled to a standard
benefit package including medical, dental, basic and dependent life insurance,
long and short-term disability coverage and defined contribution or defined
benefit plan.

US domiciled officers at the Vice President levels and above are provided with
an automobile and parking benefit, cellular telephone and computer. The
automobile benefit covers insurance and maintenance. There are no other benefit
packages which currently enhance overall compensation by more than 10%.

U.S. RETIREMENT PLANS

The executives of MNA earn pension benefits pursuant to their plan membership in
The Manulife Financial U.S. Cash Balance Plan. In addition they are also
eligible for benefits under The Manulife Financial U.S. Supplemental Cash
Balance Plan. They can also participate in the Manulife Financial 401(k) Savings
Plan.

The Manulife Financial Cash Balance Plan

Under this plan, which is a defined benefit plan, a separate account is
established for each participant. The account receives company contribution
credits based on vesting service and earnings as outlined in the table below.
The account earns semi-annual interest credits based on the yield of one-year
Treasury bills plus half a percentage point, subject to a minimum interest
credit of 5.25%. The yearly maximum amount of eligible pay allowed under the
qualified plan is $160,000 for 1999. Employees are vested after 3 years of
vesting service. Normal retirement age is 65. Pension benefits are provided to
those who terminate after three years of vesting service, and the normal
retirement benefit is actuarially equivalent to the cash balance account at
normal retirement date. Early benefits are actuarially equivalent to the normal
retirement benefits but are subsidized for participants who had attained age 45
and completed 5 or more years of vesting service on July 1, 1998 and who
terminate employment after attaining age 50 and completing 10 years of service.
The normal form of payment under the Cash Balance Plan is a life annuity, with
various optional forms available, including a lump sum equal to the cash balance
account.

COMPANY CONTRIBUTION CREDITS

Completed Years of Cash Balance Service
Credits As of December 31                        Percentage of Eligible Pay

Less than 6                                                  4%
6, but less than 11                                          5%
11, but less than 16                                         7%
16, but less than 21                                         9%
21 or more                                                   11%





                                       41
<PAGE>   42




Projected Cash Balance Plan pension benefits at age 65 payable as an annual life
annuity

<TABLE>
<CAPTION>
                                                  Years of Service
                            -------------------------------------------------------------
                              15           20            25            30            35
                            ------       ------        ------        ------        ------
Renumeration ($)               $            $             $             $             $
----------------            ------       ------        ------        ------        ------
<S>                         <C>          <C>           <C>           <C>           <C>
        $150,000            15,010       26,202        42,254        63,156        90,372
         175,000            16,011       27,948        45,071        67,366        96,397
         200,000            16,011       27,948        45,071        67,366        96,397
         225,000            16,011       27,948        45,071        67,366        96,397
         250,000            16,011       27,948        45,071        67,366        96,397
         300,000            16,011       27,948        45,071        67,366        96,397
         400,000            16,011       27,948        45,071        67,366        96,397
         500,000            16,011       27,948        45,071        67,366        96,397
</TABLE>

The Manulife Financial U.S. Supplemental Cash Balance Plan

In addition to their pension plan benefits, executives officers are eligible for
benefits under The Manulife Financial U.S. Supplemental Cash Balance Plan. This
is a non-contributory, non-qualified plan, the purpose of which is to provide
the executives with the same level of retirement benefits they would have been
entitled to but for the limitations prescribed for qualified plans under the
Internal Revenue Code. During the period of an executive's active participation
in the plan, annual company contributions are made with respect to the portion
of the executive's earnings which is in excess of $160,000 for 1999 as outlined
below with interest credited under this plan at the same rate as provided under
the Cash Balance Plan. In addition, a one time contribution may be made for a
participant if it is determined at the time of his or her termination of
employment, that the participant's pension benefit under the Cash Balance Plan
is limited by Internal Revenue Code Section 415. Together, these contributions
serve to restore to the participant the benefits they would have been entitled
to but for the limitations, in Internal Revenue Code Sections 401(a) (17) and
415. Benefits are provided to those who terminate after three years. The default
form of payment under the plan is a lump sum, although participants may elect to
receive payment in the form of an annuity provided that such election is made
within the time prescribed in the plan.

<TABLE>
<CAPTION>
Completed Years of Cash Balance Service      Percentage of Eligible Pay up     Pay Percentage of Eligible Pay over
Credits As of December 31                             to $200,000                            $200,000
<S>                                                        <C>                                  <C>
Less than 6                                                4%                                   4%
6, but less than 11                                        5%                                   5%
11, but less than 16                                       7%                                   5%
16, but less than 21                                       9%                                   5%
21 or more                                                11%                                   5%
</TABLE>





                                       42
<PAGE>   43




Projected Supplemental pension benefits at age 65 payable as an annual life
annuity

SUPPLEMENTAL
<TABLE>
<CAPTION>
                                                  Years of Service
                            --------------------------------------------------------------
                              15           20            25            30            35
                            ------       ------        ------        -------       -------
Renumeration ($)               $            $             $             $             $
----------------            ------       ------        ------        -------       -------
<S>                         <C>          <C>           <C>           <C>           <C>
        $150,000                 0            0             0              0             0
         175,000             1,501        2,620         4,225          6,316         9,037
         200,000             4,003        6,987        11,268         16,842        24,099
         225,000             6,258       10,540        16,510         24,284        34,407
         250,000             8,513       14,093        21,753         31,727        44,714
         300,000            13,023       21,198        32,238         46,612        65,330
         400,000            22,043       35,409        53,208         76,383       106,560
         500,000            31,064       49,620        74,178        106,154       147,790
</TABLE>


Projected Cash Balance and Supplemental pension benefits at age 65 payable as an
annual annuity

COMBINED
<TABLE>
<CAPTION>
                                                  Years of Service
                            --------------------------------------------------------------
                              15           20            25            30            35
                            ------       ------        -------       -------       -------
Renumeration ($)               $            $             $             $             $
----------------            ------       ------        -------       -------       -------
<S>                         <C>          <C>           <C>           <C>           <C>
        $150,000            15,010       26,202         42,254        63,156        90,372
         175,000            17,512       30,568         49,296        73,682       105,434
         200,000            20,014       34,935         56,339        84,208       120,496
         225,000            22,269       38,488         61,581        91,650       130,804
         250,000            24,524       42,041         66,824        99,093       141,111
         300,000            29,034       49,146         77,309       113,978       161,727
         400,000            38,054       63,357         98,279       143,749       202,957
         500,000            47,075       77,568        119,249       173,520       244,187
</TABLE>

Messrs. Boyle, DesPrez, Kilkuskie, Libbey, Kroll and Hill have 7.583, 9.0,
4.583, 2.583, 5.083 and 6.5 years of credited service respectively as at
December 31, 1999.

The Manulife Financial U.S. 401(k) Savings Plan

In addition, to the above plans a 401(k) Savings Plan is offered. The plan
allows employees of MNA to contribute on a pre-tax basis 1% to 15% of their
earnings up to the limits imposed by the Internal Revenue Code. The yearly
maximum an employee can contributed is $10,000 for 1999. The Company matches 50%
of the first 6% of contributions. Employees become 100% vested in the employer
matching contributions as outlined in the vesting schedule below. Additionally
they become 100% vested if they retire on or after age 65, become disabled or
die.

         Years of Vesting Service                    Vested Percentage

         Less than 2 years                                      0%
         2 years but less than 3                               50%
         3 years and thereafter                               100%




                                       43
<PAGE>   44

EMPLOYMENT AGREEMENTS

In September 1999, a Change in Control Agreement was entered into by The
Manufacturers Life Insurance Company (The Parent Company) and Mr. John D.
DesPrez. The purpose of this Agreement is to protect shareholder interests by
eliminating the distractions of a change in control on key employees of the
Company, allowing such key employees to focus on the business of the Company by
providing security and incentives to remain with the Company.

For the purpose of the Agreements, "Change in Control" is defined as follows:

o    an acquisition of 20 per cent of The Parent Company's voting shares;

o    a majority change in the Board of Directors of the Parent Company; or

o    the entering into of a Management Agreement with another insurance company
     or financial institution whereby the management of Manulife Financial
     Corporation or The Parent Company is transferred to such insurance company
     or financial institution.

The Change in Control provisions will be triggered under the following
circumstances:

o    for Mr. DesPrez, an involuntary or constructive termination within a
     specified protection window following a Change in Control.

The Change in Control severance benefits will be paid as a lump sum at two times
the annual compensation (base salary and annual incentive only) for Mr.
DesPrez,. At the time of Change in Control, long term incentives and retirement
benefits will vest. In addition, welfare benefits will continue for the number
of years equal to the severance multiple upon a Change in Control related
termination.


Item 12 - Security Ownership of Certain Beneficial Owners and Management

(a)

<TABLE>
<CAPTION>
--------------------- ---------------------- ----------------------- -----------
                        Name & Address of      Amount & Nature of     Percent of
   Title of Class       Beneficial Owner      Beneficial Ownership       Class
--------------------- ---------------------- ----------------------- -----------

<S>                                               <C>                     <C>
    Common Stock              MWLH                2,600 shares            100%
</TABLE>

(b) Nothing to report

(c) Nothing to report

Item 13 - Certain Relationships and Related Transactions

Refer to Item 7 - Liquidity and Capital Resources.

                                     PART IV

Item 14 - Exhibits, Financial Statements, Schedules and Reports on Form 8-K

(a) Financial Statements and Exhibits

(1) The following consolidated financial statements of the Registrant are filed
as part of this report:



                                    44
<PAGE>   45


a.       Report of Ernst & Young LLP, Independent Auditors, dated February 28,
         2000.

b.       Consolidated Balance Sheets at December 31, 1999 and 1998.

c.       Consolidated Statement of Income for the Years ended December 31, 1999,
         1998 and 1997.

d.       Consolidated Statements of Changes in Shareholder's Equity for the
         Years ended December 1999, 1998 and 1997.

e.       Consolidated Statements of Cash Flows for the Years Ended December 31,
         1999, 1998 and 1997.

f.       Notes to Financial Statements - December 31, 1999.

(2) Financial Statement Schedules:

a.  Schedule I - Summary of Investments - Other than Investments in Related
    Parties

b.  Schedule III - Supplementary Insurance Information

c.  Schedule IV - Reinsurance

 (3) Exhibits (the Registrant is also referred to as the "Company")

------------------- ------------------------------------------------------------
Exhibit No.         Description
------------------- ------------------------------------------------------------
1(a)                Underwriting Agreement between the Company and Manufacturers
                    Securities Services, LLC, formerly NASL Financial Services,
                    Inc. (Underwriter) - Incorporated by reference to Exhibit
                    (b)(3)(i) to Form N-4, file number 33-76162, filed March 1,
                    1999.

1(b)i               Promotional Agent Agreement between Manufacturers Securities
                    Services, LLC, formerly NASL Financial Services, Inc.
                    (Underwriter), the Company and Manulife Wood Logan, Inc.
                    (formerly Wood Logan Associates, Inc.) Associates, Inc.
                    (Promotional Agent) - Incorporated by reference to
                    Post-Effective Amendment No. 3 to Registration Statement on
                    Form N-4, file number 33-76162, filed April 29, 1997 on
                    behalf of The Manufacturers Life Insurance Company of North
                    America Separate Account A.

1(b)ii              Amendment to Promotional Agent Agreement - Incorporated by
                    reference to Post-Effective Amendment No. 4 to Registration
                    Statement on Form N-4, file number 33-76162, filed February
                    25, 1988 on behalf of The Manufacturers Life Insurance
                    Company of North America Separate Account A.

2                   Not Applicable

3(i)(a)             Certificate of Incorporation of the Company - Incorporated
                    by reference to Form 10Q, file number 812-06037, filed
                    November 14, 1997 on behalf of The Manufacturers Life
                    Insurance Company of North America.

3(i)(b)             Certificate of Amendment of Certificate of Incorporation of
                    the Company, Name Change, July 1984 - Incorporated by
                    reference to Form 10Q, file number 812-06037, filed November
                    14, 1997 on behalf of The Manufacturers Life Insurance
                    Company of North America.

3(i)(c)             Certificate of Amendment of Certificate of Incorporation of
                    the Company, Authorization of Capital, December 1994 -
                    Incorporated by reference to Form 10Q, file number
                    812-06037, filed November 14, 1997 on behalf of The
                    Manufacturers Life Insurance Company of North America.

3(i)(d)             Certificate of Amendment of Certificate of Incorporation of
                    the Company, Name Change, March 1997 - Incorporated by
                    reference to Post-Effective Amendment No. 1 to Registration
                    Statement on Form S-1, file number 333-6011, filed October
                    9, 1997 on behalf of The Manufacturers Life Insurance
                    Company of North America.





                                       45


<PAGE>   46

3(i)(e)             Certificate of Amendment of Certificate of Incorporation of
                    the Company, Registered Agent, July 1997 - Incorporated by
                    reference to Form 10Q, file number 812-06037, filed November
                    14, 1997 on behalf of The Manufacturers Life Insurance
                    Company of North America.

3(ii)               Amended and Restated By-Laws of the Company - Incorporated
                    by reference to Form 10Q, file number 812-06037, filed
                    November 14, 1997 on behalf of The Manufacturers Life
                    Insurance Company of North America.

4(i)                Form of Individual Single Payment Deferred Fixed Annuity
                    Non-Participating Contract - Incorporated by reference to
                    Exhibit 4 to Registration Statement on Form S-1, file number
                    33-6011, filed June 14, 1996

4(ii)               Form of Group Single Payment Deferred Fixed Annuity
                    Non-Participating Contract - Incorporated by reference to
                    Exhibit 4 to Registration Statement on Form S-1, file number
                    33-6011, filed June 14, 1996

4(iii)              Individual Retirement Annuity Endorsement - Incorporated by
                    reference to Exhibit 4 to Registration Statement on Form
                    S-1, file number 33-6011, filed June 14, 1996

4(iv)               ERISA Tax-Sheltered Annuity Endorsement - Incorporated by
                    reference to Exhibit 4 to Registration Statement on Form
                    S-1, file number 33-6011, filed June 14, 1996

4(v)                Tax-Sheltered Annuity Endorsement - Incorporated by
                    reference to Exhibit 4 to Registration Statement on Form
                    S-1, file number 33-6011, filed June 14, 1996

4(vi)               Section 401 Plans Endorsement - Incorporated by reference to
                    Exhibit 4 to Registration Statement on Form S-1, file number
                    33-6011, filed June 14, 1996

5                   Opinion and Consent of James D. Gallagher, Esq. -
                    Incorporated by reference to Exhibit 5 to Pre-Effective
                    Amendment No. 1 to the Registration Statement on Form S-1,
                    file number 33-6011, filed January 29, 1997

6                   Not Applicable

7                   Not Applicable

8                   Not Applicable

9                   Not Applicable

10(i)               Form of broker-dealer agreement between the Company,
                    Manufacturers Securities Services, LLC, formerly NASL
                    Financial Services, Inc. (underwriter), Wood Logan
                    Associates, Inc. (Promotional Agent) and broker-dealers -
                    Incorporated by reference to Exhibit (b)(3)(iii) to
                    pre-effective amendment no. 1 to Form N-4, file number
                    33-9960, filed February 2, 1987 on behalf of the NASL
                    Variable Account of the Company, now known as The
                    Manufacturers Life Insurance Company of North America
                    Separate Account A

(10)(ii)            Reinsurance and Guaranteed Death Benefits Agreement between
                    the Company and Connecticut General Life Insurance Company -
                    Incorporated by reference to Exhibit (b)(7)(i) to
                    Registration Statement on Form N-4, file number 33-76162,
                    filed March 1, 1996

(10)(iii)           Reinsurance Agreement between the Company and PaineWebber
                    Life Insurance Company - Incorporated by reference to
                    Exhibit (b)(7)(iii) to Registration Statement on Form N-4,
                    file number 33-76162, filed March 1, 1996

(10)(iv)            Coinsurance Agreement between the Company and Peoples
                    Security Life Insurance Company - Incorporated by reference
                    to Exhibits (10)(iv) through (10)(viii) to Pre-Effective
                    Amendment No. 1 to the Registration Statement on Form S-1,
                    file number 33-6011, filed January 29, 1997

(10)(v)             Reinsurance and Accounts Receivable Agreements between the
                    Company and ITT Lyndon Life - Incorporated by reference to
                    Exhibits (10)(iv) through (10)(viii) to Pre-Effective
                    Amendment No. 1 to the Registration Statement on Form S-1,
                    file number 33-6011, filed January 29, 1997




                                       46



<PAGE>   47

(10)(vi)            Automatic Modified -Coinsurance Reinsurance Agreement
                    between the Company and Transamerica Occidental Life
                    Insurance Company - Incorporated by reference to Exhibits
                    (10)(iv) through (10)(viii) to Pre-Effective Amendment No. 1
                    to the Registration Statement on Form S-1, file number
                    33-6011, filed January 29, 1997

(10)(vii)           Automatic Yearly Renewable Term Reinsurance Agreement
                    between the Company and Transamerica Occidental Life
                    Insurance Company - Incorporated by reference to Exhibits
                    (10)(iv) through (10)(viii) to Pre-Effective Amendment No. 1
                    to the Registration Statement on Form S-1, file number
                    33-6011, filed January 29, 1997

(10)(viii)          Amendment No. 1 to the Variable Annuity Guaranteed Death
                    Benefit Reinsurance Agreement between the Company and
                    Connecticut General Life Insurance Company - Incorporated by
                    reference to Exhibits (10)(iv) through (10)(viii) to
                    Pre-Effective Amendment No. 1 to the Registration Statement
                    on Form S-1, file number 33-6011, filed January 29, 1997

(10)(ix)            Coinsurance Agreement between the Company and The
                    Manufacturers Life Insurance Company (USA) Incorporated by
                    reference to Form 10K, file number 812-06037, filed March
                    31, 1998 on behalf of The Manufacturers Life Insurance
                    Company of North America

11                  Not Applicable

12                  Not Applicable

13                  Not Applicable

14                  Not Applicable

15                  Not Applicable

16                  Not Applicable

17                  Not Applicable

18                  Not Applicable

19                  Not Applicable

20                  Not Applicable

21                  The Company has the following wholly owned subsidiaries:
                    Manufacturers Securities Services, LLC and The Manufacturers
                    Life Insurance Company of New York

22                  Not Applicable

23(i)               Not Applicable

23(ii)              Not Applicable

24 (i)              Power of Attorney - John D. Richardson, Director and
                    Chairman of the Company - Incorporated by reference to
                    Post-Effective Amendment No. 3 to Registration Statement on
                    Form N-4, file number 33-76162, filed April 29, 1997 on
                    behalf of The Manufacturers Life Insurance Company of North
                    America Separate Account A.

24(ii)              Power of Attorney - David W. Libbey, Principal Financial
                    Officer of the Company - Incorporated by reference to Form
                    10Q, file number 812-06037, filed November 14, 1997 on
                    behalf of The Manufacturers Life Insurance Company of North
                    America.






                                       47

<PAGE>   48

24(iii)             Power of Attorney - Peter Hutchison, Director of the Company
                    - Incorporated by reference to Post-Effective Amendment No.
                    4 to Registration Statement on Form N-4, file number
                    33-76162, filed February 25, 1988 on behalf of The
                    Manufacturers Life Insurance Company of North America
                    Separate Account A.

24(iv)              Power of Attorney - John D. DesPrez III - Incorporated by
                    reference to Exhibit (14)(iv) to post-effective amendment
                    no. 1 to Form N-4, file number 333-38081 filed April 19,
                    1999.

25                  Not Applicable

26                  Not Applicable

27                  Financial Data Schedule - Filed herein.

28                  Not Applicable

(b) Reports on Form 8-K

         No reports on Form 8-K were filed during the quarter.

Supplemental Information to be Furnished with Reports Filed Pursuant to Section
15(d) of the Act by Registrants Which Have Not Registered Securities Pursuant to
Section 12 of the Act.

No Annual Report covering the Registrant's last fiscal year or proxy material
has been or will be sent to Registrant's security holders.


                                       48
<PAGE>   49



                          FINANCIAL STATEMENT SCHEDULES

                                       49
<PAGE>   50



            The Manufacturers Life Insurance Company of North America
                      Schedule I - Summary of Investments
                                December 31, 1999
                                  ($ Thousands)


<TABLE>
<CAPTION>
                                                                                                        Amount Shown in the
                                                                                                       Consolidated Balance
Type of Investment                                  Cost                          Value                        Sheet

<S>                                                 <C>                            <C>                           <C>
Fixed maturities:
   United States Government                           $ 28,634                       $ 27,988                      $ 27,988
   Corporate debt securities                            92,532                         90,168                        90,168
   Mortgage-backed securities                           28,234                         27,855                        27,855
   Foreign Governments                                   5,924                          5,947                         5,947
   States / Political subdivisions                       1,058                            964                           964
                                          -------------------------      ------------------------      ----------------------
Total fixed maturities                                $156,382                       $152,922                      $152,922
                                          =========================      ========================      ======================

Policy loans                                             7,049                                                        7,049
Short-term investments                                  41,311                                                       41,311
                                          -------------------------                                    ----------------------
Total investments                                     $204,742                                                     $201,282
                                          =========================                                    ======================
</TABLE>


                                       50
<PAGE>   51




            The Manufacturers Life Insurance Company of North America
               Schedule III - Supplementary Insurance Information
                                  ($ Thousands)

<TABLE>
<CAPTION>
                               Future Policy                Other                               Benefits,
                                 Benefits                  Policy                                 Claims    Amortization
                   Deferred    Losses,Claims             Claims and                 Net         Losses and   of Deferred
                 Acquisition     and Loss     Unearned    Benefits   Premium    Investment     Settlement   Acquisition
    Segments        Costs        Expenses      Premiums    Payable    Revenue     Income        Expenses       Costs*     Expenses*

<S>                 <C>          <C>              <C>         <C>      <C>         <C>            <C>         <C>         <C>
      1999
Wealth
  Management        654,336       139,561          -          -           -         12,514         6,735       44,474     192,452
Insurance               958           203          -          -         175            207             -           80         382
                 -------------------------------------------------------------------------------------------------------------------
Total               655,294       139,764          -           -        175         12,721         6,735       44,554     192,834
                 ===================================================================================================================

      1998
Wealth
  Management        449,281       102,245          -           -          -         12,176         4,885       53,493     133,255
Insurance                51             7          -           -          -              2             -            6       2,399
                 -------------------------------------------------------------------------------------------------------------------
Total               449,332       102,252          -           -          -         12,178         4,885       53,499     135,624
                 ===================================================================================================================

      1997
Wealth
  Management        364,984        92,750          -           -          -          7,906         4,986       42,356     110,221
                 -------------------------------------------------------------------------------------------------------------------
Total               364,984        92,750          -           -          -          7,906         4,986       42,356     110,221
                 ===================================================================================================================
</TABLE>

* For 1997, mutual fund business related items are included in discontinued
operations.


                                       51
<PAGE>   52




            The Manufacturers Life Insurance Company Of North America
                            Schedule IV - Reinsurance
                                  ($ Thousands)



<TABLE>
<CAPTION>
                                                                    Assumed                    Percentage of
                                                     Ceded to           From                       Amount
                                        Gross          Other          Other           Net         Assumed
                                       Amount        Companies      Companies       Amount         to Net

<S>                                       <C>            <C>                 <C>       <C>                <C>
Year ended December 31, 1999
Life insurance inforce                    374,308        263,621              -        110,687             0%
                                   ===========================================================================

Insurance premiums life                                                                                    0%
                                              504            329              -            175
                                   ===========================================================================

Year ended December 31, 1998
Life insurance inforce                    269,738        170,655              -         99,083             0%
                                   ===========================================================================

Insurance premiums life                         -              -              -              -             0%
                                   ===========================================================================

Year ended December 31, 1997
Life insurance inforce                    151,259         84,130              -         67,129             0%
                                   ===========================================================================

Insurance premiums life                         -              -              -              -             0%
                                   ===========================================================================
</TABLE>


                                       52
<PAGE>   53






                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report on Form 10-K to be
signed on its behalf by the undersigned thereunto duly authorized.

THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
(Registrant)



By:  /s/JAMES R. BOYLE
    -------------------------------------------------------
    James R. Boyle, Principal Executive Officer


By: /s/DAVID W. LIBBEY
    -------------------------------------------------------
    David W. Libbey, Vice President, Treasurer and
    Chief Financial Officer
    (Principal Financial Officer)

Date:  March 30, 2000


                                       53
<PAGE>   54



Pursuant to the requirements of the Securities Exchange Act of 1934, this report
on Form 10-K has been signed by the following persons in the capacities with the
Registrant on the 30th day of March, 2000.


SIGNATURE                               TITLE



*
------------------------------------
John D. DesPrez, III                    Director and Chairman of the Board



/s/JAMES R. BOYLE
------------------------------------
James R. Boyle                          President and Director (Principal
                                        Executive Officer)


*
------------------------------------
John D. Richardson                      Director



/s/DAVID W. LIBBEY
------------------------------------
David W. Libbey                         Vice  President, Treasurer and Chief
                                        Financial Officer (Principal and
                                        Accounting Officer)



/s/ DAVID W. LIBBEY
------------------------------------
*By David W. Libbey
Attorney-in-Fact Pursuant to
Powers of Attorney


                                       54
<PAGE>   55



                                  EXHIBIT INDEX

Exhibit No.       Description

27                Financial Data Schedule

                                       55